The Real X Date Is Whenever The "Big Beautiful Bill" Passes

It's not a question of when the Treasury runs out of dollars. It's a question of when the repo market does.

Call me woefully uninformed, but I just found out that the Big Beautiful Bill includes with the monstrosity a $4 trillion (House version) or $5 trillion (Senate version) raise of the debt ceiling. My lame excuse for not knowing this is I've been in the middle of a war, but I should have known better.

It doesn't matter at all if the debt ceiling raise is $4 or $5 trillion. Whatever it ends up being, immediately after the bill's passage, the Treasury will start sucking dollars out of bank reserves and into its checking account at the Fed. Once they start doing that, repo rates are going to start moving higher, and you know what happens from there. There's going to be a repocalypse, and the Fed is going to have to print the missing dollars. Either way, the final QE round will begin.

It looks like the BBB will eventually pass. I say this because the only two Senators principally opposed to it because they actually believe in doing the right thing, are Rand Paul and Ron Johnson. They won't budge, because whatever will make them budge cannot be offered by the Trump Administration. Unfortunately (or fortunately, depending on how you look at it), all the rest of the Senate opposition to the BBB is jello pudding. They are all differing consistencies of jello, but they're all jello. The Republicans have 53 in the Senate. Take away Rand and Ron and you have 51, so you'd need two of the jello people to firm up to something solid, and that will not happen. It's going to pass once the jello people get enough bribes. All it will take is a few million, maybe a car, or a boat or something.

This probably pushes forward the real X date a bit, because pressure on whatever two jello people end up voting for the BBB is not going to take until August, my guess. If it does, it does, whatever, and nothing really changes that much anyway. In the end though, the real X date is not when the Treasury runs out of dollars, but when the repo market does.

Trump's Chess Game Appears to Have Worked, for Now

Looking back on what Trump did here regarding Iran, from the perspective of a simple guy who has no political cunning, let alone interest in "the art of the deal", I realize that Israel is a chess piece in Trump's efforts to get his BBB passed because he thinks the BBB is awesome. If so, then fine, it's not the first time we're a piece on the board. Trump's weakness is