A year of lies
So, for the past year we saw the Republicans campaign for leadership. They dismally failed, despite a lousy economy, and a president that not even many democrats particularly favoured.
Yet, despite over a year of endless talk of '$1 of tax increases for 3 or even $4 of spending cuts, I saw house speaker Boehner on clown network this morning, effectively tout a 1-1 tax/spending ratio.
2 trillion 'cuts' over.. a decade...lol
It now looks like they will come to agree on a 1-1 ratio, roughly a trillion tax increase, with a trillion of spending cuts. Naturally, the spending 'cuts' will be phased in, and are largely mere accounting tricks.
With a 1 trillion annual deficit (and that's probably being overly optimistic), with 200bn of annual cuts per year (again, that's assuming no gradual phase-in), we're still looking at 800bn a year, so that means we'll see the US debt around 20 trillion in 2016.
$22 trillion.....boom
As early as 2005, it was always my outlook that the US bond market - along with related 'currency issues', would eventually hit the brick wall when the federal deficit hits $22 trillion or so. At the current rate, we'll be there some time around 2017/18. Certainly, it will be before the end of this decade.
Being from this side of the great Atlantic Ocean, I can only imagine what the republican voters must now be feeling. They have been totally sold out, mere weeks after voting them back in.
As many have noted over the years, its all a one-party game anyway. I can only imagine the laughter behind the scenes between Obama and Boehner.
Congratulations America...and especially to all those who voted republican.
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sp'daily5
sp'weekly
So long as the market can hold over sp'1430 - as at end of this week, we remain in a very strong up trend, with open air to the mid-September FOMC high of sp'1474.
A red index close seems near impossible. It is far less likely than yesterday where we saw early afternoon weakness, only to conclude in a major ramp into the close.
back later
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*I'm keeping this post up for another hour..or two. I'll add updates though..
UPDATE 12.50pm No sign of this madness stopping, we just keep on going...
Hourly charts looking horrifically overbought, but this is merely day'1 of a breakout, and lets be clear, it could just keep on going, its ALL empty air until 1474.
A severe case of Christmas hysteria might be unfolding.
After all, 2 trillion of 'cuts' over the next 10 years, that will solve the deficit spending, right?
GOLD update...
Looks like the Gold bugs are going to also be as disgusted with today, as much as the bears are...
Considering the indexes, I don''t blame them. Prime target remains GLD 158, so, a further $43 to go in this cycle.