Bond Market Closed; Obama Warns of Catastrophe, Calls Meetings with Congressional Leaders; Likely Result is More Spending
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Bond markets are closed today but the likely reaction to all this talk of catastrophe would be the same big yawn as before.
And one has to wonder how many times the stock market can rally on the same non-news that meetings are underway.
The BBC reports President Obama to meet with Congressional leaders on debt limit.
US President Barack Obama and Vice-President Joe Biden are scheduled to meet congressional leaders from both parties as the deadline to raise the nation's debt limit nears.Real Irony
The bipartisan meeting will include leaders from both the House of Representatives and the Senate. Officials warn of economic calamity should the US default on its debt.
Expected to attend are Senate Democratic Majority Leader Harry Reid, Senate Republican Leader Mitch McConnell, Republican House Speaker John Boehner and House Democratic Minority Leader Nancy Pelosi.
Weekend negotiations between US congressional leaders failed to reach a breakthrough to raise the nation's debt limit ahead of Thursday's deadline.
Negotiations between Republican and Democrat Senate leaders continued on Sunday, with both sides reportedly awaiting the Monday opening of US financial markets to reassess their negotiating positions.
On Monday, Republican Senator Bob Corker said the Democrats were demanding too much.
"For about 48 hours now, the Democrats have overreached by wanting to spend more, unbelievably", he said in an interview with NBC's Today show.
If Boehner put the damn thing to a vote right now, there would be no increase in spending.
It is the Republicans who want to increase the deficit by dropping the medical device transaction tax. And it is Republicans who want to soften the cutbacks in the increase in military spending. Notice that I said "cutbacks in the increase", not cutbacks.
Likely Result is More Spending
After all this bitching and moaning about the deficit, here's the likely "compromise": leaders of both parties will sit down and pass a spending bill that increases spending now while pushing hypothetical cuts further into the future.
Mike "Mish" Shedlock