If you’d like a little adjunct to this, read the following:
Here’s an excerpt: (This is from a Q & A session with Red State)
Congressman Kirk spoke for a few minutes - but his discourse was focused on an account of a fascinating learning-experience that he recently had.
Noting that the new budget comes with a $2 trillion borrowing requirement, he decided to try to dive down into the depths of finding the actual mechanisms by which this borrowing is done.
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He actually went down there in person (kudos, Congressman!!) to visit a sale of debt - in which he witnessed the sale of $34 billion in debt in about 15 minutes.
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Now for a really scary part. He asked the traders what would happen (mechanically) if a U.S. debt auction should fail (to get “cover”) and have to be canceled. Apparently, this would lead to an instant crisis, since these auctions are followed by the financial media. The number mentioned was that an auction failure would be a news item in about 90 seconds - or as he put it, MSNBC would be reporting it before the President had even heard what had happened.
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There is quite a bit more. I highly recommend reading it.
Over my lifetime I have had an uncanny political sense. I’m not always right and try to guard myself from paranoia :)
But, listening to CNBC today, as this unfolded I had this weird sense that the talking head response was contrived. Like someone put out the word to put a positive spin on this development. “The market loves this, blah, blah, blah.” This step by the FED could have huge negative consequences in confidence, IMHO.