by Greg Valliere, AGF Management Ltd.
Insights and Market Perspectives
Author: Greg Valliere
January 27, 2022
JOE BIDEN GETS A BREAK: plunging in the polls, facing a huge loss in the fall elections, President Biden caught a break yesterday as Supreme Court Justice Stephen Breyer gave the embattled president a chance to shift the focus away from inflation, urban crime and Covid.
THE PROSPECT OF A CONFIRMATION FIGHT electrified Washington yesterday, but this may not be a brawl. The Democrats — even Sens. Joe Manchin and Kyrsten Sinema — are likely to unify behind an African-American woman. All 50 Senate Democrats are likely to vote for Biden’s nominee; Kamala Harris could have the tie-breaking vote (Harris is a long-shot to be the Supreme Court nominee, which could rid Biden of an unimpressive vice president).
LISTS OF LIKELY NOMINEES immediately circulated through Washington; we’re watching J. Michelle Childs, the South Carolina federal judge who has enthusiastic support from Rep. James Clyburn, who jump-started Biden’s presidential campaign in 2020. Regardless of Biden’s pick, she should motivate the party’s base (but, of course, a clearly liberal nominee could motivate the GOP base).
THE UPCOMING BATTLE won’t lead to a political nuclear war because the court’s ideological mix won’t change. The real excitement will come when Clarence Thomas resigns.
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THE WINTER OLYMPICS will begin in Beijing on Feb. 4 and end on Feb. 20. Chinese President Xi Jinping has gone to extraordinary lengths to crush Covid and ensure a success, but there’s one thing that could diminish the happy headlines he’s seeking: a Russian invasion of Ukraine.
XI AND VLADIMIR PUTIN seem to be enjoying a bromance recently, as their countries move closer (Putin plans to attend some of the Olympics). We think the two leaders have an understanding that Putin will not invade Ukraine until after the Olympics (if then).
THUS IT’S POSSIBLE THAT U.S. and Russian negotiators will have another month to talk — plenty of time to offer packages of carrots and sticks. This crisis could percolate for months, without a full-fledged Russian invasion. Putin will resume cyberwarfare after the Olympics, and he may incite proxies everywhere from the Ukrainian border to the Persian Gulf to South America.
WITHOUT FIRING A SHOT, Putin has already achieved a goal: dividing the U.S., as Donald Trump’s base asks why America should get involved with far-away Ukraine. And this gives the GOP right wing an opportunity to contend that Joe Biden’s son Hunter has a stake in defending Ukraine.
PUTIN ALSO HAS EXPOSED A DIVIDE between much of NATO and Germany, and he has implicitly threatened European energy security. If cyberwarfare can keep Europe on edge, why invade Ukraine? The former KGB agent has plenty of high cards to play, but he probably knows that an invasion would be a miscalculation that could inflame Russian dissidents back home.
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This post was first published at the AGF Perspectives Blog.
