Super Committee Fails. Markets to fall?

[Small Biz Owner]

The congressional "super committee" fails to reach agreement on a deficit
reduction plan.
www.cnn.com/2011/11/21/politics/super-committee/index.html

Which means 7.9 Billion a month no longer going into our economy. Because there are no more extended unemployment benefits after Dec 2011.

Defaults and reduced consumer spending to follow.

You ain't seen nothing yet.

[Small Biz Owner]

Unemployed Americans have collected $319 billion in jobless benefits

Lawmakers must act by Nov. 30 or two million people will start losing extended benefits next month

Soaring unemployment has drained the state accounts that typically fund jobless benefits, forcing many states to borrow money from the federal government to cover their payouts. Currently, 31 states have $41 billion in loans outstanding.

Employers are responsible for replenishing these accounts and paying back the loans so their taxes are expected to skyrocket to $64 billion in 2015, up from $38 billion last year

Some 8.5 million people are collecting unemployment insurance, including 4.8 million receiving federal benefits.

Market declines?

You ain't seen nothing yet.

[wyouser]

Is it the end of the world if they cant reach an agreement? The cuts dont kick in until 2013 and they are spread over the following ten years. Would it be so bad to debate it out till the next election and maybe get some kind of mandate from the voter and then address the whole thing with maybe a "new" Congress and a "new" president?? Thoughts??

[wyouser]

This somewhat "tired" taxpayer is a bit gunshy about 11th hour deals rushed through without readin that come with inevitable uninteded consequences.

[jarhead1976]

The Super fraud committed on the good people of this country, to me is treasonable. New president, New congress. New way to make money anything but worthless. QE3 coming to a bank near you soon. These MFer"s are killing us so slow its almost hard to notice.

[dumdeedoe]

Ok here is a question. How can our economy not have a 15-20% pull back over the next 3-5 years?

I mean if Greece blew up at 144% debt/gnp ratio and Italy blew up at 120% And we are currently at 104% and adding roughly 15% a year to the debt. It gives us a 2-4 year window before we blow up.
I know the fed wants us to grow out of it but with a 600 billion a year trade deficit ( 5% gnp a year ) how can we?

The road to getting under control is to get spending under control that will take 1.5 trillion a year out of the economy. And since the money is being borrowed (created out of thin air) it has to be taken out in jobs and business.

[reasonfreedom]

I was really never shocked about the committee not working. I think it was just another stall technique and a make me look good move by the President( anybody else as president would have done the whole stall\ look at the pretty light technique anyway). I think they keep on kicking the can down the road and at the same time spending more money. I am not sure if they passed the approval for the fannie\freddie money, but I am sure they will keep up the income tax credit. Look at the FHA loans that they just increased to above 700k? That blew my mind, why in the heck would FHA need to approve a loan of 700K for a house. Maybe if people can afford a 400k house they don't need a 700k one and yet they continue not to give out FHA loans for a 50k house because of stupid stipulations( I know the latter from personal experience).

[Small Biz Owner]

I was really never shocked about the committee not working.

It was not just a committee, it was a SUPER Committe.
You know, with super powers, like Superman?

Maybe the failure was that they needed to call it the Extra Special Super Duper Committee?

Next, if nothing changes, Federal extended unemployment benefits run out.

Unemployment Extension Update: 11/22/11: Congress has recessed for Thanksgiving, so there will be no action on unemployment extension legislation until they return on November 28, at the earliest. Federal extended unemployment benefits are set to expire on December 31, 2011


Then, the payroll taxes go back up.

Payroll taxes were cut from 6.2 percent to 4.2 percent at the start of this year. The cuts are set to expire in the beginning of 2012.

This would be very, very bad for the economy. Since taxes would go up without any compensating increase in government spending, the end of the payroll tax cut would erase billions from the economy

Both of these actions reduce the ability of consumers discretionary spending in 2012.

Markets to fall? If nothing is done....

You ain't seen nothing yet.

[Deleted]

Europe is killing us!

Can we just throw those Eurotrash out and pretend they don't exist?

[Small Biz Owner]

What, exactly, are we going to be seeing?

Kool. Matches my avitar colors exactly.

[Small Biz Owner]

How low do you think the DOW will go? How long do you think it will stay there?

Below 10,000. How long? Can't tell. Depends if more government stimulus will push it back up sooner, or later.

[Small Biz Owner]

But, we have already "seen" the DOW go below 10,000 not that long ago. You said we "ain't seen nothing yet".

I was being optimistic and conservative.

Without government intervention. DOW below 5,000. No recovery over 10,000 for at least 5 years.

We never exited the recession. We are still in it. Only government stimulus gave Wall Street and the economy these temporary positive numbers.

[Deleted]

Calling Virgil - Want to tell me again that the markets already priced in the Super Committee failure? This is what, 900 point drop since announcement of the failure? Ugly Week.

[Small Biz Owner]

What kinds of things are you doing to prepare?

I have reduced my stock exposure from 20% of net worth to about 5%. Loaded up on cash and silver. Invested in a few working interests in oil wells. Picked up another rental property. Started a side business, bidding on storage units and selling the contents.

Maybe I will put the kids to work next? Darn child labor laws may get in my way though.

[usaone]

Mostly Europe. Nobody expected much from the Super Committee.

[usaone]

Nov 23, 2011 12:32:34 GMT -5 Small Biz Owner said:

What kinds of things are you doing to prepare?

I have reduced my stock exposure from 20% of net worth to about 5%. Loaded up on cash and silver. Invested in a few working interests in oil wells. Picked up another rental property. Started a side business, bidding on storage units and selling the contents.

Maybe I will put the kids to work next? Darn child labor laws may get in my way though.

Hope you didnt buy silver when it was at $50.

[Small Biz Owner]

Hope you didnt buy silver when it was at $50.

Nope. All under $15.00 an ounce. I am still waiting for Gold to hit $2,000 though. Then it will be ready to short. Just like Apple.

[hvfpaints]

I still think the Supercommittee did what it was tasked to do - delay.

[Small Biz Owner]

I still think the Supercommittee did what it was tasked to do - delay.

They could have done that without all the time wasted, and taxpayer expense.

Super Committee. Their mission: to seek out strange new elements from the distant galaxy called Compromise that would lower the long-term deficit.

They returned from that mission on Monday at least $1.5 million deeper in debt with nothing to show for their efforts.

www.thefiscaltimes.com/Articles/2011/11/21/SuperCom-Does-Squat-Adds-1-Point-5-Million-to-Deficit.aspx#page1