Congressional Floor Fights & Stock Market Signs – Top 3 Takeaways – January 9th, 2023
- Reality won the (Satur)day. On Friday my top takeaway was perception vs. reality. And as part of the takeaway, I said this: I’m going to throw a few names at you for a moment. Ron DeSantis. Matt Gaetz. Kevin McCarthy. Now, by way of Congressional voting records, who do you think is the most conservative? If you had DeSantis as being the most conservative of the bunch... You’d be wrong. He’s in the middle of the three. If you had Gaetz, defacto leader of the McCarthy opposition party as the most conservative... You’d be way wrong. He has far and away the least conservative voting record of the three. So yes, through the process of elimination you’ve now determined Kevin McCarthy as having had the most conservative voting record. In fact, McCarthy’s voting record during the Trump presidency was greater than 12% more conservative than Gaetz, and in fact more conservative than every single member of the dissenters who were in Congress during that time. That doesn’t inherently mean he should be speaker, but it does mean there’s been a game of deception that’s been played by dissenters to his bid this week. The festivities on Friday were interesting, including an opening speech prior to the first vote attempt which didn’t age well to say the least. Quoting Gaetz: Mr. McCarthy doesn’t have the votes today. He will not have the votes tomorrow and he will not have the votes next week, next month, next year. Well, he was right about McCarthy not having the votes on Friday. He didn’t. And as we ended Friday’s show with Congressman Brian Mast saying he didn’t think McCarthy would have the votes that day either – but expressing confidence that he would eventually win the bid – he was proved correct. At around 12:20 Saturday morning, on the 15th ballot, McCarthy pulled out the win with the remaining six dissenters voting present. So, in the end, what hadn’t happened in 100 years, a House Speaker not being elected on the first ballot, happened – Gaetz played a starring role of drama king – and reality won out. But that wasn’t before another form of history involving Gaetz almost played out. An actual...
- Floor fight. The term floor fight for the past 121 years has meant one thing. A war of words between dissenting factions in Congress. When Congress is in session outside of a day of national tragedy there’s a steady stream of these occurring. But the origin of the term floor fight is derived by physical fights on the floor. The all-time record donnybrook occurred in the House of Representatives at 2 am February 6th of 1858. Before we officially had the north vs. the south in the Civil War, we had the north vs. the south on the House Floor. During an ongoing debate about slavery, an abolitionist Pennsylvania Republican and a pro-slavery Democrat from South Carolina, went from yelling at each other on the House floor to throwing punches at each other on it. And while it wasn’t the first floor fight, it turned out to be the biggest to date. According to available records, at least thirty additional members of congress joined the melee until bloodied and bruised members began laughing at what they’d done to each other. The most recent actual floor fight happened in the US Senate involving two Senators from the same state – and yes, once again it involved a February night and South Carolina Democrats – this time in 1902. While of the same political party, Ben Tillman accused John McLaurin of “Treachery” for joining Republicans in voting for a provision involving the Philippines. McLaurin accused Tillman of lying. Tillman’s response to charge McLaurin with a right hook to his jaw. Additional jabs were taken but quickly other senators grabbed the two men to separate them. That was the last recorded actual floor fight, but along with the drama Friday night, following the failed 14th vote, Republican Mike Rodgers of Alabama, just might have created history with what he might have done to Matt Gaetz had he not been restrained.
- Signs, signs, everywhere there’s signs. The 5 Man Electrical Band came to mind for me this weekend because A) I’m good like that and B) because a week ago I mentioned this... Only 9% of the time has the US stock market been down in consecutive years – meaning there’s obviously a chance – but with the historical odds on the side of investors this year. It’s not often that 9% is a good number but in the case of the stock market it’s a historically great one. I don’t know what’s going to happen with everything in the stock market and economy this year. But two things I do know is that they’ll be no more votes in the House for Biden bucks allocated for free puppies, free candy and free Obama phones that are anything but free (though the Omnibus spending legislation made sure they’ll still be supplied at your expense through September) and that there’s a really good chance stock market investors will be happier at the end of the year than they are today. Aside from the S&P 500 averaging a 10% rate of return - and having a record of only trading lower in consecutive years 9% of time – we now have another compelling number. When the first week of trading for stocks is positive, 82% of the time the market closes higher for the year. So now we’re staring at two huge historic trends pulling in the same direction. That’s independent of Congressional gridlock having historically been a positive for investors. And as for the average rate of return under these circumstances? 16%. So basically, there’s now a high 90’s percent chance stocks will be higher this year with gains that are 1.6 times the average. So yeah, signs, signs everywhere there’s signs that it could be a good run for stocks generally this year.