Ok, Biden troubles are worsening. Joe Manchin (D-WV) is abandoning him (for now?)

This is Manchin's op-ed in today's WSJ

Remember the Senate is 50/50 so losing Manchin (for good) sinks the bill.


Maybe this chart is making Manchin worry about blindly following the leader of his party.

Recall that we are a very polarized country. The vast majority of the country will NEVER change its opinion about a President (for or against). So this is a big move.

How bad is this for Biden. This chart shows Biden's approval rating decline since July 9 (his recent peak) after the COVID turned higher and Afghanistan vs Trump's Nov 11 peak, after the Election and the Jan 6th protest.

Biden's approval rating is taking a bigger hit.

Restated, the public is turning against Biden more than they did against Trump, even though Trump was accused of insurrection and impeached the following week.

Yes, Biden is in deep political trouble, and Manchin abandoning him underscores it.

Can Biden turn it around?

Trump approval rating was 46% Election Day and 41% on his last day. Favorability rating higher now.

Biden approval rating is now lower than Trump on Election Day and less than 4pts from Trump's last day.

This is not good for Biden.

Another chart from the prediction markets detailing how much damage Biden has done to himself in the last few weeks.

Is he skilled enough to turn it around?

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More from @biancoresearch

15 Sep
A thread about transitory vs persistent inflation and why persistent might be actually be winning.

This comes from @economics And it breaks down CPI by reopening and non-reopening components.
Of the 5.25% inflation rate in the last year, only 1.62% was reopening components.

Breaking it down for August we find that reopening CPI components (or transitory inflation) FELL by 0.22% while CPI non-reopening components (or persistent inflation) ROSE by 0.35%

Detailing this we find that CPI non-reopening (persistent) components are surging to its highest monthly level since at least 2016.

Restated, this series of persistent inflation is trending higher, and is 78% of overall CPI.

Read 6 tweets
27 Aug
Worth noting that this is the Fed's fourth tapering attempt in the last 13 years.
All tapers end when the economy weakens (2012 leading to Operation Twist) or markets turn wobbly (19% SPX correct after they tapered QE1 in 2010 and the repo market blowing up in September 2019, after tapering QE3).

View this as a cyclical move. The Fed will turn on the printing press again should circumstances demand it.

So, markets have no reason to crash on the removal of accommodation because it is never gone for good.

Read 4 tweets
25 Aug
Tweet storm on stock market valuation.

Bottom line, companies have delivered earnings like a .300+ hitter with 35+ hrs. But you're paying that hitter $35m+/yr (record salary). Good for now. But will this hitter earn its pay next year, and the year after?

As of August 23, 2021, 475 (95%) S&P 500 companies have reported Q2 2021 earnings with a beat rate of 87%, a new record. This compares to an average beat rate of 71% since the Great Recession ended.

Analysts expected YoY earnings of ~55%. The latest blended est. is ~ 95%. This jump of ~40% is record.

YoY earnings is compared to Q2 20220, the worst point of the lockdown, big base effect. This is why estimates for Q3 2021 earnings growth drop to 29% and 20% for Q4 2021.

Read 8 tweets
20 Aug
This chart shows the SPX (red) between the overnight gains (orange) and the day session gains (blue).
Between Jun-1, 20 and Mar-11, 21, all the gains came overnight (open - prev close) and now the gains come during the day session (close-open).
This flipped on March 11th.

So what happened on or around March 11th? One thing I can find is the reopening stocks peaked on March 15th and have been terrible performers.

This graphically shows a pattern that is getting noticed more and more. That is, ES Fut are weak overnight and they rally back during the day session. Prior to March 11th, this was the opposite. And March 11th, was the effective peak of reopening stocks.

Thoughts on why?

Read 4 tweets
11 Aug
The infrastructure bill's bad crypto regulations risks turning cryptos into banks. Not good!

Below are the 10 sectors of the S&P 500, Highlighted are financials (orange) and banks (blue). Since LTCM in 1998, they have been last in returns!


Same chart as above since the Global Financial Crisis in 2008.

Again financials and banks are the worst possible investments. But now energy (green), after its epic collapse the last few years, joins the bottom of the return list.


Finally, since the Wells Fargo scandal in 2016, banks, financials and energy again are the worst possible investments.


Wells surviving could be bad for banks. Criminal activity on this scale needed to be punished. It really was not.

Read 4 tweets
7 Aug
The big office in a city center is a broken model. The pushback to return is palpable.

Instead of bribing people in a desperate attempt to return to 2019, time to think forward about what the future of the office is and what purpose it still serves.

The future of work? Look at how the gaming industry has evolved. That community has managed to develop relationships, improve productivity, train each other, and reward each other without ever sitting in the same room.

This could serve as a roadmap for the larger workforce.
What is most office jobs in 2021? You sit in front of a computer manipulating things on a screen. This describes about 30% of jobs, and virtually every job in financial services.

This is what gamers do, and they are more advanced at “remote work” than the typical company.
Read 4 tweets

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