All of today's pundits and economists somehow missed the biggest risk to Disney markets - Black Swan Donny. This week Trump made all of them look like absolute idiots. Right up until the bill passed Congress the White House affirmed their support for the bill. Trump even extended the government shutdown deadline TWICE to provide more time for negotiations. Then, when it was finished he trashed the bill and burned all of the bridges that would allow him to sign it.
Apparently today's pundits don't remember that Trump caused the longest government shutdown in U.S. history two years ago. A 35 day shutdown that started December 22nd, 2018 and lasted until January 25th, 2019. Then, like now, he was having a temper tantrum, at that time over the funding of the border wall. And he will gladly shutdown the government all over again now facing the much more dire prospect of leaving the White House. A scenario that will rubbish all of today's 2021 economic predictions before the year even gets started.
Picture what happens to an already weakening economy when unemployment runs out for millions of people, the entire Federal government shuts down, and millions of businesses lockdown due to accelerating COVID. January is expected to be peak pandemic.
Depression, that's what happens. In 2020, the U.S. government was 25% of the economy. Now take that GDP offline.
Even if the Democrats win the Senate via the Georgia runoff (Jan. 5th), that is very unlikely to derail Trump's shutdown plans. It would take a super-majority in both the House and Senate to override a veto. Highly unlikely now that Trump has condemned the current budget bill as a "disgrace". The current budget is radioactive to Republicans. The fact is that Republicans want the economy to fail under Joe Biden. For months McConnell was adamant that no additional stimulus was necessary, UNTIL he realized that the Georgia Senate runoff was at risk. When that event soon passes, he will have no political incentive to pass a major stimulus bill in January.
For their part, today's pundits and economists don't see this coming, because they can't predict the past and the present, much less the future. Back in August 2008, the Fed was still debating whether or not the economy was in recession. It had been in recession for nine months already. Most of today's pundits and economists only care about one thing: monetary euthanasia. To these fools, there is no real economy.
Meanwhile, junk stock speculators were sniffing glue this past week believing that a $2,000 stimulus bill would actually pass Congress on Thursday morning, when it was nothing more than another Trump con job. When the $900 billion bill passed on Tuesday, cyclicals rolled over, having already priced in the meager life support. Cramer couldn't comprehend the basic fact that the bill that passed was insufficient economic life support:
As it turns out of course, there is NO bridge to the vaccine now. Which means that cyclicals were far TOO optimistic this past week.
And of course Cramer was smoking crack as usual.
This gridlock clusterfuck is deja vu of winter 2008/09 when Obama won the election. Except of course 10x worse. This will be winter 2009 with expired unemployment benefits and a government shutdown. Featuring a paranoid nutjob rambling around the White House trading conspiracy theories with other alt-idiots. All while the COVID death toll skyrockets.
What a great way to be great again.
Since 2018, banks have been warning that the Trump economy is 100% fraud. Now they will enter third wave down at all degrees of trend.
Buckle up, because monetary euthanized gamblers are about to discover that Go Daddy is no safe haven from depression.
"I bought for the pandemic, but I stayed for the depression"
