Oct 29, 2020

News | US Politics: President Trump has had real achievements and a baleful effect


Oct 29th 2020

AMERICA HARDLY feels great again. There are 11m fewer people working than in February. Barely more than one-third of pupils are attending school normally. Hunger and poverty have risen; the memories of a turbulent summer of protests and racial unrest are still raw. Official figures show 227,000 people dead due to covid-19; excess-mortality data suggest the true total is over 300,000. And both caseloads and hospitalisations are surging for a third time. On October 23rd America recorded nearly 84,000 new cases, the highest daily tally so far.

The mismanaged epidemic, more than anything else, seems likely to cost President Donald Trump his job. As The Economist went to press our election model gave him less than a 5% chance of winning.

Were it not for the epidemic, though, Mr Trump might be on the brink of re-election. In 2016 he told voters he would keep the economy growing; until the epidemic hit it had done just that. Growth never quite reached the lustrous annual rate of 4% he promised, but it did do better than many had forecast, and his tax cut in 2017 turned out to be a well-timed fiscal stimulus. At the end of last year unemployment was at its lowest level for half a century. The wages of the less well paid were rising swiftly.

What was more, he had made good on other parts of his agenda. Trade deals he disliked had been abandoned or rewritten, tariffs had been slapped on countries accused of stealing jobs and immigration had fallen dramatically. He had appointed two conservative justices to the Supreme Court, a number which he has now brought up to three. “Promises made, promises kept” is one of the slogans of Mr Trump’s re-election campaign. The president tells outright lies with remarkable frequency. But in this he is stretching the truth no further than any politician might.

If Mr Trump does indeed lose the election, it seems likely that his main legacies will be the further polarisation of America’s politics, a guide to how the country’s democratic norms can be subverted and serious damage to its reputation overseas (see article). But the past four years have also seen achievements beyond that sad litany. Some of them are distinctive, not all are bad and some may prove long-lived.

Give the public a song and dance

In 2016 Mr Trump distinguished himself not just in how he talked but also in what he said. Like all Republicans since Ronald Reagan he was in favour of tax cuts, deregulation, conservative judges, safer streets, stronger armed forces and lower government debt; he was against Obamacare and open borders.

But on many issues he stood out as unorthodox, extreme or both—and in so doing captured voters’ imaginations in a way that his rivals did not. He pledged to deport all 11m undocumented immigrants in the country and build a wall on the border with Mexico. He derided the party’s foreign-policy and free-trade orthodoxies as failures, and held that trade deficits were purely a sign of weakness and poor negotiating—which, as the master of the deal, he could set right. He bashed Wall Street and was against making Social Security and Medicare, the pension and health-insurance programmes for the elderly, less generous. He mocked and disparaged not just his opponents, but also revered Republicans such as the late Senator John McCain (a “loser”).

Given that disparagement it is ironic, if not surprising, that many of his achievements have been those of a generic Republican. His tax cuts, indeed, look modest measured against those of other first-term Republican presidents. According to the Tax Foundation, a think-tank, the Tax Cuts and Jobs Act of 2017 reduces the government’s annual revenue by $150bn, or 0.7% of current GDP, over ten years. They were thus smaller than the tax cuts made under George W. Bush in 2001 (about 1.5% of GDP) or under Reagan in 1981 (2.6%). Mr Trump’s cuts included some welcome reforms, such as a curb on the deduction for mortgage interest and state and local taxes, but no deep rewriting of the tax code.

Mr Trump’s judicial appointments, too, were those that any other Republican might have made, given the chance. That he got that chance was thanks to Mitch McConnell, the Senate majority leader, who held up the confirmation of a number of Barack Obama’s judicial nominations—most notably that of Merrick Garland for the Supreme Court in March 2016. The resultant backlog allowed Mr Trump to follow the recommendations of the Federalist Society, a fraternity of conservative jurists, in appointing about 30% of the federal judiciary. Sandra Day O’Connor, Antonin Scalia and Anthony Kennedy—the three justices whom it took Reagan two terms to put on the bench—shaped the court’s rulings for decades. It is likely that Neil Gorsuch, Brett Kavanaugh and Amy Coney Barrett will do so too.

When it comes to deregulation Mr Trump can credibly claim to have outdone all predecessors. He pledged to eliminate two old regulations for every new one. He now boasts that the ratio he has actually achieved is 22 to one. The list of those scrapped is inflated with some pretty small fry; rules on Uruguayan mutton, Japanese persimmons and the like. But it is undoubtedly true that the pace of new regulation has slowed dramatically. Since Mr Trump’s inauguration, the estimated number of federal rules has grown very slightly, by 0.5%. That is one-twelfth the pace of growth during the Obama and Bush years.

In some areas losing rules was beneficial; in few was it fundamental. In finance, for example, though some rules were streamlined, Dodd-Frank, the sweeping law passed after the Great Recession to rein in banks, was not thrown out (although the Consumer Financial Protection Bureau, a watchdog agency set up by Elizabeth Warren, was effectively neutered). The exception was environmental regulation, which has been thoroughly savaged.

Of the 225 major executive actions in a studiously catalogued list of the Trump administration’s deregulations 70—a clear plurality—are environmental rollbacks. These are rules that will increase the amount of lung-damaging fine-particulate matter belched by coal-fired power plants, methane leaked by oil and gas wells and carbon dioxide emitted from the exhaust pipes of cars with new, less ambitious fuel-economy standards. When the White House claims to have saved $51bn—0.25% of GDP—in regulatory costs it ignores all such debits on the other side of the ledger.

On the signature issues which set the Trump campaign apart from the Republican establishment, the successes look more vulnerable to revocation. Take immigration. Xenophobia was the raison d’être for his campaign in 2016, which he launched with a speech warning that Mexico was sending rapists and drug-dealers across the border; later on, Mr Trump called for a “total and complete shutdown of Muslims entering the United States”. His administration’s aggressive restriction of migration was therefore no surprise, even if the shock of seeing children alone in detention camps because of a policy of family separation caused an outcry

What is perhaps less appreciated is the degree to which it has succeeded. The “Muslim ban” issued in the first days of his presidency ran afoul of the courts and had to be reworked; the border wall Mr Trump promised has not been built, let alone paid for by Mexico. But eligibility criteria for asylum have been tightened, and asylum-seekers at the border must now wait in Mexico while decisions are made. “It may not be the physical wall that Trump initially touted, but there is now a bureaucratic wall that expels every unauthorised immigrant on the southern border,” says Sarah Pierce, an analyst at the Migration Policy Institute. In its revised form the Muslim ban remains in place, with little dissent.

Apprehensions at the border with Mexico have risen to their highest level in 12 years (see chart 1), and in 2019 there were 360,000 deportations. That was not a record—there were 432,000 in 2013—but it was more than there were in 2016, and the share of the deported who had no criminal records, 14% in 2016, had risen to 36%. The administration also increased the bureaucratic hurdles faced by those trying to immigrate legally. Applications for temporary visas and permanent-residency permits have both declined by 17% since 2016. The annual ceiling of refugee admissions has been slashed. The White House recently proposed just 15,000 admissions for 2021, compared with 85,000 admitted in 2016.

A pile of debris

In the trade arena Mr Trump renegotiated NAFTA, abandoned the nascent Trans-Pacific Partnership, imposed tariffs on aluminium and steel and launched a trade war with China. By his own standards, the benefits were sparse. Though the bilateral trade deficit with China has fallen, America’s trade deficit with the rest of the world was steadily increasing even before covid-19 sent it through the roof. Tariffs have helped some targeted industries, but at great cost. American consumers are reckoned to have paid $900,000 for every steel-industry job saved. Manufacturing employment seemed to slump after tariffs with China went into effect in 2018, though Mr Trump’s advisers insist that in the long term the policy will reverse that.

Other promises went unkept, most obviously and predictably the pledge on the debt. Rather than putting America on the path to eliminating its national debt in eight years, as he said he would, Mr Trump saw the budget deficit steadily increase over the first three years of his administration. The rise was not as marked as those seen in the first terms of Reagan and George W. Bush, but the starting point was higher. After covid-19 hit the deficit jumped far further; America’s debt is set to exceed its GDP.

Nor was Obamacare repealed and replaced. Mr Trump has been promising to publish a serious health-care plan imminently for his entire tenure, during which the share of Americans without health insurance rose from 8.6% in 2016 to 9.2% in 2019. He eventually laid out something of a second-term health-care agenda on September 24th, when he declared in an executive order that under an “America-first” plan it will “continue to be the policy of the United States…to ensure that Americans with pre-existing conditions can obtain the insurance of their choice”. If a lawsuit against Obamacare that the Supreme Court will hear on November 10th goes the way the plaintiffs want, though, that coverage guarantee will disappear—and that is the side Mr Trump’s Department of Justice is taking in the case.

Mr Trump also wooed voters with a promise to “restore law and order” to cities that he portrayed in his inaugural address as crippled by “American carnage”. Crime in American cities was actually at a low ebb at the time. But after the tumult of a long summer of protests over racial injustice, some of them violent, they hardly seem safer. Preliminary estimates from the FBI suggest that 2020 will see a 15% increase in the murder rate nationwide. Mr Trump’s most notable legislative achievement in this area was signing the First Step Act, which seeks to reduce incarceration and reform prisons; it was a priority of his son-in-law, Jared Kushner.

And the swamp was not drained. Instead it spread to previously dry land as institutional watchdogs and ethical norms were swept away and new species moved into the murk. It was in these fetid waters that the administration pursued what Steve Bannon, a former senior counsellor to the president, called the “deconstruction of the administrative state”. A weakened and destabilised state apparatus, in which independent inspectors-general are removed or sidelined, the civil service is less independent and personal loyalty paramount is just the sort of government that Mr Trump wants.

How much of that which Mr Trump has done will outlast him should he lose office? The judges and the change in the tone of politics seem the strongest candidates. Beyond his slim legislative record much of what he has done has been accomplished through executive order and changes to regulation which could, in principle, be straightforwardly reversed.

On immigration, for example, the Muslim ban, family separation and the reduced refugee ceiling would be revoked at the very beginning of a Joe Biden administration. But the fact that things can be reversed does not mean that everything will be. It is hard to imagine the Democratic president completely unwinding the new asylum rules on the south-west border, which would undoubtedly invite a new surge of migrants. And there will be other scarring. Prospective immigrants may look elsewhere to study or start businesses even if the country seems welcoming again.

There would be a more thorough attempt to undo loosened environmental protections. But this could be complicated by Mr Trump’s judicial legacy—the courts he leaves behind will probably take a cagier attitude to constraints on business. And as with immigration, there will be scarring that is not easily reversed. People whose lungs were damaged by fine particles will not be cured spontaneously. According to calculations by the Rhodium Group, a research outfit, greenhouse gases equivalent to 1.8bn tonnes of carbon dioxide will be emitted over the coming 15 years solely because of Mr Trump’s deregulations.

When it comes to the body politic, the scars run deep. The bitterly divided country of the 2016 campaign is more bitterly divided than ever. Voters tell pollsters they see the stakes in this election as greater than those in any before (see chart 3). A remarkable 73% of Americans say Republicans and Democrats cannot agree on basic facts. There is a detectible rise in new strains of extreme partisanship. Data from the Voter Study Group, a research outfit, show one in five Americans saying that violence could be justified if the other party wins the impending election—a minority, but one that has increased markedly since 2017. Surveys by Lilliana Mason and Nathan Kalmoe, two political scientists, reveal disturbing levels of antipathy for fellow Americans: 60% of voters think members of the other party constitute a threat to America, more than 40% would call them evil, and 20% think they are animals (see chart 4).

This trend towards the hyper-partisan predated Mr Trump and went a long way towards explaining his election. He in turn has amplified it—both “a product and an accelerant of the partisan doom loop” in the words of Lee Drutman, a political scientist. In 2016 party affiliation had already come to dominate where Americans live, where they got their news and even whom they married. But to carry that tendency through to what would seem to be basic public-health measures—80% of Biden supporters say they have always worn masks in the previous week compared with just 43% of Trump supporters—took a gift for division unlike any before.

Mr Trump’s decision to rule as the leader of a faction, rather than the whole nation, has been supported by the Republican Party’s base and much of its elected elite. The unconvinced have mostly kept silent on the matter. This has allowed him to trample the norms of politics and good government in any number of ways, from a culpable lack of response to the devastation wrought on Puerto Rico by Hurricane Maria to describing protests against neo-Nazis in Charlottesville, Virginia, as having “very fine people on both sides” to seeing people tear-gassed to enable a photo opportunity. The most pertinent of these outrages at the moment are his attempts to delegitimise the election result. Almost 40% of Republican voters say they do not think the upcoming election will be fair; half of Democrats are worried that there will not be a peaceful transition if Mr Biden wins.

If Mr Trump were to keep his address on Pennsylvania Avenue, what then? There is no real programme for four more years of a Trump presidency. The Republican Party chose to eschew a party platform this year; in its place the campaign released a bombastic list of bullet-pointed aspirations such as “Drain the Globalist Swamp by Taking on International Organisations That Hurt American Citizens”. Without a majority in the House, Mr Trump would be able to pass little if any significant legislation. But the administrative and regulatory changes brought about in the past four years would be taken further, as would the erosion of standards in public life. And the divisions he both embodies and exacerbates would become yet more destructive.

News | Politics | US Election: Biden Courts Latino Voters as Tie-Breakers in Tight Florida Race


Jennifer Epstein

Joe Biden arrives to a drive-in campaign rally in Coconut Creek, Florida.

Joe Biden arrives to a drive-in campaign rally in Coconut Creek, Florida.

Photographer: Drew Angerer/Getty Images

Democratic presidential nominee Joe Biden on Thursday appealed to Hispanic voters in Florida, a closely divided battleground state where a win next week could be key to securing the presidency.

“The heart and soul of the country is at stake right here in Florida. It’s up to you. You hold the key. If Florida goes blue, it’s over,” the Democratic presidential nominee said in Coconut Creek in Broward County, which stretches south from Fort Lauderdale toward Miami and is a key source of Democratic votes in the state.

Although Biden has a 7.7 percentage-point lead nationally, according to the RealClearPolitics average of polls, he and President Donald Trump are essentially tied in Florida, which Trump won by just 1.2 points in 2016.

Biden pitched his remarks directly to the state’s Cuban- and Venezuelan-Americans, who Trump has sought to woo by casting the Democrat and his running mate, California Senator Kamala Harris, as socialists. But it’s Trump who “has embraced so many autocrats around the world,” Biden argued, and is “the worst possible standard bearer for democracy.”

With five days to go in the race, the Biden campaign is focused on turning out Black and Latino voters who, even with the growth in popularity of early voting this year, are still expected to vote in significant numbers on Election Day. The campaign has shown particular attention to trying to get out the Latino vote, which in Florida accounts for 17% of the electorate, as polling shows him doing slightly less well than the 66% Hillary Clinton scored nationally with Hispanics in 2016.

The campaign pointed out that Thursday was Latina Equal Pay Day, which highlights that Latinas make 54 cents to every dollar earned by the average White, non-Hispanic man. “Latinas know they deserve better – and that is why they are mobilizing, voting, and making sure their friends and family turn out at the polls,” Biden said in a statement. The campaign also planned an evening call to mark the day, hosted by Women for Biden.

Biden pledged that on his first day in office he would launch a task force to work to reunite more than 500 children with their parents, after being separated from them by the Trump administration in 2018. An ad attacking Trump’s policy and explaining the plan was to begin airing in Arizona, Florida, North Carolina, Pennsylvania and Nevada.

Biden urged his supporters to go to the polls for early voting through Sunday, to hand deliver their mail-in ballots or make a plan for Election Day, aware that high turnout in Broward could be the difference for him statewide. “You have a sacred duty, if I may say, and that’s to vote. It matters. Florida matters,” he said. “In these final days, stay empowered, stay optimistic, stay united. Make a plan and vote and help get out the vote.”

Biden’s second stop of the day, a drive-in rally in Tampa, was cut short after a torrential downpour began as he was speaking.

“I’m going to shorten this for you all,” Biden said, as he quickly wrapped up his stump speech and gingerly headed toward cover.

On Friday, Biden will have his busiest day on the campaign trail yet, heading to Wisconsin, Minnesota and Iowa for events.

— With assistance by Tyler Pager

News | Business | US Economy: U.S. Economy’s Path Less Certain After Record Quarterly Growth


By Reade Pickert

The U.S. economy’s record third-quarter surge has already given way to a more moderate pace of growth, with a fresh jump in coronavirus infections and an extended deadlock over further stimulus threatening to weigh on activity.

Economists mostly projected fourth-quarter growth at an annual pace slightly below 3% to about 6% following Thursday’s report, which showed gross domestic product jumped 33.1% in the July-September period. That figure largely reflected a rebound in economic activity after widespread lockdowns earlier this year.

U.S. GDP is recovering, but remains below pre-pandemic peak

Analysts are betting the economy will continue to grow, amid solid gains in consumer spending, strong housing demand and businesses restocking inventories. Risks are rising, though, that the pickup in Covid-19’s spread to record speed will hit businesses and jobs through renewed distancing and shutdowns, as it already has in Germany and France.

“There looks like there’s still a fair amount of momentum,” said Jay Bryson, chief economist at Wells Fargo & Co. “But there’s a lot of risk right now -- downside risk generally -- as it relates to the re-acceleration of Covid.”

Even with the outsize gain, GDP is 3.5% below its prior peak, compared to a 4% shortfall in 2009 during the depths of the last recession. The economy is forecast to stay smaller than its pre-crisis size for several quarters or longer, and sectors such as travel, restaurants and health care remain below typical levels.

Other reports Thursday highlighted improvement in a job market that’s still far from normal, and a possible leveling-off in the red-hot housing market.

What Bloomberg Economics Says...

“The pandemic will cap economic growth going forward, especially if case counts continue to accelerate into the winter months. The delay in the next round of fiscal support will exacerbate the slowdown.”

-- Yelena Shulyatyeva, Andrew Husby, and Eliza Winger, economists

For the full note, click here

Labor Department figures showed applications for U.S. state unemployment benefits fell more than forecast last week, another sign of gradual healing in the labor market.

A report from the National Association of Realtors showed U.S. pending home sales unexpectedly declined in September for the first time in five months. Elevated asking prices and lean supply may be tempering the boom in housing despite record-low interest rates.

More broadly, the nation’s economic rebound is continuing, though certain parts of the economy are recovering faster than others. Retail sales have already surpassed February levels and the manufacturing sector continues to strengthen amid renewed demand.

But the labor market has a much longer path to recovery. The unemployment rate, which was the lowest in decades before the virus, remains more than twice as high, with nearly 11 million fewer Americans on payrolls than there were in February. October’s numbers are due next Friday.

Read more:

In addition, permanent job losses and the number of long-term unemployed are on the rise, underscoring the scarring effects that may result from the pandemic-driven downturn. Colder weather may also curtail the outdoor dining that kept many restaurants afloat during the warmer months.

“To the extent that reopening drove the strength in Q3, not only have we already reopened but we may partially close a few things,” said Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. “That’s really the elephant in the room when it comes to thinking about Q4.”

The GDP report was followed later Thursday morning by Exxon Mobil Corp.’s announcement that it will slash its global workforce by 15% by the end of 2022 -- including 1,900 U.S. jobs -- an unprecedented culling by North America’s biggest oil explorer.

With just five days until Election Day, President Donald Trump is counting on the GDP figures to give him a boost. It might be too late for the figures to have much impact, though, especially given more than 79 million Americans have already cast their vote.

Trump cited the latest report as evidence of his ability to guide the world’s largest economy out of the pandemic. He tweeted Thursday that GDP was the “Biggest and Best” in U.S. history and adding that Democratic challenger Joe Biden would raise taxes and “kill it all.”

Biden issued a statement saying “the recovery is slowing if not stalling,” as well as “helping those at the top, but leaving tens of millions of working families and small businesses behind.”

— With assistance by Chris Middleton, Sophie Caronello, Josh Wingrove, Jennifer Epstein, Olivia Rockeman, Henry Ren, and Vince Golle

News | Business | Franchise Companies: McDonald’s Now Faces Bias Suit by Current Black Franchisees


Jeff Green and Peter Blumberg

A McDonald's Corp. Location Ahead Of Earnings Figures

Photographer: Christopher Dilts/Bloomberg

McDonald’s Corp. was accused of discrimination by the Black franchise operators of four its restaurants in Tennessee, escalating a legal fight after a group of Black former franchisees claimed in a lawsuit that the company set them up to fail in crime-ridden areas.

The complaint was filed Thursday in Chicago federal court as a class action by the same law firm that brought the previous case two months ago. It follows other cases alleging that the fast-food chain gives preferential treatment to Whites among the ranks of its executives and workers.

McDonald’s didn’t immediately respond to a request for comment. The company has denied the allegations in the earlier suit that the franchisees were unable to succeed and is asking a judge to dismiss it.

One thrust of the complaints is that Black owners are steered toward owning restaurants in Black neighborhoods, which brings higher overhead costs for security, insurance and employee turnover. James Ferraro, a lawyer for the franchisees, said McDonald’s is trying to improve its image with owners and has offered rent reductions and other perks to current Black owners since the Sept. 1 lawsuit filed by 52 former franchisees.

Like the plaintiffs in that case, the two brothers spearheading the new suit -- James Byrd and Darrell Byrd -- are seeking as much as $5 million per store they operate to compensate for their losses. Ferraro said there are currently 186 Black franchisees across the U.S. and that they will be able to join the case or opt out of it according to ground rules set by the court.

McDonald’s said in July that it would step up efforts to fight systemic racism by addressing any hiring biases, increasing the diversity of its leadership and doing more to attract diverse franchisees.

In response to the Sept. 1 suit, McDonald’s said that Black franchisees operate restaurants in all types of communities. It said that “while McDonald’s may recommend locations, franchisees ultimately select the locations they wish to purchase.”

The case is Byrd v. McDonald’s USA LLC, 20-06447, U.S. District Court, Northern District of Illinois (Chicago).

(Updates with lawyer for franchisees in fourth paragraph,)

Wall Street Closing Report: Stocks rebound from massive sell-off, S&P 500 closes more than 1% higher as tech gains


Fred Imbert, Jesse Pound, Yun Li

Stocks rose on Thursday as shares of major tech companies advanced ahead of their quarterly earnings reports. Sentiment also got a lift from better-than-expected economic data.

The Dow Jones Industrial Average traded 255 points higher, or 1%. The S&P 500 climbed 1.7% and the Nasdaq Composite advanced 2.2%.

Shares of Amazon and Apple were up by 2.2% and 4.7%, respectively. Alphabet traded 4.1% higher and Facebook popped 5%. All four companies are slated to report earnings after the bell Thursday. Four of the 11 S&P 500 sectors traded more than 2% higher, including tech and communication services. Netflix, meanwhile, surged more than 5% after the company announced it will raise prices for U.S. subscribers.

Earnings expectations for Big Tech companies are high given their high valuations relative to the broader market.

“Expectations are always going to be high when your share price is near the 52-week high, but these are quality companies,” said Nate Fischer, chief investment strategist at Strategic Wealth Partners. “People always talk about staple stocks, well these are internet staples ... So it’s hard to turn your eye away from them.”

More than 260 S&P 500 companies have reported calendar third-quarter earnings thus far. Of those companies, 85% have reported better-than-expected earnings, according to Refinitiv. Despite the high beat rate, several companies have seen their stocks fall after releasing their quarterly results.

Better-than-expected GDP, jobless claims data

U.S. gross domestic product for the third quarter expanded at a 33.1% annualized pace, its fastest growth ever. The reading came after a 31.4% plunge in the second quarter and was better than the 32% estimate from economists surveyed by Dow Jones.

“Overall, the initial recovery in GDP after the first wave of lockdowns were lifted was stronger than we originally anticipated,” said Paul Ashworth, chief U.S. economist at Capital Economics. “But, with coronavirus infections hitting a record high in recent days and any additional fiscal stimulus unlikely to arrive until, at the earliest, the start of next year, further progress will be much slower.”

Meanwhile, the number of first-time unemployment-benefits filers declined for a second straight week and hit its lowest level since March. Initial weekly U.S. jobless claims came in at 751,000 for the week ending Oct. 24, better than a Dow Jones estimate of 778,000.

Thursday’s moves came a day after the market’s biggest sell-off in months. Both the Dow and S&P 500 had their worst day on Wednesday since June. The Nasdaq had its biggest one-day drop since Sept. 8.

The sell-off mirrored a rough day for European markets, as rising Covid cases on that continent spurred leaders of Germany and France to announce new lockdown restrictions for the next month. Average daily Covid-19 cases in the U.S. set another all-time high on Wednesday, marking the fourth consecutive day the nation topped its prior daily record.

Click here to read the latest news heading into the U.S. election.

Currencies | The Dollar: Dollar holds ground as rising Covid-19 cases boost safe-haven demand


2-3 minutes - Source: CNBC

A £10 note is seen alongside euro notes and US dollar bills.

A £10 note is seen alongside euro notes and US dollar bills.

Matt Cardy | Getty Images

The dollar held gains against a basket of major currencies on Thursday as escalating coronavirus cases in Europe stoked investor fears that fresh lockdowns would further hit the already fragile economic recovery.

The safe-haven greenback steadied against a basket of six currencies at 94.05, up 0.7% on the day.

Concerns of further damage to the economy grew as France and Germany went back into lockdown on Wednesday, as a massive second wave of coronavirus cases threatened to overwhelm Europe.

“The vibe is similar to what it was like in late February to early March,” said Rikiya Takebe, senior strategist at Okasan Online Securities, referring to the time when the coronavirus started to spread in the U.S. and Europe.

“Back then, there was a shift to dollar-buying to prevent risks in case of emergency, leading to a higher dollar. I think the current move on the market is somewhat the same,” he said.

The euro changed hands at $1.1657 per dollar. It dropped against the Japanese yen, last fetching 122 yen.

Traders also braced for volatility with the U.S. election less than a week away, while the country, like Europe, also faces an increase in coronavirus infections.

With former Vice President Joe Biden consistently leading in the polls over President Donald Trump, traders are cautiously betting on his victory and a possible “blue wave” outcome, where Democrats control both chambers of Congress.

“While Biden is taking the lead, Trump has been catching up in some parts of swing states,” said Shinichiro Kadota, senior strategist at Barclays.

“There is certainly a possibility of a higher volatility in the market if it becomes a closer battle, involving risks such as full results not being released (on the election day),” he said.

Commodities | Gold Price Report: Gold slips to 1-month low as dollar gains upper hand


2-3 minutes - Source: CNBC

A gold bar is wrapped in a financial newspaper.

A gold bar is wrapped in a financial newspaper.

GSO Images | Getty Images

Gold prices fell to a one-month low on Thursday, extending the previous session’s sharp slide as the dollar remained the preferred refuge from risks due to mounting COVID-19 cases ahead of the U.S. Presidential election.

Spot gold was 0.4% lower at $1,868.81 per ounce, having fallen 2% on Wednesday. U.S. gold futures slipped 0.5% to $1,869.40.

“You currently see a move out of the risky assets into safe havens, but the safe haven has been the U.S. dollar,” said Quantitative Commodity Research analyst Peter Fertig.

The dollar index rose to more than a one-week peak, benefiting from safe-haven inflows as Germany and France imposed fresh lockdowns to stem a second coronavirus wave.

Ahead of the Nov. 3 election, Democratic challenger Joe Biden leads U.S. President Donald Trump nationally, but the competition is tighter in swing states.

“The precious metals have not seen much safe-haven demand amid a U.S. stock market that has become wobbly this week,” Kitco Metals senior analyst Jim Wyckoff said in a note.

Gold pared losses slightly after the release of U.S. GDP and jobless claims data. Jobless claims fell to 751,000 in the Oct. 24 week versus a 775,000 consensus forecast and compared with 791,000 in the prior week.

But gold, considered an inflation-hedge, was still up 22% this year, helped by near-zero interest rates globally and unprecedented stimulus measures.

Meanwhile, the European Central Bank left policy unchanged, resisting pressure to unveil more stimulus amid a new wave of the pandemic, but provided the clearest hint yet of fresh easing at its next meeting in December.

On the physical front, the World Gold Council expected gold demand to improve into year-end in top buyers China and India.

Silver dipped 0.6% to $23.24 per ounce after earlier slipping to a near one-month low, platinum fell 2.7% to 8.$844.02 and palladium was down 1.8% at $2,193.1

Analysis | The Daily 202: Despite GDP growth, polls suggest Trump’s advantage on economic stewardship is narrowing

James Hohmann

42-54 minutes - Source: The Washington Post

The U.S. economy grew at 7.4 percent between July and September, recovering about two-thirds of its losses during the first half of the year. This is a number Trump will ballyhoo for the five days remaining until the election, but the gross domestic product is now about the size it was in the first quarter of 2018. Growing hospitalizations and deaths from the virus, combined with uncertainty about when another stimulus bill might pass, put dark storm clouds above the economy.

For the economy to recover all that was lost in the previous quarter, third-quarter GDP would have had to surge and hit 10 percent, and even more to make up for smaller first-quarter losses,” Rachel Siegel and Andrew Van Dam report. “Officials such as Federal Reserve Chair Jerome H. Powell have long said that a robust and stable recovery depends on controlling the pandemic. … Economists put the risk of a double-dip recession later this year or early next year at 30 to 35 percent, depending on the course of the virus, the prospects of another stimulus package and any trade tensions with China.”

Another 751,000 people applied for jobless claims last week, down about 40,000 from the week before, in the final unemployment report before the election. “Claims for Pandemic Unemployment Assistance, for gig and self-employed workers, went up slightly, to 359,000,” Eli Rosenberg reports. “All told, there were about 22.6 million people claiming some form of unemployment insurance … The economy has begun to flash more warning signs in recent weeks. Companies announcing layoffs in recent weeks include aerospace giant Raytheon, financial services company Charles Schwab, and Disney World. … An increasingly large group of people are transitioning off regular state unemployment insurance to a temporary federal program for people whose state benefits have expired — a sign of the growing duration of joblessness for many.”

Speaker Nancy Pelosi (D-Calif.) revealed Thursday that she and Treasury Secretary Steven Mnuchin have remained farther apart on key issues in their negotiations for a stimulus package than many believed. A letter to Mnuchin, released to the media, casts doubt on whether a deal can get done at all during the lame-duck session. “Pelosi listed a litany of outstanding issues including state and local aid, school funding, child care money, tax credits for working families, unemployment insurance aid, and liability protections for businesses sought by the administration but opposed by Democrats,” Erica Werner reports. “She also said that she was still awaiting a final answer from the administration on agreeing to the Democrats’ language on a national coronavirus testing strategy – something Mnuchin had said on Oct. 15 that he was prepared to accept subject to minor edits.”

Trump is trying to make this election more about jump-starting the economy than controlling the pandemic, which White House Chief of Staff Mark Meadows said over the weekend that they are not going to be able to do. “This election is a choice between a Trump boom and a Biden lockdown,” Trump said on Wednesday in Arizona.

Joe Biden countered that America must get control of the contagion in order to revitalize the economy. The Democratic nominee has emphasized the uneven nature of what he calls a K-shaped recovery. The rich are bouncing back strong while the suffering of the poor only gets worse. 

“Even if I win, it’s going to take a lot of hard work to end this pandemic,” Biden said in Wilmington, Del. “I’m not running on the false promise of being able to end this pandemic by flipping a switch. … We will deal honestly with the American people, and we’ll never, ever, ever quit. That’s how we’ll shut down this virus so we can get back to our lives a lot more quickly than the pace we’re going now.”

A decline in the stock market has been one of several “October surprises” in this election. The Dow Jones industrial average fell 943 points Wednesday, closing about 9 percent lower than at the start of last month. The selloff has been driven by the rising number of new infections and the growing recognition that a gridlocked Washington will not deliver coronavirus relief anytime soon. The markets opened flat on Thursday after the GDP and jobs numbers were released because they were in line with expectations.

A Washington Post-ABC News poll released Wednesday showed Trump’s advantage on the economy receding in a vital swing state. In Wisconsin, 47 percent approve of how the president is handling the economy and 50 percent disapprove. Last month, the same poll had Trump’s economic rating net positive by seven points. “Since September, the president has also lost his narrow five-point edge over Biden on who is better able to handle the economy, with 52 percent of Wisconsin voters now saying they trust Biden more on this issue, while 44 percent say they trust Trump more,” Scott Clement, Dan Balz and Emily Guskin report. “In Michigan, Trump’s economic approval is in positive territory, 52 percent to 44 percent, which contributes to his narrower deficit in the state.”

The Post-ABC polling showed Biden leading 57 percent to 40 percent among likely voters in Wisconsin and 51 percent to 44 percent in Michigan. When it comes to handling the pandemic, Biden is trusted more than Trump by double digits in both states.

The Post’s poll of Wisconsin is an outlier. A Marquette Law School poll released later in the day showed Biden leading Trump 48 percent to 43 percent among likely voters in the Badger State. Disapproval of Trump’s handling of the economy has risen from 45 percent to 48 percent since the start of the month in that survey.

A CNN poll released Wednesday showed Biden leading Trump nationally by 12 points, 54 percent to 42 percent, with only 39 percent of Americans saying that things are going well in the country right now. “That figure has only dipped lower twice in reelection years since 1980: In 1992 (35% going well) and in 1980 (32% going well),” CNN notes. That said, Trump still led Biden on who is best to handle the economy by five points, 51 percent to 46 percent.

Ultimately, the pandemic seems to be a higher priority in the minds of voters than the economy right now. A Monmouth University poll of Georgia on Wednesday showed Biden ahead 50 percent to 45 percent. Asked who they trust more to create jobs, Trump lead Biden by 10 points (49 percent to 39 percent.) Asked who they trust more to handle the pandemic, Biden led by 12 points: 49 percent to 37 percent.

Here are three smart takes on the latest batch of polling numbers:

Trump in recent days has touted the stock market as central to his 2020 reelection bid, frequently pointing to Americans’ 401(k) accounts. … The stock market’s sharp decline clouds this characterization,” Jeff Stein reports. “Even some of the president’s allies acknowledge the challenge posed by the market decline, arguing that Trump must continue to blame Pelosi for the absence of a stimulus agreement. ‘It’s a big, big decline. … It’s very ugly,’ said Stephen Moore, an outside economic adviser to the White House. ‘Trump has to keep saying ‘Pelosi blocked the plan because she wanted the blue state bailout.’’ … [But] Trump kept trying to cancel and then un-cancel the negotiations, sometimes multiple times in a week. … 

Wall Street has had mixed assessments of which presidential candidate would be best for growth. Analysts at JPMorgan Chase said in a report Monday that an ‘orderly’ Trump victory represents ‘the most favorable outcome’ for the market. … Moody’s Analytics estimated stronger GDP growth under Biden’s economic plans than under Trump’s. Other financial analysts have pointed out that Trump’s term in office has been punctuated by erratic swings in the market: It dropped dramatically during the 2018 government showdown and again when trade tensions flared in the summer of 2019.”

By another metric, Wall Street clearly prefers Biden. CNBC reports that people who work in the securities and investment industry have contributed over $74 million to back Biden’s candidacy, compared to $18 million for Trump. That is less than the $20 million Trump received from the finance industry in 2016.

Endorsing Biden this morning, The Economist magazine sought to reassure investors who might be jittery: “Much of what the left wing of the Democratic Party disliked about him in the primaries—that he is a centrist, an institutionalist, a consensus-builder—makes him an anti-Trump well-suited to repair some of the damage of the past four years. … Although his policies are to the left of previous administrations’, he is no revolutionary. His pledge to ‘build back better’ would be worth $2trn-3trn, part of a boost to annual spending of about 3% of GDP. His tax rises on firms and the wealthy would be significant, but not punitive. He would seek to rebuild America’s decrepit infrastructure, give more to health and education and allow more immigration. His climate-change policy would invest in research and job-boosting technology. He is a competent administrator and a believer in process.”

Trump won the presidency on a pledge to engineer an economic turnaround in the Rust Belt. He hasn’t delivered,” Tory Newmyer writes in today’s Finance 202. “The forces weighing on the region predate Trump, but the president’s trade wars have also exacerbated pain for the farmers and manufacturers that make up key engines of the local economies. … Twenty-three of [Wisconsin’s] 72 counties flipped from supporting Obama in 2012 to Trump in 2016. They have not fared well, even before the pandemic struck: Just over a third experienced job growth from the first quarter of 2018 to that same period this year, according to data from the Economic Innovation Group. … Compared to similar voters in five other swing states, consumer confidence among those in Michigan ‘saw the largest drop from the beginning of the year to Oct. 15 at a 36.4-point decline,’ a Morning Consult analysis finds.”

Across the industrial belt from Wisconsin to Pennsylvania, private job growth from the first three months of 2017 through the first three months of 2020 lagged the rest of the country — with employment in Michigan, Wisconsin and Ohio growing 2% or less over that time compared to a 4.5% national average,” according to Reuters.

Trump’s 25 percent tariffs on foreign-made steel did not fuel the revival for American steel that the president promised, the Wall Street Journal reports. “Initial job growth withers as demand and prices sink; older mills face a dim future.” 

It will get worse before it gets better: States now face their biggest cash crisis since the Great Depression. “Nationwide, the U.S. state budget shortfall from 2020 through 2022 could amount to about $434 billion,” the WSJ reports. “The estimates [from Moody’s Analytics] assume no additional fiscal stimulus from Washington, further coronavirus-fueled restrictions on business and travel, and extra costs for Medicaid amid high unemployment. That’s greater than the 2019 K-12 education budget for every state combined, or more than twice the amount spent that year on state roads and other transportation infrastructure … Even after rainy day funds are used, Moody’s Analytics projects 46 states coming up short, with Nevada, Louisiana and Florida having the greatest gaps as a percentage of their 2019 budgets. … Hawaii, for example, is expecting fewer than half the visitors it took in last year in 2020, and state officials forecast its general fund revenues won’t recover to pre-pandemic levels until its 2025 fiscal year.”

The state of Michigan’s budget director, Chris Kolb, calculated that even if he eliminated 12 state departments—including education, environment and treasury—and used up every penny in state reserves, Michigan would still be short $1 billion needed to balance his budget. “We really have uncharted waters in front of us,” Kolb told the Journal. “The waves appear to be getting more choppy.”

Zeta is roaring inland after slamming into New Orleans. 

“The powerful Category 2 hurricane, which struck near Cocodrie, La., intensified right up until landfall, defying earlier forecasts for a substantially weaker storm,” Andrew Freedman, Matthew Cappucci, Paulina Villegas and Jason Samenow report. “Shortly after crossing the coast, Zeta slammed into New Orleans, its eye moving directly over the city, cutting power to more than 80 percent of its residents. … The storm unleashed wind gusts over 100 mph in both coastal Louisiana and Mississippi, and the high winds cut power to over 800,000 customers in Louisiana, Mississippi and Alabama. Coastal Mississippi was also subject to a storm surge that raised water levels nine feet above normally dry land at the coast, resulting in severe inundation. Zeta is now poised to race through central Alabama, northern Georgia and the Mid-Atlantic, covering 1,250 miles through Thursday evening. Damaging winds could stretch into interior parts of Georgia, where gusts to 50 mph are forecast in Atlanta.”

The coronavirus

America's hospitals are under attack.

“Russian-speaking cybercriminals in recent days have launched a coordinated attack targeting U.S. hospitals already stressed by the coronavirus pandemic with ransomware that analysts worry could lead to fatalities. In the space of 24 hours beginning Monday, six hospitals from California to New York have been hit by the Ryuk ransomware, which encrypts data on computer systems, forcing the hospitals in some cases to disrupt patient care and cancel noncritical surgeries,” Ellen Nakashima and Jay Greene report. “The criminals have demanded a ransom ranging upward of $1 million to unlock the system, and some hospitals have paid … On Tuesday, the FBI, the Department of Homeland Security and the Department of Health and Human Services issued a joint advisory alerting health-care providers to the threat. …

“A woman in Germany died last month when the hospital she went to for emergency care turned her away because it had suffered a ransomware attack. She died en route to another facility. … The attacks have shut down some procedures at Sky Lakes Medical Center in Klamath Falls, Ore. … The hospital is unable to offer cancer treatments that are computer-controlled, and the attack has curbed some diagnostic imaging as well. Doctors and nurses have turned to paper for patient records with the electronic system offline … Sonoma Valley Hospital in Sonoma, Calif., was also infected … Likewise, St. Lawrence Health System in Potsdam, N.Y., was hit Monday … The hospital disconnected its computer systems to prevent the malware from spreading.”

The New York Times reports these are "the same Russian hackers who American officials and researchers fear could sow mayhem around next week’s election": "‘We expect panic,’ one hacker involved in the attacks said in Russian during a private exchange on Monday that was captured by Hold Security, a security company that tracks online criminals. … The Russian hackers, believed to be based in Moscow and St. Petersburg, have been trading a list of more than 400 hospitals they plan to target, according to Alex Holden, the founder of Hold Security, who shared the information with the F.B.I.”

  • A hacker released election data from Georgia’s Hall County after a ransom they demanded from officials was not paid. (WSJ)
  • Trump loyalist John Ratcliffe, the director of national intelligence, went off script when he alleged last week Iran was trying to “damage Trump.” Two senior administration officials told Politico that the reference to Trump was not in Ratcliffe’s prepared remarks about foreign election interference, as shown to and signed off by FBI Director Chris Wray and Chris Krebs, the director of DHS's Cybersecurity and Infrastructure Agency.
  • The FBI Agents Association called on Trump and Biden to retain Wray as director, throwing its muscle behind their leader amid reports Trump has discussed firing him immediately after the election. (Matt Zapotosky)
  • Officials are stressing the security of election systems to reassure voters, following revelations of foreign meddling. (Amy Gardner, Isaac Stanley-Becker and Elise Viebeck)
  • Election disinformation is arriving via text. Voters in swing states are receiving messages either discouraging them from voting or sharing false information about Biden. (Stanley-Becker and Tony Romm)
  • Florida Gov. Ron DeSantis (R) was briefly unable to vote this week because a 20-year-old man in Naples allegedly altered his voter registration. Authorities arrested Anthony Steven Guevara and charged him with felony voter fraud. (Politico)

Record numbers of covid-19 cases are leading to new state and local restrictions. 

“Officials in Colorado, Idaho, Massachusetts and Texas are imposing new restrictions on schools, businesses and social gatherings,” Joel Achenbach and Karin Brulliard report. “Although this has been a highly politicized pandemic, some of the new restrictions are arising with no regard for local political inclinations: Liberal-leaning El Paso is under a nightly curfew, while conservative-leaning Coeur d’Alene, Idaho, on Tuesday passed a mask mandate. In Massachusetts, a spike in cases prompted Boston Public Schools to suspend in-person learning last week … One forecast published Wednesday, by modelers at Children’s Hospital of Philadelphia, warned that the virus is spreading at exponential rates across at least half of the states and that only Hawaii will not see a rise in hospitalizations during the next four weeks. … 

“A federal government briefing document circulated to top officials and obtained by The Post rates the 3,141 counties in the country by levels of ‘concern’ and suggests it would be theoretically possible to travel from the Canada border all the way to northern Mississippi without exiting a ‘sustained hotspot’ county. Another forecast, updated Oct. 22 by the University of Washington’s Institute for Health Metrics and Evaluation, projected that by Nov. 11, the country would once again surpass 1,000 deaths a day from covid-19 … That same projection said the country would exceed 2,000 daily deaths Dec. 28. Those numbers are slightly less grim than the models projected in September, but they still envision close to 400,000 cumulative deaths from the virus by Feb. 1."

  • A Long Island wedding and birthday party infected 56 with the coronavirus. (Katie Shepherd)
  • The D.C. region hit an 11-week high in new infections. The rolling seven-day average of new infections across D.C., Virginia and Maryland stands at 1,949 cases, the most since Aug. 9. (Dana Hedgpeth, Laura Vozzella, Lola Fadulu and Rebecca Tan)
  • Tony Fauci, the government's top infectious-disease expert, said for the first time the federal government should “maybe” consider instituting a national mask mandate. (Antonia Farzan and Rick Noack)
  • “I think we’re entering the most difficult phase of the pandemic right now,” Trump's former FDA commissioner Scott Gottlieb said on CNBC.
  • Indiana’s RV capital faces its worst coronavirus outbreak alone. Health officials in communities like Elkhart County — where Trump is popular — feel they are being left to struggle with surging case counts and the worrisome price of an uncontrolled outbreak. (Todd Frankel)

A Maryland family battled covid-19 at the same time as Trump. It devastated them.

Trump climbed the steps of a White House balcony when he left the hospital after three days, saluted nobody in particular, took off his mask and urged Americans not to fear the disease. Thirty miles away, Carlton Coates Jr. sat in an Annapolis funeral home, staring at the casket that contained the body of his older sister, Michael Miller reports. “Carol Coates had battled covid-19 at the same time as the president. But instead of a suite at Walter Reed, the 46-year-old Black teacher self-isolated in the basement of her family’s home. And instead of the experimental cocktail of antibodies that Trump was given, she received get-well cards from her fifth-grade students. Carol had taught nine miles from the White House. But her illness unfolded in what seemed like a different universe than the one the president described. … ‘Don’t let it take over your lives,’ Trump said during his triumphal homecoming video. Yet for many people of color in the United States, the coronavirus has already taken the life of someone they loved. …

"It would take even more from Carlton Coates. His phone buzzed during his sister’s funeral, but the 43-year-old truck driver ignored it. It was only when he returned home and saw people gathered in the driveway that he knew something else had gone wrong. As they stepped out of the car, his fiancee pulled him aside. ‘I hate to tell you this,’ she said, ‘but your mom passed away.’ … 

“It’s not clear how the coronavirus crept into the pretty house with blue shutters in Anne Arundel County. But when it did, it was little surprise that both mother and daughter got sick. … ‘As the saying goes, ‘When White folks catch a cold, Black folks catch pneumonia,’’ said the Rev. Stephen Tillett, [the pastor] at Asbury Broadneck United Methodist Church [where Carlton’s mother, Dale, was a member]. … Dale was one of two Black receptionists at a predominantly White retirement home called Sunrise Senior Living in Annapolis. … Dale kept working despite her worries over falling ill."

White House officials called off a CDC effort to trace and contain its outbreak. 

“Officials say the White House called off early efforts to get to the bottom of the outbreak [after the Sept. 26 superspreader event in the Rose Garden], including sequencing the genomes of virus samples from infected individuals,”  Desmond Butler, Tom Hamburger, Lena Sun and Sarah Kaplan report. "This genetic analysis could have revealed shared mutations that linked cases in Washington and other affected communities. Had the administration done such an investigation, it would know whether infections among aides to Vice President Pence that were reported this past weekend bore the same genetic signature as earlier cases at the White House. That could indicate whether the virus was circulating among administration officials for weeks or had slipped through infection-control measures a second time.”

White House spokesman Brian Morgenstern claimed it is “unknowable” how the president became infected. “Of course it’s knowable,” countered Tom Frieden, who directed the CDC under President Barack Obama … “It’s only unknowable if you don’t want to know.” The White House also does not appear to have traced contacts or taken other basic public health precautions with the Gold Star families who visited on Sept. 27. Most attendees did not wear masks or maintain social distance as they talked with the president.

Documents obtained by congressional investigators show HHS Assistant Secretary for Public Affairs Michael Caputo sought to use a taxpayer-funded campaign to boost the president personally. “During a September meeting, for instance, he proposed that one of the themes be ‘Helping the President will Help the Country,’ according to one document they obtained from a contractor,” Yasmeen Abutaleb reports. “The documents show that Trump political appointees and the contractors they hired also vetted celebrities for the public health campaign based on whether they had ever criticized the president, or supported [Obama], gay rights or same-sex marriage. Of at least 274 celebrities under consideration, only 10 appear to have been approved, according to a document the lawmakers obtained. Among those who did not make the cut were actress Jennifer Lopez, because she had criticized the president’s immigration policies at her Super Bowl performance … None of the celebrity PSAs went live, and the campaign is under review at HHS.” Caputo has taken a leave of absence.

  • Jared Kushner bragged in April that Trump was taking the country “back from the doctors.” The president's son-in-law and senior adviser boasted, in a recorded interview with Bob Woodward, that Trump had cut out the scientists. (CNN)
  • A retired Maryland correctional officer arrested after trying to vote without a mask sued the Harford County Board of Elections and the sheriff’s office, saying his rights were violated. He’s seeking a temporary restraining order prohibiting the election board from requiring voters to wear masks. (Ovetta Wiggins and Erin Cox)
  • Principals are critical of the D.C. school system’s plan to reopen elementary schools, which involves reassigning staff in non-teaching positions, including behavioral technicians, to monitoring jobs watching children while teachers focus on small groups during video class. (Perry Stein)

Major League Baseball is investigating Justin Turner. 

“By returning to the field in the aftermath of the clinching win Tuesday — after leaving in the eighth inning following the news of a positive test and being placed under isolation, per MLB’s protocols — Turner and the members of the Dodgers who backed him thrust baseball directly into the larger societal divide over how to deal with a virus that has killed more than 226,000 Americans.” Dave Sheinin and Jesse Dougherty report. “On Wednesday afternoon, MLB said it was investigating the matter with the players’ union ‘within the parameters of their joint 2020 operations manual.’" The league said in a statement: "When MLB Security raised the matter of being on the field with Turner, he emphatically refused to comply."

  • The Big Ten, which joined college football on the field last weekend, joined it off the field yesterday in the burgeoning category of scheduling derailments. Wisconsin canceled its Saturday game against Nebraska because it reached a troubling number of positive tests – six players and six coaches. (Chuck Culpepper)
  • The Houston Texans closed their facilities after a player tested positive. (Mark Maske)
  • The Boston Marathon is postponing its 2021 race to at least autumn. The marathon is traditionally held on the third Monday in April. (Des Bieler)

Gloom settles over Europe as days darken and the virus surges. 

“The clocks were dialed back an hour across Europe this week, and the long nights come early. The hospitals are filling up as the cafes are shutting down. Governments are threatening to cancel Christmas gatherings,” William Booth, Chico Harlan, Loveday Morris and Michael Birnbaum report. “As new coronavirus infections surge again in Europe, breaking daily records, the mood is growing dark on the continent — and it’s not even November. … Germany and France on Wednesday joined those announcing shutdowns to try to get the virus under control. The new measures are less restrictive than in the spring, and yet they are facing more pushback. People are no longer so willing to bunker down in their little apartments, stepping out in the evenings to applaud courageous nurses. Nobody is singing arias from their balconies anymore. 

"Europeans remain scared of covid-19, but they are just as scared about jobs. They’re fried — and growing angry and belligerent, too. … Anti-riot squads in Italy this week fired tear gas to disperse violent crowds in Milan, who were protesting new lockdown measures. In Turin, demonstrators hurled gasoline bombs at police. In Germany, the streets swelled with protesters from the hospitality industry, while Chancellor Angela Merkel met with regional leaders to debate the partial lockdown, in which restaurants are closed but schools are staying open.” (A man shouting “Allahu akbar” killed three in a knife attack this morning at a church in Nice, France. President Emmanuel Macron is heading to the scene.)

One of the world’s largest lockdowns wound down yesterday in Australia. Melbourne allowed roughly 5 million people to leave their home anytime they want after more than three months. “The rollback came after the city reported zero new coronavirus cases on Monday and Tuesday, a dramatic drop from the hundreds logged each day during the outbreak’s peak in late July and early August,” Farzan and Miriam Berger report. "While the 111-day lockdown helped stop the spread of the virus, it has also taken a devastating toll on the local economy and mental health of residents." Meanwhile, Taiwan on Thursday celebrated its 200th day with no locally transmitted coronavirus infections, a milestone no other nation has reached.

The Trump agenda

Trump formalizes one of the most sweeping public lands rollbacks in U.S. history.

“Trump will open up more than half of Alaska’s Tongass National Forest to logging and other forms of development, according to a notice posted Wednesday, stripping protections that had safeguarded one of the world’s largest intact temperate rainforests for nearly two decades,” Juliet Eilperin reports. “As of Thursday, it will be legal for logging companies to build roads and cut and remove timber throughout more than 9.3 million acres of forest — featuring old-growth stands of red and yellow cedar, Sitka spruce and Western hemlock. … For years, federal and academic scientists have identified Tongass as an ecological oasis that serves as a massive carbon sink while providing key habitat for wild Pacific salmon and trout, Sitka black-tailed deer and myriad other species. It boasts the highest density of brown bears in North America, and its trees — some of which are between 300 and 1,000 years old — absorb at least 8 percent of all the carbon stored in the entire Lower 48′s forests combined. 

"‘While tropical rainforests are the lungs of the planet, the Tongass is the lungs of North America,’ Dominick DellaSala, chief scientist with the Earth Island Institute’s Wild Heritage project, said in an interview. ‘It’s America’s last climate sanctuary.’ While Trump has repeatedly touted his commitment to planting trees through the One Trillion Tree initiative, invoking it as recently as last week, his administration has sought to expand logging in Alaska and in the Pacific Northwest throughout his presidency. Federal judges have blocked several of these plans as illegal: Last week, the administration abandoned its appeal of a ruling that struck down a 1.8 million-acre timber sale on the Tongass’s Prince of Wales Island.”

Sen. Dan Sullivan (R-Alaska), who is locked in an unexpectedly tight reelection race, lobbied the president personally to exempt the state from the roadless rule on the grounds that it could help the economy in Alaska’s southeast. But, but, but: "Logging in Alaska costs U.S. taxpayers millions each year, because of a long-standing federal mandate that companies profit from any timber sale. This means the Forest Service often covers harvesters’ costs, including road building. … After Taxpayers for Common Sense commented during the federal environmental review that it would be more economically efficient to hold timber sales in parts of the forest that already have roads, the Forest Service acknowledged that that was true. … Ninety-six percent of the comments during the U.S. Forest Service’s environmental review opposed lifting the existing safeguards, while 1 percent supported it. … All five Alaska Native tribal nations withdrew as cooperating agencies in the process two weeks ago … ‘We refuse to allow legitimacy upon a process that has disregarded our input at every turn,’ the tribal leaders wrote.”

A Turkish bank case showed Erdogan’s influence over Trump.

“Geoffrey S. Berman was outraged. The top federal prosecutor in Manhattan, Mr. Berman had traveled to Washington in June 2019 to discuss a particularly delicate case with Attorney General William P. Barr and some of his top aides: a criminal investigation into Halkbank, a state-owned Turkish bank suspected of violating U.S. sanctions law by funneling billions of dollars of gold and cash to Iran,” the New York Times reports. “For months, President Recep Tayyip Erdogan of Turkey had been pressing President Trump to quash the investigation, which threatened not only the bank but potentially members of Mr. Erdogan’s family and political party. 

“When Mr. Berman sat down with Mr. Barr, he was stunned to be presented with a settlement proposal that would give Mr. Erdogan a key concession. Mr. Barr pressed Mr. Berman to allow the bank to avoid an indictment by paying a fine … In addition, the Justice Department would agree to end investigations and criminal cases involving Turkish and bank officials who were allied with Mr. Erdogan … ‘This is completely wrong,’ Mr. Berman later told lawyers in the Justice Department … ‘You don’t grant immunity to individuals unless you are getting something from them — and we wouldn’t be here.’ …

“Six months earlier, Matthew G. Whitaker, the acting attorney general who ran the department from November 2018 until Mr. Barr arrived in February 2019, rejected a request from Mr. Berman for permission to file criminal charges against the bank, two lawyers involved in the investigation said. Mr. Whitaker blocked the move shortly after Mr. Erdogan repeatedly pressed Mr. Trump in a series of conversations in November and December 2018 to resolve the Halkbank matter. … 

“At the White House, Mr. Trump’s handling of the matter became troubling even to some senior officials at the time. The president was discussing an active criminal case with the authoritarian leader of a nation in which Mr. Trump does business; he reported receiving at least $2.6 million in net income from operations in Turkey from 2015 through 2018, according to tax records … And Mr. Trump’s sympathetic response to Mr. Erdogan was especially jarring because it involved accusations that the bank had undercut Mr. Trump’s policy of economically isolating Iran."

Trump has waged war on his own government.

“Early in the new administration, the White House wanted a big win for Trump on one of his top campaign promises — getting rid of poor performers at the Department of Veterans Affairs. Scott Foster got the order from his boss, a senior political appointee: Draw up a list of underachievers and give ‘your best 10’ so the president could announce their firing at a signing ceremony for a law allowing fast dismissals at VA. Foster, a seasoned personnel official, balked. The employees still had the right to due process, he argued. Within weeks, his boss tried to sack him,” Lisa Rein, Tom Hamburger, Eilperin and Andrew Freedman report. “It was one of the first shots in what became an unwavering four-year war on the civil servants who have operated as the backbone of the federal government for more than a century. … 

“In the past four fiscal years, the Office of Special Counsel, an independent anti-corruption office, has received 20,505 complaints from federal employees alleging government wrongdoing, retaliation for whistleblowing or other improper treatment, a 26 percent jump from [Obama’s] first term … Nowhere has Trump’s campaign to undermine career public servants been more forceful than at the Justice Department … Many civil servants quit Trump’s government in frustration. Others were forced out, if not by overt firings then by efforts to make their jobs untenable. A growing number have gone public with their concerns. Still others kept quiet, choosing to ride out the storm.” 

Trump’s order creating a new class of federal employees without workplace protections beckons images of the spoils system the civil service was designed to defeat, Joe Davidson explains.

Miles Taylor was “Anonymous.” 

“Taylor, the ex-chief of staff in the Department of Homeland Security who has spent the past two months building a case against reelecting Trump, revealed himself Wednesday to be the presidential critic from inside the administration known only as ‘Anonymous,’” Colby Itkowitz and Josh Dawsey report. “Taylor, who served in the administration for two years, wrote in a Medium post revealing his identity that his criticisms of Trump were ‘widely held among officials at the highest levels of the federal government. In other words, Trump’s own lieutenants were alarmed by his instability.’ Using the nom de plume, Taylor first wrote a scathing New York Times op-ed in 2018 purporting to be among a group of people inside the administration working to protect the country from the president’s worst instincts … Anonymous reemerged in 2019 with a buzzy tell-all book … Trump, at a campaign rally in Arizona, vilified Taylor, calling him a ‘sleazebag’ and a ‘low-life.’"

As Kirstjen Nielsen's right-hand man, Taylor was "involved in some of the administration’s most draconian immigration policies, including the ban on travel from mostly Muslim countries and the separation of immigrant children from their parents at the border. He regularly met with Trump during the president’s tirades about immigration before the 2018 midterm elections. … Reaction to Taylor’s unmasking was mixed, with critics questioning the New York Times’ decision to grant anonymity to a staffer at his level, as many had been left with the impression that the author was someone in the Cabinet or more senior."

The election

Democrats in Pennsylvania and North Carolina claim key wins at the Supreme Court. 

The justices allowed extended periods for receiving mail-in ballots in both states, Robert Barnes reports. “They declined to disturb decisions that allow Pennsylvania officials to receive ballots cast by Election Day and received within three days, and a ruling by North Carolina’s elections board that set a grace period of nine days. In both of the cases, the Republican Party and GOP legislators had opposed the extensions, and Trump has railed on the campaign trail about the mail-in vote. Three conservative justices – Clarence Thomas, Samuel A. Alito Jr. and Neil M. Gorsuch – objected in both cases. New Justice Amy Coney Barrett did not participate in either case. Her decision did not signal a blanket recusal in election cases involving Trump … Instead, Barrett indicated through a court spokeswoman that the cases needed prompt decisions and that, having started work Tuesday, she did not have time to fully review the legal arguments.”

  • At least 73.3 million people have voted nationwide. That’s 53 percent of the total number of votes cast in 2016. (Brittany Renee Mayes and Kate Rabinowitz)
  • More than 42 million of the 92 million mail ballots requested by voters nationally have not been returned as the window closes for USPS delivery, prompting a flurry of warnings from election officials that ballots sent via mail at this point may not arrive in time to be counted. (Derek Hawkins and Jacob Bogage)
  • USPS reports distressingly poor delivery rates in swing states, with numbers falling below 60 percent. (Bogage)
  • About $14 billion will be spent in the 2020 election, according to the Center for Responsive Politics. That's more than twice as expensive as 2016. In fact, more money will be spent on this year's campaigns than the previous two presidential cycles combined. (OpenSecrets.org)
  • Rupert Murdoch, the owner of Fox News, has told associates that he’s resigned to a Trump loss but is preparing for Fox News to become the “standard-bearer of the resistance” in a Biden administration. (Sarah Ellison and Jeremy Barr)
  • Judy Kosik, 70, will be voting for the first time ever this year. The mother of two grown children lives in Scranton, Pa., and will back Biden. “This year, I have all the reasons in the world to vote,” she told Karen Heller. “Trump doesn’t care about us. He thinks this virus is just going to go away. This world is chaos. This world is nuts.”
  • An NBC-Marist poll out this morning puts Biden up 4 points among likely voters in Florida, 51 percent to 47 percent.

Unrest in Philadelphia after police killed a Black man is a problem for Biden in Pennsylvania.

“Trump has seized on riots and looting that erupted in the aftermath of Monday’s shooting in an effort to portray Biden as soft on crime,” Sean Sullivan reports. “Biden has pushed back on those attacks, saying repeatedly that he does not condone looting and has no tolerance for violence against police. He also expressed outrage at the killing of Walter Wallace Jr., condemning in strong terms ‘another Black life in America lost.’ … To secure victory, Biden is counting on strong support from the populous suburbs around Philadelphia. Those areas have swung sharply Democratic since 2016, but Trump believes he can win back some of his supporters with his law-and-order message. … But Biden also needs high turnout among African Americans and other supporters in the city, where voters tend to be more liberal. And the former vice president’s emphasis on violent protesters has frustrated some, who say he should focus less on looting and more on racial justice.”

The city imposed a 9 p.m. curfew and called in the National Guard last night. “The moves by Philadelphia Mayor Jim Kenney (D) were aimed at curbing incidents of looting, fires and dozens of minor injuries to officers that officials said were caused by people taking advantage of the backlash against the shooting," Robert Klemko, Katie Shepherd, Maura Ewing, Mark Berman and Griff Witte report. “The order to shut down the city overnight came as Philadelphia’s police union demanded that authorities release information about the Monday afternoon shooting that has so far been kept out of public view.”

  • Protesters marched through D.C., attacking police vehicles and confronting officers outside a district station for a second night as they sought information about the death of Karon Hylton. Tensions grew along with the size of the protest, and police used pepper spray and flashbang devices to push demonstrators away from the station. (Clarence Williams, Samantha Schmidt and Tom Jackman)
  • Breonna Taylor’s mother said her case should be considered by a new prosecutor, a demand backed by two grand jurors who say the Kentucky state attorney general’s office refused to give them all the evidence they asked for in weighing whether to bring charges against officers who shot and killed Taylor in her home. Protesters have been marching in Louisville for more than 150 straight days. (Marisa Iati)
  • A Black voting rights activist is confronting the ghosts of racial terror in North Carolina. For Cynthia Brown, this election isn't just about the future. It’s also about Wilmington's harrowing past. (Sydney Trent)

A surge of new voters and Trump antipathy are giving Democrats hope for a win in Texas.

“The state has led the country in early voting, and more than 8 million Texans have cast ballots, more than 90 percent of the overall number who voted in 2016. Some experts project that turnout could hit 12 million by Election Day,” Jenna Johnson and Arelis Hernandez report. “Democratic super PACs are pumping millions of dollars into the state during the final days of campaigning, which Republicans say they probably will not be able to match. On Wednesday, Biden’s campaign launched a three-day ‘Soul of the Nation’ bus tour that will stop in Amarillo, Lubbock, Abilene, Fort Worth and Dallas. [Harris] plans to campaign Friday in McAllen, Fort Worth and Houston — a rare move for a vice-presidential candidate of any party so close to Election Day. … In the four years since the last presidential election, at least 2 million people have moved to Texas, many of them Democrats from places like California, Florida, New York and Illinois. An estimated 800,000 young Latino Americans have turned 18, and a wave of immigrants became naturalized citizens. More than 3 million Texans have newly registered to vote.” (The Cook Political Report shifted its rating for Texas from “Leans Republican” to “Toss Up.”)

Trump attacked and belittled female politicians during an Arizona rally. 

“Trump purposely mispronounced Sen. Kamala Harris’s first name, and then repeatedly accused her of being angry about it, leaning into racist and sexist tropes about Black women,” Itkowitz reports. “‘Kamala, you know, if you don’t pronounce her name exactly right, she gets very angry at you,’ Trump said. ‘And then, you know what she does when she gets angry, she starts laughing. … Uncontrollable laughs. That means she’s angry.’ The president also repeated his standard rally attacks against U.S. Reps. Alexandria Ocasio-Cortez (D-N.Y.) and Ilhan Omar (D-Minn.), two young women of color, questioning the former’s education and the latter’s loyalty to America. ‘How the hell does she get elected? She does not like our country,’ Trump said of Omar … Trump also patronized U.S. Sen. Martha McSally, who is locked in a difficult reelection fight in Arizona. While he invited several male lawmakers from out of state and Nigel Farage, a former British politician, to come speak, the president acted put out when he brought McSally up to address her constituents. ‘Martha, come up. Just fast. Fast. Fast. Come on, quick. You got one minute. One minute, Martha, they don’t want to hear this, Martha. Come on, let’s go. Quick, quick, quick, quick. Come on, let’s go,’ he said as she hurried to the stage.”

  • The use of a Marine Corps helicopter at a Trump campaign event has raised questions about both safety and partisanship in the unit. Trump shared a video on Wednesday of the aircraft hovering low over a large group of the president’s supporters as many of them cheered. (Dan Lamothe)
  • A man was arrested at a rally for Trump headlined by South Dakota Gov. Kristi Noem (R) after he brandished a knife and a wooden baton. (ABC News)
  • A Delaware man accused of plotting to kidnap Michigan Gov. Gretchen Whitmer (D) also threatened to hang Trump and posted a hit list on Facebook targeting other elected leaders, including Obama, according to an unsealed search warrant affidavit. (Detroit News)

Quote of the day

“I don’t see myself really staying where I’m at for the rest of my life,” Rep. Alexandria Ocasio-Cortez (D-N.Y.), 31, told Vanity Fair

Social media speed read

Minnesota Gov. Tim Walz (D) and three of his predecessors, including Tim Pawlenty (R) and Jesse Ventura (I), jointly recorded a public-service announcement urging people to vote – and wear masks:

Former Republican senator Jeff Flake urged conservatives to vote for Biden in Arizona:

And some people are having too much “fun” with their Halloween decorations:

Videos of the day

Seth Meyers warned that Trump and Justice Brett Kavanaugh are signaling their intent to steal the election:

Trevor Noah compared Biden and Obama’s campaign performances now that Obama is the one who gets to have fun, and Biden has to be serious: 

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From The Desk Of Fernando Guzmán Cavero

 Dear Friends:  I would like to express hereby my apologies for couldn't fulfill to be with you with my "Daily Financial News Blog&...