A Specter Of Risk

Macro Perpectives: Fri 20 Nov 2020

As we've discussed in recent days, the markets continue to underprice the risk of more chaos surrounding the election.

The VIX yesterday continued to trade near the lowest post-Pandemic levels.

Continuing the theme from my note midweek, with the timeline narrowing on the 8th December deadline for resolving election disputes, we should expect the Trump legal team to become more and more vocal - taking their case to the American people.

They started that process, with a noon press conference - not surprisingly the majority of the U.S. media did not cover it. For those that didn't see it, you can see a replay on C-Span (link below).

Trump Campaign News Conference on Legal Challenges

They alleged a broad based domestic and foreign conspiracy to fix the election. Let me repeat this: They alleged a broad based domestic and foreign conspiracy to fix the election.

What about the evidence? They claim to have signed affidavits from election workers from key counties and precincts. They have expert analysis on statistical anomalies (with congruent patterns) in key swing states. Moreover, they connect the dots to a large scale corruption scheme with the voting systems and software.

The validity of it all, of course, will be for a court to decide, but, again, they will continue to take the case to the American people, and we should expect the profile of this dispute to only increase. If the evidence grows, the mainstreet media will have a very hard time ignoring and discrediting it.

Again, this comes as markets are broadly in a very complacent mode. This should raise the specter of risk - if not put everyone on alert.