It's not my fault!
Posted on 07/24/2011 5:53:50 AM PDT by markomalley
American businesses, from Wall Street banks to major industrial corporations, are preparing contingency plans for a pair of once-unthinkable events: the United States defaulting on its debt and the loss of the nation's top AAA credit rating.
While most bankers, investors and executives still cannot imagine that politicians in Washington could be reckless enough to let the government run out of money to pay its bills on August 2, they can't guarantee that the game of chicken that has been played in recent weeks won't go awfully wrong.
Lawmakers and President Barack Obama need to agree to raise the current $14.3 trillion legal borrowing limit by that date to avert a default but the decision is being held hostage to arguments between Republicans and Democrats about how to cut the U.S. budget deficit.
And on Friday evening, the prospects of an agreement suddenly dimmed when top U.S. Republican, House of Representatives Speaker John Boehner, broke off talks with Obama, saying they had become futile because the U.S. President was demanding an increase in taxes.
It all means that just as companies once formulated expensive backup Y2K plans just in case computer systems couldn't recognize the date Jan 1, 2000, investors are devising ways to cope with financial markets pandemonium if the worst happens and the government of the world's biggest economy runs out of cash.
Ringing in their ears are dire warnings from the guardians of the nation's financial well-being - Federal Reserve Chairman Ben Bernanke said only last week that a default would be 'calamitous'.
In some cases, bankers are delaying their summer holidays, while companies are making sure they have plenty of access to cash, and investors are being told to hedge their portfolios, with gold one favored asset for that.
(Excerpt) Read more at asianage.com ...
And Goldman Sachs traders are standing by...
Unless something positive comes out by Monday morning...I’d speculate on a 300 point loss for the day for the Wall Street crowd, and at least that much for Tuesday. By Friday, it could 800 points lost for the whole week.
“they can’t guarantee that the game of chicken that has been played in recent weeks won’t go awfully wrong”
Playing chicken with a narcissist chicken is always risky business. You never know when arrogance or timidity will dominate his responses, resulting in a volatile pattern of stubbornness and concessions. You certainly can’t rely on common sense to avert a catastrophic crash at the last minute.
Even this threat of default is calamitous. Markets hate uncertainty. The cost of this foolishness has already started to pile up. The stalemate with the Won shows his destructive marxist intentions more clearly that ever. His agenda is to completely wreck the democracy and the republic. The adults need to ease him out of the office now and work damage control urgently.
Why does the media keep saying “default” like that’s guaranteed if the ceiling isn’t raised? If Obama chooses to default he can. If he chooses to suspend other government spending instead, then he can do that.
A more honest headline would be “Wall St, companies brace on fear that Obama will decide to default”
I’d like to see the house pass a bill that says “no defaulting and no suspension of SS benefits - those must be paid with the monthly revenue (which is big enough)”. See if Reid balks at that or Obama vetoes it. Then the media and Dems can stop using those BS arguments on the public.
I sense a great opportunity coming soon. Isn’t risk exciting?
The only way America defaults is if Obama and the marxists decide to do so. If nothing is done on 8/2, there will not be a default. The “MSM” is on a propaganda tear with the whitehouse to get congress to raise taxes.
It is absolutely sickening and terrifying at the same time. I have no idea what country this is anymore. Obama is cleary out to destroy the US. His fellow travellers are either complicit or too ignorant to see this.
Now they are on a tear to take down Fox news before the election...welcome to the third world, America.
Yesterday Geitner said the ‘real’ day is August 10th. Fear is Great Leader’s fulcrum, the lie is his lever.
Drivel, absolute drivel. The financial plans have been in effect for at least two years.
The new plans are how to deal with the Obama ending coup and the fires and the blood in the streets of the cities
Y2K was hype based on fear, I suspect this is the same.
That would be awesome.
40 Billion to pay the Debt, so if you pay the debt how do you default?
We are all going to die.
No Reuters, they could agree to CUT SPENDING and thus there would be no need to borrow.
Exactly. Why is anyone surprised that this little day of reckoning has finally arrived? The creation the Fed placed the control of the money supply in the hands of a cabal of private banks beholden only to themselves and their immediate Wall Street co-conspirators. Their sock-puppet FDR confiscated gold [ i.e., Constitutional currency] from private citizens and gave them funny money in return, and no one said a thing. Emboldened by the success of these crimes against the people and the Constitution, leftist sock puppets like LBJ, Bl*wjob Clinton, and the two Bushes have had a grand old time printing money and monetizing their debts, each time getting a little closer to the day when printing money is no longer an option. Kicking the can down the road, as some call it. Now, perhaps thanks be to the several ugly examples elsewhere in the world, even the American sheeple have seen the end stage of printing funny money endlessly. The regime's hype is indeed based on fear of a straw man, namely, defaults which will occur only if the Mickey so chooses, at which point he should be impeached. In short, the regime is hyping something that needn't happen while refusing to mention the ineluctable end result of printing more money, namely, an economic disaster a la Weimar Germany. And BTW, Mickey, you pencil-necked chimp, your good friends the Chicoms have already stated, quite correctly, that the US is already in default, due to YOUR intentional trashing of the US dollar.
>> In some cases, bankers are delaying their summer holidays
Poor sods. My heart cries for them.
The default will come when Obama uses all the money to keep Leftist leeches like Planned Parenthood,ACORN and the Unions financed instead of servicing the debt—as required by the US Constitution—as if Obama ever gave a damn about the US Constitution.
default shmeefault
It is NOT DEFAULT.
Future expenses will have to be cut is all
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.