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Supersonic Fiscal Free Fall
From Slope of Hope's Sunday favorite BDI, here comes Evil Plan 93.0:
Well, my fellow Slope-a-Dopes, I've been hearing a lot about the dreaded "Fiscal Cliff" for quite some time now. So I decided to take a flying frog freelance free fall leap into the woefully written word abyss, to see if I could sort out for myself, when and how we would experience the coming sensational supersonic splat.
First off, let's review what the term "Fiscal Cliff" actually means. In order to understand something it's usually best to know exactly what it is.
This definition from About.com:
“Fiscal cliff” is the popular shorthand term used to describe the conundrum that the U.S. government will face at the end of 2012, when the terms of the Budget Control Act of 2011 are scheduled to go into effect.
Among the laws set to change at midnight on December 31, 2012, are the end of last year’s temporary payroll tax cuts (resulting in a 2% tax increase for workers), the end of certain tax breaks for businesses, shifts in the alternative minimum tax that would take a larger bite, the end of the tax cuts from 2001-2003, and the beginning of taxes related to President Obama’s health care law. At the same time, the spending cuts agreed upon as part of the debt ceiling deal of 2011 will begin to go into effect. According to Barron's, over 1,000 government programs - including the defense budget and Medicare are in line for "deep, automatic cuts."
Now that we are facing this self inflicted sequestration law that the U.S. Congress has imposed on itself (Budget Control Act of 2011), the Government has three basic options moving forward:
1) They could simply let the stated law scheduled for the beginning of 2013 go into effect. This draconian, albeit way overdue fiscal budget policy measure, features a number of tax increases and spending cuts that are expected to weigh heavily on economic growth, which would most likely drive the economy back into a recession or even worse. The positive side of taking this bold step, would be that the deficit, as a percentage of GDP, would be cut in half.
2) They could repeal some or all of the scheduled tax increases and spending cuts, and once again raise the debt ceiling. This would of course add to the current $16 trillion mega debt deficit, and demonstrate to the world that the Nation is unwilling or unable to get its unmanageable fiscal budget under control, increasing the odds that the United States could face a crisis similar to that which is occurring in Europe.
3) They could draw up some middle of the road map, with a combination of moderate tax increases and fewer spending cuts, in a measured attempt to address the run away budget deficit over a longer period of time, which would have a more modest impact on current growth. The critical issue here is, would this approach be viewed as credible, or simply seen as just another bogus boot of the same proverbial can.
Here is my take on how it will all go down. Obama wins a very close presidential election by a mere 25-35 electoral votes. The Republicans remain in control of the House 240 to 195, and the Senate ends up with a very slim Democratic majority. Basically status quo as far as party control goes, except that the Republicans feel most energized about their unexpected national resurgence, perhaps even winning the popular vote outright. Leaving BamBam with a much less intimidating mandate club in his puny little hands, then his first swing around. As it turns out, old Flintstone Mitt sure gave him one heck of a run for the money, literally I might add.
After Bambi's narrow victory, the market gives him a minor reward, and pops back up towards this years highs. However, once the big eared Asses have finished their obligatory week long celebratory partying, and the Elephants are done crying into their trunks. Suddenly seemingly out of nowhere, equities will reverse course, as the investor class starts pressing the politicians to get their act together on the long term fiscal sustainability of the United States of America.
The market wants a very viable veritable verifiable budget deal on the table now, and wants it fast. After all, we can't become gonzo gringo goners, like a bunch of goofy Greeks with greedy greased palms. The S&P will start heading below 1400 in a hurry. The pressure will brutally build big time, for a solid state long term deficit real deal resolution, before the 2011 sexy Cinderella sequester drop deadline of midnight December 31st perilously passes.
The rabid resurgent Republicans feeling their oats, will decide to use the market like a hammer on Obumer's pin head.....bam.....bam....bam. Pressing the bet for fewer tax hikes and more spending halts. The definately determined demolition crew conservatives will man handle the late night jackhammers, taking the grand bargain vote down to the eleventh hour. Sorry for all the ear piercing noise emanating from torn up Pennsylvania Avenue Mr. President, no soulfully singing merry Christmas carols with Sasha, Malia & Michele this sour Santa season.
The market will make multiple lower lows heading into bawling bare baby Jesus week at sub 1330, and approach the New Year lurching back and forth 30-40 SPX points at a clip, as the law makers continue their decidedly dangerous death deifying dueling debutant dance, nearly wiping out the entire year's stock gains. Finally, just as Cinderella is about to make her big bad ballroom exit, a marginally magnificent deal is magically struck as the clock strikes twelve, whereby the market maker mavens then surge the intensely ignited indices right back over 1370. Happy New Year you seriously stressed Slopers!
All is well again in America's forever fiat fairyland...........or is it.............stay tuned for a superstitious supersonic shit storm in 2013...........Evil Plan 93.0 man the terrifying turbo torpedoes.
BDI SOH's Idiot Savant
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Not if a president, using the 'legitimate power under NDAA', makes him disappear.
Maybe more like a door stop.
All the rats will be out, the only thing left to clean up is culpability for the moral hazard that redefined systemic risk the last decade.
How I institutionalized fraud for Fascism by Ben Shalom
The new American Dream? When are the guillotines put to use? Absolutely nothing changes until the moral hazard is addressed and there are real fucking consequences for bad behavior at all levels of society.
Long black markets and fuck the paper-pushing theives.
And Pentagoons and their "evil Hurricane creation machine." Excellent work Langley! Getchya a case a beer for this one! Now on to the Sahara and "Desert Storm 2.0"...
They called them the money changers before, but paper pushing thieves has a nice ring. By either description they are evil.
Screw the guillotines, use dull axes. It might take a couple of strikes to get the head off, but if it was good enough for English trators, its good enough for ours.
here's the motherfuckers from Chase bank saying hey piece of shit sheeple given this hurricane we won't fuck you so bad, but after it's over bend over valued sheeple customer:
We hope you, your families and your customers are safe. Natural disasters are very stressful and we want to help where we can.This week, we are expanding our efforts to help you and all of our customers in New York, New Jersey and Connecticut as you manage through the storm.
º Overdraft Protection Transfer, Extended Overdraft, Returned Item and Insufficient Funds Fees for deposit accounts.
º Late fees on credit cards, business and consumer loans, including mortgages, home-equity, auto and student loans.
Please call us at 1-888-356-0023 or your personal banker if you are unable to access your funds or need help with other services. For example, we will generally waive the early withdrawal fees on CDs to help customers with their cash flow.
If you have more specific problems, please call your Financial Advisor, Business Banker, Loan Officer or simply come into your nearest open Chase branch. Our branch and telephone bankers are empowered to go the extra mile for customers with storm-related problems or concerns. We will be calling many of our customers in the hardest hit areas to see if there are other ways we can help.
We hope these efforts can play a small part in easing some of your worries following the storm. We are committed to doing what we can for our customers who have been impacted. If you need help, please call us at 1-888-356-0023, tweet @ChaseSupport or visit any of our open branches.
Sincerely,
Ryan McInerney
Chief Executive Officer
Chase Consumer Banking
Pretty dang nice. My local multinat banker only charges me $11/mo. to have a checking account w which I use fake money to buy real stuff online. Pretty dang nice.
I am leaning toward using rusty large toothed saws. Kinda like the loggers used.
This is the Karma that the Bankers have comin to em http://www.youtube.com/watch?v=JbcuK8WBKE8&feature=related
Bronze the heads after the decapitation and place them on pikes along the sidewalks to the capital building so future elected officials will get the message.
I say put them in an iron maiden with their heads out BEFORE using rusty saws