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The Wall St Junkies Are Getting Worried - Where's The Debt Fix

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A Mobilization in Washington by Wall Street

After a year of clashing with Washington over new financial reforms, the country’s most powerful bankers have found common ground with regulators in the hard-fought effort to lift the debt ceiling and avoid a default.

Wall Street is no longer watching from the sidelines as the most polarizing political fight in years plays out on Capitol Hill. In the last few days, top executives have been in close contact with Washington in a last-ditch attempt to prod lawmakers toward a compromise by Tuesday, the administration’s deadline to reach a deal.

On Friday, Jamie Dimon, JPMorgan Chase’s chief executive, raised concerns with Treasury Secretary Timothy F. Geithner about the standoff over the debt ceiling and its potential to disrupt the system through which JP Morgan and other big banks disburse federal payments. Mr. Geithner assured him that the Treasury and Federal Reserve had taken steps to keep the payment system functioning smoothly, according to individuals briefed on the call.

In addition, more than a dozen chief executives from the nation’s biggest financial services firms wrote a joint letter to President Obama and members of Congress on Thursday warning of “very grave” consequences for the economy and the job market if an agreement wasn’t reached.

The junkie certainly doesn't want to go cold turkey.

Luckily the capitalist free market will ensure they get the debt fix they so desperately need to stay in business.

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http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/8673577/America-is-merely-wounded-Europe-risks-death.html

Needless to say, these are not normal times. The US and EU debt crises are feeding on each other in a dangerous synergy, with fears of a fiscal “sudden stop” in Washington causing global risk aversion and aggravating tremors in the Spanish and Italian bond markets. It is a pre-taste of the “catastrophe” predicted by the Fed’s Ben Bernanke if politicians fail to control their passions.

And yet, data from the St Louis Fed show that America’s M2 money supply grew at a 6.4pc annual rate in the second quarter, accelerating to 12.2pc in June. The compound annual rate of change has exceeded 40pc over recent weeks.

The broader M3 indicator (including large savings deposits) is growing at the optimal rate of around 5pc. It has been an uncannily accurate lead indicator at each twist and turn of our economic drama over the past five years, and is telling us now that the Fed’s kindling wood has at last begun to ignite the damp coals of the US financial system. There is no longer a 1930s liquidity trap. We can infer that the housing market may be nearing the end of its deep slump.

The economy is curing itself in time-honoured fashion. Whether this monetary cure will be allowed to run its course depends on politicians in Washington, Berlin, Rome and Madrid.

And AEP thinks the US economy is all fixed and it will be the Europeans that undermine it all....

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http://www.zerohedge.com/news/guest-post-q2-gdp-numbers-dont-add

Q2 GDP - The Numbers Don't Add Up

Q1 2011 GDP was revised one final time from 1.9% to 0.4% and Q2 2011 GDP the first estimate was 1.3%. Before analyzing the data I have one very simple question.

Economic growth slowed during Q2 as acknowledged by the Fed and indicated by regional Fed surveys, ISM, durable goods, etc so how could Q2 GDP be higher than Q1 GDP? That would imply the economy accelerated and clearly that has not happened. In other words just as Q1 2008 was eventually shown as the start of the great recession so will Q2 2011 in subsequent revisions.

More at the link.

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clearly this is the classic MMGW hockey stick...the heat of debt raising the system temperature.

Banks will melt, economies will be sunk, and people will drown.

The graph looks like it doubles about every ten years which means it is exponential. Something will have to give some day.

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Guest spp

The graph looks like it doubles about every ten years which means it is exponential. Something will have to give some day.

BREAKING NEWS: Everything is going to be fine.

The solution is going to be announced very shortly...more DEBT! :lol:

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clearly this is the classic MMGW hockey stick...the heat of debt raising the system temperature.

Banks will melt, economies will be sunk, and people will drown.

Start taxing those icebergs before they disappear completely.

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BREAKING NEWS: Everything is going to be fine.

The solution is going to be announced very shortly...more DEBT! :lol:

"We must not let our rulers load us with perpetual debt" Thomas Jefferson.

I think Jefferson should have added in exponential debt as well. I wonder what he would think if someone brought him here in a time machine.

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The reason the debt ceiling will be raised is exactly the same reason why more and more money will be printed. No-one in the establishment wants to take the hit of fiscal responsibility and living within their means as long as it can be kicked down the line for someone else to worry about in the future.

We're now beyond the point of no return for the current system; this is not a normal bust in the boom-bust cycle. Watch the markets oscillate at an ever higher frequency until the whole mess collapses in a heap.

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The amount of debt is irrelevant.....it is the cost of paying that debt that counts, the rate of interest....the only problem being is the higher the debt the greater the interest.......the ones that had to earn the debt they lent would rather have low risk low interest, than high risk high interest. ;)

Edited by winkie

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Any chance of an inflation-adjusted graph?

inflation is irrelevant.

Means to repay, ie tax revenues, is.

and they aint paying it back....this is a plan called deficit spending, which is out of control.

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  • 335 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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