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« Baffled by Demand Destruction? | Main | Weighing the Week Ahead: Any Bottom in Housing? »

May 12, 2011


Angel Martin

Jeff, I also wanted to add, if there is a short term period where the Treasury can't meet all it's obligations and has to delay payment (and perhaps do some asset sales) what would you expect the stock, corporates, foreign exchange and treasury markets to do?


Angel Martin

Jeff, I agree with you that eventually the Republicans will cave and the debt ceiling will be raised. But I think there is a significant probability of a wreck before that, and current Intrade prices seem to agree.

One point you made that I don't agree with, in my view the Republicans will never agree to any tax increases.


Jeff - Thanks for catching the slip on "tax cuts."

Sorry you did not like the article. It is important to stick to what can be actually be predicted, and that is what I do. My forecasts, however modest you find them to be, differ significantly from what we hear every day on the news. While your list of questions is interesting for those of us closely following the issue, I don't think the answers have much investment significance. By contrast, the conclusion that despite the political brinksmanship there will be a resolution is something the investor can use.

For you and other readers who have this all figured out on your own, I congratulate you. Since I get regular questions on this topic, I know that many others are not so confident.

Thanks for joining in.



I can empathize with what SE Fest is feeling about your article. This article is not up to your usual standards.

What do you mean by "with some combination of tax cuts and spending"? Did you really mean to say tax increases and spending cuts?

Predicting a debt limit increase is slam dunk obvious. Your predictions are wishy washy.
And your article doesn't even address the most interesting questions:
1. When will the debt limit be raised?: next week?, by end of May, June, July, or August?
2. By how much will the debt limit be raised?
3. Approximately how much in spending cuts will be included with the debt limit raise?
4. Appoximately how much in tax increases will be included with the debt limit raise?

Address these somewhat difficult and interesting questions, and then answer them correctly. Then you will deserve some credit for political insight.


Heh heh --

As I said, it is difficult to do analysis without drawing mindless bozos who have a political viewpoint.

I welcome disagreement and discussion, but this anonymous troll needs to bring some game before we can even consider the comment.


SE Fest

Your grammar and your analysis are equally horrible... What should we do? Buy the dip when the rhetoric rattles markets? Very insightful.

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