Did you watch the presidential debate? All over America people are still buzzing about it, because it was definitely unlike any presidential debate that we have ever seen before. But despite all the chaos, the debate gave us tremendous clarity on one very important issue. Unless there is a blowout of historic proportions, it is exceedingly unlikely that either side will be willing to concede on the night of the election or any time shortly thereafter. In other words, the winner of the election may not be known until a long time after November 3rd, and this is being called “the nightmare scenario Wall Street wants to avoid”…
The winner may not be known for days or weeks — and even then, the election could be contested. That’s the nightmare scenario Wall Street wants to avoid.
“It was chaos,” Kristina Hooper, chief investment strategist at Invesco, said of the debate. “I walked away from last night thinking there is an even greater chance of a contested election.”
The election of 2016 was very close, but Hillary Clinton conceded fairly rapidly because enough votes had been counted to make it clear that she was not going to be able to get enough electoral votes to win.
But this time around it is being projected that up to 40 percent of the population will vote by mail, and counting votes that are sent in by mail is a very slow process.
And many of the votes that are sent in by mail will not even be received until a number of days after the election, and that will just prolong the period of uncertainty that we are potentially facing…
One of the major uncertainties is how long it will take to count the surge of mail-in ballots that is expected because of the pandemic. Some states don’t even begin that process until Election Day. Others accept mail-in ballots received after Election Day if they are postmarked by a certain date.
Both sides have recruited vast armies of lawyers, and it is very difficult to imagine either President Trump or Joe Biden rushing to concede the race.
Instead, it is much more likely that what we will go through will be “Bush v. Gore on steroids”, and many on Wall Street are anticipating a violent stock market decline if that happens.
But of much greater concern is what is happening to the real economy. It appears that a new wave of corporate layoffs has begun, and that means that it will be a very bitter holiday season for millions of Americans.
At this point, even some of our most monolithic institutions are letting people go. When I heard that Goldman Sachs was eliminating 400 jobs, I thought that there must be some mistake.
But there is no mistake. They are making cuts because times are hard and will only be getting harder.
If even “the Vampire Squid” is laying workers off, what hope is there for the rest of us?
On Wednesday we also learned that approximately 9,000 employees of Shell will be losing their jobs…
Royal Dutch Shell announced on Wednesday plans to cut up to 9,000 jobs, or over 10% of its workforce, as part of a major overhaul to shift the oil and gas giant to low-carbon energy.
Shell, which had 83,000 employees at the end of 2019, said that the reorganisation will lead to additional annual savings of around $2 billion to $2.5 billion by 2022 beyond cost cuts of $3 to $4 billion announced earlier this year.
If the U.S. economy really was in the process of “turning around”, would we be seeing layoff announcements like this day after day?
I don’t think so.
And it is those at the bottom of the economic food chain that have been hit the hardest…
The economic collapse sparked by the pandemic is triggering the most unequal recession in modern U.S. history, delivering a mild setback for those at or near the top and a depression-like blow for those at the bottom, according to a Washington Post analysis of job losses across the income spectrum.
Recessions often hit poorer households harder, but this one is doing so at a scale that is the worst in generations, the analysis shows.
Prior to this crisis, most Americans were living paycheck to paycheck, and many of them have families to support.
So what do you do when your income is gone but the expenses are still there?
Yesterday, I discussed the fact that 100,000 airline industry employees could soon lose their jobs. One of those employees that is on the verge of being laid off is 41-year-old Toni Valentine…
Toni Valentine, 41, a United reservations agent in Detroit who has been with the airline for 15 years, has been told she’ll be laid off this week. She has six children ranging in age from 2 to 22, and her husband can’t work because he’s recovering from a massive stroke.
“Knowing that I may not have insurance benefits, I feel like I have failed,” she said on a conference call set up by the Machinists Union. “I’m the primary breadwinner in this family.”
Can you imagine what it must be like for her right now?
She has been a faithful employee for 15 years, and now everything that she has worked for is about to be taken away.
51-year-old Tiffany Burgin is another woman that has had her career rudely interrupted by this pandemic. She had worked her way up to become an assistant manager at a restaurant in the French Quarter of New Orleans, but now she fears that her job may be gone permanently if the tourists never return…
“The writing is on the wall. I don’t think my owner is going to make it,” said Tiffany Burgin, an assistant manager of a restaurant in the French Quarter of New Orleans that remains closed. “It’s a 100% tourist-driven economy here. Until the tourists come back, we’re screwed.”
Burgin, 51, never got a college degree. She climbed her way up the ranks of New Orleans’ booming restaurant industry, serving entrees and tending bar for years before becoming a manager. But she has not worked since mid-March, after a mass of tourists caught the coronavirus following Mardi Gras celebrations. Many establishments in the French Quarter are still boarded up.
The only way that tourism will return to previous levels is if this virus goes away, but at this point it has become clear that is simply not going to happen.
So she will continue to have to try to survive on her meager unemployment checks, and that certainly is not easy…
“I get $247 a week in unemployment,” Burgin said. “Who can live on that? Who? Nobody I know. I haven’t been this poor since I was a teenager.”
I wish that I had some good news for workers such as Burgin and Valentine, but I don’t. In fact, economic conditions will eventually get a whole lot worse.
But in the short-term, the country is fixated on the upcoming election, and every day we see more evidence that both sides are bracing for a very long battle.
I know that there are supporters of both candidates that believe that a “nightmare scenario” can still be avoided because they are convinced that their guy is going to blow the other candidate out of the water on election night.
We shall see what happens, but I don’t think that it is going to work out that way.
Instead, I believe that we are headed for a horror show, and I don’t think that America will ever be the same again after this.
by Michael Snyder of The Economic Collapse Blog
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