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US Avoids Technical Default By Three Days
On December 24, the Senate passed a vote by a razor thin margin (with not a vote to spare) to raise the Federal debt ceiling from $12,104 billion to $12,394 billion. The actual debt ceiling increase took effect on December 28. And as the chart below shows, the Treasury's cash flow projections were spot on: 3 days later, and the debt subject to limit surged to $12,254, a jump of over $200 billion in 2 days, and a whopping $150 billion over the old debt ceiling. Three days is all the buffer the administration's reckless spending spree has afforded this country to avoid bankruptcy. Had one more Democratic vote dissented from the stopgap measure, the US would now be in technical default. There is just $140 billion left before the revised debt ceiling is breached. We hope for the country's sake that Bill refunding in January is massive, because as we already pointed out, on January 7th we expect another ~$130 of new Treasuries to be announced for auction by January 15th. And then there are two more weeks in January... Which is why the Treasury better be using that TARP money to pay down all it can, because if the general population understands how close this nation was to the fiscal brink, many more answers may be demanded out of the ruling party as to how it could allow things to get so out of hand.
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Maybe someday.
As the old CCR song goes, "Someday never comes...."
Seriously, though, I am hopeful we'll get this thing back on track.
Marla had pointed out several weeks before the vote that we were in fact over the $12T ceiling.
That was on total debt outstanding (blue line), not debt subject to limit (green line).
Ahhh, ty... I tend to think of debt as debt, nothing more, nothing less :)
As Maxwell Smart would always say, while holding two fingers close together.... "Missed it by that much."
Golf clap, CD!
That one brought back memories to this old fart!
I still have a "thing" for 99. She's burned into my memory banks, or what's left of them. It's hard to believe Barbara Feldon is nearly 78.
Move along everyone else. It's just two old farts strolling down memory lane.
http://www.imdb.com/name/nm0271156/
I vote for "I dream of Genie" Barbara Eden! Dibs.
A real beauty in her time and still a very fine looking woman at 76.
http://www.imdb.com/media/rm265914368/nm0001174
A truly beautiful woman can be beautiful at any age :) Hell, look at Morgan Fairchild or Dolly Parton
ew.
lolol.
ggmilfs
Double post.
Donna Reed!
Just read and responded to your QE 2.0 post.
Tweaker time it is. That is now part of my ZH vocabulary and I'll try to use it daily. Thanks Miles for furthering my education. :>))
It's A Wonderful Wife.
Barbara Eden ruled - but the question of Mary Ann or Ginger must be posed to the ZH old fart community.
dude. Mary Ann and Ginger.
"Lobster or cracked crab?" "Can't we have both?"
Ceiling schmealing. What's a few billion between uber debtors.
They'll make it by $1 next month and no one will care.
1. the herd doesn't care much about this.
2. passage of the raised debt ceiling was a formality. If it hadn't passed, all that would mean is the accountants would have to work a little overtime to cook the books some more.
Agreed on both points. The proof of the book cooking is the moon shot it did after the ceiling was raised. Steam has a tendency to do that when the pressure is released. You just know money was moved around and bills were left unpaid.
I'll even wager a small bet that some patriotic defense contractors called to let the government know they wouldn't mind being paid a little late if it meant they would get a "late payment" from the government as compensation for suffering a few days.
Agree. Frankly, the debt limit is just a political game so that the party out of power can complain about the party in power. It has no practical effect. Robert Rubin proved that (when was that, 1995?). If memory serves, we were over the debt limit for about 3 weeks, but Treasury shenanigans papered over it.
Don't get me wrong. The US is close to the brink, but not because of the debt limit. It's like when Bugs Bunny draws a line "I da'st you to step over that line". --next line -- "Well, you'll never step over this one." --new line--, etc. until Elmer Fudd steps over the last line and falls off a cliff. Actually, rather prescient now that I think about it.
LOL,
I just made a Maxwell Smart quip above. It's truly remarkable how cartoons and prime time TV from any era applies so well to modern day life.
Insanity any way you slice it.
Just curious - when is this debt doomsday device going to actually blow up? The collective world continues to view our electronic created dollar units as having some value. Last time I was in Australia the nice people down there gave me 1.1 of their units for every one of my "phony" US money units. The people at Taco Bell also give me a 1/2 pound bean burrito when I slip them one of these paper notes that is not backed by gold, silver or any other element on the periodic table. I have this sneaky feeling these digitaly produced monetary units will continue to be sought after and hoarded by those hard working peasants in China, sweatshop owners in India etc.. Since the collapse of global credit is effectively buried several trillion dollars into a black hole whats a few trillion of these alleged phony electronic dolar units between friends.. Much ado about nothing in my opinion.. Love ya all
maybe we will just get a higher denomination to play with soon.. the $1,000 bill.. who would be on it?? Ben? Obama? ahh yes.. Greenspan of course. It'll even sound cool.. give me some Greenspans...
How 'bout just revive the $10,000 bill (traitor to US Salmon P. Chase on that one) and/or the $100,000 bill (traitor Woodrow Wilson on that one)?
This fiat money world is like Orwell's animal farm, everybody better carry on pretending, don't let any smart pigs get out of the farm and corrupt the masses. Meanwhile the technocrats of the world will carry on using delete button to paper over any shortfalls and to amend the government accounts, all would be well, I think.
You'll only get about 0.94 of our aussie units now.
They trample over the constitution without blinking an eye. Debt limit? What's that?
What's that?
Its proof that the Constitution is toilette paper - a worthless chasing after the wind.
Congress sold off democracy in the 1970's to the bank (yep THE bank). Thank a boomer and kiss a banker. They are both fucking the country every which way possible.
Turbo timmy is just the lube!
This nation was created a constitutional republic, not a stinking mob-rule democracy.
Democracy is when 60% of the population is on welfare derived from the other 39%. Oh, and the remaining 1% is special. "We are all equal, Comrades, but some are necessarily more equal than others!"
Democracy is what happened in 2008, and we're looking at a great big helping of democratic seconds when the collectivist traitors rev up the voter registration / voter fraud machine before the mid-terms.
http://www.youtube.com/watch?v=5H8ARMlP8XM#movie_player
4 min mark. awesome!
Yes: reading stuff about how "[h]ad one more Democratic vote dissented from the stopgap measure, the US would now be in technical default" on a supposedly hard-bitten and cynical anti-establishment website is pretty embarrassing. 'kabuki': look it up, please.
So true.
They would have covered the bill just by printing out some new money, Mugabe style I think.
They will never run out of money to spend
They're going to have to raise it every couple of weeks at this rate. If they couldn't raise it by a significant level in the dead of night over the holidays, what makes them think they'll get the votes now we're in the election year?
To infinity and beyond.........Quick, get Dick to explain to us once again how deficits don't matter.
Does this mean those with mortgages won't get their principle reduced? Darn.
I hardly doubt we will be living within our means anytime soon.......what will we cut?
Once Americans are givin the choice between cutting or borrowing, they will take the borrowing and demand the ceiling be raised.
What will we cut when the economy and most Americans are dependent on gov spending.
schools of course.. they can just dumbify the exams to make it look like everyone passes .. we are going to outsource the jobs anyway
"What will we cut when the economy and most Americans are dependent on gov spending."
As I recall, households are up to about 20% of income from various gov't entities on average.
If the US is in 'technical default' but no one has the balls to call it out, is it really in default? I think what this whole crisis has taught me was that until someone uber powerful says you are fucked, ie Treasury to Bear and Lehman, then you arent fucked.
And who would have the balls to call out America? No one. Everyone wants the carousel to keep on spinning until they print[PIIGS]/export[Nazis/Japanese/PRC] themselves out of this shithole.
Agreed!
What? Are the Chinese going to put the whole nation in debtor's prison?
worse... they can change all our keyboards and road signs to Mandarin!!!
might not be so far fetched...how much US real estate do they own by now? And they've got a pro sports team too. We might just end up paying them rent to live in our houses.
I remember hearing similar comments about Japan 20 years ago, though the circumstances are now completely different. Or are they?
It looks like the debt limit won't stand beyond February 15, based upon recent deficit spending trends. That is assuming, of course, that blank checks will not be written by Fannie & Freddie for a few more months to cover their losses and/or asset (mortgage) purchases.
don't worry, they'll raise the ceiling, like I said before:
What's the point of having the fcking ceiling if they keep raising it?? why have it at all, bunch of fcking morons.
Only Ron Paul understands what's going on.
Only Ron Paul understands? What's the point?
Everything is unfolding according to the overall plan. This is a conscious and determined effort.
The way to crush the bourgeoisie is to grind them between the millstones of taxation and inflation.
-- Vladimir Lenin
This is where it gets hairy.
The Fed will start to use Fannie and Freddie, with their now-explicit backstop from the US government (erasing even the slightest doubt...) as a financial sieve.
"Money" will be pumped throughout the economy with the new Federated Feedback Loop: the Fed unloads its excess MBS and associated baggage into the GSEs as bottomless pit; the banks are now saturated with real government cash (courtesy of some dude named "Joe Sixpack"...) that they can now lend out to talented and industrious second-generation Americans who are developing the next big thing. Sounds bubblicious.
Like all the relics in the US government archive- just like in Indiana Jones- the Fed will stow away the debt in large crates never to be seen again.
The GSEs are now government entities that hold trillions of dollars in our collective "wealth" and it seems that while we were watching the best season of American Idol ever, the government wound up owning a large chunk of half the single-family homes in the nation.
Slick.
The author of the piece talks of the nick-of-time, the so-close call, within three days. Well, I submit that economics may be more of a science than we like to admit. I mean, how many times- again a la Indiana Jones- how many times can we pull ourselves from the ultimate brink of disaster just before we teeter over the edge.
All of this stuff is starting to seem like a really bad off-Broadway production of a Rogers and Hammerstein musical in some backwater town in southern West Virginia. Overly loud and deliberately confusing, we say to ourselves, "Man, there's no way they can be this bad."
Now the underwear bomber and the revelation that the Obama Admisnistration is looking for "rogue elements" inside the intelligence community who may have helped our would-be martyr slip past security in five international locations with all those red flags flying, all I can do is just shake my head.
"Rogue elements." Please.
Really, really bad script all around.
if they dont believe the first lie, keep telling bigger ones until they do
Just like Lucy and Ethel used to do.
"ooooohhhhhhh Looooooooooooo-ceeeeeeeeeeeeeee"
-Babaloo
I thought that during the Bush admin the US was in technical default at some point. Nothing happened. Largely ignored.
From 2006:
In a shocking development, the Treasury Department website is openly stating that as of January 24, 2006 our national debt stood at $8,185.3 billion and on January 26th at $8,190.5 billion.
Yet the US national debt ‘ceiling’, the maximum amount of debt the US government may hold at any one time, stands at $8,184 billion – a full $5.5 billion less. Although called upon by John Snow, Congress has not yet passed an expansion of the debt ceiling and so the US government is now operating in technical default.
No that is not correct. Although the Outstanding Debt was $8,190 Billion on the 26th Jan 2006, the debt subject to limit was $8,126 Billion. They get to do add backs like "unamortized discount" etc that total $64 B.
if you oue someone $500 its your problm
If you oue someone $12,000,000,000 ITS THERE PROBLEM
their
oue?
Amen!
Owe, not 'oue'.
And 'problem', not 'problm'. Please.
If their lips are moving, they are lying. This is a narrative, a story, that's it. There is no system, only chaos. The narratives (debt ceilings, treasuries, repos, stock purchases) are all simulacra, a truth to hide from us that there is no truth. Look at the BLS...look at the balance sheets...let's vote on this.
The big bang has already taken place. Entropy is a bitch. I'm pulling Gs and getting vertigo all at the same time.
The only reason there is order, is people believe in order. We act on things based on the meanings that they have for us.
The debt ceiling is a glaring crack in the cosmic egg and a device used to maintain order. If there ever was a system, it is broken beyond patches, props, and repairs. We keep trying to read tealeaves in the tea cup, when we all know the truth. Between theft, pride, and incompetence, we will NEVER get a look at a set of books that would give us the answers we crave.
The so called system is blown to hell and that is what they are hiding.
You go girl.
You sound like Morpheus. I was reading your post and kept hearing Laurence Fishburne in my head.
MsCreant, welcome to the reality that our nation is subsisting on tweaker time. Yes indeed, political party or any other grouping matters not a wit when all that remains is the flail. A never ending moment in time wherein everyone gets to appreciate what life with a never satisfied three thrust bust entails. I see that you have your wagging pinky finger salute all warmed up further enhancing my faith in you.
isnt there always a chance for a military coup that foils even best laid government ransacking? not saying if that would be good or bad, just sayin
It is like agent smith not accepting his destruction...so now we have to watch the two bad Matrix movies to see what happens.
bravo
Sorry but reminded me of the old saying, " Only sailors get blown offshore "
Simple - repeal the debt ceiling.
This is little company...imagine what occurs at big ones?
Koss Corp. Fires Auditor as Alleged Fraud Loss Widens to $31 Million
It is important to understand what a financial statement audit is and is not. The general public, and even sophisticated investors, are often mistaken about what an independent audit is supposed to do. The auditors are simply there to check the math and make sure that the accounting rules have been properly applied. They are not there to uncover fraud, and the truth is that financial statement audits rarely do uncover fraud.
An audit involves testing transactions to see if the company is following the accounting rules. A relatively small sample of transactions is tested by the auditors, and if the sample checks out, the rest of the transactions are assumed to be proper as well.
http://tinyurl.com/y85rtpr
What you describe sounds much more like the "review" standard. I thought the rules as to an audit essentially require the auditor to exercise some level of professional judgment as to what needs to be investigated, as a form of due diligence, to validate the numbers. I'd have to dig into the rules to find this but I'm pretty sure E&Y and other Big 4s don't get off that easy. Heck Arthur Andersen would still be around if that were the applicable standard.
The so-called near default is totally dependent on a voluntary political decision to require $4$ deficit spending to borrowing ration. Under a fait system, the sovereign currency issuer is not financially constrained and can always issue currency without the need to tax or borrow to do so.
Credit line for the states' unemployment borrowing for January is $7.5 billion....
http://yophat.blogspot.com/
"many more answers may be demanded out of the ruling party..."
Citizen: "What's goin on?"
Government: "Nothing!"
*DOOR SLAM*
What more do you dumb shit Americans need to see. Your government is no longer for the people, and certainly only by the [selected] people.
Yet, you put up with it like retards as long as there is a dollar bill tied to a string hung out in front posing as a free lunch.
You "capitalists" should be utterly ashamed.
Speaking of fiat digital currency, China's economy is a fraction of the U.S. economy....so where does China get its surplus supply of Yuan to swap for T-bills?
What is backing up the Yuan being swapped for T-Bills?
Money printing: it's good to be Chairman!
I'm in the phonebook! I've found my special purpose! Just like Navin Johnson in the Jerk I'm now somebody as well - no longer just "anonymous". Get ready to be able to identify where some of the stupiderrr remarks on ZH come from.
Ok, so, national debt has gone from 100% of GDP post WWII to 30%'ish by '70's and now ramping back up to 100% this year or next year. So what? Rising debt to GDP is supposed to incent higher treasury yields due to greater risk. However, over the past thirty years as national debt has ramped, rates have fallen. WTF? Maybe, to cite our previous VP, deficits do not matter because current generations will hand future generations the means to pay off the debt or some such sheeeit. Still, though I'm not a fan of the man, why aren't rates backing up with any concern over mounting deficits and the apparent decreasing risk premium as debt escalates. Anyone? Ready (and eagerly awaiting) to be biatch slapped for lower the bar here on ZH. Cheers.
Unfortunately our leader didn't learn the shit/shinola lesson.
No doubt Turbo will seek infinity as the next debt ceiling. Nothing to see here ...
Actually I mean't infinity+1.
Think of it this way, the higher that debt rises the more of your future work will be just to pay interest to the people that hold it.
So your future and that of your children and grandchildren seems to be to work in indentured servitude having most of the results of your labors seized by the government and given to a small group of elite superrich and the Chinese and Japanese governments.
I'd like to claim this as an original insight, but Thomas Jefferson said it first and better, "I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered."
The House of Morgan has been gasping from one crisis to the next since Aug 15th 1971. There has been some sort of crisis almost every year since then and things are accelerating. it is like the quickening on Highlander. Helicopter Ben will grow hair, and then the hair will stand up. Then all the windows blow out in the Fed and Lorenzo Lamas is confirmed Fed Chairman. Booya :p
Okay you got me, this sounds awesome! But will there be a Gathering of Central Bankers and Currencies in some place like NYC where they will do battle? "There can be only one!"
Get ready for the next shoe in the form of "positive" employment numbers, courtesy of some sort of seasonal adjustment by the BLS.
People also are forgetting that the Census Dept is hiring 1.5 million Americans. Those numbers will get reported this week...
Makes a nice headline, but isn't a miss as good as mile here?
Meaning: clearly they could have voted earlier if need be, or perhaps the surge could have been delayed by a day or two.
A close miss would be something unplanned causing a rushed panic.
Plus (not to defend it), calling Keynesian counter-cyclical spending "reckless" is a bit overtly political for a financial blog, no?
It worries me where all this goes, as the Republicans start blaming the Democrats for fiscal irresponsibility (not to accuse the author of being either), we see the full circle. Talk about the pot calling the kettle black. As if the republicans wouldn't counter-spend given half a chance. Oh wait, they did.
James Beadle
www.market-melange.com
When do we get to the point where counting the U.S. government debt becomes pointless? $12 trillion, $12 quintillion, $12 sextillion, unless people stop using the worthless toilet paper (US dollar) it doesn't matter much.
I think they'll support the dollar until they choose to crash it - to make way for a regional or world currency. Make lifeboats ready!
LOL Already happened 2000-2007....now its time for the bounce back!
Its a game of transfer the assets....flood the market with debt (printed money with zero cost) then watch inflation take off....drop in the value of the dollar as more dollars hit the streets.....then watch deflation take hold and the value of the dollar increase as interest and debt defaults sweep the streets.....then foreclose and take ownership of all the assets with printed money again.
Example - California is trying to sell off all their buildings for short-term cash but will sign 20 year lease agreements. From owner to renter! What was that line from Thomas Jefferson about the people waking up penniless in the land their forefathers conquered....
....how the ruling party allowed things to get so out of hand???? Heh, heh.
Got any charts that go back to 2000?
buy gold .... lock yer doors
The buy gold recommendation was awesome in 2000....the lock your doors recommendation is awesome for 2011!
I am new here so I don't know if anyone has ever suggested that: we try the FED for their crimes, take their stuff "asset forfiture due to fraud" and dismiss their claims of our indebtedness. After all, they have stolen, are guilty and have made bogus claims that we owe them. It works for me. Screw the FED/NWO punk-ass demons!
Shell games: the jump in the debt was about equal to last fall's drop in the supplementary financing program; the sterilized funding has probably just been reinstated, to allow the Fed to devote its QE to purposes other than helping the Treasury avoid the debt ceiling.
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I am new here so I don't know if anyone has ever suggested that: we try the FED for their crimes, take their stuff "asset forfiture due to fraud" and dismiss their claims of our indebtedness. After all, they have stolen, are guilty and have made bogus claims that we owe them. It works for me. Screw the FED/NWO punk-ass demons!
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Shell games: the jump in the debt was about equal to last fall's drop in the supplementary financing program; the sterilized funding has probably just been reinstated, to allow the Fed to devote its QE to purposes other than helping the Treasury avoid the debt ceiling.columbus mortgage loans - charlotte mortgage loans - business services - florida real estate - seattle homes for sale - new york mortgage loans - baltimore investment property
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January 7th we expect another ~$130 of new Treasuries to be announced for auction by January 15th. And then there are two more weeks in January... Which is why the Treasury better be using that TARP money to pay down all it can, because if the general population understands how close this nation was to the fiscal brink, many more answers may be demanded out of the ruling party as to how it could allow things to get so out of hand. 642-437 \ 640-721 \ FCNSP \ 000-115 \ 70-643 \ 640-461 \ 70-448 \ 70-450 \ 70-682 \ 650-195 \ 1Y0-A15 \ 70-686
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