Democracy Gone Astray

Democracy, being a human construct, needs to be thought of as directionality rather than an object. As such, to understand it requires not so much a description of existing structures and/or other related phenomena but a declaration of intentionality.
This blog aims at creating labeled lists of published infringements of such intentionality, of points in time where democracy strays from its intended directionality. In addition to outright infringements, this blog also collects important contemporary information and/or discussions that impact our socio-political landscape.

All the posts here were published in the electronic media – main-stream as well as fringe, and maintain links to the original texts.

[NOTE: Due to changes I haven't caught on time in the blogging software, all of the 'Original Article' links were nullified between September 11, 2012 and December 11, 2012. My apologies.]

Monday, October 07, 2013

Banks Stockpile Cash For Government Default They Say Won't Happen

Banks are totally not worried about the U.S. government defaulting, sparking a nightmarish financial panic. Yes, they're stocking extra cash in ATMs to satisfy cash-hungry zombie hordes. But they're sure they won't need it!

Bank executives are adding 20 to 30 percent more cash to their ATMs and re-reading their dog-eared copies of What To Expect When You're Expecting A Financial Shitstorm, according to the New York Times and the Financial Times.

"To guard against possible mayhem from a debt ceiling crisis, some of the nation’s largest banks are deploying plans that were developed in 2011 — when the government first looked as if it were on the verge of surpassing its debt ceiling limits," write the NYT's Susanne Craig and Jessica Silver-Greenberg.

This is all just in case House Republicans pull the trigger on the gun they're holding to the head of the U.S. economy by refusing to raise the federal government's borrowing limit, or debt ceiling. That could cause the government to default on its debts, triggering a crisis that would be like 2008 all over again.

At the same time, these banks are telling their clients they think there is a "zero percent" chance of such a crisis happening. Bank strategists and economists all remember the last time we came close to disaster, in August 2011, and politicians managed to pull out a deal at the last minute that time. So of course they expect the same thing to happen again. After all, past performance is a gold-plated guarantee of future results, right?

Wall Street generally seems to share this attitude. The stock market has drifted lower a bit in the past few weeks, with the Dow Jones Industrial Average down about 4 percent. But the selling has been mostly calm. On Friday, in fact, the Dow was up a smidgen, about 13 points. Bond yields were slightly higher, the opposite of what you would expect in a panic.

But there are small signs that Wall Street doesn't exactly see a "zero percent" chance of a crisis: The interest rate on 30-day Treasury bills on Thursday turned higher than the interest rate on one-year T-bills, a freakish occurrence that suggests investors are dumping very short-term Treasury debt, just in case the government can't pay it back.

Original Article
Source: huffingtonpost.com
Author: Mark Gongloff

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