You've probably noticed the "Defcon" style lights on the right sidebar of the Ticker if you've been on today, and the similar light bar on the forum this evening.
The current configuration is:
That's "3" that's lit.
Why did I put this up? Because I fully expect our government to be dumb enough to fail to deal with the deficit for the simple reason that doing so is going to force recognition of the hidden damage that they've been covering up for the last three years with all the deficit spending!
As such I fully expect the condition of our fiscal and financial house to deteriorate, until "2" and then finally "1" is lit. There is also one level worse than "1" that is already present in the table. History says that when governments refuse to deal with these matters on an honest and forward basis, eventually the "worse than 1" happens. We "practiced" the "worse than one" scenario when I was a school child, albeit for only a year or two.
I still remember it and it sucked.
Should I see meaningful progress toward dealing with our budget, tax and banking systems, I will move the indicator to "4". Should we actually address these issues the indicator would move to "5".
I don't expect to see either "4" or "5" lit, but I'd like to be pleasantly surprised.
"4" is not "$100 billion" in cuts, nor is it Rep. Ryan's BS game that he is trying to run and which the CBO says would produce more debt rather than less.
To get "4" to light up I need to see a credible plan with immediate execution that takes no less than 1/3rd of the deficit off this year, another third next year, and whatever is left the final year, plus no less than $300 billion in surplus to start paying down the debt. No games, no gimmicks, no BS or there's no light movement.
Doing the right thing will result in recognition of the rot in our economy that we've been trying to hide, and for this reason I expect the trajectory on the TickerCon indicator to be southbound. Somewhere around "2" or "1", the markets will "break" in an unmistakable fashion, and this time the Fed will not be able to stop it with their QE games.
Here are the time limits (such as they are) and the readiness standards that apply to Tickercon. Please note that Tickercon is US-centric although it may be of use to others.
Where We Are, Where We're Heading (2013) - The annual 2013 Ticker
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