• Global ‘Black Hole’ Risk Rising: A Discussion With Danielle DiMartino Booth

    Former Fed advisor Danielle DiMartino Booth discusses key economic developments and the outlook for Fed rate cuts with Hedgeye CEO Keith McCullough.

JT TAYLOR: Capital Brief - JT   Potomac banner 2

HURRY UP AND WAIT: Senate Majority Leader Mitch McConnell will delay the vote until after recess, using the few remaining days left this week to negotiate with key Republicans until he can ensure a win. Many Senate Republicans who were there during the Obamacare push are holding out and looking to make key changes as they are fully aware of the consequences this vote can have on their re-elects - just ask former Democrat Senators Landrieu, Pryor, Hagan and Udall who all lost their seats largely because of a vote cast in 2009. While the turn of events is a setback for McConnell and his strategy to move a bill quickly and stealthily through the halls of the Senate, time is now not on his side given the pile up of issues hanging in the legislative balance. To make matters worse, his conference will now be subject to furious lobbying from outside conservative groups who want to go further in eviscerating Obamacare to a bipartisan coterie of Governors who worked behind the scenes to undermine the legislation. Thankfully for McConnell it's only a one week recess and, while the odds are stacked against him, we still believe he’ll recover taking a cue from his counterpart in the Speaker’s chair.

FANNIE AND FREDDIE BREAK UP: If Republicans can muscle past health care in the coming weeks, they’d like to find a way to tackle elements of financial services reform. A large part of that starts with rolling back regulations created as a response to the crisis of 08. Democrats still defend Fannie and Freddie’s role in home lending, while Republicans fear their risky loans and growing size is a liability for taxpayers. An unlikely partnership between Senators Mark Warner (D-VA) and Bob Corker (R-TN) is forming to split up Fannie and Freddie in order to increase competition for single-family mortgages and prevent a “too big to fail” bailout. The Senate Banking Committee’s hearing tomorrow on housing finance reform will shed light on what shape the legislation may take, though not coming to fruition anytime soon.

PERRY BRINGS THE ENERGY: It’s Energy week and DoE Secretary Rick Perry is turning up everywhere: the EIA conference, round tables with Governors, and the White House press briefing promising, “a self-reliant, secure nation, free from geopolitical turmoil.” How? Becoming net exporters instead of importers via better trade deals, reduced regulation, and energy innovation. A good sign for the oil and gas industry and more so for oil field services and transportation companies which have suffered the most from price decreases.

OIL ABOVE WATER: Coal communities are suffering and it has a lot more to do with natural gas than Obama Era rules. Now, the House Natural Resource Committee is moving a bipartisan effort to the floor to help rebuild these towns. One billion in investment dollars for economic overhauls and mine clean up in old coal towns is expected to help modernize their economies. As natural gas production in the U.S. grows, prices decrease - pushing coal out of the generation market and pushing natural gas overseas. Companies like Cheniere are gearing up for more LNG exports signaling a priority from the Administration to establish international leadership through energy independence.

BRAC IS BACK?: Lawmakers are taking up the annual Defense Authorization Bills this week looking at reforms for systematic sources of waste in the defense budget on the docket. If closed, a considerable number of excess bases and facilities that the Defense Department maintains within the U.S. could save roughly two billion dollars per year according to the military. But DoD cannot close these bases without permission from Congress - and they repeatedly have not granted it. Congress has only ever allowed these closures through an independent commision known as Base Realignment and Closure (BRAC), which was established at the end of the Cold War. Several key members of Congress, including Armed Services Chairman John McCain, express support for a new BRAC Commission and plan on proposing it while addressing inefficiencies in the budget.

CALL INVITE | LOADED FOR BEAR - RUSSIAN SANCTIONS AHEAD?: We're hosting a call on July 6th at 10am on Russian sanctions with the Deputy Director of the Kennan Institute for Advanced Russian Studies of the Woodrow Wilson Center, William Pomeranz. We will discuss the implications on businesses in the U.S. and globally as well as what this means for National Security. Get the event details here.

 

 

 

HURRY UP AND WAIT: Senate Majority Leader Mitch McConnell will delay the vote until after recess, using the few remaining days left this week to negotiate with key Republicans until he can ensure a win. Many Senate Republicans who were there during the Obamacare push are holding out and looking to make key changes as they are fully aware of the consequences this vote can have on their re-elects - just ask former Democrat Senators Landrieu, Pryor, Hagan and Udall who all lost their seats largely because of a vote cast in 2009. While the turn of events is a setback for McConnell and his strategy

to move a bill quickly and stealthily through the halls of the Senate, time is now not on his side given the pile up of issues hanging in the legislative balance. To make matters worse, his conference will now be subject to furious lobbying from outside conservative groups who want to go further in eviscerating Obamacare to a bipartisan coterie of Governors who worked behind the scenes to undermine the legislation. Thankfully for McConnell it's only a one week recess and, while the odds are stacked against him, we still believe he’ll recover taking a cue from his counterpart in the Speaker’s chair.

 

FANNIE AND FREDDIE BREAK UP: If Republicans can muscle past health care in the coming weeks, they’d like to find a way to tackle elements of financial services reform. A large part of that starts with rolling back regulations created as a response to the crisis of 08. Democrats still defend Fannie and Freddie’s role in home lending, while Republicans fear their risky loans and growing size is a liability for taxpayers. An unlikely partnership between Senators Mark Warner (D-VA) and Bob Corker (R-TN) is forming to split up Fannie and Freddie in order to increase competition for single-family mortgages and prevent a “too big to fail” bailout. The Senate Banking Committee’s hearing tomorrow on housing finance reform will shed light on what shape the legislation may take, though not coming to fruition anytime soon.

 

PERRY BRINGS THE ENERGY: It’s Energy week and DoE Secretary Rick Perry is turning up everywhere: the EIA conference, round tables with Governors, and the White House press briefing promising, “a self-reliant, secure nation, free from geopolitical turmoil.” How? Becoming net exporters instead of importers via better trade deals, reduced regulation, and energy innovation. A good sign for the oil and gas industry and more so for oil field services and transportation companies which have suffered the most from price decreases.

 

OIL ABOVE WATER: Coal communities are suffering and it has a lot more to do with natural gas than Obama Era rules. Now, the House Natural Resource Committee is moving a bipartisan effort to the floor to help rebuild these towns. One billion in investment dollars for economic overhauls and mine clean up in old coal towns is expected to help modernize their economies. As natural gas production in the U.S. grows, prices decrease - pushing coal out of the generation market and pushing natural gas overseas. Companies like Cheniere are gearing up for more LNG exports signaling a priority from the Administration to establish international leadership through energy independence.

 

BRAC IS BACK?: Lawmakers are taking up the annual Defense Authorization Bills this week looking at reforms for systematic sources of waste in the defense budget on the docket. If closed, a considerable number of excess bases and facilities that the Defense Department maintains within the U.S. could save roughly two billion dollars per year according to the military. But DoD cannot close these bases without permission from Congress - and they repeatedly have not granted it. Congress has only ever allowed these closures through an independent commision known as Base Realignment and Closure (BRAC), which was established at the end of the Cold War. Several key members of Congress, including Armed Services Chairman John McCain, express support for a new BRAC Commission and plan on proposing it while addressing inefficiencies in the budget.

 

CALL INVITE | LOADED FOR BEAR - RUSSIAN SANCTIONS AHEAD?: July 6th at 10am eastern Hedgeye is hosting a call on Russian sanctions with the Deputy Director of the Kennan Institute for Advanced Russian Studies of the Woodrow Wilson Center, William Pomeranz. We will discuss the implications on businesses in the U.S. and globally as well as what this means for National Security. Get the event details here.