Rock. GOP. Hard place.

It's no longer just Boehner or another benighted Republican.  The whole party has put itself in the position of losing the good faith of its two most notable support groups:  business and the tea partyers.  You've notice that; I've noticed it; and Greg Sargent sets the scene with President Obama entering, stage left.

How long will the major GOP-aligned interest groups, particularly business groups, stick with the Republican Party, if Republican tax monomania, and intransigence on the debt ceiling, threaten to tank the economy?

Barack Obama, in his interview today with Bloomberg, tried to exploit the business community’s apparent discomfort with Republicans when it comes to the debt limit. He noted that Republican efforts to crash the economy every time it is reached is hardly good for business. ...Greg Sargent, WaPo

We don't know yet (we probably will, pretty soon) whether markets will express their lack of confidence if we get into the New Year with no deficit deal.  And it goes beyond the deal.  Here's Obama:

Another thing that CEOs have mentioned is making sure that if we do get a deal done now, that we don’t have another crisis two or three months from now because of the debt ceiling, what we went through back in 2011. You know, the U.S. Chamber of Commerce, which is hardly an arm of my administration or the Democratic Party, I think said the other day, we can’t be going through another debt ceiling crisis like we did in 2011. That has to be dealt with. ...Greg Sargent, WaPo

Republicans are facing a choice.  Boehner faces it in his particular workplace, but all Republicans on the Hill and beyond are facing it every day.  The votes of the raucous caucus, or continued backing of members of the American business community?

Comments

[Susan Jeffries]

The only surprising thing here is that it took this long for the fissure in the Republican party to be recognized as a chasm.

[rapier]

If there is no deal at all then expect the markets to explode, up, in the short to medium term. The reason is that the sudden increase in revenue which will show up in tax witholdings the first week and the quick and steady decrease in spending will lower Treasury borrowing needs right away. Back of the envelope numbers show that Treasury borrowing should drop about $50 billion a month. That means $50 a month will have find a home other than Treasury paper and that means stock, or other non Treasury bonds or commodities are likely to catch bids.

With the Fed continuing QE Treasury purchases an outright shortage of Treasury paper is likely so new record low rates are too. So if, big if the cliff is jumped, expect a possible powerful blow off rally in the financial markets.

[PW]

Are you my broker, Rapier?