economy politics

Maybe We’re Already There (The ‘Story Out Of D.C.’)

"If there is one part of the narrative that leaves me feeling naked and afraid, it is the story out of D.C.", Peter Tchir told Bloomberg late last week, as the S&P notched a third weekly advance despite rampant uncertainty around the fate of stalled stimulus talks. Admittedly, it is a bit odd that US equities continued their relentless grind higher once it became clear that Congress would not be able to reach an agreement on the next virus relief package. While the base case for many is still that something gets done, it now seems eminently possible that the discussion is subsumed into wider talks around government funding, potentially complicating both as the end of the fiscal year approaches. One unnerving aspect of this situation is that the market appears to be leaning on the assumption that the finite nature of the federal unemployment supplement from Donald Trump's executive order and the need to pass a budget by the end of the fiscal year, will guarantee another stimulus deal gets done, while the political baggage that would come with a shutdown will ensure funding talks are handled expeditiously (or whatever counts as "expeditiously" inside the Beltway these days). H
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19 comments on “Maybe We’re Already There (The ‘Story Out Of D.C.’)

  1. George says:

    You are right on with this post H………I agree except… I find it harder to imagine a World order with a Unilateral structure that is bossed by a ‘ basket case ‘ that you aptly describe , that maintains a hold on the title ‘ printer of the worlds Reserve currency ‘

  2. Sheldan says:

    Colonel Walter E. Kurtz Is in the White House. Is Biden our Captain Benjamin L, Willard?

    This movie is too horriblel to watch until the end. But we must keep eyes open, and H helps us do that.

  3. Tom says:

    “It is possible that, even in the event American democracy is literally suspended, market participants would look the other way absent a reason to believe asset prices will be allowed to reflect political reality.”

    Anything is possible, at least within the context of the Heisenberg uncertainty principle. Regardless, the above conjecture appears to me to be ahistorical. I cannot think of any case where the implosion of a system of governance was not accompanied by economic chaos.

    In the case of the United States, we are likely too close to its (cultural, military, and economic) apogee as an empire to see an immediate collapse. That said, the conditions necessary to critically weaken American global hegemony are either already in place or coming into view.

    Tinpot conspiracy theorists might even suggest that a number of ‘events’ have been engineered.

    • kilo says:

      The Heisenberg Uncertainty Principle does not even remotely say that anything is possible. This is abhorrently incorrect.

      • Tom says:

        Relax. ‘Twas a jest. You know, Heisenberg, uncertainty… ‘kay?

        • kilo says:

          Was it though? Or were you trying to intellectually beef up an otherwise useless comment?

          You mention ahistorical.

          Reality TV show host demagogue for a President. Check.

          Shortest bear market in history in the midst of the worst economic crisis in recent memory. Check.

          Never before seen massive injections of liquidity and stimulus. Check.

          Global pandemic that a significant portion of the US doesn’t take seriously. Check.

          The list goes on. Referring to your comment “I cannot think of any case where the implosion of a system of governance was not accompanied by economic chaos.” I have news for you. Our (the US) system of governance has imploded and we are indeed entrenched in economic chaos. That you don’t see this proves the statement you attempt to refute.

          I’ll repeat the quote you take issue with: “It is possible that, even in the event American democracy is literally suspended, market participants would look the other way absent a reason to believe asset prices will be allowed to reflect political reality.”

          The point of that statement, which is correct in my view and which you prove to be true from your own comment, is that market participants (and you) seem to not be aware of, or not care about, the fact that we are already living in a failed state. It’s not a giant leap from there to believe that the market will continue to ignore the collapse of whatever democracy the US has left.

          • Doppleganger says:

            Yikes…just when I’d started to enjoy the lack of unnecessarily venomous attack…

          • Doppleganger says:

            Yikes…just when I’d started to enjoy the absence of unnecessary venom…

            Sadly, jumping all over each other about the health of the empire, the Uncertainty Principle, or anything else really, ain’t gonna clean up the mess in Washington. Or blunt the sting of mourning a lost democracy.

            Although you make some good points, Kilo, I agree with Tom. At worst (and it will be very bad), we’ll have the equivalent of a Belarus-type democracy (elections held so there’s something to steal) and a really, really powerful military that isn’t going anywhere overnight.

            Let’s hope states prevail, and this election is so hard to question even the Senate gets on board on calling the winner–and the winner ain’t Trump. Best case scenario, we render this debate moot.

          • kilo says:

            Doppleganger, which part of Tom’s comment do you agree with? There’s the first part, which I just showed was a contradictory statement. That would imply you’re agreeing with a falsehood. Then there’s the second part, which is so horribly generic of a statement that it’s useless to warrant any further discussion, as I have already stated.

            When people like Tom make nonsensical arguments that attempt to dismiss the (correct) statements that the author has made on the basis of “history”, it does nothing to further the discussion and actively undermines conversation.

            The reason I subscribe to the this website is that I enjoy the author’s pointed arguments and commentary. If I wanted generic, faux intellectual arguments like Tom’s I would listen to Hannity’s podcast.

            If you want an example of a productive comment, please see Anaximander’s below.

            So again, which part of what Tom said do you agree with?

  4. Anaximander says:

    This is from Adam Ferguson writing in 1767 in “An Essay on the History of Civil Society”, incidentally 9 years before The Wealth of Nations, about this type of situation (I.e. Mnuchin and the FED protecting tranquility to such an extent that it immunizes the rich and thus destroys democracy).

    “When we suppose government to have bestowed a degree of tranquility, which we sometimes hope to reap from it, as the best of its fruits, and public affairs to proceed in the several departments of legislation and execution, with the least possible interruption to commerce and lucrative arts; such a state…is more akin to despotism than we are apt to imagine…

    Liberty is never in greater danger than it is when we measure national felicity…by the mere tranquility which may attend on equitable administration.”

  5. MMcCann says:

    Maybe with the untimely death of his younger brother, our current President will reevaluate his life-priorities (as well as his reelection probability) and decide not to seek re-election (just prior to the Republican convention in eight days)…

    • No way. The only hope we have is that he sees inevitable loss and throws in the towel. Not likely though as NY will gladly throw him in jail for fraud, so maybe Russia or suicide are his only options.

  6. Sheldan says:

    Nothing in that man’s life has provoked him to self-reflection, or to a review of his motives, or to re-assess what is valuable to society, or to measure his own behavior in relation to acceptable moral and ethical standards. Laws, for him, are for his lawyers to skirt so he can do what he wants.

    He seems incapable of translating events into experience, or understanding the imperative to create meaning in his personal life.

    One sibling’s death won’t jolt him awake.

    • John3D says:

      @Sheldan You have your assessment right. Here’s an interesting thought from one of the people who has spent time with Trump (I think it might be the guy who wrote ‘The Art of the Deal’ but can’t remember): Trump is not your typical liar who knows he’s lying. That seems absurd, but I believe it’s true by the number of lies that he’s told that anyone with half a brain knows are lies. He’s a person that believes what he thinks is the truth. That may be hard to grasp at first take, but it’s classic narcissism.

  7. The executive order that Trump signed had no effect on unemployment. After the week of 7/25 ended so did the Federal payment.

  8. Wealthy investors may embrace fascism or Trump authoritarianism in the short run, however we know from history the wealthy investors will be the easiest ones for the State to steal from in the future and so they will.

  9. Hard to steal from the poor.

  10. To quote David Rosenberg “Capitalism needs democracy and democracy needs capitalism.” Also Donald Trump respresents rule of man vs rule of law. Some of us thought this was settled in 1215……..

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