Preview Of This Week's Washington Soap Opera

Tyler Durden's picture

Goldman's Alec Phillips summarizes the playbill for this week's theatrical performance out of DC, where "a modestly busy schedule in what would normally be a quiet holiday week, with the release of the Senate Democratic budget blueprint, more (but as yet unscheduled) debt limit talks, a Senate vote on Libya, and a few relevant hearings…" Less than a month to go until the debt ceiling D-Day and still nothing. It is getting exciting to see just what "they" come up with the 11th hour and 59th minute.

Tuesday, July 5

  • Today – Senate Budget Chairman Kent Conrad (D-ND) briefs Democratic leadership on finalized budget proposal.   The proposal will be released as soon as later today, or otherwise in the next day or two. This release will have important informational value, but is ultimately symbolic since the final budget deal is likely to be crafted by the president, Speaker of the House, and Senate Majority Leader. Conrad is likely to offer an outline of over $4 trillion in deficit reduction over ten years. This will come in the form of the FY2012 budget resolution, which is about three months behind schedule (and almost as long behind the House’s, which passed that chamber in mid-April).  It is likely to involve some cuts to Medicare and Medicaid, but will probably stop short of reducing benefits or increasing cost sharing.  It is also likely to involve significant reduction in defense and non-defense discretionary spending, and will probably raise revenues through limitation of tax expenditures.  Since this proposal will come in the form of a budget resolution, which is a non-binding outline of spending and revenue levels that  leaves the specific policy decisions used to achieve them to the committees of jurisdiction, the proposal may not provide a lot of detail on specific changes.
  • 5:00 pm -- Senate votes on authorizing use of force in Libya. Today’s vote is a procedural one, with 60 votes required. If it crosses that threshold, final passage would come Thursday.  The committee vote was a fairly lopsided 14-5, so passage seems likely.
  • 6:30 pm -- House votes on FY2012 Defense Appropriations.  Medium-term defense cuts are coming, and will probably be included in the eventual debt limit compromise. However, FY2012 should be mostly immune.

Wednesday, July 6

  • President Obama town hall meeting. Hosted by Twitter…
  • FDIC open meeting on the Orderly Liquidation Authority (OLA) and resolution plans…

Thursday, July 7

  • FDA Commissioner Woodcock on PDUFA reauthorization. In the House Energy and Commerce Committee
  • Mortgage settlement hearing. In the House Financial Services Committee.  The chairs of the House Financial Services and Oversight Committees, along with several subcommittee chairs, sent a letter two weeks ago to the Treasury requesting all documents and communication between Treasury CFPB adviser Elizabeth Warren and State Attorneys General, services, or other interested parties. The deadline for providing the information was July 5.
  • EPA testifies on the ethanol “blend wall.”  In the House Science Committee. Refiners and consuming industries will also testify. EPA decided earlier this year to allow up to 15% ethanol content in gasoline sold to consumers (up from 10% previously), but with the intention that it be used only in 2001 model year and later vehicles.  There are still a number of technical issues unresolved, which EPA may address at the hearing.

Friday, July 8

  • Proposed Social Security benefit changes. In the House Ways and Means Committee.  The hearing could shed some light on the current discussion of switching to a chained CPI for indexing benefits, as has been discussed in the recent budget talks.


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SheepDog-One's picture

I dont think Obama and Boehner have played enough golf games yet to decide on the debt ceiling miracle. What a clown show.

snowball777's picture

The longer they take and more desperate they become, the more frightened and worried I become at what they'll attempt to ram through.

MegaPork(tm) candidates:

- MERS Gasoline Fire (destroy the evidence, make all new)

- Super tax break for mort principal writedowns (quid pro quo with the quo being the write-downs today)

- That whole Muni timebomb (legitimize fed backstops)

Azannoth's picture

I read to the end in the vain expectation to see

"All Members of Congress/Senate commit ritual sepuku for being the corrupt assholes they are"

oh well maybe next week

snowball777's picture

Exactly, Congress has authorized the President to launch an airstrike on K-Street and add a wing onto Guantanamo for 535 lucky new guests.

High Plains Drifter's picture

Barry Knapp sounded like Leo Kolivakis this morning on Squawk Box. Its all good. Everything is wine and roses. Don't worry about it. We are going to the moon later on this year......

SheepDog-One's picture

With long term bearish outlooks of course, all anal-cysts and other Wall St den of theives members tell us its all great for now and Wonderland is still solidly in effect and to confidently buy what theyre selling for a guaranteed double.

Muddy1's picture

Here is a preview of things to come:  even when the Republicans have a majority in the House of Representatives they cower is fear of the press and Democrats, and look for an easy way out.  Here is the link:

SheepDog-One's picture

One of the funniest things Ive ever seen, a black pimp in congress calling all of them nothing but a bunch of bitchez.

Widowmaker's picture

That sound you hear in DC is plundering the unincorporated for record bonuses for lawz-makin.

Weird, that didn't make it in to a guldfag-shlepps forecast...

Congress lives in mark-to-fantasy.

SheepDog-One's picture

Clowngress does what their world bankster puppet masters tell them to do.

earnulf's picture

Whatever trick pony they trot out it will be a hollowed shell of ficticious numbers taken from optimistic revenues and pessimistic outlays that offer to "save" money that hasn't even been allocated or spent in years that remain in the future. 

By the time the future arrives, the revenues will be significantly less and the spending, more.    We have already passed the event horizon, all the rowing in the world is not going to turn this ship around.

"here, there be monsters"

White.Star.Line's picture

This is by far the most boring and predictable soap opera ever performed.
I anticipate the script to be the following -

There will be an impasse.

Demos will defend social programs, demand raising taxes on top earners.
Repubs will defend tax breaks, demand reduction of social programs.

it will appear that no compromise will be made, debt ceiling not raised, the shutdown of government, the end of civilization, then.........


With NO increased taxes, and all cuts impacting the poor and middle class.
Of course some "assets" will also have to be sold at firesale prices to the usury clan as a showing of good faith that the US will NOT default on our debt.

RockyRacoon's picture

So, you're saying business as usual.   I suspect that you'll be right.

The net result will be further political bifurcation of the populace -- as planned.

More diversion and obfuscation.

Herbert_guthrie's picture

More diversion and obfuscation.

I've always loved the term "bamboozlement"

IMA5U's picture

obama goosed the market higher for the 3 day weekend so people could feel good


the market is his fear gauge to manipulate the people much like code red, yellow and orange terrorist alerts were for bush

SheepDog-One's picture

Obama 60% disapproval rating for his handling of the economy. Everyones bored with the lame tricks.

RockyRacoon's picture

Excuse me, but you can't call them sheeple and then quote them on their opinions.

Pick a side and stick with it.

Contra_Man's picture

"What will they come up with at the 11th hour?"

   - how about spending without a budget/unaccounted for $trillions next year of even more of YOUR leveraged, future-earned tax what will "they" come up with ???...ha, ha, ha... stop it, no please stop, he he he ... I have to go and mail in my quarterly check and (VAT) tax remittance forms ... it's almost midnight ya'know. 


SmoothCoolSmoke's picture

Debit Ceiling deal is the next "pump the market event".  If the jack job of last week starts to fade and earnings do not provide a boost....we'll see a deal pronto.  Unless of course Gaddaffi steps up as a bonus "pump boy".

So tired of rigged markets.


SheepDog-One's picture

On the Sunday shows yesterday, everyone was mentioning 'everyones going to have to feel the pain'.

lizzy36's picture

Operation Overlord, seems particularly applicable to the count down to D-Day in Washington.

Once the beaches are stormed looking forward too the commencement of the Rainbow and Unicorn H2 rally. Here is hoping they don't got bogged down in the hedgerows this time.


cdevidal's picture

No mention of this week's bond auction? The first since QE2 ceased?? That's where my interest will be.

Update: My mistake, the bond auction doesn't happen this week. But we have at least a bill auction...

Cpl Hicks's picture

Why not sell some of that Ft. Knox gold stash? Make the transaction in Euros and get some real value out of the deal.

Why not, we've sold oil from the SPR.