Riehl World View - Perhaps the most annoying statement in this Politico item about Wall Street pressuring Boehner on the debt limit is the last sentence from my excerpt: "Many executives on Wall Street believe Washington is playing an enormously dangerous game with what is typically a non-controversial vote."
Were it you, or me, or a private business, this would equate to any real estate holdings being under-water, having no money in the bank with any credit cards maxed out. Not only would a decision to take on more debt be difficult, or controversial, assuming you even could, one might just as easily conclude it's time to pay the piper and stop digging such a huge hole.
But, as with TARP, the Stimulus and everything else we've seen, they are going to roll out the "too big to fail" argument and ram this through. Obviously, the groundwork is being done for it, so be prepared. We may yet find out nothing is too big to fail when the whole mess comes tumbling down around a bunch of politicians who will manage to not feel much of a financial pinch themselves if it does. Yet, they are the same people who caused this through their irresponsible actions in the name of power and politics over the years.
Republicans are growing increasingly concerned about the impact a bruising fight over raising the nation’s $14.29 trillion debt ceiling could have on U.S. financial markets.
House Speaker John Boehner (R-Ohio) has had conversations with top Wall Street executives, asking how close Congress could push to the debt limit deadline without sending interests rates soaring and causing stock prices to go lower, people familiar with the matter said. Boehner spokesman Michael Steel said Tuesday night that he was not aware of any such conversations.
Treasury could then implement emergency measures to continuing making interest payments on existing debut until around July 8. After that, the U.S. risks going into default, an unthinkable idea to many economists and market participants who say such an event could drive scores of large banks into failure, send interest rates skyrocketing as foreign investors abandon U.S. securities and crush the already slow-going economic recovery.
Republicans and even some fiscally conservative Democrats want to use the debt limit fight as leverage to wring more significant spending cuts out of the White House. Politicians of all stripes are worried about how independents will react to a vote — or multiple stop-gap votes — to raise the debt ceiling. Many executives on Wall Street believe Washington is playing an enormously dangerous game with what is typically a non-controversial vote.