Preview Of Today's Washington Soap Opera

Tyler Durden's picture

With just 72 hours left until a possible government shutdown, everyone will be following each and every take from the DC soap opera over the next three days with great interest. As such, here is a summary of today's key events in DC via Goldman's Alec Phillips.

All eyes on fiscal issues today.  Yesterday, the consensus regarding budget negotiations seemed to have swung from viewing a shutdown as a clear risk to now viewing it as the most likely outcome (though still very uncertain). That said, talks will continue, in an effort to close the gap between positions on proposed spending cuts. House Speaker Boehner is reported to have proposed cutting $40bn from current levels versus the $33bn compromise floated last week, which if nothing else indicates that the gap between the parties amounts to a few billion dollars, and there is still a possibility of another very short-term extension of spending authority.
Morning – President meets with congressional leaders on budget?  The president is slated to leave town at noon for an appearance in Philadelphia, so any talks will need to occur this morning. Another meeting is expected in the next few hours, though no specifics have been announced yet. Another White House meeting clearly keeps talks going, though also serves as confirmation that no deal has yet been reached.
9:30 am – House Democrats meet in closed session on the budget.  Sentiment among fiscally conservative Democrats regarding the latest round of budget proposals could still be an important variable, in light of the diminished Republican support for the most recent temporary stopgap bill passed three weeks ago, which required Democratic votes to pass.
9:30 am – House Ways and Means Chairman Dave Camp (R-MI) and Senate Finance Chairman Max Baucus (D-MT) hold roundtable on tax reform.  Other members of the Joint Tax Committee (which is comprised of members of the House and Senate tax-writing committees) will also participate, to hear perspectives on tax reform from some of the architects of the 1986 reforms, former Treasury Sec. James Baker III and former House Minority Leader Dick Gephardt (D-MO).  Although broad tax reform looks like too heavy of a lift this year, market participants have been focused on the possibility of another tax holiday for repatriated profits. This has gotten a boost recently from House Majority Leader Eric Cantor (R-VA) who has signaled support, as well as Rep. Paul Ryan (R-WI), who assumed such a proposal in his budget resolution released yesterday (see below). However, the tax-writing chairmen appear less interested in this or other piecemeal reforms at this point, and Treasury Sec. Geithner spoke out against the concept again in testimony yesterday. 
10:00 am – CFPB legislative proposals. Banking industry representatives and others will testify on proposals to modify the Consumer Financial Protection Bureau created by the Dodd-Frank Act. While incremental changes are always possible, wholesale reform of the CFPB would be difficult to pass in the Senate, and would likely encounter White House opposition.
10:30 am – House Budget Committee marks up FY2012 Budget Resolution.  The draft budget resolution calls for $6.2 trillion in spending cuts compared with the president’s budget, and $1.8 trillion in revenue reductions (some associated with the repeal of the recent health reform law, some associated with tax reform, and some related to the absence of revenue raisers the president proposes). Compared with the CBO baseline, the budget proposes reducing the deficit by $11bn in FY2011 (all from spending cuts) and $86bn in 2012 ($110bn in spending cuts, offset by $25bn in tax cuts).   Note that the budget resolution by definition does not change law, so it serves mainly as a working framework for Congress, if it is approved by both chambers. The Senate looks likely to release its own budget resolution next week, but resolving differences between the two chambers is likely to be very difficult.
2:00 pm – House Republican Leadership press conference on the budget.  Will they have an agreement in hand?  If not, the focus will be on whether there is a contingency plan to provide for a short-term extension of budget authority ahead of Friday night, when current discretionary spending authority expires.
3:00 pm – Bank regulators testify on community banking. Representatives from the Fed, FDIC, OCC, and CSBC will testify.  Debate on the proposal on the Durbin amendment on debt interchange fees seems likely.

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tek77blu's picture

4:00 - Cover gold and silver short positions.

5:00 - Go long as many ounces as possible.

Viva la bull market in gold and silver!

Sudden Debt's picture



everybody would miss out on....



SheepDog-One's picture

The 'budget debate' farce comes down to bickering over what amounts to a few extra pencil erasers for the Pentagram, $30 billion, on the back of the gargantuan $3.6 trillion joke of a 'budget'? Just a damn clown show plain and simple.

Hell Bernanke prints and shreds more than this great budgetary hurdle amount in 2 or 3 days.

Blotsky's picture

Haha... Right then.

$30,000,000,000 is 0.083% of $3.6,000,000,000,000

... what? Thats progress in the right direction... kinda? maybe?

G-R-U-N-T's picture

Opening April 15, 2011....

The movie that politicians, government employees, moochers, looters, parasites, and general unproductive money sucking leeches don't want you to see.

SRV - ES339's picture

Yes, we must stop this at all cost... thank god the masses (and GOP members of congress) could never get through all those pages to learn "the truth!"

Ayn is a good read, but Utopia exists only in minds simple enough to believe in it.

Ruffcut's picture

Hoyer says "we need to be adults here."

I say "why start now!"

slow_roast's picture

If they'd just let the government shut down I think they'd realize they'll be at leat 70% more efficient with fewer fat people on Prozac doing God's work. 

Sudden Debt's picture

true, but just imagine that those people will be able to walk the streets in daylight if they don't have to report to their cubicles!





luckily they feed on brains so they'll starve in the first 24hours in the US, but what if there's a breakout to Europe?!!!!


SheepDog-One's picture

Then theyll starve in 8 hours.

Sudden Debt's picture

I don't think indigestion will kill them that fast...


Most Americans are used to eating super sized remember....


And they can't die anymore from a hart attact while trying to catch the Europeans because they have much better cardio...

Arthor Bearing's picture

I wanted to hurl insults at you but, I'm deeply embarassed to admit, you're entirely right about Americans. Particularly gov't workers (except for those dogmatic alphas who work in the agencies hunting down dissenters. Those people are tool-geniuses and are in pretty damned good shape!)

Sudden Debt's picture

I was just kidding. Our government "employees" are even worse.

- Monday I was at the post office, there was a line before me (3 people) AND THAT TOOK ALMOST 1 HOUR TO GET STAMPS!

- Last week I called the tax service about a question concerning expense that are work related: After 30 seconds: I don't know that sir, and hung up the phone.

- Also last week I had to renew 2 visas for my kids for a trip to the US. You can't imagine how many times I had to go there to get the paperwork in order. A stamp here, a stamp there and always in another building.

- A few months ago, I was scammed on a internet purchase and I wanted to put down a complain at the police office. I had to explain to those morons how consumer laws work in this country and it was like I had to explain to those morons what "THE INTERNET" actually was. Whenever you walk into a government building, it's like timetravelling to the 50's.


I realy have to prepare myself mentally whenever I need to go to a government office.

Alienated Serf's picture

EUROSOCIALIST workers are the worst.

gaoptimize's picture

Regretably, it will probably be dysentery and resulting dehydration that will take the largest number.  I already grieve for the innocent children.

Abitdodgie's picture

I hear Snooky is making a guest appearance .

Sudden Debt's picture

Nice to know that in 72hours, QE will be launched and the markets will go up again.

They'll handle "inflation" next time.


Zina's picture

Republicans: raise the debt ceiling above 100% of the GDP, and you are finished. Game Over for you. No re-election.

I'm waiting to see a replay of the 1995 shutdown...

Sudden Debt's picture

inflation will cause GDP to rise 200%, so they will be safe.



padhead57's picture

it would only "shutdown" non-essential workers, everybody's been upgraded to "essential"

i-dog's picture

It's all a carefully scripted show. They're not haggling over the depth of the cuts! ... those are meaningless unless they cut by 95%.

They are simply all queueing up for their slice of pork and this takes time to sort out between them all. Once those at the back of the queue have been given their slice, the leaders will announce a "compromise". Just as with TARP ... politics as usual.

belsebub's picture

So, that means that FED members can take a couple of days of.

SheepDog-One's picture

They strain at a gnat and swallow a camel. Hypocrites all!

youngman's picture

I am listening to all about how the REPUBLICANS are shutting down the I would think if I proposed a budget and you voted AGAINST it...that YOU would be shutting down the government...spin spin spin...we relly need a good Dictator at this point..politics is dead...they are fightin over 4 billion in a 1.6 TRILLION deficit....idiots...really .....idiots...

SheepDog-One's picture

Bloomberg used to be OK about 4 years ago, now more useless than CNBS. Bernanke prints and shreds more than double what the budget squable amount is daily.

Kolitnikov- 'The real US debt is $202 trillion' and it all rides on $4 billion? This all lowers IQ just looking at it I'm taking the day off.

SRV - ES339's picture

I'm you're not intersted in the facts, but the original House budget was for $33B in cuts... the President has agreed to every dollar. Boner's Tea Party handlers keep sending him back for more... he has zero control and will surely go down as the most inept Speaker in history.

That's what you get when children are sent to Washington... the only game they know is "lets play to the base!"

StychoKiller's picture

Dudley Do-Right will arrive in the niche of time, he always does! :>D

Zina's picture

Republicans: raise the debt ceiling above 100% of the GDP, and you are finished. Game Over for you. No re-election.

I'm waiting to see a replay of the 1995 shutdown...

SheepDog-One's picture

Guys like you crack me up caught up in this meaningless politics puppet show for dimwitted kids.

Arseclown's picture

So what's the alternative?  The current corrupt morons?  This is like trying to find the best candidate between the village idiot and a farting walrus...actually, I would vote for a walrus if he were running...

Caviar Emptor's picture

GOP using the budget to bargain for future tax cuts (extending the Bush tax cuts and getting a corporate tax moratorium)

r101958's picture

Let it shut down. Nothing of importance will stop running. It is interesting how all the MSM outlets are spouting how a government shutdown would be tantamount to Katrina for all of us. It is just another attempt to sell the belief that the people can absolutely not get along without the all knowing, all doing government.

Broker NotBroke's picture

Too bad this is fiction. If the government REALLY shut down we might have a free market for a little bit.

r101958's picture

We need to get past this Repub vs Dem paradigm. We need to hold all of their feet to the fire and demand real cuts in spending not the meaningless crumbs they are throwing on the table currently. I'll post it again....perhaps for the 6th or 7th time and no less true than the first time I posted it a year ago:

"Current politics is best represented by a two headed dragon. Politicians pay lip service to opposing ideologies but both the Republican and Democratic parties are part of the same big government dragon body. The body is moving in one direction; bigger and more powerful government. More control over the electorate. Having the two parties serves a greater purpose divides the populace (sheeple?) into two camps that are always at each others throat. I think this tactic is called divide and conquer. Until we wake up and get away from the 'Repubs this....' or 'Dems that....' blame game then we will be slowly boiled...just like the frog in the frying pan...all while the dragon stands by watching and laughing."

the not so mighty maximiza's picture

Its all semantics.  The dying screams and death throws of a defective government/empire.  If it shuts down or stays open or if people do or don't get re elected,  the end result is the same.

SheepDog-One's picture

The currency is destroyed, its game over. All this politics posturing just a sideshow to the crushing food and gas price hikes we'll soon see, pricing everyone but a few out.

Saxxon's picture

Kabuki for the unwashed masses; never, ever happen.

Eminence Front's picture

One thing is for sure, the Congress will make sure paychecks are going out before they shut anything down.

DC needs to be entombed in concrete and we need to reboot the system cause this one is worste than Windows 2000.


If the Founding Fathers were alive today they'd either be leading the revolution or hoping on the next plane out of this festering boil we call the United States.

Jay Gould Esq.'s picture

Kabuki, with a strong basenote of farce.

Bawlin' John cannot handle a cozy interview accompaied by his wife, let alone stare down the steeled, street-forged Olympian eyes of The One. 

"Paulie Walnuts" Ryan will do the CNBC/MSNBC/Fox circuit ( the modern-day political eqivalent of the Vaudeville circuit ), and do the D.C. Two-Step, reiterating his shallow, evasive comments on Fox News Sunday the week before, extolling the audacity of Republican austerity: "At least we are now talking about how much to cut, and not how much to spend."

Advantage: Barry. Frankly, our caterwauling House Speaker is the GOP equivalent of Captain Edward John Smith. A pity, that the GOP majority may be but two election cycles in duration: these people were elected to the House majority and given control of the purse strings of Government to do just that -- control spending. Thus proving the unreconstructed Beltway spending addicts that they are, cannot help themselves. A majority is such a terrible thing to waste. 

f16hoser's picture

Bring the troops home. Everything else is rubbish.



the not so mighty maximiza's picture

its very obvious wars are for profit and population thinning, but they are not to be won and finished.

Sudden Debt's picture

WARS are like ARKADE games. There's always another level as long as you keep feeding the machine with coins.




nodoctor's picture

Remember, they don't play checkers, they play chess. This is all going to go according to plan and it will get the two main plyers - the USFG and the FRB - out of their untenable positions. They let the gubmit shutdown and then they let the markets fall in response. Maybe a 20% tank. Eerything goes down but especially PM and oil. This gives BB cover to announce QE++ in 30 days, since without it he would have to announce it against a backdrop of "green shoots", "a strong market", "declining unempoyment" - all the BS that is being reset everyday. After shutdown BB can say QE3 is a tough choice but the right choice since the shutdown affected the markets so much.

So I expect the last best BTFD within 30 days.

This is a controlled release of built up pressure, just like Fukushima.

SilverBaron's picture

Shut it all down!

ThisIsBob's picture

This government buys scotch for Pelosi's free plane, picks up the tab for Obamas' date nights, and, of course, drops some change on sundry military misadventures around the world.  Not to mention subsidies, grants, pure waste,  and on and on and on.

Shut it down. Screw them.  The whole damn lot.

Problem is the parlimentary whores probably can't go a week or so without a paycheck.

nah's picture

they are going to wait for the 14yr olds to figure something out...

Piranhanoia's picture

Never going to get news from actors or politicians or on the tv.  Their union forbids it.