Hey Influence Traders,
I had a busy week and got a lot done.
After a quick trip to California to help out some old friends in the Special Forces community, I got back to NYC just in time for an awards dinner for Steve Forbes.
He won a Ronald Reagan lifetime achievement award for promoting freedom.
He had a lot to say about the creep of socialism in our country and made a strong case for why capitalism is and will be the best way to raise the tide for all boats.
Congress, meanwhile, claimed to have a big week but got little done.
The big news was Republican caving on the debt ceiling … Perhaps it was more strategic than a first glance would indicate.
When Mitch McConnell proposed putting a temporary debt extension in place through December, many argued that the GOP gave up its only leverage over the spending bills.
And that makes sense on its face. If the Dems are willing to pass the spending bills through reconciliation, the Republicans had little to negotiate with besides the debt ceiling.
But there might be more to it.
Sen. Chuck Schumer and team were putting a lot of pressure on Senators Manchin and Sinema to agree to killing the filibuster to get the debt ceiling raised.
(As a side note, progressive Dems have already targeted a primary challenger for Sen. Sinema, whom they view as a traitor to the party for not blindly signing off on their spending plans and for pushing for $100 million in cuts to climate priorities.)
That’s a strong point of leverage since killing the filibuster would create open season for Dem priorities.
I think that McConnell’s decision, while only delaying the issue, was a strategic move to take the filibuster pressure off Manchin’s and Sinema’s shoulders.
After all, killing the filibuster will hurt the GOP a lot more than a short-term black eye for caving on extending the debt ceiling.
They are still going to have to deal with it at the end of the year, but the GOP hopes that the public will recognize the insanity of many of the spending proposals and not get behind a move to kill the filibuster.
Dems love polls and they are not tracking well currently.
During the fight over the spending bills, expect the GOP to focus heavily on one of the worst jobs reports in recent memory and Biden’s record low approval numbers.
They will run the narrative that Dem policies are ineffective.
This puts pressure on Dems to rationalize their spending and putting through bills without Republican support.
McConnell made clear in a letter to Biden that they will not be so generous in the future, stating,
“Last night, Republicans filled the leadership vacuum that has troubled the Senate since January. I write to inform you that I will not provide such assistance again if your all-Democrat government drifts into another avoidable crisis."
The Holiday season might not be so joyous on the Hill.
Progressives continue to play hardball on the spending bills, threatening to kill any deals that don’t fund their social policies.
Four democratic senators protested in front of the Capitol this week to push provisions they want in the spending bills.
They were led by Massachusetts Sen. Ed Markey who said that the creation of a Civilian Climate Corps and a Clean Energy Performance Program, which would provide financial incentives for energy companies to transition to renewable energy, were non-negotiable.
He also said they can’t compromise between “a livable and unlivable world.”
Markey co-sponsored the Senate version of Green New Deal legislation.
He wants green provisions in the spending bill and wants them passed prior to the upcoming climate summit in Glasgow, which starts Oct. 31, so that Biden looks more respectable at the summit. (Warm up the private planes, we’re going to Glasgow!)
Regardless of the outcome of the spending bills – climate remains front and center for this administration.
The EPA announced that it is crafting “the next generation of Clean Air Act climate regulations” in a broader “initiative” or “strategy” to address pollution.
As I recently said, Bill Griffo is on spot with uranium.
Holdout Ireland (joined by Estonia) finally caved and agreed to participate in a global minimum tax proposal.
The pressure became too heavy on the island nation.
The decision means that Ireland will give up its favorable 12.5% corporate tax rate and join a group of 140 nations that have agreed to an effective 15% rate on major multinationals.
The decision impacts 1,556 companies in Ireland employing 500,000 people, including Big Tech like Apple (Ticker: APPL), Google (Ticker: GOOG), Amazon (Ticker: AMZN) and Facebook (Ticker: FB).
The move will cost Ireland an estimated €2B in lost revenues and cause me to rethink my offshoring.
SEC chief Gary Gensler made clear this week that the SEC will not go the route of China and ban crypto but to expect regulation.
His comments echoed recent ones by Fed chairman Jerome Powell.
Gensler emphasized that the government’s focus is on ensuring that the industry adheres to investor and consumer protection rules, anti-money laundering regulations and tax laws.
It’s a tough market but we’re still notching wins.
Ford (Ticker: F) continues to trade flat, but I still like their move into EV.
I’m going to dive more into the EV game over the next week to look at the true cost of EV conversion and where opportunities lie.
Speaking of opportunities, Palantir (Ticker: PLTR) announced its second big government contract win of the week, this time a $90 million contract for the Department of Veterans Affairs.
Regardless of what’s happening in DC or elsewhere, trading guru Andrew Giovinazzi makes #powermoves in the Capitol Gaines portfolio.
Cutting Through the Noise for You.