Investors bet on a U.S. default
It is an attack on the governance and the constitutional order of the United States. Right on. But it should be recognized that this “attack on the governance and the constitutional order of the United States” — with Republicans using blackmail to extort powers that the American people have given, in recent elections, to the other major political party– is only the latest in what has virtually been a war against the constitutional order of the United States that has been waged from the right for more than a decade. So how far back does this right-wing war against the American democracy go? I don’t believe the chronicle need go all the way back to Nixon’s crimes in Watergate, which nonetheless struck a blow against the fundamental idea that we are a nation of laws and not of men. Nor would I include the transgressions of Reagan and Co. in the Iran Contra scandal (compounded subsequently by the pardons issued by Bush the First giving a free pass to those in the Reagan administration who’d been convicted of law-breaking), even though these events demonstrated a frightening willingness –that may have been an early symptom of the power grabs to come– to run roughshod over the law and the separation of powers. Perhaps the best place to begin the chronicle of this war on “the governance and constitutional order of the United States” is with the relentless effort by the Republicans, in the age of Gingrich, from the beginning of the Clinton presidency, to find a way to bring that president down, launching one bogus investigation after another until at last they found evidence of marital infidelity, which they proceeded to inflate into a “high crime and misdemeanor” they could use to impeach the President of the United States. Without doubt, however, the history of this war against the American democracy would focus hard on the presidency of George W. Bush. With enough impeachable offenses to fill a book –as several responsible observers demonstrated during that era with books like Elizabeth de la Vega’s UNITED STATES v.
That means an investor pays about 34 cents for every $100 of potential payout they would receive in the event of default. But it’s not quite that simple. First, these contracts are only available to institutional investors. Second, credit default swaps on U.S. debt are usually priced in euros, because if the United States defaults, who wants to be paid back in dollars? Third, there are far less lucrative payouts if other scenarios occur. For example, the government could elect to partially pay its debt. Even the definition of “default” is murky. What does it mean to default? The government will soon fall short on cash, and could face a debt ceiling crunch by the middle of October . The government expects to hit the debt ceiling by October 17 , and soon after could fall short on cash and be unable to pay all its bills. Let’s say the government fails to pay daily expenses like its employees’ wages, electric bills and Social Security checks.
Goodson, recall, was the starter alongside Omar Gonzalez as the United States clinched its spot earlier this month with the win over Mexico. Goodson may have slipped lately on the depth chart (blame young up-and-comer Anthony Brooks for that), but his steady night against El Tri reminded everyone that a tested, reliable veteran is great to have around. Word came Monday that Fabian Johnson has an ankle injury and may not be available for Hoffenheims match Saturday at Mainz 05. If Johnson does not play there, expect some reluctance from Hoffenheim to release their left-sided defender-midfielder for international duty. Landon Donovan (pictured below) was back on the field for the Galaxy on Sunday in Seattle, so he is likely to be on Klinsmanns list when the team gathers next week in Kansas City. But whether the Galaxy man will be at full-fitness (and therefor full effectiveness) is another matter. There is one other element potentially destructive to Klinsmanns plan: how will MLS teams feel about losing players for meaningless contests with significant implications in their one, league contests on the line? Think about Graham Zusi, Matt Besler, Landon Donovan, Eddie Johnson and Clint Dempsey, all locks to make the final 23-man roster for Brazil. If there isnt some push back from Sporting Kansas City, the LA Galaxy and Seattle, Ill be surprised. (Goodson, too, for that matter, as San Joses playoff chances remain in the balance, and the Earthquakes are sure to want their best bunch whenever possible.) There will still be plenty to work with in the U.S. camp. Jozy Altidore will likely relish some time away from the pit of despair that Sunderland has become. There will be mutual benefit of having Aron Johannsson, so fabulously in form at Alkmaar, in another U.S. camp, especially as the Icelandic American has been in so few sessions under Klinsmann so far. Thats just to name a couple.
United States shutdown solution no closer after crisis meeting
But after nearly 90 minutes in the Oval Office, both sides emerged with positions unchanged and the government heading into its third day of shutdown. The president reiterated one more time tonight that he will not negotiate, House Speaker John Boehner said as he emerged after a meeting that he said was little more than a nice conversation, a polite conversation. The only thing thats stopping it right now is that John Boehner has not been willing to say no to a faction of the Republican Party that are willing to burn the house down because of an obsession with my health care initiative, Obama said. The White House meeting also included House minority leader Nancy Pelosi, Senate minority leader Mitch McConnell, and Vice President Joe Biden. Even as 800,000 federal employees remained furloughed and government agencies were shuttered or crippled, the White House began turning its attention to the next battle: raising the debt ceiling. Treasury Secretary Jacob Lew has warned that the government will not be able to borrow more money unless the debt ceiling is raised by October 17. Administration officials and economists have warned failing to raise the ceiling would trigger a default on government debt that could lead to meltdown in debt markets and push the economy into another recession. When asked whether Wall Street should shrug off the stalemate in Washington, Obama told CNBC: I think this time is different. I think they should be concerned. Am I exasperated? Absolutely Im exasperated because this is entirely unnecessary, Obama said. I have bent over backwards to work with the Republican Party and have purposely kept my rhetoric down. Obama hosted 14 chief executives from top financial firms at the White House on Wednesday, who afterward issued dire warnings about the debt ceiling and called on Republicans not to use it as a bargaining chip. Theres a consensus that we shouldnt do anything that hurts this recovery, Lloyd Blankfein, chief executive of Goldman Sachs, said as he left the White House. You can relitigate these policy issues in a political forum, but we shouldnt use threats of causing the US to fail on its obligations to repay its debt as a cudgel. The business community frequently sides with Republicans and has fought some of Obamas health care and financial regulatory laws. But the White House has won support from business in the current fight, with groups such as the US Chamber of Commerce urging Republicans to drop their demands that the health care law be tied to funding the government. Corporate leaders have warned that a debt ceiling crisis could be a disaster. Theres precedent for a government shutdown, Blankfein said.