- 3 bills are in question, Infrastructure(passed by Senate), Reconciliation($3.5 trillion package), and Budget
- Reconciliation bill is where the Dems have loaded up social issues(voting, Immigration, etc) to appease their base, which requires 60 votes under the rules.
- Progressives in the House number 95 votes and have said they will not vote for infrastructure if this doesn’t pass, tying virtually all 3 together
- Senate Parliamentarian upheld the limits of that reconciliation process so Dems could not use 51 majority rule to pass it where
Manchin and Sinema(in reality 4 others also) were roadblocks to avoid filibuster
- To get around this, Dems are attempting to combine Budget and Reconciliation to force the GOP and moderate Dems to vote on it using blackmail/pressure from market turbulence
- GOP will only vote for Budget issue in a clean bill w/o upping the debt ceiling, Dems are wanting both bills voted on in unison with debt ceiling risen for leverage
- Dems will attempt to modify the filibuster rules to allow for 51 vote majority passage, but its unlikely they
even have the votes for that either, delaying all bills.
I cannot see how these bills pass within the week unless we have a serious market correction which as been on the agenda since April.
The Dems do not want to raise the budget alone and have all the blame for the economy which is on shaky ground as is... McConnell knowing this just said there will be no GOP support
had lost significant influence and any real footprint in Central Asia. After being booted out of Uzbekistan, the reality in keeping forces in Afghanistan became much more evident if the Pentagons long term lily pad strategy was to be properly implemented across the region. Since
Obama had destroyed US influence in Turkey, that option to stress Iran’s defenses for any possible future conflict was logically now going to fall onto Afghanistan forward operating positions rather Turkey where we likely would get no permission from Ankara.
⁃Taper assumptions are based on the Fed rhetoric and public comments, but that is more about market signals and paying lip service to the bond market for the near term.
⁃The likelihood of tapering is low based on multiple political and economic realities. First, we have midterms in 2022 and Yellen nor Powell can ill afford a market crash that close to midterms. Secondly, in the near term, we have a fiscal problem brewing where the GOP is
totally unwilling to give the Dems a free pass and raise the debt ceiling. Because of this Yellen and Powell have prepared $3 trillion in new QE to unleash after this Jackson Hole taper tantrum head fake plays out.
Bullish US$ capped at 93-95 DXY
· US vaccine distribution has surpassed every modernized nation (except the UK)
· US Fed/Treasury actions would want to limit the perception of failing dollar
US Fed/Treasury actions to improve its purchasing power in order to combat commodity inflation
· EU banking sector insolvency issues
· EU manufactures lockdown/political upheaval to lower euro
· Fed distraction with bonds/rates to worry about rising dollar
· Weaponization of the dollar to politically stress adversaries (Turkey, Russia, China, etc)
· Dollar shortage within the EU and China, forcing sales of USTs to raise reserves
For Trump: Neutral. Losing in a manner that is extremely questionable in peoples eyes will only make him a martyr. He will use this to grow a new media and political org for the future.
For Dems: Absolute disaster. Trading Trump for the next 2 maybe 3 election cycles
will without a doubt cause significant changes within the party. A bluewave never materialized & it cost Senate & House races as I expected.
For GOP: Could not have worked out better. They seemingly push Trump out in a manner that benefited the Congressional makeup.
For Europe: Short term victory. 2021 will be rough economically and will likely find no support from a Biden presidency with Russia &
China looking to advance its geopolitical positions that were held in check for past 4 years.
Stimulus was on track to pass 2 weeks ago until Trump had contracted COVID. Nancy Pelosi, smelling political advantage, began stalling the bill and citing COVID related concerns to use the issue as an aggregator for the election.
that Pelosi had run into is gross miscalculation of her political leverage and the risk associated with stalling stimulus checks and UI on the down tickets of House races. Originally, the Dems were going to lose 8-10 seats but this error in judgment will now likely cause 10-15
seats if not more.
Now, Trump and Mnuchin have the advantage in political perception of delayed stimulus and will turn the screws on Nancy so long as it makes election sense. Next week we will see a Senate bill passing PPP and UI benefits which only increases pressure on