Support NeoGAF

[SteveWinwood]

:<

who cares they only sell clothes

 

[Grover Cleveland]

:<

Its happening?

 

[Ether_Snake]

What have Republicans been fighting for? Apart from the straightforward fund-and-raise provisions, the emerging House GOP legislation appears to contain the Vitter amendment and – according to House Democratic leader Steny Hoyer – a provision to strip the Treasury of its ability to deploy emergency measures to avoid default.

Expected, they want to keep using the default as a threat for as long as possible.

 

[Jarmel]

:<

And so it begins.

 

[empty vessel]

They can only set the fed funds rate (and operations in the discount window) that affects banks.

Yes. As I said, the Fed sets interest rates exogenously in a control sense, meaning it exercises control over it, even if not always directly.

If you need evidence, see what bond rates did the minute the rumor of tapering happened. The Fed did NOT intend for that to happen.

That is not evidence that the Fed does not control interest rates. This is evidence that it does:

Or as the Fed itself puts it:

The Federal Reserve controls the three tools of monetary policy--open market operations, the discount rate, and reserve requirements. The Board of Governors of the Federal Reserve System is responsible for the discount rate and reserve requirements, and the Federal Open Market Committee is responsible for open market operations. Using the three tools, the Federal Reserve influences the demand for, and supply of, balances that depository institutions hold at Federal Reserve Banks and in this way alters the federal funds rate. The federal funds rate is the interest rate at which depository institutions lend balances at the Federal Reserve to other depository institutions overnight.

Changes in the federal funds rate trigger a chain of events that affect other short-term interest rates, foreign exchange rates, long-term interest rates, the amount of money and credit, and, ultimately, a range of economic variables, including employment, output, and prices of goods and services.​

http://www.federalreserve.gov/monetarypolicy/fomc.htm

Given that the Federal Reserve has unlimited capacity to buy US Treasuries (and could buy every one outstanding today), you are going to have explain the mechanism by which the Fed relinquishes control of interest rates on government debt except by choice. I should add, if rates temporarily rise in the wake of default, I'd recommend buying, provided you are in the market for the safest financial asset in the world.

See also: http://www.frbsf.org/education/publ...06/august/libor-federal-funds-rate-short-term
http://pragcap.com/can-the-fed-actually-control-interest-rates

Considering rating agencies have been used by the money managers of the world, to assess sovereign risk... perhaps YOUR views are the "irrational" views here?

Definitely not. Those money managers are irrational. Unless they are doing it for countries who use the Euro, which would make sense, because those countries do not have currency-issuing governments. They can financially default, unlike the US and similar currency-issuing governments.

China is holding a TRILLION and change in US treasuries as reserve assets they buy to suppress the renminbi against the dollar. They can sell those treasuries for an alternative (which they have been pushing for since 2009). It's quite simple actually.

So step (1): China sells the US Treasuries it possesses.

Is there a step (2)?

 

[KingGondo]

Expected, they want to keep using the default as a threat for as long as possible.

The simple fact that there exists a political faction in our government that wants to do this should result in a credit rating downgrade in and of itself.

 

[jamesinclair]

NO

Why not?

(Fresh water BTW)

Makes more sense than gold which has minimal actual value

 

[jmdajr]

Congrats you're now on a watchlist.

:'(

 

[robochimp]

.



China is holding a TRILLION and change in US treasuries as reserve assets they buy to suppress the renminbi against the dollar. They can sell those treasuries for an alternative (which they have been pushing for since 2009). It's quite simple actually.

So we hand them a trillion dollars, and then they spend it. Is that the calamity awaiting us?

 

[KingGondo]

So we hand them a trillion dollars, and then they spend it. Is that the calamity awaiting us?

Dude, you don't understand. It's not just one trillion dollars. It's one TRILLION dollars.

 

[Shosai]

Why not?

(Fresh water BTW)

Makes more sense than gold which has minimal actual value

In economic terms, what's the difference between value and "actual value"?

HINT: Nothing

 

[Randy Lanzarote]

There was a supreme court decision called "Citizens United" which allows for corporations to mamited campaign contributions to whoever they want with zero transparency .

This is how the Tea Party came about.

If any moderate Republican doesn't bow down to the insane demands of the corporations that fund the Tea Party movement will spend millions if not billions on a Tea Party candidate in their district, pretty much destroying any hope for their re-election. This is what is referred to as "being Primaried".

They have taken the entire Republican party hostage, and now have taken the entire country hostage.

But surely the corporations that fund the Tea Party must now be thinking" perhaps we've gone a bit too far". Surely they must see that a default is good for nobody, especially themselves. I just wonder if they've created a monster that even they can't control now (for some reason Hitler and the National Socialist Workers Party come to mind....)

To be honest all through this saga I've believed that common sense will prevail, if only because lobbyists and corporations that donate to the Republican Party will say "enough is enough" and get them to the table to sign the bill. Perhaps I was wrong and the backers of the party are just as insane as the rank-and-file lunatics.

He'll likely be ousted as Speaker should he fail to appease his conservative base. He was treading on thin ice in 2012, but the only reason he didn't get replaced then was because the republicans had no one else able and willing to take the position.

Does the Tea Party have the numbers in the House to a) oust the speaker and b) elect one of their own in his place? I thought the Tea Party members were just a vocal minority, I didn't think (or hoped!) they held any real power.

 

[GaimeGuy]

Hate to tell you this, but anyone who replies to him will be too.

fffffffuuuuuuuuuuuu

 

[ElectricBlue187]

In economic terms, what's the difference between value and "actual value"?

HINT: Nothing

Potable water has a bit more inherent value than pretty much any commodity you'd care to name because of the fact that it's the only one whose absence is fatal in a matter of days.

Not unlimited though

 

[davepoobond]

Expected, they want to keep using the default as a threat for as long as possible.

Wow. Congress would be the new executive branch if that happens

 

[Joe Shlabotnik]

Heritage Action announces it opposes the House bill and will use it as a key vote in its scorecard. No way Tea Party reps vote for it. Boehner doesn't have the votes.

 

[Grover Cleveland]

House scheduled to vote on its debt ceiling/shutdown proposal tonight

The Republican-controlled House will vote Tueday night on a plan to reopen the federal government and avoid a first-ever default on the nation&#8217;s debt, only two days before the government exhausts its ability to borrow money.

But it was far from clear whether the Republican proposal, if approved, could attract enough support in the Democratic-controlled Senate to end Washington&#8217;s political crisis. The plan contained several provisions that Democrats have strongly opposed.

The House action came as Fitch Ratings, a credit rating agency, announced Tuesday afternoon that it was accelerating its timetable for a potential U.S. credit rating downgrade, among the first concrete effects of the standoff. If Fitch follows through, it would become the second credit rating firm to downgrade U.S. government debt, potentially triggering ripple effects across a range of financial markets.

...

Later Tuesday, House Republicans regrouped around the new version of their bill, which dropped the medical device tax provision, and officials said they would bring it the House floor tonight. The new proposal was also unlikely to win bipartisan support, in part because it would fund federal agencies only through Dec. 15, creating the threat of another government shutdown just before Christmas. But it could serve as a framework for further negotiations.

It was also unclear if House Speaker John Boehner (R-Ohio), whose previous efforts at compromise have been defeated by his party&#8217;s right flank, could round up support for the new proposal.

It's game time, folks.

 

[NullPointer]

"Defaulting on our national debt is an impeachable offense, and any attempt by President Obama to unilaterally raise the debt limit without Congress is also an impeachable offense,” Palin said

(source)

 

[Protein]

How is Palin still relevant in politics?

 

[Samyy]

(source)

lmfao, what an idiot.

 

[jmdajr]

fffffffuuuuuuuuuuuu

 

[brian577]

House scheduled to vote on its debt ceiling/shutdown proposal tonight



It's game time, folks.

So what will the Republicans do if this doesn't even pass the house? Will they still catch the first plane out of DC?

 

[jamesinclair]

In economic terms, what's the difference between value and "actual value"?

HINT: Nothing

Go a week without gold.

Now try a week without water.

 

[Grover Cleveland]

So what will the Republicans do if this doesn't even pass the house? Will they still catch the first plane out of DC?

They could bring up the Senate deal as is for a vote (which would probably pass).

Or...Boehner could bend to the right flank and dig in until they get the provisions in the CR they want.

 

[Epsilon-delta]

(source)

So dumb, they really hate Obama as President.

 

[Lagspike_exe]

Potable water has a bit more inherent value than pretty much any commodity you'd care to name because of the fact that it's the only one whose absence is fatal in a matter of days.

Not unlimited though

There is no such thing as "inherent" value.

 

[cdkee]

These Tea Party scumbags showed their true colors when they flew Confederate flags outside the White House this past weekend.

They're so determined to bring down Obama (I wonder why?) that they're willing to take the country with them.

 

[Sanky Panky]

That is not evidence that the Fed does not control interest rates. This is evidence that it does:

And you fail to understand cause and effect, because that chart shows the REACTIONARY nature of the fed funds rate and open market operations. When inflation expectations go up or down, the 10-yr bond rate goes up or down, by the relationship that bond yield = real interest rate plus expected inflation. Coincidentally, as you ignore, the fed funds rate follows the relationship of expected inflation and projected GDP by the Taylor rule.

Given that the Federal Reserve has unlimited capacity to buy US Treasuries (and could buy every one outstanding today), you are going to have explain the mechanism by which the Fed relinquishes control of interest rates on government debt except by choice. I should add, if rates temporarily rise in the wake of default, I'd recommend buying, provided you are in the market for the safest financial asset in the world.

Definitely not. Those money managers are irrational. Unless they are doing it for countries who use the Euro, which would make sense, because those countries do not have currency-issuing governments. They can financially default, unlike the US and similar currency-issuing governments.

Please hurry, since you think money managers and investment theory are irrational, there are trillions upon trillions of investor assets waiting for your ultimate wisdom.

So step (1): China sells the US Treasuries it possesses.

Is there a step (2)?

2) Good bye dollar.

 

[Like the hat?]

I would loooooove for the tea party loons to try to impeach Obama. They think they don't get he minority vote now, try wrongfully trying to remove the nation's first black president.

 

[Joe Shlabotnik]

House bill is dying as we speak, according to Robert Costa. May not be a vote tonight.

 

[The Technomancer]

House bill is dying as we speak, according to Robert Costa. May not be a vote tonight.

Gooooin off the raaaaaails on a craaazy traaaaaaain

 

[maquiladora]

So what will the Republicans do if this doesn't even pass the house? Will they still catch the first plane out of DC?

The Senate bill will be put up for a vote if it fails or if it's pulled. If it wins, the Senate will just reject it anyway and then the Senate bill will be put up in the House. So either way its pretty much inevitable that this gets resolved. The next 24 are just about saving face and playing games, but the result will be the same either way in the end.

 

[zoku88]

There is no such thing as "inherent" value.

If you don't believe in any intrinsic value, than you logically conclude that nothing has any value whatsoever.

Something with extrinsic value must eventually have its value come from something with intrinsic value.

 

[empty vessel]

2) Good bye dollar.

I will assume you are unable to articulate any problem with China selling all of the US Treasuries it owns.

 

[Shosai]

Does the Tea Party have the numbers in the House to a) oust the speaker and b) elect one of their own in his place? I thought the Tea Party members were just a vocal minority, I didn't think (or hoped!) they held any real power.

The job of the speaker is to ensure that his party votes as a single bloc, otherwise they wouldn't command a majority. If the house members aren't voting in lock-step behind him, the Speaker is considered ineffective and pressure mounts for his resignation or replacement in the next congressional term. Typically it's the majority party leaders that nominate the speaker, and no one knows how they stand in regards to Boehner. He was elected due to his seniority and that's about it.

See also: the 1996 resignation of Newt Gingrich.

 

[slit]

I heard no vote tonight on the House bill. Things are getting out of hand.

 

[brian577]

The Senate bill will be put up for a vote if it fails or if it's pulled. If it wins, the Senate will just reject it anyway and then the Senate bill will be put up in the House. So either way its pretty much inevitable that this gets resolved. The next 24 are just about saving face and playing games, but the result will be the same either way in the end.

I envy your optimism.

 

[The Technomancer]

If you don't believe in any intrinsic value, than you logically conclude that nothing has any value whatsoever.

Something with extrinsic value must eventually have its value come from something with intrinsic value.

Eh, not necessarily. I'm in the camp that says that water basically has intrinsic value, but I can see the side that argues that all value is a product of human experience. Water certainly only has intrinsic value to beings who require water to survive.

 

[Like the hat?]

Looks more and more likely like I'll be celebrating my birthday with government craziness this Thursday.

 

[GK86]

Any streams of the House floor?

 

[robochimp]

2) Good bye dollar.

The dollars are just going to be drawn back to the place where they have the most value.

 

[Ether_Snake]

Guardian:

It looks as if the House vote suddenly is off. Boehner did not find the support he needed. In his own party.

Heritage Action wins again! RT @Bencjacobs: Rules Committee hearing now being postponed indefinitely

 

[Shosai]

If you don't believe in any intrinsic value, than you logically conclude that nothing has any value whatsoever.

Something with extrinsic value must eventually have its value come from something with intrinsic value.

In economics, the term is meaningless. The value of any commodity is what people are willing to pay for it. Water is a life-sustaining substance, but it's also has a low price because it's abundant and self-replenishing. A high demand, rendered nil by a high supply.

 

[Riki]

Looks more and more likely like I'll be celebrating my birthday with government craziness this Thursday.

The Apocalypse. The best birthday ever!

Guardian:

Boehner is FUCKED.

 

[empty vessel]

Eh, not necessarily. I'm in the camp that says that water basically has intrinsic value, but I can see the side that argues that all value is a product of human experience. Water certainly only has intrinsic value to beings who require water to survive.

I would just say that value is attributed to things by sufficiently complex perceiving thinkers. Water is universally valued (by sufficiently complex cabon-based perceiving thinkers), but I'm not sure I'd say it has either "intrinsic" or "inherent" value.

 

[PhoenixDark]

Write it down: Paul Ryan will be the Speaker of The House before 2014's election.

 

[Keru_Shiri]

House scheduled to vote on its debt ceiling/shutdown proposal tonight



It's game time, folks.

Sounds like the mother of all face-in-the-door tactics.

 

[brian577]

Guardian:

Does that mean Senate can push it's proposal forward now? As in tonight.

 

[Unstable]

Any streams of the House floor?

I think it's in recess at the moment.

http://houselive.gov/

 

[The_Inquisitor]

So should I be dumping my 401k into cash now? @_@