Fiscal Cliff

wotsthat

Graham_Devon wrote: »

Bit premature old chap!

I wonder what odds you could have got betting against a deal being reached. They would have been pretty long - that's because in the real world most people realised that a deal was as inevitable as day following night.

If British politicians were carefully placing 'ticking time-bombs' to allow them to increase their media exposure whilst damaging confidence we'd be calling them f*****g lunatics. However in the US a grateful public thanks God for their politicians who keep the world turning.

This was a story about the media driving the news rather than the other way around. Bloomberg are straight on the case this morning though - because the fiscal disaster has been averted borrowing will continue to increase (as it will until until Americans can't borrow any more) - the next disaster awaiting the world therefore will be worries about debt ceiling negotiations. Fancy a bit of deja vu anyone?

vivatifosi

wotsthat wrote: »

This was a story about the media driving the news rather than the other way around. Bloomberg are straight on the case this morning though - because the fiscal disaster has been averted borrowing will continue to increase (as it will until until Americans can't borrow any more) - the next disaster awaiting the world therefore will be worries about debt ceiling negotiations. Fancy a bit of deja vu anyone?

Exactly. Strikes me as can kicking rather than deal solving too. Ironically the dollar is weaker on xe.com than it was prior to the deal going through. The reason I'm watching the dollar closely is I have a fairly large bill to pay in dollars shortly, so the more it goes in my favour and against 300m+ Americans, the happier I am:D. Sorry America.

Graham_Devon

wotsthat wrote: »

I wonder what odds you could have got betting against a deal being reached. They would have been pretty long - that's because in the real world most people realised that a deal was as inevitable as day following night.

If British politicians were carefully placing 'ticking time-bombs' to allow them to increase their media exposure whilst damaging confidence we'd be calling them f*****g lunatics. However in the US a grateful public thanks God for their politicians who keep the world turning.

This was a story about the media driving the news rather than the other way around. Bloomberg are straight on the case this morning though - because the fiscal disaster has been averted borrowing will continue to increase (as it will until until Americans can't borrow any more) - the next disaster awaiting the world therefore will be worries about debt ceiling negotiations. Fancy a bit of deja vu anyone?

It's just an extension to the pretending.

Hence why, as you say, they will hit the debt ceiling again soon. That will go through the due process of a public battle, and the ceiling will merely be moved higher again.

Doesn't actually solve anything. The probem just rumbles on, while growing in size. To be fair though, this is all everyone, bar a few countries have done to solve the crisis. it's just averting the pain today. Wonder how long this will go on for? Another decade? Greece on it's 14th bailout...US extended it's debt ceiling to 4x what it was originally? ECB lending trillions?

wotsthat

Graham_Devon wrote: »

Doesn't actually solve anything. The probem just rumbles on, while growing in size. To be fair though, this is all everyone, bar a few countries have done to solve the crisis. it's just averting the pain today. Wonder how long this will go on for? Another decade? Greece on it's 14th bailout?

This was never about solving problems. To be fair if someone would lend me unlimited sums at rates significantly less than I could achieve from investing it then I might be interested in those sort of problems myself.

I was concerned about American sub-prime lending and UK consumer borrowing years ago but massively under-estimated the effects this would have. I think you're probably in the same place if you think a little pain will lead to a bright future tomorrow - that just ignores human nature and the efforts we make to repeat past mistakes.

There's no simple answer but I suspect it involves erratic and grinding recovery combined with sharp inflation at some point. A decade? That sound very optimistic IMO.

Graham_Devon

vivatifosi wrote: »

Exactly. Strikes me as can kicking rather than deal solving too. Ironically the dollar is weaker on xe.com than it was prior to the deal going through. The reason I'm watching the dollar closely is I have a fairly large bill to pay in dollars shortly, so the more it goes in my favour and against 300m+ Americans, the happier I am:D. Sorry America.

I don't think poor Merv will be that impressed! It's pushed the £ up to a 52 week high! That's two of us happy!

FTSE100 is also at a 52 week high on this back of this, gaining 100 points since opening. Weird old thing the FTSE. Takes a lot to knock it down, but just a sniff of pretence to make it rocket.

Graham_Devon

I've nicked this image from discussion time....shows the actual scale of "cliff" measured in feet, with a bit of humour attached.

Puts things into perspective really!

http://i.imgur.com/FZE3F.jpg

Generali

Graham_Devon wrote: »

I've nicked this image from discussion time....shows the actual scale of "cliff" measured in feet, with a bit of humour attached.

Puts things into perspective really!

http://i.imgur.com/FZE3F.jpg

That was pretty much my point only your cartoon puts it much better.

The scale of the US economy is immense. I was listening to something today that said that the US Federal elections in 2012 cost $6,000,000,000. That's loads! I think.

Then the woman continues, "In 2012, Americans spent $8,000,000,000 on Halloween".

Graham_Devon

Just been discussed that this deal will add $4tn to the US defecit this year alone.

As the commentator stated....if they are waiting for the best time to increase taxes and spending cuts, we'll never see increased taxes and spending cuts.

Graham_Devon

Was just listening to a piece on the radio again. Apparently theres a slight irony in this deal (which simply delays things for a couple of months), in that it's just made everything more expensive for the US (and us) again...

Commodities rallying.

Mr_Mumble

Graham_Devon wrote: »

Just been discussed that this deal will add $4tn to the US defecit this year alone.

It's $4tn over the next ten years:

the CBO estimates that the bill will reduce revenues over 10 years by $3.64 trillion and increase spending by $332 billion.

$4tn in a single year would be something considering federal receipts for 2012 are expected to be around $2.4tn (with spending of $3.6tn).

PS. Happy new year everyone (I've not been around for 6+ months as I was getting sucked into the nasty habit of doing: http://xkcd.com/386/ )