More! November 7, 2016 I already posted once today — flying cars! [link now corrected] — but with the whole world at stake, here’s more. Some short takes for your amusement and two really thoughtful long ones. From @LOLGOP: I’ve been waiting for 7 years for Obama to take my gun and all I got was a job, health insurance and marriage equality. and We’re a nation of people who fled guys like Donald Trump! Also from Twitter, via the New York Times: The 282 People, Places and Things Donald Trump Has Insulted on Twitter: A Complete List. Forward to every millennial you know (save the easily offended or faint of heart): these totally motivating three minutes. The President schools Trump on civics — one minute. The President through Trump’s lying eyes — one minute. The Guardian — a totally absorbing must-read perspective on what government has done for America in 80 years, and a perspective, as well, on “The Big Con: What Is Really At Stake On Election Day.” A relevant chunk: . . . The New Deal saved capitalism – saved it from the big-time capitalists, though many of the big-timers didn’t see it that way. Fred Koch, the multimillionaire father of the future multibillionaire brothers Charles and David Koch, had this to say in 1938: “the only sound countries in the world are Germany, Italy, and Japan.” He found Germany to be a heartening counter-example to Roosevelt’s New Deal: “When you contrast the state of mind of Germany today [1938] with what it was in 1925, you begin to think that perhaps this course of idleness, feeding at the public trough, dependence on government, etc, with which we are afflicted is not permanent and can be overcome.” The comparison is instructive. Adolf Hitler became chancellor of Germany in January 1933. Five weeks later, Franklin Roosevelt was sworn in as US president. Two leaders, both taking office at the same time, both faced with the economic and social chaos of the Great Depression. To say that they took vastly different approaches, with correspondingly divergent outcomes, would be an understatement on the order of a piano falling on your head. History shows that Fred Koch was about as wrong as a human being can be, and Nazi Germany is only the half of it. By every measure – life expectancy, infant mortality, income, education, productivity, corporate profits, scientific and technological innovation – the mixed economy ushered in by the New Deal was a huge success. Within a generation, the United States was enjoying the fastest sustained growth in recorded history, and, moreover, the prosperity was shared broadly, with income rising faster at the bottom and middle of society than at the top. By the 1950s, there was broad consensus in America that the mixed economy was “an established and useful reality”, to borrow a phrase from a Roosevelt-era president of the US Chamber of Commerce (he was referring to collective bargaining). President Eisenhower, Republican, five-star army general and no big liberal, much less a communist (though he was accused of being one by the John Birch Society, which counted Fred Koch – him again – among its founders) broadened social security, expanded federal support of science and technology, and pushed for major infrastructure programs. Such was the political consensus that his legislation initiating the interstate highway system passed Congress with one dissenting vote in the Senate, and by voice vote in the House. In private, he mocked the arch-conservatives who dreamed of dismantling the New Deal. “There is a tiny splinter group … that believes you can do such things,” he wrote in a letter to his brother Edgar. “Among them are HL Hunt … a few other Texas oil millionaires, and an occasional politician or business man from other areas. Their number is negligible and they are stupid.” . . . And, finally (with permission), Kentucky-based Chris Browne’s monthly letter to investors, of whom — to my great good fortune — I am one. I have received several questions recently regarding the U.S. Presidential election. My thoughts, which will take the entirety of this month’s letter, are as follows: According to Nate Silver’s “Polls plus” model, Donald Trump’s chance of winning the election has recently risen from 12% to 34%. At the same time, the S&P 500 has slid for eight consecutive trading days. It is definitely not a coincidence; when news negative for Clinton prints, such as word of the FBI exploring Huma Abedin’s e-mails on her husband’s computer, the market falls immediately. Donald Trump is the first Republican candidate in recent memory roundly disliked by the American business community. Zero of the Fortune 100 CEOs have donated to his campaign. Eighteen of the 100 donated to other Republicans during the primary cycle, and 11 have donated to Hillary Clinton. Trump also trails Clinton badly among college-educated white people, a group that usually strongly prefers the Republican candidate. A September WSJ/NBC News poll showed Trump trailing Clinton by 15 points in this cohort, a stunning reversal to last cycle’s 14 point advantage for Romney over Obama. Why do the most educated voters and those with the most to lose dislike Trump? His policy and his person. Trump has misrepresented the effects of free trade, has proposed a massive $7 trillion+ tax cut for the wealthy, and has put forth little substantive detail. He has a long history of unethical business dealings, failing to pay contractors on several projects and using legal bullying maneuvers to get his way. He is involved in new litigation on average once every 3 days, currently embroiled in dozens of lawsuits, and has promised that after the election he will sue each of the 11 women who have come forward accusing him of unwanted touching and/or sexual assault. Trump’s foreign policy is confused and dangerous. His running mate confidently asserted in the Vice Presidential debate that we should bomb the Assad regime in Syria, while Trump declared five days later during the second Presidential debate that we should take decisive military action against Assad’s enemies. He has described NATO, our nation’s most important military alliance, as “obsolete.” He has repeatedly hinted at both using and allowing the proliferation of nuclear weapons, for example “Let me explain. Somebody hits us within ISIS—you wouldn’t fight back with a nuke?” On the environment, Trump has called global warming a hoax perpetrated by the Chinese to destroy American business. On public health, Trump said of American physicians and nurses, who helped to fight and contain the Ebola epidemic, “The U.S. cannot allow EBOLA infected people back. People that go to far away places to help out are great-but must suffer the consequences! … They knew the risk when they went to Africa. They choose it freely.” Imagine what our world and our country might look like now if the U.S. had failed to lead a massive public health response to stop the 2014 Ebola outbreak in West Africa. Trump was the most famous and respected proponent of the “birther” movement, declaring “An extremely credible source has called my office and told me that Barack Obama’s birth certificate is a fraud.” He has energized White Nationalists and encouraged hate speech and violence. When Trump speaks of “taking our country back,” it is a populist refrain straight out of the book of Adolf Hitler’s collected speeches, which Trump used to read and keep handy in his bedside cabinet. As a former clinician, I am certain that Trump has Narcissistic Personality Disorder. The Mayo Clinic explains, “Narcissistic personality disorder is a mental disorder in which people have an inflated sense of their own importance, a deep need for admiration and a lack of empathy for others… If you have narcissistic personality disorder, you may come across as conceited, boastful or pretentious. You often monopolize conversations. You may belittle or look down on people you perceive as inferior. You may feel a sense of entitlement, and when you don’t receive special treatment, you may become impatient or angry. You may insist on having “the best” of everything — for instance, the best car, athletic club or medical care… At the same time, you have trouble handling anything that may be perceived as criticism. You may have secret feelings of insecurity, shame, vulnerability and humiliation. To feel better, you may react with rage or contempt and try to belittle the other person to make yourself appear superior. Or you may feel depressed and moody because you fall short of perfection.” “What about Trump’s opponent?” you may ask. Isn’t “Killery” awful? Hasn’t she done all sorts of terrible things that disqualify her from being President? Perhaps the most intriguing poll of this election season is the one by Suffolk University that recently asked respondents which TV news source they trusted the most, followed by other more typical political questions. There were 1,000 people in the survey, and 270 said that Fox was their most-trusted TV news source. Of those 270, only 14% believed our country was on the right track. When a media outlet presents a disproportionate weighting of stories which, again and again, paint immigrants as dangerous, crime as sky high, and civilization is fraying, after a while people are going to believe it. I personally had to stop reading ZeroHedge a couple of years ago, because I finally realized that it was biased towards doom to the point of being generally untrue. Economic data were reported by giving only the negative subscales and avoiding mention of the positive ones. If facts or events didn’t fit into a narrative of decay and destruction and demise, they were not reported. I constantly expected the next recession to be right around the corner, and ZeroHedge fed my expectation. My own mom is the granddaughter of immigrants from the Middle East. She’s intelligent, and her dad was a Lebanese-American who served in World War II before becoming a Democratic politician in Ohio. She is also a watcher of Fox News, and a Trump supporter. She told me recently that a friend of hers was going to visit London, and how insane she was for taking that sort of a risk. “What do you mean, Mom?” She explained to me that there are all sorts of terrorist attacks over there. Telling my mom that the homicide rate in Louisville, where she lives, is 30 times higher than that of London, didn’t make a difference. Facts that didn’t conform to the narrative she had seen again and again—“the world is unsafe now thanks to Obama”—weren’t going to break through. It’s not just Fox News that feeds the right-wing narrative. Drudge, WorldNetDaily, NewsMax, Breitbart, The Washington Times, Jihad Watch, and so on carry the television narrative to tens of millions of readers online. A recent analysis showed that three-eighths (!!!) of the stories in the right-wing media contain serious factual errors. The net result is among those who trust Fox News more than other TV networks, 11% support Hillary Clinton, and 83% support Donald Trump. Among those who favor any other television news (730 of the 1,000 respondents), 62% support Hillary Clinton, versus only 22% for Donald Trump. Alex Jones, who reaches six million people a month, recently had this to say on his show: “I’m never a lesser of two evils person, but with Hillary, there’s not even the same universe. She is an abject, psychopathic, demon from Hell that as soon as she gets into power is going to try to destroy the planet. I’m sure of that, and people around her say she’s so dark now, and so evil, and so possessed that they are having nightmares, they’re freaking out. Folks let me just tell you something, and if media wants to go with this, that’s fine. There are dozens of videos and photos of Obama having flies land on him, indoors, at all times of year, and he’ll be next to a hundred people and no one has flies on them. Hillary, reportedly, I mean, I was told by people around her that they think she’s demon-possessed, okay? They said that they’re scared. That’s why when I see her when kids are by her, I actually get scared myself, with a child — with that big rubber face and that — I mean this woman is dangerous, ladies and gentleman. I’m telling you, she is a demon. This is Biblical. She’s going to launch a nuclear war. The Russians are scared of her. […] Imagine how bad she smells, man? I’m told her and Obama, just stink, stink, stink, stink. You can’t wash that evil off, man. Told there’s a rotten smell around Hillary. I’m not kidding, people say, they say — folks, I’ve been told this by high up folks. They say listen, Obama and Hillary both smell like sulfur. I never said this because the media will go crazy with it, but I’ve talked to people that are in protective details, they’re scared of her. And they say listen, she’s a frickin’ demon and she stinks and so does Obama. I go, like what? Sulfur. They smell like Hell.” Wow. Is Hillary Clinton really that evil? What, objectively, are the worst things that she has done in thirty years of public life? Let’s start with the commodity trading scandal. In the late 1970s, Hillary once made $99,500 allowing a close friend, who was also a very large commodity futures trader and an attorney for Tyson Foods, to trade a commodities account for her. At first, she said she made buy-and-sell decisions herself, but it later became clear that the friend was doing the trading for her. There are several issues surrounding these trades. The firm, REFCO, failed to supervise position limits (it is possible that her large trader friend was buying and selling more contracts than he was allowed to), failed to enforce margin requirements, and enabled trades to a bulk account to be allocated to individual clients after the trading day. It is entirely possible, although not proven, that the $99,500 she made at the time was some sort of a bribe from Tyson rather than money made honestly, trading alongside a friend who indeed happened to be a very well- known and successful trader Next, there is Whitewater. This one is hard to summarize in a paragraph, but I’ll try. Hillary Clinton and her husband were minority partners in a real estate development venture led by campaign contributor Jim McDougal. The venture, called Whitewater, ultimately failed, after receiving a loan from a Savings and Loan company, owned in part by McDougal, which itself also failed, amidst fraud. McDougal had another real estate project, Castle Grande, which his S&L was illegally funneling loans to. Hillary Clinton, as an attorney at the Rose Law Firm, had done work for Castle Grande. During the investigation by independent Special Counsel Kenneth Starr, Hillary’s billing records from the Rose Law Firm disappeared for a time, only to magically reappear one day in the White House. McDougal’s wife Susan refused to answer questions about the Clinton’s involvement and was imprisoned for contempt of court charges. After a massive investigation, Starr did not find prosecutable evidence of wrongdoing against either of the Clintons. President Bill Clinton eventually pardoned Susan McDougal During Bill’s presidency, Hillary was alleged by some Republicans to have conducted criminal wrongdoing in the White House FBI files scandal (“Filegate”), in which Craig Livingstone, director of the White House’s Office of Personnel Security, improperly retrieved FBI background reports on hundreds of past White House employees. She was also alleged by Republicans to have broken the law in conjunction with the firing of seven people in the White House Travel Office (“Travelgate”). The Clinton administration said the firings were due to financial improprieties identified in the office during the previous administration. Critics alleged the Clintons were trying to do political favors for their own people. Starr investigated both Filegate and Travelgate and found no evidence of criminal wrongdoing by either of the Clintons. Moving to recent years, my right-wing friends declare the word “Benghazi!” as if they have suddenly developed Tourette’s syndrome. In 2012, while Clinton was Secretary of State, members of an Islamic militant group launched an attack against a U.S. embassy and a CIA compound in Benghazi, Libya, killing four Americans and injuring 10 others. A common refrain is “Hillary Ignored Pleas for Help and Let Americans Die.” There are thousands of right-wing Internet articles to the effect that Clinton could have imminently saved the lives of these Americans, but somehow chose not to. There are thousands of other articles alleging that it was obvious before the attacks that the security situation was poor and catastrophe was imminent. The reality is that this has been one of the most investigated episodes in American history, and Hillary did nothing wrong. The security situation was known to be challenging in the year leading up to the attacks, and decisions regarding security were handled in the normal way by the security staff at the State Department, in conjunction with other resources. Blaming Clinton for Benghazi is akin to the Donald Trump TV ad that says Hillary Clinton has “been [in Washington for] 30 years. Taxes went up, terrorism spread, jobs vanished…” In reality, Federal taxes as a % of GDP were basically stable, the unemployment rate remained stable, the number of working Americans increased by tens of millions, and yes, terrorism spread, but mostly due to George Bush’s bloodshed in the Middle East. But what does any of that have to do with Hillary Clinton? Largely nothing, except perhaps for her husband’s excellent economic record as President. This commercial is laughable if part of you doesn’t already believe that Clinton is a nearly omnipotent demonic force. In response to the sexual assault allegations against Donald Trump, in which more than 10 women have accused him of unwanted groping, unwanted kissing, or attempted rape, the Trump campaign has developed a counter-narrative, recited in Trump’s speeches and by his surrogates, that Hillary has herself attacked women. Most of these allegations are false. There are, for example, widespread stories that Hillary Clinton “laughed at” a 12-year-old rape victim whose alleged attacker she defended in court. In reality, Clinton, who defended the man as his defense attorney, as part of the legal aid program at University of Arkansas, did not laugh at the victim at all. She laughed in a subsequent interview about the fallibility of polygraphs, and about how the prosecution in the case tried to hide key evidence from the defense team. In another case, Juanita Broddrick has been trotted out by Trump as a women who was “raped by Bill Clinton” at a political fundraiser. Broaddrick now claims that Hillary Clinton grabbed her hand in a way that was intended to be a threat, to tell her to keep quiet. Broaddrick, however, was subpoenaed in 1997 and wrote a sworn affidavit that Clinton in fact made no sexual advances towards her, and the rumors surrounding their encounter were untrue. In a 1999 NBC interview, when Broaddrick was asked “Did Bill Clinton or anyone near him ever threaten you, try to intimidate you, do anything to keep you silent?” She answered “no.” The only documented truth supporting Hillary’s “attacks” against women appears to be comments she made in her staunch defense of her husband when he was accused of having repeated extramarital affairs. She said of Gennifer Flowers, who alleged a 12-year-long consensual affair with Bill Clinton, that she was a “failed cabaret singer who doesn’t have much of a resume to fall back on,” implying that Flowers was making the allegations only for a large financial payout. It’s also clear that Bill Clinton’s campaign staff hired a professional investigator in order to try to discredit the women who were accusing him of affairs or sexual harassment, although it’s unknown if Hillary played any role. One particularly nasty attack is that Hillary stayed married to Bill even though he was once a frequent party guest of billionaire pedophile Jeffrey Epstein, and Bill may have done things with trafficked, underage girls. We know that Bill Clinton hung out with Jeffrey Epstein and partied with him, but we don’t know exactly what transpired. We also know, however, that Donald Trump was a frequent party guest of billionaire pedophile Jeffrey Epstein. So I’ll call that “a wash.” Very recently, Hillary has recently been investigated by the FBI for using a personal e-mail server for government business while serving as Secretary of State. I’ll be brief here, as the e-mail scandal is widely known and basically a Rorschach test. If you dislike Hillary, then she put our national secrets at risk in a wholly disqualifying and unforgivable fashion. If you favor Hillary, you note that she used the appropriate government e-mail systems for messages marked “Secret” or “Top Secret,” and accidentally received or sent a grand total of three (3) emails on the personal e-mail server containing the marking of (C) for “classified.” [Actually, it stands for “confidential.” — A.T.] As you’ve probably gathered by now, I don’t think Hillary is responsible for the mysterious death of over 100 Americans as “ClintonBodyCount” would have you believe. I also don’t believe she’s actually a demon. I don’t think there’s illegal “pay to play” going on between foreign leaders and the Clintons, using the Clinton Foundation as a handy cover. The right-wing media looks at the e-mail leaks from the hacked emails of John Podesta, Hillary Clinton’s campaign manager, and sees vast evidence of wrongdoing. I look at the juiciest bits of those emails and am reassured. This is all that was going on? The hack has basically revealed that Hillary Clinton was campaigning for President. A few folks at the DNC favored Clinton over a democratic socialist? Of course they did. A journalist leaked a couple of town hall meeting questions to Clinton? Of course she did. That’s not illegality; that’s life. At its essence, this election is between an unpredictable narcissist with no relevant domestic or foreign policy experience, a working knowledge of Hitler speeches, a recent history of saying anything to foment populist fervor, and a long history of completely disregarding others in order to make himself one more dollar or grab one more handful of breast; or, the other choice, a Machiavellian with considerable relevant domestic and foreign policy experience, and a history of bipartisan accomplishment, who has likely consistently used her political career to grossly enrich herself financially. [No! — A.T.] That’s not a great choice, but it is an easy one. I had expected Clinton to pull away from Trump after he looked a bit unhinged during the second Presidential debate. As there is a strong correlation between presidential margin of victory and the performance of the S&P 500 in the 30 days before an election, we spent some options premium (about 30 basis points) last month unsuccessfully betting on the large “Clinton rally” that never came By last Friday morning, it seemed that the election was starting to tighten, and knowing that there is a possibility that some Trump voters are unwilling to tell pollsters that they plan to vote for Trump, and knowing that a Trump win would likely cause a large pullback in the U.S. equity market, I spent 15 basis points of options premium as “Trump insurance,” to hedge our fund against a possible Trump victory. We bought weekly S&P 500 puts, and some volatility index calls. The trade has helped us somewhat since we put it on, keeping us roughly flat month-to-date for November in spite of the market selloff. I expect Clinton will win the election, but I believe she is only a slight favorite, something like 60/40, to do so. If she wins, in the very near-term, the S&P 500 will rally. If she loses, in the very near-term, it will fall. A drawn-out, highly contested election decided by the courts, like Bush v Gore, wouldn’t be great for equities, but it would probably be less bad than a clear-cut Trump victory. The key voices in the equity market aren’t Democrats; far from it. But the most important thing that has enabled stability in the financial system in recent years is faith in government support for financial stability. If there are doubts as to government’s willingness to allow the Fed to be independent, to honor our debts, to intervene in the case of a financial crisis, or to project American military power wisely, risk premia must rise. There are, of course, certain stocks that would be helped by a Trump presidency. Hopefully I don’t get the chance to trade those. Honestly, though the thought of President-elect Donald Trump is, as a human, utterly alarming, in the narrow role of “trader” the thought of trading the volatility he will cause is exciting. Plus, he’s going to yugely cut my taxes. I’d rather just have reasonable domestic and foreign policy though. I had second thoughts about actually sending this letter. Maybe I was being biased or unfair, etc. But any doubts were resolved this morning when my Twitter feed was full of a story, in the Washington Times and the other usual right-wing media outlets, about Hillary’s campaign manager John Podesta being invited to a dinner where the courses would be made from “blood, semen, and breast milk” and for which there had been “code for child sex trafficking.” This sort of ridiculous lie is just not okay. It’s not acceptable. Decent people need to stand up and say, “No.” This new culture of hurting anyone we disagree with in any way possible is the thing we need to “Take America Back” from. As the Kentucky state flag wisely declares, “United We Stand, Divided We Fall.” Thank you for you partnership! And if any of you have gotten this far: thank you for your readership!