Monday was a very low volume day with a decent move shortly after the open. Once that initial rally slowed, the normal type of (recent) day resumed: low volume and absolutely no volatility. I believe the reason for this is that the market was waiting on news of a real debt-ceiling "deal" however, there was once again no deal.
On the other hand, there was more bickering.
The first salvo came via Senators Reid and Schumer. There were two segments in the plan that was surprising; no new taxes from Democrats, and a huge “savings” that in my opinion is not "savings" at all.
To the Democrats credit, it would certainly look like they want to get this deal done since they are proposing a deal with no new taxes. The second segment, however, I found ridiculous even though it is par for the course in DC: no real cuts, just less increased spending.
In Washington DC if next years budget had been scheduled to increase by $200 billion for example, but Congress agrees on a budget with a $190 billion INCREASE, it is heralded as a 5% spending cut. Moreover, some politicians will use a ridiculously high presidential fiscal spending proposal as a baseline – even if it is NOT written into law – and then lie about so-called “cuts” while not telling the electorate exactly how these phantom cuts were derived.
Senators Harry Reid and Charles Schumer surprisingly acknowledged that $1 trillion of the so-called cuts in their plan will be from the removal of troops from Afghanistan and Iraq. Why should we believe them now, when 2009 presidential hopeful Barack Obama said they would be removed shortly after he was elected? But even if we can all agree that they will be coming home soon; doesn’t that mean that this was scheduled and therefore is not a new spending cut? On top of that, an additional $400 billion of saved interest payments are included – because of the aforementioned “cut.” This was all going to happen anyway.
George Will nailed this type of nonsense with the following comment in the Washington Post in 2009 "Why, one wonders, not ‘save’ $5 trillion by proposing to spend that amount to cover the moon with yogurt and then canceling the proposal?"
In the press conference Senators Reid and Schumer repeatedly claimed that the Republicans had also used the war savings in their own plans. Congressman Paul Ryan disagrees and fires off his salvo here:
On the other hand, there was more bickering.
The first salvo came via Senators Reid and Schumer. There were two segments in the plan that was surprising; no new taxes from Democrats, and a huge “savings” that in my opinion is not "savings" at all.
To the Democrats credit, it would certainly look like they want to get this deal done since they are proposing a deal with no new taxes. The second segment, however, I found ridiculous even though it is par for the course in DC: no real cuts, just less increased spending.
In Washington DC if next years budget had been scheduled to increase by $200 billion for example, but Congress agrees on a budget with a $190 billion INCREASE, it is heralded as a 5% spending cut. Moreover, some politicians will use a ridiculously high presidential fiscal spending proposal as a baseline – even if it is NOT written into law – and then lie about so-called “cuts” while not telling the electorate exactly how these phantom cuts were derived.
Senators Harry Reid and Charles Schumer surprisingly acknowledged that $1 trillion of the so-called cuts in their plan will be from the removal of troops from Afghanistan and Iraq. Why should we believe them now, when 2009 presidential hopeful Barack Obama said they would be removed shortly after he was elected? But even if we can all agree that they will be coming home soon; doesn’t that mean that this was scheduled and therefore is not a new spending cut? On top of that, an additional $400 billion of saved interest payments are included – because of the aforementioned “cut.” This was all going to happen anyway.
George Will nailed this type of nonsense with the following comment in the Washington Post in 2009 "Why, one wonders, not ‘save’ $5 trillion by proposing to spend that amount to cover the moon with yogurt and then canceling the proposal?"
In the press conference Senators Reid and Schumer repeatedly claimed that the Republicans had also used the war savings in their own plans. Congressman Paul Ryan disagrees and fires off his salvo here:
Claim 1: "Winding down the wars in Iraq and Afghanistan will save $1 trillion."
Reality: The Reid plan relies on the inaccurate assumption that surge-level spending in Iraq and Afghanistan is scheduled to continue over the next decade. An honest budget cannot claim to save taxpayers’ dollars by cutting spending that was not requested and will not be spent. Senate Democrats are employing a budget gimmick that will not fool the credit markets and does not address the urgent need for Washington to get its fiscal house in order.
Claim 2: "Paul Ryan's budget also included this savings in its deficit reduction calculation."
Reality: False. The House-passed budget cuts $6.2 trillion in spending relative to President Obama's Fiscal Year 2012 budget request. This $6.2 trillion figure assumes ZERO savings from the global war on terror relative to the President’s budget.
Read that last part again. Did you catch the scam not mentioned by Republican Ryan? He is counting PHANTOM cuts from a FY2012 "request." How can you count "cuts" from - well, let's use his own words against him - An honest budget cannot claim to save taxpayers' dollars by cutting spending that was not requested and will not be spent. OK, it may have been requested but that doesn’t make it valid: it was never written into law!
And this sort of childish bickering and blatant lying by both sides is why I rarely write about politics. At the present time, however, the clown-posse in DC is directly affecting the market.
Trade Date: 7/25/11
E-Mini S&P Trades*
(before fees and commissions):
E-Mini S&P Trades*
(before fees and commissions):
1. OTF buy @ 12:54pm at 1338.25 = -.50 & +.50 (2 lots)
2. Algorithm positions (4)
3. "Reading the Tape" positions (2) ...combined Secret's, Algo, & "Reading the Tape" total...-1.50
2. Algorithm positions (4)
3. "Reading the Tape" positions (2) ...combined Secret's, Algo, & "Reading the Tape" total...-1.50
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