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Goldman Chimes In: A Deal May Be Delayed Until The Weekend
So much for all the "priced in" hope. At this point a delay past October 17 looks inevitable. But it's ok - despite what all the fearmongers have been saying, the world will not end on October 18, or 19, or later (which as we said earlier would only embolden the GOP to demand much more, until such time as the market really does crash), because as Goldman admits: 'missing the deadline by a few days would probably be manageable." In short, it seems that no deal by October 17 is now a, well, done deal.
From Goldman's Jan Hatzius
Competing Debt Limit Plans Are Similar But Might Delay Enactment
BOTTOM LINE: The House and Senate now have competing debt limit increases, which both extend the debt limit to February 2014 and reopen the government through January 2014, but differ on details. The differences are not enough to block enactment of a debt limit increase, but could delay enactment past October 17 given the procedural timelines in each chamber of Congress. That said, the fact that the proposals are so similar implies that a final agreement is close at hand.
1. The Senate had nearly reached agreement on the debt limit… The agreement had not been formally released but Senate leaders had been in the final stages of working out a deal that would reopen the government through January 15, 2014, at the same spending level in effect prior to the shutdown, and would extend the debt limit through mid-February. It includes minor technical changes to the Affordable Care Act ("Obamacare") and would establish a formal conference committee on the budget between the House and Senate to work out a broader fiscal agreement ahead of the next deadline. This negotiation would be expected to focus on replacing some of the cuts under sequestration--the next round of cuts takes effect January 15, 2014--with the budgetary effects offset with savings from other areas of the budget, spread over ten years.
2. …But the House may attempt to pass its own deal. House Republicans may put forward their own version of the debt limit bill instead. Theirs would take the basic components of the Senate's bill but would add a two-year delay of the medical device tax and a cancellation of subsidies under Obamacare for members of Congress. These provisions appear to be aimed at ensuring adequate Republican support in the House while still having a possibility of being adopted in the Senate (with these items, the House plan will now look broadly similar to the bipartisan plan discussed in the Senate over the weekend). There is still some uncertainty as to whether there will be adequate support in the Senate, or even the House, for this bill, however; House Democrats seems inclined to oppose the bill, as does the White House, and it is unclear whether there is enough support among House Republicans alone to reach a simple majority of 217 votes.
3. A deal could still be enacted by October 17, but there are reasons to think it could go a little longer. First, although Congress has taken the October 17 deadline surprisingly seriously, the Treasury will still have funds after that date, and Congress knows this. Second, if the House amends the Senate bill or passes its own instead, this will delay enactment. Third, the Senate could present a procedural obstacle if even one member objects, since consideration can take as long as five days in that chamber. Fourth, if the House is eventually forced to take the Senate plan for a lack of viable alternative, Republican leaders are unlikely to want to hold that vote until the deadline, if not later. There is still a chance Congress will manage to get the debt limit raised by October 17, but a resolution later this week or even this coming weekend also appears possible.
4. Congress needs to raise the debt limit by October 17 to avoid disruptions, but missing the deadline by a few days would probably be manageable. The Treasury will lose its ability to borrow on October 17 and will have to rely on its cash balance. The Treasury market has already seen disruptions from the debt limit debate, and going past the October 17 deadline is likely to exacerbate those and could deal another blow to confidence. That said, the practical implications of going past October 17 are manageable. Treasury settles several auctions on October 17. $87bn in 3-month, 6-month, and 12-month bills have already been announced. It downsized its auction of 4-week bills, announced this morning, to $20bn from $30bn last week. With $120bn in bills maturing October 17, this will result in a greater-than-expected pay down of $13bn in debt. As of October 10 (the most recent data available) the Treasury had a cash balance of $36bn. The Treasury has projected that it will have a $30bn cash balance as of October 17, though this morning's announcement might reduce that somewhat. At this point we estimate that the Treasury should have at least a $10bn cash balance through late next week. That said, given the volatility in the Treasury's daily cash flows, as the Treasury's cash balance dwindles the risk of a failure to make scheduled payments increases.
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I hope there is no deal.
Let it burn.
Eventually true. Good chance they go over the cliff, get terrified by what happens and pull back.
I can feel the panic grow .....
Odd things are beginning to happen out there.
Question is... by chance or by plan?
EBTs on hold would validate tinfoil hats theory on DHS ammo purchases... Hmmmm?
Is this the transparency Obomber was talking about?
I agree, Yin(g)-Yang, a lot of weird stuff going on... And I believe, it's all not by coincidence, which supposedly doesn't happen in politics, the off-shoot of the banksters' ultimate agenda at any point in time..
This is very good (but might sound like crazy-talk to those who have not woken up yet):
MUST HEAR: THE BANKS ARE GEARING UP FOR THE COLLAPSE - Dave Hodges
http://youtu.be/BSwP0lZAWUE
[The DHS ammo purchase(s) -- and the IRS's, Social Security Office's, et al -- was no ttheory.]
Fuck you Goldman Sachs and all your shareholders.
sure always believe what goldman sucks says.
haha...
good time for a bank holiday over the weekend...
A few more days to stack!!!! the three B's
Beans
Bullets
Bullion
Something odd here. It's like this time, they want to default.
B-I-N-G-O!
Re: they
If there are more than three "they's", they could never agree on anything long enough to decide what "they" wanted to do.
so you are saying...
three or more members of TPTB cannot agree to shear the sheeple?
Default could be a better scenario than taking 50 million people on EBT and turning it into 100 million in a few years. We can cut the military spending, stop the entitlement growth, default on bonds, and still maintain sanity here at home I think.
Get ready to start paying 10x for imported goods and since the US imports just about everything these days except food, you may have to wait for the 60" flat screen TV for a while.
This would be good. Manufacturing would come back home.
Again, there is no "default"...$200+ billion monthly in tax revenue covers the only "defaultable" item...$30 billion monthly interest on Treasury debt.
Everything else is simply a promise and the only way the house can get prioritized spending is to force the US to live on taxable income...but lets see how this plays (ie, I'm not so sure money won't just keep flowing and the House GOP will find out they don't exactly own the purse strings anymore???)
The Dems will tighten the screws on the public regardless of whether there are sufficient funds coming to cover expenses. The EBT system will be shut down on Nov. 1st due to lack of funding. Watch the sheeple stampede if this is allowed to happen.
Then Choomy declares martial law, arrests the Republicans and starts rounding up all the conservatives/Christians/vets/white people.
Don't you mean the start of the next revolution?
I was wondering if i should cancel my Toyota service appointment on Thursday. Please advise
Think the internet rumor is that EBT gets cut off Nov. 1 so you've got time...maybe.
EBT is the last thing that would be cut...if this was a rational government.
Err, there is a planned cut in EBT distributions slated for November. The zombies will not be happy.
http://www.usatoday.com/story/news/nation/2013/09/23/stateline-food-stamps/2854121/
Let me rephrase my question.. Will they even be open on Thursday
I would make sure that the main escape vehicle is tune up, gassed up and ready to head for the hills if necessary.
Look, up in the sky... it's the Hindenburg Omen dangling a trillion dollar coin.
A deadline is not really a deadline unless you only have a couple hours to shop on a limitless EBT card, I guess.
Hopium is good for 500-800 point rally.
What is a muppet to do?
maybe they should continue negotiations at the Mariott in lets say Hawai? Hilton Bahamas ? Gringos Inn Acapulco?I seem to make better decesions on wacation.
just sayin
C'mon, nothing is going to happen. They'll raise the debt 'ceiling', .gov will be funded, all will be well; just in time for a Monday rally.
Clearly, you're right. TPTB always know something we don't, and the proof is in the pudding: last week, there was yet another big rally based on pure "hopium."
Today, there is no hopium, but still there is no panic.
Why is that? Well... as I said, TPTB know something we don't.
Therefore, you're right, "new edifice."
see below. a deal has been made. Full retreat in the House...good show of force for the members back home. should be interesting to see having thrown Detroit under the bus what happens vis a vis Puerto Rico. that does strike me as causii dealum as well. if this does actually happen I would expect a big move into Treasuries but we'll see. there's no Syria, there's no oil embargo, there's no runaway deficit, there's no policy mayhem...only another political fist fight that at the end of the day doesn't appear to be amounting to anything. I do/did? find it interesting that the market responds favorably to Mayhem. how many more bankruptcies are "waiting in the wings" as the reverberations of "yield hungry annihilation" continues to be felt?
How would the Squid know? Oh. I forgot. They're calling the tune.
The Squid is just another drama queen piling on the freak show of american politics.
Fuck the squid.
Hey Goldman, shut the fucking fuck up. You have a new tune every day. You don't know jack shit.