Wednesday, December 5, 2012

THE LEADER SPEAKS

Buoyant in his belief that the prize is almost firmly in his grasp, The Leader was tougher than ever in his remarks concerning the "fiscal cliff" this morning.  Whilst everyone expected a reprise of, "no hirer tax rates for the rich (to be defined), no deal," The Leader added a new requirement: the debt ceiling limitation had to be taken off the table.  For the Republicans to agree to that would amount to complete capitulation and it would appear that this is the prize which Mr. Obama seeks: the destruction of the Republican opposition for a considerable period of time.  I know, I promised never to engage in political rhetoric but when the financial and the political become so interlinked one must, despite all good intentions slip bravely into the swamp.  As an aside, The Suit confirmed The Leader's intentions this afternoon in an interview on CNBC.

Many have said that the definition of a good negotiation is one in which neither side is entirely happy.  Perhaps.  But more importantly, the definition of a good negotiator is one who, knowing he holds all the cards, leaves something on the table for the next time.  In the next 26 days we shall find out just how good is The Leader.  If he holds to this line, it is over the cliff we go I fear and then what happens is any one's guess.

From afar, it must certainly look as though we have all collectively--or separately--lost our minds and I further suspect that The Leader, having somehow attained the moral high ground over the past four years appears to be the eventual winner.  As a football coach once said, "It is what it is..." but the cause for concern has been made immeasurably higher I feel as if it is truly capitulation that is the goal it may be unattainable even under the best the Speaker of the House can do because he just may not have the votes to deliver a signed surrender document.  With that in mind, over the cliff we go and frankly, one has to ask one's self, "Self, do I want to be part of this game any longer?" At that point the sheer exhaustion and disinterest on the part of natural purchasers of Treasury obligations coupled with a complete lack of understanding as to what the game now is could result in an attitude in the face of the next auction of, "I just may sit this one out."  The absent(s) will be noticed; the slip in coverage ratio will be noticed; interest rates will move upward and the next big sound will be the talking heads trying to figure out what a rise of 50 b.p. across a $16 trillion bundle of debt might mean to the economy.  These things have a way of feeding upon one another.  Somebody will buy it but by that time the damage will have already been done.  I think Krugman has done his job; he has convinced the administration that the Market will always be there for the United States so additional spending is not a problem.  He may be right--probably is--but at what cost, immediate and future?  I don't know; sadder yet, neither does he.

Over there, the Dutch Auction continues apace with report terrific results for the Greeks (as predicted I might add)  which of course in the great scheme of things is meaningless.

The ministers are too-ing and fro-ing as to how Europe is to be run and in particular the banking system which is a lovely thing to do before the Christmas break for there is no chance anything will get done and therefore no chance of postponing festivities to meet some silly deadline.

At this stage, Trouble and Strife has spent thousands on gifts for the Grandchildren and I have to go out and get new health insurance because of Obamacare.  From this vantage point the world is completely buggered with the sole exception that apparently God still makes whiskey.  Speaking of which...

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