The rhetoric from today’s political maneuvering is eerily reminiscent of the rhetoric just a week ago and absolutely in now way represents the ‘progress’ than an impatient to BTFATH equity market appears confident about. As AP reports, Harry Reid seemed to arrogantly explain “we haven’t done anything yet” by way of compromise (as his party rejected the compromise deal on the basis of the spending and taxes issues; and the Republicans came out swinging. Boehner (behind closed doors) exclaimed “The Senate needs to hold tough; the President isn’t negotiating with us;” and tea-party caucus member Fleming blasted, “It’s very clear to us he does not now, and never had, any intentions of negotiating,” and warned, there was “definitely a chance that we’re going to go past the deadline.”
WASHINGTON (AP) – Republicans and Democrats in Congress lumbered through a day of political maneuvering Saturday while a threatened default by the Treasury crept uncomfortably closer and a partial government shutdown neared the end of its second week.
“We haven’t done anything yet” by way of compromise, Majority Leader Harry Reid, D-Nev., said after Senate leaders took control of efforts to end the impasse, although he and other Democrats said repeatedly there was reason for optimism.
Across the Capitol, tea party caucus Republican Rep. John Fleming of Louisiana said there was “definitely a chance that we’re going to go past the deadline” on Thursday that Treasury Secretary Jack Lew has set for Congress to raise the $16.7 trillion debt limit.
BofA: Expect A ‘Large-Scale’ Market Sell-Off If There’s No Deal By Oct. 17
In a note to clients, he writes:
We expect the market to become increasingly anxious as the deadline nears. To be sure, if the debt ceiling is not raised before the deadline passes, it will not lead to an immediate default, as the government should still have about $127bn of payment capacity on that day and we expect the Treasury will continue to meet its obligations until at least November 1. But knowing this, key players in the negotiations may view not reaching a deal before the deadline passes as an acceptable option.
However, the risk of a missed payment on Treasury obligations should increase dramatically after October 17 given uncertainty about government revenues. So we expect a large-scale risk-off market move if the deadline passes without a resolution. On the other hand, reaching a deal in time could lead to a relief market selloff, which may also bring volatilities higher.
Read more: http://www.businessinsider.com/bofa-large-scale-risk-off-market-move-if-no-deal-by-oct-17-2013-10#ixzz2hZCKT4pg
The world’s most powerful bankers warn of terrible consequences if the U.S. defaults
WASHINGTON (Reuters) – Three of the world’s most powerful bankers warned of terrible consequences if the United States defaults on its debt, with Deutsche Bank chief executive Anshu Jain claiming default would be “utterly catastrophic.”
A “selective default” occurs when a borrower fails to pay one or more of their obligations BUT continues to meet other payment obligations.
For instance, a country may enter into “selective default” and fail to make payments on one class of obligations but continue to make good on every other debt obligation.
Big money now telling lawmakers the “catastrophic” stakes of default
zerohedge ‏@zerohedge 2 min
Wow: Schumer Says He Worries About Monday Stock Drop on Default Risk. Nevermind the economy but don’t kill the Russell 2000
Global finance chiefs chastise U.S. for gridlock identified as biggest threat to world economy
Chuck Schumer’s “Bottom Line”: Don’t Hurt The Stocks
And speaking of Chuck Schumer’s “bottom line“, here it is.