We all know the U.S. is not going to default by 8/2/11. However, I’d be hard pressed to find people out there who would say, emphatically, we will not default within 10 years given the current trajectory of the budget. We spend too much and we make too little. It’s only a matter of time before the debt load chokes us to the point where we need to authorize severe austerity measures and much higher taxes. By that point, the U.S. economy will be in a death spiral stage, boasting real unemployment of more than 20%.
The reason why it’s so important to the markets that we get our financial house in order is because, to some, we are still the hungry lion trapped in the room filled with inexperienced day traders (appetizers). The fact that the GOP and Dems cannot craft a deal tells the world we are a country filled with baboon brains, more adept at destroying shit than building.
Should we fail to raise the debt ceiling, the market will take a hit. Plus, don’t forget, the rest of the world is entirely fucked, including the biggest house of cards: China. At some point, everything will fall, 2008 style, sending Senator Gint to his local chapel for deep prayer to his imaginary friends.
At this point, I have no ideology or agenda. I know it sounds cliche, but buying the dips and selling the rips is the only thing that resonates with me. Do yourself a favor and try to tune out the noise, especially from 3rd tier blogs, owned by kids who have never held a job for more than 2 weeks. I do not find it fashionable to call out other bloggers for their ineptitude. Frankly, paying attention to another man for more than 2 minutes is a little fruity. I will tell you now, there is nothing fucking fruity about your Lordship, Le Fly, not even his illuminati lunchbox filled with fruit.
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The global growth story is still very real (though admittedly inflated), we raise the debt ceiling and we go higher.
No it is not real. China is a massive fraud.
And Brazil, Russia, India, SE Asia, all frauds as well?
50% down on all real estate transactions in China?
http://www.rediff.com/business/report/indias-gdp-to-grow-by-8-point-six-per-cent/20110719.htm
You have to wonder who is generating the numbers………
And you have to remember that the norms of our society (while far from perfect) are also far different than those of many Asian countries who think nothing of falsification of documents and witholding certain bits of detrimental information.
How is China a massive fraud? Have you ever been there before?
Let’s start with the fucking fake apple stores and plastic rice and work our way up from there.
China is a capitalist dictatorship.
There is no contract law, no liability insurance, you can’t sue if you are defrauded. If they put poison in your baby’s formula and he dies, tough shit. More profit for the factories.
It is not a normal commercial environment over there. It is all corruption and theft.
You just have to be careful about pissing off (or not bribing enough) someone in their government cause they can get you shot.
They have gotten so far away from their communist roots that they don’t even have government health care any more.
And the USA has gotten themselves in the position of being seriously in debt to these fuckers.
That’s funny you mention that, I actually visited one of those fake Apple stores in Shanghai today. It was very interesting to see, but there was no one in the store. Conversely the real Apple store was packed! Gotta love Apple’s international potential.
I think that there’s certainly a housing bubble here, mostly due to the lack of holding costs (property tax) and their equity markets trade on nothing but speculation. So while I agree that the country has many issues to be resolved, but don’t you think that the long run potential is great despite the many issues they face near term? They’re generally savers rather than borrowers as well which I think is quite positive for the long run.
Back your shit up with links to facts on China being a massive fraud. I didn’t think so. Just another hysterical bitch.
So is Santa Claus, Bigfoor & the Lockness monster.
Big foot is fucking real.
Is the Yetti, and are they two separate species? And is that actually the last surviving members of ancient humans before our DNA was manipulated by the aliens that made us their slaves to get gold?
someone has done their homework 😉
Correct!
So is the the Loch Ness Plesiosaur.
For sure, Bigfoot is fucking real!
Bigfoot is the reason we have carnies and people who shop at Wal Mart.
It’s in the DNA!
http://imgs.sfgate.com/blogs/images/sfgate/hleon/2010/08/14/two-carnies.jpg
http://www.peopleofwalmart.com/photos
Of course Big Foot is real. She was the Attorney General under Clinton.
Santa is real too. I do theft investigation work for him at his Xmas ornament shops in China.
does that lunch box come after the 3rd or 4th degree.default now or revolt
7th degree, small pleb.
Bin Laden all over again…they announce a deal and we sell off…buy on the rumor sell on the…
Uh oh. Here come the Fruit Fly?
I dunno, everyone seems to have really backed themselves into a corner this time. Actually, what we are seeing is the Republican “Starve the beast” strategy coming to full fruition — they have been pushing unpaid for tax cuts for many years as a specific strategy to cause the current situation. This is the culmination of many years of work toward shrinking government/entitlements, and so that is why they are refusing any revenue increases. They may actually prefer default over increasing revenues in any way shape or form.
Best case at this point seems like maybe a short term, small debt limit increase, which I believe would probably still result in a downgrade. A downgrade may be nearly as bad as a default, given the impact it would likely have on rates.
In any case, futures should plunge at the open tonight.
The “problem”with starve the beast is that if it fails taxes on those who advocated it will go far higher than if the strategy was not used at all. Don’t poke a bear unless you are willing to kill it or you will lose.
thats why i dont think they plan to lose….and why they are not caving on even $1 of new tax revenue.
i want a default.i “almost” hate saying it. there is something more deep going on here between the pres and the speaker. i really think that boehner hates obama and vice versa.
Come on, they’ve got a man crush on each other.
no,the problem with every speaker of the house is that they think they are the president. it’s just like the kid thats 16 years old and runs a mickey dees, thinks that they can run the whole company.
“they have been pushing unpaid for tax cuts for many years”
Every time I hear an idiot say “unpaid for tax cuts” I feel like smacking the stupid out of them. Taxes are how we fund the government. Tax cuts mean the crooks in DC are taking less of our money to waste. There is no such thing as “unpaid for tax cuts” what there is is “unpaid for spending.”
don’t argue with me about semantics dipweed, the larger and much more important point is that taxcuts have been pushed extensively as a means to create burdensome debt and deficits, as a strategy to bring about a situation such as this where “hard choices” and “deep cuts” in entitlement programs would have to be made.
I’m not passing judgement on it either way, but you would have to be an idiot (and i think i can assume with some certainty that you are) not to see the bigger picture and strategy here. It t’aint just a bunch of sarah palin hick wingnuts trying to prove a point.
So you think it was a long term Republican conspiracy against Democratic ideology and spending to be implemented when the Dems control the purse strings? Huh? What? WTF?
More likely they really believe tax cuts stimulate job creation and revenue growth … that’s been their motto for the last century. Problem is … 1) you can’t reduce revenues to a level less than you’re spending and 2) that dog don’t hunt no more in a global economy now that we’ve succeeded in exporting democracy & capitalism to the rest of the world including the commies sans Cuba and Venezuela … Haha!
Yes, I believe the imbalance between spending and tax cuts during republican administrations has been part of a purposeful strategy that would eventually bring about this exact situation. Do some research, I’m not just guessing about this.
If the US gets a downgrade… I will demand the resignation of every single congress person immediately.
Once the first domino falls in this sovereign debt crisis, 2008 will be a pre-game warmup compared to what’s coming.
Right… and no one knows that better than “the powers that be” who do nothing all day but work to preserve their power. Letting the system collapse would not preserve their power, hence endless bailouts and money printing.
Deflation is not possible in a fiat system and history has proven the validity of that conclusion. The only domino to fall will be the US dollar and we’re still many many years away from that day of reckoning. Until then, you BTFD.
“Deflation is not possible in a fiat system and history has proven the validity of that conclusion.”
Japanese economy anyone?
Does any of this sound familiar? reduced interest rates? QE? Tightened monetary conditions? Aging population? insolvent companies+banks? Fallen asset prices?
Deflation started in the early 1990s. The Bank of Japan and the government tried to eliminate it by reducing interest rates and ‘quantitative easing’, but did not create a sustained increase in broad money and deflation persisted. In July 2006, the zero-rate policy was ended.
Systemic reasons for deflation in Japan can be said to include:
Tight monetary conditions. The Bank of Japan has kept monetary policy loose only when inflation has been below zero, tightening whenever deflation ends.[20]
Unfavorable demographics. Japan has an aging population (22.6% over age 65) that is not growing and will soon start a long decline. The Japanese death rate recently exceeded the birth rate.
Fallen asset prices. In the case of Japan asset price deflation was a mean reversion or correction back to the price level that prevailed before the asset bubble. There was a rather large price bubble in equities and especially real estate in Japan in the 1980s (peaking in late 1989).
Insolvent companies: Banks lent to companies and individuals that invested in real estate. When real estate values dropped, these loans could not be paid. The banks could try to collect on the collateral (land), but this wouldn’t pay off the loan. Banks delayed that decision, hoping asset prices would improve. These delays were allowed by national banking regulators. Some banks made even more loans to these companies that are used to service the debt they already had. This continuing process is known as maintaining an “unrealized loss”, and until the assets are completely revalued and/or sold off (and the loss realized), it will continue to be a deflationary force in the economy. Improving bankruptcy law, land transfer law, and tax law have been suggested (by The Economist) as methods to speed this process and thus end the deflation.
Insolvent banks: Banks with a larger percentage of their loans which are “non-performing”, that is to say, they are not receiving payments on them, but have not yet written them off, cannot lend more money; they must increase their cash reserves to cover the bad loans.
Fear of insolvent banks: Japanese people are afraid that banks will collapse so they prefer to buy (United States or Japanese) Treasury bonds instead of saving their money in a bank account. This likewise means the money is not available for lending and therefore economic growth. This means that the savings rate depresses consumption, but does not appear in the economy in an efficient form to spur new investment. People also save by owning real estate, further slowing growth, since it inflates land prices.
Imported deflation: Japan imports Chinese and other countries’ inexpensive consumable goods (due to lower wages and fast growth in those countries) and inexpensive raw materials, many of which reached all time real price minimums in the early 2000s. Thus, prices of imported products are decreasing. Domestic producers must match these prices in order to remain competitive. This decreases prices for many things in the economy, and thus is deflationary.
In November 2009 Japan has returned to deflation, according to the Wall Street Journal. Bloomberg L.P. reports that consumer prices fell in October 2009 by a near record 2.2%
Bottom line, if republicans do not get this debt deal done, then they lose the there status as the party for small business, big business, and just business in general because they are fucking everyone over.
This is Al Queda’s wet dream. This is financial terrorism that Al Queda wish they could do. Imagine taking down the America Stock Market by 3% at least, and basically losing Americas Credibility in the financial world, while letting world leaders realize our politicians are a bunch of jackasses?
Can someone please tell me how the republicans are not holding us hostage terrorism style and they are ready to let the bomb blow taking us all with it? i cant believe I am comparing this to terrorism but really, how can one not see the clear comparisons?
I am blaming this mostly on republicans cornering themselves with this no tax hike bs. Reality check , social programs, defense programs, and tax hikes need to all happen. You cannot just cut social programs to granny and expect to heal our issues.
It is financial terrorism. 100% correct.
financial terrorism, to accomplish what?
Are they doing this to intentionally induce fear and terror in the financial markets, or is that just a side effect of their own incompetence along with the inability for both the democrats and republicans to communicate?
They communicate just fine. Their unwillingness to compromise is crystal clear.
Why should they compromise? It’s not as if the people of the country matter to them. Congress folks are simply Legislation Salespeople, selling legislation to the highest bidder from the Special Interest Groups. Compromising, and coming up with a workable budget for the country as a whole– these things are not in their job description.
The President’s comments came after Mr Boehner said he asked the President to ‘lead’.
In a press conference, he said: ‘We asked him to put forward a plan – not a speech, a real plan – and he hasn’t. We will.’
Speaking to Fox News on Thursday, he said: ‘There is a difference between Republicans and Democrats.
‘Its like two groups of people from two different planets who barely understand the language of the other one.
‘Its stark and it would shock most Americans.’
He’s wrong. It wouldn’t shock most Americans. Because most Americans are the same way about their political “religions” that are not based on the real world. Where each side is 100% sure they are 100% correct about everything– the one true religion, I mean political ideology.
obama doesnt know how to write a plan,he had no plan when he ran for the post. if your a business person in this country and you run a small business and go to a bank,for a loan, they want to see a business plan.if i were a banker i would insist on a 5 year plan………obama has no plan,never did,and never will. and most of you voted for this? you get what you play for…………..you all know who you are
ahh, I see now, you’re talking about the communication that goes on between the men “behind the curtain”?
LOL, if you have to use terms like “terrorism” and “bomb” and dramatic language, you are using emotional arguments, not facts. Look up reticular activating system and see if you can find out how it may be possible that bias is in play here.
Have you ever seen a political discussion that was based on logical arguments? Where?
The Divide and Conquer strategy works very well. Political discussions are very emotionally based usually, and they usually divide people– rather than getting them toward mutual understandings.
Political ideologies are like religions– based on faith, not on the material world. Question someone’s political “faith”– even by innocently stating your own– and they may hate your guts. I hope this board will be OK, in spite of this discussion. Many boards turn into hate spewing festivals because of such discussions.
very good point. And when it’s like faith it becomes a part of their ego based identity of how someone thinks of themselves. So if you argue against an idea that doesn’t resonate with them, you are (in their mind) attacking who they are as a person. In reality, you are providing them with a valuable feedback loop to determine whether or not their own perception of their self is accurate, but unless they are able to “detach from the matrix”, they will not see it that way.
It is very hard to watch the TV aka “visual control from a distance” (tele-vision programming) and not get wrapped up in emotion over it, or repeat the ideas as your own, and if you spend too much time you will get your info either as a reaction to the ‘facts’ based on previously held beliefs, or simply accept what it is you’re told. One is indirect, the other is direct, but both are ways through either acceptance or conflict that serve the same purpose.
Especially when they have flashing red “alert” or “breaking news” and all the other emotional anchors and bells and whistles that go on as secondary and tertiary information (that for many become subliminal information simply because they don’t consciously catch all the nuances.) Sticking with your metaphor, if the political ideologies are like religions, then the TV is like the preacher.
thats why people wont unit to linch anyone,they have been divided.
Dear Pete. Your about as sharp as a bowling Ball, DON”T YOU GET IT, the good o’le U.S. of A is broke and our President is asking for an increase on his credit card as to spend, spend ,spend, I don’t care if you loose your meager $1500 portfolio, My loyalty is with this Great Nation And it’s future, as for the republicans, sure They are assholes, but the buck must stop somewhere so I say let it stop here.
They have raised the debt a total of 91 times. They raised it 5 times under bush. Those same republicans raised it 5 times under bush and now that they arent in charge they want to be destroy obama even at the cost of this nation. The good ole USA is broke because of all these schemes the politicans come up with. Even until now, Mangano in Nassau Country a tea party fucking idiot wants to borrow 400M in future revenue to build a new stadium.
And Foghorn, your loyalty rests with your party, not with your country. You would rather hope our president fail to prove a point. Not realizing if our president fails, so do we. I have spoken to more then enough of your kind to know who I am dealing with. So yea I will take a hit to my $1500 portfolio, but I care about where our country is going. NOT WHERE YOUR PARTY OR MY PARTY IS GOING.
Stop listening to your talk radio at lunch and start thinking for yourself.
Amen Pete. AMEN!
What if a payment is delinquent… It seems some people seem to think that if we miss the “deadline” it is a default” is that the default deadline or payment deadline. If it’s just the payment, how long do we have before it becomes a “default” I actually think that we could surprise people and go delinquent for a day or two…
Everyone in Washington is speaking in a different language with their ideas and half of them are as financially illiterate as they hope the rest of amerika is
The US will simply sell 100bill worth of assets to buy another month. Wait and see.
maybe on the (possible ) panic flight from bonds into gold they can sell gold, although I think they need to keep it as a hedge of their own inability to manage the debt ceiling.
Possible plans
Bachman plan: JUST pay the interest to avoid default, doesn’t accomplish anything else but does avoid default/delinquency.
McConnel plan: give Obama the power to raise debt ceiling so you can share the blame and leave it on him… focuses more on “it’s not our fault” and finger pointing, but at least makes it easier to raise debt ceiling.
Bohner+Obama plan: Seemed to be agreed upon until the last minute when the Gang of six had their ideas and Obama wanted to incorporate them an Bohner left to talk with senate.
Gang of six plan:WESTSIIIDE!!!
That’s what Soros and all the gold shorts want …. someone in the Obama administration to suggest the sale of some of our gold a la the SPR for a short term fix. Longs in pm’s s/b on alert to this possibility and hedge or prepare to dump quickly … just saying.
Shit, I hope you’re wrong about that. But it smacks of plausibility.
i think its a default as soon as you can’t meet your payment obligations…its not like a personal credit card where you can be “late” for some period before your loan goes into “default”….
I could be wrong, but that was my take.
Former Democratic president Bill Clinton said this week that if it came to averting default, he would invoke the 14th Amendment, raise the debt ceiling and “force the courts to stop me”.
Obama said on Friday White House lawyers had explored the option and they are “not persuaded” that it is a winning argument. But he did not rule it out.
By saying that, Clinton only demonstrated that he is ignorant of the 14th Amendment. If he read Section 5 of the 14th Amendment he’d see it says “The Congress shall have the power to enforce, by appropriate legislation, the provisions of the article.” For clarification when it says Congress it doesn’t mean the President or executive branch.
Bill was straight up pimp. When they pulled that impeachment bullshit and couldn’t get him thrown out it was just like Omar Little in “The Wire”:
“Yo, lesson here Bey (Congress). You come at the king (Clinton), you best not miss.”
John, if you don’t make the payment on time, you are in default. There is no grace period on government bonds. And you’re calling others “financially illiterate?” Were you just elected to congress this year?
Wow – No deal.
Great job Mr Boehner. You should be the first to resign… Please take Nancy Pelosi with you.
Thoughts on this gang of six getting in the way?
http://www.businessweek.com/news/2011-07-24/-gang-of-six-debt-plan-helps-derail-boehner-deal-with-obama.html
i wouldnt trust dick durbin with a child
Bohner is saving up a deal for Obama’s birthday present. (August 4th)
so ur sayin obama get a bohner for his birthday?
no… he’s turning gray and getting old fast with the presidency like dog years…
at least, not with out viagra
was going to iraq, but i Q-wait
Why did I sell my TVIX on friday ….why why why
Glad I wasnt the only one
Fook me!!!!!
Also cause you probably thought these donkeys (no political pun here) would get their fucking shit together and pass a deal!!!!
Lordship Le Fly, today’s message to the forlorn was exceptionally well done. Your prescience is daunting. I hope your minions pay heed and STFU about politics in which they have no clue or IQ.
i second that,
Wow, you’re right. Let’s all stfu and let our prestigious elected officials handle this.
Oh wait… We tried that and they failed us yet again.
Problem is, the determination of which candidates are put up for “election” is completely determined by the Special Interest Groups that finance political campaigns.
So we have no power to do anything about such situations, as long as we continue to vote for candidates who accept money from Special Intererst Groups.
Each candidate will refuse to compromise– paying attention only to the groups who financed his/her campaign in order to purchase certain legislation. The nation as a whole will continue to be ignored, except that each candidate will pretend to espouse whatever pretty ideologies the voters in his/her district enjoy listening to and believing in.
as posted before, every line in a budget is tied to a lobyist, look at the tarp bill, wooden arows? it was to save america, not the special intrest,ahhhhhhhh
Everyone has a lobbyists… in some cases, I’m not even sure many lobbyists realize the reason they are being funded is because those financiers know the lobbyists will fight for their agenda, so it comes across as more sincere than a paid actor or actress. Many of them may not understand the real consequences or who the bill is helping or what they are really fighting for. It’s more comical that way when government votes for bill to supposedly protect the people but ends up doing the opposite without the policians, the lobbyists thesmelves, or many of the people cheering for the bill on the sidelines having any idea.
we agree with the fly and get the most thumbs down.humm
told congress to go to rehab they said no,no,no
It doesn’t matter what happens now. No one, especially politcians, is willing to do what it takes to fix the situation we are in.
seemingly thats there plan..
The Tea Party is the tail that wags the dog and that dog (Boehner) has been neutered. Bout time for him to take control of his party and lead via negotiation rather than playing “deadman’s curve” with the country’s fiscal health to appease the freshmen conservatives.
Because like the Fly, politicians win even when it appears they’re losing…
http://12160.info/video/the-video-congress-does-not
Market drops on debt ceililng uncertainty then rallies hard on agreement … then “sell the news” bull slaughter begins. I am getting very short but not until we challange 1370 highs
I love these Fly weekend posts. It really gives you his true feelings and understanding of the market picture without the noise of the daily market price changes.
And then he throws you a quote like this, “illuminati lunchbox filled with fruit”…priceless…live on Dan Brown!
Well it’s a non event so far. Carry on.
Fly, You do know that Illuminati is also a devil worshipping group, supposely led by Jay Z…and has a lot of rappers in it. My friend Macy is obsessed with telling me who is Illuminati and who isn’t…
full of dog shit tn………that is all i have to say
Drummer, Of course it is, but a lot of people are fixated on it.
WTF!!!!
your friend is not the sharpest tool in the shed
Jimmy, I know, but they are fun.
I like you because you are so smart. Since I am a little predisposed at the moment, could you help me in my quest to find “the real killers”. I think someone with your knack for research could really help a brotha.
Sorry OJ, I use to practice Crim Law…not anymore.
Maybe your friend Marcy can help. Please send her email address and a nude pic. KTHXBAI.
“Illuminati”…had one…passed everything but a gas station…odd tire size…everything was imported from fuckin Pluto <—-(suburb of Xenchow)…
SO we default on China…so what…pricks were asking for it anyway…This is a higher Stakes game…smoke and mirrors..debt ceiling
You no buy
We no pay
who's yo Daddy now Ping
Would be a big mess.
i wait for the day when americans have to go through with what happend to asia during the asian financial crisis. cheap homes and goods wont matter if interest rates are 20% and above and everybody wanted huge deposits up front.
like the 80’s!?!
Historically high interest rates are inflationary, not deflationary as everyone says. The “theory” makes sense but it’s based on domestic reasoning as if there is only a domestic economy on an island separated from all other factors. People would do better to forget what they think they know.
LOL, rappers are all owned by warner music group, follow the corporate ties. Jay-Z isn’t leader of it. And yes the corporation of music is a pyramid structure where warner music corp owns subsidiaries that own murder inc, interscope records, etc interscope has a sub branch like aftermath and shady-aftermath and such. it’s not illuminati, it’s just one tiny microcosm of influential music and symbol that corresponds to the ancient babylon practices which are often what people refer to as the “illuminati”. A bunch of sun worshipers and stuff.
I imagine a lot of the control that goes on is indirect and very coordinated. It’s like, the bilderberg group is a meeting but it’s invite only. the question is “who is the one making the invites? and why do they choose who they choose and the agenda that is talked about? Kissinger is involved in the trio of CFR, trilateral commission and bilderberg group, I imagine he’s one of the common links that can help influence discussion. He likes the power but I have a feeling he’s used due to his desire for power and probably the rabbit hole goes deeper, but don’t watch those paranoid videos or listen to the people that talk about it. If they wanted to enslave us all, they would have done it already.
It IS done already. Where do you think the “interest” portion of your taxes goes? They same dudes own essentially all of the central banks on the planet. For example, the “central bank” in China has created a lot of money from nothing, and electronically “lended” it to the US gov’t. Who owns the central bank in China? The same dudes who own ~every other central bank on the planet. If 40% of your taxes go to “some dudes” who have done nothing for you and provided nothing to you, then you are already owned.
S&P downgrade of the US coming in 3..2..1…
bill tomarrow afternoon,,,,
fucking soddom and gammorah is what this fucking hell hole country has turned into. the tree need watering george.
sodom huessain?
tza, gld, damn, i anit has them…
Thank you Fly for helping me load up on TZA
Mucho gracias
wonder if paulson/gitner new this, and shorted for the gov, gov would be flush fer a min..
if they were short, it would show up in the put/call ratio, the vix, the options market, etc. Has to be someone to take the other side of the trade, too.
any link to WNR mention in Barron’s??
very small, about six lines saying you better be in it…lol the western refiners stand to do well period.as it should be.Dis: long wnr and calls
http://online.barrons.com/article/SB50001424053111903419104576454154085223200.html?mod=BOL_twm_fs#articleTabs_panel_article%3D1
> Western Refining is riskier because of its $1 billion debt load and its reliance on a single refinery in El Paso. Shares have more than tripled in the past year to 21 and could go higher if earnings stay strong, helped by the company’s access to relatively cheap crude from the Permian Basin area of Texas. <
Jeesh … talk about “shoot the messenger” … you’re welcome!
“At some point, everything will fall, 2008 style, sending Senator Gint to his local chapel for deep prayer to his imaginary friends”
Do you really think it will be a 2008-style liquidity scramble? There has to be something that was not hit in 2008. There must be a way to side-step the train wreck, but how?
safe heaven.gold and silver physical my friend
There is one thing I believe all Dems and Repubs can agree upon.
Based on my observations over the last few years, a financial crisis is good for a nice increase in “hits” and comments on this here blog.
Surprising to see the Fly missing the clue train on the deficit and debt. but that is what has happened.
I’d be hard pressed to find people out there who would say, emphatically, we will not default within 10 years given the current trajectory of the budget. We spend too much and we make too little. It’s only a matter of time before the debt load chokes us to the point where we need to authorize severe austerity measures and much higher taxes.
The “current trajectory” is a reflection of the fact that we recently experienced a credit crisis. Unless you think we we will be passing through credit crises for the foreseeable future, current trajectory is not something to be extrapolated into the future.
Credit crises create huge increases in government debt. They crush employment and tax revenue. leaving the government with a shrunken revenue stream at a time when counter-cyclical “stabilizer” payments for things like unemployment claims and Medicaid are sky high. In the U.S., those effects hit us at a time when we’d already lost our minds and figured that we could cut taxes while also increasing military spending a few hundreds of billion per year for foreign adventures and ignore the resulting budget math.
The existence of suddenly enormous government deficits is not the great danger – the deficits can be dealt with when the economy recovers. Discretionary spending in the US as a percent of GDP in 2010 was less than it averaged in the Reagan years. If we stopped playing British Empire II with our military and the stabilizing payments drop back to more normal levels, discretionary spending would be back down where it was in the Clinton years.
The danger is that the deficits result in a push for austerity that sends a wounded economy into a downward spiral.
Now, perhaps the Fly based his extrapolation of current trajectory on the political situation rather than on the economic situation. He’d have a point, then.
Krugman? Is that you?
Well said ott.
http://www.ritholtz.com/blog/2011/07/wall-street-analysts-and-economists-have-this-recession-recovery-wrong/
wefare country,from a welfare boy. a chicago POS nigger. fuck you
Drummer is banned. I will not tolerate racism here
he is just saying what they all think, anyway….
who’s they?
you know who “they” is as well as i do.
thats what boehner will never have the fucking balls to say. thats why he walked out.
brass balls mother fucker. to many sissy’s
hey listen mother fucker,when i was growing up they forced integration on my generation,and we got to see what they are all made of. all we had in 4 years of high school was nothing but racial riots. fuck you
this must be one of those french “bannings”
unshaven armpits and legs
let me just say, when marshal law is invoked, and it will be, it will begin here, chicago illinois..
Let me just say: You can’t spell worth a fuck. Which is anther reason
you should be banned.
yea, what did i misspell asshole, go fuck your self too
your like the dick that cries mommy/teacher, he did something wrong…….
Get it all out #701 … you have but a few moments to release all that pent up tension then you are on your own …. GLTY
It’s “martial law” you fucking dipshit.
it’s marital law
So I’m thinking:
1) Buy the opening dip
2) Sell the bounce (around 9:45)
3) Sit in cash
4) go eat a cheeseburger
All subject to change of course
it has been a while since we had a day with true relentless selling pressure…i’m thinking when people start to take this seriously, we could see a 2.5-3% down day with little bounce.
I dont know if tomorrow is when folks start taking it seriously, but it feels like it might be.
The thumbs down must be from the Vegan iBC crowd… no offense taken.
The thumbs down are from people long the market on margin.
Bullish, It wasn’t me…well, I am not actually a Vegan…I eat eggs, dairy
and cocoa puffs… 😉
lol, yes have to have my puffs.
wow thread has gone epic
You folks work yourselves up into a lather over nothing. Live through the depression and then get your leg blown off in North Africa by a Nazi land mine then get back to me when you have your priorities straight….
So that’s what I tripped over when I went to see the pyramids.
I may get my chance to live through a depression real soon… after I live through that I will go to North Africa and promptly get my leg blown off by a nazi mime .. I hate mimes…. and clowns
Depressions are fun….Prohibitions are a bitch…combine the 2 it’s game over…I miss Gramma
I Like Pancakes.
I’m thinking Obama calls Boehner’s bluff and veto’s the “kick the can” short term debt ceiling boost and has Geithner find some temporary source of revenue (Area 51?) for the next week or two while the Pubes reinvent their deficit plan as the entire nation calls for their heads … just a thought, now back to the Knob Creek and soda.
soo….. what do we do about that AAA?
i say we duct tape the mother fuckers at s&p or fitch or moody’s for the next 2 weeks so none of them downgrades the us?
AAA … I say we roll auto insurance into Obamacare and kill two birds with one stone. After all, auto insurance is mandatory too.
I think market wants to go lower right now it overbought… debt ceiling crap gives it a reason…. get your shopping lists ready.. I know we all have some stocks we are mad we missed in past week…we may get a secind chance.
WNR under 19 anyone….
I am actually not retarded.. sorry for all the typos.
Apology not accepted.
Bring your A game.
DOW futures down -120 now, from Bloomberg
Bunch of whiny bitches, the likelihood of this shit being forgotten in a month is quite high. This type of over hyped bullshit happens every year, wake up.
“the likelihood of this shit being forgotten in a month is quite high”. Yeah its called denial.
I keep hearing this arguement from the longs and its a bunch of BS.
These problems keep coming back because they were never solved. Our losses were papered over. Our whole system is insolvent. The stock market is going nowhere for a long time.
For now it looks like this range of 12,000-12,700 on the DOW will continue. The next major move is down as these debt issues come home to roost.
Very interesting week coming up.
The market DOUBLED in the first two years of Obama, with a Democratic House. The Republicans take over the House, start pissing and moaning, and the market goes nowhere.
There is a MESSAGE here.
you mean the market crashed and reflated to post crash levels… big deal.
Yeah. The market CRASHED on Bush’s 8-year watch and then DOUBLED during Obama’s 30 months. I regard that as a VERY big deal, since it got people with a BRAIN some huge profits.
I knew enough to SELL when Moron Bush took over, and I bought when Obama took over.
I have enjoyed doubling my money. How have YOU done?
I did all right. Who doesn’t like bush ?
Grateful Dead perform “Loser” http://www.youtube.com/watch?feature=player_detailpage&v=qpD6BmAjeDM
RISK OFF
so much hate. i feel sorry for db, and the things he must have gone thru to make him feel that way.this kind of hate will destroy a person. i cringe when i hear it.
edge – Hate makes the world go ’round. The sooner you accept it , the sooner you can see it. The sooner you see it, the sooner you can do something about it.
back in high school when i was a teenager and there were racial riots,i got jumped and beaten to near death just for being white………..thats a stain that will never be removed, dont feel sorry for me dude.
German market is up…no one cares about this fight besides the media.
The market will be higher today and the media will move on to something else in order to boost their ratings.
The idiotic media needs to get back to the “it’s really hot in the summer” stories…and be prepared for the “it’s really cold in the winter” stories coming in six months.
Almost forgot, I’m sure we’ll be getting a “here comes a hurricane that will wipe out the world and drive energy prices higher” story soon too.
FTK floats to the top – rolls $10 easily, without effort, and doesn’t look back.
Not much of a sell off!
“default not a horrible idea at this point”
http://blogs.forbes.com/greatspeculations/2011/07/25/default-is-not-such-a-horrible-idea-at-this-point/
agree or disagree and why?
His idea is beyond retarded. If we need to cut spending, we should cut spending. Defaulting on interest payments on bonds, or whatever else we as a country actually currently owe, would turn us into a 3rd world country immediately,. The dollar would become literally worth less than toilet paper. The bond market would crash, and also of course the stock market, because there would be no faith in the U.S. to honor its obligations.
I thought default while failing to pay would be deflationary. If you don’t keep borrowing more to keep it going wouldn’t it be? Where does all the money come from. The US prints bonds, not cash. If they said “we aren’t going to keep printing bonds to issue more currency, doesn’t that means that no new currency is issued and if spending becomes more reasonable that there is less money in the system? Or does that underplay everyone who sells bonds? if we don’t pay bonds, aren’t we saying the fed will have to take back the paper money that was created in exchange?
There is still revenue to pay the interest. Tax revenues are 60% of gov’t spending.
My thurs buy of CNH on earnings was a winner … up $3 1/2 and more to come.
a hater!
I also bot DWA … Thnx Fly!
GSVC just took off. There was absolutely no sales at the bid for an hour and then it just went straight up. Looks like the bottom is in.
Got in GSVC at 17 last week. I’m playing along for another WNR/FTK.
The Fed Gov. current spending is only 40% new debt. Might as well raise it up! Like the guy falling from an airplane who has not yet hit the ground…. “everything is okay so far!”
I hope you made some coin on those TZA calls this morning Fly and sold them at LOD.
The miners reversed this morning and I am trying to be really patient with GDXJ long here.
Number 180.
Take that Zombie.
Better late than never.