Update On Obama-Boehner's Debt Ceiling Non-Deal "Deal"

Tyler Durden's picture

The speculative headlines on the debt ceiling status are now coming in fast and furious. The latest is from Reuters according to which President Barack Obama and U.S. House Speaker John Boehner are discussing a possible deal that would include $3 trillion in spending cuts over 10 years to avert an unprecedented U.S. default, a senior Democratic congressional aide said on Thursday. Their potential agreement would include a promise of tax reform in 2012, the aide said. In other words, this is not a deal at all, but merely promises of cuts at some point in the future, coupled with tax reform...in 2012.

Just as we predicted: $2.5 trillion debt ceiling raise, no real spending cuts, and no real tax hikes. But the soap opera sure was fun.

Done and Done.

Oh, and if S&P carries through on its promise and actually does downgrade the US to AA because of this farce of a "deal" well the, as UBS prepped earlier, it is really a non-event.

Now... what is the next catalyst to push the market higher?

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Cdad's picture

Downgrade of US paper to follow.

Bay of Pigs's picture

Do these guys really know what they're doing or do they actually want a default?

It sure appears that they are completely clueless as to where they are going with this. 

Long-John-Silver's picture

No "real" change is possible without default.

darkstar7646's picture

Then you pretty much are doomed to martial law/COG (Continuity Of Government).

The moment the federal money ends, the rioting will be epic.

mayhem_korner's picture

If they really knew what they were doing, they would allow the default.  Better now than strung out over a couple more years and a couple more trillion Benbux.

darkstar7646's picture

I don't think you get it.

A default at this point is a material assassination of 20-40% of the US population, and that doesn't go down without civil war.

If you truly believed this and have any degree of tangible wealth, be well-armed, well-trained, start scoping out targets, and shoot first.

mayhem_korner's picture

Default is unavoidable, darkstar.  Question is when and whether it's true default or defacto via hyperinflating the debt away.

As to preparedness, I'm likely in the 3-sigma range of the the curve, with as much metal as a channel-stuffed GM dealership these days.

Doyle Hargraves's picture

I have all of the above mentioned...no need to shoot first or scope out targets though. Sound like you are trying to incite something there buddy. No need to do much but DEFEND one's self and wait it out until the new order forms...you sound like Paulson if you don't give my banksters friends some money there will be violence in the streets and martial law in days. Scare tactics and fear mongering always works for gubmint hacks and their corp buddies, some of us know better and are well prepped DEFENSIVELY for a "catastrophe".

MassDecep's picture

You Bet, they know what they are doing....future slaverades.

These specimens, (your leaders), are much smarter than anyone here thinks.

They all answer to the same master. And he is not nice.


darkstar7646's picture

They already have that. If they were to balance the budget, they'd literally have loads of human cattle (60-120 million of them) to sell to people before they not only off each other, but much of the rest of the country's population as well.

StychoKiller's picture

Excerpt from:  A Weekly Standard article...


For once, the NRA might be understating things. “Gross incompetence” doesn’t adequately describe what has transpired here. The investigation is far from complete, but the facts so far suggest that the Justice Department and White House are implicated in the needless deaths of two U.S. law enforcement agents. And the level of political collusion suggests they were motivated not by law enforcement concerns, but by a desire to gain traction in implementing a liberal gun control agenda.

asteroids's picture

OK. Let's say a deal passes. Then what??? Just like Greece 6months or a year later the problem comes back much much bigger and uglier. People have the attention span and critical thinking skills of 3 year olds.

docj's picture

You're assuming of course that the problem is "fixable" without a huge reset and a great deal of suck.

They're clueless because, in all likelihood, they know we're totally freaking doomed and they're just trying to figure out how to pin it on "the other guy(s)".

That said, they'll probably kick the can again with modest success - until 6-months (or less) from now and we're back at this because of "unexpected" further problems in the economy or "unprecidented" problems in Europe or whatever. The event horizon for each of these crises is getting cut roughly in half with each iteration. Pretty soon they'll simply run out of time.

Founders Keeper's picture

Hi docj.  Good post.

I'm going with "(or less)."

1-3 months.


Bear's picture

Downgrade the Republicans to bb- and the Democrats to junk

Michael's picture

OT or not; Danger Will Robinson danger, danger. But I guess we already knew this.

I use cross-blogging like I'm doing now to thwart their efforts.

Israel Hires Internet Soldiers to Penetrate American Forums, Chatrooms


"File under "cat out of the bag." "Israel hires Internet soldiers," Israeli students and demobilized soldiers get paid to pretend they are just regular folks and leave pro-Israel comments online. Israeli Foreign Ministry Deputy Elan Shturman is quoted from the Israeli Occupation Magazine saying:

“Our people will not say: ‘Hello, I am from the hasbara department of the Israeli foreign ministry and I want to tell you the following.’ Nor will they necessarily identify themselves as Israelis,” he said. “They will speak as net-surfers and as citizens, and will write responses that will look personal but will be based on a prepared list of messages that the foreign ministry developed.”


Counterpunch's Jonathan Cooke in "Israel's Internet Wars" describes:

a special undercover team of paid workers whose job it will be to surf the internet 24 hours a day spreading positive news about Israel. Internet-savvy Israeli youngsters, mainly recent graduates and demobilised soldiers with language skills, are being recruited to pose as ordinary surfers while they provide the government’s line on the Middle East conflict...About $150,000 has been set aside for the first stage of development, with increased funding expected next year."




macholatte's picture

C'mon, Green Hair. Who doesn't infiltrate the web with propaganda? Now that would be news.

Sudden Debt's picture

Looks like 3 of them already junked you :)


LFMayor's picture

Do you think they'll get prom queen with all that extra love and fine opinion? 

YHC-FTSE's picture


Not surprising, but nice to have it confirmed. Pro-Israel sites like the ADL have been publishing standard format ways to twist anti-Israel comments into anti-semetic rants for years. I would suggest the budget is far bigger than $150,000 when you include the editors, journalists, and columnists of major newspapers who have been on the payroll for years. Where did Murdoch get his billions to fund purchases of his media empire in the first place? 

Global Hunter's picture

people generally blame whoever is in power if things go badly economically.  The GOP is probably betting the people will blame the Democrats as they have their president in power and the Dems are betting the people will blame Congress.  Or they're retarded, both seem plausible and so do many other crazy scenarios.  

Spastica Rex's picture

Claiming the Republicans are superior in economics is like claiming the Democrats are superior in social justice.

Dr. Richard Head's picture

How does that saying go?  A turd by any other name(R or D) is just as shitty.  No offense to Mr. Turd Ferguson either. 

Rodent Freikorps's picture

You can't polish a turd.

You can't pick up a turd by the clean end.

DaveyJones's picture

Its like 7th grade where half of us took off our shirts to make another team. But they're both superior in corruption

Cognitive Dissonance's picture

Downgrade of US paper to follow.

It's not true until the BlowHole says it's true.

Cdad's picture

Oops...now this story has been retracted.

What were you saying about the BlowHole there, brother Cog?  

Cognitive Dissonance's picture

You're a slippery one, Mr. Grinch. 

darkstar7646's picture

The downgrade is going to happen in either event.

You get a "deal", and you keep the checks going for a little bit longer, but, at the end of the day, most intelligent life forms are beginning to realize that you're never paying this off. You've already got at least one minor rating agency downgrading.

You don't get a "deal", and you default, but only after you gain additional costs which make the costs of maintaining the debt, maintaining the military, and keeping the peace at home all-but-certainly greater than tax revenues. The default isn't as immediate as some think, but it comes quickly.

Parth's picture

Could someone suggest the next steps for all. Is that mean QE3 and inflation coming in fast and furious? Time to stock up on supplies ?

Sudden Debt's picture

It still depends on the size of QE3 and it's not yet clear at what level the next ceiling will be put if any.

Normally the next QE3 should be arround 4 trillion. Then we're talking about a 20% inflation in 1 to max. 2 years. That's bad. That's real bad.

But in order to have such a QE, the debt ceiling needs to go up 6 trillion! Because of the future loans they took like from the pensions and also budgets for other departements and this and next years deficit.

So about 45% debt increase...

They'll have a hard time selling that to the public.

Even without a QE3, the debt will go up 2 trillion by the end of next year.




Founders Keeper's picture

Hi Parth.

I don't want to stress you out, but you're coming a bit late to the party.  Nevertheless, you're here now.

Make haste. Not much time left to get things while they're still cheap, legal, and readily available. 

IMO, keep an emergency supply of FRNs and get rid of the rest of 'em as fast as you can on PMs, food, water, self-defense, and preps. 

Make a priority list. See survivalblog.com.

Hope for the best and prepare for the worst.


SheepDog-One's picture

$3 trillion in 'cuts' while their only path forward is nothing but printing more debt. In other words, bend over pensioners, consumers, anyone not in the top .01%.

And S&P and Moodys up to the microphone next.

Cdad's picture

Yep...if this is the best that they can do, expect the downgrade shortly.  Of course, this is why the criminal syndicate has been messaging the expectations of what will happen when that downgrade comes.

Now, not only is it time for McConnell to step down, so too is it time for Speaker Boehner to hang it up.  Both have proven themselves an impediment to progress on the most pressing issue of this nation.

Bring on the downgrade...and explain it to everyone in DC [since everyone in the heartland already understands this].

**and look...the US dollar has already weighed in**

hettygreen's picture

And if this is the best they can do and the rating agencies vacillate/prevaricate and fail to follow through with their veiled threats to downgrade no one in their right mind should have dollar one in any of these corrupt and opaque markets. Not that they should anyway after the past three years' egregious display of rigging and HFT gamesmanship.

StychoKiller's picture

You're smart enough to type such comments, the Ignorati -- not so much! :>(

Doyle Hargraves's picture

Spineless bitchez!!! Cut the rating a few notches for GP and stupidity.

mynhair's picture

Boner:  there is no deal, but we will cave to protect our rating

Careless Whisper's picture

But they have a new cologne named after him.

who knew you could bottle the scent of boner



darkstar7646's picture

I think I said it here that I felt there would be no deal, only a capitulation by one side or the other at the cliff.

The problem is that there are many people in this country who would openly go to a welfare office and start picking off recipients with a revolver if they could.

StychoKiller's picture

Picking off the public employees wouldn't do any good either!

MobBarley's picture

This is like watching some white bread newbie trying to buy drugs from shady totally

untrustworthy Columbians with guns.



Mercury's picture

Attaboy Johnny.

You negotiated the crap out of those White House boys...is it too early to re-elect you?

The cental planners solved two of the world's biggest problems today by hitting the >print more< and >borrow more< buttons.

That was easy!.....what else do ya want me to fix?

dogismyth's picture

(2.5 trillion  /  14.4 trillion)  *  100   =    36%




Obama needs to be impeached (at a minimum) if he signs this deal.  This is no longer "rubbing up against" the taxpayer....this is outright sodomy!!!

As I said before, please notify your representatives and the US Treasury that YOU will NOT accept this debt nor the responsibility for paying it back.  THEN STOP PAYING YOUR TAXES!!

InconvenientCounterParty's picture

I officially welcome you to the US.

Just a little recent history to put your sodomy into perspective: The debt ceiling was raised 4 times between 2000 and 2008. This same group of GOP man-whores were raising the limit whenever their corporate masters yanked the leash.

For those that were around and paying attention, debt limit sodomy isn't a revelation meriting a caps lock. It's a hot dog being tossed down a hallway.


dogismyth's picture

well I'll bet my last nickel I've spent more time in this hell hole, and paid more taxes than most here.  But thanks for the reminder.

You have two choices.  Either feed the monster, or not.  NEXT!

Kali's picture

Have you really stopped paying your taxes?  Just curious.  Anyone I know that has done so, has had the IRS on them within 2 yrs.  Anyone I know that has tried to stop paying their mortgages, the bank was sending them to foreclosure within 2 weeks of notice of default. (These folks were NOT underwater, they still had equity in the property).  I hear a lot of people say to stop paying taxes and mortgages etc, but how are they getting away with it unless they are already less than destitute?  Anyone I know that had assets of any kind, the hammer came down immediately.  The only ones I know who got away with not paying debt, taxes, are the ones who don't have a pot to piss in anyway or the very wealthy.

docj's picture

The debt ceiling was raised 4 times between 2000 and 2008. This same group of GOP man-whores were raising the limit whenever their corporate masters yanked the leash.

True. But should I also cue-up Senator Teleprompter (D-IL) from 2006 at this point?

Point being, that politicians are craven liars and hyporcrites is nothing new.

sdmjake's picture

I always have trouble with the captcha math so take this with a grain o salt, but it looks like 17.36% to me...

Doesn't that feel better???