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Surprise! Huge US Budget Surplus Shatters Record

Papa bull said:
It didn't have any positive impact on the markets at all.
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It is the type of news that, upon its release, should not impact equity markets at all. The stronger economic growth necessary to move markets was priced in months ago. What should be observable is the impact on the Treasury market, which have caused U.S. Government bond prices to increase.
 
Papa bull said:
All except that there's no "paying it down". What it's like is ALWAYS spending more than you take in but celebrating because your overspending isn't quite as bad as the record overspending you've been doing for the last 4 years.
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True...but I'm not going to answer for Republican actions in early 2000 and their idea to "give back" money via tax decreases rather than work on lowering the total national debt. I didn't vote for those guys.
 
Kushinator said:
It is the type of news that, upon its release, should not impact equity markets at all.
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That's correct. It shouldn't because it's not an economic indicator and it's not economic news and it's not anything but fuzzy math and calling money that we are borrowing "a surplus" just because we didn't spend as much borrowed money as we planned to spend (thanks to the sequester!). No, the markets weren't impressed, but the markets aren't partisan hacks, so I wouldn't have expected them to be giddy over propaganda.
 
Papa bull said:
That's correct. It shouldn't because it's not an economic indicator and it's not economic news and it's not anything but fuzzy math and calling money that we are borrowing "a surplus" just because we didn't spend as much borrowed money as we planned to spend (thanks to the sequester!). No, the markets weren't impressed, but the markets aren't partisan hacks, so I wouldn't have expected them to be giddy over propaganda.
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How is someone with such a limited understanding of finance arguing so aggressively? You think you would take your lumps and just move on....

It won't impact equity markets because..... the news is not earnings-centric. Meaning, U.S. publicly listed companies will not, i repeat, will not reap the types of economic benefits your ideology vehemently believe in; lower deficits create income (where as in fact, it is the other way around).

Look at bond bond prices. They have increased, which of course makes all the sense in the world if you were a bond trader and the supply of deficit orientated treasury issuance was looking to fall in considerable fashion.
 
iliveonramen said:
True...but I'm not going to answer for Republican actions in early 2000 and their idea to "give back" money via tax decreases rather than work on lowering the total national debt. I didn't vote for those guys.
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Remember the saying "it's the economy, Stupid"? The economy was in a recession and the reduction in taxes was the stimulus that got us through the recession... funny how lefties understand what stimulus is for now that they've got an Obama recession. But all that aside, the bottom line is that the government needs to stop overspending. If you constantly spend more than your revenue, you will end up so hopelessly buried in debt that you go bankrupt and that's a very bad thing to have happen, as we're seeing in Europe.
 
Papa bull said:
Remember the saying "it's the economy, Stupid"? The economy was in a recession and the reduction in taxes was the stimulus that got us through the recession...
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It was a mild recession. A lowering of interest rates was all that was needed. Massive tax cuts, low interest rates, and deregulation mentality on Wall Street was a recipe for disaster.
 
Papa bull said:
Remember the saying "it's the economy, Stupid"? The economy was in a recession and the reduction in taxes was the stimulus that got us through the recession... funny how lefties understand what stimulus is for now that they've got an Obama recession. But all that aside, the bottom line is that the government needs to stop overspending. If you constantly spend more than your revenue, you will end up so hopelessly buried in debt that you go bankrupt and that's a very bad thing to have happen, as we're seeing in Europe.
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There's nothing wrong with tax relief in the short term. Like payroll tax cuts made that lasted 2 years.

The Bush tax cuts were passed for 10 years....that's not a stimulus that's long term policy. Not to mention a payroll tax focuses on lower income individuals. The Bush tax cuts are debatable as stimulus because of the increase in the top marginal income tax rates. In a hurting economy it's hard for me to believe that the problem is individuals making over 250,000 in income or individuals with capital gains are the one's that are being squeezed.
 
iliveonramen said:
The Bush tax cuts were passed for 10 years....that's not a stimulus that's long term policy.
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The problem is, tax cuts lose their stimulative characteristics if they are viewed as temporary.


Not to mention a payroll tax focuses on lower income individuals. The Bush tax cuts are debatable as stimulus because of the increase in the top marginal income tax rates. In a hurting economy it's hard for me to believe that the problem is individuals making over 250,000 in income or individuals with capital gains are the one's that are being squeezed.
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Agreed!
 
Kushinator said:
How is someone with such a limited understanding of finance arguing so aggressively? You think you would take your lumps and just move on....

It won't impact equity markets because..... the news is not earnings-centric.
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Bullschitt. It doesn't impact equity markets because it doesn't tell anyone anything about the economy. If unemployment goes down, the equity markets react. If there's a sign that the economy in China is slowing, the equity markets react. If consumer confidence gives the market a sign that the economy is strengthening, the markets react. ANY sign that the economy is strengthening makes the market tick upward. The fact that NOTHING is happening attests to the fact that, as economic news, this "record budget surplus" non-news event is NOT an economic indicator of any sort. It doesn't tell us anything about the economy at all. That's why equity markets weren't affected by this "surprise record budget surplus". It's a big fat zero in terms of information; that's why.

But you can pretend it's "economic news" if you want. It's your credibility. Piss it away if you want.
 
Papa bull said:
But you can pretend it's "economic news" if you want. It's your credibility. Piss it away if you want.
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Your credibility was in the process of being pissed away the second you continued to peddle your partisan nonsense.

Why did it impact credit markets? If you cannot explain this, you have no business discussing such topics with anyone.
 
Kushinator said:
Your credibility was in the process of being pissed away the second you continued to peddle your partisan nonsense.

Why did it impact credit markets? If you cannot explain this, you have no business discussing such topics with anyone.
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Your question assumes a fact not in evidence. This "huge surprise budget surplus" isn't driving credit markets, either. That's because IT'S NOT REAL ECONOMIC NEWS. You get it yet? It doesn't tell us ANYTHING about the state of the economy. Damn. Just accept reality and move on.
 
radcen said:
Yes, it was... though he tried to disavow it later on.
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Politics.... him and everyone else involved will try to take credit for it when it might be a political advantage and will try to distance themselves from it when it's not.
 
Fenton said:
WOW....

No what hurt us in 2012 was Cons stayed home.

The voting rights act was FILLIBUSTERED by the Democrats in 1964 and the latest decision by SCOTUS was long over due.

Hillary, the person so incompetent she couldn't defend a New American Embassy in a ever increasing terrorist ridden Benghazi.

Hillary, so lacking of a fundamental moral core she would lie to the face of the Father who lost his Son in Benghazi. " We'll arrest the man who made that video ".

The first time she opens here shrill lieing mouth she'll lose supporters.

The womans issue ? The " War on Women " ? A false narrative drummed up by Democrats for idiots easily suscepatble to attitudes and empty charges and low information voters.

I hope they run Hillary, and I hope she wins because once Obama's done with this economy it won't be salvagable.

The next President needs to be of the same corrupt ideology that got us where were at right now.
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I think we went over this a thousand times but I'll nibble a little. Before the civil rights movement, the south use to run blue. Have you ever ask yourself why it is so red now? I let you do the research on that.

Now to your other points. I'm gonna be like a conservative/ tea party citizen for a second. If the government comes into my life and tells me what to do, then I am going to take that as a act of war against my rights as American, therefore crying about taking my country back (Hence the slogan "Don't tread on me").

So as a conservative, please explain to me the difference between your rights and the rights of a pregnant mom making a decision about their body. I don't want to hear about your religious beliefs because that is your religous rights. I want to know what is the difference between your rights not being taken away by government vs a pregnant woman's rights taken away by government.


This is the problem I have with conservatism. You only want government to mandate people's rights on conservative issues. Freedom doesn't work that way.

Also, If you honestly believe that the economy is worse than it was in 2009. Then you are not a logical thinker, you are a emotional thinker. The housing market is a lot better today, the stock market has been insane. Granted it is not where it should be. And that is not just Obama's fault. You can include the house and the senate as well to that list as well. Boehner is the worst speaker ever and that is not just my opinion. The president is powerless if the the congress and senate can not get their s*** together.
 
Papa bull said:
Your question assumes a fact not in evidence. This "huge surprise budget surplus" isn't driving credit markets, either. That's because IT'S NOT REAL ECONOMIC NEWS. You get it yet? It doesn't tell us ANYTHING about the state of the economy. Damn. Just accept reality and move on.
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Again, why did credit markets move higher following the release last night? If you lack the analytic skills necessary to answer the question, just admit it. At the very least, keep quiet.
 
Kushinator said:
Again, why did credit markets move higher following the release last night? If you lack the analytic skills necessary to answer the question, just admit it. At the very least, keep quiet.
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Credit markets have moved higher based on Bernanke's comments about tapering off QE3. If you want to present a positive cause/effect relationship between this non-news and the credit markets movement, go ahead and show me the spike that coincided with the release of this "news". Good luck with that.
 
So, let's see... we had a surplus in June. I recall that we also had one in April.

What happened in May?

Strange... I don't recall any big news releases touting what happened in May.
 
Papa bull said:
Credit markets have moved higher based on Bernanke's comments about tapering off QE3.
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He made similar comments before, and credit markets fell to their lowest levels since 2011.

If deficit originated Treasury issuance declines, while credit easing policy is held constant, inflation must increase to ensure an increase in interest rates. Now.... It looks like Treasury issuance is surely going to decline, likely by more than 50%. Which means, interest rates must decline in order to ensure $45 billion in new securities is purchased each month.

Is it clear??? Supply down... Purchases constant... Inflation Constant... Bond price up...

The economic growth necessary to increase real interest rates is the only way, as long as the relationship above holds, for the nominal interest rate of Treasuries to increase.

Hopefully this clears things up....
 
Kushinator said:
The problem is, tax cuts lose their stimulative characteristics if they are viewed as temporary.




Agreed!
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The thing tax cuts can stimulate is spending and so increase demand. So why do they need to be long term?
 
iguanaman said:
The thing tax cuts can stimulate is spending and so increase demand. So why do they need to be long term?
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Because empirical evidence suggests temporary tax cuts will not stimulate spending on an indebted economy. They will go towards debt reduction.
 
poweRob said:
Tax revenues increased. That worked. Sequestration's contribution is to a lower extent. As Tech said, a lot of it was Fannie Mae contribution.
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Tax revenues only went up $85B for the year, nice try.
 
Kushinator said:
Because empirical evidence suggests temporary tax cuts will not stimulate spending on an indebted economy. They will go towards debt reduction.
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Debt reduction means banks getting their money back. Which means banks will loan more money out, which stimulates the economy.
 
blaxshep said:
I seriously doubt that.
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That is actually based on classical economic doctrine. ;) We can observe the empirical implications using the Bush Tax Rebate programs as an example.
 
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