Geithner - US To Hit Debt Ceiling On December 31

Tyler Durden's picture




 

Just because the Fiscal Cliff was not enough...

  • GEITHNER SAYS U.S. WILL REACH STATUTORY DEBT LIMIT ON DEC. 31
  • GEITHNER: WILL USE `EXTRAORDINARY MEASURES' TO AVOID DEBT LIMIT
  • TREASURY: SPECIAL MEASURES TO MAKE $200 BLN  ROOM UNDER LIMIT
  • GEITHNER: $200 BLN TO LAST TWO MONTHS IN `NORMAL CIRCUMSTANCES'
  • GEITHNER: TAX, SPENDING `UNCERTAINTY' MAKES DURATION NOT CLEAR
  • GEITHNER SAYS ALL MEASURES HAVE BEEN USED IN PRIOR IMPASSES
  • GEITHNER OUTLINES PLANS IN LETTER TO SENATE MAJORITY LEADER

So since America's dysfunctional congress failed to "rise above" the Fiscal Cliff, it at least succeeded to "rise above" the debt ceiling. One out of two is not too bad...

To summarize: debt ceiling hit December 31, just in time for the no deal on the Fiscal Cliff, and then the Treasury will proceed to defund various Government retirement accounts for the next two and a half months, when sometime in March the true deadline to getting a joint solution on both the Cliff and the Debt Ceiling will becoming unextendable as the alternative is truly unthinkable: living within its means!

In other words, as we have said all along, the real deadline for a Fiscal Cliff is not December 31, but that day in March when all further debt ceiling extension avenues are exhausted.

The question therefore is - will the 2 months of America living under self-made austerity be enough to push it into recession.

And now cue flashbacks to August 2011

* * *

Full tiny tim letter: 

 

geithner letter

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Wed, 12/26/2012 - 20:58 | 3097813 BlackChicken
BlackChicken's picture

Sounds clear as can be, and very accurate.

Truth bothering you? You should turn in your guns right away.

Wed, 12/26/2012 - 17:28 | 3097249 lakecity55
lakecity55's picture

Hahaha. Like that is a surprise.

Forward, Soviet!

Wed, 12/26/2012 - 17:30 | 3097255 fuu
fuu's picture

Wait a minute I thought we had till March just last week.

Wed, 12/26/2012 - 17:32 | 3097267 Tyler Durden
Tyler Durden's picture

Reading is fundamental: "debt ceiling hit December 31, just in time for the no deal on the Fiscal Cliff, and then the Treasury will proceed to defund various Government retirement accounts for the next two and a half months, when sometime in March the true deadline to getting a joint solution on both the Cliff and the Debt Ceiling will becoming unextendable as the alternative is truly unthinkable: living within its means!"

Wed, 12/26/2012 - 17:35 | 3097282 fuu
fuu's picture

http://www.zerohedge.com/news/2012-12-20/plan-c-anyone

"Luckily, at least the debt ceiling is a firm deadline... Sometime in late March"

Prescient.

Beat down deserved.

Wed, 12/26/2012 - 17:37 | 3097299 francis_sawyer
francis_sawyer's picture

Nowadays EVERYTHING is a 'floater'...

~~~

I council peace...

Wed, 12/26/2012 - 17:42 | 3097325 knukles
knukles's picture

Aw come on, I wanna see 'em fight.
More fun when somebody's eye gets poked out.

Wed, 12/26/2012 - 17:51 | 3097355 fuu
fuu's picture

I was guilty of skimming before posting.

Wed, 12/26/2012 - 18:10 | 3097420 francis_sawyer
francis_sawyer's picture

I was FORE skinning... Until I was AGAINST it... [oh wait ~ I meant 'skimming']...

Wed, 12/26/2012 - 18:54 | 3097394 UNCOMPROMISED
UNCOMPROMISED's picture

Oh really knukles?

"Two Louisiana Women, convicted of plucking out their sister's eyes in an apparent attempt to drive a demonic spirit from her body, were sentenced to ten years' probation Thursday."

http://www.holysmoke.org/sdhok/ca-03.htm

Criminal Minds
http://books.google.com/books?id=7a-b9EJU4qYC&pg=PA242&lpg=PA242&dq=1994...

Wed, 12/26/2012 - 18:49 | 3097468 UNCOMPROMISED
UNCOMPROMISED's picture

Louisiana, lol. Can get away with anything there, no?

Bet I can grow poundage of my special catnip there and nobody is the wiser.

You banksters and '.gov engineers' must love it there. And it is the PRIMARY reason for the treasonous Southern Poverty Law groupo.

Wed, 12/26/2012 - 17:39 | 3097305 valley chick
valley chick's picture

Question:  In the last "G" Fund raid...did the government ever put the money back?

Wed, 12/26/2012 - 17:40 | 3097314 Sudden Debt
Sudden Debt's picture

thanks, I was going to buy gld and slv call on friday :)
better wait till februari so it seems :)

Wed, 12/26/2012 - 17:55 | 3097374 odatruf
odatruf's picture

Buy the rumor; sell the news.

 

Fri, 12/28/2012 - 01:33 | 3100966 MeelionDollerBogus
MeelionDollerBogus's picture

And the news is what, from where? Mostly rumors from bullshit-mongers.

The proper saying ought to be "buy what's undervalued & sell when it's profitable without being stupidly greedy". The rest is BS. Certainly it's up to personal judgement what's "greedy" or "stupid" or "under-valued" but whatever.

Wed, 12/26/2012 - 17:59 | 3097385 Chupacabra-322
Chupacabra-322's picture

@ Tyler Durden,

Beware "The Ides of March."  Max Keiser called for a meltdown/collapse in April.  Either way, were fucked. 

Wed, 12/26/2012 - 18:23 | 3097458 francis_sawyer
francis_sawyer's picture

Let me have men about me who are fat... Happy men & men who sleep at night... Yon Cassius has a lean & hungry look... He thinks much... Such men are dangerous...

Fri, 12/28/2012 - 01:26 | 3100958 MeelionDollerBogus
MeelionDollerBogus's picture

Max Keiser ALSO said "buy silver, crash JP Morgan". I'll take Tyler Durden over Keiser if they aren't in agreement

Wed, 12/26/2012 - 17:32 | 3097265 Zap Powerz
Zap Powerz's picture

Remember when shit like this used to matter?

Wed, 12/26/2012 - 17:43 | 3097330 knukles
knukles's picture

Yes.
And not too fucking long ago, I might remind everybody.
Seems like forever...
But weren't

Wed, 12/26/2012 - 17:46 | 3097340 ShrNfr
ShrNfr's picture

Hey bro, just too old fashioned. Where do I get me one of dem Obamaphones. Now that is shit that matters.

Of course the off books Enron accounting of the gumitup obligations doesn't matter either these days. Crap, if I filed a 10K using accounting the way the US gumitup does, I would be sharing a cell with Bernie Ebbers.

 

Wed, 12/26/2012 - 21:28 | 3097858 Go Tribe
Wed, 12/26/2012 - 17:33 | 3097269 TheSilverJournal
TheSilverJournal's picture

The last debt ceiling debacle led to automatic tax hikes and spending cuts, AKA, the Fiscal Cliff. Maybe we'll get a Fiscal Cliff 2 as part of the deal to raise this debt ceiling.

Wed, 12/26/2012 - 17:48 | 3097344 busted by the b...
busted by the bailout's picture

We haven't even had fiscal cliff 1, yet -- no tax hikes or spending cuts yet.  They always find a way to weasel out of everything, especially cuts in spending.

Wed, 12/26/2012 - 18:10 | 3097423 TheSilverJournal
TheSilverJournal's picture

This Fiscal Cliff will be weaseled out of. As long as they promise cuts in the future and then when the future becomes the present, postpone those cuts into the future, they can get around making real cuts.

The problem is the US can't stop growing its deficits without the entire fiat monetary ponzi imploding. The entire US economy is credit/debt based which means lower deficits leads to a slowing economy, which leads to malinvestments being realized and the banks going bust. Very few US politicians have the juevos to end the ponzi.

Wed, 12/26/2012 - 17:52 | 3097346 knukles
knukles's picture

The newly to be passed legislation will begin with the following language:

"Not withstanding anything to the foregoing or hereafter, he whoever wants to do any damned thing they wish, who is authorized to do so by anybody authorizing such from a position of authority, having been previously authorized, with any and all taxpayer monies, either real or imagined, in existence or to be created, is hereby authorized to do so in perpetuity, ad infinitum, without recourse or penalty."

 

(Maybe we all ought a go for a dip in the Reflecting Pool in memory of Wilbur Mills before they close it to the public.....)

Wed, 12/26/2012 - 18:17 | 3097439 TheSilverJournal
TheSilverJournal's picture

Isn't that Bernanke's oath of office?

Wed, 12/26/2012 - 18:19 | 3097450 kaiserhoff
kaiserhoff's picture

I'm pretty sure Wilbur drove into the Tidal Basin, when he was drunk as a skunk with the (ahem) fancy stripper Fanny Fox..., Not that I know anything about Fox's Fanny or her lovely Svedish apprentice..., thank god for the days before every wanker had a camera;)

Wed, 12/26/2012 - 17:33 | 3097272 FinalCollapse
FinalCollapse's picture

Timmah! Use your 7% GDP Growth Model. Ha ha ha!

Wed, 12/26/2012 - 17:35 | 3097284 otto skorzeny
otto skorzeny's picture

i thought the only ones expecting 7% growth every year were govt union pension funds

Wed, 12/26/2012 - 17:34 | 3097274 Conman
Conman's picture

Fear mongering time. Same as what it took to get  TARP passed . Timmay is very familiar with this tactic.

Wed, 12/26/2012 - 17:33 | 3097275 valley chick
valley chick's picture

"G" Fund raid AGAIN!  Damn...couldn't they be a little more original...heck...even a valley chick has figured this one out...and this time not with my money.

 

Wed, 12/26/2012 - 17:33 | 3097276 otto skorzeny
otto skorzeny's picture

push it into recession? like we ever left since 1980-other than a constant string of credit-driven bubbles

Wed, 12/26/2012 - 17:34 | 3097280 SpykerSpeed
SpykerSpeed's picture

Mmmmbuahahah!  *twirls moustache*

Wed, 12/26/2012 - 17:36 | 3097293 Catullus
Catullus's picture

File your taxes early this year -- in march, they're going to begin delaying tax returns.

Wed, 12/26/2012 - 19:12 | 3097603 DosZap
DosZap's picture

Never file early, always middle of pack.

Early n Late get the scrutiny.(Unless your a simple 1040EZ and they owe you.)

Wed, 12/26/2012 - 17:37 | 3097296 Zap Powerz
Zap Powerz's picture

BFD.

So if the debt limit is reached Dec 31st all this means is the debt limit will be increased.  Im surprised there is even still a debt limit at all because, as we all know, the borrowing is never ever going to stop until it is forced to stop.

You think the government is going to reign in spending? LOL.  You think those "conservative republicans" want to decrease spending and reduce government? LOL.

This is pure theater.  Meaningless theater at that.

The economy hasnt collapsed yet so the printing, borrowing and overspending will continue until such time that the economy does actually collapse.

Wed, 12/26/2012 - 17:46 | 3097338 John Wilmot
John Wilmot's picture

Indeed. They will spend as long as they can borrow, borrow as long as they can print, and print until what they're printing doesn't buy anything. Pretty obvious what's coming down the road..

Wed, 12/26/2012 - 17:59 | 3097386 WhiteNight123129
WhiteNight123129's picture

LOL, +10

 

Wed, 12/26/2012 - 17:38 | 3097304 busted by the b...
busted by the bailout's picture

What self-made austerity?  What are they going to stop payment on?

I assumed it will only be accounting tricks - smoke and mirrors - to fund normal expenditures until the ceiling is raised in March. 

Wed, 12/26/2012 - 17:49 | 3097347 youngman
youngman's picture

And folks...they will just cheat....the laws are not made for them...they will just hit the print...they can and will bypass the Fed...go direct....just contol-P into whoevers account needs it...its all electronic anyway...any audits..never...its political slime...the new ruling class..

Wed, 12/26/2012 - 17:39 | 3097306 kaiserhoff
kaiserhoff's picture

Timmy's head would look so good..., on a pike on Memorial Bridge.

It would be such a wonderful lesson on consequences.

Wed, 12/26/2012 - 18:48 | 3097548 Winston Churchill
Winston Churchill's picture

What about the placement of the four quarters ?

If we are going traditional,lets do it right.

Wed, 12/26/2012 - 21:30 | 3097861 Go Tribe
Go Tribe's picture

Those are moved from town to town in a wooden wagon pulled by strong horses.

Wed, 12/26/2012 - 17:40 | 3097309 Everybodys All ...
Everybodys All American's picture

Now we know what really got Oblamer off the golf course.

Wed, 12/26/2012 - 18:05 | 3097404 Conax
Conax's picture

Golf is a fine game, get outdoors in a well manicured wonderland and all, but if I get to Hawaii I'm going where the wahinis and the surf are, and maybe do some diving. I doubt I would spend much time polishing my backswing.  Maybe just the putter.

It seems the treasury has taken the 'purse strings' from congress.  Tim is going to pass them an outline of what he is going to do.

Wed, 12/26/2012 - 17:41 | 3097323 thecoloredsky
thecoloredsky's picture

You don't fucking say...

Wed, 12/26/2012 - 17:44 | 3097336 kito
kito's picture

will the 2 months of America living under self-made austerity be enough to push it into recession.........

ha ha, austerity........there is the rainy day fund...the federal employees pension fund......and then all of the 401k/ira funds....dont worry, the govt will replace them with much more stable treasuries..........................

Wed, 12/26/2012 - 17:46 | 3097342 Tyler Durden
Tyler Durden's picture

The austerity is not from the debt ceiling but from the Fiscal Cliff, which will not be resolved until the debt ceiling is extended.

Wed, 12/26/2012 - 18:33 | 3097491 kito
kito's picture

im guessing for every "cut" made, there will be shortly be a new and different "financial need" that will arise so that the government money continues to flow into the economy and prop up that paltry gdp number that is on federal reserve life support.............a good war certainly helps offset all of those nasty cuts..........perhaps the money can come out of a new department that the obama administration will set up.............with its own fresh budget....................

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