Handicap debt ceiling resolution?

[wescobrk]

Anyone want to guess when debt ceiling is resolved?

Oct 16th at 11p?

[Guest wellmont]

oct 17 is not a firm date. I think it will be closer to oct 31. however they will have communicated a framework of a deal to the public by oct 17. they can pass all kinds of temporary measures until they get a deal. I think they could actually take it into late nov early dec. we are 2.5% from all time highs with no fear whatsoever in the market.

[CorpRaider]

Seems like it might take a "market repudiation of the congressional rejection of tarp" or 2011 congressional correction type of moment to get some of the fiscal radicals to act.  I'm set up accordingly.  Of course I caught the end of 2011 action almost perfectly, which in turn caused me to position conservatively before the end of 2012 fiscal cliff stuff and therefore miss the bulk of the 2013 gains. 

[ERICOPOLY]

Cynically, I think Obama sees the government shutdown as useful.  It gives him political cover to do some things that he probably wants to do anyway, but that he knows his "base" would recoil at.  Probably the same story on both sides of the aisle.

 

I handicap the chances of default at 0%.

[muscleman]

Cynically, I think Obama sees the government shutdown as useful.  It gives him political cover to do some things that he probably wants to do anyway, but that he knows his "base" would recoil at.  Probably the same story on both sides of the aisle.

 

I handicap the chances of default at 0%.

 

But do you think the gap between republican and domestic is so wide that only a big market drop would scare them and force them to agree on a draft?

If that is the case, then the market would have to drop before it climbs back up.

I don't understand politicians, so I can't answer the above question.

[wescobrk]

I agree that Obama is seeing this as useful.

I think he is extrapolating from 95-96 when it helped Clinton.

I agree default chance is zero as well.

 

I know Lew is exaggerating with the Oct 17th deadline, maybe i'm naive, but I think there will be a deal regarding the debt ceiling by Oct 18th.

They can pass the debt ceiling but the government can continue to be shut down, right? They can pass the debt ceiling but not the CR.

I see that as a more likely situation.

[Myth465]

I dont predict dates, but this is what I see.

 

Republicans fold, they look pretty bad now.

The votes are there to pass both the CR and DC raise, and the Senate and the press will force the vote.

Boehner puts both up for a vote, and retires or is defeated by Tea Party faction if Republicans hold the house.

 

The Democrats have nothing to gain by negotiating, and there is talk of the Republicans losing the house in 2014, or Tea Party Republicans getting primaried.

 

Thats what I see happening.

[CorpRaider]

Yeah, I'm sort of with you myth, but it might take a market reaction and then the more centrist republicans can clean out the tea partiers in the mid terms.  They might need to dial down the gerrymandering, so they can have a shot to run their party.  Democrats and more centrist republicans probably both benefit by letting the tpers demonstrate their version of governing.  Seems like chamber of commerce and other business lobby money will be going after them in 2014 as well.

[SouthernYankee]

I think (or maybe hope) the Republicans will look to raise the debt ceiling, but keep pressure on in regards to the budget stalemate, which is the real problem. Let's face facts: 1) Neither party is prepared to have a balanced budget, so the debt ceiling needs to be raised no matter what. 2) The Tea Party Republicans are the best thing to happen for those who care about our future liabilities. They are unsustainable on the present course.  So-called centrist Republicans and Democrats have been passing the buck for the last 50- years.

 

Cheers, and may you all pay $.50, or less, for something worth $1, or more! CAPITALISM ROCKS, or at the least, is better than any other system devised so far by mankind.

[CorpRaider]

I think until or unless they do something about future medicare and medicaid costs they've done nothing especially material (especially when you factor in the permanence of the majority of the Bush tax cuts).  Certainly nothing worthy of all the uncertainty they have injected into the system, from my perspective.  I suppose the defense cuts are the closest to something notable, since they are so rare.

[JSArbitrage]

I think (or maybe hope) the Republicans will look to raise the debt ceiling, but keep pressure on in regards to the budget stalemate, which is the real problem. Let's face facts: 1) Neither party is prepared to have a balanced budget, so the debt ceiling needs to be raised no matter what. 2) The Tea Party Republicans are the best thing to happen for those who care about our future liabilities. They are unsustainable on the present course.  So-called centrist Republicans and Democrats have been passing the buck for the last 50- years.

 

Cheers, and may you all pay $.50, or less, for something worth $1, or more! CAPITALISM ROCKS, or at the least, is better than any other system devised so far by mankind.

 

I agree in theory but disagree in practice.  The budget stalemate isn't about the budget; it's about an attempt to reverse Obamacare without the votes to do so. 

 

This is the problem with the Tea Party movement.  They aren't for tweaking legislation to a more sustainable path.  They want to dismantle altogether and, absent that option, they'll just grind the nation to a halt. 

 

The Tea Party doesn't think Medicare/Social Security are bloated; they think they are illegal.  And if Obama makes a deal with the GOP, the Tea Party knows they can continue to strap on the dynamite vest and walk into Congress and get what the want or take the US down with them. 

 

I actually spoke with a Tea Party advocate down here in Texas and he actually WANTED a default.  He said he'd rather default small now than big later. 

 

I am very pessimistic about this round of negotiations because Obama knows he cannot budge or the Tea Party becomes a de facto terror cell in Congress.  So the Tea Party might get what they want (a small default) and they don't understand the saying "Be Careful What You Wish For."

[CorpRaider]

I agree.  If they go that route it seems to me they're likely to demonstrate that they are not rational and will be a footnote in history's record of the turmoil surrounding the great recession.  I am probably suffering from a confirmation bias here because I have already have written them off since they rose to prominence largely as a reaction to misguided anger stemming from the recession and aimed at TARP and the auto bailouts, which I regard as master strokes (and not just because of the creation of all those delicious warrants, hah).

[bmichaud]

Up until the last several days the market hasn't been acting nearly as poorly as it did leading up to the 2011 debacle, where the "SHUT" index was strongly outperforming the market. Thus this decline is perhaps more akin to the fiscal cliff non-event that provided a buying opportunity.

 

Given the largest market declines occur within a recession, and according to Cullen Roche's Orcam recession index we are not currently entering a recession, one must believe the Washington idiots will willingly drive us into a recession (see Goldman's analysis of the effects of default today...) for this to be the beginning of a large scale market decline.

 

Usually I would be in the bearish camp here, but I gotta side with my NDR boys who just upgraded stocks to a 10% overweight.