AGF Management : Biden Press Conference Will Be Remembered for Only One Thing

Insights and Market Perspectives

Author: 8

January 20, 2022

JOE BIDEN MADE LOTS OF NEWS last night - especially on his new legislative strategy - but Biden's two-hour press conference will be remembered for his disastrous comments on Russia and Ukraine.

NO PRESIDENT WANTS HIS COMMENTS "clarified" hours after they are made, but Biden's aides were compelled to clean up his assertion that a modest Russian incursion would be met by only a modest response. That's probably what Biden thinks, but you don't broadcast your thinking to the rest of the world on an issue like this.

BIDEN INDISCREETLY PREDICTED: "My guess is (Putin) will move in. He has to do something." Biden then said: "It's one thing if it's a minor incursion, and then we end up having to fight about what to do and not do, et cetera, but if they actually
do what they are capable of doing with the force they've massed on the border, it is going to be a disaster for Russia."

BUT HE EQUIVOCATED, asking whether a Russian incursion would be "something significantly short of a significant incursion or not even significant."

BIDEN'S ADVISERS UNDOUBTEDLY WERE AGHAST. They convened a "not for attribution" call with reporters after the news conference; a senior administration official (probably Jake Sullivan) said whether Russia acquires a small or large portion of Ukrainian territory, it still would be an invasion that would "merit a severe economic response."

THUS IT APPEARS THAT THREE SUCCESSIVE U.S. PRESIDENTS have been so passive that they actually encouraged Putin: Barack Obama blandly called for a "reset" and imposed ineffective sanctions after Putin annexed Crimea in 2009; Donald Trump was a virtual lap dog for Putin; and now Biden . . . .
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HAD IT NOT BEEN FOR UKRAINE, Biden's press conference would have been remembered for his pivot on legislation and his ability to give-and-take for two hours. As we reported earlier this week, Biden is now willing to break up chunks of the Build Back Better bill, and there's good chance that will produce some victories.

WE'RE NOT SURE THIS HOT ECONOMY needs more stimulus, but Biden knows he has the votes to win funding for pre-kindergarten, some expansion of Obamacare, and sweeping environmental programs.

THE NEED TO COME UP WITH NEW TAXES could complicate this process, but Sen. Joe Manchin will accept tax hikes on the very rich, and he's an outspoken proponent of pre-K spending. Whether Sen. Kyrsten Sinema will agree is unclear, but our hunch is that she will accept agree to several of the BBB components.

BIDEN UNDOUBTEDLY KNOWS Democrats face an election debacle in November, so he will take off the gloves against Republicans. But he's apparently not prepared to take off the gloves against Putin, which was the main takeaway in what will be viewed as a memorably disastrous press conference.

The views expressed in this blog are those of the author and do not necessarily represent the opinions of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies.

The views expressed in this blog are provided as a general source of information based on information available as of the date of publication and should not be considered as personal investment advice or an offer or solicitation to buy and/or sell securities. Speculation or stated believes about future events, such as market or economic conditions, company or security performance, or other projections represent the beliefs of the author and do not necessarily represent the view of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies. Every effort has been made to ensure accuracy in these commentaries at the time of publication; however, accuracy cannot be guaranteed. Market conditions may change and AGF accepts no responsibility for individual investment decisions arising from the use of or reliance on the information contained herein. Any financial projections are based on the opinions of the author and should not be considered as a forecast. The forward looking statements and opinions may be affected by changing economic circumstances and are subject to a number of uncertainties that may cause actual results to differ materially from those contemplated in the forward looking statements. The information contained in this commentary is designed to provide you with general information related to the political and economic environment in the United States. It is not intended to be comprehensive investment advice applicable to the circumstances of the individual.

AGF Investments is a group of wholly owned subsidiaries of AGF Management Limited, a Canadian reporting issuer. The subsidiaries included in AGF Investments are AGF Investments Inc. (AGFI), AGF Investments America Inc. (AGFA), AGF Investments LLC (AGFUS) and AGF International Advisors Company Limited (AGFIA). AGFA and AGFUS are registered advisors in the U.S. AGFI is a registered as a portfolio manager across Canadian securities commissions. AGFIA is regulated by the Central Bank of Ireland and registered with the Australian Securities & Investments Commission. The subsidiaries that form AGF Investments manage a variety of mandates comprised of equity, fixed income and balanced assets.

Founded in 1957, AGF Management Limited (AGF) is an independent and globally diverse asset management firm. AGF brings a disciplined approach to delivering excellence in investment management through its fundamental, quantitative, alternative and high-net-worth businesses focused on providing an exceptional client experience. AGF's suite of investment solutions extends globally to a wide range of clients, from financial advisors and individual investors to institutional investors including pension plans, corporate plans, sovereign wealth funds and endowments and foundations.

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