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"Down To The Wire": Oaktree's Howard Marks Takes On The US Debt Ceiling

Tyler Durden's picture





 

While it is always good to hear grizzled veterans explain what we all know, namely that the US debt situation is untenable and America will eventually collapse under the weight of its obligations, we wonder: where were these same people while the debt was being accumulated and everyone was shiny and happy (there is a reason why the correlation between US GDP and debt is about as close to 1 as they come) and without a care in the world about America's long term solvency?  Yes: we do enjoy the writings of Oaktree's Howard Marks who has chosen to dissect the US debt ceiling and more specifically America's untenable deficit spending as the topic of his latest letter, although we can't help but wonder: why now? Why not a year ago? Or, better yet, a decade ago? Furthermore, as last night's explosive announcements by the president and Boehner demonstrated the debt hike story has so many moving parts that staying on top of it is virtually meaningless. Indeed, it would have been much more useful for America if financial luminaries as Marks had actually spoken up while the US Treasury was accumulating trillions in debt, instead of all the Monday Morning quarterbacking we seem to be getting each and every day from all the "fiscally prudent" ones who rode the train of America's "great moderation" runaway debt to stratospheric wealth and were all very silent then...

So crticism aside, here is one of the better analyses of where we are vis-a-vis America's debt situation.

From Marks' essay:

For the last several years, as I’ve visited with clients around the world, I’ve described the typical American as follows (exaggerating for effect, of course): He has $1,000 in the bank, owes $10,000 on his credit card, makes $20,000 a year after tax, and spends $22,000. And what do lenders do about this? They mail him additional credit cards.

Most people laugh – perhaps uncomfortably – when they hear this. But no one says it’s inaccurate or benign. The bottom line is that consumer credit has been extended without any thought for how the full balance might ever be paid off. As long as the borrower is able to make monthly payments covering the interest and a tiny bit of principal, the situation is considered acceptable. But that’s not my version of fiscal health.

So now let’s jump from the top of the above list of developments to the bottom. In much the same way, credit has been available to governments deemed creditworthy without limit and without concern for the fact that:

  • Countries were constantly spending more than they were taking in.
  • Their deficits were growing non-stop relative to GDP.
  • Their national debts likewise were expanding relative to GDP.
  • In other words, repayment of principal was absolutely unimaginable.

One of the most striking aspects of debt in the modern era is that little if any attention is paid to repayment of principal. No one pays off their debt. They merely roll it over . . . and add to it. Thus credit ratings are highly deficient (shocker!) in a way that few people talk about. What ratings describe isn’t the borrower’s ability to repay principal, but its ability to make interest payments and refinance principal. But the assessment of their ability to roll their debt – likewise – isn’t based on an ability to repay, but rather to refinance again. So ultimately the security of capital providers stems not from the borrower, but from the continued willingness of other capital providers to roll debts in the future. (It was their occasional refusal in 2007-08 that caused the worst moments of the financial crisis.)

With no one asking how debt could be repaid, nations were allowed for decades to increase their deficits and debt non-stop relative to their GDP. And then, in the first quarter of 2010, the little boy stepped out from the crowd, took note of the emperor’s non-existent new clothes, and said “Hey, wait a minute: Greece will never be able to repay even the debt it has, forgetting that it takes on more all the time. Its economy is non-competitive and stagnant, and tax compliance is non-existent. They shouldn’t be able to borrow.”

That’s all it took. Greece was denied further credit. And then people took a look around peripheral Europe and saw more of the same. Today, although the situation is nowhere as dire, they’re also looking at the U.S. and some of its states.

....

The problem isn’t the ceiling, it’s our behavior. The debt ceiling merely imposes a discipline that our national leaders should provide but generally haven’t. On this note, in his press conference on July 15, when asked about conservatives’ insistence on a balanced-budget amendment to the Constitution, President Obama replied, “We don’t need a constitutional amendment to do that [balance the budget]; what we need to do is to do our jobs.” But clearly we do need some enforced discipline, because the years in which we haven’t run a deficit have been by far the exception of late, not the rule.

It seems apparent that in recent decades, politics has become more partisan, and solving the nation’s problems has taken a back seat to adhering to ideology and getting re-elected. And what gets people elected? Promises of more: more benefits without increased taxation, and more take-home pay without reduced largesse. Only recently have large numbers of politicians begun to face the music, admitting that the government has to either do less or charge people more or both.

His conclusion:

The world has awakened to the undesirability of ever-growing government debt. Repairing the situation will require difficult decisions and great sacrifices, especially on the part of lawmakers required to vote for unpopular solutions. This would be a great time to start taking positive steps.

Much more in the Full letter below

Howard Marks Debt Ceiling

 


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Sat, 07/23/2011 - 12:01 | Link to Comment rajat_bhatia
rajat_bhatia's picture

i bought gold futures today in the indian metal exchange MCX India. At almot the same price as yesterday 1601$, wat should i do on monday?

Sat, 07/23/2011 - 12:02 | Link to Comment Gold Dog
Gold Dog's picture

Take delivery, of course!

Sat, 07/23/2011 - 12:08 | Link to Comment Doña K
Doña K's picture

Best revenge for the ones who can afford to buy the stuff.

Sat, 07/23/2011 - 12:11 | Link to Comment Doña K
Doña K's picture

Beware of a debt ceiling agreement next week during PM option expiration, and an attempt to smackdown the price.

Buy more at the end of next week.

Sat, 07/23/2011 - 12:19 | Link to Comment Salinger
Salinger's picture

completely agree there will be an agreement announced - the question is when will it be leaked

Sat, 07/23/2011 - 12:35 | Link to Comment oogs66
oogs66's picture

I hope not until late Monday morning after i've covered my shorts

Sat, 07/23/2011 - 17:31 | Link to Comment GetZeeGold
GetZeeGold's picture

 

Fed Audit by the GAO just out.........tried to bury it over the weekend.

An audit of the Fed reveals why the establishment resisted an audit for so long – The U.S secretly provided an eye-popping $16 Trillion in secret loans to bailout U.S. and foreign bankers.

Here is the direct link to Senator Bernie Sander's press release.

http://sanders.senate.gov/newsroom/news/?id=9e2a4ea8-6e73-4be2-a753-62060dcbb3c3

Here is the link to the 266 page pdf GAO report.

http://sanders.senate.gov/imo/media/doc/GAO%20Fed%20Investigation.pdf

I added this after I saw the junk....this is not a hoax or a joke. Go to the Senate website.

Here's another site.

http://blog.alexanderhiggins.com/2011/07/21/fed-audit-reveals-eyepopping-details-16-trillion-secret-banker-bailout-loans-37651/

Sat, 07/23/2011 - 19:32 | Link to Comment Use of Weapons
Use of Weapons's picture

I've read parts of the report - question:

I never worked out if anyone had tracked the offset liabilities - are they costed into the $16 tril? By this, I mean all the Chinese bailouts - e.g. 10% in JP Morgue that matured in Dec/Jan - given JP & co were accepting both Fed $, and "private equity" $, and China was buying debt at that point, I'm a bit confused. There's a lot of money flowing around that I couldn't tell if it was being fresh injected, or recycled. Add to this China has bought $3 tril in treasuries, which I've not seen accurately tracked back in (i.e. They hold X. They liquidate X-n for cash, they then invest X-n into US stocks...into companies who have been bailed out already - so are they getting a double bill, or a double bailout?)

Did any cash go to Chinese banks [indirect]? (Even Libya was getting the pie, even while GS was cleaning out the fund, so... ??) If not, I think they're not mentioning something.

 

Sorry, I've had my head in Aryan Crusader Book of the Dead [Dan Brown has a lot to answer for] which required some heavy duty duty free to clear away, so the above will sound garbled. Please tear apart and enlighten me.

 

Sat, 07/23/2011 - 21:42 | Link to Comment RockyRacoon
RockyRacoon's picture

I hope not until late Monday morning after i've SHIT my shorts

Sorry, that needed fixin'.

Sun, 07/24/2011 - 09:44 | Link to Comment traybien
traybien's picture

already did leaked like six times, so your broker will force cover it for ya, wink..

Sat, 07/23/2011 - 13:00 | Link to Comment blindman
blindman's picture


end of the week?
why?

Sat, 07/23/2011 - 13:48 | Link to Comment Calculated_Risk
Calculated_Risk's picture

1. Because the possible announcement of a debt ceiling deal. The markets will rally that we're going into more debt with money we don't have, and pm's will tank because the paper hft algo's will dump paper metals, thus head faking, or should I say shaking out the weak hands in the pm trading facad.

2. It's options expiration. The cartel uses any means necessary to beat down the price so contract holders won't take delivery. Thus, keeping the game moving...

 

edit: end of the week cause that's when the options expire.. third thursday or friday of the month I believe..

 

Sat, 07/23/2011 - 14:11 | Link to Comment blindman
blindman's picture


7/26/2011 is a tuesday.
this tuesday. no?

Sat, 07/23/2011 - 16:58 | Link to Comment Calculated_Risk
Sat, 07/23/2011 - 17:51 | Link to Comment blindman
blindman's picture


and then there is this.
"We believe this information is correct, but cannot be held responsible for its accuracy. Dates subject to change, please verify with each exchange."
. 26th, 27th, 29th ?
i would like to know.
i was looking here.
http://jessescrossroadscafe.blogspot.com/2011/07/gold-daily-and-silver-w...

Sat, 07/23/2011 - 18:20 | Link to Comment Calculated_Risk
Calculated_Risk's picture

I looked around and keep seeing 27th...

But I believe you are correct cme group has 26th

"Last Trade Day
Aug 11: HX, OG"

OG = gold options

HX = copper options

http://www.cmegroup.com/trading/metals/files/2011_expiration_calendar_me...

Poster probably meant buy toward end of the week to let the momentum settle if there is a drop.(?)

 

29th on the other calendar is for equity options expiration (could be wrong on that)..

 

Sun, 07/24/2011 - 11:39 | Link to Comment blindman
blindman's picture

right or wrong i am looking for a brief window of opportunity centered on something like this ..... Silver Huge Manipulation Caught in the act July 20, 2011 http://lonerangersilver.wordpress.com/2011/07/20/silver-huge-manipulatio... . based on expiry schedule. throw in europe/euro trouble trajectory and debt limit / qe3 trajectory. the date becomes potentially significant. and won't repeat for some time ?

Sat, 07/23/2011 - 13:55 | Link to Comment HungrySeagull
HungrySeagull's picture

I agree. The Market Spread where I am between Bid and Ask is frozen at the moment very close to spot. This is not the time to do anything but buy, if you can do it clean cash without leverage. Take delivery.

Then wait a few days. We are probably going to write a new page going into next week.

Sat, 07/23/2011 - 12:17 | Link to Comment BlackSea
BlackSea's picture

Don't try eating it, that's for sure.

P.S. Are you a retard or just a garden variety troll?

Sat, 07/23/2011 - 12:19 | Link to Comment rajat_bhatia
rajat_bhatia's picture

Anything wrong with my question?

Sat, 07/23/2011 - 12:56 | Link to Comment snowball777
snowball777's picture

Nope. Answer: give your money to a worthy charity instead of banksters. You'll still lose the same amount, but you'll sleep better. Now STFU.

Sat, 07/23/2011 - 13:49 | Link to Comment Diogenes
Diogenes's picture

It is inappropriate to ask for trading advice on this board. The concensus is, if you have to ask, you should not be trading. You should already know what you expect the market to do, and why.

The second point is, this board is modelled on a movie called Fight Club. Members of the club feel they have to act mean and make very frank remarks. Some of them are funny, some of them are true, it is all part of the Zero Hedge experience.

One other thing, and that is sarcasm. You would think with all the frankness you would know what everyone thinks. But some prefer to say the opposite, they consider this funny.

Stick around, it can be fun. No sarcasm intended.

Sat, 07/23/2011 - 21:46 | Link to Comment RockyRacoon
RockyRacoon's picture

You just talked about fight club.   You're up next punk.

Sat, 07/23/2011 - 16:38 | Link to Comment traderjoe
traderjoe's picture

Yes. You splashed on every other story today that your gold shorts were going to be mega-profitable. Then this.

Most people here don't trade gold. They own it in physical form and therefore don't care about daily fluctuations.

Sat, 07/23/2011 - 12:26 | Link to Comment Gully Foyle
Gully Foyle's picture

Since y'all missed it

http://hotair.com/archives/2011/07/23/faa-hits-partial-shutdown-nobody-n...

FAA hits partial shutdown. Nobody notices.

We previously posed the question, what happens if Congress can’t manage to agree on another extension of the FAA authorization before the current one expires? Well, when the clock struck midnight yesterday, we found out.

Since politicians were not able to come to an agreement over extending the operating authority of the FAA as of midnight tonight, about 4,000 people will be out of work and federal airline ticket tax will no longer be collected. The shutdown will not affect airline safety, but it will stop airlines from collecting about $200million per week in ticket taxes that would help to to fund FAA programs. In the short term, passengers might celebrate since they will be able to save money by not paying taxes, but this means that projects will be delayed and costs might end up being higher in the long run.

Folks, this is a disaster. Sure, the planes are still flying. And, yes, the flight controllers and safety personnel are still on the job so it should be safe. But a lot of government workers were furloughed. And they won’t be able to collect taxes! And tickets may be cheaper this week! And… and…

You know, I’m not actually making a very good argument against shutting down the FAA, am I?

I’m kidding, of course. There will be some long term repercussions from this, with particularly fierce impact on smaller, rural airports. Those funds are required for repairs, construction and some scheduled maintenance items. It may seem like a short term, happy tax holiday for travelers, but the bill is going to come due sooner or later. (And we’re talking about the government here, so you already know who gets to pay that bill, right?) And since the Senate seems to have left town, it’s not going to get resolved overnight.

Just another example of congressional action and efficiency at work!

http://abcnews.go.com/Blotter/terror-alert-warns-insider-threat-infrastr...

As evidence of American infrastructure vulnerabilities, the report specifically cites the attempted insider sabotage this April at a water treatment plant in Arizona.

Officials said then a disgruntled night shift worker took over the control room and tried to create a giant methane gas explosion.

"I am taking the plant hostage," the worker said in a recorded 911 call.

There was no tie to al Qaeda and his plot failed, but the incident was a reminder of how easily one insider could create potentially deadly mayhem.

Sat, 07/23/2011 - 12:57 | Link to Comment yabyum
yabyum's picture

Make the greedy fuck bastards in DC ride the Greyhound. Problem will be solved in hours.

Sat, 07/23/2011 - 14:13 | Link to Comment Pool Shark
Pool Shark's picture

 

Did the disgruntled worker look like Jack Lemmon?

 

Sat, 07/23/2011 - 21:12 | Link to Comment jekyll island
jekyll island's picture

US Air is already raising their rates, they are going to try and profit from the lapse in federal taxes.  Expect the other airlines to follow suit, $60 in taxes on a $300 round trip ticket is too much for them to allow to be passed on to their customers.  

Sat, 07/23/2011 - 21:48 | Link to Comment RockyRacoon
RockyRacoon's picture

FAA shutdown.   Really?   Hmmm.   [Yawn]

Sat, 07/23/2011 - 17:31 | Link to Comment Smiddywesson
Smiddywesson's picture

Your question asumes that there is a market for gold.  There is a manipulated price for traders, and a market for holders.  If you were a holder, I would say take delivery and wait for fiat to be destroyed, only selling when a stable paper money appears and proves itself.  However, you are obviously a trader.  This is a very complex area, and the "market" you are dabbling in is the playground of the most wealthy, ruthless, and powerful manipulators in the world.  You are going to get killed.  Sell on Monday and reassess your strategy.  You can either be patient and take possession of PMs or play in front of all the steamrollers.  

Sat, 07/23/2011 - 18:02 | Link to Comment Prometheus418
Prometheus418's picture

Doesn't seem so obvious to me that he is a trader- more like a troll or a guy dipping his toe in the water for the first time.  Either way, there's no problem with his questions- this is a financial discussion fight club, after all.  As long as every remembers to DYODD, we can chatter at one another all we like, and new guys (myself included) might learn something.

Sat, 07/23/2011 - 17:56 | Link to Comment Prometheus418
Prometheus418's picture

Should have bought gold- not pretend gold.

But take delivery, if you can.  

It doesn't look good for the US raising the debt ceiling, and if we lose the reserve currency status, your next best bet is the Euro, which is also a steaming pile of PIIGS shit.

Only real money right now is gold, with silver trailing behind like an ambitious little brother.

Sat, 07/23/2011 - 18:53 | Link to Comment IQ 145
IQ 145's picture

 I'm glad you encouraged me to reference MCX, India on Google and read up on your contracts. It's refreshingly straightforward material. I don't understand your question. If you bought a futures contract surely you did so in order to wait for some time in the anticipation of price increase; certainly their would be nothing "to do" on Monday.

Sat, 07/23/2011 - 19:48 | Link to Comment Use of Weapons
Use of Weapons's picture

Look for a poster named "Robotrader" - I'd suggest following his posts [you can track other user's posts] and asking him financial advice whenever he's on. He is known to give out insider data on stocks.

He is something of a guru around here, all the old timers (of which I am not one) know him well.

Sat, 07/23/2011 - 21:51 | Link to Comment RockyRacoon
RockyRacoon's picture

Hey, congratulations.   You're catching on to that sarcasm thing quite well.

Sat, 07/23/2011 - 12:02 | Link to Comment rajat_bhatia
rajat_bhatia's picture

I also bought silver, at $40 rate, monday forecasts please, LOL

Sat, 07/23/2011 - 12:10 | Link to Comment Dr. Gonzo
Dr. Gonzo's picture

The sun will rise in the east and set in the west. 

Sat, 07/23/2011 - 14:15 | Link to Comment Pool Shark
Pool Shark's picture

 

"Tonight's forecast: Dark; followed by widely-scattered sunlight tomorrow morning."

(RIP Carlin)

 

Sat, 07/23/2011 - 18:28 | Link to Comment New_Meat
New_Meat's picture

+1

Sat, 07/23/2011 - 12:19 | Link to Comment BlackSea
BlackSea's picture

I forecast that you will ask more retarded questions.

Sat, 07/23/2011 - 16:51 | Link to Comment traderjoe
traderjoe's picture

+1

Sat, 07/23/2011 - 12:35 | Link to Comment Sudden Debt
Sudden Debt's picture

If silver goes up, you'll realize you forgot to press the "CONFIRM" button :)

 

Sat, 07/23/2011 - 12:40 | Link to Comment Jack Sheet
Jack Sheet's picture

If you bought it, the price will go down. If you didn't, it will go up

Sat, 07/23/2011 - 13:17 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

That always happens to me too.  In the short run.  Don't sweat it, precious metals are a good buy here.  Just be patient.

Sat, 07/23/2011 - 21:52 | Link to Comment RockyRacoon
RockyRacoon's picture

Where ARE these people coming from?

Cue the Twilight Zone music.

Sat, 07/23/2011 - 18:05 | Link to Comment Prometheus418
Prometheus418's picture

+100

Kind of like making plans for the weekend based on the weatherman's forecast.

 

Sat, 07/23/2011 - 18:29 | Link to Comment New_Meat
New_Meat's picture

Kind of like making plans for life based on the Weather Underground's projections. - Ned

Sat, 07/23/2011 - 12:46 | Link to Comment High Plains Drifter
High Plains Drifter's picture

it will be hotter than hell across the southern states, and the eastern seaboard as well as the midwest.........

Sat, 07/23/2011 - 13:05 | Link to Comment snowball777
snowball777's picture

100% chance of a forehead slap on realizing it's time for the options expiry dance (the contango tango).

Sat, 07/23/2011 - 14:17 | Link to Comment EHM
EHM's picture

You are too stupid, now get off our porch!

Sat, 07/23/2011 - 18:06 | Link to Comment Prometheus418
Prometheus418's picture

Too old, and your tits are too big.

Sat, 07/23/2011 - 17:38 | Link to Comment Smiddywesson
Smiddywesson's picture

Easy forecast:  They scare you out for a small loss.

Next most probable forecast:  You hold tight and they take a lot of money from you.

Other forecasts:

You show balls of iron and are lucky enough to take delivery when they will actually deliver.

Counterparty risk takes away your fantastic profits.

Silver tanks because fiat currency is not as bad as we paranoid Internet types think.  The economies of the West heal themselves, China throws open its books and they add up, and elderly Jewish matchmakers hook up young Palestinian boys with nubile gals from Tel Aviv.

Take your pick, but you are gambling with your hard earned money when the best position trade in a century is developing.

Sat, 07/23/2011 - 19:17 | Link to Comment Use of Weapons
Use of Weapons's picture

There will be multiple arrests around the UK centering on EDL members - or, at the very least, the watch lists & ACPO will be working OT. [Probably asset freezes as well, depending on how far / fast things are progressing]

Sat, 07/23/2011 - 12:03 | Link to Comment rajat_bhatia
rajat_bhatia's picture

btw, PMs Bitchez!

 

Sat, 07/23/2011 - 12:03 | Link to Comment Cassandra Syndrome
Cassandra Syndrome's picture

So, has the deadline past? Or was it a red herring to buy another few days? Anyway of deriving what is the actual deadline?

Sat, 07/23/2011 - 12:07 | Link to Comment Gold Dog
Gold Dog's picture

A friendly repeat.....

Dear America,

New revenues? I ain't paying. Fuck you!

Warmest regards,

Dog

Sat, 07/23/2011 - 12:10 | Link to Comment km4
km4's picture

I agree with conclusion

Sat, 07/23/2011 - 12:17 | Link to Comment Salinger
Salinger's picture

what, the part about how it is our politicians who will be making the greatest sacrifice???

Sat, 07/23/2011 - 12:09 | Link to Comment Akrunner907
Akrunner907's picture

Mr. Marks,

 

Pot meet Kettle!  The very essence of capitalism, or at least its adulterated version, has been the root cause of what you point out.  The search for bigger and better investment returns fostered, fueled and encouraged ravenous growth of credit and an alteration of the consumer market.  The go-go this and the go-go that pushed consumers to "instant now" consumption, fueled by endless credit.  It left society in taters, and now the chickens are coming how to roost.  Welcome to the hell that was created by irrational exuberance!! 

 

Sat, 07/23/2011 - 14:09 | Link to Comment Sambo
Sambo's picture

 

I have seen monkeys in the wild that chew on a fruit and throw them down,.. repeat, ...repeat... without consuming them completely.

It looked like such a waste of food.

Isn't there some theory that says man evolved from monkeys?

Sat, 07/23/2011 - 15:22 | Link to Comment cosmictrainwreck
cosmictrainwreck's picture

they're just thinking "hey, there's plenty more where that came from"

Sat, 07/23/2011 - 20:20 | Link to Comment Use of Weapons
Use of Weapons's picture

Burp!

Sat, 07/23/2011 - 20:19 | Link to Comment Use of Weapons
Use of Weapons's picture

I'm guessing you've never seen this then?

http://www.youtube.com/watch?v=D5E5TjkDvU0

1974, animals getting fucking smashed off fruit... fermenting. Elephants. Monkeys. You name it, they're drinking away their extinction blues.

 

Seems smart to me. [edit] Yes, probably the only time you'll see a pissed up giraffe in the wild.

Sat, 07/23/2011 - 16:16 | Link to Comment rg
rg's picture

taters 'n chicken... dang I'm hungry.

Sat, 07/23/2011 - 18:50 | Link to Comment Prometheus418
Prometheus418's picture

Society in taters, with chicken on the way?

Sounds like dinnertime.

Sat, 07/23/2011 - 12:09 | Link to Comment Ausbroker
Ausbroker's picture

Anyone hearing talk about the Fed handing back control to the US treasury a couple of months ago?

Sat, 07/23/2011 - 17:44 | Link to Comment Smiddywesson
Smiddywesson's picture

The Fed makes money out of thin air, and then charges the Treasury for loaning that funny money to them.  Would YOU hand that operation back to the Treasury? 

Not only that, the Fed is able to manipulate the markets at will, which is a far bigger prize for its shareholders than the money they bilk from the Treasury. 

"There is only one Fed, and He does not share power."

Sat, 07/23/2011 - 19:38 | Link to Comment Winterland
Winterland's picture

The Fed remits those interest payments back to the Treasury, no?

 

And the Treasury counts that as revenue.

 

Amazing.

Sat, 07/23/2011 - 12:11 | Link to Comment PulauHantu29
PulauHantu29's picture

We need to rememeber the politicans who were in office ramping up the deficit----Barney Franks, Pelosi, and so on whether for wars, RE subsidies, bank subsidies, energy subsidies, and so on.

We need to take a clsoe look in 2012 of new poeple to represent us.

Sat, 07/23/2011 - 13:41 | Link to Comment i-dog
i-dog's picture

"a clsoe look in 2012 of new poeple to represent us"

How many failed Congresses will it take until you stop voting for yet another one? They have been elected every 2 years for the whole of the last century of growing deficits --- congress after congress after congress after..........

On the same topic: How many failed Presidents will it take until you stop voting for yet another one? They have been elected every 4 years for the whole of the last century of warmongering and growing deficits --- president after president after president after.........

Again on the same topic, but at TD this time:

"while the US Treasury was accumulating trillions in debt"

Tyler, It's not the fucking Treasury that accumulates the debt, it is the President that submits a [deficit] budget, and the Congress that approves it [after adding more pork to the stew]!!

The Treasury merely calls the drug dealer [the Fed] on behalf of the Dem-Rep spenders for another truckload of fresh FRNs.

Is everyone suddenly going brain dead here now?!

Sat, 07/23/2011 - 12:15 | Link to Comment Salinger
Salinger's picture

Repairing the situation will require difficult decisions and great sacrifices, especially on the part of lawmakers required to vote for unpopular solutions.

F off with that BS - "especially on the part of lawmakers"

Are Tylers #1-7 off this weekend?

Sat, 07/23/2011 - 12:31 | Link to Comment r101958
r101958's picture

The great sacrifices are ours, the difficult decisions are theirs.

Sat, 07/23/2011 - 17:45 | Link to Comment Smiddywesson
Smiddywesson's picture

No, Reggie is on duty.  Why do you believe there are exactly seven?

 

Sat, 07/23/2011 - 19:11 | Link to Comment Use of Weapons
Use of Weapons's picture

Akira Kurosawa reference, I'd wager.

 

[edit]

 

Actually, if #1-7 are off, and this one is on, then there's 8.

Sat, 07/23/2011 - 12:16 | Link to Comment honestabe
honestabe's picture

The 21st century American Pledge of Allegiance:

" I want, I just don't want to pay for it". After 9/11/2001, we declared a 25yr war against "terrorism" without defining it but never appropriated a dime in new revenue to fight this global war.  In 2003 Congress passed Medicare Part D. The CBO placed the cost at 11T. Not one dime of new revenue was appropriated to pay for this new program.

   The US consumer was equally busy engaged in debt raising.Trillions in new debt was added to the household debt load through primary and secondary mortagages while household income through jobs barely crept forward from 2003-8.

   The US consumers debt/income ratio upswing very much resembles the US govt's upswing.

    In the end, the actions of govt have been a great reflection of the actions of the US consumer.  We got exactly what we voted for.

Sat, 07/23/2011 - 13:06 | Link to Comment snowball777
snowball777's picture

Maybe we'll get lucky and the entitlement problem will be "solved" by random drug interactions and overdoses.

Sat, 07/23/2011 - 13:23 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

Just end the Drug War and let people buy whatever they want w/ out a prescription, and yes, some of that will be solved right quick.

And just WHAT is you new avatar pray tell?

Sat, 07/23/2011 - 13:57 | Link to Comment HungrySeagull
HungrySeagull's picture

Not with some drugs costing 4000 dollars per day for a few extra moments of overall time in this life.

Sat, 07/23/2011 - 14:06 | Link to Comment snowball777
snowball777's picture

The Guardian of the Gates from the Wizard of Oz: "...his function is to lock green spectacles around the heads of all visitors to the Emerald City, on the grounds that the glittering rays of the City would cause blindness."

Sat, 07/23/2011 - 15:56 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

Well, OK.  That is one less question that I have to deal with...

Great weekend all!  Monday might be rough as we get our faces rubbed into raw reality.

Sat, 07/23/2011 - 13:21 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

honestabe, we do indeed get the government we deserve.

As to author Howard Marks and Tyler, there wre PLENTY of voices out there crying "Bubble" and "Corruption" even before 2005.  We (as a nation, I was buying gold) failed to listen.

And the USA will suffer the consequences brought upon us..., by ourselves!

Sat, 07/23/2011 - 13:50 | Link to Comment honestabe
honestabe's picture

Alan Greenspan was among them to be sure coining the term "irrational exhuberance" and warning of the housing debt problem.

Sat, 07/23/2011 - 15:57 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

Indeed.  The Maestro himself.  The guy who used to like gold.

Sat, 07/23/2011 - 21:25 | Link to Comment snowball777
snowball777's picture

“The ongoing strength in the housing market has raised concerns about the possible emergence of a bubble in home prices. However, the analogy made to the building and bursting of a stock price bubble is imperfect.... Even if a bubble were to develop in a local market, it would not necessarily have implications for the nation as a whole.- Greenspun

Maestro my ass.

Here's someone who really knew and was screaming about it in 2002.

Or William White who was saying the B-word (rhymes with rubble...as in what's left behind then it pops) in 1994.

Sat, 07/23/2011 - 21:58 | Link to Comment RockyRacoon
RockyRacoon's picture

Yup.  And there are plenty of folks who dislike him, but David Walker yelled himself silly, and made presentations all over the country to empty seats.   But he was telling the truth.   I heard him, looked at his numbers, and bought more gold.

Sat, 07/23/2011 - 17:49 | Link to Comment Smiddywesson
Smiddywesson's picture

You just can't fight everyone at once.  Maybe if we joined the drug lords and ganged up on the terrorists, we could get some progress.  Alternatively, we could join the terrorists and do a bully beat down on the drug lords.  

We just have so darm many wars on that I can't keep track.  Maybe if we declared a war on fat we could win one for the Gipper, because they are so out of shape.  On the other hand, we'd be outnumbered.

Sat, 07/23/2011 - 12:17 | Link to Comment disabledvet
disabledvet's picture

Now that gold is legal tender in Utah will they start printing their own gold backed currency? The USA of now feels an awful lot like Italy of the last 50 years--where there really is no controlling legal authority and the center basically devolves to spouting meaningless gibberish. who cares what the "resolution" to the "debt ceiling talks" is? we all already know the result EITHER WAY! governments will pay their bills--with or without the government. by slamming the door in the faces of every state and local government official through bank bailouts and massive and unpayable federal social programs a "state of disunion" seems fast upon us. obviously the centralized media feasts during such times--with CNN telling us we must get into even more wars (Haiti, Libya, Syria) while screaming at our leaders for failing to get the debt talks working right. In the meantime these same psychos "apologize" for inserting text messages into our phones even though they know we're dead already, paying off our police, making sure Dr. Feelgood comes to you live everyday--and are "lawyered up the wazoo" such that they can blame "hackers" for every one of their crimes. Clearly there is a crisis--but it is the narrowness and banality that has us lulled into complacency. (CASEY ANTHONY! CASEY ANTHONY!) These folks don't hide in plain sight. They come to us "live at 5:00." Still...this is America. There's no such thing as a "small problem" here. When fuel prices tripled after Hurricane Katrina for example...

Sat, 07/23/2011 - 13:10 | Link to Comment Sheba Poe
Sheba Poe's picture

I hear she's in Palm Springs. Cindy and George are in the Bahamas. If you see someone standing on the roof with a rifle in palm springs, they're not aiming at you. :)

Do you still take the government seriously? Buy gold. Get educated if you're young - learn science or math, not finance or law. Your gold and your knowledge are valuable globally. The US is done dominating global policymaking; the unwind won't be pretty.

So take your gold and knowledge and be ready to go anywhere. Who knows? You might just bump into Casey when she flees to another country :)

Sat, 07/23/2011 - 13:44 | Link to Comment Long-John-Silver
Long-John-Silver's picture

Now that gold is legal tender in Utah will they start printing their own gold backed currency?

All they can do is mint currency of Gold and Silver (coins). They can not print paper Gold and Silver even if it is redeemable for Gold and Silver bullion. Only the federal government can do that.

Sat, 07/23/2011 - 18:02 | Link to Comment Smiddywesson
Smiddywesson's picture

All is well.  You are looking at the forest.  Let's examine the trees.

Mankind is a predatory and wasteful species.  Nothing leads to decay and destruction like success.  And just what country was the most successful in the history of the world?  So why shouldn't its destruction be just as magnificent?  As history progresses, the birth, growth, and decay cycle accelerates.  So it is only natural that the USA rose, dominated, and collapsed in a little over 200 years.  If you are really a disabled vet, I am sorry to tell you, but your country is about to collapse.  It is normal, natural, and MANDATED by history.  Fortunately, the death of the currency and the country will still leave us with gentlemen like yourself to pick up the pieces.  So, don't sweat the small stuff.  Did you really want this abomination of the Constitution of the United State of America to continue?  

Most of the Founding Fathers predicted this, especially Jefferson and Washington.  If you dared to use the kind of language they used, you would be labeled a terrorist kook.  Soon, so soon, all of America will share your thoughts, and that will change everything.  What is a little suffering and discomfort against seeing the hypocrites disgraced in the history books?  They have had their way for 100 years.  Think of what it will be like to see Keynes disgraced, Bernanke and Greenspan disgraced, and Bush and Obama disgraced?  The winners write the history books.  Last time, they were able to hold onto power and make that inbicile dictator FDR a hero.  This time, it's anybody's ball game because the whole machine is coming down.

Sat, 07/23/2011 - 12:20 | Link to Comment El Viejo
El Viejo's picture

What the hell happened in 1982 ?

(Scroll down to Debt 1950-2003, Inflation adjusted)
http://www.marktaw.com/culture_and_media/TheNationalDebt.html

Sat, 07/23/2011 - 12:33 | Link to Comment cartonero
cartonero's picture

1 year after Reagan took office.

Sat, 07/23/2011 - 14:25 | Link to Comment Pool Shark
Pool Shark's picture

 

Actually, its called exponential growth, and it began long before Reagan. Federal outlays tend to increase significantly when the fed funds rate is 20%.

If you think that slope is steep now, wait 'till interest rates get back to their historical average around 6%...

Sat, 07/23/2011 - 12:44 | Link to Comment watchingdogma
watchingdogma's picture

TPTB figured out that the sheeple really don't notice when you ramp up inflation.  Inflation is good for politicians because they can spend more without taxing any.  What you see in 1982 is the beginning of the end.  What you see today is the end of the end. 

Sat, 07/23/2011 - 12:45 | Link to Comment High Plains Drifter
High Plains Drifter's picture

i passed the cpa exam and went out and got shitfaced..........

Sat, 07/23/2011 - 13:53 | Link to Comment American Sucker
American Sucker's picture

Nothing really happened in 1982.  It's just the inflection point of an exponential function.

http://www.analyzemath.com/Graphing/exponential1.gif

Sat, 07/23/2011 - 12:21 | Link to Comment futboller04
futboller04's picture

I'm in a spirited argument with a friend.  I understand that missing an interest payment (default) on our debt will affect our credit rating but he's calling a missed payment, which will occur without raising the debt ceiling, to say post office workers, military personnel, food stamps...or any other item on the laundry list of gvt expenditures, a default as well and that it too would trigger a downgrade???

Sat, 07/23/2011 - 12:42 | Link to Comment Hacked Economy
Hacked Economy's picture

??  What??

Can you please re-phrase your question in clear English so we can decide whether or not to answer?

Sat, 07/23/2011 - 15:29 | Link to Comment futboller04
futboller04's picture

If we don't raise the debt ceiling we won't be able to meet all of our "obligations" I'm told.  But of those obligations, not paying the interest on the debt is the only item that will result in a downgrade in our credit rating. 

Other obligations (to name a few) might include, paying government employees, SS, military expenditures, UE benefits, Medicare....etc.  People state that this too would classify as a default.  But failing to make these payments would not result in a credit event (downgrade), or would it? The fact that we've committed to funding these obligations is a separate issue from our credit rating, no?

Sat, 07/23/2011 - 18:47 | Link to Comment Hacked Economy
Hacked Economy's picture

Technically, any missed payment under the current terms of contract is a default.  Interest profits are desired, of course, but the original principal needs to be repaid as well.  The only upside (for the creditor) of someone not paying down the principal is that the creditor retains its position as the master over the debtor for a longer period of time.  But in the end, all monies are contracted to be repaid.

Regarding government employees, pensions, SS, UE benefits, etc., any missed payments to them that are already contractual would definitely be considered a default.  Doesn't matter that the Gov't misses three payments and then later makes a big retroactive payment to catch up.  If we did that to the Gov't on our taxes, they'd consider it a default and slap us with fines or worse.

"I am more concerned about the return OF my money than the return ON my money. --Mark Twain"

Sat, 07/23/2011 - 12:47 | Link to Comment watchingdogma
watchingdogma's picture

Technically, you only default if you miss a principal or interest payment.  Practically, the rating agencies can use their own criteria.

Sat, 07/23/2011 - 13:01 | Link to Comment dark pools of soros
dark pools of soros's picture

any downgrade by american rating companies would be unpatriotic.. Obama can just tell them don't do it

Sat, 07/23/2011 - 12:23 | Link to Comment blindman
blindman's picture


defense spending is now inescapable? see above.
oh well.
16 trillion in secret loans. etc. "money" circus/charade....flea circus, ongoing.
michael hudson interview on d.n.
Pushing Crisis: GOP Cries Wolf on Debt Ceiling in Order to Impose Radical Pro-Rich Agenda
http://www.democracynow.org/2011/7/22/pushing_crisis_gop_cries_wolf_on
.
max breaking it down.
Eurozone debt crisis-News Analysis
Posted on July 22, 2011 by maxkeiser
http://maxkeiser.com/2011/07/22/eurozone-debt-crisis-news-analysis/
.
Rejecting Lucrative Offer, Cenk Uygur Leaves MSNBC After Being Told to "Act Like an Insider"
http://www.democracynow.org/2011/7/22/rejecting_lucrative_offer_cenk_uyg...
.
PsyWar - Wake UP!
http://www.youtube.com/watch?v=NXg70qJQ6O0
.
comment: this just in ... we are mortal and will not live forever,
that is opportunity knocks. who will answer? monday, tuesday.
7/26/2011. hammer sale.? where is the powder? just a feeling
.
*************
22 July 2011
Gold Daily and Silver Weekly Charts - Options Expiry on the Comex - Porcus Interruptus
http://jessescrossroadscafe.blogspot.com/2011/07/gold-daily-and-silver-w...
*************

Sat, 07/23/2011 - 14:30 | Link to Comment Pool Shark
Pool Shark's picture

 

Actually, defense spending is only 19% of the budget, while entitlements are 57%.

You could eliminate the entire defense budget and it wouldn't even close half of the budget deficit.

we are so doomed...

 

Sat, 07/23/2011 - 15:32 | Link to Comment topshelfstuff
topshelfstuff's picture

a few items that may not be known or understood by the majority, and why I think we're getting another orchestrated "scare"...as for entitlements, Social Security does Not cost the Gov a dime. its still a "pay-as-you-go" and still takes in more than goes out. if its really a problem, then why not remove the Cap. I believe its $180,000 this year, so for those making more than that Don't pay into SS on any amount above $180K (and consider the percentage of that goes to the top 1% and 10%, the bulk, escapes that part of FICA)

the other 'eye opener' i'll paste. so you all can see that just over 50% is National I.O.U.'s, so-called Debt, and Social Security is more than China and Japan's I.O.U.s

I think any internal, National payoffs are easy-----i mean really, its paper, or just a computer entry, and in the past 3 years there has been No Raise in S.S. Cost of Living Adjustment (COLA), Inflation, 'cause the Gov said there wasn't any. take a look, see what ya think:

http://www.businessinsider.com/who-owns-us-debt-2011-7

The TRUTH About Who Really Owns All Of America's Debt

If you ever try comparing the debt situation in the US and Japan, someone will invariably say: Well, Japan can afford a lot more debt because it's all domestically owned, whereas US debt is owned by the Chinese.

It turns out this isn't really true, though unfortunately this destructive myth continues to dominate political/economic debates.

Yes, China holds a lot, but they're not dominant, and when you add it up, most debt is actually domestically held, just like in Japan.

Read more: http://www.businessinsider.com/who-owns-us-debt-2011-7#ixzz1SxJa3WwN

Here's a quick and fascinating breakdown by total amount held and percentage of total U.S. debt, according to Business Insider:

  • The U.S. Treasury / Federal Reserve: $1.63 trillion (11.3 percent)?
  • Hong Kong: $121.9 billion (0.9 percent)
  • Caribbean banking centers: $148.3 (1 percent) <<< ???
  • Taiwan: $153.4 billion (1.1 percent)
  • Brazil: $211.4 billion (1.5 percent)
  • Oil exporting countries: $229.8 billion (1.6 percent)
  • Mutual funds: $300.5 billion (2 percent)
  • Commercial banks: $301.8 billion (2.1 percent)
  • State, local and federal retirement funds: $320.9 billion (2.2 percent)
  • Money market mutual funds: $337.7 billion (2.4 percent)
  • United Kingdom: $346.5 billion (2.4 percent)
  • Private pension funds: $504.7 billion (3.5 percent)
  • State and local governments: $506.1 billion (3.5 percent)
  • Japan: $912.4 billion (6.4 percent)
  • U.S. households: $959.4 billion (6.6 percent)
  • China: $1.16 trillion (8 percent)
  • Social Security trust fund: $2.67 trillion (19 percent)
Sat, 07/23/2011 - 15:43 | Link to Comment topshelfstuff
topshelfstuff's picture

a few items that may not be known or understood by the majority, and why I think we're getting another orchestrated "scare"...as for entitlements, Social Security does Not cost the Gov a dime. it has a Surplus every year. its still a "pay-as-you-go" and still takes in more than goes out. if its really a problem, then why not remove the Cap. I believe its $180,000 this year, so for those making more than that Don't pay into SS on any amount above $180K (and consider the percentage of that goes to the top 1% and 10%, the bulk, escapes that part of FICA)

the other 'eye opener' i'll paste. so you all can see that just over 50% is National I.O.U.'s, so-called Debt, and the amount owed to Social Security is more than China and Japan's I.O.U.s

I think any internal, National payoffs are easy-----i mean really, its only paper, or just a computer entry, and in the past 3 years there has been No Raise in S.S. Cost of Living Adjustment (COLA), Inflation, 'cause the Gov said there wasn't any. take a look, see what ya think:

http://www.businessinsider.com/who-owns-us-debt-2011-7

The TRUTH About Who Really Owns All Of America's Debt

If you ever try comparing the debt situation in the US and Japan, someone will invariably say: Well, Japan can afford a lot more debt because it's all domestically owned, whereas US debt is owned by the Chinese.

It turns out this isn't really true, though unfortunately this destructive myth continues to dominate political/economic debates.

Yes, China holds a lot, but they're not dominant, and when you add it up, most debt is actually domestically held, just like in Japan.

Read more: http://www.businessinsider.com/who-owns-us-debt-2011-7#ixzz1SxJa3WwN

Here's a quick and fascinating breakdown by total amount held and percentage of total U.S. debt, according to Business Insider:

  • The U.S. Treasury / Federal Reserve: $1.63 trillion (11.3 percent)?
  • Hong Kong: $121.9 billion (0.9 percent)
  • Caribbean banking centers: $148.3 (1 percent) <<< ???
  • Taiwan: $153.4 billion (1.1 percent)
  • Brazil: $211.4 billion (1.5 percent)
  • Oil exporting countries: $229.8 billion (1.6 percent)
  • Mutual funds: $300.5 billion (2 percent)
  • Commercial banks: $301.8 billion (2.1 percent)
  • State, local and federal retirement funds: $320.9 billion (2.2 percent)
  • Money market mutual funds: $337.7 billion (2.4 percent)
  • United Kingdom: $346.5 billion (2.4 percent)
  • Private pension funds: $504.7 billion (3.5 percent)
  • State and local governments: $506.1 billion (3.5 percent)
  • Japan: $912.4 billion (6.4 percent)
  • U.S. households: $959.4 billion (6.6 percent)
  • China: $1.16 trillion (8 percent)
  • Social Security trust fund: $2.67 trillion (19 percent)
Sat, 07/23/2011 - 16:51 | Link to Comment topshelfstuff
topshelfstuff's picture

let me make a corrention, above i said i thougt the Cap was $180,000, its $106,000

http://www.wtsp.com/news/local/article/195201/8/Social-Security-Trust-Fu...

Paste from above link, only read if you want to get PO'd

However, Congress can fix the problem with one major change to the law. Currently social security taxes are only collected on the first $106,800 people earn. That means a multi millionaire pays the same as someone earning $106,000. Smith and Castor says the cap needs to be lifted so that people who are millionaires are paying more on their social security,

Smith says, "If that change was made social security would be fixed for eternity and there would be enough revenue for decades and decades down the road."

But if that is not done those of us who expect to collect our full social security benefits when we retire may be getting much less than expected.

Sat, 07/23/2011 - 12:23 | Link to Comment honestabe
honestabe's picture

Not long ago, the national slogan was:

"Debt doesn't matter"

 

Now we are paying for that.  Lest we forget.

Sat, 07/23/2011 - 12:23 | Link to Comment Sudden Debt
Sudden Debt's picture

What I DON'T UNDERSTAND is why nobody didn't see this one comming?

 

WHY didn't they STOP QE2 and use the remainder of money untill the debt ceiling talks where cleared?

I makes sense to me as QE2 didn't do shit besides stimulate inflation in the world and spice the accounts of Obama's contributors...

I know... I'm European... I don't get American Logic.... but still..

 

Sat, 07/23/2011 - 12:26 | Link to Comment honestabe
honestabe's picture

Because the national slogan during much of the 2000's was: "Debt doesn't matter"...and debt exploded.

So, does it matter or doesn't it matter?

Sat, 07/23/2011 - 12:50 | Link to Comment El Viejo
El Viejo's picture

Depends on:  

Do you have a sovereign currency like Japan and the US. (Greece does not)

What interest are you paying?  Japan and US are paying 3.5%  Greece is paying 12%

Do you have a strong GDP?  Japan and US is weak.  Greece is negative.

What kind of debt?  Structural (Greece), Private(US, Japan's is growing, Greece?), Public(US, Japan, Greece)

Do you also have a trade deficit like the US and Greece? or a surplus like Japan?

What is the trend? US(Private debt is improving, Public debt is at a crossroads)

Japan(Private is worsening, Public is worsening due to tsunami)  Greece(Worsening)

What is your current debt/GDP ratio?  US=110% Japan=200% Greece=Off the chart

Sat, 07/23/2011 - 12:45 | Link to Comment Juan Wild
Juan Wild's picture

There is no logic.  I am an American. This is illogical. Scotty, beam me up!

Sat, 07/23/2011 - 13:27 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

Sudden Debt, Mr. Juan Wild summed it up rather nicely.

Too bad things suck there in Europe too.

Sat, 07/23/2011 - 13:38 | Link to Comment Sudden Debt
Sudden Debt's picture

We never knew it any other way :)

WE FUCK THING UP SINCE YEAR 1!

Sat, 07/23/2011 - 16:01 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

Friends America and Europe keep fcuking up, bro...

Keep stacking the shiny stuff!

:)

Sat, 07/23/2011 - 14:01 | Link to Comment HungrySeagull
HungrySeagull's picture

The last Congress was all about "Health Care" as they rammed it down our collective throats. The national budget required by law was not passed, nothing much of anything else was worked on and votes were taken on stuff that did not mean anything at all.

This Congress actually passed two important bills as a step forward to solve our problems however Harry Ried in the Senate smacked em down because he does not like it.

Such as it goes when the Majority speaks and one wrinkled old fuck says nope, aint happening.

In the meantime, the Democrats are running about whining for more spending money for what they don't have.

Sat, 07/23/2011 - 14:02 | Link to Comment Diogenes
Diogenes's picture

Some saw it coming but they werent government officials. The deciders dont care. They have their own agenda and not destroying the US is not on the agenda.

Sat, 07/23/2011 - 12:25 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture

obviously, the problem is that GDP is too small

but the pump won't work cause the vandals took the handle

Sat, 07/23/2011 - 15:02 | Link to Comment Rodent Freikorps
Rodent Freikorps's picture

The pump works fine.

They've just shot so many hole in the tank, it won't fill.

Sat, 07/23/2011 - 12:25 | Link to Comment Dr. Gonzo
Dr. Gonzo's picture

Maybe the fact is they have no choice but to default or quickly go into hyperinflation and loose the status as world currency reserve. They will protect that at any cost. We go to war with nations to maintain that corrupt privilege. America now exists to be a war machine for the oligarchs. It's our only function. The people here are now just backround noise and could all starve to death as far as they care. We've been groomed by them to be mindless soulless pussies. If you loose your life savings in this process so be it. You shoulda known better. What's that? US treasuries have always been safe and you didn't want to risk buying gold in a bubble when it hit $500 and have been patiently waiting to get it on a dip? Fuck me. It always is til it isn't and if people are that dumb and trusting then Darwin's Natural Selection process is going to be working overtime these next few years. 

Sat, 07/23/2011 - 12:31 | Link to Comment lolmao500
lolmao500's picture

Geithner just changed his ``doomsday`` date...

http://www.huffingtonpost.com/2011/07/22/debt-ceiling-august-10_n_907480...

It's now August 10.

Sat, 07/23/2011 - 13:02 | Link to Comment dark pools of soros
dark pools of soros's picture

must of got the updated version of Turbo Tax..  more features

Sat, 07/23/2011 - 14:06 | Link to Comment BurningFuld
BurningFuld's picture

He stumbled on some more pension money to steal. Or he was over at Blankcheck's and found some between the sofa cushions.

Sat, 07/23/2011 - 13:05 | Link to Comment glenlloyd
glenlloyd's picture

No one in their right mind should listen to that twit.

Sat, 07/23/2011 - 14:02 | Link to Comment HungrySeagull
HungrySeagull's picture

23 bil, ss payments on the third. 90 Bil in Maturing obligations on the 4th and so on...

Sat, 07/23/2011 - 12:31 | Link to Comment DollarMenu
DollarMenu's picture

Regarding the rhetorical question of "Why now?".

You must know that until now, there would have been no method to communicate such a message, nor any ears willing to hear it.

Any attempts to discuss budgets/deficits/debt has always been shouted down.

Even today, the MSM gives equal time to budget discussions, heatwave talk, and that woman who killed/did not kill her baby.  Throw in a story of a disabled vet who overcomes all kinds of adversity (ignoring the falsity of the situation that caused his/her permanent alteration) and it's a wrap.

It's all a great steaming heap of uncompostable crap.

We're sinking deeper into it.

 

Sat, 07/23/2011 - 12:33 | Link to Comment Arch Duke Ferdinand
Sat, 07/23/2011 - 12:39 | Link to Comment G-R-U-N-T
G-R-U-N-T's picture

"All fiat currency and credit based financial systems die in insolvency"

-Ludwig Von Mises

It's not nice to fool Mother Nature...

http://www.youtube.com/watch?v=LLrTPrp-fW8

Sat, 07/23/2011 - 12:42 | Link to Comment High Plains Drifter
High Plains Drifter's picture

the teleprompter in chief already indicated that if they didn't do anything that he would raise the debt ceiling by executive order until 2013..........there's that number again......13.........hmmm

Sat, 07/23/2011 - 14:00 | Link to Comment MethodMan
MethodMan's picture

That's another "don't call my bluff" bluff.

Impeachment hearings would get underway quite quickly, if he's not outright stopped by SCOTUS.

If an argument could be made for a Constitutional angle on all this, it is that the US debt and interest must be simply paid first, and there's enough money for that.

 

 

Sat, 07/23/2011 - 12:52 | Link to Comment Fix It Again Timmy
Fix It Again Timmy's picture

We have come to an intenable situation, why try to analyze it further? 

Sat, 07/23/2011 - 13:05 | Link to Comment cdskiller
cdskiller's picture

Is the first requirement of capital management the ability to be completely and unapologetically disingenuous? Apparently, it is. Marks can't be taken seriously. What he says is not worth reading. He needs to be slapped like a silly child and told to shut up until he learns to connect the dots and tell the truth. Suddenly he is a believer in responsible borrowing? Please. Notice he makes no mention of responsible lending! What a douchebag. Force lenders to hold on to their loans and none of this shit happens, Howard, you nincompoop. Dismantle the fraud you choose to ignore and people will have no choice but to pay off their debts.

Oh, but of course, he's not going to say that because he's a bucket of shit, that's all.

For decades, this punk says, repaying principle debt was of no concern, as if HE was worried about it all that time.

More benefits without increased taxation is the problem, you say, Howard? Okay, dumbshit, call for a massive tax increase on the people, like yourself, who profited in the reckless go-go years. Makes you want to spit.

Sat, 07/23/2011 - 13:48 | Link to Comment sgorem
sgorem's picture

Bravo 'Killer, +++++++++

Sat, 07/23/2011 - 13:19 | Link to Comment gnomon
gnomon's picture

Sophistry has ruled supreme for fifty years or more. And those who run in herds can be stampeded over the cliff.  I have tended to watch from afar, but the carnage is getting less entertaining and much too close to home.

Sat, 07/23/2011 - 14:19 | Link to Comment G-R-U-N-T
G-R-U-N-T's picture

"but the carnage is getting less entertaining and much too close to home."

Unfortunately the insane politically immoral incompetent herd is running the American people write into the mouth of the government beast.

As the world can see when politicians get involved with trying to control markets complete and thorough disaster will eventually ensue and indeed the closer to home it hits the more painful it will be.

It's moral and fiscal bankruptcy disaster because politicians are controlled not by the American people but by those to whom have bribed them into soulless perdition. As a consequence the American hard working tax payer becomes more and more of a debt slave until the misery becomes so bad that liberty and freedom from it is worth fighting for even unto death as was the motive of our Forefathers.

Our Forefathers came from a pure motive in their hearts and minds to fight for liberty and freedom and in which they were willing to give their lives for. This nation was conceived in blood and it's preservation may indeed have to be protected in blood as well.

 

 

 

Sat, 07/23/2011 - 13:34 | Link to Comment gwar5
gwar5's picture

Many of us have watched for decades as the debt has grown with great alarm. TPTB work in mysterious ways to thwart the little people who eventually pay for everything coming out of the US social welfare money pump. 

The politicians are going to have to decide if they work for the people or are just agents of the banks and the Federal Reserve.

Taxes vs cuts: raising taxes and raising revenues are two different things.

Raising tax rates can not only lower revenues, but can lower the tax base as a whole by putting more people out of work, which is already find ourselves. More taxes now is not a good idea, we need more taxpayers.  

It's Marxist jingoism to mindlessly chant "raise the tax rates on the rich" when it is known to be counterproductive, especially in this depressionary environment. That's why we have sin taxes on tobacco and alcohol to discourage behavior.

 

BEST IDEA SO FAR:

(Gotta Love) Dr. Ron Paul: "I think we should rescind the $1.6 Trillion that the government owes the Federal Reserve, it will not only put us below the debt ceiling limit but it will lower our annual interest payments."  

 

Sat, 07/23/2011 - 14:10 | Link to Comment DCFusor
DCFusor's picture

Hell, you know they'll never attempt to screw their owners.  Fed is a "private outfit".

Here's a better idea -- though I promise even less popular than a tax increase.  Make all the mexicans legal, and put them on the tax rolls.  Bingo, demographic problems all solved for the moment.  Of course, since they'll then have to get min wage, and employment bennies (at least unemployment and disability insurance) no one will be able to afford them, and they'll have to go home again, and things will get more expensive for all for awhile....and how to prevent a flood of new immigrants if we make it that easy?  Most of them are young and won't have to collect SS or medicare for a really long time...they'll be net payers into the system rather than the way things are now.

 

The ones who came here illegally, and by golly some even found our little niche in the Appalacians, are the best that country had to offer -- enterprising, risk taking, hard working, and at least here, they don't collect into little mexican enclaves and start gangs (we'd start shooting them if they did).  What's not to like?  Now, I understand this looks a lot different to those near the borders, but for most of the country, the illegals are a non-problem, nice guys, a bit shy (because they don't want to be expelled!).

Can't we all just get along?

Here comes the junk...

Sat, 07/23/2011 - 14:47 | Link to Comment G-R-U-N-T
G-R-U-N-T's picture

...

Sat, 07/23/2011 - 14:43 | Link to Comment G-R-U-N-T
G-R-U-N-T's picture

"The politicians are going to have to decide if they work for the people or are just agents of the banks and the Federal Reserve."

Take a look around. Decisions have already been made and financial collapse is immanent. This is what the so called sophisticated entrenched political elite have wrought! Keep in mind they had the 2 most influential mediums on the planet on their side, education and the Media.

Interesting fact...The best that our progressive political leaders can do in this day and age is bankrupt those they have represented into oblivion. Their brilliant!!!

Sat, 07/23/2011 - 17:00 | Link to Comment gwar5
gwar5's picture

Yep, they know who they really work for and are happy drones doing it. Better said outright that pols should quit working for Mordor.

Sat, 07/23/2011 - 13:35 | Link to Comment Atomizer
Atomizer's picture

I'm sure you all heard about this on your favorite US propaganda TV channel. Thought I would re-post, just in case.

http://www.derivalert.org/news/?month=7&year=2011

Connect the crisis dots.

Sat, 07/23/2011 - 13:37 | Link to Comment oldmanagain
oldmanagain's picture

Clinton did balance the budget, Bush, "tax cuts pay for themselves" killed the surplus. Now we don't want to give up Bush lunacy, "can't tax the job providers". and job providers go overseas to hire. Just tax job export. Set up gov't banks that will lend if the private ones are too busy playing the markets.

Sat, 07/23/2011 - 14:00 | Link to Comment snowball777
snowball777's picture

Bubba got lucky milking the dot bomb for cap gains...blind chicken...grain of corn...do the math.

Dubya played Reagan-lite while the American corpus dissolved itself in a fit of cachectic jingoism.

Obama tried to force feed it a 'stimulant', but it just lay there like Terry Schiavo.

Sat, 07/23/2011 - 16:07 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

The Guardian of the Emerald City has done something that a bearing cannot do.  He summed up three presidencies in three short and sweet sentences.

Bravo masterpiece of short writing!

Sat, 07/23/2011 - 14:12 | Link to Comment DCFusor
DCFusor's picture

Bubba didn't balance the budget, and the last time any principle has been paid down was in the '50s or so.  He was projected to have balanced the budget in out-years via the same captive guys who cook the books for us now, it never actually happened.  That lie needs to go back to bed.  Eisenhower was right.

Sat, 07/23/2011 - 18:12 | Link to Comment Calmyourself
Calmyourself's picture

Balanced it right after the the House and Senate jammed it down his philandering throat.. 

Sat, 07/23/2011 - 13:37 | Link to Comment Edward Beargman
Edward Beargman's picture

I'll buy Marks' book tomorrow. But now I am going to the wine shop and later I'll listen to Amy's records.

RIP

Sat, 07/23/2011 - 13:38 | Link to Comment boeing747
boeing747's picture


Use RealEstate bubble to cover DotCom bubble.
Use Debt bubble to cover RealEstate bubble.
Use Dollar bubble to cover Debt bubble.
Use US bubble to cover Dollar bubble.
Use Bubble to cover US bubble.

Sat, 07/23/2011 - 13:47 | Link to Comment Long-John-Silver
Long-John-Silver's picture

Claim Gold and Silver are bubbles so the population will not buy Gold and Silver bullion.

Do NOT follow this link or you will be banned from the site!