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Anyone here worried that this time Congress isn't going to raise it, or at least not before triggering a brief market crash? I'm remembering how during the GFC the Congress first rejected Bush's bailout, then only passed it after the market tanked.
If you think there's a real chance of it, what's the best way to prepare? Cash? Euro-denominated government bonds?
Debt ceiling is so arbitrary, not worth really thinking about. It doesn't really mean anything in the grand scheme of things. I hope it does trigger a crash... I'd buy on that 100%.
@Ted- Meaningless in the long run, yes, but I agree with JoJo that a failure to deal with the debt ceiling in a timely manner might very well create a market buying opportunity.
@Maurice- Not thinking about gov't shutdown as much as creating (again) the threat of gov't non-payment of financial obligations. True, these have been short-term threats in the past, and probably would be again, but it might be enough to cause a temporary market pullback.
On the other hand, I do see your point. You're probably right- why would a congress with a one-party majority cause such a problem for an executive branch which claims to be of the same party (even though I don't believe that this president has the slightest loyalty to or identification with any party or entity other than his own ego).
It's really hard to see where they could make enough cuts to offset the desired military spending increases without raising both taxes and the spending "limit". This whole operation is beginning look like a third-world banana republic.
@Maurice- Yeah, I pretty much agree with you on all of that. But I still have to wonder if when the media starts all of the screaming and hollering, legitimate or not, it might create a temporary buying opportunity in the markets.
OK, just saw this, the head of the Freedom Caucus is in favor of a clean debt ceiling hike: http://thehill.com/policy/finance/344312-freedom-caucus-chair-predicts-october-cr-clean-debt-ceiling-hike Sounds like parts of the Trump administration are opposed, but no one in Congress seems to care what the Trump administration thinks at this point, so I guess we're fine. It'll be something else that leads to the next market dip.
OK, I'm nervous again. I still think the odds are we get a clean debt-limit hike, but what if Trump decides it's a good day to show'em who's boss and vetoes it?
Actually the House Dems would probably also support a clean debt-limit hike but saying this publicly will make it toxic. Maybe the Tuesday Morning Caucus led by Charlie Dent can bridge this divide.
Comments
Regards,
Ted
http://www.businessinsider.com/truth-about-debt-deal-2011-8
On the other hand, I do see your point. You're probably right- why would a congress with a one-party majority cause such a problem for an executive branch which claims to be of the same party (even though I don't believe that this president has the slightest loyalty to or identification with any party or entity other than his own ego).
It's really hard to see where they could make enough cuts to offset the desired military spending increases without raising both taxes and the spending "limit". This whole operation is beginning look like a third-world banana republic.
Sounds like parts of the Trump administration are opposed, but no one in Congress seems to care what the Trump administration thinks at this point, so I guess we're fine. It'll be something else that leads to the next market dip.
and: glitch or something other?
https://krugman.blogs.nytimes.com/2017/08/07/how-bad-will-it-be-if-we-hit-the-debt-ceiling/