With just days left until the November 3rd D-Day when the Treasury runs out of emergency cash and is forced to prioritize debt repayments over government spending, moments ago Politico reported that "congressional leaders and the White House are working toward a two-year agreement. A debt ceiling measure is on a parallel track."
Moody's Says Failure To Raise Debt Limit Does Not Mean Default As Jack Lew Pleads To "Honor Our Obligations"Submitted by Tyler Durden on 10/26/2015 11:31 -0400
In an op-ed released today in the USA Today, the US Treasury Secretary takes his appeal to raise the U.S. debt target once again, this time to the $19.6 trillion number disclosed here previously, by pointing fingers at "some in Congress" who "are endangering this progress by once again manufacturing a crisis for our country. By waiting to the last minute to act on the debt limit, Congress could cause a terrible accident. This is not an abstraction; failure to raise the debt limit would mean devastating impacts for taxpayers, consumers and businesses." Only this is not really true...
There is a tiresome debate as to whether or not volatility is an asset class. Let us end that debate... Volatility is the ONLY asset class. We are all volatility traders and the only question is whether we realize it or not. If you disagree do me a favor and imagine you are an alien that just landed on earth and you know nothing about investing.
When corrupt politicians do as they are told by their keepers on Wall Street and in the boardrooms of S&P 500 mega-corps....
This is also why the debt ceiling needs to be raised every year, and the US has doubled the national debt over the last 8 years.
The only certain outcome from the melodramatic debt ceiling fight over the next several days, is the following: the US is about to have a brand spanking new debt ceiling, one that should last it until March of 2017: $19,600,000,000,000.
One week ago he said he has no interest in the Speaker position, but so much can change in one week. Moments ago Paul Ryan sent out a letter to the GOP announcing he would run for speaker of the house. And since he had previously said said he would only enter the speaker’s race if he could lock up support from three wings of the fractious party, in the space of just 3 days this week, he appears to have done just that.
Moments ago the US Treasury promptly removed any latent optimism that this latest debt ceiling crisis will somehow be magically fixed on its own after it announced that it would postpone the two-year note auction previously scheduled for Tuesday, as the impasse over the debt limit constrains the nation’s borrowing. “Due to debt ceiling constraints, there is a risk that Treasury would not be able to settle the two-year note”
After yesterday's dramatic late day market rout catalyzed by the tumble in the biotech sector in general, and Valeant in particular, and foreseen in its entirety by Gartman who went bullish just hours before, this morning US equity futures and European stocks have recouped some losses on the recursive, and traditional, hope that Mario Draghi will say something to push risk higher when he speaks in 2 hours at the ECB's press conference in Malta. And yet, just like Yellen a month ago, Draghi faces the paradox of reflexivity that after years of being ignored, is the "new thing" in town: how does he intervene and demonstrate he is readier than ever to set up stimulus, without panicking investors over euro area’s health.
The bloodbathery in Treasury Bills continues this morning with11/12/15 Bills pushing up to 14bps (from 0bps on Friday). Despite the "hopes" of Treasury Secretary Jack Lew that the US avoids a crisis, he warns "there's no margin for error" and with GOP Leadership talks still ongoing (as Paul Ryan lays down his demands), it appears markets are not taking any chances for now.
Insane “Trillion Dollar Platinum Bullion Coin” Option Ruled Out By U.S. Treasury To Avert New Debt CrisisSubmitted by GoldCore on 10/21/2015 09:06 -0400
“If Congress fails to raise the nation’s debt ceiling by [November 3], the US could risk a first-ever default on its obligations”.
It's Back To The Future As Stocks, Futures Jump On The Latest Abysmal Economic News; China Tremors ReturnSubmitted by Tyler Durden on 10/21/2015 06:57 -0400
26 years ago, today was envisioned as day when cars flew, holographic movies were box office hits, hoverboards roamed, and people were fired by fax. None of the happened. Instead the only "back to the future" moment this morning is a deja vu one we have seen every day for the past 7 years: bad economic news leading to surging stocks.
With less than two weeks until a possible debt ceiling "accident" and with investors dumping T-Bills at near record pace, Ron Paul rages that any delay in, or opposition to, raising the debt ceiling will inevitably be met with hand-wringing over Congress’ alleged irresponsibility. But the real irresponsible act would be for Congress to raise the debt ceiling.
Less than two weeks ago, when previewing the upcoming debt ceiling battle which is shaping up to be far more contentiously than most expected, we said to "keep an eye on T-Bill yields for the turning point when the market decides this situation is becoming serious." And while things turned "serious" yesterday, moments ago the bond market officially entered into "panic" territory.
With less than 2 weeks left until the "debt ceiling accident" that Jack lew has warned about, T-Bills (maturing beyond Nov 3rd) are being dumped wholesale. Oct 29th Bills are trading -1bps but Nov 12th Bills are up 6bps at 12bps, the 1-month WI is at 16bps. Of course, equity markets will be the last to notice and algos appear to be seeing this as a panic-buying-opportunity.