Debt Ceiling Kabuki; It's another bailout for Wall Street

http://smirkingchimp.com/thread/mike-whitney/37301/debt-ceiling-kabuki-its-another-bailout-for-wall-street

Barack Obama stormed out of a meeting with Republican leaders on Wednesday when negotiations broke down over raising the $14.3 trillion debt ceiling. According to one report, the usually-unflappable Obama unloaded on House Majority Leader Eric Cantor (R-Va.) dressing him down in front of his colleagues.

Here's a blurb from an article by Time's Joe Klein: “He lit up Eric Cantor like he’s never been lit up,” said one Democrat who described Obama as telling the Republican leader that he would veto any short term bill that Cantor sends him."

:snip:

So, what's this all about?

It's just more political theater really. Are we supposed to be cheered by the fact that Obama finally found that spark of passion that liberals have been hoping to see for more than 3 years now? He certainly never got mad when workers were stripped of their collective bargaining rights in Minnesota, or when the GOP-led congress stopped him from shutting down America's torture-gulag at Guantanamo Bay, or when innocent women and children were killed in one of the many errant bomb attacks by US drones in Afghanistan or Northern Pakistan. But now he's pissed because the Republicans won't let him raise the debt limit and push through his savage $4 trillion cuts to public services and entitlements?

More at the link --

"Domestic banks would not have to classify their sizeable holdings of Treasuries as non-performing if they thought the default short-lived. But they would suffer nonetheless. Currently Treasuries represent roughly 30% of the collateral that financial institutions such as investment banks use to borrow in the $4 trillion repurchase (“repo”) market. They represent another 4-5% of the $1 trillion in collateral used in the derivatives market. A default could trigger demands by lenders like money-market funds for more or different collateral."

Well, duh! Collateral rated AAA that gets whacked by the crazy GOP will plummet in value thus creating multiple mandatory defaults!

No kidding. Banks just own a portion of these Treasuries. This effect would cascade all over the world thus creating financial distress everywhere Treasuries are held!

So its simply a "bank bailout"? For crying out loud - one must really hate the banks that hold a small percentage of Treasuries to hope for a world depression to "get even".

:thumbsup:

:kick:

(K and R)