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Welcome to Election Day! — Well, here we are again, dear friends. Four years ago at this time MM was pretty convinced Hillary Clinton was going to roundly defeat Donald Trump and become the first female president in U.S. history. That did not … what’s the word … happen. And it’s lead us to give up on the political prognostication game.

That said, the most likely scenario tonight is that Democratic nominee Joe Biden wins the presidency by taking back the upper Midwest and perhaps adding states like Georgia and even Texas. Florida and Ohio would be bonuses that could run up the Electoral College score.

None of this is certain. Trump is within striking distance in all the states he needs to repeat his narrow, shock the world, inside straight win of 2016. But polls would have to be significantly more wrong this time for that to happen than they were four years ago.

Democrats also have a strong shot at taking the Senate but less so than winning the White House. The only thing that seems relatively certain is that Democrats will hold and probably increase their majority in the House.

Beyond this, chaos could rule. Bitter legal battles may emerge over too-close-to-call states. And we may wind up in a 2000-style mess that drags on for weeks or months. Biden has a big edge with the record 90 million or so who have already voted. But Trump will likely win the remaining Election Day vote. The question is by how much?

Markets crave certainty in the outcome but there is no guarantee we will get it. In fact, it would be something of a surprise if the presidential race is actually called tonight or early tomorrow. Could happen if the “blue wave: really emerges.

But it very well may not. And Trump has been clear in his plans to declare victory early if he is leading and immediately litigate any close results in critical states if he is not. The potential for serious domestic unrest in the event of a heavily contested result is quite real.

RB Advisors’ Rich Bernstein emails: “I think anyone who thinks uncertainty will dissipate after the election is crazy. It won’t end on New Year’s Eve and it won’t end with the inauguration. For the past five years we’ve been in a new era of uncertainty and sudden clarity is very unlikely.

“US investors have developed a myopic home market bias and, as a result, don’t seem to realize US assets’ risk premiums have been growing. If one looks at CDS spreads or sovereign bond spreads, it’s pretty clear the never-ending uncertainty is fraying the US’s status as the world’s safe haven.”

GOOD TUESDAY MORNING — Did we really make it to Election Day? Seems impossible. Anyway, good luck everyone. Send us your exit polls. Email me on [email protected] and follow me on Twitter @morningmoneyben. Email Aubree Eliza Weaver on [email protected] and follow her on Twitter @AubreeEWeaver.

Well, duh. The election is the only thing that matters. A Democratic sweep would raise fears of a fin-reg crackdown but it’s not really on Biden’s top five list of things to do.

Getting new stimulus done and instituting a new Covid-19 approach would dominate an early Biden administration. Wall Street will also continue to worry about a Treasury Secretary Elizabeth Warren in the event of a Biden win. But MM continues to see the chances of that as relatively small though certainly not zero.

STAY WITH POLITICO ALL DAY — We’ll have wall-to-wall coverage and results and live commentary on POLITICO.com. We will also have live election coverage in partnership with Four Square starting at 9:00 p.m..

Host Eugene Daniels will break down the news along with Chief Political Correspondent Tim Alberta, Chief Washington Correspondent Ryan Lizza and National Political Reporter Laura Barrón-López. Watch live here.

Check out POLITICO’s election rig — informative, visually compelling and impressive in its ambition. Follow along with our live coverage and share with your social networks. You can track overall results and get real-time updates for the presidency, the Senate and the House. We’ve also used live data and our Election Forecast to allow users to predict how the electoral math could shake out. Follow our Live Chat Tuesday evening for live analysis and get the latest battleground state polls and updates from our California ballot tracker.

PELOSI EYES RECONCILIATION FOR MORE STIMULUS — Our Caitlin Emma: “House Speaker Nancy Pelosi … said Democrats will deploy budget reconciliation procedures next year to enhance the Affordable Care Act and provide additional pandemic relief if the party secures a narrow majority in the Senate, wins the White House and maintains control of the House.

“‘We’ll almost certainly be passing a reconciliation bill, not only for the Affordable Care Act, but for what we may want to do further on the pandemic and some other issues that relate to the well-being of the American people,’ Pelosi said on a call sponsored by the liberal group Protect Our Care. The Supreme Court is set to hear oral arguments next week in the Trump administration’s push to overturn the health care law.”

ICYMI: SBA TO LOOK AT PPP LOANS — Our Zachary Warmbrodt: “The Small Business Administration is quietly rolling out an effort to scrutinize the largest businesses that took payroll support loans during the pandemic, demanding new details about their operations to justify the aid.

“The SBA this week began to circulate ‘loan necessity’ questionnaires aimed at companies and nonprofits that took forgivable Paycheck Protection Program loans worth $2 million or more. The agency declined to comment on the forms and issued no public announcement beyond a brief Federal Register notice marking their release, but copies were obtained by POLITICO.”

K-STREET MAY NEED TO DUST OFF DEM ROLODEX — Our Theodoric Meyer: “When Republicans seized control of Congress and the White House in 2016, lobbyists with ties to … Trump and powerful GOP lawmakers saw their stock skyrocket. Tuesday’s election could sweep all of that away, locking Republicans out of power and sending K Street scurrying for well-connected Democrats instead.

“On Monday, one of Washington’s biggest lobbying firms, Brownstein Hyatt Farber Schreck, got a jump on the potential transfer of power, announcing it had hired former Sen. Mark Pryor (D-Ark.) away from a rival firm. Pryor is one of fewer than a dozen former Democratic senators on K Street who served alongside Biden.”

WALL STREET RALLIES AHEAD OF POTENTIALLY TURBULENT WEEKAP’s Stan Choe, Damian J. Troise and Alex Veiga: “Stocks notched broad gains on Wall Street Monday as investors looked ahead to Election Day and the potential for a turbulent stretch for markets.

“The S&P 500 climbed 1.2 percent, recouping some of its losses from a sharp sell-off last week, as more companies reported stronger profits for the summer than Wall Street feared and reports on manufacturing came in better than expected. Health care, industrial and financial companies drove much of the broad rally, which followed gains for European and Asian stocks following their own better-than-expected economic data.”

WALL STREET FINES PEAKED IN 2020 — WSJ’s Dave Michaels: “Fines for wrongdoing on Wall Street and other securities-related cases hit a record $4.6 billion this year, despite a pandemic that shuttered courts for months and sent government enforcers home to do their jobs.

“The feat was driven by the results of a few large cases, including $1.2 billion that a mobile-messaging company, Telegram Group Inc., agreed this year to repay investors to resolve a regulatory lawsuit over its sale of a cryptocurrency. Telegram neither admitted nor denied the claims.”

HOW INVESTORS ARE GAMING ELECTION NIGHT — Reuters’ Lawrence Delevingne and Pete Schroeder: “From the beach towns of Pinellas, Florida, to the suburbs of Bucks County, Pennsylvania, Wall Street will be closely watching a few dozen counties on Tuesday night for hints on who will win the U.S. presidential race.

“Investment firms, faced with the prospect of a chaotic election complicated by an unprecedented number of mail-in ballots, have hired political analysts and crunched voting data to try to identify crucial counties and Senate races that might tell them which way the vote is headed.”

BIGGEST BANKS AREN’T AS STRONG AS THEY APPEAR — Bloomberg’s Yalman Onaran: “The largest U.S. banks are less healthy than they appear, boosted by temporary accounting and capital-relief measures as well as massive market support from the Federal Reserve, an advocacy group said.

“Although the six biggest banks’ leverage ratios reported at the end of June averaged almost 2 percentage points above the regulatory minimums, the actual average would have been only 0.84 percentage points above without the relief measures, Americans for Financial Reform said in a report Monday.”

TREASURY DIALS BACK ESTIMATES FOR U.S. BORROWING — WSJ’s Kate Davidson: “The Treasury Department on Monday dialed back its estimates for government borrowing through the end of the year as negotiations over another large fiscal stimulus bill remain stalled.

“The Treasury estimated the government would borrow $617 billion from October through December, down from its $1.216 trillion estimate in early August. Senior Treasury officials said they continue to assume that Congress eventually will pass another economic-relief package with about $1 trillion in new spending — the same assumption they made in August — but that much of that borrowing would likely be pushed back to early 2021.”

AMERICA’S ECONOMY FACES A WINTER CHILL — WSJ’s Justin Lahart: “Covid cases are rising, cold weather is on its way and, for many American households and small businesses, financial resources are running out. The next few months could be tough. While the economy still isn’t close to a full recovery from the pandemic, it has rebounded impressively.

A LOOK AT GLOBAL MARKETS UNDER TRUMP — Reuters’ Marc Jones: “Donald Trump’s campaign slogan in 2016 could have been ‘build the Wall Street’, but a scan across global markets throws up plenty of surprises, especially in the emerging economies that have been in Trump’s cross-hairs.

“While the numbers may have been exaggerated by this year’s COVID-19 crisis, most analysts agree that Trump’s tax cuts, combined with low interest rates and the online boom, have made Wall Street a winner over the last four years.”

TRANSITIONS — Per Talking Biz News: “After spending five years on the insurance beat, Oliver Ralph will be taking over as Financial Times breaking news editor. He will be working with teams based in London, New York and Hong Kong.”

HOW THE ELECTORAL COLLEGE WORKS — TruScribe has handy video explaining why it exists and how it works.





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