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Desire to Reach a Deal and Doing It are Two Different Things

Summary:
Partisan StandoffYesterday I noted Gold Jumps as Bipartisan Stimulus Talks Resume.But the talks have started and stopped a half dozen times since September. In the EU, deals never happen until the last moment. The EK and EU have been working on a Brexit deal since January. Drop Dead DatesIn Europe, the legal drop dead date for a post-Brexit deal is the end of the month. In the EU, deals never happen until drop dead dates, and often those drop dead dates get extended.In the US, the drop dead date appears to be Christmas. That's a political deadline, not a legal one, but expect a deal.Good Faith In Europe, as talks dragged on, the UK accused the EU of lack of good faith. The EU accused the UK of the same thing. For 11 months, both sides accused the other of the same thing.In the US, talks

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Partisan Standoff

Yesterday I noted Gold Jumps as Bipartisan Stimulus Talks Resume.

But the talks have started and stopped a half dozen times since September. 

In the EU, deals never happen until the last moment. The EK and EU have been working on a Brexit deal since January. 

Drop Dead Dates

  • In Europe, the legal drop dead date for a post-Brexit deal is the end of the month. In the EU, deals never happen until drop dead dates, and often those drop dead dates get extended.
  • In the US, the drop dead date appears to be Christmas. That's a political deadline, not a legal one, but expect a deal.

Good Faith 

  • In Europe, as talks dragged on, the UK accused the EU of lack of good faith. The EU accused the UK of the same thing. For 11 months, both sides accused the other of the same thing.
  • In the US, talks between Senate majority leader Mitch McConnell and House Speaker Nancy Pelosi broke down repeatedly over alleged lack of good faith.

Momentum on Good Faith

The closer one gets to drop dead dates, the more likely discussions get serious. Today we learn, Republicans and Democrats signal a desire to reach a deal soon.

There was an alleged desire to reach a deal in September, but only if both sides got exactly what they wanted. 

The Wall Street Journal reports Coronavirus Stimulus Efforts Show Momentum.

Senate Majority Leader Mitch McConnell (R., Ky.) said Wednesday that Democratic leaders had “signaled a new willingness to engage in good faith.” On Monday night, House Speaker Nancy Pelosi (D., Calif.) and Senate Minority Leader Chuck Schumer (D., N.Y.) sent Mr. McConnell a new Covid-19 relief proposal, whose contents they have declined to disclose.

House Majority Leader Steny Hoyer (D., Md.) said Wednesday that he was hopeful that in the next few days, “we will be able to come to an agreement on a bill that responds to these major crises, at least in the short term,” referencing the need to help state and local municipalities and small businesses, among other things.

Mr. Hoyer said he had spoken to Mr. McConnell and the two agreed that legislation should come up before the end of next week.

“Finally, this week we’re seeing cracks starting to form in the Democratic leaders’ stonewall,” Mr. McConnell said.

Sen. Chris Murphy (D., Conn.) said Tuesday on CNN. “We should not and cannot go home for Christmas unless we have delivered relief to the millions of desperate families out there who are running out of money.”

“The president will sign the McConnell proposal that he put forward yesterday,” Mr. Mnuchin told reporters Wednesday. “We look forward to making progress on that.”

For partisan reasons, both sides want a deal before Christmas but the Democrats want a deal more. 

Nearly the same deal was available to the Democrats in September but political reality set in: Biden's Progressive Agenda is Dead on Arrival

Democrats did not win the Senate and lost seats in the House. The best deal now is the one they could have had months ago..

In Europe, time is running out. For discussion please see Question of the Day: Bad Deal on Fish or No Deal on Fish?

Mish

Mike Shedlock
Mike Shedlock (Mish) is a registered investment advisor representative for SitkaPacific Capital Management (http://www.sitkapacific.com/). Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.

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