Backdoc: DOES ANYONE WANT TO GRAB SOME POPCORN AND SEE SOME NEWS?
TONIGHT’S EPISODE OF THE “MAIN EVENT” HASN’T DISAPPOINTED!
WILL THE REPUBLICANS PLAY CHICKEN WITH THE PRESIDENT OR JUST GIVE IN AT THE LAST MINUTE?
BETTER YET, WILL THERE BE VALUED DINAR IN TIME TO PAY BILLS? MMMM
TENSION IS RISING IN THE AIR!
SLAP! I NEED SOME MORE POPCORN! DOC
Thunderhawk: Backdoc Alert
Debt ceiling cash crunch: When millions won’t get paid
Over four different days in November, the U.S. government has to cut checks to Social Security recipients totaling close to $70 billion.
Then there is the salary for federal workers and the military: $12 billion must be paid over five different days.
And don’t forget the interest to all those bond holders with U.S. Treasuries: $30 billion due on November 16. All those payments underpin the immediate crisis unfolding (yet again) on Capitol Hill over whether to raise the debt ceiling.
Don’t raise it or at least suspend it soon and Treasury Secretary Jack Lew estimates that after November 5 he will only be able to pay the country’s bills with the surplus cash he has on hand plus the daily tax revenue coming in. But at some point it won’t be enough to pay everyone.
Lew said he expects the cash stash to deplete “quickly.”
The Bipartisan Policy Center now projects quickly could mean between Nov. 10 and Nov. 19.
In all, the Center found the Treasury will have to make large daily payouts totaling $48.8 billion on October 30, $33.1 billion on both November 3 and November 16, and more than $15 billion on October 21 and between November 9 and November 10.
On other days between now and the end of November, Treasury will be making payments totaling anywhere from $1.4 billion to $14 billion.
When its cash runs short, millions of people and businesses expecting timely, in-full payments from the federal government may find their checks delayed.
That’s because Treasury will be forced to either postpone all payments due on a given day until it can pay each in full, or to choose which pick and choose who to stiff.
Related: 7 things you need to know about the debt ceiling (yes, that again) Some Republicans in Congress have made clear that they don’t wish to vote for an increase in the debt ceiling unless it’s pared with spending cuts. Some have also asserted that the Treasury can simply prioritize payments to bondholders and avoid default.
But that strategy bears huge risks politically and practically.
The Treasury pays millions of bills every day. And most of those payments are automated. It pays interest to bond investors from one computer system and makes all other payments from another.
So while technically it may be possible to make interest payments since they’re processed separately, it would be much harder for Treasury to prioritize what to pay among all the country’s other obligations. And many argue that not making any payment due – not just that to bondholders – is a default.
The one thing Speaker Boehner must do before leaving
Many people are hoping that House Speaker John Boehner will do big things before he vacates the job and Congress. I count myself among them. But there is one thing on that to-do list that absolutely must get done: Raise the debt ceiling.
Contrary to myth and ill-informed bombast, raising the legal limit on the nation’s borrowing is not akin to giving the federal government or the president a blank check. Raising the debt ceiling is not about future spending, but past spending approved by Congress. “Refusing to raise the debt limit does nothing to reduce those existing obligations or cut the deficit,” the Treasury Department explained during the debt-ceiling crisis of 2011. And it’s not as bad as a government shutdown. It’s worse, as the president would have to rob Peter to pay Paul and still come up short in satisfying creditors and anyone else who relies on cash from Uncle Sam.
[Speaker Boehner leaves House in disorder]
There are three reasons for my alarm here, in no particular order because they are all terrifying. One, the vote on the incoming speaker will not take place until Oct. 29, the day before Boehner “zip-a-dee-doo-dahs” his way back to Ohio. Two, the nation will cease to have the ability to pay all of its bills “on or about” Nov. 5. Three, the next speaker of the House might not have the rest of his leadership team in place to corral the votes to raise the federal debt limit. And heaven help us all if Boehner’s successor is House Majority Leader Kevin McCarthy (Calif.).
Boehner’s resignation is effective Oct. 30, so the vote on his successor the day before makes sense. That the rest of the Republican House leadership — the majority leader and the whip — won’t be voted on that day does not. According to the Hill, “It’s possible those elections won’t take place at all” if McCarthy fails in his speaker bid. He would then stay put as majority leader and Rep. Steve Scalise (La.) would remain the whip. But NBC News Capitol Hill correspondent Luke Russert tweeted Wednesday morning that Rep. Tom Cole (R-Okla.) told him that McCarthy “will win” on the first ballot.
If that prediction proves true, McCarthy won’t have a leadership team to help him tend to his raucous caucus. And in three more tweets Russert spelled out why a McCarthy victory is worrisome. In short, the older members of the House Republican conference want Boehner to get the debt ceiling off the table for his presumed successor because they fear it “[could] blow up” due to compromises McCarthy will have to make to conservatives to secure the necessary 218 votes.
[McCarthy will get whipped like Boehner and Cantor]
And this brings me back to the Nov. 5 deadline for raising the debt ceiling. That was the date Treasury Secretary Jack Lew warned Boehner that the federal government would “exhaust” the “extraordinary measures we have been employing to preserve borrowing capacity.” Lew also explained what would happen if Congress failed to act by the deadline.
At that point, we would be left to fund the government with only the cash we have on hand, which we currently forecast to be below $30 billion. This amount would be far short of net expenditures on certain days, which can be as high as $60 billion. Moreover, given certain payments that are due in early to mid- November, we anticipate that our remaining cash would be depleted quickly. Without sufficient cash, it would be impossible for the United States of America to meet all of its obligations for the first time in our history.
This would all go down exactly one week after the House speaker elections. If Boehner doesn’t take this fiscal bomb off the table, I fear that the Republican-controlled Congress and the House conservative caucus in particular would be content to let the timer run out. The newly minted House majority tried that in 2011 and brought the United States the closest it has ever been to being a global financial deadbeat. Now that there are more of them and they control both houses of Congress, the possibility is very high that the full faith and credit of the United States will be destroyed.
************ Backdoc: LAST NIGHT WE SAW PRISONER RELEASES TO POTENTIALLY REDUCE COSTS OF THE GOVT. !!
TODAY WE SEE AMTRACK IN JEOPARDY OF CUT BACKS! MMMM SOUNDS LIKE A DEFENSIVE MOVE BY THE WHITE HOUSE!
I’M AFRAID THE REPUBLICANS HAVE A MANDATE OTHERWISE WHY WOULD MR. SPEAKER ON THE WAY OUT THE DOOR? DOC IMO
Thunderhawk: Backdoc Alert
VIDEO: Feared ‘Amtrak shutdown’ is actually a rail system shutdown By the end of this year, 12,000 route miles owned and operated by freight carriers will have a mandated safety system in place, but that’s only a fraction of the 60,000 miles requiring it.
Come December it could get much tougher to take the train. Or, for that matter, to ship anything on one.
This week Amtrak made waves when it threatened to suspend service on some of its routes unless Congress extends the deadline for the rail carrier to get a major safety upgrade in place. In a letter to the Senate Commerce Committee, Amtrak warned that the “vast majority” of its network would become inoperable starting in mid-December if the current Dec. 31 mandate for U.S. rail carriers to implement something called “positive train control” stands as is.
Backdoc: GLENCORE IS DRAGGING DOWN SOME BIG BANK SINCE IT IS HIGHLY LEVERAGED! WATCH OUT EURO YOU ARE GETTING HIT FROM EVERY ANGLE!
THE BRITS WANT TO LEAVE,
THE SCOTTS SAY THEY WILL LEAVE IF THE BRITTS DO,
ANTI-AUSTERITY FROM DEFAULT IN GREECE,SPAIN AND PORTUGAL ALSO IN A SECESSION BUBBLE,
WOW! THEN LETS NOT FORGET VW ECONOMY IMPACT! DOC IMO
Thunderhawk: Backdoc Alert
Coal Problems Being Made Worse by Global Slowdown, Glencore Says
The slowdown across global economies is exacerbating a coal glut that’s driven prices for the fuel to the lowest level in eight years, according to Glencore Plc.
The market continues to re-balance amid weaker than forecast demand, said Peter Freyberg, Glencore’s head of coal, according to the e-mailed text of his speech delivered in Newcastle, Australia. The mining company, which in February announced it would cut Australian output by 15 million metric tons this year and delay some projects, will continue to review its operations to find ways of saving money, Freyberg said.
Coal prices have collapsed amid a broader slump in commodities that has rocked Glencore, prompting a 29 percent slump in its share price in a single day last week on concern over its debt burden. The Swiss company, the world’s biggest exporter of thermal coal, has since rebounded after it said business was “robust” and it had secure access to funding. Shares closed at 117.85 pence in London Tuesday.
Backdoc: TODAY I HEARD A DEALER TALKED ABOUT ON CNBC, IS VERY ANGRY! WILL LAWSUITS BE ON THERE WAY AS WELL?
DEALERS CAN’T SELL A DEVALUED BUSINESS NOW. THEIR INCOME IS BEING CUT.
THIS DEALER SAID HE FELT BETRAYED! MMMMM
Thunderhawk: Backdoc Alert
VIDEO: Volkswagen plays down hopes of quick answers over emissions cheating Volkswagen (VOWG_p.DE) said on Wednesday it would take time to get to the bottom of its rigging of diesel emissions tests, hours before the carmaker is due to give updates on its findings to German regulators and U.S. lawmakers.
More than two weeks after it admitted to cheating U.S. emissions tests, Europe’s largest carmaker is under pressure to identify those responsible, to say how vehicles with illegal software will be fixed and whether it also cheated in Europe.
Backdoc: LET ME SAY, IMO IF THE EURO GETS A SURVIVAL CHALLENGE THIS BANK AS THE WHITE SOX ANNOUNCER CALLS IT, “HE GONE” !! TOO MUCH EURO DENOMINATED DEBT!! DOC IMO
Thunderhawk: Backdoc Alert
Deutsche Bank Sees $7 Billion Quarterly Loss on Writedowns
Deutsche Bank AG expects to report a surprise third-quarter loss of 6.2 billion euros ($7 billion) and may eliminate its dividend for the year after writing down the value of its two biggest divisions and boosting its reserve for legal costs. ….
The estimates, announced in a statement Wednesday, are part of a strategy that co-Chief Executive Officer John Cryan will present Oct. 29 as he looks to shore up capital and boost profitability at Europe’s biggest investment bank. Deutsche Bank’s American depositary receipts tumbled 6.4 percent after the disclosure to $26.96 at 4:22 p.m. in extended trading in New York.
The firm said it’s taking a 5.8 billion-euro writedown of goodwill and intangible assets as higher capital requirements reduce the value of its investment bank and it adjusts the estimate of what it will receive in the disposal of its Postbank unit. The Frankfurt-based lender also is adding about 1.2 billion euros to its litigation reserves.
Backdoc: YES MY FRIENDS OIL WILL BE POLITICALLY STABILIZED BUT IT MIGHT NOT BE A SMOOTH TRANSITION!
THIS CURRENCY HAS BEEN AND WILL CONTINUE TO BE DEFLATIONARY! CURRENCIES WILL HAVE TO ADJUST TO LOWER PRICES FOR YEARS TO COME!
REMEMBER 60.00 PER BARREL IS LOW COMPARED TO THE PEAK OF 110.00 PER BARREL! DOC IMO
************* Thunderhawk: Backdoc Alert
Four Ways the Oil Price Crash Is Hurting the Global Economy
Remember when the oil price plunge was going to be a huge economic tailwind? Lower oil prices were roundly celebrated as a tailwind for global growth. In theory, the movement of wealth from commodity producers, which often stow away oil revenue in sovereign wealth funds, to consumers, which spend a far larger portion of their income, is a positive for economic activity.
But strategists at Credit Suisse believe that so far, the global economy has seen only the storm from lower crude, not the rainbow that follows.
“The fall in the oil price was considered by many investors, and ourselves, to be a significant positive for global GDP growth,” a team led by global equity strategist Andrew Garthwaite admitted. The net effect of this development, according to their calculations, has turned out to be a 0.2 percent hit to the global economy.
The negative effects of lower oil—namely the large-scale cuts to capital expenditures—are having a large and immediate impact on global gross domestic product.
Backdoc: COULD THIS BE THE TRIGGER TO AN ACCIDENT ON PURPOSE? WE WATCH!! DOC IMO
************ Thunderhawk: Backdoc Alert
Banks’ Glencore Exposure Is a $100 Billion `Gorilla,’ BofA Says
Global financial firms’ estimated $100 billion or more exposure to Glencore Plc may draw more scrutiny as regulatory stress tests approach after the commodity giant’s stock plunge this year, according to Bank of America Corp.
Bank shareholders and regulators may be concerned that Glencore’s debt and trade finance deals, of which a “significant majority” are unsecured, will reveal higher-than-expected risk and require more capital once the lenders are put through U.S. and U.K. stress tests, BofA analysts said Wednesday.
Adding an estimated $50 billion of committed lines to the company’s own reported gross debt, the analysts say financial firms’ exposure may be three times larger than Glencore’s reported adjusted net debt of less than $30 billion.
“The banking industry may have significantly more exposure to Glencore than is generally appreciated in the market,” analysts including Alastair Ryan and Michael Helsby said in a note titled “The $100 Billion Gorilla In the Room.” The commodity-price bust and “stress in Glencore’s share price and debt spreads may spur a review by investors, supervisors and bank management,” while “bank shareholders may pressure managements to reduce exposures,” they said.
Backdoc: WELCOME TO THE POWER OF THE NEW GLOBAL REALITY !!!!
THIS CHANGES EVERYTHING ON TRADE! THIS IS CONTROL 101 !!!!!!! DOC IMO
FRANK I DESERVE A COOKIE FOR THIS ONE!!!
GREAT FIND THUNDER!! BAMM!
powerofprayerBACKDOC, Customs, what about TSA, DHS?
Backdoc: TSA I BELIEVE WILL BE FOCUSED ON PEOPLE SURVEILLANCE IN AIRPORTS AND ARE UNDER GREAT SCRUTINY PRESENTLY!
DHS MAY BE ELIMINATED SOON SO SAYS RUMORS! WE WATCH! DOC IMO
Thunderhawk: Customs will have the power to hold goods under TPP
Customs will be given new powers to hold goods at the border that they suspect breach copyright or trade marks under the Trans Pacific Partnership.
And those who find themselves on trade mark infringement charges could pay more, with New Zealand courts to be given new discretion to award additional damages.
Those penalties would come on top of the compensatory damages already provided for under New Zealand law for trade mark infringement.
TPP will also require a new ‘patent linkage’ system to be established, where a pharmaceutical patent holder would be notified if a generic version of their product is submitted to Medsafe for regulatory approval.
New details on the TPP were released by the Ministry of Foreign Affairs and Trade (Mfat) today in the form of fact sheets, including one on intellectual property.
Customs will need to be given new powers that would allow it to act on its own initiative to temporarily detain material suspected of breaching copyright and trade marks.
The Government has also agreed to extend existing laws on technological protection measures (TPMs).
TPMs are technical locks copyright owners use to guard or restrict the use of their material stored in digital format, such as encryption software.
Currently it has not been a criminal offence to circumvent a TPM, but it is to engage in large-scale commercial dealing in devices or other means to enable people to do so.
New requirements under the TPP are to provide civil and criminal penalties against people breaking TPMs – not just those dealing in devices that allow them to be skirted.
There will, however, be clear exceptions in cases where there is no copyright issue – for example, if someone plays region-coded DVDs legally purchased while overseas.
The exceptions are not set out in the TPP – they will be decided by the Government during implementation.
The new ‘patent linkage’ system to be established would notify pharmaceutical patent holders of generic versions of their product submitted to Medsafe, and give them enough time to seek preliminary injunctions to stop drugs entering the New Zealand market.
The resolution of disputes would remain a matter for the courts, not Medsafe.
An exception already in New Zealand law, that allows the use of a patented pharmaceutical to try and get regulatory approval for a generic version, will remain.
New Zealand has also agreed transition its 50-year copyright period to 70 years.
That will mean New Zealand consumers and businesses will forego savings they otherwise would have made from works such as books, music and films coming off copyright earlier.
The Government still estimates the long-term average annual cost to be around $55 million.
There will be no major changes to how liable internet service providers are for copyright infringements. There had been fears from some internet user groups that the TPP would make ISPs terminate accounts or take other action against users.
Backdoc: STAGNATION IS NOT GOING TO BE INFLATION FOR SURE!
I’M SURE THEY ARE WORRIED ABOUT DEFLATION!
GET THOSE OIL PRICES UP A LITTLE AND IT WILL HELP BUT THAT MAY NOT BE AS QUICK AS SOME HOPE FOR!! DOC IMO
Thunderhawk: IMF Warns World Financial System Faces Risk from Emerging Markets
In its most recent Global Financial Stability Report, the International Monetary Fund warned that emerging markets could be a source of instability. This is mainly due to weaker commodity prices, slower economic growth, share market volatility, and high levels of company debt. The end result could be a global economic output cut of 3 percent.
The report calculated that companies and banks in the developing countries had over-borrowed an estimated 3.3 trillion in US Dollars. If the Federal Reserve raises its interest rate, emerging markets will become vulnerable to higher borrowing costs.
The IMF singled out China as the main country of concern as it modernizes its economy. According to the IMF, “The Chinese authorities face an unprecedented policy challenge in carrying out their objectives to make the transition to a new growth model and a more market-based financial system.” In response to this statement, PBOC’s deputy governor Yi Gang said not to worry as China will “pretty much” still have middle-to-high growth in the near future.
Backdoc: MOVE OVER SDR!! MAKE ROOM FOR CHINA IN NOVEMBER!!
NOW WHO GETS KICKED OUT? MMMM MAYBE THE EURO??? MMMM DOC IMO
Thunderhawk: China adopts IMF statistical benchmark, improves transparency
BEIJING, Oct. 8 (Xinhua) — China’s official statistics will conform to the Special Data Dissemination Standards (SDDS), a statistical system created by the International Monetary Fund (IMF) to improve transparency, the central bank has announced.
With approval from the State Council, China’s cabinet, People’s Bank of China (PBOC) Governor Zhou Xiaochuan informed IMF Managing Director Christine Lagarde of China’s decision, the central bank announced on Thursday morning.
Since 2002, China has used the General Data Dissemination System (GDDS), which the IMF set up in December 1997 to provide a framework for countries to adapt and improve their statistical systems.
The GDDS applies to all IMF members, while the SDDS applies to member countries that have or are seeking access to international markets.
The SDDS was started by the IMF in 1996 to help it gain access to regular economic and financial statistics and assist participating countries in crafting updated economic policies and gaining access to financial markets.
Chinese President Xi Jinping promised last November at the Brisbane G20 Summit that China would switch to the SDDS.
In the past year, China’s central economic agencies, including the National Bureau of Statistics, the PBOC and the Ministry of Finance, have worked to meet the IMF’s SDDS statistics requirements.
The adoption of SDDS is a necessary step in reform and opening up, which will further improve China’s statistical transparency, credibility and comparability among different economies, the PBOC said.
On Wednesday in Peruvian capital Lima, PBOC Deputy Governor Yi Gang and David Lipton, first deputy managing director of the IMF, attended a ceremony to celebrate China’s adoption of the SDDS.
At the ceremony, Yi said China and the IMF have been working together to improve China’s statistics for many years, and subscribing to the SDDS is another milestone in the collaboration.
“We are committed to strengthening our statistical system and enhancing transparency, as this is not only crucial for our own policy making, but also beneficial for a better understanding of the Chinese economy by the outside world,” Yi said.
The IMF welcomed the move, calling it “an important advance.” Lipton said adhering to the SDDS shows “China’s strong commitment to transparency as well as to the adoption of international best practices in statistics.”
The United States also welcomed China’s commitment to release economic data in accordance with the SDDS by the end of the year and China’s continued efforts to enhance transparency.
China recognizes the importance to successful RMB internationalization of meeting the transparency standards of other major reserve currencies.
The consensus between the world’s top two economies was one of important results arising from President Xi’s state visit to the U.S. late last month.
Backdoc: NOW THIS IS WHERE THE DINAR GOLDEN CHILD WILL MAKE A DIFFERENCE!
WHEN THAT TYRANT MALIKI IS ARRESTED, LAWS ARE IMPLEMENTED, AND THOSE PESKY ZEROS GET FINALLY LIFTED VERY SOON, WE WILL SEE THE GLOBAL RESET TAKE ON NEW LIFE!
Thunderhawk: China’s slowdown effects global economy: IMF
China’s slowdown has repercussions on the global economy, but the impact will be greater in countries that have greater trade exposures with the world’s second-largest economy, the IMF has said.
“What happens in China has repercussions for the entire world economy. These repercussions are greater in countries that trade with China or that depend on exports which China consumes very intensively,” said Maurice Obstfeld, IMF Economic Counsellor and Director of Research Department.
Backdoc: THE FINANCIAL DISTORTIONS ARE GETTING WORSE THE LONGER THE FED STAYS PINNED IN A CORNER UNABLE TO MOVE! WITH JOB LAYOFFS BEGINNING TO BE IMPLEMENTED THE FED IS DEAD!
BRING US THE GLOBAL MONETARY REFORM AND WAKE US UP FROM THIS BAD DREAM!! DOC IMO
Thunderhawk: US Federal Reserve ‘Should Wait’ on Raising Interest Rate
IMF Monetary and Capital Markets Department Director Jose Vinals said that amid more uncertainty in the global economy, it is the IMF’s judgement that the Federal Reserve should wait to increase policy rates until there are further signs of inflation rising steadily towards its objective with continued strength in the labor market.
The US Federal Reserve should postpone an interest rate increase as uncertainty in the global economy continues to exist, IMF Monetary and Capital Markets Department Director Jose Vinals said in a press conference on Wednesday.
“Amid more uncertainty in the global economy, it is our judgement that Federal Reserve should wait to increase policy rates until there are further signs of inflation rising steadily towards its objective with continued strength in the labor market,” Vinals said.
In September, the US Federal Open Market Committee, a body that operates under the Federal Reserve, announced it would keep the interest rate unchanged at 0 to 0.25 percent range.
Federal Reserve Chair Janet Yellen said increasing the interest rate will depend on wide range of economic and financial indicators, including progress towards the 2 percent inflation target and improved labor market conditions.
Yellen also noted that the longer the Federal Reserve waits in increasing the interest rate, the steeper subsequent rates increases will be.
Vinals, however, urged the US authorities to adhere to gradual changes in the further rates hike. “The pace of subsequent policy rates increases should be gradual and well-communicated,” he argued. The Federal Reserve has previously stated that an interest rate increase could take place before the end of 2015.