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Electoral College Confirms Biden Win

Tony Nash joins Jamie Robertson at the BBC Business Matters podcast and they discussed mostly the US Election as the electoral college confirms Biden win. Or is it too early to tell? They also talked about the recent Google meltdown and why it shouldn’t be a surprise. Also, do Chinatowns around the world suffer because of the anti-China movement? What about the vaccine — will it help us get back to normal at last? And, what’s wrong with California and why do businesses and people move out of the state and to Texas?

 

This podcast was published on December 15, 2020 and the original source can be found at https://www.bbc.co.uk/sounds/play/w172x194l551ll3

 

 

BBC Business Matters Description:

 

Joe Biden has been formally certified as the next president of the United States, with results from electoral colleges in all but one US state giving him 302 votes. This takes him over the 270 threshold required to win the presidency. The electors in each state are appointed to reflect the popular vote, which was won by Mr Biden in November. We get reaction from Washington DC and examine the US democratic process.

 

Two major cyber-incidents on Monday. The first you may well have noticed, the second will have almost certainly passed you by but may be in the long term far more significant. Google applications including YouTube, Gmail and Docs suffered a massive service outage, with users unable to access many of the company’s services. The second was a sweeping hacking campaign that may have attacked the US Department of Homeland Security, the Treasury and Commerce departments and thousands of businesses. We take a look at how working from home may be leaving businesses and government more vulnerable.

 

And we’re in the Philippines where the country has been showing an interest in the very English game of cricket. Throughout the programme, Jamie Robertson is joined by analyst Tony Nash in the United States and social welfare expert Rachel Cartland in Hong Kong.

 

 

Show Notes

 

 

JR: Joe Biden has been formally certified as the next president of the United States, but results from Electoral College is in all but one US state, giving him 302 votes. That takes him over the crucial 270 threshold, which is required to win the presidency. The electors in each state are appointed to reflect the popular vote which has won by Mr. Biden in November. OK, so, Tony, it’s all over. Pretty much, you reckon?

 

TN: I don’t know. I sat with you guys the day after the election and I said, everyone is pretty convinced that it was the end of the line then. And I said at that point, it’d be weeks, if not months before this was settled. And we still have a lot happening here. So honestly, I have no idea what’s going to happen on January 6th, but it’ll be interesting.

 

Look, Donald Trump is always interesting. You can never accuse the guy of being boring. So I wouldn’t be surprised. Actually, your commentator was not right about the president of the Senate, which is Mike Pence, actually has to accept the electors.

 

JR: It’s not just a question of counting. It’s a question of accepting that count as a right.

 

TN: So the speaker of the House and the president, the Senate have to accept the electors. So if they don’t, then it goes to the House. But there’s one vote per state and there are more Republican delegate delegations to the House of Representatives than there are Democrat delegations. If you look purely a state, no. So I actually have no idea how it’s going to end. I have no idea what’s happening on January 6th. But it’s not as simple as this was done because there are, I think, six or seven states where the Republican electors actually protested and actually sent their electors as well. So you have states divided and protesting, it can be problematic, so I have no idea what’s going to happen.

 

JR: I certainly haven’t heard the fat lady sing in us. Tony who feels like we might be losing a battle somewhere here, or do you think it’s not as easy to say as that?

 

TN: First of all, there is more hacking and there’s more information lost than most people are aware of. This is terrible, but I don’t think we should be naive and believe that this is rare.

 

JR: Why would it become public, though? It’s quite interesting that I mean, why tell people this has happened?

 

TN: Because so many companies have been exposed. It’s 18,000, I think. But I think publicly traded companies never disclose that  happens to them, even though they’re obligated to disclose, they don’t govern institutions. You know, it happens all the time. And it’s a daily occurrence.

 

My company is on Google infrastructure for part of our work. And what worries me is we’ll never know what information was exposed, especially with the Google hack. And I think there should be a requirement that companies let people know what has been exposed, but we’ll never know and we’ll never know what was lost and what was exposed. Companies have their their corporate secrets, their trade secrets on their cloud drives. And we never really know if things were exposed. And we never you know.

 

JR: Tony, there’s a Chinatown in Houston. And there’s research to back this up. Chinatowns have suffered worse than many other communities in the U.S. Is it connected to an anti China feeling, do you think? Or is there something else going on here that I haven’t seen?

 

TN: I don’t think there is. I lived in Asia for 15 years and my entire social community for much of that time was Chinese. I understand it at a different level. I do think there is a sensitivity among the Chinese community that they may be targeted for this. So I don’t necessarily believe that is the case. At least it’s not in Houston. Maybe it is in New York. But in Houston, I don’t feel that’s the case at all.

 

JR: I just want to continue our conversation she had earlier, which is about China or at least Chinese Institute of Chinese Chinatowns in the United States, which may have been losing more business than most other communities, possibly because they’re Chinese. And Tony gave a very nuanced view saying, but perhaps there’s a perception this is happening, but it may not be actually true in reality. Right, Tony? A vaccine, is it a shot in the arm for the economy as well? I mean, my impression I got from that interview with Constance Hunter from KPMG was that he thinks it’s going to take a bit of time, but it may be just the light at the end of a tunnel, which everybody needs.

 

TN: Just put the vaccine into context. So fatality rates for Covid, at least in Texas, are a third today of what they were just in September. So it’s more the government halting business that.

 

JR: Can I just challenge you on that? You say it’s a third time. It is a third of the total. But on the other hand, you’re having many more many more cases identified than you were in September. I mean, that may be in absolute terms. I’m not quite sure whether if you’re getting more cases actually reported, if it’s a third of the ones being being reported.

 

TN: More deaths in August.

 

JR: Yes.

 

TN: August 5th and 6th, we had 229 deaths in Texas now were around 139, 146, 121, 128, OK. So right now, the thing that we need to caution both on absolute and percentage numbers, we’re a third as a percent. We’re a third better. We’re a third of what they were in September even.

 

It’s great that we have a vaccine. I’m not trying to pull back on that.

 

But the problem here is that the government pulled the plug on people’s livelihoods. Hundreds of thousands of companies in America are out of business because state and local governments shut economies. That is a fact.

 

JR: You don’t think people would have been frightened to go out, frightened to go to restaurants, frightened to go to cinemas?

 

TN: I believe that people are responsible and they would have washed their hands and done all this stuff, worn masks, all that stuff.

 

Government officials killed local economies. What’s happening right now is federal government officials have not put the stimulus out that they should have put out in August. The package that came out in May was only supposed to last three months. They were supposed to put another package out in August, September. They didn’t. So we’re in on one hand, it’s state and local governments that killed economies and killed hundreds of thousands of companies and millions of jobs. On the other hand, it’s the federal officials who wanted to negotiate small details while people starve. It is government on both ends of this that are harming individuals, killing companies, harming families. It’s terrible.

 

JR: What is wrong with California? What’s so great about Texas?

 

TN: I have an artificial intelligence company in Texas. So we are in a technology ecosystem here in Texas. And Oracle, as you noted, just announced on Friday, they’re coming. Tesla’s moved.

 

I lived in California during the first Internet bubble of the late 90s, early 2000s. And what I find about California now is especially around the talent. They’re good. There’s nothing wrong with the talent there. It’s good. But it’s not the world class that it once was. It’s really expensive and it’s very arrogant. Silicon Valley is, kind of, to use an Asian analogy, it’s the Singapore of the U.S. It’s entitled, expensive, and kind of OK, good, but not great.

 

I’m in Texas and I moved my company from Singapore to Texas because I can find a very experienced technical person who will roll up their sleeves and actually do hard work. People are pretty affordable. The quality of skills here are great and it’s a fantastic business environment.

 

JR: This may sound a little bit like an Englishman talking, but it’s not to do with the weather, is it? And there is more to that question to mention immediate, bearing in mind for the rather high temperatures and wildfires.

 

TN: California’s got the Pacific Ocean and beautiful weather. People are coming here initially because they have to. But then they want to because they realized there are a lot of really nice people here. And I loved it. I lived in California for a long time and I voluntarily moved to Texas because of the business environment. I’ve been here four years now.

 

JR: And Tony, I mean, cricket may be played in far flung things, but in Texas, I don’t think so.

 

TN: You would be surprised, Jamie, 20 miles from my house is the largest cricket complex in America. That’s amazing. So Texas has a very large Indian community and we have the largest cricket complex in America.

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QuickHit: “Perceived Recovery” and the Artificial Market

Political economic consultant Albert Marko joins us for this week’s QuickHit episode where he explained about this “perceived recovery” and how this artificial boost in markets help the economy. He also shares his views on the 2020 US Presidential Election and the chance of Trump winning or losing this year. What will happen if his scenario plays out, particularly to the Dollar, Euro, and others?

 

Albert Marko advises congressional members and some financial firms on how the machinations of what D.C. does and how money flows from the Fed, Treasury or Congress out to the real world. He is also the co-founder and COO of Favore Media Group.

 

This QuickHit episode was recorded on August 25, 2020.

 

Last week’s QuickHit was with independent trading expert Tracy Shuchart on the end of “buy everything” market and the unknowns and apprehensions.

 

The views and opinions expressed in this QuickHit episode are those of the guests and do not necessarily reflect the official policy or position of Complete Intelligence. Any content provided by our guests are of their opinion and are not intended to malign any political party, religion, ethnic group, club, organization, company, individual or anyone or anything.

 

Show Notes

 

TN: We’ve seen a lot of intervention in markets from the Fed and the Treasury. I’d really love to hear what you’ve seen and what your assessment is of that activity.

 

AM: First off, we have to understand that politics and economics are tied to the head. You can’t deviate from the two of them. I don’t like when people try to disassociate the two from that. The Fed and the Treasury had to work on financial stability of the markets. That is the ground game right now. The only way to do such a thing would be to congregate all the market makers and select certain equities and pump those equities until the market had a perceived recovery at that point.

 

TN: So perceived recovery, that’s an interesting, interesting word. When you say market makers or strategists got together and plan this, what concentrations have you seen in markets? Is it possible to focus on a specific number of companies and make sure that the rest of the market moves based on their coattails?

 

AM: Of course. This is not a new strategy. We’ve done this in 1907, and done this in nineteen eighty seven with Buffett and Goldman and we’re doing it now. It’s just the way it is.

 

The way the strategy works is you take a couple equities, say a dozen of them, maybe a little bit less. Tesla would be one. Nvidia, Adobe, all of these companies that don’t really have international peers to compare with and valuations that they can pump and the market takes over and comes up with all sorts of fancy ideas of why Tesla is at a $400 billion valuation.

 

But the fact of the matter is, if you look at the pricing and you look at all the call options that have happened over the last four months, it’s pretty clear that this was completely done artificially.

 

TN: It seems the US markets lead global equities. Is there some linking of this? And again, are there international coattails that follow on to US equities coattails or is that what you’ve seen in recent months?

 

AM: That is absolutely correct. There are a couple of markets that would support the US market specifically. That obviously would be the U.K. But the one I like to look at is the Swiss National Bank. They have their minions and their people intertwined within US hedge funds and working with the Fed and the Treasury for years. So if something is going on, they would probably be the next people to hear about it. And you can actually see this by looking at their portfolio buys in Q1 and Q2, as opposed to the 2018. You’ll see that those certain equities like Apple and Tesla had just gotten ridiculous amount of eyes.

 

TN: How successful is that been? As we look at the depths of the pullback in April? Crude oil was at negative $37 in April and it fell $99 from January through April. WTI did at least, right? Equities obviously had a lot of problems. So from your perspective, how has that been executed? How has it been pulled off? Is it okay? Is it good? Are we seeing, at least in equity markets, are we seeing a “V” and do you think that translates into the real economy whatever that is?

 

AM: I use the word “perceived recovery” before as this is artificial. It does support the markets. They’ve done exactly what the Fed was mandated for financial stability. Loretta Mester says that quite often in her speeches. In that respect, yes, they absolutely stabilize the market. Now comes the challenge of rotating out into value stocks and the actual financials or retail or something that’ll actually create jobs later on. They’re going to have to do that. But again, this is basically to stabilize not only the markets, but also the political class that’s supporting it.

 

TN: When you talk about the political class… We’re in the middle of an election cycle. This is my first election to be back in the US since the first Bush election. I was overseas for a long time. So I’m seeing things I haven’t had a front row seat to for a long, long time. How does all the things we’ve been talking about with supporting markets and and really having this kind of quasi recovery, how does that segue into the election? How do you see the election playing out?

 

AM: The people that are in charge now are appointed by the political class in charge at the moment. So those two are going to protect themselves at all costs. Trump appointing Mnuchin. Mnuchin doing what he has to do for financial stability. Now we’re looking at Trump ”losing in the polls” — highly questionable when you look at the methodology about those polls. Right now, I would have Trump winning — about a 60 percent chance at the moment.

 

TN: But the president isn’t the only office, right? So do you have an opinion on the Senate and the House as well? Do you think we’re going to see a flip in either of those places?

 

AM: No, I think the Republicans will actually take back anywhere between eight and 10 seats in the House and they’ll lose possibly two, maybe three seats in the Senate. So they’ll still control the Senate, although that’s when the political calculations come into work where one senator, two senators can block an entire policy of the president. Trump is going to have to do more executive orders going forward, which I personally don’t like, and nobody really should actually advocate for that. But this is the time that we live in.

 

TN: If your scenario plays out, how does that impact US foreign policy for the next four years? What do you see is the major… I would say trade was a big issue in the first four years of Trump, right? And bringing China to the four was one of the big issues. What would you say would be the big foreign policy issues under a second Trump administration if it comes to pass?

 

AM: The big one is China. China is quite intelligent. They hire former congressional members to go and talk politics so they understand how it works. They’re going to start hedging their bets. If they see that Trump is possibly going to win, Phase One Agriculture deals will be flying. They’ll make some concessions on intellectual property rights and whatnot. So you’ll see some of that happening from China.

 

The Europeans are absolutely in denial of what can actually happen if Trump gets elected. The only reason I see the Euro at these levels is because they’re on vacation and the US has just negative news pounding us day in and day out with the Dollar dropping to the low 90s. But I don’t see that sticking around. I think that as soon as Trump gets re-elected, I think the dollar’s back up north of 97.

 

TN: I think you’re right. I think that’s feasible.

 

Well, thank you so much for your time. I really appreciate this. Obviously you have a lot going on and you have a lot of information. This is hugely valuable for us. So I’d like to check in maybe before the election, maybe after the election so that we can do an assessment of how would the changes, whether it’s Biden or Trump, how does it impact markets and how does it impact geopolitics? That would be a fascinating discussion. So thanks for your time. Really appreciate it.

 

AM: Thank you. Thank you, Tony.

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QuickHit Visual (Videos)

QuickHit: Market unknowns and apprehensions

A returning guest joins us for another QuickHit talking about how the current market unknowns are affecting the economy, and what are these “unknowns” anyway? Independent trader Tracy Shuchart discusses with Tony Nash about the “buy-everything” market and why is it happening despite the worries and crashes of economies because of COVID. We’ve also looked at the crude oil market and whether it will recover or not and how? She also shares what she thinks about the regionalization and shifts in supply chain.

 

Tracy Shuchart is a trader portfolio manager and all-around high-profile, social media person on markets. We did the first two QuickHit episodes with her with the recent one on “Oil companies will either shut-in or cut back, layoffs not done yet“ last May.

 

 

This QuickHit episode was recorded on August 14, 2020.

 

The views and opinions expressed in this QuickHit episode are those of the guests and do not necessarily reflect the official policy or position of Complete Intelligence. Any content provided by our guests are of their opinion and are not intended to malign any political party, religion, ethnic group, club, organization, company, individual or anyone or anything.

 

Show Notes

TN: It feels like the markets have taken a breather this week. Is that what you’re seeing and also what are we waiting for?

 

TS: You notice all this entire summer, actually, that it’s been a buy-everything market. Bonds are up, equities are up, gold’s up, crude oil’s up, across the board, everything was up. Commodities, equities, fixed income, and then just starting in August about a week, week and a half ago, we started seeing some of that error let out of those sales.

 

Equities are still grinding higher but gold futures reached 2,089 dollars, and then came off to 200 dollars really quickly. It has stalled out over the last couple of days.

 

Crude oil in general, this summer has been stuck in a range. So, I guess you could say OPEC did their job. They wanted to stabilize the oil market. They did that.

 

Then this week we’ve seen some of the air come out of bonds. So I think, right now, it was kind of buy-everything. We had all this government stimulus, we had central bank stimulus and now we’re at the point where the government stimulus is out. The extra unemployment, PPP loans, there’s no more checks things like that. And then we have the election come up. The markets are waiting to see what’s going to happen.

 

 

TN: And RobinHood closed their api. So, we don’t know what the Robinhood traders are doing anymore.

 

 

TS: Yeah, so it just seems like there’s a lot of things that are unknown. If you look at the vix curve structure you see the kink in that November area. So, the markets are forward looking at that as an unknown. So, these next couple months might be either going to be flat until we find out or it’s going to get really volatile.

 

 

TN: Right, the one that really told me that we are in a pause is when gold turned around. When we started to see gold turning around and we’ve seen it paused where it is now, that’s really what showed me that things have changed or things have at least slowed down. And so, are we waiting for clarity around stimulus? Because I don’t think it’s earnings or anything like that that we’re looking for. It really does, as you said, kind of a stimulus-driven market. Is that really the next thing that we’re looking for?

 

TS: I think it’s a combination of things. Fed purchases have curtailed a tiny bit. We still have an unknown about what’s going to happen and congress just adjourned for recess without a decision. So, we won’t find out what a decision is really probably until September. That leaves a whole unknown, especially, when you’re talking about that extra unemployment.

 

The big thing is the election because we don’t know what the market’s going to do. If there’s a Biden win, that will only be a sector rotation in my opinion, because of what their agenda is. Everybody’s just very apprehensive right now. They are pulling back on, their involvement in the market being that there are a lot of big unknown factors out there right now.

 

TN: It’s really one of the only recessions where incomes have actually grown during the recession, which is weird. We’ve seen retail sales and industrial production in recent months come in and they’re actually okay. It seems like the breaks are put on that with stimulus stopped as well. The question really about being stagnant or rising? Or is there a possibility that we tip over and start to decline if stimulus isn’t forthcoming by the end of August or early September?

 

TS: That’s a possibility that we see a pullback in the markets absolutely. I don’t think you’re going to see anything, like we saw obviously back in February. But I could definitely see a market pull back just on people’s apprehensions of the unknown.

 

TN: As you mentioned OPEC and that crude oil has settled and it’s been horizontal for the past couple months. What would move that either way? Do you see airlines coming back online? Do you see major events happening that would really push the oil price up? Or do you think we’re just also in a waiting pattern there?

 

TS: We’re in a waiting pattern. But from what I’m seeing, the fundamentals are improving. Even though people don’t really want to see that. I look at driving patterns not only in the States but driving patterns in the world. I look at airlines and things of that nature and we are seeing a slight improvement. Everybody’s looking for a big crash in oil prices again but I don’t foresee that at this point. Unless, obviously, something fundamental changes, like the whole world goes on a lockdown again or some unforeseen event happens. But right now, the crude oil market looks pretty strong. We’re still over supply but we’re working off that oversupply. Especially going forward into 2021, when that supply really starts to be worked off, then we have a Capex problem. We’re gonna have a supply problem. I can forsee the oil prices even going higher into next year. But right now, I would say we’re stable to drift higher at to the end of the year. We are hitting that soft season. But again, I don’t see the oil market really pulling back that much at this point.

 

TN: Is the back-to-school factored into your expectation of rising oil prices or would that accelerate it?

 

TS: I believe that people will be apprehensive to send their kids on a school bus. So they’ll probably be driving them to school. That’s actually oil demand positive for me.

TN: Our view is to see oil grind higher into the end of the year. As of August 1st, that was our view as well. I’m also curious about your views on the dollar. Do you see any dramatic movements either way in the dollar or are we in the low 90s for the next few months?

 

TS: The market is so oversold at this point and everyone is so leaning bearish. I wouldn’t be surprised in he next couple of months if prices don’t go lower that people start to unwind those short trades and we could see not a huge spike in the dollar. But just a general unwind of that shortness.

 

TN: Great, okay, is there anything out there that you’re seeing that’s really interesting that we should know about? It’s late summer. People are tired. They’re not really all into work. Is there anything that you’re looking at that we’re not really paying attention to?

 

TS: The lumber market. I sent out a few tweets about that. I think that’s definitely something to watch because the housing market is doing better than anticipated. However, we don’t need things like extra ten twenty thousand dollars added on housing costs for new home builds. So, that’ll put a very big strain on the market and on home builders. So that’s definitely something to watch at this point.

TN: I noticed if you go to home depot, the lumber section is empty. That’s not where home builders go, but that’s what I see as a consumer is. It’s just empty. There look to be seriously obviously. There’s demand pulled but there really seems to be some sort of supply issue there as well.

 

TS: Yeah, there’s a supply issue. A lot of the mills have been closed like they’ve been closing for the last couple of years because the demand hasn’t really been that high, well at least in British Columbia. But with this new surge, I’m hearing that tons of mills are back up and running shifts  24/7 now. Even smaller mills that you used to do little to no business are back up and running. So, I think that looking forward October, November, we should see some more supplies.

 

 

 

TN: What we’ve seen since COVID from toilet paper to meat processing to lumber is real stress put on supply chains. And from your perspective as a portfolio manager and a trader, do times like this make you concerned about the stability of the U.S. economy or do these tests make you feel like the people participating in that economy are making their supply chains more resilient? Do you think people are actually investing to make those things more resilient or do you think they’re just getting through and they’ll forget about it within a few months?

 

TS: No, we are seeing some improvement on supply chains and moving forward. There are companies that are diversifying out of China. It’s in supply chains closer to the U.S., Mexico, Latin America. This particular incident, this COVID really made people rethink and reassess things and I think we are seeing changes. It’s not easy to move supply chains obviously, right? So, it’s just going to take some time but I definitely see in the markets where companies are changing.