For most of last week I wrote about the impending debt ceiling breech that should occur Monday, May 16th given the arithmetic. It turns out I was correct – the US government’s credit card is maxed out. Since the government always spends more money than it takes in via tax receipts, Congresses ability to spend is granted by its creditors and Master Card just said “no more.”
The Master Card has not been revoked, it has been suspended and therein lies the truth: this is all political theatre. The same “theatre” has been performed many, many times before. In fact, Congress has raised the debt ceiling TEN TIMES since just 2001.
In 2006, for instance, Senate Democrats voted unanimously against raising the debt limit for President George W. Bush. Then Senator Barack Obama thought raising the debt ceiling was a bad idea and made the vote unanimous. Here is part of his speech railing against the debt increase…
The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies. … Increasing America’s debt weakens us domestically and internationally. Leadership means that ‘the buck stops here.’ Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better.
Yes, America deserves a lot better than speeches and “hopium.” But the Republics are no better and are cut from the same hypocritical cloth. When their guy is NOT in the White House, all of a sudden it is a repugnant idea to raise the debt ceiling. The situation was reversed in 2010: no Senate Republicans supported a higher debt limit for Obama, accusing him of reckless government spending.
The Master Card has not been revoked, it has been suspended and therein lies the truth: this is all political theatre. The same “theatre” has been performed many, many times before. In fact, Congress has raised the debt ceiling TEN TIMES since just 2001.
In 2006, for instance, Senate Democrats voted unanimously against raising the debt limit for President George W. Bush. Then Senator Barack Obama thought raising the debt ceiling was a bad idea and made the vote unanimous. Here is part of his speech railing against the debt increase…
The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies. … Increasing America’s debt weakens us domestically and internationally. Leadership means that ‘the buck stops here.’ Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better.
Yes, America deserves a lot better than speeches and “hopium.” But the Republics are no better and are cut from the same hypocritical cloth. When their guy is NOT in the White House, all of a sudden it is a repugnant idea to raise the debt ceiling. The situation was reversed in 2010: no Senate Republicans supported a higher debt limit for Obama, accusing him of reckless government spending.
Nothing has changed and nothing will change. Both sides of the isle are groups of petulant children and the market knows it. US interest rates are at near historic lows. The bond market knows that once the hissy-fit is over, Congress will agree to continue its profligate spending ways.
Trade Date: 5/16/11
E-Mini S&P Trades*
(before fees and commissions):
E-Mini S&P Trades*
(before fees and commissions):
- VA sell @ 8:43am at 1333.00 = +.75 & +1.00 (2 lots)
- OTF buy @ 10:32am at 1338.50 = b/e & +.75 (2 lots)
- Algorithm positions (2)
- "Reading the Tape" positions (2) ...combined Secret's, Algo, & "Reading the Tape" total... +4.75
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