A few weeks ago we pointed out that Obama enjoyed massive, unprecedented spikes in black voter turnout in both the 2008 and 2012 elections.  After hovering around 50-55% for decades, black voter participation soared to over 60% in 2008 and 2012.  That said, in the past we’ve raised serious doubts over whether Hillary should expect the same level of enthusiasm from black voters in this election cycle or whether overall turnout of black voters would revert back to pre-Obama levels.

Unprecedented black voter turnout was a huge component of Obama’s victories in 2008 and 2012.  Per the chart below from the New York Times, after running in the low-to-mid 50% range for decades, black voter participation surged to over 60% for Obama in 2008 and 2012, the highest ever recorded.

 

So, the question is, should Hillary expect the same level of unprecedented black voter turnout that Obama was able to garner?  Apparently, her campaign is not convinced and that’s why, according to Leslie Wimes, President of the Democratic African-American Women Caucus, they’re in “full panic mode.”

Well, early voting data out of some key swing states seems to reveal that, in fact, black voter turnout is reverting back to pre-Obama levels, which is a terrible sign for team Hillary.  According to Old North State Politics, early voting data out of North Carolina suggests that black voter turnout is down roughly 7 points, as a percent of the overall electorate versus 2012, implying that cumulative black votes are down around 16%. 

As a reminder, Mitt Romney won North Carolina in 2012 by slightly over 2 points.  Given that black voters usually favor democrats by 80-90%, simple math implies that a 7-point reduction in blacks as a percentage of the overall electorate would hurt Hillary by roughly 6 points versus the 2012 results….not encouraging to say the least.

Meanwhile, the outlook is even more troubling in Florida as black composition of early votes is down 9.5 points versus 2012. 

According to a recent article by Politico, in 2008 and 2012, Obama received 95% of the 1.7mm votes cast by black voters in Florida.  Given that, simple math would imply that a 9.5-point reduction in blacks as a percentage of the overall electorate would hurt Hillary by roughly 9 points, versus the 2012 results, which is disastrous news for a state that Obama narrowly won by less than 1 point. 

Unfortunately for Hillary, a recent poll from Florida Atlantic University provides even more bad news.  While Obama received 95% of the black vote in Florida in 2012, Hillary is only polling at 68% among black voters while Trump is polling at 20%.  And, at least according to the president of the Democratic African-American Women Caucus, this math has the Clinton campaign in “full panic mode.”  Per Politico:

“Hillary Clinton’s campaign is in panic mode. Full panic mode,” said Leslie Wimes, a South Florida-based president of the Democratic African-American Women Caucus.

 

“They have a big problem because they thought Obama and Michelle saying, ‘Hey, go vote for Hillary’ would do it. But it’s not enough,” Wimes said, explaining that too much of the black vote in Florida is anti-Trump, rather than pro-Clinton. “In the end, we don’t vote against somebody. We vote for somebody.”

But, we won’t hold our breath until the various polls around the country adjust their “ethnic oversamples” accordingly.

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Recall that in the days leading to the Brexit vote, one of the most closely followed indicators of public sentiment was online bookmaker betting, where in a curious split, the majority of smaller wages was for Brexit, however the total amount better was skewed by a handful of far bigger bets on “remain.” However, when it comes to Trump, there appears to be confusion – or interference – at least in the last several days. According to a recent Paddy Power tweet, on Monday and Tuesday the Republican candidate outshone his rival in terms of both the number and the volume of wagers, as just shy of 100,000 euros ($111,000) in bets came in, with 91 percent of that for Trump.

In the past 48 hours, 91% of bets on the US Election have been on Trump. He’s into 9/4. And we’ve already paid out on Hillary. Uh-oh. http://pic.twitter.com/pGEkHMbrF2

— Paddy Power Politics (@pppolitics) November 1, 2016

Cited by Bloomberg, Féilim Mac An Iomaire, a spokesman for the company, confirmed the report saying that “this election’s been a serious betting anomaly. Even before October 28, when FBI Director Jack Comey announced the discovery of new e-mails potentially related to a probe that has troubled the Clinton campaign, money placed on a Trump victory amounted to almost the same as that bet on his rival, despite her lead in opinion polls.

“You don’t normally see so much placed on the outside candidate but I think the shock of Brexit is fresh in people’s minds,” Mac An Iomaire said.

In an attempt to talk down the potential significance of the recent surge in online betting for Trump, Bloomberg notes that “U.K.’s June referendum bruised professional pollsters by dealing an unexpected blow to the status quo. Yet another lesson of that vote is that betting flows are not a foolproof indicator, with bookies reporting a surge in bets that the U.K. electorate would choose to remain in the European Union on the morning of the vote. The next day, the “Leave” camp emerged triumphant.” What it ignores, and what we pointed out repeatedly over the summer, is that the vast majority of bets pre-Brexit were for Brexit, however in what some have said was a deliberate attempt to skew the result, a few prominent, large betters were shifting the odds in Remain’s favor. They were wrong.

Indeed, the recent Trump wave is confirmed by various market indicators with the Mexican peso, Credit Suisse AG’s “ultimate market indicator,” weakening more than 3 percent since Comey’s letter, as Trump’s improving prospects jolt the currency.

Still, the probability of a Trump victory implied by offshore bookmakers’ odds are now at 28.5%, according to Convergex market strategist Nicholas Colas. That’s roughly the same as flipping a coin and getting heads twice in a row, and matches estimates by professional polling analysts. 

For Paddy Power, which reports third-quarter earnings on Friday, the stakes are higher than most. As we reported previously, on October 18 Paddy Power announced it would start paying out on a Clinton victory, having initially offered a Donald Trump presidency at 100/1. Should Trump win, the outcome may be yet another bankruptcy, only this time it won’t involve a Trump casino.

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Philippine President Rodrigo Duterte, who promised last week to stop cursing after a personal chat with god, once again slammed the United States on Wednesday for halting the planned sale of 26,000 rifles to his country, calling those behind the decision “fools” and “monkeys” and indicating he might turn to Russia and China instead. Duterte’s tirades against the US have become a virtiually daily event, and on Wednesday he said that he once believed in Washington, but had since lost respect for what is the Philippines’ biggest ally, Reuters reported.

Which is why the US decision to halt an arms shipment to Duterte should probably not come as a major shock: the State Department halted the sale of the assault rifles to the Philippine police after U.S. Senator Ben Cardin said he would oppose it, Senate aides told Reuters on Monday. Aides said Cardin, the top Democrat on the U.S. Senate Foreign Relations Committee, was reluctant for the United States to provide the weapons given concern about human rights violations in the Philippines during Duterte’s bloody, four-month-old war on drugs.

The news prompted the following outburst: “Look at these monkeys, the 26,000 firearms we wanted to buy, they don’t want to sell,” Duterte said during a televised speech. “Son of a bitch, we have many home-made guns here. These American fools.”

Why the renewed anger? “That’s why I was rude at them, because they were rude at me,” he said.

According to procedures in Washington, the State Department informs Congress when international weapons sales are in the works. Aides said the State Department had been informed Cardin would oppose the deal during the prenotification process, thus halting the sale. U.S. State Department officials did not comment.

Meanwhile, the local authorities appeared displeased with their leaders’ relentless verbal diarrhea: the Philippine police chief, Ronald dela Rosa, on Tuesday expressed disappointment that police would not get the M4 rifles, which he said were reliable.

Duterte reiterated that Russia and China had shown willingness to sell arms to the Philippines, but he would wait to see if his military wanted to continue using U.S. weapons.

Alternatively, it is possible that all the State Department has avhieved, is to hand over a brand new client to China and/or Russia: “Russia, they are inviting us. China also. China is open, anything you want, they sent me brochure saying we select there, we’ll give you. “But I am holding off because I was asking the military if they have any problem. Because if you have, if you want to stick to America, fine.

“But, look closely and balance the situation, they are rude to us.”

Of course, the real question is whether Duterte wants to “stick to America”, because for all his talk, the new president still appears uncertain he will succeed in cutting off all ties with Washington. Which means that the ultimate decision to sever ties may have to come from the US, which may just snap as a result of the relntless mockery.

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Well that escalated quickly… again…

Hope? Nope!

And bonds & bullion continue to strengthen…

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Hold your real assets outside of the banking system in one of many private international facilities  –>    http://ift.tt/2cyFwvQ;

With Only Six Days Remaining, Trump Surges in the Polls as Hillary Supporters Abandon Ship

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In the latest bombshell Project Veritas video, a large Democratic donor, Benjamin Barber, is caught on film at a fundraiser comparing black republican voters to Nazis and saying they’re “fucked in the head.”  The disparaging comments came at a New York City fundraiser for Deborah Ross who is running for the U.S. Senate for the state of North Carolina.

“Have you heard of the Sonderkommandos? Jewish guards who helped murder Jews in the camps. So there were even Jews that were helping the Nazis murder Jews! So blacks who are helping the other side are seriously fucked in the head. They’re only helping the enemy who will destroy them. Maybe they think ‘if I help them we’ll get along okay; somehow I’ll save my race by working with the murderers.’”

Deborah Ross, the Democratic nominee for the U.S. Senate from North Carolina, is running against Republican incumbent Richard Burr.  Ross also makes a cameo in the latest Project Veritas video citing the recurring Democratic narrative that all Republicans are racists who try to use voter ID laws to suppress minority votes.

“Republicans know that young people, African Americans and women are less likely to have the ID, so they won’t vote.  It’s Jim Crow.  Just put the road block in…”

And now the Russians are reprogramming the minds of large Democratic donors…will they stop at nothing?

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While equity ‘protection’ costs are rising (VIX over 20 yesterday), and bond risk has risen to 6-week highs, the most prescient ‘hedge’ for a Donald Trump presidency has soared to its highest since the European crisis in 2011.

USDMXN short-dated implied volality has exploded higher in the last few days…

Furthermore, as Bloomberg reports, the largest U.S.-based exchange-traded fund of Mexican equities saw its biggest withdrawals since the 2013 taper tantrum on Tuesday, as renewed FBI attention on Hillary Clinton’s e-mails boosted the odds of a Donald Trump presidency.

The iShares MSCI Mexico Capped ETF has become a popular vehicle for traders looking to bet on the U.S. election, and saw $94 million in outflows.

“This particular ETF seems to be the most connected to the polls,” said Eric Balchunas, who analyzes exchange-traded funds at Bloomberg Intelligence. “This has literally become a proxy for what you think will happen in the election.”

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With Gawker no longer operational, and both Peter Thiel and Hulk Hogan having proven their point, former Gawker CEO Nick Denton said in a blog post that the media company is settling its case with Hulk Hogan: "After four years of litigation funded by a billionaire with a grudge going back even further, a settlement has been reached. The saga is over."

According Forbes, Denton did not disclose the terms of the settlement, however court documents revealed the case was settled for $31 million plus a portion of the website's sale proceeds. Denton added wrote that while the company was "confident" an appeals court would reduce a $140 million settlement awarded to the former wrestler and entertainment star, ultimately Gawker, the writer of the story against Hogan and he himself would not be able to fund the legal battle.

Below is Denton's full statement:

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October was a month most investors will wish to quickly forget. As DB’s Jim Reid writes, for the most part October will likely be remembered as the month where ‘Hard Brexit’ concerns well and truly jumped into the spotlight and Sterling related assets suffered as a result. Politics was a fairly consistent theme during the month however with the US Presidential Election campaign also attracting plenty of attention. Earnings season has provided another distraction for markets while we’ve also had the usual focus on central banks including a number of speculative ECB stories. Add to that the ongoing OPEC related news and it’s certainly made for a busy October.

As DB adds, it was sterling assets which really stand out. Unsurprisingly the negative news flow had a big impact on the currency with Sterling dropping -6% during the month from around $1.30 to the low $1.20’s. Negative sentiment also hurt Gilts which in local currency terms dropped -4% however in USD hedged terms plummeted -10% and the most amongst the assets in the asset sample. It was a similar story for UK equities which were up 1% in local terms but -5% in USD terms. Given the moves for Gilts, Sterling credit also had a poor total return month despite the BoE purchasing scheme impressing with the initial pace of purchases in October. Indeed GBP corps, non-fins and fins were -8% to -9% in USD total return terms (and -2-4% in local currency terms) although GBP HY (0% local and -6% USD terms) did outperform.

It wasn’t just Gilts which suffered in bond markets however. With markets also reassessing inflation expectations, in USD terms BTP’s (-5%), EU Sovereigns (-4%), Bunds (-4%) and Spanish Bonds (-4%) all suffered. BTPs being also hit as the polls leaned slightly towards a rejection of the senate reform referendum in early December. Treasuries (-1%) outperformed but were still weaker during the month. Those moves had another obvious knock on in credit markets too although performance was reasonably resilient despite the rates selloff. US credit outperformed with indices finishing flat to -1% during the month while European indices were broadly -1% to -3% with ECB purchases still evidently having a positive impact and helping out-perform rates. Interestingly EUR higher beta HY and sub-fins outperformed more.

Speaking of financials, banks had a decent month. European Banks were +9% in local terms and +6% in USD terms no doubt supported by better than expected earnings to some degree, and also the positive correlation to the move higher for bond yields. Other equity markets were more mixed however. The FTSE MIB, Nikkei and IBEX were all +2% in USD terms while the DAX (-1%), S&P 500 (-2%) and Stoxx 600 (-3%) were more disappointing. It was a similar story for EM equities too which were little changed during the month, although the Bovespa (+14%) did top the table for the month. The other asset class to highlight is commodities. Oil traded around OPEC headlines and had looked on to course to end the month flatish before yesterday’s sharp plunge saw WTI and Brent finish -3% and -4% for the month respectively. It was the softs which outperformed with Corn (+5%) and Wheat (+4%) continuing the strong performance from the end of September, while Gold (-3%) and Silver (-7%) were down as Fed rate hike expectations for December crept above 70%. All in all, in local currency terms 17 of the 39 assets finished with a positive return while just 12 assets did in USD terms.

A quick refresher where we are YTD now. It’s the usual culprits which head the top of the leaderboard in local currency terms with the Bovespa (+50%), Silver (+29%), WTI (+27%) and Gold (+20%) leading while Russian equities (+18%) round out the top five. Sterling (-17%) takes up the bottom place while Italian equities (-17%) and European Banks (-13%) are still languishing. It’s worth noting however that these assets have bounced back from heavier losses earlier in the year.

Elsewhere the S&P 500 (+6%) has had a reasonable YTD while the Stoxx 600 (-4%) has struggled. Bond markets outside of Gilts are in the 1-5% return range while credit markets have had a strong year. European indices are up anywhere from 4-8% while USD IG indices are up 5-9%. US HY is leading the way however, returning +14% YTD.

Source: DB

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Originally posted op-ed at The Wall Street Journal,

Fewer than three of 10 Americans trust government to do the right thing always or most of the time, Gallup reports, and the years since 2007 are “the longest period of low trust in government in more than 50 years.” The details emerging about the multiple investigations into Hillary Clinton explain a lot about this ebbing public confidence in institutions such as the Justice Department and Federal Bureau of Investigation.

***

Start with Attorney General Loretta Lynch. A cavalcade of former Justice heavyweights are now assailing FBI director James Comey for reopening the Clinton email file, and Justice sources are leaking that the director went rogue despite Ms. Lynch’s counsel not to alert Congress so close to an election.

But Mr. Comey works for the Attorney General. If she thinks Mr. Comey was breaking Justice rules by sending Friday’s letter to Congress, then she had every right to order him not do so. If Mr. Comey sent the letter anyway, and he didn’t resign, Ms. Lynch could then ask President Obama to fire him.

Our guess is that she didn’t order Mr. Comey not to send the letter precisely because she feared Mr. Comey would resign—and cause an even bigger political storm. But the worst approach is to let a subordinate do something you believe is wrong and then whisper afterwards that you told him not to. The phrase for that is political cowardice.

Ms. Lynch’s abdication began when she and her prosecutors declined to empanel a grand jury. It continued in June after her supposedly coincidental rendezvous with Bill Clinton on a Phoenix airport tarmac. She could have told Hillary Clinton’s husband that the appointment was inappropriate, or refused to let him board her plane. She says the conversation was “social,” but she allowed the ex-President to create the appearance of a conflict of interest.

“The fact that the meeting that I had is now casting a shadow over how people are going to view that work is something that I take seriously, and deeply and painfully,” Ms. Lynch conceded at an Aspen forum in July. The Clinton campaign compounded the problem by gossiping to the press that Mrs. Clinton would keep Ms. Lynch on as AG if she wins.

Ms. Lynch also abandoned her post when Mr. Comey staged his July media event dissecting the evidence in the Clinton email case and exonerating the Democratic nominee. The FBI’s job is to build a case, not make prosecutorial decisions. Yet Ms. Lynch later told Congress that rather than make up her own mind on the evidence she would merely “accept the recommendation of that team” at the FBI “and there was no basis not to accept it.”

***

Meanwhile, the Journal’s Devlin Barrett broke the news Sunday that senior Justice officials and FBI officials disagreed over how aggressively to pursue the Clinton Foundation for financial fraud and influence peddling.

FBI field agents—in New York, Los Angeles, Washington and Little Rock, Arkansas—wanted to pursue subpoenas and empanel a grand jury. Senior officials at Justice, likely political appointees, refused to give the FBI agents permission. But the agents continued to investigate under their current authorities, even after Justice denied their request to read the Clinton-related emails that the national-security team had uncovered.

In August a “very pissed off” Justice official dressed down Andrew McCabe, the bureau’s second-in-command who oversaw the Clinton email investigation, for looking at the Clinton Foundation in an election year. According to the Journal story, Mr. McCabe replied, “Are you telling me that I need to shut down a validly predicated investigation?” The official said no, but the message down the FBI chain of command was to “stand down.”

This follows Mr. Barrett’s previous scoop that Mr. McCabe’s wife received $675,000 in campaign donations from Clinton comrade Terry McAuliffe for a Virginia legislature race. The FBI says there was no actual conflict of interest because Mr. McCabe detached himself from his wife’s campaign, but the appearance of a conflict is egregious. Mr. McCabe should have been removed from the FBI probe.

Democrats and their media allies are now in attack-and-deflect mode, assailing the FBI agents on the Clinton cases as “conservative.” But considering that the Journal story is the first public confirmation in the heat of election season that the Clinton Foundation is under investigation, the agents were handling the matter professionally and discreetly despite Washington interference.

***

All of this reveals a Justice Department and FBI in turmoil, with some agents in semi-open revolt against their political leadership. This is terrible for those institutions, for confidence in government, and for Mrs. Clinton’s ability to govern if she does win next Tuesday’s election. These events mean she could enter the Oval Office under criminal investigation, with her right-hand aide Huma Abedin suspected of concealing evidence, and Congress investigating these compromised investigations.

The Clinton penchant for deception and secrecy bears much of the blame for this mess, but then so does the President who is currently responsible for the Justice Department.

Mr. Obama sent his own bad political message when he twice suggested in interviews, in October 2015 and April 2016, that Mrs. Clinton’s unsecured email setup did not endanger national security and that she had no ill intent. The norm is for the chief U.S. law-enforcement officer not to comment on ongoing investigations, and Mr. Obama’s prejudgment of the legal questions may have seeped down to the rank and file.

In Mr. Obama’s April 2016 absolution of Mrs. Clinton, the President said repeatedly that “I guarantee that there is no political influence in any investigation conducted by the Justice Department, or the FBI, not just in this case, but in any case.” He added that “Guaranteed. Full stop. Nobody gets treated differently when it comes to the Justice Department, because nobody is above the law.”

If Donald Trump wins next Tuesday, one major reason will be that the meltdown at Justice has shown how manifestly false Mr. Obama’s statements were.

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