Hey Influence Traders,
I’m going to go on an old-fashioned Tuesday Rant.
But first … Billionaires at play!
Jeff Bezos, the world’s richest person, took off in a capsule built by his rocket company, Blue Origin, and headed more than 62 miles above West Texas.
That’s 12 miles higher than fellow billionaire Richard Branson went last week.
Yes – he came back down.
Boys and their toys!
The traditional and crypto markets all had a major smackdown.
The word on WallStreet is that the markets are concerned about the rebound from the coronavirus recession.
K-Street put the blame squarely on the Delta Variant and the unvaccinated … which is wildly misunderstood.
Whose Misinformation is Misinformation?
Ok, here comes my rant!
The White House continues to push for full vaccination.
The media has termed the Delta Variant a killer.
But the stats … and more importantly, the wording … are misleading.
Yes, the Delta Variant is more transmissible, but like with all other previous viruses that have mutated it is a less severe form of the virus.
And yes, the majority of people contracting the virus currently are unvaccinated, but almost exclusively unvaccinated who have not previously had COVID.
It appears that natural immunity is the best immunity … or at least on par with vaccinations (a recent study has shown that natural immunities are more effective against more strains since the vaccinations tend to target a particular strain and not the broad virus).
And all of that helps drive herd immunity … why natural immunity is being discounted and pushed under the rug is beyond me.
Everyone has an agenda, so you need to read into the data that is being used to drive those agendas.
The Selloff and the Rebound
This was the steepest selloff since January, and was driven by a lack of faith in stocks reliant on consumer activity, such as travel companies.
Some pharmaceutical stocks balanced out the declines.
The Dow lost 725 points (2.1%), with airlines, cruise lines, construction firms, energy producers and financial services companies leading the decline.
The S&P 500 fell 1.6%, and the Nasdaq 1.1%.
The good news is that the futures are looking good for stocks today.
Bitcoin (Ticker: BTC) broke through the well-watched support level of $30,000.
Some prognosticators are looking at $25,000 as the bottom, but this slide is real.
This crypto implosion comes as Senator Elizabeth Warren indicated that legislation may be needed to give the Securities and Exchange Commission (SEC) the authority to regulate cryptocurrency exchanges.
She sent a letter to SEC Chairman Gary Gensler last week asking him if “Congress needs to act to ensure that the SEC has the proper authority to close existing gaps in regulation that leave investors and consumers vulnerable to dangers in this highly opaque and volatile market.”
She’s bored … it happens … and that’s dangerous for a serial regulator.
Warren argued that “The increased use of cryptocurrency exchanges presents unique risks to consumers. Although they describe themselves as cryptocurrency ‘exchanges,’ these platforms lack the same types of basic regulatory protections as traditional national securities exchanges like the New York Stock Exchange or Nasdaq.”
Crypto markets do not like talk of regulations.
K-Street Battle Royal
Senator Chuck Schumer plans on starting a Donnybrook tomorrow as he presses for the Senate to take up the bipartisan infrastructure bill.
The vote on Wednesday is a vote to begin debate on the bill – it’s pretty standard.
But some Senate Republicans have vowed to block it from moving forward.
To get it passed, Schumer needs 60 votes, including the support of at least 10 Republicans.
It is called a “vote on cloture.”
The bill is just a shell into which senators will then swap the text of the bipartisan deal once it is finished.
Republicans are feeling snubbed on the process, particularly regarding the larger partisan bill, and are skeptical of the spending on non-economic issues.
The bill comes at a time when Democrats are having a tough time selling their economic vision.
They have put forth a number of massive spending bills, have not defined what they will do for the economy, and have given little guidance on how they plan to pay for them.
That formula does not make for a coherent message that they can sell to the American people.
Some Additional Taxes
In addition to traditional tax plans that have been floated – taxing the rich and corporations – Democrats are eyeing a tax on imports from countries that don’t have strong policies aimed at combating climate change.
An “unnamed source” said that the partisan $3.5 trillion Democrat budget deal would propose “polluter import fees.” What those are was not defined.
The European Union has also stated that it will propose carbon border taxes.
The goals of the tax and spend climate policies are to meet President Biden’s objective of 80% clean electricity and a 50% reduction in carbon emissions by 2030.
Democrats also indicated that they want to tax polluter imports.
Sen. Chris Coons (D-Del.) and Rep. Scott Peters (D-Calif.) have introduced legislation that would levy an import fee on goods including aluminum, cement, iron, steel, natural gas, petroleum, and coal starting in 2024.
Pursuant to the bill, the list of products subject to the fees will be expanded as the U.S. determines the carbon intensity of producing various types of items.
The fee would be determined based both on the greenhouse gas emissions that occur during the item’s production and annual U.S. estimates of costs incurred by companies to comply with American environmental laws.
Despite these moves, many climate change advocates are expressing disappointment that the $3.5 trillion budget does not do enough to combat global warming.
Truth bomb: no amount will ever be enough for the “advocates.”
The progressive Sunrise Movement pushed for a $10 trillion deal and Budget Committee Chairman Bernie Sanders proposed $6 trillion.
Scarily, Sanders is gaining more influence with his Senate colleagues … or at least that’s what the media tells us.
Cutting Through the Noise for You,