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Snags and Dissent as Congress Marks Up Massive Bill

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Insights and Market Perspectives

Snags and Dissent as Congress Marks Up Massive Bill

Author: Greg Valliere

March 20, 2020

THERE WERE SO MANY MAJOR DEVELOPMENTS in the past 24 hours that the only way we can even skim the surface is to offer the following bullet points:

There were no new local coronavirus cases in China for the second day in a row, that’s the headline.

Aside from the stunning increase of infections in the U.S., the big story as the weekend approaches is a lack of supplies — test kits, swabs, chemical solutions, etc. A nasty “blame game” is likely.

Estimates of new cases are staggering; will half of all Californians really get the virus, despite a lockdown?

Cracks are developing in the junk bond industry; the Wall Street Journal has a sobering article in this morning’s edition.

While there is no imminent breakthrough on a vaccine, use of relatively safe anti-malaria drugs will spike. Donald Trump will demand quick action from FDA on new drugs, but clinical trials will take several months.

Prospects for quick action on a $1 trillion-plus bill have faded as Congress bickers on several key provisions. Enactment is still several days away. The premise hasn’t changed: money is no object — but the details are contentious.

Conservative Republicans are divided on the size of government checks, or whether that’s the best approach.

Democrats resent their exclusion as a Mitch McConnell bill advances. The best summary of his bill is in this morning’s Politico, a free web site that has been excellent lately.

Congress is determined to attach strings on aid to industries like airlines — there will have to be executive pay curbs, no stock buy-backs, etc. Loans are far more likely than outright grants.

Everyone has their own pet issues to attach to this massive bill — student loan forgiveness, unemployment reform, etc. Chuck Schumer is preparing the ultimate Christmas Tree.

Congressional votes will be complicated because many more members are likely to test positive; the concept of what constitutes a quorum will have to change dramatically.

There’s a renewed effort to get Saudi Arabia and Russia to call a truce on oil production; watch this one for a potential breakthrough over the weekend.

A crisis like this requires villains, and there are two — politicians like Sen. Richard Burr (R-N.C.), who bailed out of stocks as he downplayed the virus; and the idiot drunks at beaches, who richly deserve the nation’s scorn.

Donald Trump allowed his famous temper to show yesterday, as he blasted his critics, especially the media. The mood of bipartisanship, seemingly strong on Monday, has faded.

BOTTOM LINE: We still believe massive monetary and fiscal stimulus will lessen the duration and depth of the recession, but that won’t stop the new infections — which will surge this weekend as Congress bickers.


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.

AGF Investments is a group of wholly owned subsidiaries of AGF Management Limited, a Canadian reporting issuer. The subsidiaries included in AGF Investments are AGF Investments Inc. (AGFI), AGF Investments America Inc. (AGFA), AGF Investments LLC (AGFUS) and AGF International Advisors Company Limited (AGFIA). AGFA and AGFUS are registered advisors in the U.S. AGFI is a registered as a portfolio manager across Canadian securities commissions. AGFIA is regulated by the Central Bank of Ireland and registered with the Australian Securities & Investments Commission. The subsidiaries that form AGF Investments manage a variety of mandates comprised of equity, fixed income and balanced assets.

About AGF Management Limited

Founded in 1957, AGF Management Limited (AGF) is an independent and globally diverse asset management firm. AGF brings a disciplined approach to delivering excellence in investment management through its fundamental, quantitative, alternative and high-net-worth businesses focused on providing an exceptional client experience. AGF’s suite of investment solutions extends globally to a wide range of clients, from financial advisors and individual investors to institutional investors including pension plans, corporate plans, sovereign wealth funds and endowments and foundations.

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©2023 AGF Management Limited. All rights reserved.

Written by

Greg Valliere

Greg Valliere

Chief U.S. Policy Strategist

AGF Investments

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