No Plausible Legal Grounds To Contest Election: Levitt

To get some color to there, we welcome Justin Levitt. He is professor of constitutional law at Loyal Law School based in Los Angeles. Justin, thanks so much for joining us here. Let's assume we get through the next couple of days and this is really a close one, But what are some of the legal challenges if former Vice President Biden were to win that a President Trump could raise. I don't really think there are any, at least none

that we've seen so far. In order to braise illegal challenge, in order to go to the courts, you need to have some plausible fact scenario that shows a violation of the statutes or violation of the Constitution, and the good news in a couple of ways. Is it. We got done fighting about most of these things months ago. There were a record number of lawsuits this summer and fall that helped resolve a lot of the issues that would otherwise be contested. And beyond that, yesterday, the election day

voting was pretty smooth in most of the country. So there really isn't anything we know of now that any sort of legal grounds two protest or contest whatever the final count is. We're still waiting on the final account. We've got to be patient. Um, But a couple of days from now, as you suggested, we'll know what that final count is, and it doesn't look like there are any legal grounds to challenge it at this point. But

that's pretty phenomenal. If you're working for the tomp campaign, would you say the same thing, though, So I was working for the Trump campaign, I would do what they've been doing for really five years before the president went office the first time and make some wild claims about action the courts to destabilize and de legitimize the election results. That's in fact what we found from the president last night, declaring victory completely false. Um. Not something he gets to do.

And uh so I might well bluster, I might well file lots of things. Um, I might well make a lot of the hand that I'm dealt in the media, But I don't know that I would actually see any legal path to do anything other than that. Uh, just to take us back to two thousand, Bush Gore Florida, could we have something like that? What was the basis there? Just refresh our memory, and could we have something along

those lines this time? Sure? I think the only way you're going to have something like that line is when the counting is done. If the counting is five thirty seven votes apartists, if Trump and Biden are separated by five seven votes, as Bush and Gore were in Florida in two thousands, then yes, you could well see litigation. And the question is and over what's it's really about? Everything?

So in Florida, there were, as we all remember, problems with hanging Chad's punching through punch card ballots in a way that left it ambiguous about who you were voting for.

But there were also other problems with ballot design. There were problems with mail ballots or problems with military ballots, their problems with registration, their problems with purges, their problems with lines, on and on and on and on and on, the election of Florida was a mess, and the margin of error was far larger than the margin of victory, which is to say, seven votes close everything matters. It's unlikely that any of the states at this time around

you're going to be that close. It's not impossible, but unlikely. Um And if the election is ten thousand votes apart or twenty thousand votes apart, even though that's a fraction of a percent, that's not the sort of ground tickets overturned in litigation. The election two sixteen was a fraction of a percent in Michigan and Pennsylvania was Hanson in New Hampshire, but that was still way too much of a lead to overcome via any sort of litigation, And I think that's more likely to be the case this

time around. I don't know who's going to end up on top, but unless it's seven votes close, I think the people will decide the selection and not the courts. It seems ripe for an extraordinarily sharp mind to come up with something new. Is that possible? Do you think justin that that some flipper snapper out there will come up with some grounds to see somebody on and set a new precedent. It's always possible, but again it's really not likely. Law isn't magic. It's a dispute resolution mechanism.

It exists in order to resolve a complaint that we have based on the way the rules are applied, and it's not like magically conjuring a spell reversus a result. There has to be something that you can point to that is a demonstrable problem that violates the current law. Well, what about ballots a riving after a certain point? Is there the possibility that you could find something to dispute there? There is, although I don't know that the results are

going to turn on that. I think we're going to have results that clarify when or one way or another, even without counting uh those ballots. The only place in which there's a legal dispute over ballots arriving late are places where that deadline changed, places like Pennsylvania or North Carolina or Minnesota. There were changes based on changes in

state law to what that deadline is. By the way, all ballots in those states essentially have to be cast by election day, So we're really just waiting for the ballots to come in rather than worrying about anybody casting a ballot. Now, Um, there's a small window of potential fighting or discrepancy over those balances. Ballots that were didn't arise by election day in those states, but that arrived a couple of days later if they were cast earlier.

But I think that's going to end up being a rather small number of votes, and I don't think it's going to be enough to close whatever margin we have. Again, I don't want to suggest that I know what the answer is going to be, but the states that we've seen so far have been close, but not that close. Um, I don't think there'll be enough balance to make up the difference. So, Professor, we we know Donald Trump's history way before the he became president is that he is

very litigious. So I think a fair assumption would be that he in fact will try to avail himself of the courts here. If he does, what is the kind of timing that we should be thinking about. Yeah, no question, he is that, you justis. He has been liturgists. That's decades long. That's not just as a political figure, but

it's certainly continued since he's been President. UM, a lawsuit without provable facts of a statutory or constitutional violation is just a tweet with a filing fee, and so I think you can expect lots of those tweet with filing keys. I would expect lawsuits to be filed, maybe as soon as today. UM. There are still a few that are lingering again on more minor issues with relatively few ballots at stake. You might see new litigation file today or tomorrow or over the coming days. I don't think any

of those are going to impact the process. If you're looking for something that might maybe sort of kind of possibly impact the process, I think we'll really know what that is after we get the initial count, which means next week or the week after. But I don't really see any big dispute large enough to question those results. So expect the lawsuits to be filed. I don't expect them to work. So I know you're a constitutional lawyer,

but I can I'll ask your question. If you don't want to answer is, or if you feel like it's it's not your expertise or what have you, then then find just pass you know, say Joe Biden wins right, because right now is maybe looking as sliver more likely that that he wins, but that the Senate remains publican are we looking at the end of major changes like, for example, the filibuster or uh, you know, changing the

makeup of the Supreme Court or what have you. If it's a split government, does does that not even enter into the picture. If it's split government, it's going to be very hard to change the composition of anything. UM. Courts, the rest of government, procedure, agencies, etcetera. UM, as the president has discovered, there's there's not all that much you

can do through the executive power alone. UM. Combination of one chamber of Congress and the courts will generally put a stop to most of that, not all the most of it. UM. You talked about about rules like Senate procedure, like changes to the filibuster, that's always possible. UM. I honestly don't know whether if the Senate should change hands or if it should remain in Republican hands, whether either party will have any interest in eliminating the cilbuster. A

lot depends on whether there's unified government or not. If Joe Biden ends up winning the presidency, And as we said, we just don't know yet give it a couple of days. Um. If the Senate does become democratic, they'll be much more interesting. I think in the Democrats side on ending the celebuster, and that's something they can do on their op It's just a question whether they're gonna want to. Professor, what do you make of this Supreme Court? Obviously six to

three here? Uh, conservative? I guess. How do you expect the Supreme Court is going to rule going forward? Do you you have any we have any indications. I think they're going to be a very conservative court generally, there's a little doubt of that. That's exactly what President Trump promised, and in that respect he has indeed delivered. Um. I don't know, uh, And I don't think they're going to really have the opportunity or desire to weigh in on

this election. UM. I think there are lots of issues to justices think of themselves as above individual party politics. They're they're on the court for life. They don't need an individual presidential fight. So despite the fact that the President keeps calling on his justices to save him, I don't think they're interested in doing that. UM. I think that they're likely to be a very conservative block, and how they choose to exercise that power is going to

be up to the individual issue confronting them. It's not always going to be a conservative outcome in every case. Um. In fact, on some hot button issues, I think they might prefer to go slowly rather than go quickly. I think you'll see the Chief Justice, who is currently in the media and Justice, remains quite powerful on the court. But I think it's also likely that the media and Justice, which is not the same moderate Um, it's quite conservative court,

will become either justice. Course, it's your justice, Kabina, depending on the particular issue. It's say, Professor, what would your students at Loyola or indeed other little schools be looking at specifically today? What kinds of questions will they be debating amongst themselves? Well, most of them will be doom scrolling through various social media feeds, I'm sure, um, and

or hitting refresh repeatedly on the websites of choice. Um. There's a lot of anxiety out there, and I understand that anxiety has been the year of anxiety, not just in America but globally. UM. And it's reflected in this so far uncertainty about the electoral outcome. I'm sure that people will be paying attention, probably more than they should frankly, to new lawsuits that are filed. There's a lot of wild speculation about where those could go. As mentioned, I

don't think they're going much of anywhere. Um. Really, I think if they're smart, and I know they're smart, they'll be paying more attention to us than to anything else. And by that I mean, really, the election process is up to we, the people we had the chance to express to ourselves. Votes are mostly in a few more trickling in. Um. Now it's up to us to be

patient enough to wait. We have to give the people who are counting the ballots time to do their job, to count the dots, to dot eyes and cross teas, and when they're making a list, to make sure they check it twice. And if we give it time to work, UM, I think that the election process will actually be smoother than all of us are anticipating right now. Um, what

comes next is pretty mundane. A lot of local towns and counties are counting ballot one by one, and I have no doubt that my students in the rest of America will be watching that process really closely. Well it certainly seems like turnout is massively up in general, and we'll know final numbers on that at some point and we'll be talking to you in the meantime, and I wish you the best of luck with your students and with all that scrolling and debating it. Justin levet as professor.

Professor Justin Levitt is professor of Constitutional Law at Loyola Law School, and our thanks to him. It is time to turn back to markets which seemed to be quite delighted with themselves, at least equity markets at the moment. David Ko talk as chairman and chief investment Officer at

the Cumberland Advisors. David, give us an update on liquidity because we've seen quite the move and treasuries overnight and today again quite the move in stocks, you know, I mean there are definitely individual stories, um, you know, an Alzheimer's drug providing some boost to some some of the healthcare stocks. But in general is this a liquid market. It's a very liquid market in the large cap Bonnie,

in the growth stocks. I looked right before the interview, Um, if you looked at the s MP five hundred large camp and I j R. Which is the t F for the s MP six hundreds small cap the difference in performance today was three hundred basis points. So there's liquidity, it's flowing into the nurse take, it's flowing into the large cap growth sector, and other parts of the market

seem to be either in disfavor or just ignored. So, David, there was a lot of discussion, you know, over the last several months about when and if investors should think about rotating out of some of those big tech names that do have the proven top line growth stories into some of the more cyclical stories that depend upon you know, us getting to the other side of this pandemic and getting to economic recovery. Where are you now here? We

are election a plus one on that thought. Well, we have taken positions in and we have positions in small cap and mid cap and um we are leery of the intensity of the half of ju stocks that make up the fang or how whatever, however you want to spell the acronym, because we've we're continuing right through today to see this bifurcated market. You have the SNP five hundred five giants and you have the other four hundred,

and there's a big gap between the two. UM. Last week in the sell off, we saw sentiment reach real extremes, so we went to the buy side. So by the end of last week we're about invested in our US ets portfolios, which is where we are today. UM, it's been great for seventy two hours. If I were to tell you anything other than I am very nervous and leary here, I wouldn't be telling you the truth. David, you're in Florida. I'm just curious as to you know,

whether you anticipated the Florida results. Oh, thank you, know, thank you. I listened to the interview you just had with with your colleague about Florida. UM. Florida's that chaotic place these days. It's the outcomes were strange. We saw lots of the Hispanic communities, Cuban and Venezuelan and Puerto Rican, various communities, and how they were surprisingly strong for Trump. If you were in Florida, you could see the field

work being done by the Trump campaign people. It was deep here and the intensity of the divide in Florida is really very alarming. M Vanny. I live here. UM, I see two populations, one population of which I'm a part are older, they're worried about the virus. They wear masks, they wash their hands, they stay socially distant, they're careful. There's a lot of us here like that. And there's another cohort younger um thirties, forties, twenties, and they're on

the other side. They don't wear mess they don't distance, they get sick, they don't care. They think it's like a cold. We just had an episode in Delray Beach on the other coast where there was a march on main Street and then to the end of the march they had a mask burning event. So we really have a divided state and the intensity of the division is alarming to some of us. I'm one of those, David, Is it is it regional within the state as well? Florida such a big state, you know, it's almost like

their South Florida. Then there's Central Florida North Florida. Is it different that way as well? I think it is fault And I think not only is it regional uh north or South or the two coasts in the middle, but really regional in maybe the metropolitan center. So Miami is quite different from Tallahassee, from Jacksonville, from Tampa, from sarah Soota where I am in, down to Naples. So you you go to different places in Florida, and it is it is a micro cosum and they are distinguishable.

And for us in Sarasota, we you know, Cumberland is now headquartered here, and we're in many states around the country, but in Florida, we we have clients and relationships from Jacksonville, a Key West, and from Tampa to Fort Lauderdale. So we're on the phone or talking to our people all the time. And you would think you're in six or

eight or ten different states, not just one. That's incredible, incredible, David, I'm gonna ask you a question I asked earlier, but I'm just fascinated by it is a supposed election trade yet well, I don't know. We we have we The way I think about it is we have a very unusual transition or not with Trump, who has created a unique presidential environment after two hundred and twenty years. So what is Trump and the Trump supporters? They are a version of a revolution, and a revolution in an early

stage has a lot of energy. To see it in the rallies, you see it in the expressions of support for Trump, and you see it in the concern of others who look at it and get worried about it. And revolutions have to evolve, and then they have to get tired and they mature. This is a young revolution. How big it is, what it will do to be sustained, how much of it is idiosyncratic to one unusual political figure,

remains to be seen. So how we how we deal with this is a very difficult thing, and from an investment point of view, from from an economics point of view, doubly so, because Trump has changed all global trade patterns, introduced protectionism and tariffs, uprooted agreements with drawn from them. So the disruption is the easy part. It's the reconstruction of whatever the new is gonna be. That's the hard part. We've only seen the disruption and we don't know the

degree of it yet. So we're in a remarkable place. I tell my clients and friends we are writing a history book and we are right in the middle of the fifth chapter and it's a ten chapter book. So, David, if former Vice President Joe Biden were to win the White House, what do you think his job one needs to be? Well, he would like to be a healer. He's an old time season politics and he's been in the Senate for a long time. He thinks he knows

how the Senate works. Um, we don't know what the Senate is gonna look like exactly, but we know it's going to be very close. And we also know the House didn't expand it doesn't look like it. Pelosi's margin is is difficult, it's narrow. So Biden is a politician with long skills. Can he accomplish some workable relationship and have policy? We know the policy. He wants a climate change that's a big issue. He wants an infrastructure bill.

We've that's a big issue. He's going to raise taxes on certain areas of the economy and on wealthy people and on corporations. That's an issue. Can he pass them? How much can he get through the houses of Congress? This is an extraordinary piece. I don't know that anybody can forecast trajectories are outcome sitting here today. Yeah, And I mean, David, you know the president has a limit

of powers. If you're talking about you know, traditional presidents that doesn't sign executive orders all the time, and and you know some of those executive orders weren't really even you know, in in law. So if it is Joe Biden and he treats the presidency as a traditional presidency, what at all can he accomplish? Can he even rejoin the Powers Agreement, for example, that's something we know he wants to do. Well, would seemed to me funny he can He can reverse executive orders just as easily as

Trump could issue them, and and he can not use them. Also, it would seem that the country want, or some of the country wants, less chaotic governance, more calm, more traditional normalcy, and search for it. So Biden has a way to deliver it. Whether he can accomplish that remains to be seen. But he has his network of people who have governed before, and they have the capability and experience to govern, and he knows them, and he's comfortable choosing the people to

work with. In the case of Trump, we didn't have a transition team, we didn't form a government. It was chaotic from the very beginning, and the turnover has been so high, So that would speak in favor of Biden being able to have successes progressively, Let's hope. So, Hey, David, thank you so much for sharing some of your time with us. We really appreciated. David Kotok, he's a chairman

and chief investment officer at Cumberland Advisors. A risk on day today, on election Day plus one, let's get a sense of what's driving these markets. We can do that with our good friend Danielle di Martino Booth. She's a CEO and Director of Intelligence at Quill Intelligence. She's also a former advisor at the Dallas Federal Reserve and a Bloomberg Opinion calumnist. She's based in Dallas, Texas. Daniel thanks

so much for joining us here. So when you woke up this morning you kind of got a look at the news feeds. What did you think we were going to see in the market today, Well, it was more like when I went to sleep this morning, since that had a few hours um, you know, it was it was pretty apparent that the market started to factor in a lot of the benefit of gridlock, if you will in the coming years. Uh, you know, plus the idea, you know, if Wisconsin and Michigan and Nevada do go

to Biden. And I don't really follow polls at all, but I follow Vegas very closely. And that's what Vegas is saying right now. So if we get over the two seventy electoral vote, uh line, you get a camp Down trade war, no sack Supreme Court, no rising corporate taxes, no rising capital gains taxes, neglig dorble antitrust, and stimulus, but not socialism. So I mean, who doesn't win in

this scenario? Uh? But you know, we do still have the specter of unlike conspiracy theories that we're running around out there, we do still have the specter of of of the virus sitting out there as well. So but but no, markets are celebrating. They have a lot to celebrate right now. Yeah, I mean, it definitely looks like

they're celebrating this immediate sort of results. But if, as our previous guests said, there will won't be anything to sort of challenge on at least in the in the courts, then you know, and and and we have divided government. So let's say, and I know this is all hypothetical because we don't have any answers yet, but let's say there's a President Biden with a Republican Senate. Is that gridlock?

Is that what markets are enjoying here? Well, it's it's the things that I said that that that they would be. It's it's the inability to pass, you know, the sweeping legislation, the things that were most feared on the part of the GOP. And and that's why we've seen bondyields come down so hard. And it's not just here in the United States. We've seen bond yields come down worldwide to

day and volatility literally crash. So, Danielle, you know, obviously the FED is already in session if you like, and tomorrow there's another meeting after which we'll have a decision and a statement from Fed Jerry J. Powell. Will this change anything about what statement might emerge tomorrow as opposed to if we really did have a you know, a strong mandate on either side. Well, I think you're going to hear the volume turned up even higher. Remember the the SET is not a spender, it is a lender.

So you're going to hear the volume turned up even higher because of the prospect for a smaller stimulus package then probably what most SET officials would like to see, and that you know there there are there are a lot of very small band aid but huge macroeconomic stimulus measures that can be taken along with the December the eleventh Continuing Resolution that the government has to vote on that by December the eleventh during laying up lame deck,

excuse me to keep the government open. So it would just be a matter of I did the math recently, back of the envelope about a hundred billion dollars to extend the Cares Act unemployment benefit through the end of March, which would match up with when CARES Act forbearance on mortgages, and uh same could be said for rental eviction moratorians. Again. You add those two up and it's it's a rounding era for for Uncle Sam of a hundred billion dollars.

But you're preventing a massive fiscal cliff on December thirty one, when the pandemic unemployment assistance, all of the different names of unemployment jobless claims that we talked about every Thursday morning, those are set to expire at the end of the year. So is the rental eviction ratorium that President Trump signed a memoranda to to extend via CDC funding. So those

are easy things. I think that that the Congress can do, but I think the Fed will reiterate that they really do want a larger stimulus package in order to carry this economy over what appears to be a growing coronavirus third hospitalization waves. Yeah, so, Danielle, you're you're exactly right that numbers are going in the wrong direction. Is there any appetite do you think for the Republicans to kind of change their tech and and and do in fact

deliver a bigger number to whoever is president. Well, you know, it's it's it really is going to come down to and this is just my view, but it is going to come down to some interesting comments that Bloomberg reported on a few weeks ago from Jamie Diamond and the cabinet that Biden chooses from the get go, and those types of acts of goodwill on his part to show, don't tell that he's going to be centrist, that he's going to unify the country instead of unifying the Party

of the Democrats. If there are signs that Biden is going to follow through on some of his election promises, that he is going to be the Biden that we've always known, straight down the middle, then I think that you would see a much more amenable Senate Lad gop led Senate daniel D. Martino both, thank you so much for joining us. We appreciate that Danielle's the CEO and director of intelligence at Quill Intelligence. She was a former advisor to at the Dallas Federal Reserve and also a

Bloomberg Opinion commist. We always appreciate her thoughts and Vannie getting some headlines coming across the Bloomber terminal. Georgia expects all votes to be counted today and the state of Georgia has two thousand ballots left to be counted. That's according to a state official. So making some headway in the state of Georgia. And we just heard, of course from the state of Michigan as they continue to count

their ballots. Yeah, I mean, I think we've heard from many of those states who have ballots left to count at this point. Really, the main message is reassuring voters that their vote won't go astray and it won't get not counted. And you know, whether it's a Republican state or a democratic state, you have been hearing from the

governors and state officials that that is the case. So it will be interesting to see what President Trump will do about this and whether he intends to continue to carry out his threat, you know, to have election counting or ballot counting stopped beyond a certain point. I mean, nobody seems to think that that's a politicibility, including the

constitutional lawyer we just spoke with. Yeah, exactly right. So I think I guess the common theme we're hearing from these states is in terms of their messaging, is every vote will be counted. You can have confidence in that. Uh. And then obviously so over the next several days we should know something more clearly. Thanks for listening to Bloomberg Markets podcast. You can subscribe and listen to interviews at Apple Podcasts or whatever a podcast platform you prefer. I'm

Bonnie Quinn. I'm on Twitter at Bonnie Quinn, and I'm Paul Sweeney. I'm on Twitter at pt Sweeney. Before the podcast, you can always catch us worldwide at Bloomberg Radio