How This All Shakes Out

Steve M. has a theory on the debt-o-rama endgame, and it's basically "this is only the beginning".  Ted Cruz will exact his pound of flesh by delaying a Senate vote into Thursday or Friday, and we have one of those "international economic whoopsie" things:

Somewhere in the period of Cruz's delay and the House GOP's threat to block the deal in that chamber, U.S. and global stock markets are going to go into free fall. These won't be irreversible plummets -- they'll just be a warning shot across Boehner's bow.

I think he'll respond then -- but I'm not sure. He's put his Speakership above all else so far. It may take more pressure from the business mainstream, either against Crazy Caucus members or on behalf of non-crazies. That kind of pressure seems slow in coming, but I think the prospect of default will concentrate minds.

So I think this will end -- for a few months. This is a short-term deal, after all. We'll be back in crisis again in a few months.

I'd like to think President Obama's demands that the hostage-taking stop, but the GOP is now fully vested in Obama Derangement Syndrome, so Steve is most likely correct.  There will be a "default" and Friday is going to be a miserable day for the markets, with the understanding that this will be "resolved" before Monday, one way or the other.

The practical upshot however is that barring a total meltdown by the GOP position, in January we'll most likely be right back at square one with the additional factor of more scheduled Pentagon sequestration cuts happening in the middle of the month.

Won't that be fun?