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At Least Now It's Obvious Who's In Charge

Tyler Durden's picture




 

Submitted by Simon Black of Sovereign Man blog,

It’s clear to everyone by now that the government of the largest country in the world is careening towards default in just over 200 hours.

Yet curiously, even though the US government’s completely ridiculous, untenable fiscal situation is a front page embarrassment for the entire world to see, markets have barely budged.

A few very short-term rates have shot up, but for the most part, stocks are very close to where they were before the shutdown.

The US 10-year yield has actually dropped over the last month, from 2.95% in mid-September to 2.64% today… pretty much where it was a week ago before the shutdown began.

(Bear in mind that the 10-year yield in Italy, Spain, etc. were all over 7% at the most recent peaks of their respective crises…)

Meanwhile, other rates like the 30-year Treasury and 30-year fixed mortgage rates are even a hair lower than they were a week ago.

Where’s the calamity? Where’s the panic?

There’s been almost none.

The conventional wisdom right now is that, since the government shutdown is reducing US GDP growth by approximately 0.1% per week, the Fed is going to keep printing money to the tune of $85 billion per month (or roughly $1 TRILLION annually).

Remember, at the beginning of the global financial crisis, the Fed had less than $500 billion in US Treasury securities and almost zero mortgage backed securities (MBSs).

Today, the Fed owns over $2 trillion of US government debt (a 4-fold increase) and another $1.3 trillion in MBSs.

They’ve completely mopped up every ounce of liquidity. And in doing so, they’ve twisted interest rates and manipulated every asset class from stocks to bonds to real estate to commodities along the way.

Stocks and bonds haven’t moved because nobody cares what’s happening in the US government anymore. And that’s because every serious investor understands that the US government long since abdicated any economic power to the banking sector.

Everyone knows that the Fed is going to keep printing money, ergo they’re going to keep sending markets higher.

The US government and the incompetent elected officials are just giant stooges in this deeply flawed monetary system.

And this debt ceiling charade only proves it. The secret is out there in the open. And now it’s completely obvious who’s really in charge.

 

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Tue, 10/08/2013 - 15:52 | 4035159 The Gooch
The Gooch's picture

18,000,000,000,000 SERVED!

Since 1913

Tue, 10/08/2013 - 15:52 | 4035179 BlackChicken
BlackChicken's picture

Over 300 million screwed over since 1913.

There, fixed it for you.

Tue, 10/08/2013 - 15:56 | 4035197 highandwired
highandwired's picture

This is how you talk to cops:

 

http://www.youtube.com/watch?v=GXBLDL0GoEA

Tue, 10/08/2013 - 16:02 | 4035228 achmachat
achmachat's picture

"... the government of the largest
country in the world"

WTF Simon??!!

Tue, 10/08/2013 - 16:07 | 4035250 Arius
Arius's picture

this time is different ... we have got Advanced Macro Tools ...

Tue, 10/08/2013 - 16:08 | 4035262 Dareconomics
Dareconomics's picture

There will be a deal, because there always is a deal. Except that if there isn't, it will be a disaster.  

 

http://dareconomics.wordpress.com/2013/10/07/around-the-globe-10-08-2013/

Tue, 10/08/2013 - 17:22 | 4035620 Frozen IcQb
Frozen IcQb's picture

Everybody knows that the dice are loaded
Everybody rolls with their fingers crossed
Everybody knows that the war is over
Everybody knows the good guys lost
Everybody knows the fight was fixed
The poor stay poor, the rich get rich
That's how it goes
Everybody knows

Everybody knows that the boat is leaking
Everybody knows that the captain lied
Everybody got this broken feeling
Like their father or their dog just died

Everybody talking to their pockets
Everybody wants a box of chocolates
And a long stem rose
Everybody knows

 

https://www.youtube.com/watch?v=GUfS8LyeUyM

Tue, 10/08/2013 - 17:27 | 4035636 Steve in Greensboro
Steve in Greensboro's picture

Imagine how long it would take Obama to replace Bernanke were he to stop QE.

Tue, 10/08/2013 - 17:36 | 4035663 Frozen IcQb
Frozen IcQb's picture

Sorry to say that you have that backwards:

The bankers that Bernanke answers to decides who the President will be.

The President just rubber stamps the chairman's nomination.

Tue, 10/08/2013 - 19:33 | 4036195 Steve in Greensboro
Steve in Greensboro's picture

Which bankers are those oh wise one?

Dick Fuld? Oh wait. His bank went bankrupt and didn't get bailed out. Why was that? Maybe Chairman Fuld forgot to pay his Bilderberg dues. .

How about John Corzine? Oh that's right. MF Global went bankrupt too and it didn't get bailed out either, just like Lehmann. Maybe Chairman Corzine forget to keep up his Trilateral Commission membership.

Here's the short version. Bankers are useful vassals to their Lords, the politicians who run the Total State. Vassals are useful until their masters in the Total State decide they are not and then they get thrown overboard, like Fuld and Corzine.

If you believe that Jewish bankers are running the world, you need to take a break from listening to Alex Jones.

Tue, 10/08/2013 - 17:41 | 4035709 Anasteus
Anasteus's picture

An interesting article on the King World News on how not to let the possible debt ceiling crisis go to waste

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/10/8_Fo...

Wed, 10/09/2013 - 00:26 | 4037036 Crisismode
Crisismode's picture

King World News is just like Alex Jones.

 

More BS Hype about the end of the world.

 

Tue, 10/08/2013 - 20:46 | 4036462 Wahooo
Wahooo's picture

I actually prefer the thesis from the ZH article over the weekend, essentially that this is all horse trader talk as the two sides divvy up the spoils. There will be no default, only another taxpayer fleecing. It's what's for dinner.

Tue, 10/08/2013 - 16:10 | 4035265 King_of_simpletons
King_of_simpletons's picture

Panic and Calamity are so overrated.

These only happen in third-world banana republics.

We are the richest country in the world with exceptional human presence in DC.

Tue, 10/08/2013 - 18:14 | 4035821 Oldwood
Oldwood's picture

What were we fucking thinking??

Tue, 10/08/2013 - 16:08 | 4035254 negative rates
negative rates's picture

And just think, there is only 168 hours in a week, that should slow um down a tad, about 40 hours from now.

Tue, 10/08/2013 - 16:15 | 4035286 Save_America1st
Save_America1st's picture

@achmachat:   maybe he meant, "largest debt nation" in the history of the universe.

Tue, 10/08/2013 - 16:28 | 4035365 Unprepared
Unprepared's picture

"... the government of the largest
country in the world"

WTF Simon??!!

 

He was probably referring to the average waist circumference per capita.

Tue, 10/08/2013 - 16:02 | 4035234 Troll Magnet
Troll Magnet's picture

<--FUCK YOU, BEN BERNANKE!

<--FREE JON CORZINE!

Tue, 10/08/2013 - 16:06 | 4035259 Arius
Arius's picture

Corzi for Fed Governor .. only he can outsmart china ...

Tue, 10/08/2013 - 16:31 | 4035385 DoChenRollingBearing
DoChenRollingBearing's picture

Corzslime is still free, no?

Tue, 10/08/2013 - 16:55 | 4035522 Troll Magnet
Troll Magnet's picture

NO! 

Our Justice Bros (O & Ho) went after him hard and arrested...Oh, wait.

Tue, 10/08/2013 - 17:35 | 4035681 Chupacabra-322
Chupacabra-322's picture

Degenerate Criminals. Many of The courts are also Criminal. The Global Criminal Oligarch Cabal Bankster Intelligence Crime Synicate has installed their "Agent Smiths" on many of the highest levels of the very Criminal institutions they own & established.

There's now, no doubt that Crimes Against Humanity & Crimes Against The American, People/Treason have been committed. Mass Global Arrests are needed & justified. Their Crimes are no longer "hidden in plain view". Their Crimes are all out in the open for all the world to see. How the mass arrests happen effectively is the question.

The Criminals are flaunting their Crimes in our faces. Complete Hurburis & bravado. True Meglomanics, Sociopaths & Psycopaths. Pure Evil.

Tue, 10/08/2013 - 18:20 | 4035837 Oldwood
Oldwood's picture

The are technically only crimials if they are convicted of a crime and as we know that won't happen as they are doing God's work here, trying to save our asses, even though we don't appreciate it one little bit. We are so blessed to have these crimi....er ah saints looking out for us. As Barney Frank once said, what does the constitution have to do with it, they are only trying to help!

Tue, 10/08/2013 - 17:26 | 4035640 kchrisc
kchrisc's picture

"Cops" is passe. "Gun and badge thugs (GBTs)," or "goons"would be better.

I like to call them "boots," as in Orwell's"...imagine a boot stamping on a human face—for ever."

I like "pigs" too, but it doesn't quite capture their essence.

Tue, 10/08/2013 - 17:29 | 4035649 Son of Captain Nemo
Son of Captain Nemo's picture

Highandwired

Unbelievable.  Alberta Canada but WTF, the use to have a Jusctice system that worked, but like us no longer.

He could easily be talking about the now famous picture of the National Guardsmen (we think) with his assault rifle loaded and pointed at a someone looking out there window when they locked down Boston.

You only have to imagine what is in our civilian police and military.  This is what will get turned lose from the prisons and put into police and military uniforms (and has been) only in enormous numbers when they want all hell to break lose.

Anthony Burgess predicted all of it when he wrote A Clockwork Orange. Alex is reacquainted with his two partners in crime that now work for the police that turn on him!

Tue, 10/08/2013 - 21:11 | 4036534 Buck Johnson
Buck Johnson's picture

No kidding, no kidding.  Also try to get to Internal Affairs withought a lawyer and the cop will do everything they can to stop you.  At least in the US.

Tue, 10/08/2013 - 17:29 | 4035651 screw face
screw face's picture

.....'Screw everyone, then annihilate self' ~The Fed~.......

Tue, 10/08/2013 - 17:39 | 4035700 Crash Overide
Crash Overide's picture

So you are saying he who has the money creation computer makes the rules? I AM SHOCKED!

Tue, 10/08/2013 - 15:55 | 4035185 MeMadMax
MeMadMax's picture

Don't shoot em', let em' BURN!

Tue, 10/08/2013 - 15:57 | 4035201 cossack55
cossack55's picture

"Saving Uncle Sam"?

Tue, 10/08/2013 - 16:17 | 4035306 Emergency Ward
Emergency Ward's picture

"SamBOZO, SamBOZO, SamBOZO the Klown"

Tue, 10/08/2013 - 16:24 | 4035355 edotabin
edotabin's picture

Now if we can get Ronald McDonald to pay, we'll be all set to go!

Tue, 10/08/2013 - 16:00 | 4035163 TaperProof
TaperProof's picture

What about King Dollar?

Tue, 10/08/2013 - 15:51 | 4035164 TeamDepends
TeamDepends's picture

200 hours!  Boy, when you put it like that....

Tue, 10/08/2013 - 15:52 | 4035169 DoChenRollingBearing
DoChenRollingBearing's picture

To be on the safe side, I suggest buying more gold and taking some $$$ out of the bank.  Some more bullets and water put would not hurt either.

Tue, 10/08/2013 - 15:58 | 4035199 McMolotov
McMolotov's picture

Just make sure you store all that shit on the other side of the world like Mr. Black.

Tue, 10/08/2013 - 16:01 | 4035230 TeamDepends
TeamDepends's picture

The Black Side?

Tue, 10/08/2013 - 16:13 | 4035272 The Gooch
The Gooch's picture

... and when the fed appoints a different goon,

I'll see you on the black side of the moon.

Tue, 10/08/2013 - 16:04 | 4035238 DoChenRollingBearing
DoChenRollingBearing's picture

Diversification is a key point!

 

1) Diversification in your asset holdings

2) Diversification in where they are

Tue, 10/08/2013 - 17:03 | 4035571 delacroix
delacroix's picture

diversification:  100 oz bars  10 oz bars  1 oz bars and coins  junk silver

Tue, 10/08/2013 - 17:25 | 4035625 PacOps
PacOps's picture

Investing rule taught to me ~60 years ago. "Investments are like manure. Ya gotta spread it around to make it effective."

Tue, 10/08/2013 - 16:15 | 4035305 Save_America1st
Save_America1st's picture

@DCRB:  DONE--AND--DONE!!!  thank you :-)

Tue, 10/08/2013 - 16:24 | 4035349 DoChenRollingBearing
DoChenRollingBearing's picture

Freedom!  

It's a wonderful thing while we still have it.

Tue, 10/08/2013 - 15:52 | 4035175 Mr Poopra
Mr Poopra's picture

Anyone care to venture guesses for gold and silver prices October 18th?  Be ready to get inundated with calls from all the sheep you've been trying to warn for the last few years.

Tue, 10/08/2013 - 16:05 | 4035244 seek
seek's picture

I'll be surprised if it's allowed to go past $1350, and shicked if it breaks $1400. The Bernankinator and fellow traveler banks have been pretty active against gold, and I don't see that changing, especially now.

Tue, 10/08/2013 - 16:13 | 4035284 DoChenRollingBearing
DoChenRollingBearing's picture

$1350 or $1400 is a gift for anyone who does not have at least 5% of their net assets in gold.  That is, if you take the gift by buying some...

Tue, 10/08/2013 - 16:17 | 4035311 Save_America1st
Save_America1st's picture

or if you've got a good amount of gold, then hey...you can get 59 ounces of silver for 1 ounce of gold.

...just sayin'...

Tue, 10/08/2013 - 16:29 | 4035373 DoChenRollingBearing
DoChenRollingBearing's picture

Save_America1st

If you really like silver better than gold, and you like to write and would like to "Guest Post" at my blog, gmail me at my moniker.  I really need to have a nice piece on silver.  Something on the order of "The Case for Silver".

Tue, 10/08/2013 - 17:31 | 4035654 it aint easy
it aint easy's picture

The case for silver: it aint paper.

Tue, 10/08/2013 - 15:54 | 4035176 kurzdump
kurzdump's picture

The FED is out of bullets. All thats left is to keep the printing press operating, hoping that global growth remains green and other nations do not turn away from the USD.

Tue, 10/08/2013 - 17:36 | 4035672 walküre
walküre's picture

hope there will be no change - gotcha!

Tue, 10/08/2013 - 15:54 | 4035180 Shizzmoney
Shizzmoney's picture

When in doubt, print moar.

Works for Japan.  #fail

Tue, 10/08/2013 - 16:16 | 4035295 kurzdump
kurzdump's picture

A nation without external public debt can only default if interest payments exceed tax revenues.

That doesnt apply to the US. #doublefail

Tue, 10/08/2013 - 18:05 | 4035781 yogibear
yogibear's picture

The US is following.

Tue, 10/08/2013 - 15:53 | 4035181 Theta_Burn
Theta_Burn's picture

After this clown show, treasuries aren't being dumped yet?

Tue, 10/08/2013 - 15:54 | 4035187 NOTaREALmerican
NOTaREALmerican's picture

200 HOURS!   What's the worry, that's - like - nearly forever.

Tue, 10/08/2013 - 15:57 | 4035192 20-20 Hindsight
20-20 Hindsight's picture

It's been obvious for ZH'ers for several years now.  Will this awaken the sheeple?  I doubt it...

 

And let's take a wild guess on what's going to happen in less than 200 hours from now?  Stawks will ramp up again, as always.

Tue, 10/08/2013 - 16:00 | 4035206 Jethro
Jethro's picture

Only when the bread and circuses are over. The capital has been sacked, and treasury looted. But hey, Dancing With the Stars is on tonight, and football!

Tue, 10/08/2013 - 16:10 | 4035268 RockyRacoon
RockyRacoon's picture

Just like Maria Barfaroma just said, "The markets are complacent... until they're not."

She's so brilliant!  I just love Maria.......

Tue, 10/08/2013 - 16:57 | 4035525 Millivanilli
Millivanilli's picture

I read that her bush is so thick possums, racoons, and hedge hogs call it home.

Tue, 10/08/2013 - 17:30 | 4035656 PacOps
PacOps's picture

I'd consider an address change.

Tue, 10/08/2013 - 18:10 | 4035796 obejoyful
obejoyful's picture

She is a Whore.

Tue, 10/08/2013 - 16:01 | 4035213 Devotional
Devotional's picture

Nope, the latest edition of Big Brother in Portugal has prostitutes as participants. Yep, known escort girls. That is what the sheeple want, a gangbang on TV and post commentary. Now that you can take to the bank.

Tue, 10/08/2013 - 16:27 | 4035361 North Sea Cowboy
North Sea Cowboy's picture

I'd buy that for a Dollar!

Wed, 10/09/2013 - 06:29 | 4037269 StychoKiller
StychoKiller's picture

The PM's will be manipulated lower by the paper shuckers...

Tue, 10/08/2013 - 15:55 | 4035193 kito
kito's picture

The markets have barely budged because they aren't going to default and everybody knows it. Makes for good drama but that's it.

Tue, 10/08/2013 - 15:58 | 4035207 The Gooch
The Gooch's picture

You mean just like the (un) taper?

Tue, 10/08/2013 - 16:00 | 4035223 Uncle Remus
Uncle Remus's picture

Bonus graft for the brinksmanship and drama so the proles will appreciate their masters more when shit doesn't get serious.

Tue, 10/08/2013 - 16:11 | 4035252 DoChenRollingBearing
DoChenRollingBearing's picture

@ kito

 

Dow was down 159 points today, it was down triple digits yesterday IIRC.

EDIT:

And that would be some 6% off its near-term high a smidge over three weeks ago.

Tue, 10/08/2013 - 16:10 | 4035276 RockyRacoon
RockyRacoon's picture

....merely a flesh wound Mr. Bearing.

Tue, 10/08/2013 - 16:18 | 4035309 DoChenRollingBearing
DoChenRollingBearing's picture

And that, Mr. Racoon, is why we smart non-humans buy gold...  Having some gold to balance out those equities only makes natural sense!

Wed, 10/09/2013 - 00:47 | 4037056 Crisismode
Crisismode's picture

Does your company make gold bearings?

How about silver bearings?

 

Tue, 10/08/2013 - 16:11 | 4035279 fonzannoon
fonzannoon's picture

Dochen if this was real you would have circuit breakers going off. Do you have any idea how hard they have to try to generate this fraud of a selloff? Everyone is salivating to buy this dip. Boehner is going to have to drop at least one F bomb at 4:30 if they want another 100pt selloff tomorrow. Otherwise as everyone sniffs the deadline coming up they will increasingly btfd.

Tue, 10/08/2013 - 16:22 | 4035337 DoChenRollingBearing
DoChenRollingBearing's picture

By default, fonz, I have plenty of stock (for me stocks are a diversification).  I certainly benefit with all the "btfd" mentality, and of course I would be tangibly hurt in a big-ass selloff.

TODAY, I am not ready to de-diversify by selling all my equities.  Not yet.

Ugh re circuit breakers.  If it happens in October (like 2008), maybe I will see it all while in Lima.  I have noticed that when we travel overseas in October (about 50% of the time), well, SHTF!

Tue, 10/08/2013 - 16:25 | 4035358 fonzannoon
fonzannoon's picture

The good news for you is that if tshtf you will be overseas at least.

Tue, 10/08/2013 - 16:34 | 4035405 DoChenRollingBearing
DoChenRollingBearing's picture

For two weeks...  When she started to blow in Sept / Oct 2008, I remember going to internet cafes in Italy and emailing my friends...: WTF are you guys doin' over there?!?!

Tue, 10/08/2013 - 17:37 | 4035690 walküre
walküre's picture

make some last minute travel plans for October then. let's get this show on the road!

Tue, 10/08/2013 - 19:18 | 4036103 it aint easy
it aint easy's picture

Yea, anything short of ICBM's flying is simply a BTFD-moment.

Tue, 10/08/2013 - 16:35 | 4035400 Al Huxley
Al Huxley's picture

Kito, it doesn't even make for good drama anymore - it's a fucking re-run and everybody knows the outcome.  When somebody puts a NEW show on (maybe a Chinese production of 'Let's fuck America by suddenly dumping our Treasuries and backing the renminbi with gold') THAT will be good drama.

Wed, 10/09/2013 - 00:52 | 4037060 Crisismode
Crisismode's picture

Truth.

 

It's all a Kabuki Theatre. Much drama and no detail.

 

Let the Shit Hit The Fan.

 

Tue, 10/08/2013 - 15:57 | 4035200 insanelysane
insanelysane's picture

But I can't get into my local federal park, waaahhh.

Tue, 10/08/2013 - 16:16 | 4035301 A Lunatic
A Lunatic's picture

That the government takes punitive measures against a particular demographic of society because they can't mange their fucking money should be of great concern to you......

Tue, 10/08/2013 - 16:35 | 4035418 DoChenRollingBearing
DoChenRollingBearing's picture

Excellent & crazy point!  + many more!

Tue, 10/08/2013 - 17:39 | 4035699 walküre
walküre's picture

The park is still there and the gates can be jumped. Less visitors as well, I'm sure. Where's the problem?

Tue, 10/08/2013 - 15:57 | 4035202 Joebloinvestor
Joebloinvestor's picture

I am just waiting for the PM manipulation to "get away from them" and then WHOO FUCKING HOO!

Just hope it is in my lifetime.

Tue, 10/08/2013 - 15:58 | 4035210 King_Julian
King_Julian's picture

I listened to a popular talk show host today talk about the debt ceiling. He mentioned that the interest on the debt was about $12-20 billion per month. (It fluctuates). He mentioned taxes amounted to $250 billion per month. So where is the worry, he asked? The Fed is worried because if the borrowing stops, it's game over. If they can't buy UST from the.gov, the flow stops, doesn't it? That is the real truth that no one dares speak.

Tue, 10/08/2013 - 16:11 | 4035270 Tsar Pointless
Tsar Pointless's picture

True.

Tue, 10/08/2013 - 16:45 | 4035460 g'kar
g&#039;kar's picture

It's been said, just nobody listens.

Tue, 10/08/2013 - 16:56 | 4035520 LostPolarBear
LostPolarBear's picture

Yep, it's all about the flow and not the stock.

 

 

Tue, 10/08/2013 - 17:19 | 4035617 Surging Chaos
Surging Chaos's picture

Now if only that same talk show host actually wanted to end the Fed...

Tue, 10/08/2013 - 18:28 | 4035868 Oldwood
Oldwood's picture

Obama wants this default. We know even with the shutdown they can technically make their obligations, but they are acting like its just too damn difficult for all those high paid government workers to sort it out. They are taking a hell of a chance here thinking they can crash things and paint it on conservatives. Its becoming pretty obvious that Obama is going for maximum disruptive and destructive effect and is willing to burn down the house to do it. Maybe, just maybe, the MSM doesn't have the clout they think they do. The powers that be could have a real shock when this all shakes out.

Tue, 10/08/2013 - 16:01 | 4035218 ejmoosa
ejmoosa's picture

Oh, there are too many buyers that they do NOT control to maintain their manipulation much longer....

 

Tue, 10/08/2013 - 16:02 | 4035231 Lugnut
Lugnut's picture

"It’s clear to everyone by now that the government of the largest country in the world is careening towards default in just over 200 hours."

Where does the media keep coming up with this crap??? There is more than enough daily tax revenue coming into the Treasury to pay for the principle and interest on ALL outstanding soverign debt instruments several times over. So, the only way we can actually default, is if someone in power makes a concious decision to NOT pay the principle and interest, not because they can't. Seriously WTF. Worse case, bills dont get paid and emplyoees dont get paid. Buts thats far from default. It would be an actual government shutdown, not this farce of a shut down where everyone (17%) still gets paid for staying home, and we barricade some parks.

Can we have some intelligent commentary on this subject just once? Please?

Tue, 10/08/2013 - 16:21 | 4035326 walküre
walküre's picture

optics and credibility are in the crapper for a couple generations

Tue, 10/08/2013 - 16:32 | 4035395 King_Julian
King_Julian's picture

Nut, I think it's the Fed and associated banksters who are worried. See my comment about flow, above. No debt = no flow. They will not allow it.

Tue, 10/08/2013 - 16:58 | 4035455 chdwlch1
chdwlch1's picture

You're assuming tax revenue gets paid to the US Treasury.  Taxes are collected by the IRS who collects the money for their lords at the Federal Reserve.  The money needed to fund the federal govt comes from borrowing, not tax collections.  The Grace Commission Report in 1984 is also worth the time to research in order to see how tax dollars are "processed".

http://www.silverbearcafe.com/private/10.13/collection.html

 

Tue, 10/08/2013 - 18:32 | 4035896 Oldwood
Oldwood's picture

Like it is always been said, if you repeat a lie often enough and if it is big enough, the people will believe it. I just don't think so this time. Numerically I think you are correct, its just that our government employees think it is just too damn hard. The one thing about a sycophantic press is they isolate the left from reality while trying to sell the big lie to everyone else. Obama believes his press releases and assumes everyone else does as well. I feel the mood a changin.

Tue, 10/08/2013 - 16:04 | 4035233 TWSceptic
TWSceptic's picture

It's always calm before the storm, but this is not the storm. This is all theatre and distraction.

Tue, 10/08/2013 - 16:02 | 4035237 Tenshin Headache
Tenshin Headache's picture

It is conceivable that destruction of liquidity will outpace the Fed's (realistic) ability to print, especially with a derivatives meltdown.

Tue, 10/08/2013 - 16:10 | 4035273 Dr. No
Dr. No's picture

I think the FED has pretty well established they will snuff out any liquidity issues. Even in the event of a Gov default on debt.

Tue, 10/08/2013 - 16:04 | 4035239 JebusKhrist
JebusKhrist's picture

The US government can't and won't default even if the debt ceiling isnt raised. The Constitution dictates that debts have to paid. They'll have to pay the debt and not pay something else.

Tue, 10/08/2013 - 16:14 | 4035299 Tenshin Headache
Tenshin Headache's picture

You forgot, the Constitution is just a piece of paper.

Tue, 10/08/2013 - 16:43 | 4035454 g'kar
g&#039;kar's picture

Ink on a page. To some.

Tue, 10/08/2013 - 16:20 | 4035323 Dr. Engali
Dr. Engali's picture

Since when has the constitution mattered? They thew that out the window in 1913. 

Tue, 10/08/2013 - 16:27 | 4035362 TheManWithNoName
TheManWithNoName's picture

They threw it out in 1860 with the election of that first lying jackass lawyer.

Tue, 10/08/2013 - 17:24 | 4035626 Shell Game
Shell Game's picture

Absolutely. It cannot be over-emphasized that the destruction of the real power of the 10th Amendment - volunteerism of the States to form a Union of THESE United States - marked the end of the potency of the Constitution.  The forced union was the perfect setup for the Federal Reserve system to move in and the implementation of the Federal Income tax in, as the good Doc mentioned, 1913. 

The motherfucking control freaks, and their power, must end.

Tue, 10/08/2013 - 16:26 | 4035363 IndyPat
IndyPat's picture

No shit. DHS, time to sell those surplus bullets

Tue, 10/08/2013 - 16:28 | 4035369 IndyPat
IndyPat's picture

...and the tanks. I want a tank.

Tue, 10/08/2013 - 17:45 | 4035726 obejoyful
obejoyful's picture

They will not default this year, but eventually they will, jut like Japan, Spain, France, Italy .....

Seventeen Trillion debt and 100 Trillion in obligations, you do not have to know much math to see how that is going to catch up with you.

One black swan (Europe bk, CDS (200 Trillion), US dollar no longer world currency, Japan bk , China housing bubble burst, ...) and it is all over for the the US.  The US will be have a huge debt spiral and the Fed will print like crazy with the blessing of most americans.

A couple of years of that will kill the US dollar and the interest rates will go up to 20 %.

Tue, 10/08/2013 - 18:38 | 4035920 Oldwood
Oldwood's picture

You may be right but it will NEVER be allowed to be called a default. That hasa such a negative sound to it and besides, default woul dme they have to pay off all of those derivatives out there. Now if they could ge those under a Fannie Or Freddie with full government backing, then maybe we would see your default then. If Ben can buy MBS and Treasuries, why can't he sell the derivatives? Cash positive until they ain't right? If they are looking to cash out of a burning house, wouldn't they want the derivatives covered by the fire also?

Tue, 10/08/2013 - 16:05 | 4035242 1835jackson
1835jackson's picture

A deflationary death spiral can only be averted by the govt borrowing more money from the fed. The debt ceiling limit is a show to keep us all distracted and to keep the masses thinking that there are actually 2 political parties in Washington. 

Tue, 10/08/2013 - 16:13 | 4035280 robertocarlos
robertocarlos's picture

The death spiral and the cash in my mattress could be killed in 15 minutes. That would be a double whammy and people won't know if they are coming or going. What will the reset look like? Don't ask me. I still believe in the dollar but it is getting harder to not spend it on real stuff.

Tue, 10/08/2013 - 17:42 | 4035708 walküre
walküre's picture

Agreed. When you look at that cash, you gotta wonder. What is this fucking paper really worth?

Tue, 10/08/2013 - 18:10 | 4035807 Herd Redirectio...
Herd Redirection Committee's picture

14 bucks of fiat for 6 bottles of local (Canadian) beer

Wed, 10/09/2013 - 01:00 | 4037071 Crisismode
Crisismode's picture

WOW

 

$2.25 for a bottle of beer?

Are you crazy?

 

Tue, 10/08/2013 - 16:07 | 4035251 robertocarlos
robertocarlos's picture

I watched The Day After last night. I don't believe anyone in their right mind will press the button. Obama is clinically insane.

Tue, 10/08/2013 - 16:08 | 4035263 falak pema
falak pema's picture

200 hours is a bat of an eyelid. I don't believe bats have eyelids, they do, but they rely on sound to get around.

ITS TIME TO MAKE A LOT OF SOUND LIKE BATS FLYING OUT OF HELL.

Tue, 10/08/2013 - 17:52 | 4035755 it aint easy
it aint easy's picture

Eyelids don't have bats. Duh.

Tue, 10/08/2013 - 16:10 | 4035266 Mercury
Mercury's picture

Everyone knows that the Fed is going to keep printing money, ergo they’re going to keep sending markets higher.

And this debt ceiling charade only proves it. The secret is out there in the open. And now it’s completely obvious who’s really in charge.

 

Is the Fed going to make coupon payments now too?

Tue, 10/08/2013 - 16:09 | 4035269 A Lunatic
A Lunatic's picture

There is literally nothing to see here. This is the same melodramatic bullshit argument as the "the Iranians are going to have nuclear capability within a year" crap we have been hearing since 1978. There will be no default of any meaningful consequence, only fear mongering and blindly lashing out at the only sane person in the room; the American taxpayers, who by a 60% margin (or more) do not want any more debt added to their account until there are realistic limitations to government spending....

Tue, 10/08/2013 - 18:43 | 4035932 Oldwood
Oldwood's picture

Come on! At least let us enjoy a little of the anticipation. When it really does happen it probably going to be a big disapointment anyway, so let us have this little bit.

Tue, 10/08/2013 - 16:13 | 4035283 dirtyfiles
dirtyfiles's picture

we can always sell Alaska back to Russia.

Tue, 10/08/2013 - 16:15 | 4035300 daemon
daemon's picture

"And now it’s completely obvious who’s really in charge."

Yeah !

And it is sooo comforting to think that, at least, uncle Bernie is in charge....  always ready to take off with his helicopter.

Don't you think so ?


Tue, 10/08/2013 - 16:14 | 4035302 SheepDog-One
SheepDog-One's picture

People talking about 'buying a dip' so as not to miss 'the big pop' and all this nonsense....as it stands DOW is not even -3% from all-time record insane highs. This is the type of shit where fools suddenly find their head has been lopped off.

Tue, 10/08/2013 - 16:22 | 4035333 Icewater Enema
Icewater Enema's picture

Time for Ben "The Roach" Bernanke:

http://www.youtube.com/watch?v=f96p-IhcZhQ

Tue, 10/08/2013 - 16:33 | 4035410 Yellowhoard
Yellowhoard's picture

It's not default so long as interest and principle is paid off on mature debt.

We have plenty of revenue to cover this.

Tue, 10/08/2013 - 16:47 | 4035468 dlfield
dlfield's picture

Ergo, nobody cares about this article anymore.

Tue, 10/08/2013 - 16:48 | 4035479 Uchtdorf
Uchtdorf's picture

You people need to get over yourselves. Bankers have fixed Greece, dozens of times, in the last few years. America will get through all this with nary a scratch. Mark my words. So stopping making such a big deal about debt limits and Obamacare and junk like that.

It pains me to do this, but...<sarc off>

Tue, 10/08/2013 - 16:57 | 4035540 Son of Captain Nemo
Son of Captain Nemo's picture

"Stocks and bonds haven’t moved because nobody cares what’s happening in the US government anymore."...

Oh they'll care when the entitlements are no longer available to them and the welfare checks cease coming in.

The next item on the agenda for these evil co(%$u(kers is a World War and a way to bring it home to the sheep just like 12 years ago only violent enough that we will need a new draft.

The guys in Washington and New York haven't given up yet, and they're not about to go quietly into that good night for there money to be parked in destinations like Bejing and Moscow.

Tue, 10/08/2013 - 18:47 | 4035943 Oldwood
Oldwood's picture

Oh they have no problem kicking people out of the parks becasue that ain't there peeps anyhow. They know who butters their buns and they are going to take damn good care of those folks right up till the very end, when they actually need hordes into the streets. Another application for usefull idiots.

Tue, 10/08/2013 - 16:59 | 4035542 wisehiney
wisehiney's picture

<---------Markets freak out 1st

<---------ZHer freaks out 1st

Tue, 10/08/2013 - 18:21 | 4035849 forwardho
forwardho's picture

Hiney, been "freakin out" since TARP.

The mind boggles that an entire world can buy into the collective fantsy that you can print imaginary wealth.

There is no 17 trillion which can be used to "pay back" the excesses of the present at some time in the future. It's a lie. That all are willing to go along with the fantasy tells you just how bad it will be when an outside event puts the truth to the lie.

Tue, 10/08/2013 - 17:02 | 4035560 Winston Smith 2009
Winston Smith 2009's picture

"the largest country in the world is careening towards default in just over 200 hours"

Please don't perpetuate that complete and utter bullshit.  The fedgov brings in $250 billion in income every month, so the $30 billion monthly interest payment could easily be made.

Tue, 10/08/2013 - 17:41 | 4035710 walküre
walküre's picture

But they're spending more than $220 billion a month. Now what? Either don't pay the creditors or don't pay your staff.

Tue, 10/08/2013 - 18:13 | 4035817 Herd Redirectio...
Herd Redirection Committee's picture

Exactly.  And either one is just itching to turn on you.

In Zimbabwe, Mugabe decided to (ironically) spend the few USD the state had on his soldiers.  Because he knew if they didn't get paid, it was over for him in a heartbeat.

Tue, 10/08/2013 - 18:38 | 4035910 Winston Smith 2009
Winston Smith 2009's picture

"But they're spending more than $220 billion a month."

As pointed out by David Stockman and many others, you then prioritize payments to absolutely essential items, like paying the debt interest for instance so as not to default, just as you would do in that position as an individual.  Why is that apparently so very difficult for people to understand?  There was even an article here about that just a day or two ago.

Tue, 10/08/2013 - 18:54 | 4035965 Oldwood
Oldwood's picture

The last thing I want is Obama prioritizing anything for me.

Tue, 10/08/2013 - 20:11 | 4036342 Winston Smith 2009
Winston Smith 2009's picture

Now that we've drifted so ignorantly far from my original point, let me get back to it:

Talk of a US default is political BS used to scare the ignorant because the $30 billion in monthly interest can easily be paid even if the shutdown continues and the debt ceiling isn't raised!  Case closed.

Tue, 10/08/2013 - 17:02 | 4035566 devo
devo's picture

Computers don't panic.

Tue, 10/08/2013 - 18:11 | 4035811 forwardho
forwardho's picture

No, but they do make decisions based on faulty input.

 

Tue, 10/08/2013 - 17:04 | 4035568 yogibear
yogibear's picture

Hey's it's almost the Federal Reserve bankster 100th birthday and bank takeover of the US treasury.

Tue, 10/08/2013 - 17:06 | 4035582 rp1
rp1's picture

Bernanke needs a better setup.  This guy has style:

http://www.youtube.com/watch?v=NZR64EF3OpA

Tue, 10/08/2013 - 17:07 | 4035587 OwnSilverPlayMusic
OwnSilverPlayMusic's picture

I've got to bust out an old gem END THE FED! We're still with you Ron.  Some people DO actually care about this country.

Tue, 10/08/2013 - 17:14 | 4035600 dcohen
dcohen's picture

Do you mean the country of the largest govt?

Tue, 10/08/2013 - 17:23 | 4035629 Surging Chaos
Surging Chaos's picture

As already mentioned, there will be no default. Interest payments (for now) are low enough to where debt can be easily serviced.

The real question we should be asking, is when will yields go back up? Just ask Greece what happens when your bonds get blown up.

Tue, 10/08/2013 - 17:46 | 4035720 kurzdump
kurzdump's picture

What about maturity? Public debt has to be rolled over as well, it is not just a matter of interest.

Tue, 10/08/2013 - 17:28 | 4035639 Mi Naem
Mi Naem's picture

"the largest country in the world"

Simon, you were referring to Russia, or China? 

Tue, 10/08/2013 - 17:27 | 4035644 Teddy Tenpole
Teddy Tenpole's picture

 

 

 

So buy the dip, right?

Tue, 10/08/2013 - 17:29 | 4035652 kchrisc
kchrisc's picture

Uncle "Sam the Scam."

Like an uncle that sneaks in at night to "touch you to sleep."

Do NOT follow this link or you will be banned from the site!