Establishment GOP, throws in towel? "A sign of weakness!"

Editor’s Note – The ‘Establishment’ GOP throws in the towel without even putting up a fight? Does the ‘Ol’ Guard’, establishment GOP,  represent “We the People” or even those that put them into their offices?

The Senate GOP Plan to Surrender Debt Control to Obama

By Mike Flynn – Breitbart News

Senate Republicans, led by Majority Leader, Mitch McConnell, (R-KY), are reportedly planning legislation allowing President Barack Obama to lift the nation’s debt ceiling on his authority, according to sources on Capitol Hill.

Under the potential Senate Republican plan, Congress would merely retain the right to “disapprove” of the President’s action to lift the nation’s debt limit. But disapproving the action would require a hard-to-reach two-thirds vote of both chambers of Congress.

Senate Minority Leader Mitch McConnell, R-Ky, gestures during a news conference on Capitol Hill in Washington, Tuesday, Sept. 23, 2008, regarding the financial crisis. (AP Photo/Charles Dharapak)
Senate Minority Leader Mitch McConnell, R-Ky (AP Photo/Charles Dharapak)

Political observers may recognize this move. It is similar to the Corker-Cardin legislation that allowed Obama to agree to the nuclear deal with Iran. The Corker legislation simply allowed Congress to disapprove the action, albeit with a vote threshold that was almost impossible to attain.

It conveniently allowed the Iran deal to come into force while enabling Republicans to vote against the treaty in everything but name.

Adopting the Corker framework for the debt ceiling does two things important to Sen. McConnell. It would allow the nation’s debt ceiling to increase, empowering the Treasury Department to continue borrowing funds.

It would also allow most Republicans to cast symbolic votes against lifting the debt ceiling. They could then campaign saying they were against raising the debt ceiling in the upcoming elections next Fall.

It’s a plan only a politician in Washington could love. It also goes a long way to explain the visceral disgust most voters feel towards Washington. On a more fundamental level, it explains the existential crisis gripping the Republican party.

The debt ceiling limits the amount of debt the federal government can accumulate, and is now set at $18,100 billion.

The federal government is borrowing additional funds for the expected 2016 budget, so it will hit that limit sometime after Nov. 3. Unless raised again, the ceiling would bar additional borrowing, and would force politically painful cuts in annual federal spending.

The Republican party in Washington is basically in the business of hiring hit-men, to ensure it has a solid alibi when a crime is committed.

The operational strategy of the Republican party now is to avoid any protracted political fight with Obama or the Democrats and hope to gain marginal political advantage in the next election. It presumably is working for a day when it control all levers of government by such a margin that it can enact its platform with zero political risk.

In the coming weeks, while most of the political world is consumed with the battle to replace

Rep. John Boehner (R-OH) as House Speaker, the Congressional calendar is chocked-full of measures that the Washington establishment thinks must be passed. A new spending bill must be authorized by early December.

The Treasury Department says the debt ceiling must be lifted in early November to avoid a potential default on the nation’s debt. There is a “need” to shore-up the Highway Trust Fund and a desperate push by corporate donors to reestablish the Export-Import Bank.

The pending Senate plan to give Obama the power to lift the debt ceiling is preview of how Republicans plan to navigate these waters. They would rather cede Congressional authority over the purse to Obama than have a debate or fight.

If Senate Republicans go through with a Corker-type bill granting Obama the power to lift the debt ceiling, as seems likely, it raises the question not only of why we have Republicans, but why we have a Senate.

IMF Warning – China banking unexamined, financial implosion?

Editor’s Note – Fiat, margin calls, puts, options, bubbles, portfolios, mortgage backed, toxic assets, and derivatives are all terms spoken hourly since 2008 when the globe began to feel the financial implosion. Never before has any international banking cartel examined China, but that moment has finally occurred.

The IMF is sounding the alarm and this is a cause for concern beyond description. Who in China has been paying attention to their balance sheets and manipulating loans, bonds and trade? Seems experts were too afraid to ask. Ladies and Gentlemen, this could be the most sobering news we are about to witness yet and you can bet here in America, the media will not report it, the Feds will down play it, and the White House will claim plausible deniability, or say its above their pay grade. Check that buckle on your seat belt.

IMF sounds warning for Chinese banking system

China’s banks face ‘steady build-up of financial sector vulnerabilities’, according to IMF report

By Alan Hawkes

The Guardian – UK

A rise in off-balance sheet liabilities and a house-price boom have left Chinese banks vulnerable to heavy losses, the International Monetary Fund (IMF) has said.

In a wide-ranging report into the Chinese financial system, the IMF said that China is facing a “steady build-up of financial sector vulnerabilities”.

“The system is becoming more complex and inter-linkages between markets, institutions, and across international borders are growing. In addition, informal credit markets, conglomerate structures, and off-balance sheet activities are on the rise,” it warned on Tuesday.

The government’s role in allocating credit, as well as broader economic policy, is leading to a build-up in contingent liabilities, the IMF added, although it said it was difficult to quantify the risks given the paucity of data.

Stress tests on the country’s 17 largest banks showed they were resilient to one-off shocks: “If several of these risks were to occur at the same time, however, the banking system could be severely impacted,” the IMF has said

The review is the first time the IMF has reviewed the Chinese banking system. It recommends that the Chinese government intervenes less to keep down the value of the yuan, uses interest rates rather than administrative limits to control credit demand, and allow banks to make commercial decisions on lending.

“Banks’ large exposures to state-owned enterprises, guaranteed margins provided by interest rate regulations, still limited ability and willingness to differentiate loan rates, coupled with the implicit guidance on the pace and direction of new lending, undermine development of effective credit risk management in the banks. It is important that banks have the tools and incentives to make lending decisions based upon purely commercial goals.”

In response to the report, the People’s Bank of China (PBC), the country’s central bank, said: “While the assessment in the reports is, overall, objective and positive, and the recommendations on the future reforms are constructive, a few points are not sufficiently well-rounded or objective, and the timeframe and suggested priorities of some proposed reform measures need to be further analysed.”

In particular, the PBC said China had already moved away from administrative quotas on credit and towards an interest-rate based monetary policy.

China’s breakneck growth has created huge opportunities for investment. But many warn of the significant risks attached, too. Veteran UK fund manager Anthony Bolton, of Fidelity, said on Monday he was employing five different corporate investigation firms to check up on Chinese investment targets after a disastrous year in which the value of some of his fund’s assets have slumped on the suspicion of fraud.