Backdoc: DOES ANYONE WANT TO GRAB SOME POPCORN AND SEE SOME NEWS?
TONIGHTS EPISODE OF THE "MAIN EVENT" HASN'T DISAPPOINTED!
WILL THE REPUBLICANS PLAY CHICKEN WITH THE PRESIDENT OR JUST GIVE IN AT THE LAST MINUTE?
BETTER YET, WILL THERE BE VALUED DINAR IN TIME TO PAY BILLS? MMMM
TENSION IS RISING IN THE AIR!
SLAP! I NEED SOME MORE POPCORN! DOC
Thunderhawk: Backdoc Alert
Debt ceiling cash crunch: When millions won't get paid
Over four different days in November, the U.S. government has to cut checks to Social Security recipients totaling close to $70 billion.
Then there is the salary for federal workers and the military: $12 billion must be paid over five different days.
And don't forget the interest to all those bond holders with U.S. Treasuries: $30 billion due on November 16.
All those payments underpin the immediate crisis unfolding (yet again) on Capitol Hill over whether to raise the debt ceiling.
Don't raise it or at least suspend it soon and Treasury Secretary Jack Lew estimates that after November 5 he will only be able to pay the country's bills with the surplus cash he has on hand plus the daily tax revenue coming in. But at some point it won't be enough to pay everyone.
Lew said he expects the cash stash to deplete "quickly."
The Bipartisan Policy Center now projects quickly could mean between Nov. 10 and Nov. 19.
In all, the Center found the Treasury will have to make large daily payouts totaling $48.8 billion on October 30, $33.1 billion on both November 3 and November 16, and more than $15 billion on October 21 and between November 9 and November 10.
On other days between now and the end of November, Treasury will be making payments totaling anywhere from $1.4 billion to $14 billion.
When its cash runs short, millions of people and businesses expecting timely, in-full payments from the federal government may find their checks delayed.
That's because Treasury will be forced to either postpone all payments due on a given day until it can pay each in full, or to choose which pick and choose who to stiff.
Related: 7 things you need to know about the debt ceiling (yes, that again)
Some Republicans in Congress have made clear that they don't wish to vote for an increase in the debt ceiling unless it's pared with spending cuts. Some have also asserted that the Treasury can simply prioritize payments to bondholders and avoid default.
But that strategy bears huge risks politically and practically.
The Treasury pays millions of bills every day. And most of those payments are automated. It pays interest to bond investors from one computer system and makes all other payments from another.
So while technically it may be possible to make interest payments since they're processed separately, it would be much harder for Treasury to prioritize what to pay among all the country's other obligations. And many argue that not making any payment due - not just that to bondholders - is a default.
The one thing Speaker Boehner must do before leaving
Many people are hoping that House Speaker John Boehner will do big things before he vacates the job and Congress. I count myself among them. But there is one thing on that to-do list that absolutely must get done: Raise the debt ceiling.
Contrary to myth and ill-informed bombast, raising the legal limit on the nation’s borrowing is not akin to giving the federal government or the president a blank check. Raising the debt ceiling is not about future spending, but past spending approved by Congress. “Refusing to raise the debt limit does nothing to reduce those existing obligations or cut the deficit,” the Treasury Department explained during the debt-ceiling crisis of 2011. And it’s not as bad as a government shutdown. It’s worse, as the president would have to rob Peter to pay Paul and still come up short in satisfying creditors and anyone else who relies on cash from Uncle Sam.
[Speaker Boehner leaves House in disorder]
There are three reasons for my alarm here, in no particular order because they are all terrifying. One, the vote on the incoming speaker will not take place until Oct. 29, the day before Boehner “zip-a-dee-doo-dahs” his way back to Ohio. Two, the nation will cease to have the ability to pay all of its bills “on or about” Nov. 5. Three, the next speaker of the House might not have the rest of his leadership team in place to corral the votes to raise the federal debt limit. And heaven help us all if Boehner’s successor is House Majority Leader Kevin McCarthy (Calif.).
Boehner’s resignation is effective Oct. 30, so the vote on his successor the day before makes sense. That the rest of the Republican House leadership — the majority leader and the whip — won’t be voted on that day does not. According to the Hill, “It’s possible those elections won’t take place at all” if McCarthy fails in his speaker bid. He would then stay put as majority leader and Rep. Steve Scalise (La.) would remain the whip. But NBC News Capitol Hill correspondent Luke Russert tweeted Wednesday morning that Rep. Tom Cole (R-Okla.) told him that McCarthy “will win” on the first ballot.
If that prediction proves true, McCarthy won’t have a leadership team to help him tend to his raucous caucus. And in three more tweets Russert spelled out why a McCarthy victory is worrisome. In short, the older members of the House Republican conference want Boehner to get the debt ceiling off the table for his presumed successor because they fear it “[could] blow up” due to compromises McCarthy will have to make to conservatives to secure the necessary 218 votes.
[McCarthy will get whipped like Boehner and Cantor]
And this brings me back to the Nov. 5 deadline for raising the debt ceiling. That was the date Treasury Secretary Jack Lew warned Boehner that the federal government would “exhaust” the “extraordinary measures we have been employing to preserve borrowing capacity.” Lew also explained what would happen if Congress failed to act by the deadline.
At that point, we would be left to fund the government with only the cash we have on hand, which we currently forecast to be below $30 billion. This amount would be far short of net expenditures on certain days, which can be as high as $60 billion. Moreover, given certain payments that are due in early to mid- November, we anticipate that our remaining cash would be depleted quickly. Without sufficient cash, it would be impossible for the United States of America to meet all of its obligations for the first time in our history.
This would all go down exactly one week after the House speaker elections. If Boehner doesn’t take this fiscal bomb off the table, I fear that the Republican-controlled Congress and the House conservative caucus in particular would be content to let the timer run out. The newly minted House majority tried that in 2011 and brought the United States the closest it has ever been to being a global financial deadbeat. Now that there are more of them and they control both houses of Congress, the possibility is very high that the full faith and credit of the United States will be destroyed.
FROM THE DEPARTMENT OF THE TREASURY
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Backdoc: LAST NIGHT WE SAW PRISONER RELEASES TO POTENTIALLY REDUCE COSTS OF THE GOVT. !!
TODAY WE SEE AMTRACK IN JEOPARDY OF CUT BACKS! MMMM SOUNDS LIKE A DEFENSIVE MOVE BY THE WHITE HOUSE!
I'M AFRAID THE REPUBLICANS HAVE A MANDATE OTHERWISE WHY WOULD MR. SPEAKER ON THE WAY OUT THE DOOR? DOC IMO
Thunderhawk: Backdoc Alert
VIDEO: Feared 'Amtrak shutdown' is actually a rail system shutdown
By the end of this year, 12,000 route miles owned and operated by freight carriers will have a mandated safety system in place, but that's only a fraction of the 60,000 miles requiring it.
Come December it could get much tougher to take the train. Or, for that matter, to ship anything on one.
This week Amtrak made waves when it threatened to suspend service on some of its routes unless Congress extends the deadline for the rail carrier to get a major safety upgrade in place.
In a letter to the Senate Commerce Committee, Amtrak warned that the "vast majority" of its network would become inoperable starting in mid-December if the current Dec. 31 mandate for U.S. rail carriers to implement something called "positive train control" stands as is.
Backdoc: EMERGING MARKETS HAVE BEEN DECIMATED BY BLACK GOLDS DECLINE.
COMMODITIES HAVE BEEN DRAGGED DOWN BY THIS GLOBAL CURRENCY!
WITH NEGOTIATIONS POTENTIALLY UNDERWAY OR ALREADY AGREED TO PRICES SHOULD EVENTUALLY BECOME STABILIZED BUT OCTOBER COULD RETEST ITS LOWS SINCE WE CONTINUE TO SEE INVENTORY BUILDS.
WE CAME UP TO THE 200 DAY MOVING AVERAGE AND PROMPLY BACKED OFF OF IT AND ENDED DOWN FOR THE DAY!
WITH CHINA COMING BACK FROM A WEEK OFF ITS ANYONE GUESS WHERE WE GO FROM HERE?
MOST BELIEVE DOWN FOR THE SHORT TERM! I'M IN THAT CAMP! DOC IMO
Thunderhawk: Backdoc Alert
VIDEO: IMF Warns of Growing Emerging Markets Risks*
Morgan Stanley Investment Management Ruchir Sharma discusses the latest in emerging markets with Bloomberg's Scarlet Fu, Joe Weisenthal and Alix Steel on "What'd You Miss?" (Source: Bloomberg)
Backdoc: GLENCORE IS DRAGGING DOWN SOME BIG BANK SINCE IT IS HIGHLY LEVERAGED! WATCH OUT EURO YOU ARE GETTING HIT FROM EVERY ANGLE!
THE BRITS WANT TO LEAVE,
THE SCOTTS SAY THEY WILL LEAVE IF THE BRITTS DO,
ANTI-AUSTERITY FROM DEFAULT IN GREECE,SPAIN AND PORTUGAL ALSO IN A SECESSION BUBBLE,
WOW! THEN LETS NOT FORGET VW ECONOMY IMPACT! DOC IMO
Thunderhawk: Backdoc Alert
Coal Problems Being Made Worse by Global Slowdown, Glencore Says
The slowdown across global economies is exacerbating a coal glut that’s driven prices for the fuel to the lowest level in eight years, according to Glencore Plc.
The market continues to re-balance amid weaker than forecast demand, said Peter Freyberg, Glencore’s head of coal, according to the e-mailed text of his speech delivered in Newcastle, Australia. The mining company, which in February announced it would cut Australian output by 15 million metric tons this year and delay some projects, will continue to review its operations to find ways of saving money, Freyberg said.
Coal prices have collapsed amid a broader slump in commodities that has rocked Glencore, prompting a 29 percent slump in its share price in a single day last week on concern over its debt burden. The Swiss company, the world’s biggest exporter of thermal coal, has since rebounded after it said business was “robust” and it had secure access to funding. Shares closed at 117.85 pence in London Tuesday.
Backdoc: TODAY I HEARD A DEALER TALKED ABOUT ON CNBC, IS VERY ANGRY! WILL LAWSUITS BE ON THERE WAY AS WELL?
DEALERS CAN'T SELL A DEVALUED BUSINESS NOW. THEIR INCOME IS BEING CUT.
THIS DEALER SAID HE FELT BETRAYED! MMMMM
Thunderhawk: Backdoc Alert
VIDEO: Volkswagen plays down hopes of quick answers over emissions cheating
Volkswagen (VOWG_p.DE) said on Wednesday it would take time to get to the bottom of its rigging of diesel emissions tests, hours before the carmaker is due to give updates on its findings to German regulators and U.S. lawmakers.
More than two weeks after it admitted to cheating U.S. emissions tests, Europe's largest carmaker is under pressure to identify those responsible, to say how vehicles with illegal software will be fixed and whether it also cheated in Europe.
Link to Part 2