Debt Limit talks stall is time runs short to avert U.S default. There was no sign that President Joe Biden and house Speaker Kevin McCarthy had spoken since their meeting at the White House This most recent Monday A new round of discussions between their hand-picked negotiators on Tuesday ended with the two sides deadlocked over an eventual agreement to raise the federal borrowing limit. House Republicans escalated their accusations that Biden lacked urgency in negotiations while a democratic aide called McCarthy unwilling to compromise across a wide spectrum of disputed points, threatening the legislative proposal of a deal. If a default does occur, Economists project it could throw the U.S into recession with widespread job losses and other Economic Consequences spilling into the coming election year.

I Don't think anyone's surprised by that. But what I do want to talk about with all of you is this concept of when the debt limit negotiations come to an end, compromises are made, We figure it all out and we kick the can down the road. Do you think the Market's going to go up or do you think it's going to go down at first? Your knee-jerk reaction might be. well, yeah, of course we're going to go up.

That's good news. We're taking an uncertainty out of the market and we don't have to worry about the US defaulting. That's a fair thought. But if you go back to the last time that there was like major major issues with the debt ceiling, you're going to be talking about 2011.

in 2011, there was a momentary Pop please fact check me on this one I Believe it lasted for about two days. After that, the market actually continued to set up And part of the reason and this is definitely multifaceted. But part of the reason is in the compromise: there were spending cuts. Yeah, that helps on one thing such as inflation, which we all want to come down.

but inherently, there's less money in the system. Now, remember when we were all locked inside and our economy was arguably not good, the stock market ripped to a new all-time high Because there was so much money being pushed into the system via a process known as quantitative easing. And then all of a sudden and when things started to open back up, our stock market actually came down. Because we went from QE to QT quantitative tightening, we were taking money out of the system.

So right here. Yeah, when you do government spending cuts, that definitely definitely definitely helps with spending. But in terms of the stock market, it's literally less money. It's less spending.

So obviously that was the last major one. and I think it's just food for thought and I would love to get your thoughts. Let me know in a comment: I'm here to talk about it with all of you. You can be like, well, hang on man.

I Was looking at it and like, yeah, 2011 was the last major fight, but then what happened in 2013. in 2013, it wasn't as confrontational if you will, but also in those ones. When they negotiated and it was solved, then the market actually did pop. So we do have some conflicting data.

I would argue that 2011 is much more similar to our current situation than 2013. But even with that, when you're comparing all the three, there's clear nuances. So for example, in 2011, the unemployment rate was double triple 2.5 x where we are right now. so it's not perfectly comparing Apples to Apples.

So I I just wanted to throw that out there and just give you something to maybe mull over and just understand that as soon as it is announced or it isn't announced, that's a pretty clear bearish play. But if they do come to some sort of resolution, which I wholeheartedly believe, that doesn't necessarily mean we should be like degenerately yoloing into calls because history tells us a little bit of a different story. Maybe it's not as such a slam dunk play as you would think it is. But anyway, with all that being said, would love to get your thoughts.

would love to chat about it because we do have a little bit of extra time this morning. So where's everyone else at on that? I Wanted to share some facts Politico Did a really good write-up on it. so where are you cool cats and kittens on that? If it is resolved, there's a really good chance it involves heavy spending cuts. Heavy spending cuts.

Not so good for the stock market, but it is good for an inflation. So as I was alluding to before when we were starting this, like the complexity here of everything interconnected that I actually find it to be really, really interesting, but I want to know where you guys are?.