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Who knows....but its possible.
Posted on: March 18, 2017 at 15:51:03 CT
GA Tiger MU
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The U.S. Treasury has blown a massive wad of cash in order to pay its bills during the last few months, but will soon be back into the market borrowing hand-over-fist. That is, draining cash from the dealer market as it floods Wall Street with new bills, notes and bonds.
At the peak level of its cash hoard on October 24, the U.S. Treasury was sitting on $482 billion of cash.
But as of Wednesday, the Treasury's cash balance stood at just $77 billion, meaning it burned through $305 billion of cash in just 51 calendar days since the inauguration, and nearly $360 billion since the October 24 peak.
But now that the debt ceiling is again frozen into place, an explosive political crisis is coming soon.
There is simply no pathway to a Congressional majority to raise it until Washington reaches the brink of political crisis and has gone beyond.
The prolonged and turbulent debt ceiling crisis that is coming down the pike is surely not "priced-in." As I have said, the robo-machines can read headlines, but they can't read the Washington tea leaves.
The fact is, what is impending is nothing like the 2011 crisis when Obama's Keynesian advisors scared the wits out of him about a debt rating downgrade, and the GOP backbenches were set-up for a patented betrayal by House Speaker "Lawnchair Johnny" Boehner.
This time there will be no timely compromise.
That's because the Deep State and its Democratic shills are attempting to re-litigate the election, while the Donald has declared war on them in turn — compounded by his aggressive actions on the immigrant ban, deportation of illegals and the erection of provocative controls and walls at the Mexican border.
The fact is, as a political matter, Hispania is the 51st state, and the channel through which the Democrats hang on to power. They will not support a debt-ceiling increase unless Trump throws in the towel on Obamacare and his anti-immigrant dragnet.
Yet if he folds on those core issues, he will incite a massive revolt in the GOP rank and file, which would make a majority for a debt ceiling increase even more problematic.
Besides, the temporary expedients and accounting gimmicks which the Treasury will now began to roll-out to temporarily defer the day of reckoning actually make no difference where it counts.
Last year during the March through May period, in fact, net debt rose by $96 billion, and there is every reason to believe that this year the shortfall will be even higher.
Last year during the March through May period, in fact, net debt rose by $96 billion, and there is every reason to believe that this year the shortfall will be even higher.
Accordingly, the current meager cash balance at the Treasury will not even last to Memorial Day.
After that, Uncle Sam will be back on Wall Street borrowing cash hand-over-fist — even as the Fed continues destocking its hoard of government debt through the back door of the repo market.
So what commenced this week and what will remain into the indefinite future is that Washington will be draining massive amounts of cash out of financial markets that have been suckling on the teat of government "stimulus" for most of the past three decades.
Does the school marm running the Wall Street casinos banking window see any of this double whammy coming?
Au contraire.
Again Wednesday she professed to see no bubbles anywhere, while floundering incoherently when asked about the timing of the Fed's belated normalization campaign. A questioner wondered why the Fed is now raising rates just as the U.S. economy shows signs of gathering weakness and the global economy — centered in China and its supply chain — lurches forward in a slow-motion train wreck.
Anyone buying stock based on confidence that the Fed has their back notwithstanding Wednesday's action surely deserves the pounding just ahead. What Yellen had to say doesn't even reach the status of babbling; it was flaming incoherence:
Well, look, our policy is not set in stone. It is data-dependent and we're — we're not locked into any particular policy path. Our — you know, as you said, the data have not notably strengthened. I — there's noise always in the data from quarter to quarter. But we haven't changed our view of the outlook. We think we're on the same path, not — we haven't boosted the outlook, projected faster growth. We think we're moving along the same course we've been on, but it is one that involves gradual tightening in the labor market.
So when faced with actual facts about declining real wages, collapsing Q1 GDP estimates, disappointing retail sales and a wild and woolly fiscal process ahead, the Fed chairman defended the third rate hike in 11 years by saying that the "data is noisy."
What isn't noisy is the data on the stock market's bubble of a lifetime.
When it finally pops Yellen and her posse of Keynesian money printers will be incoherent, speechless and finished.
And that pop could come awfully soon.
Regards,
David Stockman
At the peak level of its cash hoard on October 24, the U.S. Treasury was sitting on $482 billion of cash.
But as of Wednesday, the Treasury's cash balance stood at just $77 billion, meaning it burned through $305 billion of cash in just 51 calendar days since the inauguration, and nearly $360 billion since the October 24 peak.
But now that the debt ceiling is again frozen into place, an explosive political crisis is coming soon.
There is simply no pathway to a Congressional majority to raise it until Washington reaches the brink of political crisis and has gone beyond.
The prolonged and turbulent debt ceiling crisis that is coming down the pike is surely not "priced-in." As I have said, the robo-machines can read headlines, but they can't read the Washington tea leaves.
The fact is, what is impending is nothing like the 2011 crisis when Obama's Keynesian advisors scared the wits out of him about a debt rating downgrade, and the GOP backbenches were set-up for a patented betrayal by House Speaker "Lawnchair Johnny" Boehner.
This time there will be no timely compromise.
That's because the Deep State and its Democratic shills are attempting to re-litigate the election, while the Donald has declared war on them in turn — compounded by his aggressive actions on the immigrant ban, deportation of illegals and the erection of provocative controls and walls at the Mexican border.
The fact is, as a political matter, Hispania is the 51st state, and the channel through which the Democrats hang on to power. They will not support a debt-ceiling increase unless Trump throws in the towel on Obamacare and his anti-immigrant dragnet.
Yet if he folds on those core issues, he will incite a massive revolt in the GOP rank and file, which would make a majority for a debt ceiling increase even more problematic.
Besides, the temporary expedients and accounting gimmicks which the Treasury will now began to roll-out to temporarily defer the day of reckoning actually make no difference where it counts.
Last year during the March through May period, in fact, net debt rose by $96 billion, and there is every reason to believe that this year the shortfall will be even higher.
Last year during the March through May period, in fact, net debt rose by $96 billion, and there is every reason to believe that this year the shortfall will be even higher.
Accordingly, the current meager cash balance at the Treasury will not even last to Memorial Day.
After that, Uncle Sam will be back on Wall Street borrowing cash hand-over-fist — even as the Fed continues destocking its hoard of government debt through the back door of the repo market.
So what commenced this week and what will remain into the indefinite future is that Washington will be draining massive amounts of cash out of financial markets that have been suckling on the teat of government "stimulus" for most of the past three decades.
Does the school marm running the Wall Street casinos banking window see any of this double whammy coming?
Au contraire.
Again Wednesday she professed to see no bubbles anywhere, while floundering incoherently when asked about the timing of the Fed's belated normalization campaign. A questioner wondered why the Fed is now raising rates just as the U.S. economy shows signs of gathering weakness and the global economy — centered in China and its supply chain — lurches forward in a slow-motion train wreck.
Anyone buying stock based on confidence that the Fed has their back notwithstanding Wednesday's action surely deserves the pounding just ahead. What Yellen had to say doesn't even reach the status of babbling; it was flaming incoherence:
Well, look, our policy is not set in stone. It is data-dependent and we're — we're not locked into any particular policy path. Our — you know, as you said, the data have not notably strengthened. I — there's noise always in the data from quarter to quarter. But we haven't changed our view of the outlook. We think we're on the same path, not — we haven't boosted the outlook, projected faster growth. We think we're moving along the same course we've been on, but it is one that involves gradual tightening in the labor market.
So when faced with actual facts about declining real wages, collapsing Q1 GDP estimates, disappointing retail sales and a wild and woolly fiscal process ahead, the Fed chairman defended the third rate hike in 11 years by saying that the "data is noisy."
What isn't noisy is the data on the stock market's bubble of a lifetime.
When it finally pops Yellen and her posse of Keynesian money printers will be incoherent, speechless and finished.
And that pop could come awfully soon.
Regards,
David Stockman
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Who knows....but its possible. - GA Tiger MU - 3/18 15:51:03