By Bilal Hafeez 13-11-2020
In: hive-exclusives | Politics US

Don’t Believe The Trump Coup Conspiracy Theories

(2 min read)
Resize text:

A vocal minority still believe that President Trump could win the election. According to them, his options are overturning the results, pressuring state electors to ignore the popular vote or even staging a military coup. Indeed, prediction markets are assigning a 15% chance to his re-election (Chart 1). I’m sceptical – many of these conspiracy theorists were also expecting Trump to sabotage the election by subverting the postal service and to intimidate voters with militia on election day. Neither happened. Here are four reasons to expect Joe Biden to be president on 20 January 2021:

(1) Election fraud exists, but there is no evidence of correlated fraud in 2020.

To assert that there is zero fraud across the patchwork of US electoral systems is bold. It’s ironic that many (often Democrats) who believe in zero fraud also believe that votes can be repressed or that foreign countries like Russia can manipulate US elections. Moreover, there is academic evidence that US voter fraud occurs, though on too small a scale to affect an election, and there is evidence of it across other advanced democracies too.

The real question is whether there has been so much correlated fraud that it led to states flipping to Biden. There the evidence is lacking. And judging by the cases Trump has put before courts, there is little chance of proving fraud. We must also remember that vote recounts have never overturned majorities in the tens of thousands. Therefore, Biden has the votes to win the electoral colleges and become president.


(2) State legislatures won’t overrule the popular vote.

One conspiracy theory is that Republican state legislatures will overrule the election results in the states that voted for Biden. In the US system of electoral colleges, voters choose presidential electors in their states who in turn cast their votes for the president based on the popular vote. The theory here is that Trump is somehow manipulating the state legislatures into defying convention and their state laws to ignore the popular vote and elect the incumbent. Aside from a whole raft of constitutional and legal issues with this, the Republicans performed better in the House and (likely) retained the Senate – so why scrub the election results when they turned out better for Republicans than expected?


(3) Key pro-Trump media has turned against him.

Media organisations like Fox News and platforms like Twitter that enabled Trump before the election have dropped their support. Indeed, Trump has been openly hostile towards Fox News since they called the election for Biden. Meanwhile, Twitter is now censoring tweets from Trump – a departure from their policy for most of his presidency. Together, these developments dramatically reduce Trump’s power.


(4) The military will not support Trump.

As any student of coups will know, you need the military onside to stage one. There is absolutely no evidence that the military would support one. Indeed, Trump sacked Defence Secretary Mark Esper partly for refusing to invoke the Insurrection Act to send US troops onto US streets to quell civil unrest during the summer. His replacement, Christopher Miller, is an establishment defence figure who was aligned with previous Defence Secretary James Mattis – a critic of Trump. To make this point clearer, the Cybersecurity and Infrastructure Security Agency (CISA) – a body Trump created – that sits under Homeland Security recently issued a statement that included this:

‘The November 3rd election was the most secure in American history…There is no evidence that any voting system deleted or lost votes, changed votes, or was in any way compromised’.

Therefore, in my view, Trump’s chances of remaining president are near zero. And there should be no reason for investors to position for a sell-off in markets. A more valid reason to be negative is that Trump could use his remaining days to enact actions that might harm markets – these could include sanctions on China, constraints on the Fed or blocking any fiscal stimulus. Better to focus on these risks rather than conspiracy theories.







Bilal Hafeez is the CEO and Editor of Macro Hive. He spent over twenty years doing research at big banks – JPMorgan, Deutsche Bank, and Nomura, where he had various “Global Head” roles and did FX, rates and cross-markets research.

(The commentary contained in the above article does not constitute an offer or a solicitation, or a recommendation to implement or liquidate an investment or to carry out any other transaction. It should not be used as a basis for any investment decision or other decision. Any investment decision should be based on appropriate professional advice specific to your needs.)


For access to our Slack Chat Room, where we discuss all things markets with our researchers and subscribers



Successful Start-Ups Build Strong Founding Teams (4 min read)

By Sam van de Schootbrugge | Feb 10, 2021
Start-up success hinges on many factors, but most would agree that the skills and experience of the founder and initial founding...

Where Will the Economy Find 10 million Lost Jobs? (3 min read)

By John Tierney | Feb 08, 2021
The headline January labour market report was another downer – private payrolls rose a scant 6,000 versus the consensus...

Where Can you Get Higher Bond Yields?

By Caroline Grady | Dec 04, 2020
US yields are rising. The combination of growing optimism over a global recovery given vaccine progress, and the possibility of a US...


The Fed is Failing (1 min read)

By Bilal Hafeez | Mar 01, 2021
The Fed’s failure is neither that rates…

Do ESG Ratings Affect IPO Valuations? (4 min read)

By Sam van de Schootbrugge | Mar 03, 2021
Summary A new Journal of Corporate Finance…

Want To Join Our Community Of Leading Investors And Researchers In Our Slack Chat Room?