DACA DEADLINE: The patina of bipartisanship may be fading quickly as Senate Majority Leader Mitch McConnell imposes a deadline of Friday for legislators to come up with a compromise deal on immigration legislation in the wake of comments by allies of Trump Administration that Trump’s proposal is their (and his) best and final offer. Senators are racing to finish a number of partisan and bipartisan proposals in time for the weekend rush to the gates and any proposal to capture 60 votes will win the day. At least in the Senate. There are currently two Republican amendments that will get floor time – President Trump’s four-pronged immigration plan and Senator Jeff Flake’s (R-AZ) scaled-back version of Trump’s plan – one that just might attract Democrat votes. The Democrats are torn over whether to pursue their own strategy or throw their weight behind a consensus deal Senate centrists are in the process of forging. Let’s keep in mind that even if a deal is struck in the Senate (the Senate passed immigration legislation twice with over 60 votes – both in 2006 and 2013 - only to die on the vine), the House will likely reject it. In the event no bill garners 60 votes, the House may move to take up a conservative bill sponsored by Rep Bob Goodlatte (R-VA) – which won’t pass muster in the Senate. You get where this is going.
YOU SAW THIS ONE COMING: We mentioned last year that OMB Director/acting CFPB Director Mick Mulvaney had the agency in his crosshairs when he all but leveled out the agency’s budget request for 2018. And now Mulvaney and the Trump Administration are taking it to the next level in their recent FY19 budget proposal and are looking to revamp and scale back the agency that’s been the ire of conservative Republicans since enactment of Dodd-Frank almost 10 years ago. In language released yesterday, the proposed reforms “would impose financial discipline, reduce wasteful spending, and ensure appropriate congressional oversight to prevent actions that unduly burden the financial services industry and limit consumer choice, the proposal restricts CFPB’s broad enforcement authority over federal consumer law.” Needless to say, Democrats are apoplectic, but are defenseless at least until a new director is chosen by Trump (almost anyone is better than Mulvaney in their view) – and by that time Mulvaney may have sealed the agency’s mandate in his image for years to come.
WORLD’S BIGGEST HEDGE FUND BETS BILLIONS AGAINST EUROPE: “Looks like we have company on the short side of European Stocks—we’ve had steady pushback on that call for months," writes Hedgeye CEO Keith McCullough. He’s referring to Bridgewater, the $120 billion fund run by Ray Dalio. It has at least $13.1 billion in shorts (wagers that a stock will fall) according to EU regulatory filings. That’s up from the $3.2B it disclosed on February 1. It more than doubled the number of stocks it’s shorting to 44 from 20. You may recall that #EuropeSlowing has been Hedgeye’s call for some time. Here's what we wrote in our Q3 2017 Macro Themes deck: "Contrary to our positive outlook in the U.S., our model is prospectively signaling a concomitant deceleration in both economic growth and inflation across the Eurozone economy. This view is very counter to consensus that remains extremely complacent on the long side of the euro and European equities." More to be revealed.
SNEAK PRIMARY PEEK: It's back. Yes, election season. We’re now a few weeks away from the nation’s first primary with Texas leading the pack on March 6 - followed shortly thereafter by races in Illinois and then kicking into high gear with Ohio, West Virginia, Georgia and Pennsylvania and Indiana in early May. There’s a lot of buzz here inside the Beltway about the amounts of money Democrats have in their campaign arm’s coffers, but Republicans have been buoyed by recent polling showing that they’re making up for double-digit deficits in generic polling numbers and nudging into positive territory when it comes to public sentiment over tax reform. It’s way too early for the pundits to start making calls, but we’re looking for signs post- Texas to March 13 where Republicans are working to stave off a Democratic challenge and keep a safe Congressional seat in their column in a critical special election in the very critical bellwether state of Pennsylvania.
CONFERENCE CALL: GOOD START BUT JUST A START - WE ANALYZE DOD’S FY19 BUDGET REQUEST | Join General Emo Gardner on February 20 at 11am ET as he provides his unique perspective on the FY19 DOD budget request and the long-term defense budget environment.
LOWERED ASPIRATIONS FOR CERN? | PRESIDENT DECLINES TO REQUEST FULL FUNDING OF VA CONTRACT IN FY 2019: Our Senior Health Policy Analyst Emily Evans writes the Budget request is for $1.2 billion of which $675 million is dedicated to EHR; stabilization of VistA system suggests long road. Read her note with Andrew Freeman here.
CALL REPLAY | IT'S A MAD, MAD, MAD, MAD WORLD: The global scene is more confusing and jumbled now than we have witnessed in at least half a century. CLICK HERE to listen to a replay of General Christman's call covering the true geopolitical risks impacting business investment and operations.
