Eye on Washington: Stimulus Duration Likely to Extend Further

In a note last week entitled “Obamerica: The Honeymoon is Over” we highlighted President Obama’s inability to get a single vote from Republicans in the House for the stimulus bills despite a week of vigorous lobbying. Nonetheless, given the Democratic majority, the bill passed and is now in the Senate, where its future, at least in the current form, seems questionable.

Senate Republican Leader Mitch McConnell made a statement Sunday implying the bill would go down in defeat if it wasn’t stripped of unnecessary spending and focused more on housing issues and taxes. McConnell also went on to specifically challenge Obama’s ability to manage his Democratic colleagues in Congress when he said in an interview:
"I think it may be time ... for the president to kind of get a hold of these Democrats in the Senate and the House, who have rather significant majorities, and shake them a little bit and say, “Look, let's do this the right way”. I can't believe that the president isn't embarrassed about the products that have been produced so far."

While President Obama and Vice President Biden seem to be posturing to suggest they will get at least some Republican support for the bill in the Senate, the Republican Party appears very well organized in opposition to this bill. Senator Jon Kyl from Arizona, who is the No. 2 Republican Senate, backed up McConnell with even stronger words when he stated:
“When I stay start from scratch, what I mean is that the basic approach of this bill, we believe, is wrong.”

Given that the Republicans currently have 41 seats in the Senate, they do have the ability to stop the bill, so it is likely that the bill will change in form, and perhaps dramatically. Ultimately, the investment implications are that approval of the bill will likely be pushed out and with it the duration of the investment catalyst(s) relating to the bill.

Interestingly, the Republicans are continuing to focus on creating the image that President Obama is unable to manage his former Democratic colleagues in the House. They are placing the blame on Democrats in the House for the impractical and unwieldy nature of the bill, but implying that Obama should have managed them better in the process.

That may be partially true, but the reality is that President Obama, due to no action of his own, has in both Nancy Pelosi and Harry Reid two teammates that seem somewhat unwilling to create legislation that would garner bipartisan support. In Reid specifically, President Obama also has a Senate Leader that seems unwilling to cede much influence to the President, which was highlighted by his January 9th comment,”I don’t work for Obama”. Indeed.

Daryl G. Jones
Managing Director

7 Tweets Summing Up What You Need to Know About Today's GDP Report

"There's a tremendous opportunity to educate people in our profession on how GDP is stated and projected," Hedgeye CEO Keith McCullough wrote today. Here's everything you need to know about today's GDP report.

read more

Cartoon of the Day: Crash Test Bear

In the past six months, U.S. stock indices are up between +12% and +18%.

read more

GOLD: A Deep Dive on What’s Next with a Top Commodities Strategist

“If you saved in gold over the past 20 to 25 years rather than any currency anywhere in the world, gold has outperformed all these currencies,” says Stefan Wieler, Vice President of Goldmoney in this edition of Real Conversations.

read more

Exact Sciences Up +24% This Week... What's Next? | $EXAS

We remain long Exact Sciences in the Hedgeye Healthcare Position Monitor.

read more

Inside the Atlanta Fed's Flawed GDP Tracker

"The Atlanta Fed’s GDPNowcast model, while useful at amalgamating investor consensus on one singular GDP estimate for any given quarter, is certainly not the end-all-be-all of forecasting U.S. GDP," writes Hedgeye Senior Macro analyst Darius Dale.

read more

Cartoon of the Day: Acrophobia

"Most people who are making a ton of money right now are focused on growth companies seeing accelerations," Hedgeye CEO Keith McCullough wrote in today's Early Look. "That’s what happens in Quad 1."

read more

People's Bank of China Spins China’s Bad-Loan Data

PBoC Deputy Governor Yi says China's non-performing loan problem has “pretty much stabilized." "Yi is spinning. China’s bad-debt problem remains serious," write Benn Steil and Emma Smith, Council on Foreign Relations.

read more

UnderArmour: 'I Am Much More Bearish Than I Was 3 Hours Ago'

“The consumer has a short memory.” Yes, Plank actually said this," writes Hedgeye Retail analyst Brian McGough. "Last time I heard such arrogance was Ron Johnson."

read more

Buffalo Wild Wings: Complacency & Lack of Leadership (by Howard Penney)

"Buffalo Wild Wings has been plagued by complacency and a continued lack of adequate leadership," writes Hedgeye Restaurants analyst Howard Penney.

read more

Todd Jordan on Las Vegas Sands Earnings

"The quarter actually beat lowered expectations. Overall, the mass segment performed well although base mass lagging is a concern," writes Hedgeye Gaming, Lodging & Leisure analyst Todd Jordan on Las Vegas Sands.

read more

An Update on Defense Spending by Lt. Gen Emo Gardner

"Congress' FY17 omnibus appropriation will fully fund the Pentagon's original budget request plus $15B of its $30B supplemental request," writes Hedgeye Potomac Defense Policy analyst Lt. Gen Emerson "Emo" Gardner USMC Ret.

read more

Got Process? Zero Hedge Sells Fear, Not Truth

Fear sells. Always has. Look no further than Zero Hedge.

read more