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Tuesday, October 25, 2016

Washington (AFP) – The United States was still facing a potentially devastating sovereign debt default after senators failed to agree on terms to reopen the federal government and raise the country’s borrowing limit.

Republicans and Democrats — at war over the country’s finances for more than two weeks — tried to shed a positive light Sunday on a weekend of talks that despite the threat of global economic censure produced no solution.

The Senate convened a rare Sunday session to try and break the budgetary impasse that prompted the government to shut down on October 1, a move that has since damaged domestic confidence and undermined America’s reputation as the world’s leading economic superpower.

If the U.S. debt ceiling is not raised by October 17, the Treasury would run out of money and could begin defaulting on its obligations for the first time in history.

Seeking to avert that scenario, Democratic Senate leader Harry Reid spoke with the top Senate Republican, Mitch McConnell, though nothing concrete was disclosed.

“I’m optimistic about the prospect for a positive conclusion,” Reid said.

Bank of France Governor Christian Noyer on Monday warned of dire consequences if there was no solution.

A default would be “a thunderbolt on the financial markets” that would set off “extremely violent and profound turbulence worldwide,” he told the daily Le Figaro.

In Asia, markets were down in part over the deadlocked talks.

Oil prices also edged lower in Asian trade, with West Texas Intermediate for delivery in November, down 29 cents at $101.73 in afternoon trade, and Brent North Sea crude for November down 17 cents to $111.11.

And the dollar slipped in Singapore afternoon trade to 98.27 yen from 98.59 yen in New York late Friday. Japanese markets are closed for a public holiday.

“So far, markets have not panicked because both parties have come out to reassure that they are working towards a compromise after every failed vote, keeping alive hopes for a last-minute deal,” Singapore-based DBS Bank said in a note.

U.S. Treasury Secretary Jacob Lew earlier told the International Monetary Fund’s policy steering committee that Washington understood its reputation as a safe harbor was at risk.

Stock markets are already factoring in a possible default if no deal is reached between President Barack Obama, his Democratic Party and rival Republicans by Thursday night.

Polls released since the shutdown show Congress’s approval rating at record lows, with Republicans taking most of the blame.

Both parties in recent days indicated a deal must be reached at all cost despite the bitter rancor.

“This is something that’s wreaking havoc around the world and will affect economic growth, and I do hope that over the next week we’ll reach a conclusion and I think we will,” Republican Senator Bob Corker told Fox News Sunday.

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Copyright 2013 The National Memo
  • docb

    1/3 of the repub party ..the BAGGERS..ARE ATTEMPTING TO DESTROY THE NATION..No deals with the bagger terrorists…Cut them off at the knees now…No more jomac cruz lies and deceit and destruction.

    Rubbish needs to be taken out to the trash heap.

  • alboy5

    Tyrannical Obama should be impeached and Obamacare should be aborted, before Obama reaches into everybodys pants and forcibly removes his tribute.

    • AMADAL

      You are one fornicating idiot

    • Independent1

      Been drinking Faux News Koolaid I see!! Obama is a tyrannical – really?? I don’t think it’s Obama who is trying to get his way via extortion. It’s not Obama that’s saying: Either give me my way or I’ll trash the country because you won’t let me ILLEGALLY DESTROY a law that was fully enacted by Congress and signed by the President and then confirmed by the Supreme Court. Sorrry clueless, but it’s the GOP terrorists that are doing basically what the Somalia Pirates love to do – Either fork over 5 million bucks or we’ll destroy this ship with all the passenters on it!! That’s basically what the GOP was saying when it passed the idiot Continuing Resolution with the destroying of Obamacare ringer on it!!!!!! Wake UP!! The GOP is willing to damage the country just so they can GET THEIR WAY!!!!

    • highpckts

      Impeached for what idiot?? Trying to do his job with both arms tied behind his back because of the T party? The only impeachable offense I see is the House refusing to work with him when they swore to uphold this Nation, not drag it through the dirt!!

  • Always remember: The Republicans and their conservative allies in the Heritage Foundation, Club for Growth, and FreedomWorks planned this shutdown for months and months. (Heritage’s Michael Needham admits as much.) That’s why Eric Cantor rigged it so he or his designee would be the only House members that could introduce a CR to reopen the government.

    This is a #GOPshutdown and it will be a #GOPdefault leading to a worldwide #GOPcrash unless Eric Cantor’s rich buddies make him pull back from the brink.

    • Todd Nelson

      It takes at least 6 months to get anything procured through the federal government. The signs shutting down the federal parks and memorials were up within 5 hours of the shutdown. You tell me Harry Reid and Barack Hussein Obama didn’t have this planned. The house of representatives enacted spending bills to pay for all government expenditures except Obamacare, as is their choice, and responsibility, under the constitution. Harry Reid and the democrats in the senate chose not to pass said legislation. This makes Harry Reid and the democrats in the senate responsible for the shut down. This is not a new tactic by the house. It even has a name, given to it by Tip O’Neil. it is called “legislation by appropriation”, where an unpopular law is strangled by lack of funding. The democrats have been doing the same thing for over 50 years

      • Paul Bass

        Yea Todd, you go ahead and believe Reid and Obama are responsible for the shutdown.

        Too bad all the polls (including the conservative Wall Street Journal) blame the shutdown on the republicans….

      • awakenaustin

        There is simply no end to the silly crap you guys will believe.

      • omgamike

        Every agency knew the shutdown was coming in advance of its actual happening. The President told every agency to be prepared for a shutdown. This had to be done so agencies could decide who was essential and who was not. The national parks and memorials, though important, are not ‘essential’ — so they were shut down. The House didn’t pass any appropriations until they realized that people were raising a real ruckus over it. So, first a few right wing nuts showed up at the memorials, making sure that tv cameras were on them, and then screamed at how unfair it was for the President to shut these memorials down. And not all of the government appropriations were passed by the House — just the politically sensitive ones. They shut down the government in an effort to defund the ACA. But they knew, in advance, that that wasn’t going to work. It would never pass the Senate, and even if, by some miracle, it did, the President would veto it. And it would have been impossible to get a 2/3 majority of both houses needed to override the President’s veto. Those nut jobs are just saying whatever they feel is necessary to stir up all the low information voters. You need to watch something other than Fox news, my friend. Start fact checking what the wingers are trying to tell you.

      • charleo1

        If you want someone to tell you President Obama, and Leader Reid
        didn’t plan the government shutdown. Here you go! You’ve now been
        told. I guess you missed the little T-Party affair in front of the White
        House. “Cut it or shut it!” They were chanting. Michelle Bachmann
        and Marsha Blackmon, were just on Fox News, saying how as they
        hadn’t seen their caucus so energized, and happy. With Blackburn
        offering, I think this is great! It’ll show people just how much of the
        Federal Government they can get along just fine without! Fox News
        refuses to call it a shut down. Because they know how pissed the
        American public is over a shutdown. So, they’re calling it a, “slim
        down.” When was the last time Fox News tried to cover Obama’s
        ass for something he did, the Right Wingers didn’t agree with?
        Never! So they also know, as most of the public knows.
        It’s the T-Party, again!

      • highpckts

        The GOP has had this fiasco planned since last Spring! Check your news sources!!

  • JDavidS

    Boehner, who can only be described as weak and ineffectual, can’t rein in the Tea Clowns… fools who have no clue about economics, and insist on barreling full speed ahead, oblivious to the impending economic chaos lying just around the corner. A chaos of their making. They claim that their goal is to save America money, yet in their stupidity, they’re costing the American taxpayer billions with their myopic vision. Their agenda isn’t about America…it’s about them and their 1% masters.

  • charleo1

    We still have, even after Wall Street reforms, a mostly unregulated, non- transparent investment market. Remember credit default swaps? Yes, they are still around. And there is an estimated 8 trillion dollars of these insurance policies, issued on a wide variety of investments. Although no one knows the total for sure. In 2008 it was these credit default swaps that threatened to bring down global insurance giant, AGI. The first among others to receive the too big to fail designation. Entitling it to
    several hundred billion dollars of taxpayer money from the Federal Govn’t.
    The best way to think about these instruments is they hedge aganist loss. The
    riskier the investment, the more it costs to insure it. They are sold on the U.S.
    debt as well. And since the U.S. before the T-Party extremists, was considered
    the safest place in the world, for the world to park it’s money. The interest rates
    we paid others for the privilege of using their money, was, and continues to be
    the cheapest anywhere in the World. But, the T-Party threatens to end all of that.
    In fact, previous to 2011, to buy a default swap on the T-Bill, brokers needed to
    arbitrarily assign a risk factor. As risk on monies backed by the U.S. Govern’t
    had a risk factor of zero. The thing about these, “swaps,” this insurance is, the
    Federal Govern’t need not actually default, before one’s hedge aganist it makes
    a profit. It only must appear the risk of such an event has increased. Now, if you
    were a billionaire investor, and had bought your swaps at .005% to cover your 10
    billion dollars in U.S. Govn’t backed securities. And a reporter asks John Boehner,
    “Would you actually allow a default, if you can’t reach agreement with the Democrats?” And his reply was, “That’s where we’re headed.” Your investment in
    credit default swaps, may have just increased by a factor of five. And if you sell,
    you just made a ton of money.

    • I think you might know this, charlio. I thought Obama could order that the debt ceiling be raised, and that default is not allowed anyway. But I can see why both sides want the public to believe otherwise and ‘blame’ the other side for something that does not have to happen. Please could you send me a large bag of credit swaps, and I will pay if I can.

      • Allan Richardson

        The problem with the President taking that course is that its legality has never been ruled on by the Supreme Court. Considering the attitude the extreme Republicans have, someone will start a lawsuit (“I should not have gotten my SS check because the government exceeded its debt limit”) which will take years to go through the court system, and in the meantime investors will not want to invest in T-bills because they are afraid they MAY be later ruled void. And the Republicans would also be likely to impeach him for taking an action that Congress did not specifically approve, and impeachment is much faster than the courts. This is what happened to Andrew Johnson (they passed a law over his veto to stop him from firing a cabinet member, Johnson did so anyway, contending the law was unconstitutional, but Congress impeached him and almost removed him from office WHILE THAT QUESTION WAS IN DOUBT). The President has been explaining for the past week that taking the “I think it’s Constitutional anyway” approach would cause even more chaos and economic upheaval than the default itself.

        • I greatly appreciate your explanation,but it seems to be the case that governance can be hindered seriously by politicians intent on obstruction rather than opposition. Confusion is a good weapon against democracy – perhaps it serves both parties equally.

      • charleo1

        Sure! I’ll mail some out right away! No, I don’t really see this as
        political theater. I’m a Liberal, but I would have to think a better
        economic picture would be far more helpful to a Party that holds
        the White House. Than, to simply blame the GOP for practicing
        an unethical, and extortion based type of politics. As you say,
        some including former President Clinton have expressed their
        opinion, that raising the debt limit is a power granted under the
        14th Amendment. Which also might be interpreted as making
        default illegal. However, there are opinions to the contrary.
        Concerns about settling government debt, especially as it
        effects servicing the debt itself, by largely unsettled law, would
        tend to cloud, the process. This opinion by the way, is from
        the financial sector itself. Which would absolutely rather this
        topic be put to rest, and never be visited again.

        • Thank you charlio. There are some persuasive arguments against the economic picture ever recovering it’s old charm – the cheap oil phase of development being all but over, and everyone being in denial as to why – or what it means.

  • jeffromac23

    So what is the Republicans willing to give up for these concessions they are demanding, nothing but reopening the government they shut down and to raise the debt ceiling and that is not giving up anything it is just doing their job. They we’d to just shut up and do their jobs and it is as simple as that.

  • tax payer

    What did the Food Stamp recipient say to the other Food Stamp recipient about the shutdown? Who cares ( as long ) as we continue to eat free.

    • highpckts

      You know so much! Are you one of them??

      • tax payer

        I know more than enough because when I see two Obese Slobs pushing a shopping cart each I know they aren’t going to pay for the food they are putting inside the carts. I Judge the Book by the Obese Cover. If I was one of them I would be defending them, so does that answer your question?

        • highpckts

          So you judge by looks? Intelligent!! Woudn’t expect anything else from you!!

          • tax payer

            If I see two skinny people pushing one cart with two or three bags of food I know they pay cash for their food, so yes I can Judge by Looks.

          • AustinBamBam

            I’ve bet you’ve made a fool of yourself plenty of times judging people by their looks.

          • Robert Morris

            You stupid troll. Go back to your room at Habbo Hotel.

    • You should learn what brackets are for, even if you want to write stupid posts.