Stocks Rise As House Kicks Debt Ceiling Can To May 19; IBM Accounts For 76 Of 73 Up Dow Jones Points

Tyler Durden's picture

No sooner had the House got its 212 votes to pass (with 109 Democrats voting against) the debt-ceiling extension "No Budget, No Pay" bill then Silver and US equities began to rise. At the same time, WTI started to crack lower. Now it is over to Harry Reid and the promised 'smooth sailing' through the Senate. As a reminder for all those ebullient Dow watchers, IBM's gains today account for 76 Dow points - which means the remaining 29 names of the Dow are -3 points! The brief risk-on rally is already fading...priced-in? or doesn't matter?

The initial excitement has faded...



Dow's gain entirely due to IBM...


The House, by a vote of 285-144 passed the "No Budget, No Pay" measure that ties a temporary suspension of the federal debt limit with the Senate passing a budget. House Speaker John Boehner (R-OH) called the measure "a plan to balance the budget over the next ten years." The deal would raise the government's current $16.4 trillion debt limit until May 19. In exchange, the House and Senate must pass a budget resolution by April 15 or place members' salaries in an escrow account until the chamber acts.

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Surly Bear's picture

That'll be the day...

fonzannoon's picture

Oh they will pass a budget. It just won't be balanced. It will have a trillion dollar deficit. But that is okay because now with the debt ceiling and fiscal cliff out of the way the avalanche of growth coming will Shirley offset any deficit.

Pharming's picture

HAHAHAHHAHAHAHAH....what about em?  HAHAHA...


Time for a reminder from the Bears...October last year.

"How the Rich Get Richer Explained"

trav777's picture

deficit gotta be more than $1T...look at shadow liabilities and other deleverage metrics and you'll know how much additional has to be deficited

TerminalDebt's picture

Its basically an unlimited debt ceiling for 3 months, enough time for Timmay to stash a few trillion for a rainy year or two

JPM Hater001's picture

Escrow my ass.  Why would we ever give it to them.

In fact I say $5000 a day fine until they all come to a balanced budget.

NotApplicable's picture

Why would you want to pay a fine?

I don't believe you've thought this "government thing" all the way through.

fonzannoon's picture

Obummer already said he would sign it. I am not sure why the Senate would hold it up. Once they suspend it that gives them more leeway to just keep it suspended. With all the stuff coming up (NCAA tourney etc.) people will quickly forget we ever had a debt ceiling.

stocktivity's picture

It's all Bullshit!!!  Rally on.

DCFusor's picture

Don't worry about our poor lawmakers.  It's only an escrow account, they'll get that money back no matter what - and since we know their official pay is only a tiny fraction of their income (not to mention, bennies) - it won't hurt a bit.  It's the usual stupid stunt.

So, we get to zero deficit in 10 years?  What will the debt be by then?  Then see Krasting's post above.

pods's picture

There is probably some inane rule that allows the critters to kite checks equalling multiples of their escrow account.


Groundhog Day's picture

no chance of that.......going down that is

Al Huxley's picture

Fuck off, Wall Street.

Wilcat Dafoe's picture

What does the stock market have to do with the {real} economy?

otto skorzeny's picture

nothing-now prepare to be "droned" for speaking the truth

eclectic syncretist's picture

"What does the stock market have to do with the {real} economy?"

As much as Federal Reserve Notes have to do with wealth.  Any connection is real only if you believe that it is.  It's an illusion, an eidolon, a willo-the-wisp, like trying to grab and hold the wind.  BS berstanke thinks the market crash of 1929 had a huge effect on the national psyche and it's confidence in ball street banksters, leading to a prolonged depression.  He postulates he can stop it from happening again if he can prop the market long enough for some sort of recovery to manifest itself. 

Here's a good quote from the Berstank to help you understand what's going on with the stock market right now.  "To the extent that bank panics interfere with normal flows of credit, they may affect the performance of the real economy."  Essays on the Great Depression

He thinks by gaming the stock market he can maintain the publics confidence in banksters sufficiently to ride out the storm and avoid the hard mathematical reality, but the clock is ticking and it's not on his (or our) side.

TruthInSunshine's picture

 "History does not repeat itself, but it does rhyme."

Replace Great Britain with PIIGS+UK+Japan currently, and, voila, bitchez (throw in the economic meningitis of the U.S., along with the creeping and quite real economic disorder seizing China's economy, which are undeniable, for good measure).

To those repositing their trust in any central fiat bank's "put" in the form of their own wealth (if it's OPM, no sweat, that's what broad & legally binding disclaimers & arbitration clauses are for), good luck. You will probably need a lot of it.

The Harvest excerpted from the book The Creature from Jekyll Island

When men are entrusted with the power to control the money supply, they will eventually use that power to confiscate the wealth of their neighbors. There is no better illustration of that law than the Crash of 1929 and the lingering depression that followed.


During the nine years before the crash of 1929, the Federal Reserve was responsible for a massive expansion of the money supply. A primary motive for that policy was to assist the government of Great Britain to pay for its socialist programs which, by then, had drained its treasury. By devaluing the dollar and depressing interest rates in America, investors would move their money to England where rates and values were higher. That strategy succeeded in helping Great Britain for a while, but it set in motion the forces that made the stock-market crash inevitable.

Al Huxley's picture

And Fuck off, Congress.

benbushiii's picture

How about not paying them until there is a deal. No escrow account.

surf0766's picture

How about not paying them at all.

LikeClockwork's picture

Or introduce them to Madame Guillotine

e_goldstein's picture

Tar, feathers, then guillotine.

It will be like a lifesized Tyson's slaughterhouse.

Conman's picture

How about making politifcal office a non paying job. Voluntary and temporary.

pods's picture

Even easier, all you have to do is once a year have them all put their names into a hat. 

Pull out one name and shoot them on the spot.

Not even psychopaths want to die.


TheFourthStooge-ing's picture

Once a year? At that rate do you realize how many of them will get away?

Good idea, though. My recommendation is every Friday.

Pharming's picture

How about they do it for room and board.  Or out of the goodness of their hearts for their country....

HAHAHAHAHA....just kiddin.

DosZap's picture

 (with 109 Democrats voting against) the debt-ceiling extension


LOL, it's called CYA.Sure as hell not because they are against.

Cdad's picture

Nice gimmick.  

Pharming's picture

Wait...I feel like I've seen this scenario somewhere before...

Ground Hog Day. 

I tinks me should jump back into the market full power.  All of it on the table. Guns a blarin.  I'm selling my gold, silver, take my cash out from under my bed and I'm back into the market!  Yeah BABY! ....

.....*cough* *cough*....   blink blink....


What a dream...I dreamed that all that printing of cash was great, the markets rebounded, gold dropped down to $250/oz, Silver $7.55/oz.  We quit bombing the middle east, gas was under a $1.00/gallon, and everything was being made here in the United States.  Obviously a dream.  


Well, back to reality and Zerohedge.

caimen garou's picture

how about paying them in chicken feet

JR's picture

The Big Banks Founded the Fed, and Still Control It
But the market will break up this rotten system, says Gary North”


The largest banks are immune to reform or regulation. They control the Federal Reserve System, and have since the beginning in 1914, when it opened for business. The Congress defers to the FED. So, the banking system never changes much. There is never a significant reform.

Today, the 12 largest U.S. commercial banks hold 69% of the deposits. If you think the free market produced this allocation, you are the victim of a Keynesian economic theory. The centralization continues relentlessly. All the "democracy" chatter in Congress is simply a form of self-delusion.

Woodrow Wilson, the so-called reformer, signed the Federal Reserve Act of 1913, passed in the final hours before the Christmas recess. He signed it within two hours after the Senate passed the bill.

The fix was in.

The fix has been in ever since.

LawsofPhysics's picture

Hurry up, you are going to miss the rally, go long now...

PUD's picture


Dr. Engali's picture

Spend bitchez! max out the credit card then default like a good American!

fonzannoon's picture

There is no max Doc. Ain't it beautiful?

Dr. Engali's picture

I called the bank and asked them to temporarily suspend my debt cap and they started laughing.....go figure. Funny thing is ...I don't need to borrow money pay my  bills.

Bay of Pigs's picture

How long can this shit go on? 

NotApplicable's picture

Until the very instant you decide to refuse dollars as payment for goods and services. Otherwise, it's a classic infinite asymptotic approach to zero (when charting purchasing power).

fuu's picture

House Speaker John Boehner (R-OH) called the measure "a plan to balance the budget over the next ten years."

You'll get around to balancing the budget 3 years after Germany gets their gold. Good to know.

busted by the bailout's picture

The serious fiscal conservatives are now officially irrelevant. 

No debt ceiling, no spending cuts, no budget, and no pay withheld until April 15 at the earliest.  Wow, that's what I call playing hardball!

We'll have this deficit spending under control in no time!

PlannedObsolescence's picture

I will gladly pay you Tuesday for a hamburger today

Racer's picture

That is quick... you should get my unborn great great great grandchildren to pay like the banksters make me do

moonstears's picture

Your GGG grandkids, and mine, will use credits, not dollars. They'll be as familiar as you are with "Continentals".

Racer's picture

That's what you get with a price weighted index... and the skew gets ever more the higher it goes

Brahms Third Racket's picture

And while we're at it, FUCK IBM too. They're the vampire squid of the tech sector.  Probably responsible for sucking more middle class tech jobs out of America than anyone.