Enter Voldemort

In the early days of the Bill Clinton administration, James Carville had a melt down about the new POTUS' quick abandonment of his campaign agenda. As outlined in Bob Woodward's outstanding The Agenda, the "Ragin' Cagun" was pointing to a napkin with 4 top issues, all tossed aside because Treasury Secretary Bob Rubin had convinced the new President that "the bond market would not permit it." To which Carville famously replied, "I used to think if there was reincarnation,  I wanted to come back as the president, or the pope or a .400 baseball hitter. But now I want to come back as the bond market. You can intimidate everybody."

Now is the time to start imagining what a Clinton 2.0 agenda might look like. Central bank bond purchases were considered desperation 3rd world Hail Mary's as recently as POTUS 42. The deficit was public enemy No. 1, as it was with Obama and the "sequester." The destructive force of inflation remains a feared ghost, the Valdemort of economic old timers. I do not get the sense that Hillary will be so quick, or politically able, to throw her agenda aside for the now 1.75% 10 year. Compare to the ankle shackling 6.50% that so constrained Bill and Bob. (interesting sidebar- the 2/10 curve is about 40bp steeper today than 1997 !)

I think a change is coming. I don't think the bond market, having been tamed for so long, scares Mrs. Clinton. I don't think, even with her many Wall St. lectures, she seeks the council of FI grey- hairs who recall the power of falling bond prices. I think the re-incarnation is beginning.

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