Skip to comments.What Goldman Sachs is saying about the US government shutdown and debt ceiling
Posted on 10/10/2013 4:58:40 AM PDT by honestabe010
From the summary of a new Goldman Sachs research note (this is a corrected version, which restates the potential GDP drop in the final point):
The federal government has been partially shut down for 4 days, and it appears likely that the situation could continue for a while longer. As the shutdown continues, the political focus has begun to shift to the next deadline: the Treasury expects to exhaust its borrowing capacity by October 17. We expect the Treasurys cash balance to be depleted no later than October 31 and possibly quite a bit sooner.
After October 17, the Treasury can keep conducting auctions to roll over maturing securities, but it cannot increase outstanding debt. Under current sizes, Octobers month-end settling auctions would raise a large amount of net cash. If the debt limit has not been raised, auction sizes could be cut significantly, or some of the month-end settling coupon auctions could be postponed.
In the event that the Treasury lacks adequate cash to make all of its scheduled payments, technical complexities and legal uncertainties might prevent a full prioritization of all payments. However, we do believe that the Treasury could ensure that enough cash was available to make interest payments on Treasury securities. There are other strategies the Treasury might also be able to pursue.
(Excerpt) Read more at aei-ideas.org ...
Goldman-Sachs; among the many bankers who, in 2008, said “We need the money. Give it to us now.”
I just thought it was an interesting insight, and although they may be corrupt, I am certain they have more knowledge of finance than those in the federal government who think that Oct 17 is doomsday.
The only "money" in America is in our hands ... it is our labor.
What if everyone in America got blue flu?
One day would be a heads up ... two or more, no more than a week would be a movement and two weeks would be a revolution ...
That we'd win ... without firing a shot.
Jamie Dimon at JPMC however, has a target on his back for speaking out against this administrations policies (ironic tho, Jamie was the first person to walk O around Wall St introducing him as "my guy" see what that get's ya?!) and is offering 11 bil to make everything go away. The admin however won't be happy until he is gone and out of the bank.
Blankfein is playing ball and Jamie wasn't or isn't - despotism at its best.
I haven’t heard that the IRS is going to shut down and stop collecting taxes.
They collect over $2 Trillion a year just in taxes and that is enough to prioritize paying interest in the debt (about 10% of that $2 Trillion) and fund the rest of govt at 2001 spending levels- about a 25% reduction across the board from current spending
Given that the govt has revenue to meet most of its obligations, default would not be triggered
unless Barack-cade obama ordered it
If so then Congress has a whole new issue
as per Mark Levin who went through this in detail on his Monday or Tuesday show
I think the Federal Government, while incompetent, knows October 17 is not doomsday. They are lying to try to scare everyone.
Wall Street bankers want the money party to continue; it’s dumping billions into their coffers.
Unstated is the likely hood that the treasury has overdrawn the credit ceiling line. The actual debt exceeds the present ceiling and Lew is grubbing around to assure the ceiling is raised to cover his tracks.
Having no audit, the size of the actual debt is actually unknown. The debt clock merely applies a time related constant adder to a beginning number that has no relation at all to what is done in sessions behind closed doors.
What is borrowed off the books is also unknown. What was stolen is also of unknown magnitude
How about paying the interest from the revenues received?
Your post reminds me of “Alice’s Resteraunt”
If just one person walks in singing the song they’d thing he’s nuts...
Poor ol' officer Obie ...