(04-10-2013, 10:15 AM)freedom Wrote: [ -> ]Since you are asking me to read a book and you read so many books, please educate me about my challenge.
where is US government spending its money and how much tax does US government collect?
Please don't dodge the questions.
There are 2 sides to a coin, but there are not 2 sides to a fact.
http://www.google.com/imgres?safe=off&sa...x=53&ty=67
And your point is???
I would also like to be educated on how the budgets are different
freedom the way you speak is very rude, I agree with the others that you should read up more.
(01-10-2013, 05:10 PM)freedom Wrote: [ -> ]anyway, in terms of politics, it is much easier to agree to disagree, than to argue continuously.
We just have totally different political ideology.
We already establish our difference in political ideology more than once. There is no need for further argument. I will not accept your populist thinking and I don't intend to convince people to accept my thinking.
All has been said.
I have no issue if you tout your capitalistic ideals. But I have issue if you equate socialism to populism or lazy/stupid when you
obviously don't have a clue what socialism means. I respect those who knows what they are talking about even if I disagree.
Ultra capitalist is as dangerous as communist. Anything in excess or dogmatic is dangerous. I am not suggesting reckless spending or entitlement. But you are saying ALL entitlements are wrong. Probably human rights are wrong too unless it comes with a price tag.
Secondly I also have an issue when one thinks we should have a supercar lane rather than a bus lane because the former pays more tax. This example essentially divides our views. Capitalism is efficient, but it is not effective... until you understand that, your arguments is as sound as Fox Network.
Socialism does not solve all problems, but Singapore's model of socialism with capitalistic tools shows it can work. But the first principle must be right. Putting capitalism first instead of as a tool in the past 13 years has not been beneficial for the nation as a whole. That's obvious.
(04-10-2013, 11:03 AM)AlphaQuant Wrote: [ -> ] (04-10-2013, 10:40 AM)ForeverAlone Wrote: [ -> ]guys what happens if 2 weeks later the debt ceiling is not raised?
so far my conclusion is that noone knows.
on one hand, Jacob Lew (the Secretary of Treasury) says that all extraordinary measures will run out by then and so the G will not have enough cash to pay the coupons on the Treasuries due. So there's a default of UST.
on the other hand, there is a view that Obama can always invoke Section Four of the Fourteenth Amendment and assert authority to breach the debt ceiling to pay “the public debt of the United States, authorized by law”. (copied from http://www.theatlantic.com/politics/arch...aw/280176/)
Also, 2 days ago on Bloomberg, David Stockman (ex-OMB director under Reagan) says that there's always a way for the Treasury to rearrange the payment of stuff and so the coupons can always be paid if the G forces it.
so unless you are a member of the Treasury and knows the inside out of the pecking order of the Treasury payments, i doubt anyone really knows whether a default is on the cards.
However, what is clear is that IF a default occurs, there is going to be chaos. First, tons of hedgies/mutual funds/real monies will not get the cash into their books. That is going to be a disaster. Second a downgrade of the UST should happen and some funds might no longer be willing to hold the UST if they are mandated to take only AAA debt - so looks like sell UST, sell USD, buy other AAA sovereign. Then of cos if the UST yield curve shifts because of the selldown, risk premium will be repriced since everything is priced off the UST curve.
Remind me of the 700 billion bailout during the GFC, it was not passed initially by COngress, but later passed when the news of the non-passing rocked the markets.
Well, so a default and a crash before people start thinking is not actually impossible.
NEW YORK — United States stocks fell yesterday (Oct 7), extending two weeks of losses, as a lack of progress in ending the partial US government shutdown or the debt-ceiling standoff kept investors nervous.
The S&P 500 ended near its lows of the session in a volatile day and dropped for its 10th time in the past 13 sessions. The CBOE Volatility index, a measure of investor anxiety, jumped 16 per cent to its highest level since June. The VIX has gained for three weeks, up 48 per cent over that period.
Much of the government has been closed since the start of the month, resulting in up to a million workers being furloughed. Investors are also looking ahead to the upcoming debate over the debt ceiling, which could result in a default on US debt if not resolved.
In weekend comments, neither Republicans nor Democrats offered any sign of progress and both blamed the other side for the impasse. The deadline to increase the ceiling is Oct 17.
“The market is vulnerable to further declines for as long as the situation remains unclear. With each passing day, the market becomes more restless,” said Mr Leo Grohowski, chief investment officer at BNY Mellon Wealth Management in New York.
Mr Grohowski, who helps oversee US$175 billion (S$218.3 billion) in client assets, estimated that each week the shutdown continues could shave 10 to 15 basis points off gross domestic product.
“While that isn’t a lot, the recovery is still too fragile to withstand any long-term impact. It will start to have an impact on earnings estimates, which will impact valuations,” he said.
Nine of the S&P’s 10 sectors were lower on the day, with groups tied to the pace of economic growth, including financials and materials, among the weakest of the day. The only sector that rose was telecom, which is considered a defensive play.
About 70 per cent of Nasdaq-listed shares closed lower while more than three-fourths of stocks traded on the New York Stock Exchange ended down.
Among the biggest losers in the financial sector, Capital One Financial lost 2 per cent to US$68.88 while American Express lost 1.8 per cent to US$72.94.
The Dow Jones industrial average was down 136.34 points, or 0.90 per cent, at 14,936.24. The Standard & Poor’s 500 Index was down 14.38 points, or 0.85 per cent, at 1,676.12. The Nasdaq Composite Index was down 37.38 points, or 0.98 per cent, at 3,770.38.
The S&P has fallen for two weeks and is down nearly 3 per cent from its all-time closing high on concerns about Washington dysfunction. The benchmark index closed below its 50-day moving average, a sign that near-term momentum may be to the downside.
US-listed shares of BlackBerry rose 3.6 per cent to US$7.97 after sources close to the matter said it is in talks with Cisco Systems, Google and Germany’s SAP about selling all or part of the company.
Apple rose 1 per cent to US$487.75 after Jefferies upgraded the stock, citing expected margin improvement.
Atossa Genetics slumped 46 per cent to US$2.85 after the company said it would recall a medical device used to collect breast fluid for cancer detection along with a test that uses it.
With the ongoing stalemate in Washington, trade data today and retail sales on Friday are among important economic reports that will not be released if the shutdown continues. Last week, non-farm payrolls, construction spending, and factory orders data were not released.
Volume was light, with about 4.54 billion shares changing hands on the New York Stock Exchange, the Nasdaq and NYSE MKT, below the daily average so far this year of about 6.1 billion shares. REUTERS
SAN FRANCISCO (MarketWatch) — U.S. stocks fell sharply on Tuesday hit by growing jitters over the budget impasse in Washington, with the partial government shutdown extending into a second week with few signs of a deal to end it or raise the nation’s debt ceiling.
now only 9th, 1 more week to 17th the debt ceiling
VIX is rising... showing more fear
is it time to be greedy? or wait somemore?
I don't feel the fear yet.
I shall just wait.
(07-10-2013, 12:33 PM)specuvestor Wrote: [ -> ] (04-10-2013, 10:15 AM)freedom Wrote: [ -> ]Since you are asking me to read a book and you read so many books, please educate me about my challenge.
where is US government spending its money and how much tax does US government collect?
Please don't dodge the questions.
There are 2 sides to a coin, but there are not 2 sides to a fact.
http://www.google.com/imgres?safe=off&sa...x=53&ty=67
And your point is???
I would also like to be educated on how the budgets are different
My point is simple. US treasury has no problem to pay its interest and principal and to continue to issue new debt to pay its old debt, which does not require lift of debt ceiling.
There is no way unless the politicians are so stupid that they will default on interest or principal.
If a man is owing too much money and he still has some income, first thing to do is not to indulge unnecessary spending, but to pay the interest and principal. Ask a bankruptcy judge.
So clearly, what US government need do is to cut spending, not to raise debt ceiling again and again.
US government revenue has been rising since the recession, but the spending continues to rise, too. If US government could just spend as much as 2008, the budget could be well balanced. So are we in a worse situation than in 2008? Why should the government try to spend more and more then? And where are they spending the money? More entitlement and transfer only. It is a never ending rise of the government spending. Good times, I spend more and bad times, I spend more. And you think it is not populist?
In real life, I haven't seen a person having such spending habit can have his/her finance in order.
2 hours 18 min ago
WASHINGTON — The International Monetary Fund (IMF) cut its global outlook for this year and the next as capital outflows further weaken emerging markets and warned that a government default in the United States could “seriously damage” the world economy.
Growth worldwide will be 2.9 per cent this year and 3.6 per cent next year, the IMF said in a report yesterday, compared with July predictions of 3.1 per cent and 3.8 per cent respectively. It sees emerging economies growing 4.5 per cent this year, 0.5 percentage point less than three months ago, as projections were reduced for China, Mexico, India and Russia.
“Advanced economies are gradually strengthening” while “growth in emerging market economies has slowed”, IMF Chief Economist Olivier Blanchard wrote in the World Economic Outlook report. “This confluence is leading to tensions, with emerging market economies facing the dual challenges of slowing growth and tighter global financial conditions.”
The IMF’s forecasts factor in a short US government shutdown and an agreement on the nation’s debt-limit before an Oct 17 deadline. A stalemate that causes a default “could seriously damage the global economy”, it said.
“A longer shutdown could have sizable adverse growth implications,” the IMF added. “A failure to promptly raise the debt ceiling could also adversely affect financial markets and economic activity, with spillovers to the rest of the world.”
With Europe overcoming its debt crisis and a recovery of the US housing market, global policymakers’ concerns are shifting to the uncharted territory of exiting extraordinary monetary stimulus.
The fund said its forecasts assume the Fed will not raise its benchmark interest rate before 2016 and that the US central bank will start tapering its bond-buying programme later this year.
The IMF urged the world’s major economies to adopt policies that will boost their prospects or face prolonged subdued expansion, especially at a time of weaker growth in China, which will hurt commodities exporters and other developing economies. BLOOMBERG