Let the nation default?

[Toro]

I see, so:

1) The market doesn't remember August 2011 like you do, so they are doing the same thing again.

2) You know that this isn't already built into the price.

They love people like you who assume you know more than they do, you rack up the transaction costs of trading. Lots of people out guess the market once. Nobody does it consistently over time.

What is built into the price is the belief that they will do a deal, like they did in August 2011 and on New Years Eve re the Sequester. Every single person whom I speak or listen to believes a deal will get done, even though some of them are starting to hedge.

There are three logical options.

1) They believe a deal will get done
2) They have already incorporated a deal not getting done into the pricing
3) They don't think a deal not getting done affects valuations as much as politicians say it will.

I have a hard time believing #1. Anyone following this at all recognizes that both sides are now dug in and Obamacare is a very emotional issue. I read the Wall Street Journal every day, and there is no lack of reality in the reporting. Your contention that the basic national news is not getting to Wall Street just doesn't pass the smell test. As for the second and third, I don't know. But that prices are drifting down says to me it's a combination of the two.

I had three meetings today with managers who control in aggregate $15 billion. I have meetings like this every day. And just like every other meeting I have had over the past few weeks, every single one of them believes a deal will get done. I have had 40-50 meetings over the past month, listen to numerous speeches, and read countless articles, and no one - and I mean no one - believes the politicians are that stupid that they would default on the debt. As one guy whom I met today said, it's a low probability but high catastrophe event, though the low probability is inching up. The really smart investors watch what people do, not what they say. And in the past, despite the rhetoric, the politicians have gotten a deal done. Investors believe they will get a deal done this time as well.

 

[Kevin_Kennedy]

Default is inevitable. The sooner it happens the less harmful it will be.

 

[Geaux4it]

Default is inevitable. The sooner it happens the less harmful it will be.

 

[Geaux4it]

Oh, the stupid left gambled and lost. They thought the House would of caved by now. The longer this last, the more incompetent Obama becomes. I know, hard to believe this asshat could screw this country up more than he has already

-Geaux

 

[Toro]

Default is inevitable. The sooner it happens the less harmful it will be.

No its not.

 

[Missouri_Mike]

It's the law! You can't change that.

You traitors!

You want this country to fail!

We can't live without government!

You anarchists!

You despicable radicals!

You're holding our country hostage!

Just cave to what the king wants and it can all be over.

 

[hortysir]

Default is inevitable. The sooner it happens the less harmful it will be.

No its not.

QFT


We have the tax revenue to pay our loans and interest

So we may have to do without the post office for a while.....big deal

 

[Kevin_Kennedy]

Default is inevitable. The sooner it happens the less harmful it will be.

No its not.

The official $17 trillion debt, and counting, is never going to be paid down, let alone what's off the books. That's a default.

 

[Kevin_Kennedy]

Default is inevitable. The sooner it happens the less harmful it will be.

No its not.

QFT


We have the tax revenue to pay our loans and interest

So we may have to do without the post office for a while.....big deal

So when do we start?

Never.

 

[hortysir]

No its not.

QFT


We have the tax revenue to pay our loans and interest

So we may have to do without the post office for a while.....big deal

So when do we start?

Never.

I'm not saying I have the faith in those that are in charge to properly prioritize our spending....just that it could be done
the tit-suckers will never go for it tho

 

[Kevin_Kennedy]

QFT


We have the tax revenue to pay our loans and interest

So we may have to do without the post office for a while.....big deal

So when do we start?

Never.

I'm not saying I have the faith in those that are in charge to properly prioritize our spending....just that it could be done
the tit-suckers will never go for it tho

Certainly it could be done, and I would obviously prefer that, but it won't. Thus default is inevitable.

 

[Toro]

Default is inevitable. The sooner it happens the less harmful it will be.

No its not.

The official $17 trillion debt, and counting, is never going to be paid down, let alone what's off the books. That's a default.

No it's not.

A default is when an interest or principal payment is missed. There is nothing inevitable about a US default.

And the debt never has to be paid off. The US Treasury has carried some sort of debt for most of our 237 year history.

 

[Flopper]

I see, so:

1) The market doesn't remember August 2011 like you do, so they are doing the same thing again.

2) You know that this isn't already built into the price.

They love people like you who assume you know more than they do, you rack up the transaction costs of trading. Lots of people out guess the market once. Nobody does it consistently over time.

What is built into the price is the belief that they will do a deal, like they did in August 2011 and on New Years Eve re the Sequester. Every single person whom I speak or listen to believes a deal will get done, even though some of them are starting to hedge.

There are three logical options.

1) They believe a deal will get done
2) They have already incorporated a deal not getting done into the pricing
3) They don't think a deal not getting done affects valuations as much as politicians say it will.

I have a hard time believing #1. Anyone following this at all recognizes that both sides are now dug in and Obamacare is a very emotional issue. I read the Wall Street Journal every day, and there is no lack of reality in the reporting. Your contention that the basic national news is not getting to Wall Street just doesn't pass the smell test. As for the second and third, I don't know. But that prices are drifting down says to me it's a combination of the two.

If you think it's already in the price, you should be selling deep OTM puts by the truckload. I wouldn't advise it though.

You aren't really listening to me. I have opinions, but I keep saying in all our discussions clearly that I don't trade on the assumption I know more than The Street. I know that I don't. So I trade on my risk tolerance, investment time line, diversification that that sort of thing. Nobody who has told me like you do they know more than The Street has backed it up with any pattern over time.

Obama said today he was willing to do a short term spending plan to keep the government afloat until Congress could come up with a resolution.

I can't imagine Boehner saying "no, let's just go into default", unless he's completely lost his mind.

 

[Toro]

BTW there was a good article by Gerard Seib in the WSJ today about how the GOP leadership had planned to negotiate cuts with the Obama administration until the Tea Party hijacked the agenda and made it about Obamacare.

 

[Kevin_Kennedy]

No its not.

The official $17 trillion debt, and counting, is never going to be paid down, let alone what's off the books. That's a default.

No it's not.

A default is when an interest or principal payment is missed. There is nothing inevitable about a US default.

And the debt never has to be paid off. The US Treasury has carried some sort of debt for most of our 237 year history.

Well you know I disagree.

 

[Flopper]

No its not.

The official $17 trillion debt, and counting, is never going to be paid down, let alone what's off the books. That's a default.

No it's not.

A default is when an interest or principal payment is missed. There is nothing inevitable about a US default.

And the debt never has to be paid off. The US Treasury has carried some sort of debt for most of our 237 year history.

They aren't like to actually default on payment of treasury bond interest or principal. However, they could easily end up delaying payments to contractors, states, Medicare payments, trust funds, and a host of other government obligations. A default on treasury bonds would turn this into a worldwide financial crises.

 

[C_Clayton_Jones]

What is built into the price is the belief that they will do a deal, like they did in August 2011 and on New Years Eve re the Sequester. Every single person whom I speak or listen to believes a deal will get done, even though some of them are starting to hedge.

There are three logical options.

1) They believe a deal will get done
2) They have already incorporated a deal not getting done into the pricing
3) They don't think a deal not getting done affects valuations as much as politicians say it will.

I have a hard time believing #1. Anyone following this at all recognizes that both sides are now dug in and Obamacare is a very emotional issue. I read the Wall Street Journal every day, and there is no lack of reality in the reporting. Your contention that the basic national news is not getting to Wall Street just doesn't pass the smell test. As for the second and third, I don't know. But that prices are drifting down says to me it's a combination of the two.

If you think it's already in the price, you should be selling deep OTM puts by the truckload. I wouldn't advise it though.

You aren't really listening to me. I have opinions, but I keep saying in all our discussions clearly that I don't trade on the assumption I know more than The Street. I know that I don't. So I trade on my risk tolerance, investment time line, diversification that that sort of thing. Nobody who has told me like you do they know more than The Street has backed it up with any pattern over time.

Obama said today he was willing to do a short term spending plan to keep the government afloat until Congress could come up with a resolution.

I can't imagine Boehner saying "no, let's jut go into default", unless he's completely lost his mind.

Boehner has completely lost his mind.

 

[C_Clayton_Jones]

BTW there was a good article by Gerard Seib in the WSJ today about how the GOP leadership had planned to negotiate cuts with the Obama administration until the Tea Party hijacked the agenda and made it about Obamacare.

Pity.

 

[Flopper]

BTW there was a good article by Gerard Seib in the WSJ today about how the GOP leadership had planned to negotiate cuts with the Obama administration until the Tea Party hijacked the agenda and made it about Obamacare.

It's a good article that hit's nail on head. Lately, Boehner has been talking mostly about spending cuts, not defunding Obamacare.

 

[C_Clayton_Jones]

The official $17 trillion debt, and counting, is never going to be paid down, let alone what's off the books. That's a default.

No it's not.

A default is when an interest or principal payment is missed. There is nothing inevitable about a US default.

And the debt never has to be paid off. The US Treasury has carried some sort of debt for most of our 237 year history.

Well you know I disagree.

And you have every right to disagree provided you understand you’re factually wrong and Toro is absolutely correct.