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Hilsenrath Warns Fed Is Out Of Ammo, "Policy Makers Resorting To Backup, Backup Plans"

Tyler Durden's picture




 

As the U.S. economic expansion ages and clouds gather overseas, policy makers worry about recession. But, as WSJ's Jon Hilsenrath warns, their concern isn’t that a downturn is imminent but whether they will have firepower to fight back when one does arrive. "The world economy is like an ocean liner without lifeboats,” economists at HSBC Bank explained, and as looming threats are a reminder that the slow-growing global economy is just a shock away from peril, with rates already at zero, Douglas Elmendorf, the recently departed director of the CBO, warned, "policy makers are thinking about their backup, backup plans."

As The Wall Street Journal reports,

Money has been Washington’s primary weapon in the decades since British economist John Maynard Keynes proposed aggressive government spending to battle the Great Depression. The U.S. generally injects cash into the economy through interest-rate cuts, tax cuts or ramped-up federal spending.

 

Those tools could be hard to employ when the next dip comes: Interest rates are near zero, and fiscal stimulus plans could be hampered by high levels of government debt and the prospect of growing budget deficits to cover entitlement spending on retired baby boomers.

Even so, looming threats are a reminder that the slow-growing global economy is just a shock away from peril.

Japan’s economy contracted in the second quarter and Europe recorded lackluster growth. China’s slowdown, meanwhile, appears more severe than global policy makers initially realized and a currency devaluation there might spur trade frictions.

 

With the U.S. expansion entering its seventh year, policy makers are planning how to respond to the next downturn, which history shows is inevitable. The current expansion is now 16 months longer than the average since World War II, and none has lasted longer than a decade.

 

“The world economy is like an ocean liner without lifeboats,” economists at HSBC Bank wrote in a recent research note.

In the next downturn, former Fed Chairman Ben Bernanke said in an interview, the tools of government will be “more limited than usual, but they’re not zero by any means.”

The Fed, for example, could experiment with negative interest rates. A recession also could force Congress and the White House to bridge Washington’s partisan divide to strike a deal that pairs short-run stimulus with long-run plans to reduce the deficit.

 

“This is a very live question,” said Douglas Elmendorf, the recently departed director of the Congressional Budget Office. “Policy makers are thinking about their backup, backup plans.”

Many economists believe relief from the next downturn will have to come from fiscal policy makers not the Fed, a daunting prospect given the philosophical divide between the two parties.

At issue is how much the U.S. can afford to borrow and spend to goose the economy out of the next recession. The experience of the past recession has set off sharp disagreement among economists.

 

“If there’s another recession, there will be pressure to expand the deficit fairly rapidly to a level that is unprecedented in modern time,” said Stephen King, senior economist at HSBC and author of the report on the global economy’s lack of fiscal lifeboats.

 

No one knows how much U.S. debt can grow without triggering an increase in inflation and interest rates that would hobble investment and growth. “We don’t have that much experience with countries carrying debt like the level the U.S. has right now,” said Mr. Elmendorf, the budget analyst.

 

Even if it were clear that the U.S. could afford to boost spending or cut taxes, partisan disagreements over Mr. Obama’s 2009 stimulus spending stand in the way of a consensus on the benefits of fiscal policy in a downturn.

 

Compromise has been elusive. After Republicans won control of the House in 2010, the White House sought, unsuccessfully, a deal to raise revenues and curb long-run growth in spending, in exchange for a short-run stimulus.

 

The next downturn could return the two sides to the bargaining table. But lawmakers will have less room to maneuver “because the entitlement side hasn’t been addressed,” Mr. Corker said. “We haven’t dealt with even the most basic elements.”

*  *  *

So taking Hilsenrath as The Fed's unofficial mouthpiece, this note suggests rates are coming off the zero-bound no matter what as a lack of 'tools' in a downturn trumps the risk of causing a downturn to start with.

 

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Tue, 08/18/2015 - 10:35 | 6438887 Grandad Grumps
Grandad Grumps's picture

Their next bullet (aimed at the left temple) is creative destruction ... as it could have been in 2008.

Tue, 08/18/2015 - 10:38 | 6438908 Headbanger
Headbanger's picture

WHAT I SAID YOU QE-4 MOOK-TARDS!

THE FERAL RESERVE WILL RAISE RATES SOON NO MATTER WHAT

Tue, 08/18/2015 - 10:49 | 6438960 J Jason Djfmam
J Jason Djfmam's picture

Orwellian Federal Reserve will raise rates by to -2%.

Tue, 08/18/2015 - 10:57 | 6438994 Secret Treaties
Secret Treaties's picture

"The Fed, for example, could experiment with negative interest rates."

 

Or citizens, for example, could burn the Fed to the ground.  You know, just to try a different approach.

Tue, 08/18/2015 - 11:06 | 6439029 Secret Treaties
Secret Treaties's picture

The next downturn could return the two sides to the bargaining table. But lawmakers will have less room to maneuver “because the entitlement side hasn’t been addressed,” Mr. Corker said. “We haven’t dealt with even the most basic elements.”

And there is your crony capitalist swill for the day . . . translated . . . “We need to cut entitlements so that taxpayer money can be freed up for future corporate bailouts.  And, of course, to pay for maintaining the empire.”

Tue, 08/18/2015 - 11:31 | 6439150 Occident Mortal
Occident Mortal's picture

They will start tightening very soon.

 

Dollar will fly and EM will die.

 

The US is going to export deflation as the USD strengthens and commodities and commodity currencies all crash and burn.

 

A tidal wave of cpaital will flood back in the US, specifically to be parked in UST just as the Fed looks to unwind its ridiculous UST holding.

Tue, 08/18/2015 - 12:33 | 6439417 Fudomyo
Fudomyo's picture

Yes, that's part of it.

And the infrastructure investment and retooling of production coming off the back of it.

The hot money flows back out of EM is the start of a 10 + year cycle of a production shift back to the U.S., (which will be bolstered by lower energy costs).

The private banks are going to pick up the slack in the private sector with increased loan activity and easing of credit which will create the next housing bubble and services boom.

It will be much more profitable for them with rates going up than loaning during the ZIRP period.

The corporate tax holiday for repatriation of overseas holdings will have some kind of Investment in America provision built in as a patriotic gesture, and you'll see all kind of Ads championing them "making America great again".

It's called making money coming and going. Watching Buffett buying production and transport on the cheap should tell people something. He just spent half of Berkshire's cash on Precision Cast Parts at a premium for a reason. 

Tue, 08/18/2015 - 13:37 | 6439705 Stumpy4516
Stumpy4516's picture

That's funny.  Is this MDB, if not you forgot the sarc at the end.

Export deflation and at the same time rocket the dollar's purchasing power.  Which means the national debt in real terms rockets up which means the interest payments on the debt rocket up due to the increased purchasing power of the dollar and the interest payments really rocket up due to the increased interest percentages due to the tightening.  That right there causes the failure of the current US economic reality.

And all those foreign holders of the dollar are going to take those dollars and invest in new companies in the US?  Why?  Instead they will buy out the assets of the US such as the highways, water rights, mineral rights, electrical systems and spend the rest of their dollars building factories in their countries or where it is cheaper, fewer EPA regs, no "carbon pollution" BS and where the social structure is not crumbling into an unknown outcome.

Park their now high purchasing potential dollars into UST?  Not a chance. What they will be doing is cashing in their UST, taking that money and making purchases in commodities, hard assets and companies/industry built outside of the US.  They will see that the US is getting near a collapse phase and will step clear of the destruction. 

Such a situation will also cause the US war machine to become even more onerous upon the US economy.  This results in a difficulty in keeping the war machine ramped up and active at the current levels.  Resulting in numberous hot spots igniting to probe and test the ability to engage.  If weakness is found then all sorts of activity begins and Israel will demand the US provide active and expensive engagement. 

Tue, 08/18/2015 - 10:57 | 6438996 clooney_art
clooney_art's picture

I have lost control of everything.

Tue, 08/18/2015 - 12:26 | 6439403 Implied Violins
Implied Violins's picture

Where's TeamDepends when you need him?

Tue, 08/18/2015 - 14:02 | 6439851 Dsyno
Dsyno's picture

@Debtcrash: Stop linking your comments to your shitty website.

Tue, 08/18/2015 - 10:54 | 6438976 y3maxx
y3maxx's picture

Back up plan includes,  inflation continues at officially near zero, unnofficially >25%.

Tue, 08/18/2015 - 10:54 | 6438981 SafelyGraze
SafelyGraze's picture

"an ocean liner without lifeboats"

when the liner capsizes, you find out quickly who is not wearing a personalFloatationDevice.

-warren

Tue, 08/18/2015 - 11:19 | 6439090 Mr. Bones
Mr. Bones's picture

Did they increase the chocolate ration again? 

Tue, 08/18/2015 - 10:50 | 6438965 y3maxx
y3maxx's picture

Back up plans not mentioned include,

Cayman Islands, Switzerland and Bermuda.

Tue, 08/18/2015 - 11:59 | 6439276 PlayMoney
PlayMoney's picture

Its going to fall sooner or later the princess might as well push it over the edge. Go ahead Janet... I dare you. No, i double dog dare you.

Tue, 08/18/2015 - 12:33 | 6439431 KnuckleDragger-X
KnuckleDragger-X's picture

Dear chairwhatever Yellen, don't be surprised if an aborigine chops you up when your money cannon jams... Yours truly the aborigine's....

Tue, 08/18/2015 - 10:44 | 6438929 Takeaction2
Takeaction2's picture

They have to print don't they?  They won't let it fall...will they?  It is soooo close right now to unraveling I can feel it.  =THese fuckers are going to press the print button.....aren't they?  You guys always talk QE to infinity, and in my head I am going "No way, they can't just print into oblivion...over and over, they have to stop, start raising rates, etc"  They never can do what is right...can they?

Tue, 08/18/2015 - 12:30 | 6439423 Implied Violins
Implied Violins's picture

I'm going long toilet paper - double ply, not too soft, so I can write little $ signs on each square without ripping it. Bet I can trade those for food, soon.

Tue, 08/18/2015 - 10:35 | 6438892 ebworthen
ebworthen's picture

Translation:  "QE 4, 5, & 6 or it's tanks in the streets!"

Tue, 08/18/2015 - 10:39 | 6438911 Headbanger
Headbanger's picture

Tanks on the streets

Again

Tue, 08/18/2015 - 11:01 | 6439008 Arnold
Arnold's picture

Tanks for the Mammarys.

 

( I like that slogan, I'll find a perfect place for it someday.)

Tue, 08/18/2015 - 11:37 | 6439177 general ambivalent
general ambivalent's picture

Make a nice neck tattoo.

Tue, 08/18/2015 - 10:35 | 6438896 max2205
max2205's picture

Fools 

Tue, 08/18/2015 - 11:32 | 6439153 BandGap
BandGap's picture

If they use negative interest rates aren't we all going to be stuffing our mattresses with money?

Here comes the black market economy, no wonder they are trying to do away with cash. You can bet the FSA will have their EBTs loaded and ready to go.

Tue, 08/18/2015 - 12:10 | 6439327 agstacks
agstacks's picture

There will be new laws to compliment the negative interest rates. 

"Yes, Mr. Customer, I see your 5k balance right here. "

"OK, I'd like to close my account."

"OK, what bank would you like the check made out to?"

"No thanks, I'll take the cash"

"I'm afraid I can't do that, Dave"

 

 

Tue, 08/18/2015 - 10:36 | 6438897 ghostzapper
ghostzapper's picture

Not an issue.  Yellen will simply solicit assistance from the guys on Fast Money - they are the strongest and smartest guys on the planet.  

Tue, 08/18/2015 - 10:36 | 6438900 J Jason Djfmam
J Jason Djfmam's picture

Dumbfucks.

Tue, 08/18/2015 - 10:37 | 6438902 order66
order66's picture

At issue is how much the U.S. can afford to borrow and spend to goose the economy out of the next recession

 

Well, the U.S. is already over 100% debt to GDP so.......unlimited debt destruction?

Tue, 08/18/2015 - 10:50 | 6438963 r101958
r101958's picture

Hmmmm, let me see.......? 18 trillion debt, 3 trillion income......'afford to borrow and spend to goose the economy' = Big 0.

Tue, 08/18/2015 - 11:48 | 6439223 Arnold
Arnold's picture

Negitive Zero,

 

-- Inhabitant of Bizarro World Economics Foundation

Tue, 08/18/2015 - 12:00 | 6439283 Bobportlandor
Bobportlandor's picture

Here's what I would Start with.

Balanced Budget 4 ALL: fed, state, households.

All existing unfunded debt going forward renegotiated into balance.

ALL DEBT frozen @ 2% into perpetuity or paid off. This includes: fed, state, credit cards, pensions, car loans, etc.

Tax the hell out of corporation and the the wealthy and use that money to target small businesses.

Shrink government and use the money for Infrastructure.

 

Tue, 08/18/2015 - 10:37 | 6438905 J Jason Djfmam
J Jason Djfmam's picture

Not one word about dropping money from helicopters.

Tue, 08/18/2015 - 10:46 | 6438941 cpnscarlet
cpnscarlet's picture

Remember when a helicopter drop was a tax "rebate" to the masses instead of easy money to the banksters? Ah...the good ol' days when we all enjoyed going into debt.

Tue, 08/18/2015 - 10:51 | 6438972 CuttingEdge
CuttingEdge's picture

The money has been dropping from helicopters, but only above the Hamptons.

Tue, 08/18/2015 - 11:45 | 6439210 sschu
sschu's picture

dropping money from helicopters.

This has to be in the cards, by executive decree.  But it will be in the form of vouchers so people just do not use the money to pay down debt.

This crash in commoditoes and (soon) to be housing has got to be stopped at all costs.

It will have minimal effect, but we all knew that going in.  At least they "did something." 

sschu 

Tue, 08/18/2015 - 10:37 | 6438906 q99x2
q99x2's picture

Convert HSBC into a publicly owned and operated open source financial system

Tue, 08/18/2015 - 10:40 | 6438918 cpnscarlet
cpnscarlet's picture

There ARE lifeboats and they're made of PMs. Problem is the pain you get jumping into them and waiting for the iceberg....and everyone laughing at you while you sit there. And wondering if the party you missed was worth it.

Tue, 08/18/2015 - 10:42 | 6438921 Bill of Rights
Bill of Rights's picture

Just as I said last night he he

Tue, 08/18/2015 - 10:42 | 6438922 The Duke of New...
The Duke of New York A No.1's picture

They could just start raising interest rates and send everyone into their bunkers for the next couple years.

Tue, 08/18/2015 - 10:47 | 6438947 Charles Nelson ...
Charles Nelson Reilly's picture

ha.. good one.  It's about Obama's "legacy" now.  

Tue, 08/18/2015 - 11:01 | 6439002 Bill of Rights
Bill of Rights's picture

Legacy? oh you mean the worst piece of shit to ever  hold office...ok noted.

Tue, 08/18/2015 - 11:08 | 6439040 Arnold
Arnold's picture

Doubt they will carve that on the Library entrance lintel.

Might use mulatto. It's becoming fashionable again.

Tue, 08/18/2015 - 12:47 | 6439476 kralizec
kralizec's picture

Mulatto is such an old term...how about Halfrican?

Tue, 08/18/2015 - 10:43 | 6438923 f16hoser
f16hoser's picture

Yeah, like attacking other countries. Did anybody see that harbor explosian in China? Weird...

All kidding aside; my prayers to the family's who lost loved ones.

Tue, 08/18/2015 - 10:44 | 6438924 Dr. Engali
Dr. Engali's picture

I read this puke piece earlier. The joke line of the article that stood out for me is: "Few economists believe the U.S. is near recession. The economy seems to have regained its footing after a first-quarter stumble"


Well Hilsenbarf, few economists believe that because their job depends on them not believing it. The truth is that we have been in a major depression since 2000 and it's getting worse. It's been masked over by major debt, propoganda, distractions, SNAP, and homeless centers. All of which are running out.

Tue, 08/18/2015 - 10:45 | 6438938 J Jason Djfmam
J Jason Djfmam's picture

The depression is what remains even after you stop not believing in it.

Tue, 08/18/2015 - 11:07 | 6439035 TeethVillage88s
TeethVillage88s's picture

"It's been masked over by major debt, propoganda, distractions, SNAP, and homeless centers. All of which are running out."

It has also been masked over by huge FISCAL Policy of exponential spending and a Global War on Terror... and bolstered by the Pivot to Asia and new Cold War with Russia.

But I probably missed the major financial maneuvers here.

- Purges of Retirement & Pension Wealth
- Purges of Savings Account Interest Earning
- Purges of Housing Wealth
- Purges of Good Full Time Jobs
- Purges of Middle Class Wealth
- Purges of State and Voter Influence in Vichy DC
- Purges of Privacy
- Purges of Justice & Individual Rights & Opportunity
- Purges of Free Press & Media through Nationalization

I here that in 1929 after the FED Doubled the Money Supply from 1921 it caused the stock market crash and bank runs after Rockefeller and Bernard Baruch exited the Markets.

This collapsed 16,000 banks.

Hm we only have 5,500 banks today, so...

They can always go after RE, Property, and US Businesses in a collapse. Sovereign Bonds can be Targeted. Highways, Bridges, Parks.

Record breaking can kicking... out of ammo?

Velocity is in the Shitter.

Maybe Fiscal Policy to aid new Industries?
Low Intensity War seems the preferred crisis solution.
How does the FED turn a one world currency into a Financial Bubble?

Tue, 08/18/2015 - 10:42 | 6438925 Infinite QE
Infinite QE's picture

Let me know when the talmudic overlords are loading up their spacecraft and departing for whatever shit planet they originate from.

Tue, 08/18/2015 - 10:58 | 6438999 TuPhat
TuPhat's picture

You will never know.

Tue, 08/18/2015 - 13:21 | 6439624 detached.amusement
detached.amusement's picture

that'll probably coincide with the asteroid

Tue, 08/18/2015 - 10:45 | 6438935 aliki
aliki's picture

QE4 and when that doesn't work, she'll go to congress and get authority to buy stocks. this won't happen until they crash 20-25%. congress always wets/shits themselves when stocks are in crash-mode (same reason no real legislation has happened since TARP, dodd-frank - all non-sense that covered-up what they really should have done which was restructure the debt instead of re-flate the bubble & build a bigger debt-bomb). now, they are so fucking far down this rabbit hole, they have no choice at this point. they have to keep rates dirt-lo to keep housing with any sort of pulse. they have to keep the stock market up because they've forced all these under-funded pensions into stocks since they can't diversify with any confidence the risk-reward is worth it while making they're manditory 8%. i don't know when this all happens, but when it does, the real heavy, industrial-size shit hits the fan.

Tue, 08/18/2015 - 10:47 | 6438952 J Jason Djfmam
J Jason Djfmam's picture

Fire bomb all major U.S. cities.

Think of the rebuilding jobs!

A Krugman wet dream!

Tue, 08/18/2015 - 10:57 | 6438992 Sudden Debt
Sudden Debt's picture

I'm okay with that, but what about all those black children that could be Obama's kids?

 

Tue, 08/18/2015 - 11:06 | 6439031 J Jason Djfmam
J Jason Djfmam's picture

Oops!

Tue, 08/18/2015 - 12:37 | 6439444 OpTwoMistic
OpTwoMistic's picture

I doubt O has ever fathered a child.

Tue, 08/18/2015 - 11:34 | 6439164 hxc
hxc's picture

I like you, despite your raiders avatar.

Tue, 08/18/2015 - 10:46 | 6438940 FreeShitter
FreeShitter's picture

NIRPY nirp, bitches...itz coming to a joo bank near you.

Tue, 08/18/2015 - 10:48 | 6438958 matinee55
matinee55's picture

it's ponzi fiat & controlling / manipulating banks (fedsters) - nothing to worry about - just keep eye on futures bs

Tue, 08/18/2015 - 10:49 | 6438962 Dr. Engali
Dr. Engali's picture

Oh ye of little imagination. We still have NIRP to look forward to, and there's plenty of oil debt, student loan debt, and car loan debt for the fed to monetize.

Tue, 08/18/2015 - 11:15 | 6439076 TeethVillage88s
TeethVillage88s's picture

I remember Germany getting a 35% VAT Tax.

We keep pulling ideas from the Jesuits, Catholic Church, Chinese, and from European Banking & Government.

Of course the greatest Empires like Rome were Fascist Military Regimes.

Tue, 08/18/2015 - 12:00 | 6439279 Grandad Grumps
Grandad Grumps's picture

Rome was originally a Republic. It was not until it started to fail that it became a military dictatorship.

Tue, 08/18/2015 - 10:53 | 6438979 Arnold
Arnold's picture

@ Hilsenrath

 

Hope you got a substantial part of your salary put away.

You might have half of the half left after taxes and haircut.

Bank shaving, 50%

Equity Shaving, 50%

There is no Plan B short of taking away everything we own.

And that will be ineffective policy as well.

Molon Labe

Tue, 08/18/2015 - 10:55 | 6438988 Sudden Debt
Sudden Debt's picture

15 MINUTES!!!

15 MINUTES IS ALL IT TAKES TO UNDO EVERYTHING!!!

BERNY SAID SO!!!

Tue, 08/18/2015 - 10:58 | 6438997 JoWazzoo
JoWazzoo's picture

Bottom line --- we ARE fscked.  All the alternatives have already been tried and FAILED in Japan.

The absolute only way to clear things is up is to ALLOW the system to melt down.  That SHOULD have been allowed in 2008.  Had the natural cleansing been allowed, by now we would not be having this conversation.

Tue, 08/18/2015 - 11:04 | 6439023 Sudden Debt
Sudden Debt's picture

Yeah, but the following 7 years since 2008 would have been boring and we wouldn't probably been looking at porn websites instead of being on ZH...

 

Tue, 08/18/2015 - 10:58 | 6439001 Son of Captain Nemo
Tue, 08/18/2015 - 11:59 | 6439080 Son of Captain Nemo
Son of Captain Nemo's picture

All I can do is keep thinking of that Zionist piece of shit Reverend John Hagee and his "blood moons"...

But with everything else out there that is truly apocalyptic in the carnage that is the end-run of financial market(s) and the destruction through escalating wars to secure real estate by force as the "last option" it's not so fucking funny anymore to muse at the superstitous whether it's September 23, 3/11 or "9/11"!

Tue, 08/18/2015 - 11:01 | 6439011 Yen Cross
Yen Cross's picture

  By the time the nutjobs at the Fed. are done, a 10 year old Yugo will cost $50K, a gallon of gas $10.00, loaf of bread $10.00, and oil will be trading the $20.00 handle.

 Fucking Keynesian morons.

Tue, 08/18/2015 - 11:05 | 6439015 khakuda
khakuda's picture

Bernanke was thrilled with the prospect of using negative rates.

If it ain't working, just do more.  It wasn't bad enough to punish people with zero rates to discourage saving and capital formation, we must now make them negative.

Then, when people go to the bank to withdraw their funds, we can ban withdrawals.  We had to destroy capitalism and free markets to destroy them.

Idiots.

Tue, 08/18/2015 - 11:08 | 6439047 J Jason Djfmam
J Jason Djfmam's picture

But just think of all the money you could borrow and get paid more to do it!

Tue, 08/18/2015 - 11:06 | 6439030 the grateful un...
the grateful unemployed's picture

the fed could tap out before the next crash, and if they do i am for taking the debt off balance sheet. then a lot of wrangling over deficit reduction. everyone agrees what the problem is, but once the debt is off balance sheet, out of sight out of mind..

the inflationists say, just give us one more chance to increase economic growth by deasing the currency through inflation.do they hatchet assets slowly or all at once. theres the debate

Tue, 08/18/2015 - 11:12 | 6439065 TeethVillage88s
TeethVillage88s's picture

We know they are going to increase Military Spending again and Federal Spending will increase since it is like 1/3 of the Economy.

I bet they can go another 5 years just like this.

Who is going to stop them? They live in compounds with private security right? They use Limos and Private Aircraft with special access to garages and buildings.

Tue, 08/18/2015 - 16:09 | 6440494 RaceToTheBottom
RaceToTheBottom's picture

Worked for Enron....

I know, I know, countries are different than companies, but companies are the same as people.....

Tue, 08/18/2015 - 11:08 | 6439046 magnumpk
magnumpk's picture

Let's raise rates, cause a meltdown, then cut them to stop the meltdown.  There, that should do it.

Tue, 08/18/2015 - 11:10 | 6439058 J Jason Djfmam
J Jason Djfmam's picture

A kick in the nutz so the punch in the nose doesn't seem to hurt as bad in comparison?

Tue, 08/18/2015 - 11:09 | 6439049 SantaClaws
SantaClaws's picture

Okay, so the Fed raises interest rates.  How does the Federal Government then deal with its higher borrowing (i.e., repayment) bills?  Perhaps even worse, how do the (insolvent) 50 states deal with the higher repayment costs?

Tue, 08/18/2015 - 13:24 | 6439642 detached.amusement
detached.amusement's picture

the debt #s look so much better once adjusted for fraudulent, odious debt -    anything owed to a tentacle doesnt need to be paid back, and should not be paid back.

 

and any tentacles that set foot in this country should be summarily executed

Tue, 08/18/2015 - 11:10 | 6439057 Bastiat
Bastiat's picture

"Compromise has been elusive. After Republicans won control of the House in 2010, the White House sought, unsuccessfully, a deal to raise revenues and curb long-run growth in spending, in exchange for a short-run stimulus"

 

Do they listen to themselves?  What absolute bullshit.

Tue, 08/18/2015 - 11:36 | 6439176 JoWazzoo
JoWazzoo's picture

That is not quite true.  The WH did NOT provide a real "curb to long-run growth in spending".  What they proposed was so full of smoke and mirrors.  Similar tp "base line budgeting" which is 100 % bullshit.  "See - we cut spending by 3 %".  No you cut the rate of growth of spending by 3 %.  Big difference and both parties continue that line of garbage.

Tue, 08/18/2015 - 11:11 | 6439062 22winmag
22winmag's picture

The large crowds of people at my local shooting ranges are not out of ammo.

 

In fact, they spend a great deal of their hard-earned fiat money buying guns and ammo, and practicing combat shooting skills on their own dime.

 

They are angry and will be looking for answers.

Tue, 08/18/2015 - 11:18 | 6439088 Banker Buster
Banker Buster's picture

I've noticed the same thing.  Most are armed to the teeth and pissed.  I haven't met one liberal out there, where do they practice shooting?

Tue, 08/18/2015 - 11:24 | 6439107 TeethVillage88s
TeethVillage88s's picture

A lot of minorities join the army I heard.

Saw some guys in the Gun Shop, Big Box Store, looked like they were more aggressive types than hunters. Guess they were educating themselves on the action of a black shotgun.

Tue, 08/18/2015 - 13:17 | 6439602 Winston Churchill
Winston Churchill's picture

What are targets for $100 Alex.

Tue, 08/18/2015 - 11:11 | 6439063 all-priced-in
all-priced-in's picture

It's a confidence game -

 

When people lose confidence the game is over.

 

 

 

 

Tue, 08/18/2015 - 11:25 | 6439113 TeethVillage88s
TeethVillage88s's picture

Crisis what Crisis. Great album cover for Rush.

$T Debt Added
J. Carter, ,$0.37 T (4 yrs)
R. Reagan, $1.69 T
G. H Bush, $1.4 T (4 yrs)
W. Clinton, $1.627 T
G. W. Bush, $4.357 T
B. Obama, $6.365 T (4 yrs)
B. Obama, $8 T (6 yrs est.)

Tue, 08/18/2015 - 11:12 | 6439066 Banker Buster
Banker Buster's picture

Bernanke you were wrong.  What an arrogant idiot.  LIESman you were wrong.  Yellen, you keep going down the Bernanke path and you will be wrong too.  ZH, pull out the Bernanke shit eating smirk when this thing starts moving down like China.

Tue, 08/18/2015 - 11:27 | 6439125 besnook
besnook's picture

the interesting metric on the recession rate change chart is that every recession began with a republican in charge. the only democrat recession since the 20s was the 1937 recession. the republicans can't seem to stop themselves from raiding the cookie jar.

Tue, 08/18/2015 - 12:19 | 6439365 Wahooo
Wahooo's picture

You have ow intelligence.

Tue, 08/18/2015 - 11:28 | 6439129 Raoul_Luke
Raoul_Luke's picture

Peak Keynesianism!

Tue, 08/18/2015 - 11:29 | 6439137 Raoul_Luke
Raoul_Luke's picture

Only one "tool" left - WORLD WAR!  The last refuge of failed Keynesians...

Tue, 08/18/2015 - 13:45 | 6439746 TheAntiProgressive
TheAntiProgressive's picture

In that is the political "distraction" to deflect the rath of America against these crooks and criminals.

Tue, 08/18/2015 - 11:33 | 6439148 Not if_ But When
Not if_ But When's picture

RE:  Recession/Depression and income inequality discussion.

I'm beginning to think this 1% talk is in itself limiting.

-  The .01% to 1% have been living in extravegance as every economic policy is formulated to serve them.

-  But, IMO this discussion should be expanded to include the top 5% or so.  These are the households who received inheritances or are made up of (generally) two working professionals.  For example, the doctor and lawyer marriages.  In my experience, among other things, this is the Lexus SUV-driving population who approve each and every spending item to increase property taxes, etc.  For example, my small NH town has the most extravegant library in the state and just built a palatial new fire station which could readily make the cover of "Firehouse Monthly".  Oddly, a newspaper ran an article about the out-of-control property tax increases in my town.  I think the reporter took town officials by surprise so the officials thought it would sound good if they mentioned planning a nebulous sort of meeting in the future to address these kinds of budgetary concerns.  I have personally inquired about the scheduling of such a meeting in person and am treated like I am from the ex-planet Pluto.  I also used the town website to inquire on their suggested format and got a " 404 error message" esentially saying the website was broken for such a request.  I took it to the town offices and they expressed surprise, etc, BUT DID NOT FIX IT !!!!  And yes, I'm looking to move out.

-  Going back to my point, I believe the description of "who is doing well" should be expanded to the top 5% or so.  The type of people described above who have destroyed the livability situation in my own town.  (As an addendum:  When an individual brought up such spending concerns at the annual town meeting - he was admonished by someone to move away if he didn't like it).

Tue, 08/18/2015 - 12:29 | 6439405 agstacks
agstacks's picture

We got that line in CT as well. 

Elizabeth Etsy told a group of senior citizens "you're free to move to one of our neighboring towns." With a shit eating grin on her face.  

fucking cunt. 

 

 

 

 

Tue, 08/18/2015 - 12:40 | 6439451 hxc
hxc's picture

Bitching about the top x% is best left to grubby occupy hippies and brainless leftists. Anyone that knows markets can tell you that what matters is the state at the end of the day.

Tue, 08/18/2015 - 13:48 | 6439761 DrewJackson
DrewJackson's picture

The working rich, the professionals are the ones PAYING ALL THE TAXES!!! You are a fucking moron! It is the .001% who get FREE money from the FED - the Oligarchs that are stealing and ruining the World!

 

I suggest you educate yourself, and get a fucking JOB.

 

The working "rich" bust their asses off, from schooling, to taking risks starting their own small businesses.   If they stopped working, they would be POOR like you!

 

 

Tue, 08/18/2015 - 11:32 | 6439154 besnook
besnook's picture

these dumdfucks just can't understand that when the best jobs in the country are sent overseas for the enrichment of the .1% eventually they will have to pay for it.

 

c'mon yellen break out the helicopters and make the first 50 grand in income tax free for a family of four.

Tue, 08/18/2015 - 11:48 | 6439199 SMC
SMC's picture

They have another plan?  ROFL!

Zero Confidence.

Here is a plan.  How about removing approximately 5/6 of the Alphabet Soup in DC, bring back Glass-Steagall in full, repeal a few million pages of "regulations" and crony protectionist laws, break up the TBTF, investigate and prosecute the TBTJ, and get the **** out of our way.

Tue, 08/18/2015 - 11:59 | 6439275 jakesdad
jakesdad's picture

at some point there will be a tipping point of enough people having the epiphany that what actually matters is not "money" per se but critical goods (water, food, shelter, clothes, etc) & services (medical, plumbing, etc).  money only arose as a(n effectively) perfectly fungible catalyst for trade, eliminating the inefficienies of barter.  once the inefficiencies (particularly RISK) of money outweigh the "good ol' days" it's game over.  the real hurt for us comes when china realizes they've given us a generation of slave labor & the middle east realizes they've given us millions of years worth of hydrocarbons in exchange for glass beads.  the day either stumbles across the term "sunk cost" on wikipedia is going to be a profoundly bad day for us americans...

Tue, 08/18/2015 - 12:00 | 6439282 Consuelo
Consuelo's picture

 

The only thing at stake is the credibility of the $USD, and if such a fuss is necessary over a .25% hike, then the United States is in a much worse position than anyone can imagine.

Tue, 08/18/2015 - 12:05 | 6439302 agstacks
agstacks's picture

“Policy makers are thinking about their backup, backup plans.”

 

so war?

Tue, 08/18/2015 - 12:23 | 6439388 SSRI Junkie
SSRI Junkie's picture

"Hilsenrath Warns Fed Is Out Of Ammo, Policy Makers Resorting To Backup, Backup Plans"

 

"Hilsenrath Warns Fed Is Out Of Ammo" translated, means we will print until the septic tank overflows

"Policy Makers Resorting To Backup, Backup Plans" translated, means we will print until the septic tank overflows

 

any questions?

Tue, 08/18/2015 - 12:42 | 6439460 hxc
hxc's picture

One question. Why is govt like a septic tank?

 

The biggest chunks rise to the top

 

Tue, 08/18/2015 - 13:01 | 6439532 SSRI Junkie
SSRI Junkie's picture

...or the effluent always ends up in DC   lol

Tue, 08/18/2015 - 12:58 | 6439521 LooseLee
LooseLee's picture

"A recession also could force Congress and the White House to bridge Washington’s partisan divide to strike a deal that pairs short-run stimulus with long-run plans to reduce the deficit.

Right. Like any 'plan' to reduce the deficit was ever seriously executed...

Tue, 08/18/2015 - 13:02 | 6439538 PoliceThePolice
PoliceThePolice's picture

Since Hilsenrath is the septic breath mouth piece of the fed, listen to what he is saying. He is telling everyone that it is coming no matter what. This is one of the many warning shots that will be fired over the coming weeks. Every other article this asshole has written is pro FED, Banks, Debt, Fiat and other bullshit to back up what they are doing. So now he has just given everyone their first notice that the Jenga block structure is only a few pulls away from coming down. The only problem is when the blocks come down, it will be on our heads and not the elite scum that caused it.

 

Get out of the system while you can!!!!! Diversify your portfolio with Gold, Silver, Bitcoin, Guns, Ammo, Food and plenty of water. I for one want to be hydrated when bankers and politicians are getting beat to death on the street corners. The tears of joy will be flowing from me for sure.

Tue, 08/18/2015 - 13:48 | 6439758 TheAntiProgressive
TheAntiProgressive's picture

“The world economy is like an ocean liner without lifeboats,”economists at HSBC Bank wrote in a recent research note.

First overboard are FED officials, TBTF bankers and the croney capitalist.  Make sure some are bleeding quite a bit to attract the real sharks in the world.  Fun to see such a feeding frenzy.

Tue, 08/18/2015 - 16:40 | 6440651 RobM1981
RobM1981's picture

Has Paul Krugman heard this heresy?  Clearly The Krug can talk some sense into Yellen.  There are plenty of tools left, such as:

Raise the prime to 11%, flood the market with US Backed Securities, and Use That Money To Jump Start The Economy.

Tax the Rich, and Use That Money To Jump Start The Economy.

Tax the Nearly Rich, meaning "anyone making more than $15,000/year, and Use That Money To Jump Start The Economy.

Open the Border, allowing unlimited access to our markets, and Use That Money To Jump Start The Economy.

Print money, and Use That Money To Jump Start The Economy.  And by "Print" I mean "Scrip."  Paper greenbacks.  What we need is a $50Zillion note.  We'll give one to every man, woman and child - as long as they voted the right way - and Use That Money To Jump Start The Economy.

 

No ammo left?  Please.  We haven't even released the Kraken, yet...

 

 

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