Maybe the US markets are not about Evergrande ... maybe it is Washington.

A thread to explain.

Let's start with this from CNN (!).

They are finally saying the quiet part out loud. His presidency is on fire, because his own party is the problem.

While his appr rating might be bottoming (Gallup today at 43%, so we'll see), his disappr keeps making new highs.

In a polarized world where the vast majority will never chg their opinion (either way), this is a big move and only about 2% higher than Trump on election day.

Rs are saying "Ds, you do it"

Biden is going have to use his political capital to get Ds to pass spending/debt ceiling.

Again, see Biden's approval/disapproval chart above ... what political capital? It seems to be disappearing by the day.

Why is this important, because a never ending stream of Wall Street Pundits on financial TV confidently saying the spending bill will be passed and the debt ceiling will be raised. Assumed in these comments is all this will happen without any drama.

Are we sure?


• • •

Missing some Tweet in this thread? You can try to force a refresh

Keep Current with Jim Bianco

Jim Bianco Profile picture

Stay in touch and get notified when new unrolls are available from this author!

Read all threads

This Thread may be Removed Anytime!


Twitter may remove this content at anytime! Save it as PDF for later use!

Try unrolling a thread yourself!

how to unroll video
  1. Follow @ThreadReaderApp to mention us!

  2. From a Twitter thread mention us with a keyword "unroll"
@threadreaderapp unroll

Practice here first or read more on our help page!

More from @biancoresearch

22 Sep
I think everyone is getting Evergrande backwards.

It's not what a default means for China. Rather it's what happened to China to cause a default.

Start with this chart. Economists are hacking China growth forecasts, and the downgrades are accelerating.

These downgrades are consistent with the Economic Strength Indices (ESI) compiled by our colleagues at @DataArbor . They measure incoming economic data versus its 1-year average.

China’s ESI has been falling and recently turned negative.

Currently, China (orange) is the only large economy with an ESI below zero.

Read 5 tweets
21 Sep
Gensler taught a blockchain class at MIT. When he was nominated the crypto universe was excited as a guy that "gets it."

Now we see he really thinks the entire space (incl BTC) is a giant scam and his agency must protect investors from themselves.

What is going on here?

Gensler is a career bureaucrat, nothing more, nothing less.

That means he gets important positions of power and he gets to be in the room when the policy is formulated, and offer his opinion, and it will be seriously considered.

But when the policy is made (read: Yellen decides) Gensler is to prostitute to the full force of his office/reputation to sell it. And sell it like he means it!

Otherwise, they will find another bureaucrat and he can go back to MIT.

This is how Washington works.

Read 5 tweets
19 Sep
An addendum to this thread about the debt ceiling debate maybe moving from non-event to event.

Two issues to clarify.


First, the Ds have the ability to raise the debt ceiling by themselves, explained here. So, they are not hostage to a filibuster.

BUT! This assumes the Ds are in agreement on a spending bill. As I noted in my earlier tweet, they are not.

In 2013 the SEC ruled that any Govt sec that does not pay on maturity date is in technical default and must be valued at $0.

So, money market funds holding T-Bills maturing while in a debt ceiling fight, must market them at $0 until paid.

Read 5 tweets
19 Sep
The WSJ just released a Janet Yellen Op-Ed imploring congress to raise the debt ceiling.

Maybe this is not the done deal everyone thinks it is ... a thread to offer some thoughts.

So who is Yellen talking to here?

The democrats have the presidency and the majority in the House and the tie-breaking vote in the Senate (50/50, VP breaks ties).

They do not need a single republican vote to raise the debt ceiling.

So what is Yellen worrying about?

Could it be that Biden is losing political cloud?

As this chart shows, and I have mentioned in previous tweets, we are a very polarized country. No one ever changes their opinion (for or against). So a move of this size is significant.
Read 6 tweets
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
3 Sep
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.

Read 7 tweets

Did Thread Reader help you today?

Support us! We are indie developers!

This site is made by just two indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3/month or $30/year) and get exclusive features!

Become Premium

Too expensive? Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal Become our Patreon

Thank you for your support!

Follow Us on Twitter!