Major funds/banks partner chatter is signaling a market crash. One specifically has obviously one of the best lines into Fed and have a very risky balance sheet so when the Fed waves the caution flag they need to permeate that awareness to at least 100 people in the firm to "slow
down or brace”. That makes it one of best indicators in the world. Oil is out of control and headed north of $100 and US equities simply cannot handle that combined with China “reboot”.
The Fed has finally trapped itself in doom loop of inflation and propping up the equity
market using several tools in its arsenal. The market simply no longer believes in the over valuation of equities and is calling the Fed out on its nonsense. Without stimulus, this market simply cannot go up much. Fiscal is needed in 30-45 days and a market correction could give
fuel to congress to act.
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A certain major defense contractor has finally worked through all the legal implications of the executive order mandating the COVID vaccine.
This is what they’ve concluded…
if they don’t have 100% compliance by December 8th, they are at a serious risk of losing all current and future federal contracts if they are not, and also expecting for the company to not only be compliant to but force their tier 2 and 3 subcontractors to be compliant as well.
So a tier three subcontractor who only gets 10 percent of its revenue from a prime two levels up is expected to comply.
Defense officials and contractors are in total panic. There are experienced experts who are couple of years out from retirement who are going to retire rather
Democratic Party civil war upends Biden’s Build Back Better timetable
Losing political capital has consequences. The inability to pass legislation is the biggest consequence of all in the Beltway.
The moment that the Afghanistan decision was falling apart in real-time under
the global media’s scrutiny, that was the end of Joe Biden’s political capital. We noted in April that the Reconciliation bill would have trouble passing and the desperate attempt of Democrats to tie the Budget and Infrastructure bills to it should have waved red flags to
analysts against its passage. Creating political vacuums does not only cause conflict in geopolitics, but also domestic politics, which is precisely what has materialized between the progressives lead by Jayapal and the old guard represented by Pelosi.
- 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
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