Contrarian fade: Congress veto override mispriced at deep discount
L1 prices a 2026 Congress veto override at 11¢ with an implied yield of 1,775% — the highest IY in the legislative dataset at a 5-day tau. L2 prices the same event ever at 29¢ (98% IY). The 18-cent gap between L1 and L2 implies the market thinks it happens eventually but not in 2026, yet Trump's 20% resignation probability and midterm dynamics (Democrats 82¢ House control) create a non-trivial 2026 path. Buy L1 for lottery-style yield on a real constitutional trigger.
Oil surging 3.7% (WTI at $123.75) while tariff probability sits at 83¢ creates a classic stagflation setup: inflation sticky, growth slowing, Fed paralyzed. The market prices 94-96¢ for no July move, but dissent markets and CPI edges signal the consensus is dangerously complacent. We play both the yield on mispriced inflation contracts and the contrarian dissent angle.
CatalystDemocratic House majority post-midterms creating override conditions; Trump veto of spending or immigration bill
RiskRepublicans retain Senate blocking any override; Trump avoids vetoing must-pass legislation
WatchCongress overrides a Trump veto before 2027 (L1) resolves YES · by 2026-12-31
sf ideas && sf book KXVETOOVERRIDE-29JAN20-27