Long-Term Budget Deficit Revised, Now $2 Trillion Dollars Worse
Two days ago the market ripped a few hundred points after yapping heads couldn't shut up about how next year's budget deficit was going to be revised down by $260 billion, after a stellar financial system managed to ramp up 100% ever since State Street refused to lend any stocks for shorting... ever... and after the FDIC has somehow managed to maintain the bank failure rate at a stellar +/- 10 banks per week. Well, as is usually the case with CNBC, they jumped the shark early in keeping with the overall propaganda directive. The full report that will be released on August 25 will demonstrate that the budget deficit for the next ten years will be worse... by $2 trillion dollars. From Bloomberg:
White House budget review set for release Aug. 25 will show cumulative deficits over the next decade amounting to $9 trillion, up from $7.1 trillion that the administration predicted in May, the official said on condition of anonymity because the figures have not been made public.
And here is the reason for the better than expected performance for the current year:
The lower deficit projection for the fiscal year ending Sept. 30 is largely attributable to the administration dropping contingency plans to provide hundreds of billions in additional aid to the financial industry, the official said.
Next week expect to see downward revised projections for GDP growth and unemployment. Yet somehow the millions extra unemployed, and the additional $2 trillion in debt that will need to be issued to finance the extra deficits will nonetheless result in a market spike, especially in three months when the $9 trillion is actually revised down to $8,999,999,999, and the $1 in savings will translate into at least $1 trillion in additional market cap for the S&P.