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July 22 : We enter the danger zone

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posted on Jul, 23 2011 @ 01:56 PM
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Boehner Issues Interim Statement As Debt Ceiling Talks Continue

Following a resumption of the "failed" debt ceiling discussion as of 11 am this morning, John Boehner has just released the following broad statement: “As I said last night, over this weekend Congress will forge a responsible path forward. House and Senate leaders will be working to find a bipartisan solution to significantly reduce Washington spending and preserve the full faith and credit of the United States." So much for the debt talks breaking down.


Boehner will shaft the American people with his stiffy.



posted on Jul, 23 2011 @ 04:03 PM
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And the deal so far...

Obama : Debt ceiling talks fell apart, Boehner walked out

On the discretionary spending front, both sides had "identical offers," said one of the officials. There would be $1.2 trillion in cuts over the course of ten years;

Or 120 billion a year... if they even keep the plan for the next 10 years.


$1 trillion in savings that would come from the draw-down of the wars in Afghanistan and Iraq;

Which won't happen.


and $250 billion in savings in Medicare over the course of 10 years.

Or 25 billion a year... if those savings ever happen (which they probably won't)


Both sides had also agreed to attach a second piece of legislation, to be decided via the reconciliation budget process, that would have changed the retirement age for Medicare and changed the premium structure for Medicare Part B and D, while eliminating certain kinds of supplemental insurance. That bill would also contain changes to the way Social Security benefits were paid starting in 2015, with buffers put in to protect the lowest-income beneficiaries.

Which probably won't happen due to political capital not being there to do that... just look at what happened when France tried to do it...

Total cuts : 120 billion a year... MAYBE a little more... Deficit will still be above 1.4 trillion a year in the best case scenario... Mwahahahahha.

That's it America, if the rating agencies got ONE ounce left of honesty, they will downgrade the US in the next 2 weeks, deal or no deal.
edit on 23-7-2011 by Vitchilo because: (no reason given)



posted on Jul, 23 2011 @ 04:22 PM
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why do the poorest and weakest always get the worst of it? I don't think they should be talking about any cuts or changes that would harm anyone in poverty. The government needs to cut defense, foriegn aid and rich government employees salaries!



posted on Jul, 23 2011 @ 04:28 PM
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Originally posted by dreamseeker
why do the poorest and weakest always get the worst of it? I don't think they should be talking about any cuts or changes that would harm anyone in poverty. The government needs to cut defense, foriegn aid and rich government employees salaries!

Defense, foreign aid and cutting gov. employees salaries that are too high, hell yeah.

Cutting defense will probably send million of people on unemployment however.... but the industry of death needs to be stopped.



posted on Jul, 23 2011 @ 04:31 PM
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This is political theater. They are conning the world into believing they wont pass the debt ceiling. They are conning the American people into believing the US no longer has the funds to pay for basic services, infrastructure, etc.

They are also providing theater to make the Dems and Reps appear to be opposed, when in reality we know they all support the same basic ideas of expanding empire while denying services to people at home.

The American people are being groomed to accept a new reality wherein social servcies and public infrastructure are no longer provided by the government, but by private corporations.

This is the new feudalism.



posted on Jul, 23 2011 @ 04:34 PM
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Originally posted by incrediblelousminds
This is political theater. They are conning the world into believing they wont pass the debt ceiling. They are conning the American people into believing the US no longer has the funds to pay for basic services, infrastructure, etc.

Yep. Well doesn't matter if they raise the debt ceiling or not... with the crappy deal they are pushing, the US will get downgraded and the downward spiral will accelerate... and America will become the new Greece.



posted on Jul, 23 2011 @ 04:36 PM
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reply to post by incrediblelousminds
 


My limit is only One Star

thanks...and a voicerfious AMEN to what you posted...
edit on 23-7-2011 by St Udio because: (no reason given)



posted on Jul, 23 2011 @ 04:37 PM
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Latest :
News Alert: Boehner tells GOP he plans to unveil new debt strategy within 24 hours

House Speaker John A. Boehner (R-Ohio) told his troops Saturday that he hopes to roll out a two-step strategy within the next 24 hours for raising the federal debt limit and restraining the national debt to avoid roiling Asian financial markets when they open Sunday, according to a participant in the conference call.

In the call with his House GOP colleagues, Boehner said he still hopes to slice as much as $4 trillion out of the federal budget over the next decade, despite the collapse of talks with President Obama on Friday over a bipartisan “grand bargain” to reduce the government’s spiraling debt.

Right...



posted on Jul, 23 2011 @ 04:40 PM
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Originally posted by Vitchilo

Originally posted by incrediblelousminds
This is political theater. They are conning the world into believing they wont pass the debt ceiling. They are conning the American people into believing the US no longer has the funds to pay for basic services, infrastructure, etc.

Yep. Well doesn't matter if they raise the debt ceiling or not... with the crappy deal they are pushing, the US will get downgraded and the downward spiral will accelerate... and America will become the new Greece.


The new greece might be a bit of an exaggeration, but the US economy is definitely being prepared to be put on par with the rest of the world. This has been in the work for decades. It proceeded NAFTA< but NAFA kept it going. The US (and the rest of the world) is heading towards third world status. The haves and have nots will rarely inter mingle. This is all theater shaping our perceptions to this inevitable end goal.



posted on Jul, 23 2011 @ 08:30 PM
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Good News: It's Almost Over After Pelosi Says Congress Looking At "Two-Tiered" Deal

With 23 hours left until the Asian open (or, more importantly, 19 hours until FX trading resumes) and with today's round of talks now official over after a one hour meeting in Boehner's office with congressional leaders achieved nothing, it is becoming clear that the final debt ceiling outcome will be "no change" in spending or taxing habits and a temporary hike in the debt ceiling, so that the soap opera can be repeated again every three months... and again... and again... and so forth for an "extended period of time" as "transitory solutions' become the new grand consensus. At least we now know the phrase for complete, impotent incompetence in the Hill is: "Two tiered approach" which is how Nancy Pelosi called the last minute attempt at compromise. Per The Hill: "House Minority Leader Nancy Pelosi (D-Calif.) said Saturday night that congressional leaders are considering a two-tiered approach to raising the debt ceiling and reducing the nation’s long-term budget deficit. Pelosi reiterated that she backs “a long-term extension” of the $14.3 trillion debt limit, putting her in line with the demands of President Obama and Senate Majority Leader Harry Reid (D-Nev.)." Alas this now appears to be a mirage: at best the Republicans will agree to a $200-300 billion extension to get the Treasury through for another 2 months (although at the delayed run rate, Geithner needs to issue $350 billion in debt right now just to catch up with where bond issuance should be).


FX markets open in 18h30 or so... by then, we will be fixed.



posted on Jul, 23 2011 @ 08:36 PM
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reply to post by Vitchilo
 

do you really believe there is a chance it wont be passed?

This just gives the Dems a great opportunity to give in to many of the GOP's demands for cuts in social services.

"We didnt want to cut these programs, but if we didn't, the GOP wouldn't have passed the debt ceiling!"

Theater



posted on Jul, 23 2011 @ 09:07 PM
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Originally posted by incrediblelousminds
reply to post by Vitchilo
 

do you really believe there is a chance it wont be passed?

Maybe 1% chance.

Me thinks they won't cut anything and just continue to spend like drunken sailors... while under the table, threaten the rating agencies with jail or assassination if they downgrade the US... But of course, that won't stop the bond market from blowing up.



posted on Jul, 23 2011 @ 10:25 PM
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Well they are definitely going to have to sort out the rating agencies because they are gong to downgrade sooner or later regardless of agreement to raise the debt ceiling or pass any deficit cuts....


The senior White House official, speaking on condition of anonymity, said the size of US debt - which stands at over $14,000 trillion, or nearly 100 per cent of GDP - also remains a serious concern.

"There's a very real prospect that the US will be downgraded not for failing to raise the debt limit, but for failing to take serious action to control our deficit," the official said.


'Very real' risk of US rating drop as debt talks deadline looms



posted on Jul, 24 2011 @ 12:30 PM
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Still no deal... and the FX markets open at 4PM... Boehner is supposed to have a conference at 4:30PM... too late to save the FX markets.

The Asian markets open at 8PM...

And of course the whole super congress BS they are thinking about...
'Super Congress': Debt Ceiling Negotiators Aim To Create New Legislative Body

Now it’s all come down to the Boehner-Reid-Pelosi-McConnell talks to solve the debt crisis. Notably absent? The president.

Boehner, Reid, Pelosi and McConnell... the worst of the worst.... yeah this is gonna end well... NOT.



posted on Jul, 24 2011 @ 06:46 PM
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reply to post by Vitchilo
 


Seriously when it comes to worst of the worst you are NOT joking. Those 4 are the slimiest, creepiest, dirtiest politicians in DC .. the fact that it is down to those 4 proves to me the direction the country is headed.. absolute insanity.



posted on Jul, 26 2011 @ 01:59 PM
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Obama Threatens Veto Of Boehner Plan

Just because we needed some fireworks, here is Obama, providing the catalyst. Watch for a very indignant Boehner TV appearance in T minus 5...4...3... And yes, this will not help the consensus-building effort.

Good. DEFAULT ALREADY.

The Cost Of A US Downgrade: $100 Billion Per Year, Offsetting All Deficit "Reduction" Efforts

Earlier today, while discussing the implications of a US debt downgrade on a SIFMA call, JPM head of fixed-income Terry Belton told listeners that a US downgrade could cost the US an additional 60-70 bps in incremental interest.

Should there be a downgrade, investors may not sell Treasurys, but they sure will be forced to sell other lower rated instruments to keep the overall rating distribution of their portfolio in line with mandated rating requirements. Which in turn, following margin calls, will result in, you guessed it, selling of Treasurys. Yet this debate is the topic of another post. What is more important is that on the same call, Belton said that a 70 bps increase in interest would result in an incremental $100 billion in interest expense each year. As a reminder, this is roughly the amount that the NPV of a realistic deficit reduction plan over 10 years would chop off from the US deficit on a yearly basis. Simply said: the US downgrade alone, now virtually taken for granted by everyone, will offset any beneficial impact from any deficit reduction that will have to happen for the debt ceiling to be increased. And that, ladies and gentlemen, is why cash flows matters.



posted on Jul, 26 2011 @ 02:47 PM
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Obama to Banks: We're Not Defaulting

While officials from the Obama Administration raised their rhetoric over the weekend about the possibility of a debt default if the debt ceiling isn't raised, they privately have been telling top executives at major U.S. banks that such an event won’t happen, FOX Business has learned.

In a series of phone calls, administration officials have told bankers that the administration will not allow a default to happen even if the debt cap isn't raised by the August 2 date Treasury Secretary Tim Geithner says the government will run out of money to pay all its bills, including obligations to bond holders. Geithner made the rounds on the Sunday talk shows saying a default is imminent if the debt ceiling isn't raised, and President Obama issued a similar warning during a Friday press conference after budget negotiations with House Republicans broke down.

Of course there will not be a default. There's way enough money to pay the interest on the debt. Obama is just fearmongering to the sheeple when he does his speech, lying all the way through.



posted on Jul, 26 2011 @ 09:08 PM
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A must read article for those who still don't understand that any way the US government goes, it is screwed.

The Road To Hell Directly Before Us

Note this story from Bloomberg:

Political wrangling over a plan to reduce the deficit may cost the U.S. its AAA rating, adding $100 billion a year to government costs while dragging down economic growth, according to Wall Street bond dealers.

A U.S. credit-rating cut would likely raise the nation’s borrowing costs by increasing Treasury yields by 60 to 70 basis points over the “medium term,” JPMorgan Chase & Co.’s Terry Belton said today on a conference call hosted by the Securities Industry and Financial Markets Association.

But that's just the start, you see.

Right now rates are at historic lows. So let's presume that the economy "improves"; if that happens then rates go up. In fact, there was a hearing this afternoon in the House Banking Subcommittee talking about exactly that.

Here's the current Treasury MTS; it shows total interest on the public debt last year was $355 billion, and this year thus far is $386 billion. This implies (on a grossed-up 9/12ths basis) that the blended interest rate on the debt is running about 3%.

Here's the problem, in short: Rates have nowhere to go but up.

So is 70 basis points "realistic"? No. If the economy improves, they'll go up double that or more just on their own on the short end. Then you get to add this "penalty" from the downgrade.

We have the government claiming they will "cut" about $1 trillion in real spending (the rest is gimmicks - the wind-down of the wars that were going to happen anyway) over the next ten years.

But if the economy improves the increased cost of the interest on the existing debt will be double that over the same ten years, and if we get downgraded you can double that again!

Each 100 basis points on $15 trillion in debt is $150 billion a year - every year - and the CBO says we'll have $25 trillion in debt by 2020.

At a 4% blended interest rate this load on that $25 trillion will come to $1 trillion in interest annually - just 1 percent higher in interest than we're paying now!

Anyway, I suggest you read the whole thing.

- Cut deficit : GDP crashes.
- Don't cut deficit : Get downgraded and interest on the debt skyrocket... won't be long till you are screwed.
- Economy recovers : Interest on debt skyrocket... won't be long till you are screwed.

The only way the US economy lasts for a while longer is if everyone else around the world (mainly EU and China, collapses before, driving everyone to buy US treasuries to keep low interest rates)... that or QE to infinity.

As CBO Scores Boehner's (Laughable) Deficit Cut Plan, Jay Carney Admits Obama Still Does Not Have An Actual Plan

Granted, Boehner's plan is an abysmal joke, with $4 billion in discretionary spending cuts in 2012 growing mysteriously to $111 billion by 2021, and $0 billion in debt service reduction for 2012 and 2013 (growing to $37 billion in 2021), for a combined cumulative deficit impact of $850 billion, which on a NPV basis is more like $50 billion, but at least it is a plan.

It's even worse than I thought.

Down To The Wire: Wednesday's Congressional Vote On Boehner Plan Delayed Until Thursday To "Find More Savings"

When describing the Boehner's plan as perceived by the CBO we used one key word: "laughable" in that i) it cut far less than many had expected it would cut, particularly during its "first stage" and ii) it had a pathetic $4 billion of actual discretionary cuts in its first projected year. It seems even the GOP has realized that its plan is nothing but a red herring, and as a result has declared that it is delaying its previously scheduled vote on the debt ceiling which was supposed to take place tomorrow, has now been delayed until Thursday after republicans "scrambled Tuesday night to rewrite the measure to ensure that accompanying spending cuts were large enough." Which means that with far too much action expected int he aftermath, most of which includes the expected voting down in the Senate following just after the House vote, and another vote on a plan proposed by Reid, as well as possibly a vote on Obama's still non-existent grand compromise, this is no longer an 11th hour affair. The budget farce just became a 12th hour and 1 minute affair. Alas, the money runs out at midnight.


I think in the end what we'll have is no real cuts and an extension of the debt ceiling or a ``default``...
edit on 26-7-2011 by Vitchilo because: (no reason given)



posted on Jul, 28 2011 @ 01:40 AM
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More Idiocy From Democrats

The Democrats are on TV right now trying to crash the markets.

The facts are this:

* Their plan has a CBO score of $2 trillion in deficit reduction over 10 years.

* S&P says it must be FOUR TRILLION. Four is greater than two - by 100%.

Therefore, no matter what sort of crap the Democrats spew, until and unless they put a credible plan on the table that achieves four trillion in actual deficit reduction neither party is serious.

No, this is not a pass for the Republicans. They haven't put forward a credible plan either.

The fact of the matter is that both parties are well-aware that addressing the problem will cause an immediate contraction in GDP. If you get rid of deficit spending it's an immediate 12%+ hit. If you cut in half it's 6%.

Pick one - there's no resolution that actually fixes the problem and avoids this.

Either come up with a $4+ trillion plan which is still going to produce a monstrous amount of damage and will only extend the time before we blow up - not fix it - or shut up and go home.


Posted by Speaker Boehner's Press Office on July 27, 2011



The Congressional Budget Office (CBO) has released its analysis of the revised Budget Control Act of 2011 today, and CBO’s analysis confirms that the spending cuts are greater than the debt hike – affirming that the House GOP bill meets the critical test House Republicans have said they will insist upon for any bill to raise the nation’s debt ceiling. Specifically, the CBO analysis confirms the Republican plan will:

* Cut and cap spending by $917 billion over 10 years – that’s more than the $900 billion debt hike;

* Cut $22 billion in spending for FY2012 and hold spending below FY2010 levels until FY2016;

* Continue reducing discretionary spending each year compared to President Obama’s budget (by $96 billion in 2012, $118 billion in 2013, $115 billion in 2014, $117 billion in 2015, and so on); and

* Require Congress to draft proposals that produce reductions of at least $1.8 trillion that help protect programs like Medicare and Social Security from bankruptcy.

Republicans adjusted their spending cut bill after a lower-than-expected score from CBO. This updated analysis confirms what others are saying: the Republican plan “changes the trajectory of spending” and “would keep the debt cutting process going.” Unlike Senator Reid’s gimmick-filled plan, the Republican proposal includes real spending cuts and reforms that will restrain future spending – and the spending cuts are larger than the debt limit increase.

This bill is far from perfect, but it’s a positive step forward that denies President the $2.4 trillion blank check that lets him continue his spending binge through the next election. Learn more about it here.

The bill is UTTER BS.

White House Says Treasury Will Be "Running On Fumes" Shortly

Contrary to calculations performed by Barclays and other analysts (including Stone McCarthy first presented on Zero Hedge), which speculated that the Treasury would have enough cash to last it through August 15th due to an increase in tax receipt, the White House's press secretary Jay Carney said that the Treasury will be "running on fumes" if the debt ceiling is not raised by August 2, naturally adding the traditional doomsday phrase that it is a "crisis situation." He had also added previously that tax revenues are not coming at an accelerated pace and that the cash will not last longer than Tim Geithner's original forecast of August 2. As the chart below shows the Treasury had $75 billion in cash as of last night, and will raise another $55 billion in net cash over upon settlement of this week's auctions. In other words, Geithner now predicts that the pro forma cash of $130 billion will last the US just one week. Well, at least we can see what the source of all the problems is.

The federal reserve account...


One thing is sure, the next week is gonna be very entertaining.



posted on Jul, 28 2011 @ 03:14 AM
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So what is the solution? There isn't one is there? Make the deep cuts as required and wreak serious damage on an already weakening GDP and fragile economy. Or avoid the deep cuts and raise the debt ceiling and risk downgrade, and its unknown consequences, but perhaps this buys more time and from the position the state of the economy is in now, somehow work to strengthen economic production, increased employment and therefore reduce spending and cuts from wasteful government expenditures.

I personally don't see the economy strengthening significantly in the current climate and conditions to be enough to pull the US out of what is becoming an economic crisis. But all the same, I think making the deep cuts is gonna rip the bottom out from under it all. There could be a recovery but not before there is an economic crash and pandemonium in the streets. I think the choices are TOUGH for both parties so its kind of like Barlow and Chambers, they knew they were goners so in a last desperate attempt to save their own, they blamed the other to deflect culpability, but in the end both were hung for their crime.
edit on 28-7-2011 by surrealist because: (no reason given)

edit on 28-7-2011 by surrealist because: (no reason given)



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