One of our podcast guests, Pratik Chougule, alerted me to a monster alpha opportunity out there right on PredictIt. As many of you know, President Trump finally broke up with Attorney General Jeff Sessions, his first Senate sweetheart, after months of domestic disputes over Robert Mueller’s Russia probe. After this nasty little breakup, Trump went on the rebound with Sessions’ deputy, Acting Attorney General Matt Whitaker, but declined to make it official. Finally, on December 7, the President committed to a permanent replacement and nominated Bill Barr, a former Attorney General for George H.W. Bush.
Right now, PredictIt has a market for how many total votes Barr will get during his Senate confirmation, which gives me a major chubby because it’s a rare opportunity to make a 3-10x return.
Get this: the odds favor Barr getting 60+ votes during his confirmation, which the J.V. team in D.C. probably thinks is bananas. That’s because partisans have turned the Judiciary Committee into a slaughterhouse for civility. Recall that this is the panel where President Obama’s Supreme Court nominee, Merrick Garland, never even got a hearing; it’s where Senate Democrats tried and failed to murder Brett Kavanaugh’s nomination; and it’s where Democrats produced strong evidence that then-Attorney General-nominee Jeff Sessions was absolutely a racist bigot because… he had a Southern accent and ate at Chik-fil-A, or something like that.
But if you look outside this house of horrors, you’ll see that Trump’s nominees haven’t done that badly in front of the whole Senate. On average, his picks got around 67 votes last Congress, which means about 15-16 Democrats supported them. When you only look at cabinet slots at the agencies that give Democrats their jollies — the ones that control health care, civil rights, and environmentalism — that number falls to 55.
However, I think Barr is going to crush it and get way more than one or two measly Democrats’ support. That’s because Republicans clearly picked him to call a truce. My best guess is that they did this because Mitch McConnell is getting seriously tired of having to swat away the “protect Mueller” amendments that Democrats are tagging on to every single Post Office naming, dog catcher appointment, and Obamacare repeal going through Congress these days, and has convinced Trump to nominate someone who won’t get held up by that noise– i.e., not Chris Christie, Rudy Giuliani, or Matt Whitaker, who Democrats seem to think is the serpent from The Jungle Book.
That’s why Bill Barr’s nomination is such a genius choice. Trump dialed George H.W. Bush’s Attorney General’s number shortly after his old boss’s death and in the middle of a national swoon for 41’s bipartisanship. If this isn’t a move to buy Democratic votes, then I don’t know what is.
And why wouldn’t Democrats support Bill Barr? Every day that they don’t confirm him is another that Whitaker, their newest boogeyman, is slithering around the White House, sweeping evidence of Russian collusion under the West Wing rug and hiding the burner phones that Trump uses to call Putin about state secrets. The Democrats want Whitaker out of power, ASAP, and in Bill Barr, they’ve got an acceptable replacement who was approved UNANIMOUSLY in 1991 to the very same job. Oh yeah, and one of the Senators who supported him in 1991? A young New Yorker named Chuck Schumer.
Basically, the Republicans are trying to waive the white flag. If Bill Barr can get through his confirmation hearing without saying something dumb about Mueller, abortion, or illegal immigration, then I’m thinking that the Democrats will accept him. Seeing as this bro’s already got plenty of practice and shares of 60+ votes are trading at 17 cents, I’m going to get in while the getting’s good.
And if Barr tanks his hearing and the Democrats signal that his nomination is going to be a party-line vote, then I’ll dump the 60+ for a nominal loss and start buying down in the 52-53 vote range, where I am already accumulating shares at 10/18 cents. That puts my total cost of business at 45 cents a share, which is a great deal. Basically, I just don’t see how this nomination resolves in any way other than a big bipartisan bear hug or an act of partisan political theater. Which means this is a lock too:
Though I’d probably wait for some inevitable negative press to come out on Barr and buy the dip when it does.
Merry Christmas. Now go pay your credit card bills.