Obamacare

Presented with little comment aside to note that perhaps the House should rename the amendments they propose to "defund" in order to gain a more popular position among the citizenry?

"Obamacare is a disaster," is the jumping-off point for David Stockman's latest tirade against the "greatest expansion to the welfare state in the last 80 years," that was rammed through congress on a totally partisan vote. In this brief Bloomberg TV clip, Stockman "understands why the Republicans are willing to hold up government if they have to," as there is growing intensity of partisanship and resentment that can only bode ill for debt ceiling discussions... "The Republicans have to take a stand."

Update: And another quick rejection: CARNEY SAYS PIECEMEAL APPROACH TO FUNDING GOVT ‘NOT SERIOUS’

If the president was hoping to shame the Republicans into caving and passing a clean Continuing Resolution, by constantly blaming them about the broader government shutdown, he will have to shift his strategy. Moments ago Reuters and other wire services report, citing Republican Peter King, that House Republicans plan to pass three funding bills today to reopen Federal Parks, veteran programs and fund for the District of Columbia. In other words, little by little, the GOP will provide funding for everything... except Obamacare, which they will keep as a trump card up their sleeve until the debt ceiling negotiation comes to a head some time in the next week.

If there is one day the Fed's trading desk actually did want futures lower, if only for purely optical purposes and to at least suggest that the government, and not the Fed, is still in charge of the US, it is the day when the US government - for the first time in 17 years - has shut down. They certainly did not want the S&P to be up nearly 0.5% mere hours after Congress and the presidency confirmed to the world that in a world in which "the Chairman gets to work", a functioning government is completely irrelevant. Yet this is precisely what is going on. What is making matters worse is that on the other side of the world, Japan also finally announced the well-telegraphed sales tax increase to8%, offset by a JPY5 trillion yen "stimulus" which however Japan said, much to the Chagrin of Mrs. Watanabe and a 100 pip overnight plunge in the USDJPY, would be funded not with more new bond issuance (and thus without new "wealth effect" generating monetization). It is unclear just how it will be funded but since increasingly more global fiscal and monetary policy is based on science fiction we know better than to ask.

It's 12:01am, do you know where your government is?

*WHITE HOUSE BUDGET OFFICE DIRECTS AGENCIES TO BEGIN SHUTDOWN

*U.S. GOVERNMENT SHUTS DOWN FOR FIRST TIME IN 17 YEARS

The last government shutdown lasted 21 days, from December 1996 to January 1997, and cost the administration of US President Bill Clinton cost an estimated $2 billion, according to the White House’s Office of Management and Budget.

S&P Futures are 1677, 10Y yield 2.65%, WTI $101.96, Gold $1329.00 - let's see where we open tomorrow...

Full White House Statement below... and 10 ways the government shutdown could hurt America

As almost everyone expected, the House just passed the stop-gap bill, with its individual mandate delaying amendment, which was also the third Continuing Resolution passed by the House, in a 228 to 201 vote. Surprisingly 12 Republicans voted Nay and 9 Democrats voted Aye. Off it goes now to the Senate. But, the moment it broke on the wires, Harry Reid has his response:

• *SENATE MAJORITY LEADER REID SAID SENATE WON'T PASS HOUSE PLAN
• *SENATOR REID SAYS HOUSE REPUBICANS WANT TO SHUT DOWN GOVERNMENT

So it looks like we are heading to a government shutdown tonight (and for now the S&P does not care one little bit).

With just over 4 hours left until the government shutdown deadline, following the earlier tabling of the previous bill passed by the House which delayed Obamacare by one year, the House has resumed debates on the Continuing Resolution, which as reported earlier will likely include a one-year delay in the individual mandate, and a measure eliminating some of the benefits that members of Congress and certain members of the executive branch would receive under the ACA.

There is a considerable amount of debate in alternative economic circles as to whether a federal government shutdown would be a “good thing” or a “bad thing”. Sadly, a government shutdown is sizable threat to the American financial system, and few people seem to get it.  Perhaps because the expectation is that any shutdown would only be a short term concern.  And, this assumption might be correct.  But, if a shutdown takes place, and, if “gridlock” continues for an extended period of time, We have little doubt that the U.S economy will experience renewed crisis.  Here's why...

The USA is turning into a sorry state of affairs. But, it only has itself to blame. The successive governments for the past decades have done nothing but increase the debt ceiling in the country.

With 54 voting Aye (and 46 against), the Senate has enough votes to kill the house proposal to delay Obamacare and send it back to the House. What happens next, only Vince Gilligan knows.

Last week Obama was unwilling to negotiate on the two key issues in the current government pre-shutdown debacle: Obamacare and the debt ceiling. Things seem to have changed quite quickly, now that the government shutdown is just 11 hours away.

• OBAMA SAYS EVERYONE MUST SIT DOWN AND NEGOTIATE IN GOOD FAITH, CAN'T HAVE TALKS UNDER RISK OF POTENTIAL U.S. DEBT DEFAULT
• OBAMA SAYS HE IS NOT RESIGNED TO A GOVERNMENT SHUTDOWN TAKING PLACE
• OBAMA SAYS U.S. DOLLAR IS RESERVE CURRENCY OF THE WORLD, "WE DON'T MESS WITH THAT
• OBAMA SAYS EXPECTS TO SPEAK TO CONGRESSIONAL LEADERS MONDAY, TUESDAY, WEDNESDAY

In other words, Obama blinked (for the n-th time in what has not been a good year for presidential leverage). And to think it took less than a 1% drop in the S&P (and a rather stubborn Republican party) to get "diplomacy" going...

BofA's breakdown: "The shutdown will likely add to the budget deficit. It is costly to stop and start programs. The 1995-96 shutdown directly added $1.4 bn to the deficit (about $2.5 bn in today’s dollars) Moreover, the shock to growth will undercut tax revenues. In addition, ironically it does not impact the implementation of Obamacare since it is an entitlement similar to Medicare. However, there is some chance it could delay US economic data releases: in 1996, the December employment report was delayed two weeks as a result of the shutdown then. The Federal Reserve and the Post Office, both of which do not depend on Congressional appropriations, will not see any cutbacks due to a shutdown."

"Listen to the American people," is the cry from House Speaker Boehner this morning as both side prepare to defend the decisions that this ping-pong lawmaking continues to point to. With government shutdown looking increasingly likely, Boehner prods the Senate that 'the people' "don't want a government shutdown and don't want Obamacare."

A full summary about the only event the market is focused on today.