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Stockman: "After March 15 Everything Will Grind To A Halt"

renman95renman95 Posts: 7,037 ✭✭✭✭✭

Stockman: "After March 15 Everything Will Grind To A Halt"

“I think what people are missing is this date, March 15th 2017. That’s the day that this debt ceiling holiday that Obama and Boehner put together right before the last election in October of 2015. That holiday expires. The debt ceiling will freeze in at $20 trillion. It will then be law. It will be a hard stop. The Treasury will have roughly $200 billion in cash. We are burning cash at a $75 billion a month rate. By summer, they will be out of cash. Then we will be in the mother of all debt ceiling crises. Everything will grind to a halt. I think we will have a government shutdown. There will not be Obama Care repeal and replace. There will be no tax cut. There will be no infrastructure stimulus. There will be just one giant fiscal bloodbath over a debt ceiling that has to be increased and no one wants to vote for.”

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Comments

  • icsoccericsoccer Posts: 1,339 ✭✭✭

    +1

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  • derrybderryb Posts: 36,015 ✭✭✭✭✭

    will affect confidence which will affect gold.

    "Do you hear alarm bells ringing? Neither do I. And that’s a huge problem." - Simon Black

  • bronco2078bronco2078 Posts: 9,961 ✭✭✭✭✭

    @rawteam1 said:
    I'll take the other side of that forecast...

    You still sticking pins in that David Stockman voodoo doll? B)

  • carew4mecarew4me Posts: 3,459 ✭✭✭✭

    nothing will grind to a halt...there is always the next election to worry about


    Loves me some shiny!
  • bluelobsterbluelobster Posts: 1,220 ✭✭✭
    edited February 27, 2017 2:18PM

    If Clinton was Potus, I could see Cruz and some of his cohorts really holding out, regardless of the risk of default, we've seen it before, this time it would have been even more contentious, But with control of congress and the house and the senate not wanting to torpedo DT so early in his term, they'll be happy to pass a spending bill. And while I'm sure Stockman is a pretty smart guy, he certainly has a poor track record on predicting markets and the future.

    Of course, the wild card is DT, he might think he could default on treasuries and buy them back for pennies on the dollar, as part of his business model.

  • BaleyBaley Posts: 22,658 ✭✭✭✭✭

    I can still hear my 10th grade English teacher, Miss Sarbough, intoning, "Beware the Ides of March!!"

    Liberty: Parent of Science & Industry

  • ChrisRxChrisRx Posts: 5,619 ✭✭✭✭

    What's all the worry? We will just get the putin bailout.

    image
  • OverdateOverdate Posts: 6,890 ✭✭✭✭✭

    The debt ceiling will likely be raised. Even if some Republicans in Congress balk, I expect the majority of them along with plenty of Democrats to go along. Neither the R's nor the D's want to be accused of "shutting down the government" after what transpired a few years ago.

    My Adolph A. Weinman signature :)

  • derrybderryb Posts: 36,015 ✭✭✭✭✭

    Doesn't need money to keep running. Credit works just fine.

    "Do you hear alarm bells ringing? Neither do I. And that’s a huge problem." - Simon Black

  • DoubleEagle59DoubleEagle59 Posts: 8,139 ✭✭✭✭✭

    One thing Trump knows, is how to get out of a financial mess.

    Legally and illegally, he's most likely done it both ways in the past.

    Now he has that wonderful option of a money printing press, something he never had before.

    Watch out!

    Could get very interesting.

    "Gold is money, and nothing else" (JP Morgan, 1912)

    "“Those who sacrifice liberty for security/safety deserve neither.“(Benjamin Franklin)

    "I only golf on days that end in 'Y'" (DE59)
  • rickoricko Posts: 98,724 ✭✭✭✭✭

    Buckle the seat belts, when business and politics collide - anything is possible...Cheers, RickO

  • TwoSides2aCoinTwoSides2aCoin Posts: 43,755 ✭✭✭✭✭

    Gotta love the market. Metals make for a good trade , too.

  • EagleEyeEagleEye Posts: 7,676 ✭✭✭✭✭
    edited March 1, 2017 9:13PM

    The optics (politics) of it would make me think that it would be best for the Republicans to quietly submit a new debt ceiling legislation and move on to other things. Can't blame the minority party on this and I don't think the minority wants to get in the way. I think it will be a relatively quiet blow-over storm.

    Rick Snow, Eagle Eye Rare Coins, Inc.Check out my new web site:
  • jmski52jmski52 Posts: 22,263 ✭✭✭✭✭

    Bump to keep this thread visible until at least March 15th.

    I have no doubt that the jellyfish in Congress will raise the debt ceiling like a helium balloon on a 100 degree day in July.

    Q: Are You Printing Money? Bernanke: Not Literally

    I knew it would happen.
  • rawteam1rawteam1 Posts: 2,472 ✭✭✭

    Why's that?... no one gonna be able to post after the 15th???...

    keceph `anah
  • derrybderryb Posts: 36,015 ✭✭✭✭✭

    @jmski52 said:
    Bump to keep this thread visible until at least March 15th.

    I have no doubt that the jellyfish in Congress will raise the debt ceiling like a helium balloon on a 100 degree day in July.

    one party will delay and drag it out to make the other party look bad.

    "Do you hear alarm bells ringing? Neither do I. And that’s a huge problem." - Simon Black

  • TwoSides2aCoinTwoSides2aCoin Posts: 43,755 ✭✭✭✭✭

    @cohodk said:
    Boo!!

    that's funny.... no matter how deep our debt, or high our ceiling.

  • jmski52jmski52 Posts: 22,263 ✭✭✭✭✭

    Why's that?... no one gonna be able to post after the 15th???...

    Because I'm likely to forget about this thread between now and then,,,,and I am curious to see if anything at all happens.

    I wanna see if Stockman is even close on this one.

    Q: Are You Printing Money? Bernanke: Not Literally

    I knew it would happen.
  • derrybderryb Posts: 36,015 ✭✭✭✭✭

    Stockman will be spot on. He speaks from experience as a former white house budget director.

    "Do you hear alarm bells ringing? Neither do I. And that’s a huge problem." - Simon Black

  • ShadyDaveShadyDave Posts: 2,184 ✭✭✭✭✭

    I haven't heard anything on the debt ceiling in the media and were not far away...I wonder what is going on behind closed doors.

  • cohodkcohodk Posts: 18,493 ✭✭✭✭✭

    @derryb said:
    Stockman will be spot on. He speaks from experience as a former white house budget director.

    Lmao!!!

    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • jmski52jmski52 Posts: 22,263 ✭✭✭✭✭
    edited March 7, 2017 1:49PM

    The senators and representatives are busy trying to figure out how to skim money from the public and feather their own nests with obamacare light. That's what's going on behind closed doors.

    Stockman has a classical finance background and knows government finance as well. At least, he knows how it used to be played. Maybe not so much since the national debt = $20 trillion. Not counting unfunded liabilities, which nobody talks about.

    So what happens when PBGC runs out of money to pay the teamsters union and the other retirement plans that are about out of money? I'll give you one guess. Hint - it won't be coming from JPM.

    Q: Are You Printing Money? Bernanke: Not Literally

    I knew it would happen.
  • mt_mslamt_msla Posts: 815 ✭✭✭✭
    edited March 7, 2017 2:29PM

    The National Debt will NEVER, and I mean NEVER, be repaid. Ever. There may be national emergencies, there may be wars with other countries, there may even be SOME pay down of the debt. But there will always be an increase to the ceiling.

    Repayment will not happen. It just won't.

    Insert witicism here. [ xxx ]

  • mariner67mariner67 Posts: 2,746 ✭✭✭
    edited March 7, 2017 3:20PM

    I agree with the above...the debt is never intended to be repaid.

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  • derrybderryb Posts: 36,015 ✭✭✭✭✭

    @mariner67 said:
    I agree with the above...the debt is never intended to be repaid.

    don't tell those that hold it. lol

    "Do you hear alarm bells ringing? Neither do I. And that’s a huge problem." - Simon Black

  • mt_mslamt_msla Posts: 815 ✭✭✭✭

    @derryb if they don't realize it already.... well that's on them.

    Insert witicism here. [ xxx ]

  • jmski52jmski52 Posts: 22,263 ✭✭✭✭✭
    edited March 7, 2017 6:22PM

    The problem with too much debt is when the debt service eats up everything else.

    Repayment? There's no way in creation that repayment will happen. The only way repayment is even possible is via hyperinflation or default. Repayment per se' just isn't going to happen.

    Q: Are You Printing Money? Bernanke: Not Literally

    I knew it would happen.
  • Downtown1974Downtown1974 Posts: 6,668 ✭✭✭✭✭

    I'd be happy just to see a balanced budget, let alone any debt reduction.
    Let's start there.

  • jmski52jmski52 Posts: 22,263 ✭✭✭✭✭

    Balanced budgets require actual decisions over priorities. No politician wants to be held responsible for making 49.9% of the electorate mad.

    Q: Are You Printing Money? Bernanke: Not Literally

    I knew it would happen.
  • derrybderryb Posts: 36,015 ✭✭✭✭✭

    And at about the same time FED says it will raise rates. LOL

    "Do you hear alarm bells ringing? Neither do I. And that’s a huge problem." - Simon Black

  • cohodkcohodk Posts: 18,493 ✭✭✭✭✭

    @jmski52 said:
    The problem with too much debt is when the debt service eats up everything else.

    Repayment? There's no way in creation that repayment will happen. The only way repayment is even possible is via hyperinflation or default. Repayment per se' just isn't going to happen.

    And if all that debt is converted into 50 or 100 year maturities? Suddenly it's easily manageable.

    Mexico and Disney have 50 yr debt. Why can't the USA?

    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • cohodkcohodk Posts: 18,493 ✭✭✭✭✭

    @derryb said:
    And at about the same time FED says it will raise rates. LOL

    A quarter point, half point, 1, 2, 3, 4 or even 5 points would not hinder repayment.

    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • derrybderryb Posts: 36,015 ✭✭✭✭✭
    edited March 8, 2017 8:37PM

    @cohodk said:

    @jmski52 said:
    The problem with too much debt is when the debt service eats up everything else.

    Repayment? There's no way in creation that repayment will happen. The only way repayment is even possible is via hyperinflation or default. Repayment per se' just isn't going to happen.

    And if all that debt is converted into 50 or 100 year maturities? Suddenly it's easily manageable.

    Mexico and Disney have 50 yr debt. Why can't the USA?

    @cohodk said:

    @derryb said:
    And at about the same time FED says it will raise rates. LOL

    A quarter point, half point, 1, 2, 3, 4 or even 5 points would not hinder repayment.

    You are correct only if there is never to be repayment. A rate increase creates a need for more borrowing to pay the higher interest. An increase in borrowing costs, when expenses are greater than income, always hinders repayment.

    "Do you hear alarm bells ringing? Neither do I. And that’s a huge problem." - Simon Black

  • cohodkcohodk Posts: 18,493 ✭✭✭✭✭

    A rate increase would spur economic activity and thus create more tax revenue. The Fed has finally figured this out. Japan and Europe are beginning to come out from behind their ego also.

    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • derrybderryb Posts: 36,015 ✭✭✭✭✭
    edited March 8, 2017 10:55PM

    @cohodk said:
    A rate increase would spur economic activity and thus create more tax revenue. The Fed has finally figured this out. Japan and Europe are beginning to come out from behind their ego also.

    just like the last rate increase did? lol

    The FED is still trying to figure out where they went wrong before, during and after the last big crisis. And it's so simple. . . just quit blowing bubbles.

    "Do you hear alarm bells ringing? Neither do I. And that’s a huge problem." - Simon Black

  • cohodkcohodk Posts: 18,493 ✭✭✭✭✭

    Yes it did.

    The Fed does not create bubbles. Regulations and investors create bubbles.

    You are always looking for the Great Evil One, when in fact it is us.

    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • derrybderryb Posts: 36,015 ✭✭✭✭✭

    @cohodk said:
    Yes it did.

    The Fed does not create bubbles. Regulations and investors create bubbles.

    You are always looking for the Great Evil One, when in fact it is us.

    FED policy is instrumental in providing the funding and the incentive for asset bubbles to expand. Believe what you wish at your own peril.

    "Do you hear alarm bells ringing? Neither do I. And that’s a huge problem." - Simon Black

  • cohodkcohodk Posts: 18,493 ✭✭✭✭✭

    Lol. Just because I'm handed a shovel doesn't mean I have to use it.

    Personal responsibility is completely lost one you.

    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • derrybderryb Posts: 36,015 ✭✭✭✭✭
    edited March 9, 2017 8:29AM

    The bubbles we are witnessing indicate a lot of digging going on, mostly at the institutional level. And yes, FED policy has fueled it.

    "Do you hear alarm bells ringing? Neither do I. And that’s a huge problem." - Simon Black

  • roadrunnerroadrunner Posts: 28,303 ✭✭✭✭✭

    50 yr debt. Bingo. The solution to mortgage debt, credit card, and student loan debt. I'm surprised no one thought of this before. And when that starts to reach stressful levels....bring on the 100 yr Mortgage.

    Barbarous Relic No More, LSCC -GoldSeek--shadow stats--SafeHaven--321gold
  • derrybderryb Posts: 36,015 ✭✭✭✭✭

    Treasury Secretary Steven Mnuchin has called on Congress to raise the United States debt limit "at the first opportunity."

    "Do you hear alarm bells ringing? Neither do I. And that’s a huge problem." - Simon Black

  • cohodkcohodk Posts: 18,493 ✭✭✭✭✭

    @derryb said:
    The bubbles we are witnessing indicate a lot of digging going on, mostly at the institutional level. And yes, FED policy has fueled it.

    Of what bubbles do you speak?

    Show me a chart of a major asset class that looks like the nasdaq from 1990 to 2000, or gold from 2001 to 2011, or oil from 2002 to 2008.

    Some valuations might be at upper bounds, but there are no bubbles. If prices of the major assets double in the next 2 years then I'll agree...and what a wonderful time we will have had.

    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • dpooledpoole Posts: 5,940 ✭✭✭✭✭

    cohodk,

    Wouldn't you say that the stock market has been the refuge of cash seeking returns in the face of microscopic interest rates, and that stock prices have consequently been bid up to levels beyond the underlying values? I'd always thought that was the definition of a bubble.

  • cohodkcohodk Posts: 18,493 ✭✭✭✭✭

    Yes, a bubble would be when price far exceed "tangible" values, but specifically over a short period of time. There needs to be an extreme valuation difference....such as silver going from 4 to 50 in 8 years, or 9 to 50 in 3 years.

    How exactly would you say stocks are overvalued?

    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • derrybderryb Posts: 36,015 ✭✭✭✭✭
    edited March 9, 2017 1:28PM

    When the prices rise so sharply and at such a sustained rate that they exceed valuations justified by fundamentals a bubble has formed.

    most can't identify a bubble until it is no longer a bubble. Unfortunately bubbles lose air much faster than they gained it.

    One of the ways to know that equities are overvalued is to compare them to economic output. According to CNBC "right now, the total market cap of the Wilshire 5000 index as a percentage of U.S. gross domestic product is about 120 percent, far above the 45-year average of 75 percent."

    "Do you hear alarm bells ringing? Neither do I. And that’s a huge problem." - Simon Black

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