Debt Ceiling talks getting ugly

[DJ FC]

Originally Posted by Repugnant Abomination

We're citizens of a country that is a representative democracy based popular sovereignty. That's not the same thing as being subjects of each other.

It has become a subjugation, however, as society is dividing itself into the providers and the takers. Personally, I'm bitter about the fact that Ex-patriots of the United States must pay US income taxes (Iraq also does this, pretty much nobody else does.) It's slavery. And if you give up your citizenship you have to cut the government a check for half of what you own. THAT IS SLAVERY.

But mine is a niche case.

[DJ FC]

As for the ratings agencies not downgrading US debt: I don't think you know what you're talking about, DH. The US does not have the best credit rating in the world, I believe that honor belongs to Norway. The fact is the US is in decently rough shape for an entity given so much respect and power. A downgrade isn't the end of the world given the US doesn't have the top rating right now.

[Saint DH]

I know exactly what I'm talking about. US bonds are considered risk free.

[f3lix]

Wow DDT, could you create any more of a doomsday scenario? You sound like a breathless MSNBC reporter.

[DJ FC]

Originally Posted by Dirty Harry

I know exactly what I'm talking about. US bonds are considered risk free.

No.

You don't know what you're talking about.

They aren't considered risk free. Not by bond traders. Not by investors. Only by 20 year old finance text books.

Norway is currently lower risk than the US. If the US is risk free does that mean Norway is negative risk???!?!?

[Saint DH]

They are considered risk free by anyone who knows dick about finance. A US bond is risk free because the government can print more money to pay the debt. Norway's bonds are probably also considered risk free. I'm beginning to wonder if you even know the inputs of an interest rate.

[DJ FC]

Originally Posted by Dirty Harry

They are considered risk free by anyone who knows dick about finance. A US bond is risk free because the government can print more money to pay the debt. Norway's bonds are probably also considered risk free. I'm beginning to wonder if you even know the inputs of an interest rate.

Oh God.

DH. Calm down. I understand that finding out that Finance 101 textbooks might have been a bit over-simplistic may be a shock to you. I've studied everything you have, I'm fairly confident in this. Except on top of my degree in this shit I also have 4 years in the trenches. You are guilty of a few logical faults.

1) The US government simply isn't risk free. The fact that CDS (Credit Default Swap) products exist on US Treasuries PROVES this. Do you even know what a CDS is? Anybody who knows dick about finance knows about the CDS market. And anybody with 2 brain cells knows that if there is somebody in the world willing to pay for CDS protection on US Treasuries then they sure as hell arnen't risk free.

2) The government can't just print money dipshit. The Federal Reserve is separate from the US Treasury for this very fucking reason. Because when other countries allowed the central bank and the official debt issuer (Treasury) to intermingle: hyperinflation has been the result. So we separated them.

3) Even if a government has the option to print money they may still opt for a default instead - it's less harmful to society. Russia defaulted.

4) Learning about interest rates isn't easy. I've spent the last 4 years of my life DIRECTLY dealing with the European interest rate markets. I've personally traded interest rate futures and swaps.

[Repugnant Abomination]

You don't have to take that kind of back talk from a SLAVE, DH! Put the mouthy boy in his place.

[DDTempest]

Originally Posted by f3lix

Wow DDT, could you create any more of a doomsday scenario? You sound like a breathless MSNBC reporter.

What scenario would you create? The U.S. government defaults on its debt and everything gets better?

[f3lix]

Originally Posted by DDTempest

What scenario would you create? The U.S. government defaults on its debt and everything gets better?

This is not the apocalypse that the media is trying to create it to be.

Note the media is all over the GOP for not working with Bam Bam, but not mentioning how Harry Reid and company are fine letting part of the FAA shut down instead of quit subsidizing his own airport, along with a few others blocking that legislation for going through.

[Repugnant Abomination]

Yeah...Larry Summers, Fareed Zakaria, Christine Lagarde, Ben Bernake...They're all tools of the mainstream liberal media.

[Saint DH]

I understand that you've been working in the field for several years now, and as a result, I normally yield to your wisdom. Again, this time is no different. For you make some excellent points on why the US treasury bonds are not, in fact, a risk free security. I am so thankful to have these talking points.

Indeed you are correct, my good sir. The very existence of such an insurance product as a US Treasury bond credit default swap proves it to be so. I suppose, in my stupor of last night and the morning, that I meant US Treasury bond interest rates are still the closest approximation of a risk free rate (but are not actually risk free).

I must also agree with you that sometimes defaulting is better than printing more money. It's kind of like what's happening in Greece. Greece wants more money to be printed, but the Germans at the ECB are like hell no. It's a very interesting dynamic over there with the European Union.

Having said that, I am not really sure what I'm arguing about anymore, or why I was even arguing to begin with. I was drinking last night and probably shouldn't have been arguing for anything. I thought I talked mainly of Clinton and Iraq. Anyways, nice to have a discussion with you DJ FC, as always. I hope many English virgins and other wonderful things your way. God bless you, and god bless America. You limey faggot.

[DDTempest]

Originally Posted by f3lix

This is not the apocalypse that the media is trying to create it to be.

Note the media is all over the GOP for not working with Bam Bam, but not mentioning how Harry Reid and company are fine letting part of the FAA shut down instead of quit subsidizing his own airport, along with a few others blocking that legislation for going through.

This is not an answer at all.

I am asking you: f3lix, master of all knowledge, to create your scenario for whats going to happen August 2nd if there is no debt ceiling increase.

[Beebs]

Originally Posted by Dirty Harry

They are considered risk free by anyone who knows dick about finance. A US bond is risk free because the government can print more money to pay the debt. Norway's bonds are probably also considered risk free. I'm beginning to wonder if you even know the inputs of an interest rate.

I think the guy making his living on it knows more than the guy taking his 3rd class on it.

Next time somebody says "US bonds are considered risk free" just say "well that is just for simplicities sake, so we can do these problems based on the equation" and they will say "yes, that's correct, there is actual risk, but it fucks up the equation, so just roll with it."

[f3lix]

On August 2nd, nothing will happen because all the prediction markets will have already reacted. To act like this one event will fuck this country for an eternity is nonsense.

[DJ FC]

Originally Posted by f3lix

On August 2nd, nothing will happen because all the prediction markets will have already reacted. To act like this one event will fuck this country for an eternity is nonsense.

Not true. Because we don't 100% know yet what the outcome will be. Politicians are unpredictable. Maybe they don't pass the debt ceiling hike. The US will definitely be subject to a ratings downgrade in this scenario. And certain types of investors will have no choice but to sell some of their US Treasuries (whether they want to or not their hands will be tied). The US might be downgraded regardless of the outcome just based upon how we arrive at our outcome.

[Repugnant Abomination]

Why political polarization has gone wild in America (and what to do about it) – Global Public Square - CNN.com Blogs

Excellent take by Zakaria.

[DDTempest]

Originally Posted by f3lix

On August 2nd, nothing will happen because all the prediction markets will have already reacted. To act like this one event will fuck this country for an eternity is nonsense.

You genuinely think there are no consequences to our credit rating being downgraded?

Also, I never said it will fuck this country for an eternity, but the global financial system has had some serious hiccups over the last few years and this would only amplify that. The exact result? Double-dip recession? Possible. Depression? Possible. Remember what it took to get out of the last depression?

Our financial pain ripples through the economies of most of the industrialized world. There are very few countries that have said "I don't think we should sell our shit to America" given we are the worlds largest consumers, so nearly every country would take a hit.

Will the end of the world happen? No. Could things get seriously rough for a great number of people? Very. To think nothing will happen is naive.

[angry pancake]

"Obama could cut 9 billion in taxes, eliminate the EPA, declare global warming a sham, insist that homosexuality can be fixed with more prayer, deport all undocumented people, grant tax breaks to all corporations, eliminate the federal reserve, support state and private militias to combat the corruption in washington, and the republicans will still have their agenda goal to make Obama a one term president."

it's hard to republicans seriously when they openly admit this is their platform and primary goal.

[f3lix]

DDT, you're not following me at all. The title of the thread is about the talks getting ugly, not what you've implied me claiming. You asked me what would happen come August 2nd and I replied, but you interpreted my answering of what would happen on that single day with how I feel about the entirety of this event.

Why don't you take a gander at what I said would happen back in May.

Investmenting Options/Suggestions...

[DDTempest]

Originally Posted by f3lix

You asked me what would happen come August 2nd and I replied, but you interpreted my answering of what would happen on that single day with how I feel about the entirety of this event.

Ok so you're taking the lawyer approach? I guess you are the fucking wizard here because this entire discussion has revolved around a single day of consequences and I am too dense to realize that, should I make another thread for the ongoing effects? One for each day of consequences?

You're a fucking chimp if you think that answer is going to fly at all. And you're a fucking chimp if you genuinely think that everything I said, and you categorically denied, was meant to occur on August 2nd immediately.

You said my claim was shit, so I asked you to explain a better scenario and you've failed to do so in any way at all ... instead you're tap-dancing around the question like its beneath you instead of admitting you might not know what the fuck you are talking about or taking a couple moments out of your busy lifestyle to provide an alternate scenario.


You aren't even good at being a troll.

[f3lix]

Nice try on the hidden text. Unlike everybody else around here, I'm not suddenly an expert on credit default. The thread was created to discuss the talks getting ugly, not the actual results of the talks. This isn't a lawyer approach, as nothing has changed since my initial post.

[Ugly Bastard]

I love how much the economy gets everyone into a frenzy. IT MUST CONTINUE GOING UP SO WE CAN ALL GO BUY MORE CHINESE PRODUCED CRAP ZOMG JUST KEEEEEP WORRRRKING!!!

[f3lix]

Wall Street didn't seem to care about it today, GOP sent another plan, Dems only talked about a plan; average day at the office.

[DJ FC]

Believe it or not the debt talks have not been the focus of the global markets. They've been about 30%.

The European debt crisis has been about 50%. All other bullshit 20%.

Truth is: everybody already knows the US is going to take on more debt and it's pretty much a non-issue.

As for buying Chinese crap: UB you're spot on. We've become suckers for this shit and we're digging ourself into a nasty hole of dependency. Thank God we have Apple, Pfizer, Goldman Sachs, and Google.

We gave the rest of the world the ability to find Viagra on our iPhones and they love it. American innovation is what we have and we shouldn't let that die. Trouble is everybody wants to be a lawyer, not an engineer. And the powers that be want to keep the engineers working on the next Google algorithm or iPhone ap out of the country. Either by denying a visa or by a ridiculous tax regime. Fuck working in San Francisco if I'm an Indian financial whiz kid. Why pay 75% tax when I can work much closer to home (Dubai) and work for Goldman Sachs there. Fuck working for Apple, I'll go work for Ching Chong Chang in Singapore and pay 0% tax.

Fuck it. I'm not working at all. Obama got my back.