Trump will forever be known as the Jim Jones of presidents. A Kool-Aid serving false prophet hell bent on burying his true believers...
Anyone who falls for his fake concern for the middle class is a useful idiot, who is in for the lesson of a lifetime.
The net result of COVID-2020 was to increase U.S. wealth inequality to Banana Republican levels, as the rich were continuously bailed out by central banks while working people went under the bus.
"Why didn't anyone think of this sooner?"
The stunt that Trump just pulled with this surprise stimulus pushback is emblematic of his entire presidency: Abject ignorance, self-absorption, extreme arrogance, followed by knee jerk incompetence. Of course $2,000 per person is a great idea - The Democrats have been in favor of it all along. The only problem is that it took seven months of relentless haggling to reach the mini stimulus that is currently on the table. McConnell was dead set against any more one time stimulus checks until he realized that the Georgia Senate runoff was at risk. Trump is now at war with his own uncharitable party. Republicans only believe in bailouts for rich people, not bailouts for people who actually need money. By pulling this stunt, Trump could delay or cancel all stimulus whatsoever and cause extreme economic hardship in the depths of COVID winter. There was no room to maneuver for this type of last minute political grandstanding.
As usual, Jim Jones just threw millions of people under the bus:
"President Donald Trump’s last-second opposition to a coronavirus relief and federal funding bill already passed by Congress threatens to torch jobless benefits for millions of Americans and shut down the government during a deadly public health crisis"
A federal eviction moratorium — which the legislation would extend through Jan. 31 — would expire at the end of the year. Tens of millions of people could face the threat of losing their homes if the measure lapses."
The president could kill the legislation through a so-called pocket veto if it does not get to him until Thursday or later"
“If you think he cares about the size of the checks, I’ve got a bridge to sell you. All this is is a middle finger to America on his way out the door.”
Recall that two years ago this month, Trump pulled the exact same stunt - he blocked the passage of the annual budget over border wall funding, leading to the longest government shutdown in U.S. history:
"On December 11, President Trump held a televised meeting with Speaker-designate Nancy Pelosi and Senate Minority Leader Chuck Schumer in the Oval Office and asked them to support an appropriation of $5.7 billion for funding of a border wall along the U.S. southern border with Mexico. They refused, resulting in an argument between Trump and both Congressional leaders. During the contentious discussion, Trump remarked, "I am proud to shut down the government for border security ... I will be the one to shut [the government] down. I'm not going to blame you for it ... I will take the mantle. I will be the one to shut it down."
S&P 500 2018:
"Merry Christmas!"
What happens next? I have no idea. Hopefully checks go out ASAP to families in need - in any amount. From an economic standpoint, the amount won't matter, because the economic impact will last probably a week at most. Most of this money will be spent on food, credit card bills, and rent. It's impossible to "stimulate" an economy that is on lockdown mode. The current Keynesian multiplier is the limit approaching zero. The sectors that need this money the most, won't see any of it.
From a markets standpoint, this asinine gambit has no upside either. Beyond short covering, the sugar high won't last more than a few hours or days. The risks of Trump's ever-increasing time bomb are as extreme now as they were before he pulled this stunt.
This chart basically sums it up:
MAGA has been one massive crack high of ever-increasing stimulus:
Deja vu of the tax cut, global markets are starting to price in renewed deflation which contrary to every economic prediction - is inevitable in the post-pandemic world.
"Using the greenback to finance carry trades is a relatively recent phenomenon, reflecting the depreciating pressure of the Fed’s easing measures after years of dollar strength. But with speculative and real money accounts betting against the currency, any bounce higher by the greenback could lead to short covering and a potentially painful squeeze."
This blow-off top is in its sixth up week in a row - a streak we haven't seen ALL year. Up 50% since the election, on mega volume.
"All you do is scan headlines and buy what everyone else is buying"
"I can do that"
In summary, 2020 was the biggest pump and dump in human history:
"In a year that saw a pandemic upend financial markets and economies around the globe, U.S. companies and their largest shareholders raised a record $435 billion with stock sales."
