US government has shut down

Big A.D.

Big A.D.

Well-Known Member
Silver Stacker
http://www.smh.com.au/world/united-...as-congress-hits-dead-end-20131001-2upwq.html

The US government began a partial shutdown at midnight for the first time in 17 years, putting as many as 800,000 federal employees out of work, closing national parks and halting some government services after Congress failed to break a partisan deadlock.

No further negotiations were immediately planned, raising concerns among some lawmakers that the shutdown could bleed into a fight economists consider even more consequential: how to raise the nation's debt limit to avoid a first-ever default after October 17.

Chances of a last-minute deal - seen so often in past fiscal fights - evaporated shortly before midnight (2pm today, AEST) as the House stood firm on its call to delay major parts of President Barack Obama's health-care law for a year. Senate Democrats were equally firm in refusing.
Advertisement

As the US government sped toward shutdown, lawmakers lobbed dead-end proposals across the Capitol and began blaming each other for failing to come up with a way to fund the government.
Click to expand...

Well, this will be interesting...
 
I still can't tell if this is massive news or if they are just off looking for the can that is in the bushes somewhere before giving it a good boot again.
 
It's going to be just like the fiscal cliff. The shutdown will cause plenty of hype and worry, but in the last minute the government will save the day with a groundbreaking new deal ;)
 
http://www.forbes.com/sites/eamonnf...ask-chinas-permission-first/?partner=yahootix

In their never-say-die efforts to defeat Obamacare, Tea Party Republicans brought the federal government a giant step closer to shutdown last night. What they seem not to have considered is how America's foreign creditors will react.

Although China, Japan, and other major creditor nations have no dog in the Obamacare fight, they have a strong interest in preserving America's basic financial, economic, and social stability. From their point of view, the Tea Party contingent is not following the script and a corrective may be necessary.

If the creditor nations were to sell just a small proportion of their American assets, they could send Wall Street into a tailspin, with unpleasant implications for the net worth of many Republicans.

They are unlikely to push things that far but even if they were merely to slow the pace of their buying, bond yields would rocket and stocks could fall 15 percent in the space of a couple of weeks. A key thing here is that American asset valuations are at historic highs the Standard & Poor's 500 is on a P/E of 19 and long-term bond yields are still near their lowest in decades.

It is sometimes suggested that by triggering a sell-off, creditor nations would be cutting their own throats. Actually this is a characteristically myopic Western way of looking at things a view that completely misunderstands how things have changed now that East Asians call the tune. The creditor nations are long-term holders who are largely indifferent to short-term fluctuations.

As a general rule, East Asians hate drawing attention to themselves. But they are quite effective behind the scenes. One of the most important ways they wield influence is through major Wall Street investment banks, which by no coincidence are openly hostile to the Tea Party's latest gambit. Wall Street banks spend large amounts on political contributions, typically backing both Republicans and Democrats. Their money gives them plenty of face time to advise American elected representatives on "good economics," a term that more and more these days amounts to economics that serves East Asia's interests. Meanwhile American investors generally are short-term thinkers who rarely show much intestinal fortitude in riding out market downturns.

It remains to be seen how markets will react tomorrow but the betting is that, in the absence of a climbdown by Republicans, we will see a significant correction. And if Tea Party stalwarts continue to stick by their guns in the weeks ahead, we could see damage particularly in techs and other high P/E stocks. For the record, major tech stocks that seem most richly valued on a forward P/E basis include CRM, LNKD, CCI, FB, and ADBE. Although future prospects may justify such valuations, the short-term action could be quite bumpy certainly bumpy enough to frighten a lot of the Republican rank and file.
Click to expand...
 
petey said:
I still can't tell if this is massive news or if they are just off looking for the can that is in the bushes somewhere before giving it a good boot again.
Click to expand...
+1
 
... and if they come up with a deal, it will be all rainbows and unicorns again.

... until next time.
 
Meh, it's all theatrics for the government to gain more control somehow.
 
You just look at the US government and think how the hell do they run the biggest economy in the world like it's a game. There's always a debt ceiling or a budget or a fiscal cliff which leads to posturing and grand-standing to the last minute before there's a stop gap resolution and the cycle repeats. There would be better governments in impovished countries of Africa that wouldn't be this stupid to run a country like this. Most of countries don't wait until the last minute to pass a budget or lift a borrowing limit.
 
Caput Lupinum said:
You just look at the US government and think how the hell do they run the biggest economy in the world like it's a game. There's always a debt ceiling or a budget or a fiscal cliff which leads to posturing and grand-standing to the last minute before there's a stop gap resolution and the cycle repeats. There would be better governments in impovished countries of Africa that wouldn't be this stupid to run a country like this. Most of countries don't wait until the last minute to pass a budget or lift a borrowing limit.
Click to expand...


I disagree EVERY african government is seriously turtled up full of violence and deep curroption.-- waaaaaaaaayyyyyyy more so than this dysfunctional US government in every sense.
 
Court Jester said:
Caput Lupinum said:
You just look at the US government and think how the hell do they run the biggest economy in the world like it's a game. There's always a debt ceiling or a budget or a fiscal cliff which leads to posturing and grand-standing to the last minute before there's a stop gap resolution and the cycle repeats. There would be better governments in impovished countries of Africa that wouldn't be this stupid to run a country like this. Most of countries don't wait until the last minute to pass a budget or lift a borrowing limit.
Click to expand...


I disagree EVERY african government is seriously turtled up full of violence and deep curroption.-- waaaaaaaaayyyyyyy more so than this dysfunctional US government in every sense.
Click to expand...

Libya wasn't so bad before America tried to clean up yet another mess [mess being no central bank ...and a "dictatorial" leader (Qaddafi)'s fatal idea of an African currency backed by shiny yellow rocks]. :rolleyes:

Of course that ignores the US being equally turtled up full of violence (score 1 Russia re Syria) and deep corruption (I think the very forums roots explain that in enough detail).
 
You must log in or register to reply here.
Back
Top