Europe Heads for Double-Dip Recession; Will U.S. Follow?

Posted on 11/23/2020 6:53 AM

More positive vaccine news | More delays for WHIP+ | Software glitch for ARC-IC

 


In Today’s Updates


 

Market Focus:
* Equities higher on more upbeat news about another vaccine
* Is U.S. heading for a dreaded W-shaped recovery?
* Europe’s double-dip downturn
* U.S. inflation could be poised for a comeback

* Abu Dhabi bets big on oil
* Focus on oil storage
* Bitcoin climbed back above $18,000 last
* Turmoil at having impact on ag exports
* Russian wheat prices slip

• Cattle placements drop to a four-year low

• Hog slaughter climbs vs. week prior, easing concerns about Covid-19 slowing kills

 

Policy Focus:
* Progress on possible resumption of Covid aid/stimulus package negotiations
* Hoeven lists efforts to ensure farmers receive aid until conditions and prices improve
* WHIP+ application approval delayed
* Delays also for ARC-IC due to software glitch

 

U.S./China update:
* Another U.S. ban coming on China
* U.S. admiral’s undercover visit to Taiwan certain to annoy China: SCMP
* China promises crackdown on misconduct in country’s bond market
* China’s corn imports now top its TRQ commitments
* Chinese pork imports still running well ahead of year-ago

 

Trade Policy:
* Biden said unlikely to quickly unwind China tariffs
* Protest in Taipei at easing of U.S. pork Imports: CNA

 

Energy & Climate Change:

* Participants at virtual Group of 20 summit discussed climate change
* Study projects U.S. greenhouse gas emissions will decrease 9.2% this year


Food & beverage industry update:
* Cocoa futures whale revealed


Coronavirus update:
* Daily California coronavirus cases triple as pandemic dramatically worsens
* AstraZeneca, Oxford Covid-19 vaccine up to 90% effective in late-stage trials

 

Politics & Elections:
* Georgia Secretary of State certifies Biden’s win
* Deadlines for certifying the official vote tally in the U.S. election
* Dominion spokesman comments
* House to end ban on earmarks
* 2020 polling autopsies: WSJ opinion
* Elections analyst offers ‘handicapper’s confession’ on 2020 elections
* Biden to name Linda Thomas-Greenfield nominee for ambassador to UN
* Tony Blinken is Joe Biden’s apparent pick for Secretary of State


Other Items of Note:
* U.S., Mexico, Canada extend border closures

 


MARKET FOCUS


 

Equities today: Asian stocks began the week with gains alongside European and U.S. equity futures signal higher openings.

 

     It’s a holiday-shortened week in the U.S., with stock and bond markets closed on Thursday for Thanksgiving Day and only a half day of trading on Friday.

 

     Portfolio rebalancing. "We see some vulnerability in equity markets in the near term from balanced mutual funds, a $7 trillion universe, having to sell around $160 billion of equities globally to revert to their target 60:40 allocation either by the end of November or by the end of December at the latest,” according to JPMorgan Chase.

 

     U.S. equities Friday: The Dow fell 219.75 points, 0.7%, to 29,263.48.  The S&P 500 slipped 24.33 points, 0.7%, to 3,557.54 on Friday. The Nasdaq lost 49.74 points, 0.4%, to 11,854.97.

 

     For the week, the S&P 500 and Dow ended down 0.8% and 0.7%, respectively. The Nasdaq notched a gain of 0.2% for the week.

 

On tap today:

 

     • USDA Weekly Export Inspections report, 9 a.m. ET.
     • IHS Markit's U.S. manufacturing index for the opening weeks of November is expected to tick down to 53 from 53.4 at the end of October, and the services index is expected to slip to 55 from 56.9. (9:45 a.m. ET)
     • Bank of England Gov. Andrew Bailey appears before the Treasury Select Committee at 10:30 a.m. ET.
     • Federal Reserve: Richmond’s Thomas Barkin speaks at a Greater Winston-Salem virtual event at 12:30 p.m. ET, San Francisco’s Mary Daly speaks on the future of work at 1 p.m. ET, and Chicago’s Charles Evans speaks on the economy and monetary policy at 3 p.m. ET.
     * USDA Crop Progress report, 4 p.m. ET.

 

Is U.S. heading for a dreaded W-shaped recovery? Forecasters in the U.S. are starting to downgrade expectations for the final months of 2020 and the opening months of 2021 as coronavirus cases surge, restrictions on activity increase and Congress declines to provide more stimulus. And reports have surfaced that Joe Biden and his economic team are preparing for the possibility of a double-dip recession next year (link to NYT item).  

 

     J.P. Morgan Chase is now looking for a double dip. "This winter will be grim, and we believe the economy will contract again in 1Q, albeit at 'only' a 1% annualized rate," bank economists said in a research note. Credit Suisse downgraded its 1Q forecast to a mere 0.7% growth rate.

 

     There's good news: Vaccines appear to be on the horizon, more fiscal support could be around the bend and the Federal Reserve is doing what it can to keep the economy going. Those factors could help the economy pick up pace early this spring and through much of next year.

 

     Wobble

 

Europe’s double-dip downturn. IHS Markit composite eurozone purchasing-managers’ index of 45.1 for November — down from 50, the figure that separates expansion from contraction, the previous month — confirms a downward trend in European economic activity this autumn. Measures to contain a second surge in Covid-19 infections have forced many businesses in the bloc’s dominant service sector to limit operations. The damage caused by the second wave of lockdowns is expected to be less severe than that of the first. However, the region is still on track for its first double-dip recession in nearly a decade, which few economists had expected earlier this year. Forecasters now expect the euro area’s economy to shrink by 2.5% in the final quarter of 2020. The bloc was already on the brink of recession before the pandemic struck, thanks in part to Brexit, trade tensions and sagging diesel-car sales. But it was Covid-19 that pushed it over the brink.

 

U.S. inflation could be poised for a comeback. Some economists are starting to embrace the idea that a prospective Covid-19 vaccine could allow people to once again spend money on travel, restaurants and other services—and drive-up prices in the U.S. That would be a change from the past 10 years, when inflation rarely hit the Federal Reserve’s 2% target despite a strong economy and low unemployment. It would also test the central bank’s new framework, which calls for periods of inflation above that level after stretches when it has run below, the Wall Street Journal reports (link).

 

     Inflation return

 

Market perspectives:

 

     • Outside markets: The dollar dropped to a two-and-a-half year low as fast-tracked plans to roll out a Covid-19 vaccine in the U.S. bolstered appetite for risk assets. The other important outside market sees January Nymex crude oil futures prices firmer and trading around $42.75 a barrel. The yield on the benchmark 10-year U.S. Treasury note futures is currently trading at 0.85%.

 

     • Abu Dhabi bets big on oil. The emirate said that it plans to spend $122 billion on petroleum production over the next five years, tapping new oil discoveries. The planned expenditures come as OPEC insists that its members cut production.

 

     • Focus on oil storage. Oil tanks in Cushing, Oklahoma, America’s most important crude storage hub, are filling again, approaching the levels reached in May after prices crashed. Stockpiles at Cushing, the delivery point for West Texas Intermediate futures, stood at about 81% of capacity, according to the most recent U.S. government data. The next data release for Cushing is on Wednesday.

 

        Not so cushy

 

     • Bitcoin climbed back above $18,000 last week to flirt with record levels, a spectacular rally driven by a new group of buyers seeking the opportunity for big profits. The digital currency traded as high as $18,965 on Friday, according to CoinDesk, about 4% below its all-time high. It has surged more than 50% in the past month alone.

 

        Bit rally

 

     • Turmoil at ports jammed by peak-season imports is drawing more attention from regulators; impact on ag exports. The top U.S. maritime watchdog is jumping into the fray with an investigation of whether shipping lines are harming American exporters by holding back containers. The Wall Street Journal reports (link) that agriculture exporters claim the carriers’ push to quickly return empty boxes to China leaves them without the containers needed to ship goods abroad. The complaints come amid growing strains at U.S., European and Asian ports. Companies that faced pandemic-driven upheaval in supply chains this year are rushing to get goods in place for a high-stakes fourth quarter, driving up spot rates out of Asia, backing up boxes at ports and causing carriers to cancel contracted bookings on packed ships. Chinese and South Korean regulators have raised alarms, and the Federal Maritime Commission will look at whether carriers are violating U.S. shipping law.

 

        Empty boxes

 

Items in Pro Farmer's First Thing Today include (Link to subscribe to FTT):

Russian wheat prices slip
• Cattle placements drop to a four-year low
• Hog slaughter climbs vs. week prior, easing concerns about Covid-19 slowing kills

 


POLICY FOCUS


 

—  Some progress on possible resumption of Covid aid/stimulus package negotiations. Senate Majority Leader Mitch McConnell (R-Ky.) on Friday backed Treasury Secretary Steven Mnuchin’s proposal to use $580 billion that was allocated for Federal Reserve loan guarantees, small business aid and other virus relief programs that is unspent. “Congress should repurpose this money toward the kinds of urgent, important, and targeted relief measures that Republicans have been trying to pass for months, but which Democrats have repeatedly blocked with all-or-nothing demands,” McConnell said in a statement.

 

     “We are going to come up with a plan to sit down with [House Speaker Nancy] Pelosi and [Senate Minority Leader Chuck] Schumer (D-N.Y.) and try to get a targeted bill done for the people that really need it, and hopefully the Democrats will work with us and hopefully that will get done,” Mnuchin said Friday on CNBC.

 

     But the reclaimed Federal Reserve funds cannot be used for other programs under congressional budget scoring conventions. The Congressional Budget Office assumes that loans will be repaid, so failing to offer the loans in the first place does not yield any measurable savings.

 

     Meanwhile, predictions are growing that the Fed will unveil more monetary action when it meets in December after the central bank said it will comply with a Treasury request to return unused funds meant to backstop five emergency lending programs.

 

— Hoeven lists efforts to ensure farmers received aid until conditions and prices improve. At the North Dakota Farm Bureau’s annual meeting, Sen. John Hoeven (R-N.D.) on Friday outlined his efforts to ensure agriculture producers receive “the support they need to weather the challenges of severe weather, low commodity prices, trade disruptions and Covid-19, with the goal of getting back to stable production conditions and market prices.” They include (link for more details):

 

     • Providing agriculture assistance under the second Coronavirus Food Assistance Program (CFAP) and ensuring the assistance is delivered as effectively as possible.

     • Securing the regular, full reimbursement of the Commodity Credit Corporation (CCC) to prevent any payment delays under Farm Bill programs.
     • Pressing the administration to finalize the quality loss coverage under the Wildfire and Hurricane Indemnity Program Plus (WHIP+) as soon as possible.
     • Providing regulatory relief, including from the 2015 Waters of the U.S. (WOTUS) rule.
     • Ensuring strong support for farm country’s priorities in the Senate’s Fiscal Year (FY) 2021 funding legislation, including crop insurance and loan programs.

 

— WHIP+ application approval delayed. Some Wildfire and Hurricane Indemnity Program Plus (WHIP+) applications approvals and payments have been temporarily delayed as USDA goes through what is known as “reapportion funding” and is awaiting approval from the Office of Management and Budget.  Once this process is complete, applications will be approved and paid. 

 

— Delays also for ARC-IC due to software glitch.  ARC-IC payments usually have not been issued until December as crop data for the entire farm must be received before a payment can be made. Typically, this process has been done manually. Though the Farm Service Agency (FSA) attempted to automate the process and began to issue payments, a glitch was found in the software. Result: payments have been put on hold until a fix for the software is developed.  Additionally, payments will not be made until minor oilseeds data are published. FSA still anticipates issuing payments in December which will be on track with previous years.
 


U.S./CHINA UPDATE


 

— Another U.S. ban coming on China. The White House is close to issuing a list of 89 Chinese aerospace and other companies that would be unable to access U.S. technology exports due to their military ties, Reuters reported. A spokesman for the U.S. Department of Commerce declined to comment, the news agency said. Such a move would restrict the companies from buying American goods and technology, Reuters added. It could also fuel already-heightened tensions between the two nations as Joe Biden prepares to take over from Donald Trump.

 

U.S. admiral’s undercover visit to Taiwan certain to annoy China, says the South China Morning Post (link). Analysts said the visit of Rear Admiral Michael Studeman, director of intelligence at the command, was “unusual and unprecedented” and would further push Beijing to take a hardline approach towards the island. The Taiwanese foreign ministry remained tight-lipped about the visit, refusing to disclose the name of the visiting official, who was identified by Reuters and several local media outlets. Studeman arrived on Sunday. “There are frequent interactions between Taiwan and the United States, and we welcome the visit by the U.S. official, but as this itinerary has not been made public, the foreign ministry has no further explanation or comment on his visit based on mutual trust between the two sides,” Joanne Ou, spokeswoman for the foreign ministry, said today.

 

— Liu He, China’s vice-premier, promised a crackdown on misconduct in the country’s bond market. Several state-owned firms, including Yongcheng Coal & Electricity Holding Group, a giant coal producer, have recently defaulted on their debt. The government said it would come down hard on fraud, including falsified disclosures, malicious transfer of assets and misappropriation of issuance funds. Yields on Chinese double-A rated corporate bonds—a grade that in China’s credit-rating system signals a significant amount of risk—rose to nearly 4.38% on Friday, their highest since January 2019, according to Wind.

 

— China’s corn imports now top its TRQ commitments. Customs data shows China imported an impressive 1.14 MMT of corn during October, a dramatic increase from negligible imports the year prior. That pushes the country’s total corn imports for 2020 to 7.82 MMT, 97.3% above the year prior and above its official 7.2 MMT low tariff rate quota (TRQ) for 2020. The Phase 1 trade deal required China to fulfill its TRQ obligations for the first time. Its wheat TRQ is at 9.36 MMT, and the latest update shows China has imported 6.69 MMT of wheat with two months remaining in the calendar year. That’s up 163.6% from year-ago. Beijing imported 630,000 MT of wheat in October, a 126.9% surge from the year prior. China’s imports of other grains are also up notably from year-ago through October, with the country bringing in 5.98 MMT of barley, 13.4% above year-ago, and 4.02 MMT of sorghum, a 449.2% surge. China’s sugar imports have also jumped 28.4% from last year at 3.65 MMT.

 

— Chinese pork imports still running well ahead of year-ago. China imported 330,0000 MT of pork during October, an 80.4% jump from the year prior but a 50,000 MT (13.2%) dip from the month prior. China has ramped up its imports of pork and other proteins after African swine fever wiped out much of its massive hog herd. The country is now in rebuilding mode. Ten months into the calendar year, China has imported 3.62 MMT of pork, according to customs data, a 126.2% jump from year-ago. The country also imported 170,000 MT of beef last month, a 12.2% jump from year-ago. This pushed its calendar-year-shipments to 1.74 MMT.

 

U.S./China Phase 1 tracker: China’s purchases of U.S. goods. Link

 


TRADE POLICY


 

— Biden said unlikely to quickly unwind China tariffs. Joe Biden isn’t likely to quickly unwind the tariffs Trump has imposed on Chinese goods, said Sen. Chris Coons (D-Del.), a close ally of Biden. “I would not expect [Biden] to simply just take off all the tariffs and try to take us back to where we were in 2016,” Coons said Friday at a security event, adding he would expect him “to begin by consulting with our close and trusted allies,” like the U.K. and Canada, before moving forward.

 

— Protest in Taipei at easing of U.S. pork Imports: CNA. Thousands of people in Taiwan’s capital on Sunday protested the government’s decision to ease restrictions on U.S. pork imports, the Central News Agency (CAN) reported. About 20,000 people joined the annual Autumn Struggle labor demonstration in Taipei, the report cited the Kuomintang party as saying. Dozens of labor-rights groups co-organized the event, with support from Kuomintang and the Taiwan People’s Party, to put focus on the U.S. pork issue. KMT chairman Johnny Chiang invited President Tsai Ing-wen to a debate about the imports, CNA said.

 

     Background. Tsai’s administration said three months ago it would lift a long-standing ban on U.S. pork and beef imports as of January. It’s part of Taiwan’s move toward bilateral trade agreement talks with Washington.

 


ENERGY & CLIMATE CHANGE


 

— Participants at a virtual Group of 20 summit discussed climate change in a session hosted by Saudi Arabia. “G20 members should strengthen the fight against climate change and continue to play a leading role to achieve full, effective implementation of the Paris agreement,” Chinese President Xi Jinping said. The U.S. formally exited the accord, which pledges limits on fossil-fuel pollution, earlier this month, but there are hopes that Biden will rejoin the accord.

 

     President Donald Trump used his address to the session to again slam the Paris deal, justifying his decision to walk away from the accord “to protect American workers.” “The Paris accord was not designed to save the environment, it was designed to kill the American economy,” Trump said. “I refused to surrender millions of American jobs and send trillions of American dollars to the world’s worst polluters and environmental offenders and that’s what would have happened.”

 

BloombergNEF study projects that U.S. greenhouse gas emissions will decrease 9.2% this year to 5.9 billion metric tons, the lowest level since 1983, as a result of the stalled economy caused by the coronavirus pandemic. The report said the drop in emissions could be partially offset by an economic rebound next year, noting that 2020 emissions would have been just 1 percent lower than the previous year if not for the pandemic's economic impact. Link to more details via Washington Post article.

 


FOOD & BEVERAGE INDUSTRY


 

Cocoa futures whale revealed. News reports identified Hershey as the buyer who agreed to acquire huge amounts of cocoa through the ICE futures exchange, sending December futures contracts soaring. Hershey normally buys physical cocoa beans but appears to have turned to the markets after Ghana and Ivory Coast imposed extra costs to support their farmers. Link to Bloomberg item.

 


CORONAVIRUS UPDATE


 

 Summary: Sources: Johns Hopkins University as of 11:30 a.m. ET Sunday; Hospitalization figures from the Covid Tracking Project as of Saturday.

      * 58,344,477: Confirmed cases world-wide, and 1,383,788 deaths
      * 177,552: New U.S. cases recorded Saturday
      * 12,104,978: Total confirmed cases in the U.S.
      * 1,448: Deaths in the U.S. recorded Saturday
      * 255,959: Total U.S. deaths
      * 83,227: People currently hospitalized in the U.S.83,227      
      

     Link to Covid Case Tracker
     Link to Our World in Data

 

— Daily California coronavirus cases triple as pandemic dramatically worsens. California's average daily number of coronavirus cases has tripled in the last month, a Los Angeles Times analysis has found. As of Saturday night, California was averaging more than 11,500 new coronavirus cases a day over the last seven days — infecting more Californians daily than at any previous point in the Covid-19 pandemic. The new figures raise concerns about a new peak in coronavirus-related deaths by Christmas. L.A. County public health officials on Sunday announced they will issue an order suspending outdoor dining at restaurants amid a surge of new coronavirus cases. The new rule takes effect Wednesday evening and restricts restaurants, along with breweries, wineries and bars, to takeout and delivery. The order will remain in place for at least three weeks, officials said.

 

— AstraZeneca, Oxford Covid-19 vaccine up to 90% effective in late-stage trials. The Covid-19 vaccine being developed by the University of Oxford and AstraZeneca was found to be as much as 90% effective in preventing infections without serious side effects in a large clinical trial in the U.K. and Brazil, the partners said. The vaccine proved 90% effective when trial subjects received a half-dosage in the first of two injections; it was 62% effective with two full doses. Manufacturing has begun in ten countries.

 

     Meanwhile, U.S. officials said vaccinations may start in less than three weeks. The Food and Drug Administration’s advisory committee prepares to meet on Dec. 10. A federal authorization is expected almost immediately. “Our plan is to be able to ship vaccines to the immunization sites within 24 hours from the approval, so I would expect maybe on day two after approval, on the 11th or on the 12th of December, hopefully, the first people will be immunized across the United States, across all states, in all the areas where the state departments of health will have told us where to deliver the vaccine,” Moncef Slaoui, the head of Operation Warp Speed, told CNN on Sunday.

 


POLITICS & ELECTIONS


 

— Georgia Secretary of State certifies Biden’s win. Georgia’s Republican Secretary of State Brad Raffensperger certified Biden’s win in the state on Friday, a day after completing a hand audit of the state’s more than 5 million ballots, starting the clock for its electors to be named and any further recount demand from Trump’s campaign. Biden won Georgia by a margin of 12,284 votes, or about 0.3 percentage points, marking the first time a Democrat won Georgia since 1992.

 

     Trump asked for a second recount in Georgia (Associated Press), which Biden captured, making him the first Democrat to win Georgia since 1992. Trump’s campaign also filed a narrow appeal late on Sunday in Pennsylvania tied to a judge’s rejection of his earlier challenge in the state (Politico). And the partial recount in Wisconsin that Trump’s campaign is paying for is now underway as the team seeks to disqualify batches of ballots.

 

­ — Deadline for certifying the official vote tally in the U.S. election is today for Michigan and Pennsylvania, and Tuesday for Nevada and North Carolina. Link to the latest on President Trump’s legal challenges to the certification process via the NYT.

 

— Dominion spokesman: Trump won 14 Pennsylvania counties where Dominion voting systems were used. A spokesman for Dominion Voting Systems blasted claims of a national voter fraud conspiracy from President Trump's election legal team. On Sunday, Dominion spokesman Michael Steel, who formerly worked with former House Speaker John Boehner (R-Ohio) and former Florida GOP Gov. Jeb Bush, rebutted claims from Trump's camp that Dominion voting machines were used to flip votes from Trump to President-elect Joe Biden. "They keep bringing in jurisdictions where we don't even work. They keep talking about — they're asking for recounts in Milwaukee, in Dane County, Wisconsin, or in Pennsylvania," Steel said. "In fact, in 14 counties where Dominion machines were used, the president won 52% of the vote." When asked if the votes could have been skewed to favor Biden, Steel said that was a "realm of conspiracies so dark" he has "no idea" what they're talking about.

 

     Steel confronted claims from Trump legal member Sidney Powell that Dominion voting software enabled votes to be counted in fractions for Biden. "If someone tried to alter the electronic record, the printed paper ballots wouldn't match. It's not possible. Again, we've gone back in Georgia, we've gone back in other places, matched the ballots to the electronic tally. They match. There is no widespread fraud in the way they're alleging," Steel said. "I have not yet heard a claim that is in any way legitimate that would substantially alter, or alter, a single vote, no," Steel added.

 

     Steel described himself as a "conservative Republican" with a history of working for "conservative causes, candidates, and election officials for nearly 20 years," and said the Trump camp's claims of fraud are against the "very system that inspires the confidence that we have and the love of our country."

 

— House to end ban on earmarks. House Democratic leaders confirmed plans to bring back earmarks for the 117th Congress, according to Majority Leader Steny Hoyer (D-Md.). In an interview with Congressional Quarterly (CQ), Hoyer said that sometime after the Appropriations Committee’s new chairwoman is elected the week of Nov. 30, she will begin soliciting House lawmakers to “ask for congressional initiatives for their districts and their states.” The three candidates to replace retiring House Appropriations Chairwoman Nita Lowey (D-N.Y.) are all on board with restoring “congressionally directed spending,” as it has come to be known. Marcy Kaptur of Ohio and Debbie Wasserman Schultz of Florida had previously endorsed the return of earmarks; Connecticut’s Rosa DeLauro had hesitated but now “unequivocally” backs restoring line items for members’ districts after further conversations, an aide said, according to CQ.

 

     Hoyer isn’t concerned that Senate Republicans’ permanent ban on earmarks will complicate negotiations on appropriations bills if the GOP keeps control of that chamber following two Georgia runoffs on Jan. 5. “I don’t expect it to be a partisan effort. Now that doesn’t mean that everybody does participate,” he told CQ. “But I know there are a lot of Republicans on our side and a lot of Republicans on the Senate side who want to  . . .  have the ability to invest in their states.”

 

     Background: Former House Speaker John Boehner (R-Ohio) added a ban to House GOP rules in 2011. Senate Democrats followed a few months later with the support of President Barack Obama. Senate Republicans made their earmark prohibition permanent last year, but several party members, including Appropriations Chairman Shelby (R-Ala.) support bringing the practice back.

 

— 2020 polling autopsies are still being written, and there are many unanswered questions, says an opinion item in the Wall Street Journal (link). “How did Republicans win 27 of 27 House districts identified as tossups by the Cook Political Report? How did Sen. Susan Collins win Maine by nine points when she didn’t lead in a single major poll for months? How are President Trump and Joe Biden separated by a little under four points in the national popular vote when Nate Silver’s FiveThirtyEight average showed an 8.4-point Biden lead on Election Day?

 

     “The predictions that Democrats would gain 10-15 seats or more in the House were so wrong that they may have hurt the GOP chances to take House control in what was a very close result,” the item continues. “The Cook Political Report, which is taken as gospel by the media, was notably wrong about GOP prospects. Charlie Cook says he and his team were misled by the polls. ‘In my judgment, there was a blue wave building, a pretty big one, then something happened, like a fish getting spooked before taking a bite out of a lure,’ Cook explained. ‘Too many of the most experienced political operatives in both parties could see it coming. My guess is that while a majority, albeit a small one, wanted to unseat Trump, they got skittish about giving Democrats unified control.’”

 

     “Something happened all right,” the WSJ opinion noted. “But if he’s right that polls misled him, then the Cook Political Report has no special claim to expertise. Yet its estimates influence the flow of campaign cash… The GOP was heavily outspent, yet it may gain as many as 12 net seats in the House. What might have happened if Cook and his House analyst, David Wasserman, had been more accurate and said the battle for House control would be close?”

 

— Elections analyst offers a ‘handicapper’s confession’ on 2020 elections. Nathan L. Gonzales is elections analysts with CQ Roll Call. In an article for the publication (link), he provides analysis on where he was right and where he was incorrect on the 2020 elections. An ability of anyone to admit not only when they were wrong, but why, is an admirable trait. Here is what Gonzales said about his way off the mark prediction, as was others, regarding House races (check the article for what he got right):

 

     Prediction: House Democrats will add seats. On Oct. 28, 2020: “In the House, Democrats are poised to expand their majority. With a projected gain of 14-20 House seats, Democrats are on track to repeat the 2006 and 2008 cycles, when the party built on significant midterm gains to seal the capture of two entire branches of government two years later.”

 

     “Undoubtedly my biggest whiff of the cycle, and maybe ever. Rather than a double-digit Democratic gain in House seats, Republicans are poised for a double-digit gain, depending on a handful of uncalled race results. While we accurately projected that Democrats would maintain their majority, we obviously totally missed the overall trajectory of the House elections.

 

     “The clear majority of pre-election data (public and private, partisan and nonpartisan, including Democratic and Republican polling) showed Trump underperforming in key districts around the country and proving to be a liability for many GOP candidates down the ballot. Now we know there was a widespread underestimation of the president’s support and he ended up being an asset, by doing about as well as he did in 2016 in battleground districts. But to be clear, GOP strategists did not believe this scenario was particularly likely, or they would have been shouting from the rooftops that they’d come within a handful of seats of the majority.

 

     “Don’t get me wrong, I take responsibility for our projections, and I’m still a little sick about them. Not because we were rooting for a party, but because we take it seriously. This is not a game to us. I think people misunderstand that there’s literally no incentive for us to skew our ratings against what we think is going to happen, since we’re just trying to get it right. I’m still frustrated and am going to be thinking about our 2020 House projection for a long time.

 

     “It might be dangerous to say, but I’m not convinced public opinion polling is permanently broken, considering our 2018 midterm projections (and projections going back decades) were pretty darn good. I am skeptical of polling in elections when Donald Trump is on the ballot. If that ever happens again, I’d have to consider punting individual race ratings to the next cycle.”

 

— Biden to name Linda Thomas-Greenfield as his nominee for ambassador to the United Nations, as he will announce several other key position personnel on Tuesday (see The Week Ahead for more details). Thomas-Greenfield’s confirmation would place the former career Foreign Service officer, who is African American, in one of the most high-profile diplomatic posts in government. Thomas-Greenfield served as the top U.S. diplomat to Africa under President Barack Obama, an assistant secretary job that capped her 35-year career in the Foreign Service. Known as “LTG” among State Department rank and file, Thomas-Greenfield retired in 2017 and joined the Albright Stonebridge advisory firm as a senior counselor, working with her mentor, former secretary of state Madeleine Albright.

 

— Tony Blinken, Joe Biden’s apparent pick for Secretary of State, is a longtime foreign policy aide, and would signal Biden wants to return to a world of international alliances and cooperation, after four years of combative “America First” policies under President Trump.  Blinken’s first priority will be rejoining global agreements and institutions, the New York Times reports (link). That includes returning the U.S. to the Paris climate accord — which Biden has made a top priority — and remaining in the World Health Organization. He has also spoken of making Europe a partner of “first resort, not last resort,” potentially defraying trade tensions with the EU. “The world does not organize itself,” Blinken wrote in a 2017 NYT Op-Ed. “In the absence of an engaged, diplomatically energized America, others will set the agenda, shape the rules and dominate international institutions — and probably not in ways that advance our interests or values.” He will probably try to build an international coalition to put pressure on China. The Trump administration battled Beijing largely alone, using tariffs as weapons. But Blinken is expected to build closer ties to India and other Asian countries to focus on trade and tech investments as an alternative to partnering with China, reviving the pre-Trump game plan behind the Trans-Pacific Partnership.
 


OTHER ITEMS OF NOTE    


 

— U.S., Mexico, Canada extend border closures. Department of Homeland Security acting Secretary Chad Wolf announced the U.S., Mexico, and Canada have agreed to extend the closure of their borders to non-essential travel until December 21.

 


 

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