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Latest Rumor: White House Announces $1.5 Trillion Cuts Agreement Reached

Tyler Durden's picture


From $4 trillion to $2 trillion to $1.5 trillion (soon $0 trillion of course, but that is another story). The latest gimmick to bounce the market is the completely unfounded rumor that the White House has said both side agree on $1.5 trillion in deficit cuts and an additional $200 billion can be agreed upon soon. Stocks surge, bonds tank...because, you know, this is good for America's credit standing according to Moodys. We give this rally a few minutes before Boehner comes out and denies everything. To all those who just bought the 30 Year, condolences... at least for the next few minutes.

or... maybe a little longer than a few minutes:


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Thu, 07/14/2011 - 13:35 | 1456710 Cassandra Syndrome
Cassandra Syndrome's picture

BTFD Bitchez

Thu, 07/14/2011 - 13:38 | 1456727 camaro68ss
camaro68ss's picture

is that 1.5 T for this year or over 10 years. theres a difference

Thu, 07/14/2011 - 13:40 | 1456746 DonnieD
DonnieD's picture

The government always uses a multiplier of 10 to make everything look better. I expect the next time around that will have to use a multiplier of 100 to have an effect.

Thu, 07/14/2011 - 13:41 | 1456754 oogs66
oogs66's picture

it will be over 10 years, but probably doesn't even start for 5 years....easy to cut stuff 5 year forward when it is only a projection anyways

Thu, 07/14/2011 - 13:46 | 1456788 DCFusor
DCFusor's picture

Yes, never believe a promise made by a politician who won't be in office by the time it's supposed to be kept.  doh!  Will Merkel still be there when it's time for Germany to finally shut those reactors down?  Nah, and by then rising prices might create a whole different attitude -- but she bought time for herself.  So simple and obvious how it works if you pay attention.


Same thing here, nothing to see, move along.  If anything, it's a nice way to implement Darwin on the gullibles who believe in out-year promises.  This of course isn't what they want -- they want to increase those, not kill them off, but like most schemes, this lie carries the seeds of its own destruction in it.


Thu, 07/14/2011 - 13:49 | 1456803 oogs66
oogs66's picture

bush always knew the tax cuts would be hard to let expire, but it helped the budget at the time.  they can't help themselves, games instead of real solutions

Thu, 07/14/2011 - 13:59 | 1456836 nope-1004
nope-1004's picture

If the US heads the way of Zimbabwe, which some think it will, then one $1.5T dollar bill can be issued in 10 years.  There..... Debt paid!

I find it hard to believe that any of this talk about Trillions in budget numbers will actually be paid back in present value dollars.  The debt either needs to be inflated away, or the RESET button hit.


Thu, 07/14/2011 - 15:10 | 1457170 knowless
knowless's picture

I still don't understand how the "inflate away" theory makes any sense, wouldn't the lender nations just demand an inflation adjusted number of dollars, since the inflation was essentially fraud commited through printing?


Thu, 07/14/2011 - 23:18 | 1458374 StychoKiller
StychoKiller's picture

Shhh!  No one's supposed to know about the Double-Secret Print Button™...


Thu, 07/14/2011 - 13:59 | 1456841 Dr. Richard Head
Dr. Richard Head's picture

In all fairness, Bush and Obama both know that buying off the big agri, financial, insurance, military, telecom, and serf industries can be expensive.  Cake for EVERYONE!!!!!!!.....except you middle-classers....your class sucks.

Thu, 07/14/2011 - 14:21 | 1456926 eureka
eureka's picture

That's right - the middle class sucks - Bernanke talks - and markets go up and down like yoyos - but who are the real yoyos ?

Could it be the middle class - for buying into it all - yoyo stocks, yoyo empire, yoyo reality?

Will the middle class ever pull the plug on the yoyo Federation?

Thu, 07/14/2011 - 14:27 | 1456954 Dr. Richard Head
Dr. Richard Head's picture

No, the middle-class will not pull the plug on their stocks and their reality.  I still talk to co-workers and neighbors I was screaming to about silver and gold back in 2008.  I show them receipts on the cost for my first purchase back in 12/9/2008 and then show them the prices today.  They say it is a fluke.

Just yesterday I spoke with a co-worker that she was just reading something about silver and its bull buying run was over.  She expected it to sit right where it was at for "quite some time". 

One cannot save all of New Orleans from a Katrina storm.  That energy would be better suited to saving oneself and one's family.

Thu, 07/14/2011 - 14:54 | 1457105 unky
unky's picture

when the shit hits the fan they will remember you and your talk about PMs. Then they will come to your home and take it from you violently...

Thu, 07/14/2011 - 15:00 | 1457139 Dr. Richard Head
Dr. Richard Head's picture

I wish them the best of luck in locating it as well.  Plus, when the shit hits the fan, I will depart from my home immediately.  Poof - we are gone.

Plus, I have a really easy grab set up for my guns.  Considering these fucktards were not motivated enough to buy, they will simply fade away into the sunset, hungry, cold, and wishing.

Thu, 07/14/2011 - 14:49 | 1457090 fallout11
fallout11's picture

I'm bullish on yoyos.

Thu, 07/14/2011 - 14:15 | 1456898 MiguelitoRaton
MiguelitoRaton's picture

Let me try to decode the deal:
1. $1.5T/10 years = $150B per year
2. is back-end loaded so only $2B this fiscal year
3. BUT...that is against planned INCREASES to the budget, not against the current budget

So the actual result will be, INCREASES to the deficit and the debt without interruption and growing exponentially into the future until we hit a wall. Excellent work politicians!

Thu, 07/14/2011 - 16:16 | 1457351 maxcody
maxcody's picture

That is history. This is now and time to pass Cap, Cut & Balance before

total collapse. 68% of the people disagree with status que.

Thu, 07/14/2011 - 13:52 | 1456816 TaxSlave
TaxSlave's picture

Through the Looking Glass:
The Queen:

Sometimes I've believed as many as six impossible things before breakfast.

Thu, 07/14/2011 - 14:02 | 1456848 monkeyshine
monkeyshine's picture

I sure was wondering what caused the market to rally back so big so fast. 

Thu, 07/14/2011 - 13:41 | 1456750 TheTmfreak
TheTmfreak's picture

Right. Not to mention the 100 billion "cut" per year is probably accounting tricks that don't actually cut anything.

Thu, 07/14/2011 - 14:10 | 1456889 DaveyJones
DaveyJones's picture

"tricks" really is the appropriate term for prostitutes and their work

Thu, 07/14/2011 - 13:42 | 1456757 Cassandra Syndrome
Cassandra Syndrome's picture

I think 10 years. But how can they tell how much a future deficit is?


Thu, 07/14/2011 - 13:49 | 1456801 DCFusor
DCFusor's picture

Pure BS projection, like that one in slick Willie's adminsitration that causes his true believers to think Clinton actually had a surplus -- you see them saying on all the less intelligent forums all the time while they are blaming some bush for it all -- as if either party was not in on the scam.  Wasn't it reported here it was way back in the previous century the last time any debt was actually paid down?  Not in his administration or any other since, for sure.


Thu, 07/14/2011 - 13:51 | 1456808 oogs66
oogs66's picture

all a scam, and all they do is play games...bush knew the tax cuts would be difficult to let expire, but by saying they expired, made the budget look better....they need to start making some hard decisions with real solutions.

Thu, 07/14/2011 - 13:51 | 1456805 TruthInSunshine
TruthInSunshine's picture

is that 1.5 T for this year or over 10 years. theres a difference



The entire 1.5 trillion is over the next 42.7 years and comes exclusively from cuts in the school lunch program.

Thu, 07/14/2011 - 13:51 | 1456815 slaughterer
slaughterer's picture

$1.5 trillion is not enough for Moody's.  Prepare helmets for sovereign credit rating downgrade.    The US is officially on its way to insolvency and default. 

Thu, 07/14/2011 - 14:26 | 1456936 SheepDog-One
SheepDog-One's picture

Social security LOST 1.1 trillion last year.

A token 1.5 trillion 10 year fantasy 'debt all fixed' plan wont fool anyone.

Thu, 07/14/2011 - 13:58 | 1456829 cdude
cdude's picture


What makes God laugh?....A ten year plan.

What makes everyone laugh?....A government ten year plan.

Thu, 07/14/2011 - 14:10 | 1456885 slaughterer
slaughterer's picture

Just get Apple to sell "Uncle Sam  iPads" to save the government... Debt problem solved. 

Thu, 07/14/2011 - 13:35 | 1456713 Gubbmint Cheese
Gubbmint Cheese's picture

Kabuki theatre.. nothing more.

Thu, 07/14/2011 - 13:42 | 1456761 john39
john39's picture

agreed.  but, you have to have your head out of the matrix to understand that raising the debt ceiling was decided a long time ago.  this is all show for the sheeple, creates fear and distration... much better for control purposes...  let them go on believing that we live in a representative democracy...   more like a demoncracy.

Thu, 07/14/2011 - 13:57 | 1456834 Tuco Benedicto ...
Tuco Benedicto Pacifico Juan Maria Ramirez's picture

More importantly the sheeple are kept in a constant state of flux which minimizes critical thought, the bane of the New World Order demons.



Thu, 07/14/2011 - 14:05 | 1456863 carbonmutant
carbonmutant's picture

Looks like Harry Reid was the source of this particular piece of BS.

According to Bloomberg TV

Thu, 07/14/2011 - 13:35 | 1456714 the not so migh...
the not so mighty maximiza's picture

YHAY, we are saveed!!!!!

Thu, 07/14/2011 - 13:36 | 1456716 digitlman
digitlman's picture

Wow.  Over ten years, that won't make a dent.

Thu, 07/14/2011 - 13:37 | 1456724 oogs66
oogs66's picture

over 10 years, and starting in 5 years! 

Thu, 07/14/2011 - 13:43 | 1456759 hedgeless_horseman
hedgeless_horseman's picture

...with a corresponding 500B in stimulus payments to American families right before the elections and a 1T tax cut to help stimulate jobs.

Thu, 07/14/2011 - 14:00 | 1456830 karzai_luver
karzai_luver's picture

Obamao is too stupid-why not cut taxes by 4-5 trillion?

We would grow into a surplus no doubt.

Just hold spending where it is, we will grow out of the hole at least

that's what I hear.

Hell tax holiday for the rest of the year, go for it.


Thu, 07/14/2011 - 13:37 | 1456722 lolmao500
lolmao500's picture

This is gonna be fun :

At least 7,000 top-rated municipal credits would have their ratings cut if the U.S. government loses its Aaa grade, Moody’s Investors Service said.

Thu, 07/14/2011 - 13:38 | 1456730 Ying-Yang
Ying-Yang's picture

Here is what Marc Faber says about the debt debate - It is mind boggling that people would consider buying 10-year U.S. Treasurys with yields trading at around 3 percent, said Marc Faber. 

Thu, 07/14/2011 - 13:45 | 1456782 sbenard
sbenard's picture

Reminds me of a song, "Fools Rush In"!

Thu, 07/14/2011 - 15:25 | 1457209 tbone654
tbone654's picture

And -- "Fools are kind of blind" -- song = write this down, performed by George Strait

Thu, 07/14/2011 - 13:38 | 1456733 hamurobby
hamurobby's picture

It will be a decrease in the increases planned for the next twenty years, if at all. There is noooo way they can cut spending and not collapse their system.

Thu, 07/14/2011 - 13:40 | 1456734 docj
docj's picture

So the Teleprompter is reduced to wishcasting at this point.


Thu, 07/14/2011 - 13:39 | 1456735 YesWeKahn
YesWeKahn's picture

Why bothering cutting anything, nobody cares!

Thu, 07/14/2011 - 13:39 | 1456736 Hugh_Jorgan
Hugh_Jorgan's picture

The gloves WILL come of on this one. I wonder if Boehner and crew have any skeletons that no one but Nancy and Harry know about?

Thu, 07/14/2011 - 13:39 | 1456737 newstreet
newstreet's picture

Carthago delenda est.

Thu, 07/14/2011 - 15:08 | 1457163 Catullus
Catullus's picture

America est omnia in tres partes.

E. Semper ubi sub ubi

Thu, 07/14/2011 - 13:40 | 1456738 TruthInSunshine
TruthInSunshine's picture
  • 1:35 p.m. est:  White House announces debt ceiling deal has been reached with Boehner, Cantor and Ghost of Ludwig von Mises.
  • 2:59 p.m. est:  Boehner denies any debt ceiling deal has been agreed upon. Neither Cantor nor ghost of Ludwig von Mises comment.
  • 3:59 p.m. est:  Boehner denies he earlier denied debt ceiling deal had either been agreed upon or disagreed upon. Neither Cantor nor ghost of Ludwig von Mises comment.
  • 4:01 p.m. est:  White House denies that they previously claimed that debt ceiling deal has been reached with Boehner, Cantor and Ghost of Ludwig von Mises.
Thu, 07/14/2011 - 13:43 | 1456768 Agent P
Agent P's picture
  • 9:30 a.m. est. (T+1): Wash, rinse, repeat.
Thu, 07/14/2011 - 13:40 | 1456742 Arttrader
Arttrader's picture

Stocks spike until people ask "So WHAT will the gov't not be buying, from WHICH companies, and WHO are the potential (or should we say former) consumers they not be paying?"

Thu, 07/14/2011 - 13:40 | 1456744 buzzsaw99
Thu, 07/14/2011 - 13:41 | 1456756 alexwest
alexwest's picture

that's why Germans MUST HAVE PIIGS IN EURO zone.. :))

07-14 13:29: Germany sees total budget deficit of EUR 41.5bln this year
07-14 13:23: Germany says it aims to have balanced budget by 2014

imagine what would rate deuthcmark/$ be ? 3$ per mark, 5$. 7$


Thu, 07/14/2011 - 14:31 | 1456973 Max Hunter
Max Hunter's picture

Can't happen.. If the DM i that high, exports will crumble, thereby creating a negative growth scenario and a weaker currency. But it will by god be as strong as it can without that happening..

Thu, 07/14/2011 - 13:41 | 1456758 entendance
entendance's picture

It is good and necessary to hear different views, and the discerning mind seeks out quality perspectives of all types. But it is not productive to waste time with baseless swill tossed out by trolls and 'analysts' too lazy to put some real work, facts, and diligence into their opinions.
You would not eat garbage off the street. Why would you put something that is of a similar character into your mind, so it will affect your investment accounts? Be selective in how you spend your time. There are quite a few opinionated idiots and broken traders who would love to drag you down to their level and beat you with experience.
Distractions can affect your trading. If they do, get rid of them.
Trading is just a business, and so one should treat it as such. It is neither good nor bad, but a craft of sorts if you will. One has to be on the right side of the market, and it has nothing to do with courage, and everything to do with knowledge, luck, and skill.
Conducting ourselves honorably and standing for the truth, upholding our oaths if you will, is a calling however, a high aspiration which we all receive, but which not all take up.>
from Jesse

Thu, 07/14/2011 - 13:42 | 1456760 mynhair
mynhair's picture

Big whoop.  More Oweblahma BS.

Thu, 07/14/2011 - 13:42 | 1456763 machineh
machineh's picture

$1.5 trillion -- probably consisting of $60 billion a year for years 1-8, and $1 trillion in years 9 and 10.

Easy. We'll never even notice. And neither will the deficit.

Thu, 07/14/2011 - 13:52 | 1456817 oogs66
oogs66's picture


Thu, 07/14/2011 - 14:02 | 1456850 Dr. Richard Head
Dr. Richard Head's picture

In ten years 1 trillion will be the new denomination of the US quarter. 

Thu, 07/14/2011 - 13:42 | 1456765 sbenard
sbenard's picture

Bizzaro World! Perhaps stocks will tank even faster now!

How much of that spike was short-term shorts covering their positions versus genuine longs.

This whole debt debacle has the markets on pins and needles. If we see a short-term resolution, we're just assured of a longer-term catastrophe. It is time to deal with the reality of our circumstance and the awfulness of our situation.

But I doubt that can happen as long as the Deceiver in Chief remains in the White House!

Thu, 07/14/2011 - 14:19 | 1456918 monkeyshine
monkeyshine's picture

It rallied so fast it had to be stop triggers. Are shorts really expecting a rally on a debt ceiling + tax deal? 

Thu, 07/14/2011 - 13:44 | 1456772 RobotTrader
RobotTrader's picture

Wow, oil down $4 in just a few hours.

Amazing how they can "Jawbone" or adjust margin requirements to instantaneously smash any commodity at will.

Los Angeles gas prices still crashing:


Thu, 07/14/2011 - 13:51 | 1456810 lieutenantjohnchard
lieutenantjohnchard's picture

wow, the 1099 processor must be pulling his hair out. all he had to do was short fnm, fre, bear and lehman at the top in 2007 and he would be living large rather than dreaming of sitting at the banquet table in the hampton's with his walter mitty dream of his version of the beautiful people.

as for his portfolio: mo, vz and hd still trading furiously in their .1% trading band.

Thu, 07/14/2011 - 14:20 | 1456921 SheepDog-One
SheepDog-One's picture

Should have just listened to Gentleman Jim, Robo.

Thu, 07/14/2011 - 13:51 | 1456812 Robot Traders Mom
Robot Traders Mom's picture

"Who the fuck would ever live in LA"



Thu, 07/14/2011 - 14:16 | 1456903 Vic Vinegar
Vic Vinegar's picture

Well that's one less person on the freeways here.

Thu, 07/14/2011 - 13:56 | 1456819 Bastiat
Bastiat's picture

Halflife on these manipulations is getting shorter and trend grinds on.

Thu, 07/14/2011 - 13:45 | 1456778 lolmao500
lolmao500's picture

Still better than this :

“How much does the Biden plan actually cut from next year’s discretionary spending budget?” the Kentucky Republican asked the room.

Obama’s Office of Management and Budget Director Jacob Lew told him, “$2 billion.”

Thu, 07/14/2011 - 13:46 | 1456783 Everybodys All ...
Everybodys All American's picture

If the presdient comes out with a lame plan for spending cuts I truly believe the ratings agencies will cut the AAA rating of the US.

Thu, 07/14/2011 - 13:55 | 1456785 Cdad
Cdad's picture

19 million shares of the Roach Motel [SPY] bought in 15 minutes.  That should seal the deal for a plunge at the that $2.4 billion dollars was misallocated based on a rumor...which, by the way, had it been true, would have been disastrous.

Nice pachinko machine market.  F'n joke

**And over at the BlowHorn [CNBC], they fill the awkward space in time with a story about yogurt.  That seems just about right.**

Thu, 07/14/2011 - 14:06 | 1456865 Deepskyy
Deepskyy's picture

Slow news days are an absolute bitch.

But it does make for some funny side stories if you are a cynic.


Thu, 07/14/2011 - 14:19 | 1456914 SheepDog-One
SheepDog-One's picture

We're in the 'sparkle rainbow zone' Cdad...funny place to be. World in flames a couple weeks ago, US faced with impossible debt problem we'll throw out some meaningless numbers and all is well.

Thu, 07/14/2011 - 14:32 | 1456996 Cdad
Cdad's picture

I hate sparkly rainbows, dog.  

Thu, 07/14/2011 - 23:34 | 1458395 StychoKiller
StychoKiller's picture

Living is easy with eyes closed, misunderstanding all you see.  It's getting hard to be someone but it all works out, it doesn't matter much to me.

Let me take you down, 'cause I'm going to Strawberry Fields.  Nothing is real and nothing to get hungabout.  Strawberry Fields forever.

-- John Lennon

Thu, 07/14/2011 - 14:25 | 1456943 monkeyshine
monkeyshine's picture

DJIA was down 60 and S&P down 11 when the rumor hit. DJIA and S&P closed almost all of it. Then they went down again to about 30 and 5, and then closed it again.  I expect, if the rumor is false or worse that the two sides come out with acrimonious statements like yesterday, then the markets should fall to -150 and -20 on the day (or tomorrow, given that the news may not hit until after close).  But what do I know.  They should also fall if they do strike a deal.

Thu, 07/14/2011 - 13:46 | 1456787 Robslob
Robslob's picture

Hey, as long as that !1.5 Trillion is from Next Years budget then I think that is a good

: )

Thu, 07/14/2011 - 13:46 | 1456789 kito
kito's picture

1.5 trillion over 100 years!!! we are saved!! thank the Good Lord for our politicians. where would we ever be without them?

Thu, 07/14/2011 - 13:46 | 1456790 earnulf
earnulf's picture

The ten year deficit total is over 7 trillion dollars.

That is based on revenues doubling by 2019 while spending goes up only 66%.

All these "cuts" are so much fart gas.

Thu, 07/14/2011 - 13:47 | 1456791 SheepDog-One
SheepDog-One's picture

Well yea we're insolvent, but nevermind all that 'we got a plan'....promise to cut something so far down the road most of us wont even be here including obama! See? fixed!

Thu, 07/14/2011 - 13:49 | 1456802 Tuco Benedicto ...
Tuco Benedicto Pacifico Juan Maria Ramirez's picture

This would be a "Tom Dempsey" kicking of the can down the road!:)


Tuco Benedicto Pacifico Juan Maria Ramirez

Thu, 07/14/2011 - 14:01 | 1456820 Calmyourself
Calmyourself's picture

Flat foot Dempsey there is a memory..  Kickin' it wayyy down the road.

Thu, 07/14/2011 - 13:47 | 1456792 Shameful
Shameful's picture

1.5 trillion in cuts, in what over the next 1.5 trillion years?  "This will set us to have a balanced budget by 57,432 AD".  What a yawn fest, of course it will be increased.  Go for it, gives us more time to get to the lifeboats and will make life all the more hellish for those who dance while the USA Ponzitanic lists and sinks.

Thu, 07/14/2011 - 14:03 | 1456857 SheepDog-One
SheepDog-One's picture

1.5 trillion years LOL.

Thu, 07/14/2011 - 13:48 | 1456795 MrBoompi
MrBoompi's picture

$1.5T over 10 years while we have a $2+T debt ceiling increase over the next 2 years? LMAO

One way or the other the Powers will push more credit on the world. The only other choice is economic collapse and the new economic Phoenix that will rise from the ashes.

Thu, 07/14/2011 - 13:48 | 1456797 P Rankmug
P Rankmug's picture

Rally on a debt deal? Solve the debt problem by increasing the debt? Apply this logic to solve life's problems. 

-Obese. Eat more. 

-Marital problems. Get a mistress. 

-Market risk. More margin. 

-Stress. Work longer and harder. 

-Alcoholic. Drink more. 

-Penis in a garbage disposal. SOL. Some problems defy logic.

Thu, 07/14/2011 - 14:03 | 1456853 Lem Motlow
Lem Motlow's picture

Not SOL. Execellent candidate for addadictomy surgery.

Thu, 07/14/2011 - 14:16 | 1456900 P Rankmug
P Rankmug's picture

+ 10 inches

Thu, 07/14/2011 - 14:07 | 1456879 Hubbs
Hubbs's picture

Sell peepee grinds to sausage factory. Instead of cellophane seal, use condom.

Thu, 07/14/2011 - 14:17 | 1456907 DaveyJones
DaveyJones's picture

Criminal Bankers - Give them Money 

Thu, 07/14/2011 - 13:48 | 1456798 r101958
r101958's picture

A little off subject but; IMO, looking at the way oil is tanking, I wouldn't doubt another SPR release is in the works.

Thu, 07/14/2011 - 14:05 | 1456864 SheepDog-One
SheepDog-One's picture

Well they already announced that. And like the last 2, within a week oil will be right back up.

Thu, 07/14/2011 - 14:43 | 1457059 DCFusor
DCFusor's picture

It's a cinch JPM won't be selling out the batch they bought on the last release to keep it off market so they could sell it at higher prices later, but if they release more, JP might buy that too to get their cost per bbl down a little -- they kind of overpaid the last time to keep it off the market.

Thu, 07/14/2011 - 13:50 | 1456807 Blano
Blano's picture

Well that takes care of one year of deficits (assuming they even stick with it)....what about all the other deficits in upcoming years??

Thu, 07/14/2011 - 13:51 | 1456813 HEHEHE
HEHEHE's picture

Hmm announced right with S&P 500 approaching 1300;)  Kudos!

Thu, 07/14/2011 - 13:51 | 1456814 CrashisOptimistic
CrashisOptimistic's picture

There is a distinct sense that the party is over.  

The cuts will not be finessed.  They will be real.  

The way you tell if a cut is real is YOU feel it.  You encounter potholes that aren't fixed.  You encounter streetlights that don't work.

If you don't cut, real cuts, then interest rates spike, GDP falls and you have no job, AND no unemployment checks.

There is no painless solution.  Prepare to endure.

Thu, 07/14/2011 - 13:54 | 1456826 janchup
janchup's picture

Let's see if we can knock a few pennies off our $1200 plus wine dinner bill. We'll feel so successful!

Thu, 07/14/2011 - 13:57 | 1456835 r101958
r101958's picture

Doubtful about debt deal. Smoke and mirrors. I will believe it when I see a clear plan with all numbers out in the open.

Thu, 07/14/2011 - 13:58 | 1456840 Robslob
Robslob's picture

The irony in all this is Bernanke stating earlier today any cuts in spending could derail the "recovery" and the market enters the twilight zone.

Thu, 07/14/2011 - 14:07 | 1456872 RobD
RobD's picture

The Bernanke said something like "drastic cuts in the near term could derail" the "recovery". I don't think he was worried about fictional cuts in some future year so he would be good with this.

Thu, 07/14/2011 - 14:00 | 1456846 colonial
colonial's picture

this is being pushed back now

Thu, 07/14/2011 - 14:01 | 1456847 Hubbs
Hubbs's picture

An agreement by such self proclaimed politician idealists? My! my! They must both really be worried about their re-election chances if they can't make this whole problem disappear...until after elections. So follow the convoluted as a corkscrew monetary sleight of hand gimmicks to confuse the masses until 2013, when, with shovels in hand, they start digging up all the rotting, decaying bodies.

Thu, 07/14/2011 - 14:03 | 1456854 j0nx
j0nx's picture

$50 says all these mofos in CONgress are on the phone with their broker as they float these rumors. Making a mint. I can't believe that insider trading is allowed for them. It's no wonder we are in this mess and why voting does absolutely jack and shit for stopping this nonsense.

Thu, 07/14/2011 - 14:03 | 1456856 silvertrain
silvertrain's picture

will spend more than that getting the lybian central bank up and running...

Thu, 07/14/2011 - 14:04 | 1456858 CrashisOptimistic
CrashisOptimistic's picture

A particularly powerful reality is Pelosi was never able to get a tax increase bill approved by her own caucus.  No Democrats wanted to vote for a tax increase.

Nothing has changed on this.  If the GOP offered to allow a standalone Democrat tax increase bill on the floor, it would fail to get a majority of Democrat votes.

There is no easy answer to this.  There are going to be deep cuts and it will be fiscal contraction and pain looms.  There will never be the magical "grow our way out" solution ever again.  Oil won't allow it.

Thu, 07/14/2011 - 14:32 | 1456988 MachoMan
MachoMan's picture

This.  My hope is that we don't descend into chaos through the pains of deleveraging and contraction...  and, hopefully, the power vacuum is filled by a master that treats us better.

Thu, 07/14/2011 - 14:04 | 1456860 Translational Lift
Translational Lift's picture

All pure BULL SHIT.........$1.5 Tril over next ten years.....I promise....i promise.....

Thu, 07/14/2011 - 14:04 | 1456861 whaletail
whaletail's picture

The key here is when will the debt ceiling need to be raised again? If, based on projections, the next date is before the 2012 elections, that a big victory for the Republicans. They can yank Our Dear Leader's chain again right before he stumps for re-election. Either way, I join others in declaring "gold bitchez" and whatnot. 

Thu, 07/14/2011 - 14:05 | 1456862 Drnumbers
Drnumbers's picture

The problem is that the cuts would have been larger, but with NFLX increasing prices....well you guys can figure it out...

Thu, 07/14/2011 - 14:06 | 1456867 CrashisOptimistic
CrashisOptimistic's picture

Ten year cuts will not get through the House unless there is a heavy 300ish Billion cut in year 1, that is FY2012.  In the end, this is what will stop the deal.  Obama won't want to deal with 12% unemployment next year, instead of 10% which it would be otherwise.

Thu, 07/14/2011 - 14:14 | 1456893 SheepDog-One
SheepDog-One's picture

Or the 25%+ unemployment real number.

Thu, 07/14/2011 - 14:06 | 1456874 Rikki-Tikki-Tavi
Rikki-Tikki-Tavi's picture

I have never seen this much micro management of the market - they must be really scared. USS Hindenburg flying on extreme leverage.

Thu, 07/14/2011 - 14:08 | 1456882 Sgt.Sausage
Sgt.Sausage's picture

Wow. OK. So that takes out last year's defecit. Now what about this year's?

Thu, 07/14/2011 - 14:11 | 1456890 SheepDog-One
SheepDog-One's picture

Party pooper.

Thu, 07/14/2011 - 14:10 | 1456887 Caveman93
Caveman93's picture

I decided to max out my credit cards today with no ability to pay them back on unemployment. I bought spam...lots of spam. The wife was happy to know I could make the interest payments for the next two years though..

Thu, 07/14/2011 - 14:14 | 1456892 drivenZ
drivenZ's picture

1.5 trillion would be an absolute cop-out and the market would know it. might even be worse than 0. It just screams "kick the can down the road"

Thu, 07/14/2011 - 14:14 | 1456894 Aductor
Aductor's picture

Obviously, coke sniffing traders are not able to read. It says that 1,5 Tr is what they _can_agree_on_, it doesn't say a deal is in place. I.e, what does the Dems get in return? Negotiations will continue tomorrow.

Thu, 07/14/2011 - 14:15 | 1456895 NuYawkFrankie
NuYawkFrankie's picture

US economy SAVED!!!
Let the good times roll! Yeehaa!!!

And in other Breaking News: Romans to head-off Visigoths at the pass!!!No Dark Ages!!! Yippee!!!

Thu, 07/14/2011 - 14:17 | 1456904 NuYawkFrankie
NuYawkFrankie's picture

US economy SAVED!!!
Let the good times roll! Yeehaa!!!

And in other Breaking News: Romans to head-off Visigoths at the pass!!!No Dark Ages!!! Yippee!!!

Thu, 07/14/2011 - 14:17 | 1456906 ryanseventyfive
ryanseventyfive's picture

Meh, i'm still waiting to hear what Lindsay Lohan's take is on this urgent matter.

Thu, 07/14/2011 - 14:19 | 1456915 slewie the pi-rat
slewie the pi-rat's picture

even if they reach an "agreement" wtf doodoo it mean?  other than that the debt ceiling gets adjusted, for now, so timmah can borrow money to cover his checks, and the benzelbubbabubbler can print QE for whatever reason he makes up, at the time.

why should we subject our AAA image to harmful light rays and risk being perceived as insolvent when we have the FED, the Reserve Currency, and ZIRP? 

ron paul, running fer prez, has declared the nation insolvent.  now, somebody tell him that if he designs a campaign around that, he should promise to End The FED and declare the nation bankrupt and in default right after the inaugural. what a campaign that would be for america!  we could all get "we are fuked" T-shirts with "vote for Paul & deal w/it, BiCheZ" on the back.  maybe in nice rasta colours.  yah, mon!


Thu, 07/14/2011 - 14:21 | 1456925 Magnix
Magnix's picture

Never trust rumors! I need facts!

Thu, 07/14/2011 - 14:24 | 1456938 CrashisOptimistic
CrashisOptimistic's picture

In return for a 1.5T cut, the Dems get a 1.5T extension of the debt ceiling.  That would be the deal.  Which would last til January.

Thu, 07/14/2011 - 14:25 | 1456945 economists_do_i...
economists_do_it_with_models's picture

JPM:XLF ROC(1) is at a quite abnormal level not seen in more than a year.  First the pump, then...

Thu, 07/14/2011 - 14:33 | 1456997 Zymurguy
Zymurguy's picture

Just raise the debt ceiling up another $20 Trillion.

What does it really matter.  It's all fake money anyway.

There is nothing they can do to save our economy or financial system or our monetary system.

Raise it on up, print the money, pay everyone off with piles of worthless fiat and go ahead and crash it.

Then we can start all over with a currency supported by actual values, eliminate the central banking system, eliminate the fractional reserve lending system, reform campaign finance, rid ourselves of lobbiests and make congress and govt. employees live by the same laws we live by (including paying taxes).  Any politician, banker, etc. attempting to violate these principles will be shot on sight.

Thu, 07/14/2011 - 14:33 | 1456998 NOPOMO
NOPOMO's picture

This is all about trying to keep the markets up until OPEX is over...then the take down.  In the meantime I continue to buy Aug & Sep puts cheap.  FED & PD pumped the markets to drive out the shorts & puts for July.  Foolish think on their part as it just give me more time to keep buying them puts.

Thu, 07/14/2011 - 14:53 | 1457102 wandstrasse
wandstrasse's picture

...soon $0 trillion of course...


Thu, 07/14/2011 - 14:58 | 1457125 nah
nah's picture

mite as well say the gubmint has agreed to a defecit of only $12 trillion


Thu, 07/14/2011 - 15:40 | 1457253 bill1102inf
bill1102inf's picture

I just saw a unicorn with wings fly by and it shit skittles !!!!!!

Thu, 07/14/2011 - 15:57 | 1457304 Dr. Acula
Dr. Acula's picture

Are you sure it wasn't a horned pegasus?

Thu, 07/14/2011 - 17:49 | 1457721 Bindar Dundat
Bindar Dundat's picture

Time to move your money to Canada and buy a second house.  At least Canada turned off the printing press and they are reducing debt as we speak...

Thu, 07/14/2011 - 18:23 | 1457792 Buck Johnson
Buck Johnson's picture

Obama doesn't get it, the republicans see now that he is buckling so that if true that little walk out he did 24 hours ago didn't last.  They are going to stay at 2 Trillion and say we have came down enough from 4 Trillion.  I don't see them or the Tea Partiers taking the 1.5 Trillion.

Thu, 07/14/2011 - 18:25 | 1457794 jmc8888
jmc8888's picture

Because the answer to fraudulent debt is cutting and printing!

How about cut fat, i.e. not social security and medicare/medicaid...but things like wars, excess defense spending, actual fat.

Then couple that with wiping away the fraudulent debt, via Glass-Steagall, and thus where is our debt...a helluva lot lower than it is with either of the idiots' approaches.

The answer isn't to cut

The answer isn't to print

THE ANSWER is to wipe away the fraudulent debt.

Everything else is pissing into the wind, catching it, and selling it as lemonade flavored rain.  I hear China will be listing such a company on an exchange doing that soon.

Glass-Steagall (and this has been an option since it was repealed, let alone 2008....hell we could of even reinstated it, before it was repealed...because 1998 version of Glass-Steagall, wasn't 1933 version.)

H.R. 1489 is before congress, it can be passed easily if CONgress would get their heads out of wall street's smelly ass.

1933 Glass-Steagall...wipe away the fraud, end the wars.  Issue credit for real recovery for real tangible works all put out before....NAWAPA, Mag-lev, fusion, space program, machine tools, desalinization. Mission accomplished.  Throwing grandma under the bus is not an option, for anyone who isn't a fascist fucktard idiot.

Thu, 07/14/2011 - 20:08 | 1458023 jack stephan
jack stephan's picture

[Stone flies through Mr. Burns' office window]
Look Smithers, a bird has become petrified and lost its sense of direction.

Thu, 07/14/2011 - 21:11 | 1458155 Plumplechook
Plumplechook's picture
So now the Republicans, who were happy to raise the debt ceiling 7 times for Bush's wars (and tax cuts), are holding the entire US economy to ransom when Obama is trying to deal with the financial clusterfuck left by Bush - and all to protect their uber-rich bankster buddies from paying one more cent in tax.

Still - at least we know the trickle-down philosophy of the last 25 years works. Which is why there are no more poor people in the US. Oh wait....

Fri, 07/15/2011 - 01:14 | 1458501 Don Keot
Don Keot's picture

What did Obamer mean when he said "Don't call my bluff" or what?  He's going to let her go into default, declare martial law and be a benevolent dictator with fairness for everyone and a bullit train.

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