White House

The latest headlines as they flash by:

• Carney Says Obama Would Consider ‘Couple of Days’ Extension
• Says short-term deal would give time to finish debate.
• Carney Says Treasury Could Give Update ‘This Weekend’ on Plans

It is unclear what a few day extension would achieve, aside from a rating adowngrade but it is enough to get the headline scanning robots ramping higher again.

The latest meaningless headlines from White House spokesman Jay Carney:

• CARNEY SAYS NO REASON TO REPEAT DEBT DEBATE LATER THIS YEAR Except for retaining Obama's job of course
• CARNEY SAYS AMERICAN PEOPLE WANT COMPROMISE ON DEBT LIMIT Preferably the democrat compromise which saves a few quadrillion by not launching war on Mars?
• And sure enough there it is: CARNEY SAYS REID PROPOSAL REPRESENTS COMPROMISE 
• CARNEY SAYS SENATE WILL REJECT BOEHNER DEBT PROPOSAL
• CARNEY SAYS TREASURY WILL EXPLAIN HOW IT WILL MANAGE FINANCES
• CARNEY SAYS BOEHNER PLAN VOTE WILL NOT LEAD TO COMPROMISE
• CARNEY SAYS CONGRESS `CONTROLS OUR FATE' ON DEBT LIMIT
• CARNEY SAYS ONGOING DEBATE HAS HAD NEGATIVE IMPACT ON ECONOMY
• CARNEY SAYS `NO QUESTION' BOEHNER PROPOSAL IS `POLITICAL ACT'

Bottom line: algos now using every appearance of the word "compromise" in a headline as buying trigger.

Contrary to calculations performed by Barclays and other analysts (including Stone McCarthy first presented on Zero Hedge), which speculated that the Treasury would have enough cash to last it through August 15th due to an increase in tax receipt, the White House's press secretary Jay Carney said that the Treasury will be "running on fumes" if the debt ceiling is not raised by August 2, naturally adding the traditional doomsday phrase that it is a "crisis situation." He had also added previously that tax revenues are not coming at an accelerated pace and that the cash will not last longer than Tim Geithner's original forecast of August 2. As the chart below shows the Treasury had $75 billion in cash as of last night, and will raise another $55 billion in net cash over upon settlement of this week's auctions. In other words, Geithner now predicts that the pro forma cash of $130 billion will last the US just one week. Well, at least we can see what the source of all the problems is.

Update: we have just gotten word that there will be a GOP conference call at 4:30 pm on the debt limit. Apparently the GOP is dead set on the 8pm Asian open and disregarding the much more important FX open.

It may be time to panic... at least on a "transitory" basis. After Boehner essentially said earlier that there are still no details what the "two-tier" plan noted yesterday would look like, we now are 5 hour away to FX open. And judging by the comments of White House Chief of Staff, it is almost as if the administration would like to see a selloff. Per Reuters: "White House Chief of Staff Bill Daley said on Sunday there will be a few stressful days ahead for financial markets but that a U.S. debt deal will ultimately be reached. "In the end, we may have a few stressful days coming up -- stressful for the markets of the world and the American people," he said on the CBS program "Face the Nation. Daley quickly added that he is confident a deal will be reached to raise the debt ceiling. We are confident he is right. We are also confident that if it takes a 200 point plunge in the S&P to achieve that target, well, so be it.

A week after Barack Obama stormed away from Republican negotiations on the debt ceiling, it is now Boehner's turn. Per Obama's live speech which is currently ongoing, John Boehner has broken away discussions with the president. Obama's response is to demand a meeting with Bohner, Pelosi and McConnell at 11 am tomorrow to explain to the president how it is possible that America will be in non-selective default in as little as ten days: "I want them here tomorrow at 11am...we have run out of time." Readers can watch the live webcast here.

From $4 trillion to $2 trillion to $1.5 trillion (soon $0 trillion of course, but that is another story). The latest gimmick to bounce the market is the completely unfounded rumor that the White House has said both side agree on $1.5 trillion in deficit cuts and an additional $200 billion can be agreed upon soon. Stocks surge, bonds tank...because, you know, this is good for America's credit standing according to Moodys. We give this rally a few minutes before Boehner comes out and denies everything. To all those who just bought the 30 Year, condolences... at least for the next few minutes.

Prior to the reception, Thigpen will be attending a special policy briefing with senior White House and Administration officials on topics including housing, immigration reform, innovation, energy, and job creation.

Last week David Stockman was on Tom Keene, making the usual media rounds (sometimes we marvel at his patience and endurance), as one of the few voices of fiscal prudence available to TV producers who seek to hold a balanced debate on the topic of US insolvency. Today, Reagan's budget director was again on Bloomberg TV explaining the reality of the situation to Matt Miller for the nth time (by now even a 2 year old will understand the cul-de-sac facing the US), although presenting a new spin on the situation, namely that we have gotten to a point where both parties are implicitly pushing for a US default, while though their inability to reach a political compromise, blaming each other for this inevitable outcome. "The real problem is the de facto policy of both parties is default. When the Republicans say no tax increases, they're saying we want the U.S. government to default. Because there isn't enough political will in this country to solve the problem even halfway on spending cuts. When the Democrats say you can't touch Social Security, when you have Obama sponsoring a war budget for defense that is even bigger than Bush, then I say the policy of the White House is default as well...That is the question that really needs to be understood better and appraised by the bond market. Both parties are advocating default even as they point the finger at each other."

Remember all those stories about bin Laden posing an armed threat and hiding behind a woman leaving the SEALs no other choice but to shoot him? Turns out they were not quite correct. Politico reports: "The White House backed away Monday evening from key details in its narrative about the raid that killed Osama bin Laden, including claims by senior U.S. officials that the Al Qaeda leader had a weapon and may have fired it during a gun battle with U.S. forces.
Officials also retreated from claims that one of bin Laden’s wives was killed in the raid and that bin Laden was using her as a human shield before she was shot by U.S. forces...During a background, off-camera briefing for television reporters later Monday, a senior White House official said bin Laden was not armed when he was killed, apparently by the U.S. raid team." At this point one wonders, as noted yesterday, just how much of the official story spun by the administration will continue to unravel.

And for the most unsurprising news of the day, Reuters reports that the White House has admitted it knew about the S&P rating action on Friday. Which means that all the key bond buyers (or sellers are the case may be, Pimco), knew at roughly the same time what the key market catalyst on Monday would be (we can't wait to get a declassified glimpse of Larry Meyer's phone log over the weekend one day in the future). Which also means that today's action was a strawman in which the big boys merely waited for an opportunity to buy bonds are lower prices, which the ongoing European collapse merely facilitated. Most importantly, it is now all too clear why over the weekend, Tim Geithner's face, instead of being hard at work at finalizing his tax filing, would grace each and every TV screen. Advance damage control, TurboTax style.

Earlier, we reported that Obama mentioned that NATO is currently evaluating military options against Libya. Now, White House spokesman Carney adds some additional color on what Operation "Nobel Peace Prize", aka the invasion of Libya, will look like. From Reuters: "White House says no option removed from table on Libya response but use of ground troops not at top of list."Does that mean air force intervention is at the top? Luckily Zero Hedge readers know very well that the USS Enterprise is now peacefully sailing in the Mediterranean, awaiting for its moment in the sun. And on the use of the SPR: "White House says no specific price point would trigger the use of oil reserve; the issue is oil supply disruption." But what supply disruption: wasn't the spin up to now that Libya is largely irrelevant for the US from a supply perspective?

A little-known program to aid the economy by distributing money to bloggers is gathering support in the White House and Congress. In the bruising fight to see which party can give away more borrowed money, Republicans and the Obama administration hammered out a compromise on the White House plan to pay "qualified" bloggers $100 per post, up to $100,000 each. The Obama administration had originally included income limits in its "Web Entrepreneur Program" (WEP) legislation, but Republicans forced the White House to drop the stipulations which would have limited payments to bloggers who earned more than $250,000 annually.

The chairman of the Joint Chiefs blows the whistle on a suggested faux casus belli.

Next time you swing by the White House, remember to tell your now desperately insecure president that he has your support, or else we may get another temper tantrum like the one yesterday. It appears that now none other than the White House has the (in)security issues of a 14 year old girl. In what has to be the epitome of a surreal joke, the official White House website has released a list of actual individuals and institutions (among these, shockingly, the New York Times, Market Watch, Harvard and, no shit, Bank of America) who have voiced their "statements of support on the framework agreement on middle class tax cuts and unemployment insurance." Oddly, nowhere in this list is even a passing mention of the Zero Hedge reminder that just the tax cut extension portion of the deal is likely to boost the deficit, and thus the US funding need, by $5 trillon over the next decade. In other news, the market is up because consumer confidence is higher... and consumer confidence is higher because the market is up. The adventures of Alice through the looking glass have nothing on America's blind meanderings through the depression zone.

Perhaps for the best demonstration of what cutting education budgets in the US means for our nation's current and future mathematical capabilities, look no further than the White House's Propaganda, pardon Fact Sheet on the tax extensions. The only notable item is the following (which is stunningly added as an accomplishment): "The plan has three key accomplishments: Does not worsen the medium- and long-term deficit.
These are responsible, temporary measures to support our economy that
will not add costs by the middle of the decade. The President does not
believe it is affordable to make the high-income tax cuts permanent and
will continue to have that debate in the years ahead." Alas, that is a flat out lie. According to the Congressional Research Service, the cost of keeping the tax cuts will be just over $5 trillion over the next 10 years. And it will be at least 10 years: after Obama loses the 2012 presidential election, Republicans will have a carte blanche to make the Bush tax cuts permanent, and will likely do so. And, furthermore, this figure does not include the cost of the Unemployment Insurance extension.