Saturday, September 28, 2013

Lowdown on the Countdown to the Showdown

With government shutdown Armageddon only days away, is the stock market  freaking out? Will brokers be jumping out of windows if the contrived debt ceiling isn't raised? Well, apparently not. Fear is only for the little people. The Market is cool, calm, and collected.... and collecting, extracting, counting and hoarding.

Despite the crisis atmosphere whipped up by the concentrated ownership media conglomerates, those in power, those with all the wealth, those in the know, are apparently not panicking -- either over a looming government shutdown if Congress fails to pass  a CR by Tuesday (continuing resolution to keep the bureaucracy humming)  or later next month, when its failure to pay the nation's bills would breach the imaginary debt ceiling.

Pay the Damned Bills and Let Me Outta Here!

That is because The Market (whom, we have been led to believe, is a living, breathing entity not controlled by mere greedy humans) fully expects the two right wings of the Money Party to come together in the usual series of last minute negotiations. The plutocrats have seen this movie before. It always ends well for them. They expect to make a ton of money by the time all the manufactured dust has settled. The more it comes right down to the wire, the more profitable it will be for them. It's how disaster capitalism always works. Create a crisis, cash in while the freak-out is in full throttle, and the stunned populace will never know what hit them. All they will know is that the crisis has been averted and the world has been saved.

In the event of a government shutdown this week, the Bureau of Labor Statistics will not be able to issue its Friday jobs numbers, the abysmal nature of which usually causes a slide in the market. Therefore, what can't be told will not endanger the bottom lines of the investor class. Our ignorance is their bliss.From Reuters:
In a second explosive Washington cliffhanger, Congress must agree to increase the $16.7 trillion limit on federal borrowing, which the administration says will be reached by October 17. If Capitol Hill fails to act in time, the unthinkable could happen and the United States could default on its debts.
But even in the options market, which is often seen as the place to offset risk and make protective bets against a decline in the stock market, there is little or no volatility premium priced in for the debt ceiling debate.
A growing number of market participants are even viewing the battle in Washington as an opportunity to jump into equities.
"Every situation we've had like this over the past few years has been a buying opportunity. This is just another wrinkle, not a time to change your strategy," said Andres Garcia-Amaya, global market strategist at J.P. Morgan Funds in New York with $400 billion in assets under management.
During the federal government shutdown from December 15, 1995, to January 6, 1996, the S&P 500 added 0.1 percent. During the November 13 to November 19, 1995, shutdown, the benchmark index actually rose 1.3 percent, according to data by Jason Goepfert, president of
An unthinkable tragedy of epic proportions if we default on our debts and merely threaten to drown government in a bathtub is a tried-and-true buying opportunity for the chosen few. Welcome to the feudal states of America.

Meanwhile, the official story from the Paper of Record is that the House of Reprehensibles is meeting in one of those increasingly common "rare Saturday sessions" (the crisis atmosphere is immediately ramped up just thinking of the spectacle of politicians working on weekends. It seems like only six months ago that Congress was meeting in a whole series of rare weekend, middle-of-the-night sessions, the better to screw us as we slept unaware in our beds.)

And President Obama, in his all-too-common Saturday dose of pabulum, proclaimed that "the American people have worked too hard to recover from crisis to see extremists in their Congress cause another one.”

Huh? I was not aware that the American people had actually recovered from anything. Most of us are hardly working, through no fault of our own, thanks to the real crisis: a decades-long unraveling of the social safety net and government for the common good that culminated in an epic crash and burn and the opening of the most extreme wealth chasm in American history.  Even during the times of outright slavery, the income inequality was not as bad as it is now.


Here are reprints of my New York Times comments from yesterday and today. First, from Charles Blow's excellent piece on a Congress full of demented Ahabs stalking the whale of an Obamacare law:
Take a 2,000-page law that nobody's read, in large part because the average American reads about a book a year. Throw in ownership of 90% of all media outlets by six conglomerates. Add a coup d'etat by a minority faction owned by the Koch cabal, with its billionaire-bloated tentacles winding and squeezing their way around the Supreme Court to the halls of Congress, to the state houses, to K Street, cable, the hinterland, and beyond -- and you've got yourself one epic mess, a tragedy in its final act.
And yes, right along with the pathological greed of the plutocrats, racism in the Age of Obama has blown up like a tempest in a Tea Pot.
Those Koch-funded alien abduction probe ads seem to be doing the trick. Because, according to another poll, while 46% of Americans view Obamacare negatively, only 37% view the Affordable Care Act negatively. Another 30% had no opinion, because explaining things is not in the pollsters' job description. Nor is it the job of the media, according to NBC flack Chuck Todd. They aim to please their sponsors by mastering the script.
In a sane world, in a real democracy, our politicians would be hounded daily over the fact that the vast majority of us want Medicare for All.
Just think. The law that created the Canadian single payer health plan is all of 13 pages long. But that is way too complex, when the continued spin of the closed feedback loop -- wealth begetting power begetting wealth -- depends upon keeping us simple, stunned and quiet.
And from yesterday's editorial on the Republican Ransom Note, in which the unnamed writer warns against a possible Democratic cave to extortion:
Here's how Disaster Capitalism kabuki always works (unless the Tea Party crashes the party again.)
The GOP submits its usual laundry list of impossibly outrageous demands. The Democrats, rather than countering with demands of their own, such as a Robin Hood transaction tax on Wall Street trades, a living wage bill, lifting the contribution cap on Social Security taxes -- whine and complain and waffle. And then, phony disaster looming, they begin to capitulate, bit by teensy bit. Because they're the adults in the room. Also because the plutocrats of Fix the Debt are back in town, clamoring for Social Security and Medicare cuts.
Republicans want to slash $40 billion from SNAP? The Senate, bless their little adult hearts, already agreed to "snip" $4 billion, on top of the planned expiration of the increase in the program that was put into effect under the 2009 stimulus package and that nobody even dreamed of renewing. And the Dems are willing to cut even more. They haven't a clue or a care about the millions of people who might miss a few meals because of their grand bipartisan horse-trading.
As Gore Vidal observed, this country boasts one political party with two right wings. And we're drifting ever closer to the bipartisan-manufactured, plutocrat-approved point of no return from de facto feudalism.
It could be avoided if the president did his constitutional duty and invoked the 14th Amendment, simply ordering the government to pay the bills.
And finally, my comment on Paul Krugman's Plutocrats Feeling Persecuted:

If the malignant rich had as many brains as they do dollars, they'd know better than to whine and complain. The magnates have become magnets -- for the seething anger of the great unwashed masses.
They feel compelled to rub our noses in it, with their insatiable need to criminalize poor people every bit as compelling as their endless craving for yet another financial fix. The extraction of rents, the extraction of 350 times the income of the average worker is not enough, nor is their reaping of 90% of all the gains since the collapse that they themselves instigated. 
The thing about this new breed of plutocratic class warriors is that they ain't got no class.
Take the Extell Corp. of NYC, income disparity capital of the world. Developers (big political donors) wanted to get some special state subsidies for themselves, and tax deductions for the purchasers of luxury condos in their new high-rise. So, they grudgingly agreed to include some affordable apartments in the same building. The tenants, who already pay regressive tax rates on their own labor in order to fund the rich, are thus double-dipped through their rent payments. Oh -- and they must use their own special back door to get in. Plus, they're barred from using the pool and the full-sized basketball court.
Economic apartheid is now the de facto policy of the feudal states of America. We are subsidizing our own serfdom and perpetuating our own inequality, just so that the rich may be quantitatively eased.


James F Traynor said...

The oligarchs will not allow a refusal to pay on the debt; it would imperil the dollar's position as the ultimate global currency. On the other hand, it is a wonderful rationale for allowing the Democrats, under this phony threat, to 'under extreme duress and the national interest' cut Medicare and Social Security. The bastards are so transparent and yet they continue to get away with it. I'm actually beginning to think the Democrats are the bigger menace of the two right wings.

Zee said...


You've given an entirely credible, one-sentence analysis as to why the debt-ceiling will be increased, no matter what else comes down the 'pike:

"The oligarchs will not allow a refusal to pay on the debt; it would imperil the dollar's position as the ultimate global currency." --James F. Traynor


Also, I applaud your avoidance of a "comma splice" in your
post: All glory, laud and honor to the under-appreciated semi-colon.

Will's "rap-video lesson"--which was hilarious--must have paid off.

(Not that I had found you particularly guilty of "comma-splicing" in the past.)

Meredith said... your post on the Extell 12th floor window directly overlooks their huge construction project in the West 60s by the Hudson. I look down on the digging and foundation laying every day. I listen to the beeps of those machines. It's rather fascinating actually. But my entire view will be slowly obscured while I listen to the noise of huge condos going up. I'll just go outside to watch the sunsets! I'll keep an eye out on how many entrances they build, and perhaps I can notice class differences of the residents. Interesting sociologically, huh?

Karen Garcia said...


You have my sympathy. I'd ask you to send pics, but am afraid the Goldman Sachs/Stasi security cameras would catch you in the act and get you swept up by the NSA dragnet. Upon further review, that ship has already sailed!

Valerie Long Tweedie said...

Do Americans even get themselves worked up about the faux debt ceiling crisis any more than they believe in CIA secret information about our "enemies" as a justification for preemptive war? Hasn't the Federal Government played this hand once too often? Is there anyone who still believes there is a difference between the two parties? It is, as you described, the same colluding players acting out the same play over and over again. When are the American people going to catch on?


Will said...

Nice to hear from you again, Valerie. :)

When will the American people catch on? Honestly, I don't believe our masters really care one way or another if we do. The infrastructure to crush any meaningful dissent is already firmly in place. The dystopian future we're so fearful of is right around the corner.

Think I've been reading a little too much Hedges lately? Perhaps. Let's try a little experiment. See if you can get through his column today and still have any hope for humanity. I certainly couldn't.