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Hats Off to Kevin McCarthy, the Big Winner in Yesterday’s Vote; Putin Health Rumors — Again

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Hats Off to Kevin McCarthy, the Big Winner in Yesterday’s Vote; Putin Health Rumors — Again

Author: Greg Valliere

April 27, 2023

WE THOUGHT KEVIN McCARTHY WOULD LOSE by a couple of votes yesterday, but he won by a couple of votes as the House approved his budget proposal. We reiterate that the bill has no chance of passing in the Senate, but the vote sends a signal that House conservatives are united — and the White House is suddenly on the defensive.

WHILE IT’S STILL VIRTUALLY CERTAIN that the Senate will reject the deep spending cuts in McCarthy’s bill, the dynamics have changed a bit. McCarthy can say “we passed budget cuts, so what have the Democrats done?” Democrats had portrayed conservatives in the House as the obstructionists — but which side has produced a bill?

AT SOME POINT PRESIDENT BIDEN WILL HAVE TO NEGOTIATE with the House Republicans, and McCarthy begins that process with a victory. He’s been vastly under-rated by most people in Washington, including us.

TWO BIG TAKE-AWAYS: First, McCarthy is adept at horse-trading; he managed to appease the Iowa Republicans, keeping their priority — ethanol subsidies — in the bill. And he made commitments to conservatives on work requirements for people receiving government benefits. Second, McCarthy easily subdued a right wing rebellion in the House; whether he can get the activists to support a more liberal Senate bill remains to be seen.

BOTTOM LINE: Gridlock between the two houses is still likely for many weeks to come, but McCarthy has some fresh clout and the faint beginnings of a deal. The White House now has to respond.
* * * * *
VLADIMIR PUTIN’S HEALTH: The rumors are back — is the Russian President ailing? Ever since Russia’s invasion of Ukraine in February of 2022 there have been reports that Putin is suffering from a neurological illness. Intelligence experts in the West generally dismiss these rumors; they say Putin is too healthy.

THERE WILL BE AN INTENSE FOCUS on Putin, 70, at the upcoming May Day parade in Moscow — his gait, his complexion, etc. At last year’s May Day parade, on a chilly day, he was wrapped in a blanket and appeared to be frail.

PUTIN HAS BEEN HUMILIATED by Russia’s inability to subdue Ukraine, and now it appears that China is hedging its bets on the war, unwilling to send arms to Russia. In addition to the enormous human toll in this war, the economic impact on Russia’s economy has become acute in recent weeks.

THE GREATEST RISK to Putin may not be his health. It may be the increasing opposition to him by oligarchs and the generals, who see the nation in a downward spiral that could last for years. Will they take matters into their own hands? That’s a more intriguing issue than the health rumors.


The views expressed in this blog are those of the author and do not necessarily represent the opinions of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies.

The views expressed in this blog are provided as a general source of information based on information available as of the date of publication and should not be considered as personal investment advice or an offer or solicitation to buy and/or sell securities. Speculation or stated believes about future events, such as market or economic conditions, company or security performance, or other projections represent the beliefs of the author and do not necessarily represent the view of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies. Every effort has been made to ensure accuracy in these commentaries at the time of publication; however, accuracy cannot be guaranteed. Market conditions may change and AGF accepts no responsibility for individual investment decisions arising from the use of or reliance on the information contained herein. Any financial projections are based on the opinions of the author and should not be considered as a forecast. The forward looking statements and opinions may be affected by changing economic circumstances and are subject to a number of uncertainties that may cause actual results to differ materially from those contemplated in the forward looking statements. The information contained in this commentary is designed to provide you with general information related to the political and economic environment in the United States. It is not intended to be comprehensive investment advice applicable to the circumstances of the individual.

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Written by

Greg Valliere

Greg Valliere

Chief U.S. Policy Strategist

AGF Investments

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