Hey everyone me kevin here, oh my gosh. I absolutely cannot believe what congress is up to and usually it's not a surprise what's happening in congress, because they're all just hating on each other and things just don't go right. Look. Let me give you a quick background.

As to where we stand and what just changed, because it's big news so first things first, we know that joe biden is trying to get his one to one point: two trillion dollar hard infrastructure package done. Then he wants a three and a half trillion dollar soft infrastructure package, with child tax credit paid, leave day care for children, so on and so forth. Uh now what's been a challenge is the pricing for that three and a half trillion dollar package and that pricing has now been negotiated tentatively down to a range of about 1.8 trillion dollars to about 2.5 trillion dollars at the high end. Now so, we've really shaved that three and a half trillion dollar infrastructure package down a lot.

So that leaves us with two packages: the one to one point: two trillion dollar package and that one point eight to two and a half trillion dollar package. The problem is, republicans will not help get democrats what they need to pass the infrastructure package, the soft one that 1.8 to 2.5 trillion package. They want democrats to do that alone. That means democrats have to use the budget.

Reconciliation maneuvers problem is budget. Reconciliation is something that is going to take probably three to four weeks to actually use. At the same time, we're hitting a debt ceiling crisis in literally two weeks and republicans are like. Ah democrats can go handle it, but the problem with democrats just going to try to handle the debt ceiling crisis on their own is they'd have to use budget reconciliation which would take about four weeks to get done, which four weeks from now was about the first Week of november now, up until this point up until today, everybody has thought this is exactly going according to plan for republicans, republicans will just sandbag this force democrats to rush on budget reconciliation.

Make all these crazy amendments later to avert a debt ceiling catastrophe where we default on our debts, which would be really really bad? We don't want to default on our debts. We don't want to miss that x date, which right now is about october 18th, because then, all of a sudden social security payments stop going out bond payments, stop getting made uh and and we default on on our credit rating. Essentially, our credit rating gets trashed in the united states, uh uh as the united states, dollar and uh, which is oftentimes deemed to be one of the safest assets in the world, and certainly treasury bonds are basically deemed to be risk-free. The last thing we want is a credit downgrade similar to what we had uh during the latter portion or right around the end of the first and second beginning of the second term of the obama administration, but anyway, now out of nowhere out of nowhere.

Just a few minutes ago, this update comes in and it absolutely blows my mind. First, we already knew this. We already knew this part uh senate majority leader, chuck schumer is planning to hold his vote on whether on to basically suspend the debt ceiling until december of 2022. We already respect republicans are planning to block that from going through, but but but but - and this is the big thing - this is massive.

I can't believe this senate gop leader who's, the minority leader in the senate mitch mcconnell, is floating a short-term increase in the debt limit that would last through november. That would give democrats plenty of time to negotiate in full their soft infrastructure package and use budget reconciliation appropriately, because that process is going to take at least four weeks. This buys them about seven weeks of time, and this takes a lot of pressure off our our markets over fears of a potential debt ceiling crisis, and so, if mitch, mcconnell is willing to sign on to extending the debt ceiling through the end of november. That would be november 30th.

That would afford democrats all the time that they need to get their soft infrastructure package done, and my expectation is now we'd probably get to about the middle of november. When we have infrastructure, hard version pass the one to one point: two trillion dollars passed, we'll have the one and a half the two and a half trillion dollar soft infrastructure passed and with that we'll probably incorporate a longer change. More solid change of raising the debt ceiling, probably for another year, kicking the can down the road to the end of 2022, but this mitch mcconnell offer. This is a massive lifeline.

I was not expecting this to happen at all. I am blown away that mitch. Mcconnell. Would even make this offer to democrats i'm somewhat partially confused, because i thought this was going perfectly according to plan for republicans to basically ruin the chances of democrats.

Getting the infrastructure package passed, uh the the soft infrastructure passed, but i think republicans realize that that also puts that jeopardy. The hard infrastructure package it puts us on the brink. It's not good for markets, it's not good for our reputation around the world uh and it's also not good for the 2022 elections. Where democrats might be able to say to republicans, hey look, you guys stood in our way and you brought us to the brink.

Remember what elizabeth warren said yesterday warren said yesterday: hey look we're willing to raise the debt ceiling ourselves using budget reconciliation. Just please get out of our way and don't filibuster filibuster refers to blocking the end of a vote. Remember you need 60 votes in the senate to get most things done, and the reason for that 60 vote is not actually 60 votes to pass. It's still 51 votes to pass a bill.

It's 60 votes, though, to actually end the debate on bills, which basically means that the debate goes on forever. A bill can get filibustered and it basically means the the bill would never get passed. This shift by mitch mcconnell is huge uh. It really averts what janet yellen calls a manufactured crisis, a self-inflicted crisis uh, and something that we must vehemently oppose uh to to essentially breach the debt ceiling limit of october 18th.

So this shift by mitch mcconnell, while i'm very interested to know exactly the implications of or or his rationale for why he would fold the way he is apparently holding right now uh but uh, but he is uh at least tentatively. That's the current news that mitch mcconnell is folding on the debt ceiling, allowing uh democrats to raise the debt ceiling through the end of november. Very very big news, especially since uh, like i said, uh elizabeth warren yesterday said just get out of our way. Let us raise it, maybe that's where those political implications come in where, in the 2022 election cycle, republicans are probably looking around going hey, we don't want to come across as being the people who literally stood in the way uh, let's, let's just give them a little Bit more time and uh not have that as a target on our back for when we go to running a 2022 uh campaign, so uh folks, this uh.

This is incredible. I expect uh this to be very uh well received in markets uh, although it it may not reflect very quickly because we still we've really just kicked the can down. The road is what we've done uh, but it's better than than going to the brink right. Let's go to the day chart here on the 10-year treasury, so looking at the 10-year treasury on the day chart, we've actually had a little bit of a tick up here on the 10-year treasury.

So this is all uh all today and uh we've been bouncing around the sort of 1.52 level what we went as low as about 1.514. This news broke about within the last 10 minutes here, so we haven't seen clear changes uh in action here on ten-year treasuries. So uh pretty stable here see if we have any kind of action in the s p 500, a firm by the way, doing really really well yeah s, p, 500, uh yeah, i mean we've. Certainly it's hard to pinpoint it the technically the news broke here at 10 52, while we were already on a tentative downside, but it looks like we started, getting a substantial push of volume about 10 minutes after that around 1102 and now we're sort of on an Uptrend, so i think it's taking a minute a hot minute for markets to recognize what's happening here, but this is very good news.

I'm very happy to see this. I do think it's going to slow down infrastructure negotiations, but it does remove a very big and bad negative catalyst for markets and, in my opinion, it's entirely possible that we end up seeing these indices start going positive again. Yeah. Look at this nasdaq just turned positive russell small cap and recovery stock here, mostly still down 1.0 percent, but look at that s p.

Just went positive. Nasdaq, positive and dow jones is on its way from going positive. Despite having those uh earlier falls. So big move here by mitch, mcconnell again trying to understand why? But i think i recognize why he's doing this.

It has to do with the 2022 election cycle and making sure that republicans do not get branded as being brinksmen and brinks women. I suppose we could say that not to be confused with people who deliver money to businesses, but anyway, big news for mitch mcconnell. Thank you so much for watching this update, really appreciate you watching or watching this uh. If you watched it, live or recording, make sure to get life insurance linked down below in as little as five minutes by going to medkevin.com life and folks we'll see in the next one thanks so much.