Stalemates And Stagflation

"I don’t know", Nancy Pelosi said Thursday, asked when she might sit down again with Steve Mnuchin to resume talks around a new virus relief package for the US economy. "When they come in with $2 trillion", she added, alluding to a compromise figure Democrats have billed as a "halfway" point between the two sides. The idea of the talks extending into September and becoming entangled with wider discussions around government funding should be a non-starter for both sides. But it's at least pos

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13 thoughts on “Stalemates And Stagflation

  1. Cap ages of congressmen (and women) and senators to 65 years old. Ensure they have an education that is beyond a crap law degree at a peripheral university. Ensure they have at least 10/15 years experience in the private sector.

  2. Ships sink slowly till the end then anything nearby gets sucked down with them.
    If Bears are wondering why some of us put money in this market the last 5 months this is why. Not for now.

  3. Btw, what is the inflation hedge? TIPS? I re-bought Gold and Silver after the trend reversal ended up being a one day affair. But, then, I also remember that when the markets were crashing, Gold sold off with everything else.

  4. The writing may be on the wall that the GOP old guard has finally decided to cut the rope to an unsalvageable sinking ship, turn against Trump who they never wanted, and reclaim their old position as deficit hawks. Such a strategy hinges entirely on maintaining control of the Senate. These stimulus talks increasingly appear to have less to do w the current crisis, and more to do with mail in voting, which is an existential issue for the GOP. For once, the Dems may be playing hardball to ensure they vanquish a President they consider to be the most dangerous in modern history. They may be willing to sacrifice the suffering in the process, which would hardly be out of character for them. This is a high stakes gambit.

    1. I should add that saddling a weak Democratic administration with a depression, while stonewalling fiscal spending in the Senate, would hardly be a bad political strategy in the Machiavellian sense, if the GOP focus in on gaining more power in 4 years. The FED will protect their real base. Essentially it’s the same strategy they played for 6 years under Obama.

        1. Wikipedia: “All 34 Class 3 Senate seats are up for election in 2022; Class 3 currently consists of 12 Democrats and 22 Republicans.” The Republicans could be slaughtered in 2022. For all their bluster, they have a poor hand now. I don’t think they can rhetorically pull themselves out of the Trump-alignment septic tank that they dug for themselves over the past four years. Either you enabled Trump or you resisted him. There will be no weaseling out of that stark record.

    2. Why not make the “sacrifice?” Like generals who send our children off to get killed in needless wars, it’s no sacrifice to any of the “old Guard” personally. They have immunized themselves in advance.

  5. The issue is Mark Meadows. When Mnuchin was negotiating himself things went swimmingly for compromise when negotiating with the Democrats. This was something that Trump and the malevolent faction in the White House could not stand. So they sent Meadows for this round of negotiation along with Mnuchin. Meadows had never been a crafter of legislation in the House. He was a destructive force as part of the “Freedom” caucus/Tea Party faction, help to destroy a Republican Speaker, and basically nuked lots of compromise/ possible legislation during his time there. As long as Meadows is front and center for the White House, nothing is going to get done. Of course this is overplaying the White House’s hand. They are 80 ish days from the election and as things get closer you can bet that Trump will want aid- and will probably get a “worse” deal than he wanted. The great deal maker is in fact a lousy negotiator when the other side has ammo – he only wins when he has a decided advantage and can bully the other side. This is not one of those times. Pelosi is an extremely savy politician. I put my chips on her.

  6. “If there were listed puts for American empire, now would be a good time to buy-to-open”… couldn’t agree more. But shorting, even with puts, has been a tough tough tree to climb. Others might say, “Never short America…” But when the total equity value of the U.S. markets exceeds the total value of the world’s GDPs, one has to wonder how much further this can go. Yea, I have heard all the arguments of why the Feds are pushing investors to go far out on the increasingly fragile limbs of the market. But fragile those limbs are, and I rather be safe as opposed to grabbing the last leaf off that limb. Over the last week, I have divested of “safe” trades — gold, silver, municipals, utilities, long-term treasuries, the short-term rise of the dollar from the lows… I rather wait for new growth. I am happy to watch the Robinhood traders learn the hard lessons that I have learned over a much longer life. Maybe I’ll wait until next spring to start climbing that tree again… But I will sleep well waiting..

  7. Bruce chase,

    Spot on. Don’t have to swing at every pitch. The ability to wait for a good risk reward is what investing is all about imo.

    Good luck, stay wise, stay healthy and invest well.

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