Treasury Secretary Jack Lew says the US debt ceiling limit will be reached on November 3 (http://www.reuters.com/article/2015/10/15/us-usa-fiscal-treasury-idUSKCN0S91MR20151015). The several news sources detail the usual woe if Treasury can't pay its bills. We've been through this before; a deal averted the shutdown at the last minute. The last debt ceiling fight probably contributed to House Speaker John Boehner''s recent decision to step down. Given the rancor in Congress these days, even within parties, the overhanging question of whither the Fed rate decision, and the noise of the Presidental political campaign, the combination of these external forces seems to portend more difficulty than usual in coming to an debt ceiling agreement. The government agencies go through gyrations, but what happens to the markets? How do you think the markets will react leading up to November 3? If there is a shutdown what can expect from the markets and from the Fed facing both domestic and global economy pressures? What investing strategies can we take to protect ourselves while the White House and Congress do battle?
I'm guessing that a shutdown (if there is one) wouldn't have much effect on the markets. Most of these things don't seem to.
Well, as a pessimist, i would take a grim view on a business as usual resolution. This is something which will affect the next generations. OTOH, a shut down of just days would show the rest of the world how instable and fragile U.S. finances are. The emperor is naked! Personally, I'd prefer to get it over with and stop the window dressing and start economising. There will never be a good time to slash budgets.
Hs0zfe, the executive and legislative branches will do battle and those affected will whine. My question is, given the factors I mentioned above, what if anything can we investors in the markets do to protect ourselves or make some money in the markets? JR suggests not much effect. The political posturing of the factions within each party in Congress may make for amusing theater, but gives me pause.
History has shown both the sabre-rattling and any shut-down would have no impact on the market overall. Obviously certain companies could be effected more than others, but I think overall Wall Street doesn´t much care anymore. That said, I dont´think there will be much of a conflict this time, the deal will get done.
Well this will go exactly as it has gone before. "ohh we are reaching the debt limit, better raise it higher!" That is the only thing that has happened, and that is the only thing that will happen this time too. All the talk and debate and blaablaa is just that... politicians talking BS.
