After witnessing the fighting of undeclared never ending wars, passage of freedom destroying legislation like the Patriot Act & NDAA, approval of pork barrel spending to the tune of hundreds of billions, rule by Executive Order, using ZIRP to extract hundreds of billions from senior citizen savers and give it to criminal Wall Street banks, forcing the American people at gunpoint to replenish the Wall Street banks with $700 billion after they had committed the greatest financial fraud in history, and a continuing trampling of the U.S. Constitution, the American people continue to remain willfully ignorant of the truth. The American Dream is dead. We’ve allowed a rich, privileged, elite few to achieve hegemony over our economic and political system with their control of the media and manipulation of our financial markets. They will collapse the country because they will never be satisfied with the amount of wealth and power they’ve accumulated. Their voracious greed will be their downfall.

The so-called recovery is built on sand, and as stock markets climb and climb, and more traders and investors turn bullish, we come ever-closer to a new 2008-style collapse. Soaring markets, and soaring speculation. Big finance using loopholes to speculate bigger and harder. Mainstream financial journalists becoming more and more complacent about the “recovery”. We’ve been here before. Isn’t repeating the same behaviour and hoping for different results the very definition of insanity?

The market ramped, modestly, on the earlier news that the House would push the debt ceiling by three months with an implied budget/spending cut provision. That the market actually moved on this headline shows front and center just how clueless the algos doing all the trading truly are, because one doesn't need Politico to tell them that this proposal is absolutely DOA and is nothing but more theater. However, those who do need Politico to tell them that, here it is: "House Republicans will vote next week on a bill that would raise the nation’s debt ceiling for three months and attach a provision that would stop pay for members of Congress if the Senate doesn’t pass a budget, GOP officials said Friday. It’s an attempt to force the Senate to lay out a spending plan, but is sure to go nowhere in the Democratic controlled upper chamber."

And the game continues as Speaker Boehner appears to be kicking the can across the corridor to the Senate (and implicitly the Democrats) as he quite specifically advises them that with no budget, there is no talk of debt-ceiling extensions. The principle is simple, he notes, "no budget, no pay." As Dow Jones reports, the 'compromise' deal is that the House will propose a three-month extension of the debt-ceiling in exchange for a budget (i.e. spending cuts from the Senate) - which of course is all but impossible given the years of inability to pass a budget anyway. Check to Obama (though we know the response)...

• *U.S. HOUSE WILL PASS 3-MONTH DEBT LIMIT INCREASE NEXT WEEK
• DJN - DJ U.S. HOUSE TO SEEK THREE-MONTH EXTENSION OF DEBT CEILING
• DJN - DJ U.S. REP CANTOR: IF HOUSE AND SENATE DON'T PASS BUDGET IN 3 MONTHS LAWMAKERS WON'T GET PAID

UPDATE: VIX and SPX have recoupled

Given the compression in realized volatility and surge in stocks, it is not totally surprising that spot VIX would see some catch down compression. Sure enough, spot VIX just plunged to 13.00 (for the first time in almost 6 years). Stocks are falling as VIX is falling though - in a convergence from yesterday's gap-open. Longer-date VIX futures are also falling but not as much - implying further debt-ceiling deadline steepeners being laid out.

According to Bloomberg's rankings (based on wealth disparity, average unemployment benefits, and overall unemployment pool), and somewhat confirming the food-divide discussion we had last night, the following states are the worst to live in if you are unemployed. Connecticut tops the list with its massive wealth disparity - more than one $200,000 household for every household earning less than $10,000. New York, California, and D.C. are close behind with Oregon and Alabama in 19th and 20th 'worst' place to be unemployed. Welcome to the bifurcated un-recovery.