Tue, Jan 6, 2026

Markets typically price checks and balances as a risk premium. Debate creates friction. Friction slows capital deployment. Yesterday, the US Senate effectively announced a zero-friction policy.

Despite the administration bypassing the Gang of Eight to execute a regime change in Venezuela, the Senate GOP signaled they are unfazed by the procedural bypass. The reaction from the street was telling: S&P futures held steady. Why? Because Wall Street loves a CEO who doesn't have to wait for board approval.

The Legislative Branch has voluntarily entered receivership. They have ceded operational control to the Executive in exchange for insulation from the decision-making process.

The most significant disclosure yesterday did not come from the White House, but from Senator Cynthia Lummis. In explaining her support for being bypassed, she stated: "I’m glad the president didn’t try to talk to Congress about it first... because this place leaks like a sieve."

And to avoid triggering the debt covenants of the Constitution (specifically the War Powers Resolution), the Senate is engaging in aggressive semantic accounting.

Senator James Lankford provided the new guidance: US involvement does not rise to the level of war powers unless the US intends to "occupy, dominate, control."

This is a critical redefinition of the asset class.

Old Standard: Conflict = War.

New Standard: Extraction = Law Enforcement.

Today is January 6th. Five years ago, the threat to the Capitol was physical and chaotic. Today, the threat is administrative and orderly.

The Senate has not been conquered. It has been streamlined. Senator John Kennedy’s comment that he expects no changes to the GOP vote on War Powers confirms the restructuring is complete. The Legislature has successfully pivoted from a co-equal branch to a silent partner.

It is a quieter arrangement. It is more efficient for the markets. And it effectively liquidates the overhead of a Republic.

The Trade: Buy The Executive. Write down Article I to zero.