The result is turmoil in the financial markets, possibly concurrent with the political system melting down. Which sets the stage for…
This year is, by any measure, brutal.
First came a pandemic so baffling that virtually no one other than Sweden made it through without a near-depression. (Reminiscent of the previous decade’s financial crisis, when only Iceland got it right.)
Then came civil unrest on a scale not seen since the 1960s, about which more than enough has already been written.
Then came fires that are burning even parts of the Northwest previously thought to be non-flammable, blanketing the region with toxic smoke.
That’s a lot. But it might be just the warm-up act for a couple of potentially bigger crises.
The upcoming presidential election, for instance, will be conducted amid a pandemic that is forcing many states with little mail-in voting experience to adopt the practice wholesale. The inevitable mess will be tolerable if one side wins in a landslide big enough to swamp doubts about the election’s legality. But that’s not looking likely as battleground state polls tighten.
(MSN) – With the election just weeks away, voters and polling officials have seen Democratic presidential nominee Joe Biden’s lead over President Donald Trump narrow in the past few days. Now, the most recent state polls show that Trump is within the margin of error to win in seven major swing states: Arizona, Georgia, North Carolina, New Hampshire, Nevada, Texas and Iowa.
While national polls show Biden ahead of Trump by 7 percentage points, as of Wednesday, most polls in major swing states show no clear or definitive winner. In Georgia, a state that hasn’t voted Democratic since the ’90s but is now considered a toss-up, Biden is projected to win 47 percent of votes compared with Trump’s 46 percent, well within the 3.6 percent margin of error, according to an AARP poll released September 10.
Arizona, New Hampshire and North Carolina all show Biden leading by only 3 percentage points in recent polls, while a September 12 New York Times/Siena College poll shows Biden with a 4 percentage point lead in Nevada, which is within the 5.3 percent margin of error.
Since Trump tends to outperform his polls, a close race is now probable (barring a debate flame-out by one candidate or the other, a very real possibility), and both sides expect the other to try to steal the election through vote-rigging and/or voter suppression. See “Trump has a plan to steal the election – in fact, he has a bunch of them” and “The Dems plan to steal the presidency.”
Republicans view vote-by-mail as a ploy for Democrats to practice their traditional big-city political machine corruption on a national scale. Democrats, meanwhile, fear that in-person voting during a pandemic will keep at-risk groups (i.e., likely Biden voters) away from the polls.
The result: Whoever loses will believe they were robbed and – having learned from the recent “peaceful but fiery demonstrations” that rioting is both fun and frequently profitable — will take to the streets. The losers will also head to the courts to pursue what the other side will label a coup, prompting more angry protests, and so on, until one side takes control by brute physical or judicial force. It will not be pretty. Here’s a concise overview of the situation:
Meanwhile, developments in the stock market virtually guarantee turmoil in 2021. It seems that retail investors – aka “dumb money” – have become the dominant players in both Big Tech stocks and related call options. Here, for instance, is the trading volume of calls relative to stocks. Normally more stocks trade than options. But suddenly:
And here is Tesla’s stock and option trading, prior to its recent stock split.
Anyone with a sense of financial history would look at the above, along with reports that “tech stocks are the most crowded trade ever”, and conclude that it’s Big Short time. But thanks to the combination of free stock trading apps like Robinhood and government pandemic relief money flowing to Millennials, the dominant players in this market have a different take, which is, “that stock is rising, let’s buy call options on it!”
The apparently inevitable result is turmoil in the financial markets, possibly concurrent with the political system melting down. Which sets the stage for a 2021 that makes this year seem placid by comparison.