Shit, guys, seriously

[solarbird]

I don't know whether you guys noticed or not, but House Speaker John Boehner invoked party discipline - in public! - for Thursday night's first delayed, then abortive budget vote, and he did not get it. That's a big fucking deal. This is a budget measure; most other places, that's a confidence vote he hasn't managed to pass yet. But, well, no election opportunity - is the Tea Party/Republican internal coalition collapsing, or is this all theatre? If it's theatre: this is crazy.

S&P 500 futures dropped a little over a percent on the news (in one sharp spike down), then bounced a little; DIX is up and down and up and down, swinging in about a 1% range. Nikkei down about half a percent on the news, Hang Seng didn't like it but calmed down over lunch. All the open futures markets globally are down, but that's the futures.

More reports that bondholders will get priority in payments if the debt ceiling is not raised. Banks continue to ask what the contingency plans are, on the record. China is not happy. The Telegraph's Ambrose Evans-Pritchard thinks this is all just entirely insane.

This has some of the same kind of crazy edge to it that a lot of 2008 did. People are starting to panic a little. This vote failure is a big deal. Of course, they'll be back at it tomorrow, but still. People are gettin' weird.

PS: US container imports fell 7% year-over-year in June.

Comments

[silussa.livejournal.com]

Given we know even the Blue-Dog Democrats aren't going to support his bill, the vote cancellation means he doesn't have his own party's backing, at least not enough to pass it.

That implies, in turn, that the tea-party Republicans are refusing to get on board.

This has been, ultimately, the problem in reaching any sort of deal. The leadership recognizes the situation, but a substantial chunk of the rank and file does not, including at least one Presidential candidate. They think there's more tricks that can be played to stretch this out still further; if there is, I wouldn't want to be either SecTreas or the President when that comes out in the press.

My expectation has been for a week now, and continues to be, that we are going to end up in default of some form, whether it's not paying Social Security in full or a "formal" default. It won't matter to the rest of the world how it happens.

The next election will be very interesting.

[triadruid.livejournal.com]

What do you think are the odds of a Coalition of the Middle?

[silussa.livejournal.com]

Not good.

35-40% of the American electorate would vote for Bealzebub if he was on the ballot with an "(R)" next to his name.

35-40% of the American electorate would vote for Satan if he was on the ballot with a "(D)" next to his name.

The balance controls elections, but isn't enough to pass anything on their own.

The problem now in Congress is that, given how most of the districts are drawn, the current office holders are worrying about people MORE radical then they are (either right or left, depending on whether a Republican or a Democrat) challenging them successfully. Politically, that pressures them toward the extremes, not the middle.

One would like to think that the good of the nation would be a unifying influence, but as Solarbird has pointed out, there is a case to be made that the current course IS for the good of the Nation, compared to the alternatives.

[mojave-wolf.livejournal.com]

I would just like to point out that the current democratic party is well to the right of the middle in most of the policies they push, and are using their media access to stear the public further rightward with every bit as much gusto as the Republicans are.

The Democratic leadership is now in the vicinity of where the Republicans were under Reagan. The Republicans are somewhere round the bend.

As long as people perceive the current Democratic party as liberal/progressive/leftist, even by 1990's US standards (or, for that matter, current US standards), there's no hope.

[solarbird]

Absolutely it means that the Tax Party won't get onboard. That's not implied, that's explicit. But they're getting on board now, because now includes a Balanced Budget Amendment requirement - the one, iirc, that requires a supermajority in order to raise taxes. HAHAHAHAHAHAHAHAHAHAHAHAHA doomed. XD

[silussa.livejournal.com]

Depends on the version. The most basic version of a BBA would probably pass at this point.

The version submitted last week, which called for rolling spending as a percentage of GDP back to 1966 levels? Not possible, and not a chance.

[silussa.livejournal.com]

To explain to anyone reading about that "not possible" part, the Baby Boomers are retiring. Social Security and Medicare are going to be an increasing aspect of government expenditures, as long as those programs exist in their current form.

It also means we'll gradually shift from 8 working for every 1 on Social Security (roughly 1966 levels; might have been larger) to approximately 1 for every 2.

So, go figure how you can reduce spending relative to GDP drastically AND support that commitment at the same time, without drastically cutting every other program almost out of existance.

[silussa.livejournal.com]

Kool aid, anyone? I prefer grape, myself.

I'm anticipating a major inflationary hit as the dollar drops, and imports (including, oh, oil) go up when we default.

[403.livejournal.com]

In other news, this URL should speak for itself: http://www.businessinsider.com/goldman-makes-a-gold-mineand-finds-another-way-to-screw-the-markets-and-consumer-2011-7

I am now less inclined to buy anything in an aluminum can.

[silussa.livejournal.com]

Of course it's insane. We're going to default because our elected representatives can't manage to agree on a lunch order, let alone how to deal with the debt ceiling, the deficit, and the national debt.

[phillipalden.livejournal.com]

The so-called "Tea Party" are mostly small groups financially backed by people like the Koch Brothers. But they have no stomach to actually stick with the political process and do the kind of work a real grass-roots party would.

Besides, I think even those idiots are starting to figure out they're being used, and their "leaders" don't really give a shit about them.

[king-chiron.livejournal.com]

I don't know where you live, but having lived in the south I can tell you a large segment of the population in that region buys into the tea party worldview, whether or not they officially call themselves tea baggers.

[phillipalden.livejournal.com]

Okay. But how much political "action" do these people engage in? I've heard the press uses tricks to make the groups look larger, and I read an article that said most "Tea Party" folks don't actually bother to vote.

Sorry, I have to vent by being absurd...

[stolen-tea.livejournal.com]

*sarcastic:*

I know! China's currency is undervalued, right? So let's just declare that the dollar will be pegged to the renminbi at a much higher rate, say 1-to-1! Then it'll be easy for our federal government to pay its debts using RMB, our trade deficit with China will magically vanish, and countries with heavy US holdings will have no choice but to play along! And they say war is good for the economy, too, right?

*sigh*

[king-chiron.livejournal.com]

Of course. The US isn't going to default on bond payments. They'll simply cut spending on other programs and once those checks stop flowing the pressure will be immense and a deal will be cut very quickly, one way or the other.