Commentary from Leguius on the Fool
As of this morning, I am completely out of the stock market; having converted all of my holdings (including those in mutual funds) to other liquid and completely risk free accounts. The only thing that Wall Street abhors more than uncertainty, is uncertainty of a sui generous or heretofore unseen quality or magnitude. I believe the present state of limbo with respect to the presidential elections creates precisely this type of uncertainty. Thus far, the market has been only tentative... however I fear that as the days and weeks without resolution wear on, there will come a point at which confidences may be eroded so much that people will effectively stampede out of the market to protect their wealth. I hope that such a mass exodus does not occur, because it will be tremendously harmful. But, I am sufficently concerned that I have pulled my investments early. Perhaps I am being overly cautious. It is likely that I am. It may well be that Micron/AMD/RMBS reach an agreement while I'm out and I miss the run-up. So be it. Because if what I fear occurs, my family and our finances will be protected.
For what its worth, here are my thoughts as somewhat of a constitutional scholar on how this could play out.
The "first round" of the recount is now in, with Bush narrowly ahead. The Florida Sec. of State has indicated that the state will not certify results until November 17th, when the overseas absentee ballots are in. She cannot certify the results in any event, because a judge has issued an injunction pending hearings on the "butterfly ballots" in Palm Beach county. Law suits in that regard are already on file with more in the works. As an aside, Florida law provides for invalidation of an election where there is a "reasonable doubt" as to whether it reflects the will of the people. That is an incredibly low burden to meet, although the remedy (i.e., re-vote, etc) is not clear. There may also be "disenfrancisement" lawsuits by voters in the Panhandle, based on the issue of the media "calling" the election for Gore while people were still en route or in line to vote. These cases will argue that voters behaved differently because they thought Gore had won. Some will be Democrats claiming that the projection convinced them their vote was unnecessary, or could be cast for Nader; others will be republicans who will claim they thought voting was futile in light of the purported Gore win. These suits will not be as strong as the Palm county suit, but they may well be filed anyway.
I predict none of the suits will be successful, but they could well tie this matter up for months.
Meanwhile, the Bush camp has only a limited time to trigger recounts in other close states. Wisconson, I believe, requires a request for a recount within 3 to 5 days of the vote. As some of you will recall, that state has a close margin and a TV news station story alleged last week that in some cities, Democratic supporters had been offering homeless people cigarettes as a reward for requesting and casting absentee ballots. There are indications of a potential law suit based on this activity.
The electoral college must meet to cast their votes for president on December 18th. Significantly, about half of the states allow electors to "jump ship." In other words, they are not strictly required to "go home with the girl they brought to the dance," so to speak. You will hear a lot of this in the coming days, as pro-Gore forces advance the argument that, even if Bush should take Florida, the electors should vote the "national conscience" as reflected in the popular vote. It will only take three electors out of the whole bunch to accomplish this result. If it happens there is no court review (it is a non justiciable political question), and Gore will take office.
Another intereting scenario could result from the delays that may be occasioned by the litigation. Unless the cases are thrown out of court following the hearing next Tuesday, it is entirely possible that Florida will be unable to certify its delegates to the electoral college AT ALL by December 18th when the college is supposed to vote. Under the constitution, the college must meet and vote anyway; and, because no candidate will have received 270 electoral votes, the matter would then go to the House of Representatives to pick the next president. For this House of Representatives vote, however, each state delegation gets one vote. So, you may be thinking that this would favor the Republicans, since they in theory would be able to prevail given the composition of the House on a state by state basis. Well, don't go so fast. Under Amendment XII to the Constitution, that vote must be by a QUORUM of two thirds of the states. In other words, the Democrats can theoretically prevent that vote from happening by refusing to show up and create a quorum. What result? Well, if the House does not act by March 4th, the Constitution provides that the NOW SITTING vice president shall act as president as in the case of the death or other disability of the president; and he gets to nominate a vice president who shall then be confirmed by both houses of congress. As I read the 25th Amendment, they then get to finish the term. So, ladies and gentlement, we may wind up with Gore and his running mate by default! Put that in your pipe and smoke it.
Before you get too confused about what I've just suggested could occur, please realize that it might be rendered irrelevant in the days ahead. Here's why. Although the press has not picked up on it yet, I have it on very good information that in Broward County, Florida, there were over 3,000 GOOD AND VALID BALLOTS that registered no vote at all for President when counted by the computers. As you know, Florida requires ballots to have a hole punched out of them. If the hole is not punched propertly, it is possible to see who was voted for by looking at the ballot, but the machine will not see it. Now you know why the Gore campaign wants a "hand recount" If a hand recount is done, Gore will likely gain the extra 3 or 4 hundred votes he needs to win Florida. Broward County, as a whole, cast ballots for Gore in a ratio of two-to-one over those cast for Bush.
Of course, if Bush eventually loses Florida, his forces could tie up electoral votes in other states and kick us back into the House of Representatives scenario I've suggested above. The only difference is that, in that case, the Democrats would have tremendous political cover for staying away and preventing a quorum.
As I said, uncertainty abounds. Soon, the media are likely to pick up on all of the scenarios I've noted above; and in turn, the Street will get nervous. On top of that, the Dell warning has triggered selling. In the minutes that have passed since I started writing this, the Dow and Nas have each lost another 40 points on the day. Ughh, now I'm kind of glad I placed those sell orders.
I plan on missing this little dive in prices, and will jump back in once this mess is figured out. I also plan on getting a lot of BUS shares on sale-- say at around 35 or so.
Best of luck to all, and may God help our republic if we don't get this resolved soon. |
