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The New York Stock Exchange dropped today, but by a relatively piddling amount, as the markets still have given no indication that they will yet punish Congress for failing to pass a debt limit deal. NASDAQ even gained a few points. The market may be pricing in the fact that Treasury has more cash on hand than it claims, enough to hold things together past August 2nd, past the Social Security payments on August 3rd and even past the large debt rollover on August 4th.
Once you get out to the next large set of payments, there could be problems. But there’s a great deal of credibility tied up in the imprecise rendering of August 2nd as the drop-dead date. If the Administration actually has the cash to go a bit further, it will confirm the basest suspicions of the conservatives.
That’s why OMB Director Jack Lew was out there today denying that Treasury had the additional headroom.
“Aug. 2 is very real. And, you know, I think if you look at the markets, we’ve never predicted a day when things would change,” Lew said on MSNBC [...]
“One thing is clear, if the markets believe that this is not going to get resolved, nobody should feel comfortable that they could live with the consequences of that,” Lew said. “And I think that if you look at what the markets are telling us is they think we’ll get our work done. We’ve always gotten it done before, and they believe we’ll get it done now. If we don’t, then I think one should not be comfortable with what comes next.” [...]
“I know there are a lot of people outside trying to count the hour-to-hour and day-to-day cash flows. No one has come to me with any evidence that there is more room than August 2nd,” Lew said.
It’s impossible to know with specificity months and months out, given all the variables, the precise day of running out of cash. The White House could be forgiven for missing the mark by a couple days on either side. But this is tied up with perceived credibility. To a large portion of the conservative base and the caucuses in Congress, the White House has none. And this will only feed that. It will make it more impossible to get to a final resolution.
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I was unaware that Obama had any credibility left.
Boxturtle (I suppose it’s amazing what you can find, if you clean the sewers thoroughly)
It would be one of the most wonderful things that ever happened to this country if the Tea Party, hopefully joined by the Progressives, can block any increase in the debt ceiling.
First of all the Obama Administration and the Chicken Little’s of the minstream media would suffer a significant credibility shellacking.
Secondly, we’d have to find another way to finance our tax deficits than the sale of bonds, which cost a lot in terms of interest. (Since we’re no longer on the gold standard, we have no need for borrowing. Ours is a fiat currency. We can simply print or mint it. duh!)
All sounds like threat issued by Paulson. Give us trillions or the sky will fall in. If the debt ceiling is raised on the backs of the people, which is how it looks right now, then I say default, because the rich as well will feel the pain. But more importantly, it will allow us to reset this entire corrupt system, and God knows we need to do that
If defaulting would be good for the people, they won’t do it. Sorry to be a cynic.
The hell with the debt ceiling, and the cuts to social services.
The elephant and the donkey in the room is the Super Committee.
With that, the MOTU’s can hack us up at leisure or with great immediacy.
Does ANY one have ANY hope we get out of this without the Super Committee enacted? (bonus if social services and SS are spared cuts)
Any one?
The big lie is that if the Market farts, the american people have to call it Chanel #5.
How much can we get for the gulf coast states, tossing in Georgia and South Carolina for good measure?
When a business is in trouble, you have an asset sale. We could relabel it the Chinese Riviera, and they’d gobble it up. Heck, we might make enough to stay solvent for a half decade more.
Something David Swanson has set up:
http://stophoping.org/
Let’s primary this guy. Vote here for who you’d prefer
Based on Obama’s record of end-running Congress. I think this is exactly what we’re headed for. If Obama/republicans don’t set it up, the IMF will. they own US now, you know.
It’s all Obama and the R’s now, notice that? Of course you do. sorry
The ony hope is to tank BOTH deals in the House and Senate or allow default.
If the IMF and Obama do that then perhaps we can finally dispense with the pretense that we are living in a vibrant democracy. The sooner we get rid of pretense the better.
He’s got more credibility than the Congressional Progressive Caucus. Ok, that means absolutely nothing.
Nice.
Well, this is just a reminder that President Obama has to make good on his “concern” that Social Security payments will NOT BE ISSUED on August 3 … which the White House and its advisers are convinced will re-established Obama’s credibility and truthfulness or truthiness.
For example, the remainder of Obama’s “base” who, from the small sampling available today, will happily take this as the great victory which it is, and, being unconcerned with the rule of law, will scoff at the notion that, by law, so long as the USA remains a “viable” state, the Federal Governmnet IS REQUIRED to issue those payments.
The mythical middle, the independent voters, we are assured, having no sample of their opinions to actually evaluate, will go wild with joy at the prospect of grandparent’s eating catfood, and “dependent widows and children” going shoeless, homeless, and hungry.
Obama’s “disaffected” will all retire to the basements of their catfood swilling parents, don tattered bathrobes, put food on their children whilst covering themselves with snack-food munchies and head right for the keyboards of their computers.
Presumably nobody else will give a defecation and will simply relieve themselves over the whole affair.
Now, if any members of any of these groups were expecting SS checks on or after the 2nd, the above speculations will be meaningless, but so far no one has worked up the nerve to tell anyone in the Democratic leadership about this fact because facts seem to upset them even more than facts annoy Republicans.
Tune in for the next nail-biting update on the trials and tribulations of President Gut-yer-hopes Obama and night-hosses of the Apocolypso Club.
(Concern for those too-small-too-affect-the-too-big-too-failers? Surely, you jest? This is America, Get Rich, or Get Out or Get Dead, Quietly!! So there!)
The preceeding almost-snark is for those entertainment porpoises only, who have requested that we humans stop using the ocean as a carbon “sink” … whatever that means.
DW
Do you suppose that it would be possible to just ignore Obama for the rest of his term? I am so tired of him.
Nope…he’ll work overtime to make sure you can’t
Obama never lets a self-induced crisis go to waste – uses a crisis to give us Romneycare, a crisis to give us Bushbama tax cuts, a crisis to go to war without a Congressional approval, now using a crisis to go after Social Security. Of course when a real crisis actually happens – like with Petronobyl – Obama disclaims any responsibility and tells us how powerless he is.
Twain, in all seriousness, I am convinced that we must think post-Obama, whether that “post” be the end of this term or the next …
We shall be picking up pieces, regardless, and ought to get into the proper mindset.
If we wish a civil society, then we shall have to build it ourselves.
I think it wiser to start sooner rather than later, so we must begin to think post-politics as we now know them, and start thinking about ourselves, as we need to be … in order to maintain our humanity and the possibility of meaningful life on planet earth, on paradise.
I’m certain I must sound like a broken record?
(I know that you are old enough to understand that allusion, Twain, just as you have a clear understanding of what is necessary to a functioning rule of law.)
I think we should stop over-talking the daily outrages and begin to discuss principles and morality necessary to OUR future.
What do you think, Twain?
I would really appreciate your thoughts on the future.
DW
In case anyone’s interested
#fuckyouwashington – Fact “#1 Only 58 percent of Americans have a job right now”
9 more facts at the link
More directly to the point, 10-year U.S. treasury bonds rose in value today, meaning that their interest rates fell (by 5 basis points). This shows that investors had MORE confidence in the creditworthiness of these bonds today than yesterday.
Thanks for link — great stuff.
Thanks
I added two more links
The gold bugs are mostly predicting another ’08 crisis only bigger this year. That could affect their plans. Otherwise I don’t know. A meteor could vaporize Dee Cee? Godzilla vs. Wall Street?
Give them a few props at least they didn’t vote for cut,crap, and balance and apparently are not providing Boehner the cover he needs to get his grand plan out of the House. It’s small but it’s a start.
I’ve got a new crisis for Obummer to think about- his ass is now grass and the seniors all own lawnmowers. The social security act says that the Secretary of the Treasury shall keep enough money in liquid form to pay all SS claims for the whole year. Then he is allowed to invest any excess in treasury bonds. So either these two sleazebags are just flat out lying or they intend to embezzle SS money and take care of their buddies first. Or the money is already gone and they are trying to cover, maybe that is why he is so afraid of using the 14th. It would all hit the fan then.