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    • An Avalance of Scandal Could Bury Trump

    An Avalance of Scandal Could Bury Trump

    By Paul Krishnamurty Jun 22, 2020 Opinion
    An Avalance of Scandal Could Bury Trump
    With Donald Trump behind in the polls and betting, Paul Krishnamurty explains how and why betting on alternative Republican candidates could pay enormous dividends


    The 2016 election produced unprecedented drama. Trump’s takeover of the Republican Party. Clinton’s e-mail scandal. Both parties hacked by the Russian state. 24/7 chaos on social media - whether the fallout from Trump’s tweets, or fake news about his opponent’s imminent death. Buckle up - 2020 will be even crazier.

    Gambles on alternative candidates are commonplace

    If one lesson was to be surprised by nothing in politics anymore, another regards how betting markets are moved by even the wildest speculation. Right up until polling day, people were backing alternative Democrats to replace Clinton on the ticket. Ditto moves against Trump both prior to his confirmation as GOP candidate and following the ‘Pussygate’ scandal.

    We’ve already seen big gambles on Democrat alternatives to Joe Biden. Earlier reported moves for Andrew Cuomo and Hillary Clinton have correctly dissipated but it will be no surprise to see further outsider gambles on the Democrat side but right now, Republicans offer a better opportunity.

    Trump and his party trail polls by catastrophic margins

    Trump is in very serious trouble. Although still given a 40% chance on Betfair (a declining estimate), that is much higher than conventional prediction models, which rate his re-election at below 25%. Both approval ratings and head-to-head polls against Biden are abysmal. Both he and down-ballot Republicans are staring at catastrophic defeat. 

    It is near impossible to keep up with the US news cycle. George Floyd protests. Covid spreading across America, with increasingly terrible infection numbers. Trump holding an indoor rally amidst fast rising numbers in Tulsa - scene of the worst ever massacre of African Americans - coinciding with Juneteenth celebrations marking the end of slavery. 

    All those subjects are hurting him. Then there is the ever growing band of former White House colleagues and senior Republicans lining up to condemn him. General Mattis, Mitt Romney, George W Bush, Colin Powell and now former National Security Advisor John Bolton declares him ‘unfit for office. 

    Bolton book piles on the pressure
    The White House failed in their bid to block Bolton’s book and the revelations are both damning and humiliating. Kow-towing to President Xi over Chinese concentration camps, whilst begging for help to get re-elected, for example. Bolton confirms the charges relating to Ukraine that led to Trump’s impeachment by the House of Representatives, and provides further information.

    Just as we were digesting the first releases, a new scandal involving long-term legal stress blew up. Geoffrey Berman, the Manhattan prosecutor overseeing numerous cases regarding Trump and various associates, was effectively sacked by the Attorney General. 

    Bill Barr, however, somewhat botched the execution, meaning the process of installing his preferred replacement, rather than Berman’s assistant Audrey Strauss, will not be quick. Investigations and perhaps imminent charges, will carry on as normal.

    Campaign will be marred by multiple scandals

    The cases are of startling significance. Trump’s loan history with Deutsche Bank and the financing of his Inauguration Fund. Rudy Giuliani’s connections to the Ukranians at the centre of the impeachment enquiry, whom Berman charged. He is the attorney who jailed another Trump lawyer, Michael Cohen.

    This is an unprecedented electoral situation. No US presidential campaign has ever been mired in anything like this level of scandal. The Berman case puts corruption and obstruction of justice centre stage. Key findings from the Mueller investigation and Roger Stone trial are being unredacted, enabling more dots to be joined regarding Russia. Mary Trump, his niece, is releasing a damning book within weeks.

    A perhaps fatally worse development would be for the Supreme Court to rule against Trump in the Deutsche Bank case. He is suing to prevent the bank plus accountants Mazars from complying with subpoenas for his records. Were the Republican-majority court to rule in his favour, it would arguably make any president immune from oversight. 

    The court may not be as partisan as fatalists believe. They just ruled against Trump twice, on LGBT rights and an immigration dispute, with Chief Justice Roberts flipping to the liberal side on the latter. The reaction from Trump and his surrogates was furious.

    I have argued for years that the public release of his Deutsche Bank records - which are said to involve large-scale money laundering on behalf of Russian oligarchs close to Putin - would finish him. The court’s decision is imminent and doubtless on Trump’s mind. 

    My impression is that Trump is in meltdown. The walls are closing in - politically and legally. Once leaving office, he becomes liable for prosecution on these matters. Republicans have shielded him since 2016 but can they relied upon anymore?

    Speculation about 2020 withdrawal likely to grow  

    In any other election situation, with these polls and distractions, a party would dump their candidate. Yet the odds about it happening here are huge. He’s 14/1 to not be the Republican Nominee and 9/1 to fail to complete a full-term. The only alternative Republicans trading below Betfair’s maximum odds of 999/1 are Mike Pence (120) and Nikki Haley [300].

    Granted, the chance and logistics of him leaving office before being confirmed at the convention on August 24th are extreme. Were Trump to be removed from the ticket, it would most likely be a resignation on health grounds. That could happen or, more pertinently is bound to be speculated upon, over the next four months.

    In addition to consistently laying Trump to win (average 2.22) - a preferable position to backing Biden - I’ve been backing Pence and Haley at around those marks. The latter would start hot favourite in any new, emergency contest. When the speculation comes, I expect the odds about both to fall significantly, enabling a profitable cashout. In a dream scenario, Trump suddenly resigns and we get a new Republican nomination contest.

    Having read extensively about the man’s career, following the money, I have long argued that Trump’s political career was unsustainable. True, that meant getting the 2016 election wrong. But whilst it is impossible to predict exactly when something will become unsustainable, that doesn’t change it being so. There is always a tipping point and it feels close.


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