It's disgusting how gullible (or corrupt, depending) investors are.

It has just occurred to me that today is Friday, and I need a topic. It's also Euchre Night, and I need a potluck dish.

Any suggestions?

either Euchre or a pot of beans would be appropriate, the former because saner people are going to have to figure out how to euchre the Weeping Cheeto to do the right thing for the country or his party is finished and the beans will be all we can afford if he doesn't.

I think the HFT puffery was likely early in the day when the big players were informed about the Weeping Cheeto's magnanimity in offering Obama a whole month before he has to face this mess again, giving the teabaggers time to come up with a strategy they have a chance of selling to the stupid.

or hash browns casserole. My grand mother used to make something similar to this and I think she used to put crumbled up potato chips on top for extra crunch.

http://southern.food.com/recipe/cracker-barrels-hashbrowns-casserole-copycat-15242

This is the bicentinial of Verdi. How about a weekend of Opera and Italian food. Something to tempt you....

http://www.telegraph.co.uk/travel/destinations/europe/italy/10350334/Verdis-Italy-ham-cheese-and-opera.html

and annoy the neighbors thoroughly with it. The last time I listened to it I could bellow along.

How times have changed.

Sing like know one is listening.....

http://ourfuture.org/20131010/shutdown-conservatives-revenge-against-the-47-percent-pt-1



During the first days of the government shutdown, conservatives were beside themselves with joy. Michele Bachmann (R, MN) told the Washington Post, “It’s exactly what we wanted, and we got it.” Conservative media figures looked forward to “a long siege” that would “ideally” keep the government closed through the 2014 election. It was as if Republicans were relishing revenge against the “47 percent” that Mitt Romney disdained during the 2012 election, and the rest of the American electorate for rejecting the GOP’s agenda.

But conservatives aren’t just rejoicing over the success of their plan to shut down the government. Conservatives are also celebrating the consequences of the shutdown for those hit hardest by it: government workers, and those who rely on the services government agencies and workers provide. Conservatives believe shutting down the government is the right thing to do for the same reason they believed sequestration was the right thing to do. To understand this, one must first understand the conservative worldview as explained by George Lakoff.



In this worldview, the purpose of government is to protect the country by “maximizing military and political strength,” and “promote unimpeded economic activity” so that the “disciplined moral people” and “undisciplined immoral people” get what they deserve. You can tell who the “disciplined moral people are” by their “worldly success.” You can tell who the “undisciplined immoral people” are by their “lack of success.” Basically, the better off are better off because they are better people. The poor are poor because of their poor character. Promoting “unimpeded economic activity” means favoring the “best people” — those who control wealth and power — over those who are unsuccessful because they are morally weak.

Any government which “impedes” economic activity by the “best people,” through regulations designed to protect the consumers, workers, communities, etc., penalizes morality and discipline. Any government activity which protects the “immoral undisciplined people” from the economic consequences of their poor character rewards immorality and discipline. To conservatives, sequestration was a good start, but shutting down the government is even better. Sending government workers home without pay, and cutting off services to low-income Americans is the right thing to do. Plus, it means conservatives can force the country to conform to their worldview, without even having to win an election.

BUT WAIT, THERE'S MORE!


Terrance Heath is the Online Producer at Campaign for America's Future. He has consulted on blogging and social media consultant for a number of organizations and agencies. He is a prominent activist on LGBT and HIV/AIDS issues.

Didn't greed used to be one of the seven deadly sins? What happened to theology that two thousand years of tradition suddenly gets ignored because greedy, sinful people want to feel good about themselves?

that said anybody born with money is blessed by gawd and will enter heaven automatically. The rest of us are inherently evil and have to work hard in order to bribe our way out of hell.

Well, if we believe that sort of thing.

Yet he, and that speech, have become ideals to emulate for many of the wealthy and powerful.

the dark underbelly and turn their backs on offers from Wall Street to pursue more noble things.

6 months after it came out he said he was "knee-deep" in letters from college students asking if he had any more tips on how to get a job there...

It's like we, as Americans, can't wait to find a way to screw someone else.

. . . According to Ayn Rand.

but not Catholic, last time I looked....

Catholics aren't Christians.

You don't want to know what they think of UUs.

How do you intimidate and terrorize a Unitarian-Universalist?

Burn a question mark on their lawn.

http://ourfuture.org/20131010/petition-shows-progressives-united-engaged-over-budget-fight

Wow! In just a day and a half we got more than 140,000 (and still rising fast) signatures on a petition to encourage Representatives to sign a “discharge petition” to force a vote to end the shutdown. Progressives are united. If Democrats don’t cave we can stay united all the way to the 2014 elections...


Tell Republicans: Sign the discharge petition and end this shutdown

http://action.ourfuture.org/p/dia/action3/common/public/?action_KEY=247

http://www.bloomberg.com/news/2013-10-11/when-yellen-speaks-world-listens-as-fed-charts-u-s-course.html

President Barack Obama’s nominee to lead the Federal Reserve, Janet Yellen, soon may be delivering speeches and setting policies that reverberate not just through the U.S. but around the world.

“The job of the Fed chair is not just, you know, our top monetary-policy maker,” Obama said during remarks announcing her nomination Oct. 9. “The world looks to the American Fed chair for leadership and guidance.”

If Yellen wins Senate approval and rises from vice chairman to succeed Chairman Ben S. Bernanke early next year, she will not only need to unite the Federal Open Market Committee around a strategy for unwinding unprecedented stimulus. She also will face a community of international central bankers concerned about the effect of the Fed’s policies on their economies and fiscal policy makers -- around the globe and at home -- struggling to agree to anything.

“When it’s the U.S. turn to talk, absolute quiet reigns in the world because they want to hear,” said Joseph Gagnon, a senior fellow at the Peterson Institute for International Economics and a former economist in the Fed’s international finance division. “She’s a top-notch academic from the get-go and she’d be head of the Fed, the most powerful economy, first among equals among central banks.”

which is why Larry Summers was the most inappropriate choice he could have made.

http://www.bloomberg.com/news/2013-10-11/jpmorgan-reports-380-million-third-quarter-loss-on-legal-costs.html

JPMorgan Chase & Co. (JPM) reported its first loss under Chief Executive Officer Jamie Dimon after taking a $7.2 billion charge to cover the cost of mounting litigation and regulatory probes.

The third-quarter loss was $380 million, or 17 cents a share, compared with a profit of $5.71 billion, or $1.40, a year earlier, the New York-based company said today in a statement. Shares of the company rose 2.6 percent at 7:50 a.m. after profit adjusted for one-time items beat analysts’ estimates.

Dimon, 57, who led JPMorgan to record earnings in each of the past three years, is grappling with regulatory investigations and tightening internal controls following its more than $6.2 billion trading loss last year. The legal costs contributed to a 54 percent surge in non-interest expenses to $23.6 billion, as revenue dropped 8 percent from a year earlier.

“In this highly charged and unpredictable environment, with escalating demands and penalties from multiple government agencies, we thought it was prudent to significantly strengthen” the bank’s legal reserves, Dimon said in the statement. “While we expect our litigation costs should abate and normalize over time, they may continue to be volatile over the next several quarters.”

http://www.bloomberg.com/news/2013-10-11/trade-hindered-as-shutdown-slows-goods-traffic-at-ports.html

Business at Thrush Aircraft Inc. should be booming this time of year as the Georgia company ships its crop dusters to customers in Brazil preparing to fertilize crops.

A partial U.S. government shutdown, however, has brought about $13 million worth of orders to a halt because the shuttered U.S. Export-Import Bank isn’t providing financing for the buyers in South America, where it’s now spring.

“It’s just brutal,” said Eric Rojek, the vice president for sales of the closely held company, based in Albany. “It’s a very difficult position that these guys have put us in,” he said, referring to U.S. lawmakers who couldn’t agree on a plan to keep the bank and other federal agencies open before the Oct. 1 start of the fiscal year.

American exporters and some companies trying to ship products into the U.S. say they are finding new roadblocks as the impact of the shutdown in Washington spreads overseas. In addition to delayed sales, the furlough of hundreds of thousands of federal workers has slowed the processing of some goods at U.S. ports.

http://www.bloomberg.com/news/2013-10-11/obama-says-real-boss-in-default-showdown-means-bonds-call-shots.html

President Barack Obama knows who is the boss: the bond market.

“Ultimately, what matters is: What do the people who are buying Treasury bills think?” the president told reporters this week, when discussing measures he could take to end the threat of a historic default on the nation’s debt.

Even with the U.S. budget deficit down by more than half since 2009 as a percentage of the economy, the Congressional Budget Office says the government this fiscal year will need to borrow an average of almost $11 billion each week. That’s why Obama is so sensitive to what investors will tolerate.

“The market is the final arbiter of any policy, the ultimate barometer and enforcement mechanism,” says Russ Certo, a managing director at Brean Capital LLC in New York. “The market holds risk-takers and policy makers accountable.”

http://www.bloomberg.com/news/2013-10-11/u-s-retailers-september-store-sales-miss-estimates.html

U.S. retailers including Gap Inc. (GPS) and L Brands Inc. (LTD) posted September same-store sales that missed analysts’ estimates as a lack of new products and a choppy economy encouraged shoppers to restrain spending.

Same-store sales for the more than 10 retailers tracked by Retail Metrics Inc. rose 2.3 percent last month, excluding results from drugstores, the Swampscott, Massachusetts-based researcher said in an e-mailed statement yesterday. Analysts’ had estimated a 3.4 percent gain, the researcher said.

The lower-than-projected sales signal consumers are still holding back spending amid higher taxes, uncertainty about the implementation of the Affordable Care Act and the first government shutdown in 17 years, which took effect on Oct. 1. Last month also was warmer than usual, damping sales of fall merchandise and leading retailers to deepen discounts to lure shoppers.

“The lack of product newness drives weak mall traffic, which drives ongoing promotions,” Simeon Siegel, a New York-based analyst at Nomura Securities, said in a phone interview yesterday. “Couple that with unseasonable weather when you want to be selling seasonable products and that leaves you with less-than-exciting results.”

http://www.bloomberg.com/news/2013-10-10/debt-cap-raise-until-nov-22-gains-support-to-bar-default.html

The White House endorsed a short debt-limit increase with no policy conditions attached, signaling potential support for House Republicans’ plan for a monthlong reprieve from a default.

The proposal today by House Speaker John Boehner wouldn’t end the 10-day-old partial shutdown of the federal government. The plan would push the lapse of U.S. borrowing authority to Nov. 22 from Oct. 17.

Jay Carney, the White House press secretary, said today that President Barack Obama would support a short increase in the U.S. debt limit with no “partisan strings attached,” though he prefers a longer extension. House Republicans haven’t specified what they plan to tie to the measure and Carney said the White House would need to see a bill before accepting it.

“The president is happy that cooler heads at least seem to be prevailing in the House, that there at least seems to be a recognition that default is not an option,” Carney said.

http://www.bloomberg.com/news/2013-10-11/wells-fargo-posts-record-third-quarter-profit-on-reserve-release.html

Wells Fargo & Co. (WFC), the largest U.S. home lender, said third-quarter profit climbed 13 percent to a record as fewer loan defaults and lower expenses helped overcome weakness in mortgage lending.

Net income advanced to $5.58 billion, or 99 cents a share, from $4.94 billion, or 88 cents, a year earlier, the San Francisco-based company said today in a statement. The average estimate of 33 analysts surveyed by Bloomberg, excluding some items, was 97 cents a share.

Chief Executive Officer John Stumpf, 60, is releasing loan-loss reserves set aside in earlier quarters as an improving economy and rising home prices make it easier for borrowers to repay. Wells Fargo cut thousands of mortgage jobs during the quarter to counter a slowdown in home-loan refinancings, which had helped drive three straight years of record profit.

“The combination of lower credit costs and noninterest expense is enough to overwhelm a significant decline in mortgage origination revenues,” John McDonald, an analyst at Sanford C. Bernstein & Co. in New York, wrote in a Sept. 30 report. McDonald rates the shares to outperform and predicts the stock will reach $46 within the next 12 months.

http://www.bloomberg.com/news/2013-10-10/rinehart-daughter-bianca-loses-bid-to-manage-family-trust.html

Gina Rinehart’s $4 billion family trust is without a nominee to replace her as manager after a judge rejected a proposal from her youngest daughter Ginia Rinehart and her son withdrew a nomination for himself and his choice of an independent candidate.

John Hancock and his sister Bianca Rinehart sued their mother in 2011, accusing her of misconduct and sought to replace her. Gina Rinehart agreed to step down last week, ahead of a trial that began Oct. 8 to determine her successor.

New South Wales Justice Paul Brereton yesterday rejected a proposal to nominate Bianca Rinehart and today he turned down a bid from Ginia Rinehart, saying both ideas would lead to an “unacceptable” delay in the trial. Hancock then withdrew his nomination as well as that of Bruce Carter, an Adelaide businessman he had proposed, leaving the judge to choose a trustee on his own.

“Your honor has no one,” to choose from, Christopher Withers, lawyer for John Hancock and Bianca Rinehart, said at today’s hearing.

http://www.bbc.co.uk/news/business-24486685


China and the European Central Bank have signed a currency swap agreement worth 350bn yuan ($57bn; £36bn), state-owned Xinhua news agency has said.

Such agreements mean the central banks can exchange currencies and firms can settle trade in local currencies rather than in US dollars.

The deal is one of the largest for China as it looks to build a more international role for the yuan.

It will last for three years and can be extended if both parties agree.

While decreasing my time on the Internets over the past few weeks, a family emergency has occurred that necessitates most of my time away for now. One of my brothers had a motorcycle wreck on his way to work early Wednesday morning that has landed him in the hospital. His helmet saved his life, but he has multiple broken ribs which punctured both his lungs, a broken clavicle and sternum. That's really bad, but worse is that when the tube was inserted to help breathing, it punctured the diaphragm and the liver. We are praying he has no further complications. Powerful meds are controlling the pain, but amazingly, he is eating and talking! If anyone is inclined, additional prayers for my brother's recovery would be welcome. Many thanks.

Best wishes and keep in touch if you can.

I roadraced motorcycles for 15yrs. and collar bones and ribs were my favorite bones to ding. You know it only hurts when you breath. How bad is the bike?

are with your brother, yourself and with the medical staff taking care of your brother. Lost a nephew a year ago. He wasn't wearing a helmet.

http://www.theatlantic.com/business/archive/2013/10/grad-students-the-few-the-proud-the-indebted/280396/

Americans now owe more than $1 trillion in student loans. It's a big, beastly sounding number. But as I've written before, it's disproportionately driven by a smallish slice of learners and colleges.

And it's especially driven by graduate students.

Advanced-degree seekers make up only around 15 percent of all students in higher ed. But they were responsible for a whopping 32 percent of all federal borrowing in 2012-2013, according to a recent report from the Department of Education that breaks out grad students from other borrowers for the first time.



When you stop and think for a second, this all makes perfect sense. As a matter of habit, most of us probably think of student debt primarily in terms of undergraduates. But graduate-degree programs are extremely expensive and often don't provide much in the way of financial aid. Meanwhile, there's no cap on how much graduate students can borrow from the government. So they end up as a small but mighty segment of debtors.

That's cause for both relief and concern. On the one hand, the less debt undergraduates are piling on, the better, since they're the most likely to have trouble paying back their loans. On the other, there's no reason to celebrate the ridiculous cost of grad school. And beyond that, there's a good chance the government will end up having to write off a large chunk of these debts. Today, former students who enroll in an income based repayment program can have their loans forgiven after twenty years. The idea was designed as a safety valve for undergrads who leave school with high debts and low salaries. But, judging from the limited information we have available, it's likely attracting graduate students instead. And, let's be real, our student loan safety net really wasn't really meant to be a windfall for JDs, or, for that matter, graduate schools themselves.

http://www.businessinsider.com/gold-just-tanked-on-heavy-volume-2013-10

In a note, Miller Tabak chief technical market analyst Jonathan Krinsky writes:

Gold has dropped ~$20 in the past few minutes. While there might be a fundamental reason, we had been watching 1273-78 as a key support level. This represented the low from August 7th, and October 2nd. It also represents the neckline of a head and shoulders continuation pattern. Recall there was a larger “potential” inverse head and shoulders bottoming pattern, but it never confirmed above the neckline. This smaller pattern, however, is currently breaking the neckline, and has downside measured move to ~$1110 - $1120. That would imply a breach of the June low at $1180.

A couple other concerning factors are that price is now back below the 50 Day Moving Average, which is declining once again. Further, momentum is now negative, but far from oversold.

Although Silver is down more on a percentage basis right now (-3.7% vs. -2.2%), it has yet to breach its October low. That level is 20.62. While that is a small salvation to the bulls, it is one level to watch on any further weakness.

If this is a false breakdown, price should reclaim 1273 at a minimum. Since today is Friday, the close will also represent a weekly settlement price, adding to the significance.



Read more: http://www.businessinsider.com/gold-just-tanked-on-heavy-volume-2013-10#ixzz2hQ9csKvC

Waiting for the after shocks.

when it comes to gold. These gyrations are manupulations and profit taking. I am hanging on to mine and getting more if I can.

i think it makes a lot of difference if have actual gold.

well, that is just something you wipe your backside with.....

http://www.businessinsider.com/university-by-economics-noble-prize-wins-2013-10

The Sveriges Riksbank will announce the 2013 Nobel Prize in economics winner on Monday.

Bloomberg's Michael McDonough just tweeted this chart from Bloomberg's Rich Yamarone ranking the universities that have produced the most laureates.



Read more: http://www.businessinsider.com/university-by-economics-noble-prize-wins-2013-10#ixzz2hQAMRPdK

http://www.spiegel.de/international/europe/spanish-jobseekers-stranded-in-germany-a-927361.html

When night falls in Erfurt, Diego Lopez has to go into the "hole." That's what the 21-year-old Spaniard calls the cellar of an old school where he and 20 of his countrymen have been sleeping in recent weeks. Bunk beds are crammed next to each other in two small rooms, which smell like sweat and dirty socks, Lopez says. The ventilation system doesn't work properly, and they all have to share a single shower, he adds.

But unlike their last accommodations, at least the heat works and they don't have to sleep on the floor. Furthermore, Lopez can still afford to stay here. A night in the "hole" costs €3.50 ($4.74).

A trained geriatric nurse, he is one of 128 Spaniards who have been stranded in Erfurt after being promised jobs that didn't come through. Full of hope, they struck out for Germany two weeks ago to take part in a program that the Federal Employment Agency calls "The job of my life." The new initiative promises young people from ailing southern European countries either dual vocational training or employment as a skilled worker, along with language courses and lodging -- all subsidized by the German state. And it was this program that two private job placement agencies used to lure the Spaniards to the eastern German state of Thuringia.

Their dream jobs never materialized, though. "They deceived us shamelessly," Lopez says. He's talking about Kerstin S. and Sven K., the heads of the agencies X-Job and Sphinx Consulting. "Sven told me that I would earn €818 per month and live in a four-bedroom shared apartment," he says.

http://www.newyorker.com/online/blogs/borowitzreport/2013/10/hostage-takers-call-comparisons-to-tea-party-hurtful.html?utm_source=tny&utm_medium=email&utm_campaign=borowitz&mbid=nl_Borowitz%20%28180%29

A group representing America’s hostage-takers today blasted President Obama for his repeated comparisons between them and the Tea Party Republicans, calling his remarks “degrading and hurtful.” The complaint came from the National Alliance of Hostage-Takers and Blackmailers, a watchdog group that monitors negative images of extortionists in the media.

“As professional hostage-takers, we never take hostages unless we have a well-thought-out plan, realistic demands, and a clear exit strategy,” read the group’s official statement. “Any comparison between what we do and these inane Tea Party antics are derogatory and unacceptable.”

The statement continued, “For years, our members have been subjected to offensive Hollywood stereotypes of hostage-takers as crazed madmen, cackling evildoers, and worse. The President’s hurtful remarks only reinforce those negative images.”

Later in the day, White House press spokesman Jay Carney offered an apology to the group: “As you can imagine, in the heat of a crisis we often say things we don’t mean. The President regrets any hurt his remarks may have caused.”

Mr. Carney said that in order to avoid offending other groups in the future, the President would resist the temptation to call the Tea Party Republicans terrorists, lunatics, or babies.

DYNASTY WRIT LARGE

http://www.bbc.co.uk/news/world-asia-china-24394243

Lust, power and corruption can make for an explosive mix. An unlikely whistle-blower for President Xi Jinping's much publicised crackdown on official corruption has emerged - the scorned mistress...In recent weeks their public accounts have offered a rare glimpse of the extravagant lifestyles of the Communist Party elite, enraging the Chinese public...With the growing power of the internet, details that would have once remained private are now leaking into the public domain.

Sex scandals, of course, happen in all countries. But the difference in China, says Mr Zhu, is that government officials are using public money to pay for their love lives.

"In China nothing is clear," he says, "The public don't know what officials are up to. But mistresses live with government officials, they spend their money, they know about everything that goes on.

"When a mistress stands up, the truth comes out."

...Mistresses have become the ultimate symbol of corruption in China. According to a government report in 2007, an astonishing 90% of top officials brought down by corruption scandals had kept a mistress - and in many cases they had more than one. Former Railways Minister Liu Zhijun, jailed for corruption earlier this year, reportedly kept 18 mistresses...Mistresses are nothing new in China. Emperors were renowned for keeping concubines. But China's top sexologist, Li Yinghe, believes that many Chinese men believe they are still living in imperial times.

"I think many Chinese men have an emperor's complex," she says. "Being an emperor means you can have many women. This is something they are proud of. They see women as trophies of their success."

SALACIOUS DETAILS AT LINK

Of castrating the losers and destroying their 'line'.

http://en.wikipedia.org/wiki/Eunuchs

http://prospect.org/article/how-crisis-ends


What are the odds on the different outcomes?

I know it may be a little hard to envision right now, but the crisis we're in at the moment is going to come to an end. The question is, how? It might be worthwhile to think through the major possibilities. I've added odds for each one, based on my best (and necessarily subjective) judgment.

1. President Obama caves.

He agrees to delay the Affordable Care Act for a year to restart the government and agrees to budget cuts and entitlement cuts beyond the sequester-level budget Democrats have already agreed to in order to raise the debt ceiling. Tea Partiers triumph. Many congressional Republicans still think this is a possibility. They see Barack Obama as a weakling who will always crumble in the end. They also suffer from a common political delusion, that the American public agrees with you on both the substance of policy and the tactics you've chosen. So even with polls showing approval of the shutdown, their party, and the institution in which they serve plunging to the depths of Hades, they believe they're going to win and get everything they want. Odds: 3 flepzillion - 1

2. The crisis is settled with a "grand bargain."

In the ever-changing list of Republican demands, this one seems to be gaining momentum, particularly as attention starts to shift from the incredibly awful government shutdown to the possibility of a truly disastrous default. As near as anyone can tell, the "grand bargain" consists of Democrats giving Republicans a whole bunch of things off the GOP wish list, like steep cuts to Medicare and Social Security, along with other cuts to domestic spending and perhaps tax cuts as well. In exchange, Republicans would offer ... well, they'll offer nothing, other than the bright future that will result. Odds: 200 - 1

3. Boehner allows votes in exchange for a minor concession from the Democrats.

In this scenario, Democrats give Boehner something like a delay or elimination of the medical-device tax, so he can claim he got out with less than a total defeat, thereby (sort of) saving face. Tea Partiers still cry that it was a betrayal and cling to the certainty that if Republicans had just held out a little longer, they would have achieved total victory. No one steps up to challenge Boehner for speaker, because no one wants that godawful job. Odds: 2 - 1

4. Boehner makes peace with the fact that Republicans have lost and allows a vote on a clean CR and debt limit.

This outcome becomes more likely with each passing day, because every variable pushing in this direction is increasing in strength. It's becoming more clear to the public that the shutdown and coming default are the Republicans' doing. The consequences of the shutdown are becoming clearer. Their party's popularity is diminishing.

Conservative writer John Podhoretz makes a very good point about this in a column today. This crisis is doing untold damage to the Republican Party's image, and Podhoretz says when he talks to conservatives, they say their allegiance isn't to the party but to conservatism. "But here's the conundrum: There is only one electoral vehicle for conservative ideas in the United States—the Republican Party." Even if they're right that the GOP is timid and compromised, the conservatives are destroying the only thing that can help them get their ideas enacted. "It may not have been a very good vehicle in the first place, and you may think it couldn't drive worse, but oh man, could it ever. And it's the only one you've got."

The chances of Democrats taking the House in 2014 and holding the presidency in 2016 are increasing, making party leaders and donors very unsettled. The business community, which does not control the GOP but certainly exerts significant influence over it, is growing more and more nervous about the economic consequences of the crisis. Disunity within Republican ranks is growing. In sum, there is not a single factor that over time is making a GOP victory more likely. My guess is that Boehner knows this but is hoping that the fight itself will win him enough breathing space with the conservatives to keep his job when its over. He'll lose, but he'll show them that he was willing to inflict some harm on the country in the process, which will deplete their rage just enough. Odds: 1.5 - 1

There could, of course, be some other possibility I'm not thinking of. But that's how things are looking now. And yes, I made up the word "flepzillion."

FROM THE COMMENTS:

...Obama WILL cave. He will have to. In one week he will have no choice but to give in to whatever extremist demands the Republicans care to make or risk America defaulting for the first time in its history. The Republicans have the president over a barrel. They hold ALL the cards, including that pesky little requirement in the Constitution that any bill authorizing the government to spend money has to originate in the House of Representatives. As long as they maintain their impressive and disciplined unity behind John Boehner on the floor, the Republicans in the House have this sucker already won. And by the 2014 election the crisis will be a dim memory and the GOP, with its heavily gerrymandered districts, will have no trouble keeping its House majority....


SADLY, I AGREE. UNLESS OBAMA MINTS THE TRILLION-DOLLAR COIN, OR OTHERWISE FINESSES THIS DILEMMA, HE AND WE ARE SCREWED.

THE RECORD TO DATE SHOWS THAT OBAMA HAS NO FINESSING SKILLS...

http://prospect.org/article/postcards-shutdown-edge

Wondering why you haven't heard about people going without essential programs? States are covering for the feds, but they can't keep it up much longer.

Ten days into the shutdown, it’s easy to wonder just how much the federal government helps people day-to-day. We’ve heard about delays in highways maintenance and about federal workers who have to wait until the government opens to get paid. What about those programs conservatives are always complaining about? You might have expected stories about people suffering without help from various federal services—from food stamps to welfare checks. Instead, there’s been little to indicate needy people are going without. That’s because the worst potential effects of the shutdown have been delayed—for now. States, even deep red states, are currently covering for the feds. Some programs waiting for re-authorization—like food stamps—are still largely intact because the federal government sends out reimbursements at the end of the month, so there’s still money and state employees to administer the benefits. Others programs have state money to thank. Through moving funds around, draining reserves, and employing a few other accounting tricks, state governments have been able to keep almost all key safety-net programs going despite the shutdown. Because many of these programs, like cash assistance, are funded through block grants, their financial situation and short-term viability vary tremendously from state to state. Regardless of ideological bent, interviews with experts at several national and state groups that monitor federal grants all confirm that most states have been uniformly working to keep such programs going for as long as possible...Most states use a combination of state and federal funding for welfare programs, from cash assistance to domestic violence prevention to childcare, says LaDonna Pavetti, vice president for family-income-support policy at the Center on Budget and Policy Priorities, a left-leaning economic think tank in Washington, D.C. Because it’s early in the fiscal year, states can spend the money they’ve already designated upfront and wait for the federal agencies to put in their share later. For a limited time, that can keep things chugging along.

Even when there hasn’t been that state and federal funding mix, states have looked for ways to avoid suspending programs. As of last week, Arizona appeared to be the only state that would cease issuing welfare checks. The state is one of 11 relying on federal funding alone to keep its cash-assistance program running. When the federal dollars ceased, the state had no other money designated for the same purpose it could to fall back on. Much like Texas, Arizona’s conservative state government had already slashed the amount of the checks and raised eligibility requirements, so the program could gently go to the good night. Instead, this week Governor Jan Brewer commanded state agencies find the money to keep the program chugging through the month. Through the fiscal equivalent of searching under couch cushions for lost change, states have been able to blunt the impact of the shutdown, but they can’t keep this up much longer. No one knows when the government will reopen.

“It depends state to state but the funds will run out in every state the longer the shutdown goes on,” says Kathryn White, a fiscal policy analyst for the National Association of State Budget Officers. The Obama administration has guaranteed to reimburse states for spending on mandatory programs like cash assistance. But on other programs, it’s not as clear just how much states will get back. And there’s still no answer to when that money will appear.

“If states had a clear end in sight, and they could see they had the cash available to cover costs that are normally funded by [congressional] appropriations, they might be more willing to continue carrying [those costs],” says White. As it is, however, states have to worry about making sure they have enough cash to last them for their many other financial responsibilities... as Karen McLaughlin, the director of budget and research at Arizona’s Children's Action Alliance told me, “If we come to November, there’s a whole lot of everything else that starts to fall apart.”

http://www.nakedcapitalism.com/2013/10/talks-over-debt-showdown-finally-underway-but-acrimony-republican-divisions-impede-dealmaking.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

YVES SMITH DOES SOME CALCULATIONS OF ODDS, TOO. HER CONCLUSION?

...brace yourself for at least six weeks of ugly drama. And no matter how it concludes, there’s no happy ending.

THE SITE IS CURRENTLY OFFLINE, I PULLED THIS FROM EMAIL NEWSLETTER

http://blogs.reuters.com/felix-salmon/2013/10/07/felix-salmon-smackdown-watch-debt-prioritization-edition/

On Thursday I said that the US is not going to default on its bonded debt, even if the debt ceiling is reached: “with Jack Lew (or anybody else, really) as Treasury secretary, you can be sure that debt service payments would be priority number one”. This is not a popular view within the blogosphere, maybe because it’s generally associated with Republicans trying to say that hitting the debt ceiling wouldn’t be that bad. Both Cardiff Garcia and Dylan Matthews have come out with sterling attempts to answer the question of whether debt prioritization is even possible; Danny Vinik, for one, says that there’s “pretty good evidence to demonstrate that prioritizing debt payments is not possible”. The problem, however, as Garcia says, is that most of the primary sources you’d want to go to on a question like this “are vague and unhelpful”.

It’s worth stipulating up front that hitting the debt ceiling would be disastrous even with prioritization: Garcia calls it “breaking the economy’s knees with a fiscal crowbar”, while Paul Krugman says that it would be “a catastrophe”. But it would be much better than the truly apocalyptic state of affairs that we would see in the event of a Treasury bond default. Deutsche Bank says that in that event, the S&P 500 would fall some 45% — and, boldly, puts a 0% probability on that actually happening. It’s also worth stipulating that before the debt ceiling is hit, a lot of very sensible politicians want to make prioritization seem as unlikely as possible, because that maximizes the incentive to avoid hitting the ceiling at all. On the other hand, after the debt ceiling is hit, the very same politicians should be willing to move heaven and earth to ensure those bond coupons get paid.

So, why is Matt Yglesias so convinced that prioritization is impossible? He gives four reasons.

The first is that prioritization is illegal: “Treasury is not authorized to unilaterally decide to pay certain bills and not others”. This is true — but also a bit irrelevant. Treasury is under unambiguous Congressional orders to pay lots of bills — all of them, in fact. If it fails to pay those bills, it will be violating the law as laid down by Congress. Hence the 14th Amendment argument that the president should simply ignore the debt ceiling entirely, if it comes to that. But underneath it all, it’s hard to credit any argument which says “Treasury isn’t allowed to pay its own bonds”. If that’s what Treasury wants to do, then surely it can do so. Besides, who would even have standing to sue?

Yglesias’s second reason is that prioritization is just not feasible: it can’t be done in the real world. Both he and Matthews cite the Treasury inspector general, who does indeed say what they say he says:



It’s worth reading the whole letter, however, because the inspector general says a lot more than that. And while the systems are designed to make payments in the order they come due, they have also been designed so as to effectively insulate bond repayments from all other payments. Bond repayments are made through a system called Fedwire, while all other payments are made through the standard banking ACH system. Logistically, it’s entirely possible to keep up to date on all Fedwire payments without making any ACH payments at all.

And the inspector general was very careful to keep all options open:



What’s more, the inspector general does rather fudge the central issue of prioritization, which is whether debt repayments can carry a higher priority than everything else. “Treasury officials determined that there is no fair or sensible way to pick and choose among the many bills that come due every day,” he said — but that’s false on its face: prioritizing debt repayments is very sensible, since defaulting on Treasury bonds would be much more harmful than simply paying all bills as they come due, whether they’re a bond coupon or a fighter jet.

There is an argument from the left that prioritization constitutes “paying China first”, and would “require the government to cut large checks to foreign countries, and major financial institutions, before paying off its obligations to Social Security beneficiaries and other citizens owed money by the Treasury”. Well, yes. But I don’t think anybody in Treasury is swayed by such arguments: they know that in the grand scheme of things, all Social Security beneficiaries would be much better off receiving their money in arrears than they would be if Treasury defaulted on US sovereign bonds.

Yglesias then rolls out the timing argument, which is further developed by Zero Hedge: debt repayments are lumpy things, and it would be hard to “save up” enough money before the big repayments were due, if you were paying any other bills at all. Zero Hedge improbably says that “Treasury will simply halt new Bill issuance” if the debt ceiling is reached, but I don’t buy it: no one’s requiring that the national debt go down. And investors generally want to be able to roll over their short term debt: failure to be able to do so would be better than default, but not much.

Could Treasury decide to prioritize Fedwire payments, and then turn on the ACH payments sporadically, only insofar as they didn’t eat up enough cash to endanger bond repayments? I don’t see why not. Treasury wouldn’t like it, of course. And as Yglesias says in his final point, such a scheme might well be so messy that the markets would have to end up assigning some kind of credit risk to Treasury bonds anyway.

Still, doing so would send a very clear message to markets, that Treasury cares about them more than it cares about the sick, the elderly, or any other recipients of government funds. And the markets, in return, would probably reward Treasury with lower interest rates on Treasury bonds. After all, in a crisis, money always flows into Treasuries — even when it’s a Treasury-bond crisis.

SOURCE LINKS:

Four Reasons Debt Ceiling Breach Means Default By Matthew Yglesias

Matthew Yglesias is Slate's business and economics correspondent. He is the author of The Rent Is Too Damn High.

http://www.slate.com/blogs/moneybox/2013/10/07/debt_ceiling_breach_default.html

A new idea is taking hold among House Republicans that perhaps breaching the debt ceiling isn't such a terrible idea after all. One form this takes is the patently absurd remarks of Rep. Ted Yoho (R-Fla.) who muses that "I think, personally, it would bring stability to the world markets." If you think that's right, you might wonder why the Chinese government is warning that "the clock is ticking" and politicians need to stop screwing around...The more sophisticated view comes from the likes of Rep. Justin Amash (R-Mich.) who's concocted an idea about how we could avoid default even while breaching the debt ceiling:

"There's always revenue coming into the Treasury, certainly enough revenue to pay interest," said Rep. Justin Amash, R-Mich. "Democrats have a different definition of 'default' than what we understand it to be. What I hear from them is, 'If you're not paying everything on time that's a default.' And that's not the traditionally understood definition."

This is what's known among debt ceiling junkies as "payment prioritization"—you use cash on hand to keep paying interest and rolling over the principal on the national debt, while letting Medicare reimbursements or salaries for FBI agents slide. Here are four problems with the idea, according to the Treasury Department:

1. It's illegal: Treasury is not authorized to unilaterally decide to pay certain bills and not others. If it were, the constitutional order would completely collapse. Obama could just not cut the checks for farm subsidies or missile defense programs he opposes. Then in a few years President Ted Cruz could refuse to pay SNAP benefits.

2. It's also impossible: Because payment prioritization is illegal, Treasury's payment system is not designed to allow prioritization to happen. Cardiff Garcia has an in-depth roundup of coverage of this angle, but the best simple explanation comes from the Treasury inspector general, who explains that on a technical level, the systems "are designed to make each payment in the order it comes due." Of course systems could always be changed. But look at all the problems Health and Human Services is having in getting the Affordable Care Act computer systems to work. They can't just whip up an entirely new computer system in the next two weeks. (And, of course, given the government shutdown, it would be illegal for them to hire someone to try.)

3. The timing doesn't work: Over a given year, the Treasury certainly collects more in taxes than it pays in interest. But that's not necessarily true on any given day. Most days the Treasury doesn't pay any interest. Then on some days large interest bills come due. To prioritize interest payments, you would need to not pay certain bills the Treasury does have enough cash on hand to pay in order to stockpile money for future interest payments. That further exacerbates problem Nos. 1 and 2.

4. Prioritization doesn't solve the problem: Even if all these problems could be waived away, you're not really solving the underlying problem. Yes, bondholders would still get their money. But nobody in the future could seriously treat U.S. government debt as a risk-free information-insensitive asset. It would become just another speculative play whose odds of working out would depend on your assessment of the ups and downs of American politics. Making the interest payments would somewhat mitigate the ensuing financial crisis, but would by no means eliminate it.

Stepping back a little, I'd also note that House Republicans can't have it both ways here. Either the debt ceiling is a major leverage point to extract concessions from the president, or else it's no big deal. If it's no big deal, there's no leverage. If there's leverage, then it's because failing to raise the debt ceiling would be very damaging.


TREASURER'S LETTER (PDF)

www.treasury.gov/about/organizational-structure/ig/Audit%20Reports%20and%20Testimonies/Debt%20Limit%20Response%20(Final%20with%20Signature).pdf

our great hope lies in developing what is good. ”

— Calvin Coolidge

I believe it was a WPA project.

become since, he neglected to regulate business and probably had as much to do with the Depression as anyone, but he had his good points, among which was his willingness to argue against racism. And I think that quote probably has a lot we could learn, since we as a country do seem to spend an inordinate amount of effort trying to fight the bad, while our efforts to support or enable the good seem weak. That probably hurts us as much as anything.