Transcript:
Hello, everybody, welcome to Wednesday. The S&P 500 was up .4% today. Two days in a row, now we’ve had a good up day. That’s nice. We haven’t seen that for a while. But very interesting, it started off the day down quite a bit: over 1%, in the morning the S&P 500 was down. And one of the things that happened was that we’re waiting for this vote that would happen for the raising the debt ceiling. And then all the reports are, “the Republicans aren’t going to vote for it.” Then all of a sudden, in the afternoon we heard a report that they were willing to let the Democrats raise the debt ceiling, a certain dollar amount, so that they would have enough money to last until December. So the market saw that is a good thing. I see that as a good thing too, because the thing that I looked at this whole time was two sides.
Number one is: “are the republicans willing to let the U.S. default, in an attempt to win more seats in the midterm?” I wasn’t positive one way or another? Number two: “if they were going to do that, did the Democrats have a good path to go down, and could they execute that in time before the default?”
That was a little bit in suspect, too. Last Tuesday, a little over a week ago, Biden said that, you know, we weren’t going to change the filibuster to raise the debt ceiling. Well, yesterday, this Tuesday, all sudden that story changed and Biden’s coming out and say that’s a real possibility.
I think that’s the easiest, fastest, and cleanest way to raise this debt ceiling. And I do think that puts some pressure on the Republicans to then come forward and say, “Hey, we’d be willing to do something here.” …They don’t want the filibuster to be changed, because obviously if you change it for the debt ceiling, you could change it for voting rights, you could change it for a whole bunch of different things theoretically, and it could be a bit of a slippery slope.
Now the problem with what the Republicans are offering right now is that they are offering a certain dollar amount, that they will allow happen so that the government can operate until December. That’s not normal. Usually what is offered has done on the debt ceiling increase is for a certain amount of time, a certain date in the future, where Congress has to come back and approve it again. And there’s a lot of Democrats that don’t want to put $1 amount on it, because then they have to run against that dollar amount… in the midterms.
The other thing is what looks like they’re doing here is trying to give the Democrats more time, to put the debt ceiling increase inside of the reconciliation package. So they’re still negotiating that package, that gives him more time to do that. But the Democrats don’t want to put it in the package, because when you put it through reconciliation again, you have to put $1 amount. Instead of just saying, Hey… I think they’ve raised the debt ceiling 57 times. And every single time it’s been some dates in the future.
So that’s what people are used to. And of course, then those Democrats would have to run against potentially that dollar amount. Look at how much the Democrats raised the debt to get this package through. Which isn’t a fair argument, because really raising the debt is to pay for everything that’s happened, both future until that debt limit date comes up, and everything we did in the past.
But nonetheless, you know how politics work, they can sometimes narrow in on certain things, and if you don’t know all the details, it could be damaging to your campaign, so to speak. So, this is still an ongoing thing, but I do think it’s very important that the Republicans came forward and that there’s some type of negotiation started here. There seems to be, at least in my opinion, some willingness to not let this go into default.
We’ve had two good up days in a row. If things are decent tomorrow, I’m going to start to nibble back in again, with the money that we took off the table over the last two weeks. We’re at a lower point now, that would help our rates of return here, because we’ve missed out on some of the downturn. It was part of that money, so that would be great. Again, this is mostly on the IRAs as far as that goes. But nonetheless, really interesting timeframe as usual. Very fascinating. See what happens tomorrow with this conversation that’s happening with the debt ceiling. Thank you very much.