Re: The US Economy Thread

[I Have Mono]

No we definitely shouldn't allow the country to default on its debt. I understand what raising the debt level does sorry I didn't make that clear.

I just feel considering the circumstances a 400-500 billion deficit per year seems reasonable and do-able and feel that since the last time we raised the debt ceiling congress should have been constantly cutting cost in order to get us there.

I'm mad at both side like you, GOP for threating to let us default on our debts, and the Dems for refusing to cut any money off our debt.

The 2011 budget resolution or whatever you want to call it is complete bullshit 1.2 Trillion over 10 years really, 120 billion, 10% of our national deficit every year. The deal should be about 5x that and we should have been working towards that for the last year, only then would I feel comfortable raising the debt ceiling.

Were caught in a shitty position we have to raise the debt ceiling but at the same time that's just enabling what is currently going on and pushing and even larger national debt onto our generations shoulders(not sure how old you are) but our parents generation of politicians are *bleep* us.

[FalcaoPunch]

With the government shutdown, does that mean no taxes will be withheld from check? Wishful thinking I know.

But I'm seeing that everywhere

[Swanhends]

With the government shutdown, does that mean no taxes will be withheld from check? Wishful thinking I know.

But I'm seeing that everywhere

No, payroll taxes are automated collections so they will continue

However, IRS telephone support, auditing, and return processing are all halted

[zizzle]

how come the stock market is up today

[Swanhends]

how come the stock  market is up today

Probably because the market thinks the government is less likely/able to hurt the economy if it's shut down

[TalkingReckless]

Stock markets aren't really part of the government

[zizzle]

The government is the biggest employer in the U.S. and probably in the world. Those employees are given an unpaid leave so this should reduce the purchasing power of the public and that should kill the stock market. In theory at least. plus think of all the companies that do business with the government, contractors and such, and all the businesses that do business with these companies and so on. It's an economic cycle and the US government is the biggest piece there is.

[zizzle]

how come the stock  market is up today

Probably because the market thinks the government is less likely/able to hurt the economy if it's shut down

Even gold is down ! if i wasnt reading the news id think that it's just a normal day.
But maybe investors are flocking away from the bond market into stocks ? (although i read somewhere that payments on the national debt will still be payed.)
or maybe because the Fed announced today that it will not scale back QE anytime soon...

sometimes i just dont get it

[RealGunner]

Not sure if this is the right thread for it but.

[Swanhends]

people would rather have a completely uneducated opinion then no opinion at all

[BarrileteCosmico]

I think one of the more interesting things I've learned from this deal is how some states allow the congressmen to draw up their own constituencies. This has the effect that they can build entire constituencies of very conservative people and suffer no backlash at all for holding the government hostage. In fact, it might even promote extremism as they have to cater more to the more conservative sides.

[Swanhends]

janet yellen the GOAT got that nomination on lock

[BarrileteCosmico]

Yellen

Although apparently 5 seats will become empty next year in the FOMC and if Obama's past appointees are any way to judge him for even having Yellen at the top might do no good.

[RealGunner]

What are the chances that the debt crisis will return in few months?

[RedOranje]

Well, that depends on how you define "a few" I guess. The budget crisis will return in January and the debt crisis will probably return in February.

[sportsczy]

This is all posturing to get a better deal.  Happened with Bill Clinton, George Bush and now Obama.  There's zero chance of the crisis.  Every real estate deal that i closed, there were negotiations until the last second of the escrow deadlines.  Just how it works with dealmaking these days because you're trying to find out how much backbone the otherside has and squeeze him/her if there's weakness.

The proof that this is all daytime soap opera is that the stock markets in the US barely reacted to the whole thing that past 2 weeks.

Been there, done that.  I don't even pay attention anymore tbh.  Waste of my time.

[RedOranje]

Except neither of the previous presidents you mentioned had to deal with a fringe party with as much influence as the Tea Party currently has. You're underestimating how their presence has changed the US political landscape.

[sportsczy]

It will never happen... trust me on this.  Every politician involved would be committing political suicide if it did.  

And the tea party is a non factor if a deal is struck between republicans and democrats.  They're a minority the republicans need if they want to outright beat the democrats in a vote... not if they need to make a deal.  Since Obama has unilateral veto power over this issue, it has to be a deal.  Even with the tea party votes, the republicans wouldn't have a super majority (2/3 of the votes) in the house, which would be the only way to get around Obama's veto power.  Obviously, if a deal is reached between republicans and democrats, the majority is easily achieved (simple majority is 50% + 1 vote) and there would be no veto.

Zero chance.  None.  It's all political and dealmaking posturing.  The republicans and Obama are negotiating a bill that he would sign off on after it passes the house and senate.

[RedOranje]

Sigh.

[BarrileteCosmico]

The proof that this is all daytime soap opera is that the stock markets in the US barely reacted to the whole thing that past 2 weeks.

Been there, done that.  I don't even pay attention anymore tbh.  Waste of my time.

The market barely cares about the gov shutdown and default... yet jumped 1% when it was solved? It's likely the shutdown was already priced into the market before it was officially announced on Oct 1st.

[sportsczy]

I doubt it.  Look at the market over the past 3 weeks.  On 9/23, the Dow Jones was at 15401.  On 10/14, it was at 15301.  It was basically on standby... nothing positive or negative.  Today, it's at 15297. Beginning of Sept, the Dow wasn't even at 15k.

Maybe the fall uptick slowed slightly as a result of this. But there was no adverse effect to speak of. Nothing....  markets stop reacting to bs at least from the institutional side.  If individuals want to be stupid, they can of course and they often are lol.

http://www.bloomberg.com/quote/INDU:IND

[sportsczy]

Although i agree with RO that the Republican party doesn't wants to piss off the Tea Party extremists.  They need them united in congress obviously.  So they will influence some of the deal points the Republican Party is trying to get through.

I miss the days where most people were centrists even if they were Republican or Democrat.  Seems like there's a lot more pull the the extremes in recent times.  

Obama has disappointed me big time there although i voted for him both times... his fiscal policies are not good.  He's often times populist as opposed to pragmatic. I know a lot of wealthy people who have set up alternate citizenships in case they need to give up the US one for fiscal reasons. You never want wealthy investors to leave your country... only the french think that's a good idea

[RedOranje]

Right, it's much better to play to their desires.

[BarrileteCosmico]

I doubt it.  Look at the market over the past 3 weeks.  On 9/23, the Dow Jones was at 15401.  On 10/14, it was at 15301.  It was basically on standby... nothing positive or negative.  Today, it's at 15297.  Beginning of Sept, the Dow wasn't even at 15k.

Maybe the fall uptick slowed slightly as a result of this.  But there was no adverse effect to speak of.  Nothing....  markets stop reacting to bs at least from the institutional side.  If individuals want to be stupid, they can of course and they often are lol.

http://www.bloomberg.com/quote/INDU:IND

I haven't looked at the data, but I've read that if you look at short term treasury bills they did show an adverse effect. And still, even if you think they didn't care at all, then why would the market jump 1% yesterday? Markets care, but since the shutdown was expected it was not news and thus there was no "reaction".

[sportsczy]

I'm not a short term market speculator.  I have a personal portfolio and there's 1 year, 5 year and 10+ year components to it.  

You're going to get the 1-2% jumps because, even if the risk of something tangible happening from such a manufactured crisis is 0.0000001%, you still don't want to get caught with your pants completely down.  So you invest a bit more in hedge positions (options) to protect yourself from the downside.  These upticks come from institutions moving the additional monies assigned to these hedge strategies back to long positions.

I bet you that the Chicago-based markets made a killing during all this since they handle most of the options trading in the US.

I invested a bit more in options too (more than what is budgeted normally) which are worthless now and will expire.  But hey, it helped me sleep at night and it still helped the US economy since i spent it on the options market.

[sportsczy]

Right, it's much better to play to their desires.

 No.  But it's all about debate and compromise in the US.  That's not how things get done.

That's why i love it when congress is controlled by one political party and the white house by another.  Checks and balances.  Neither side can go too extreme.  Sure it's gridlock. But I'd rather government do nothing then something stupid.

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