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T-Minus 15 Hours: The Complete Government Shutdown Summary
Presenting the full summary about the only event the market is focused on today.
MAIN POINTS:
Today sees the Senate reconvene after yesterday saw the Republican-led House voted in favour of a modified continuing resolution (CR) which includes a one-year delay to Obamacare (the Affordable Care Act). The Senate is not scheduled to meet until 1400ET today meaning that if the new bill is rejected there is not enough time to create a new CR and pass it back to the Senate before the midnight deadline, leading to a government shutdown in which all non-essential government workers will stay at home. Expectations are now that it is likely there will be a temporary shutdown given that the White House signalled the new CR would be vetoed by President Barack Obama and Democrats in the Senate immediately said the legislation approved by the House yesterday is unacceptable.
Even if there is a government shutdown, it is expected to only last a day or two and a CR is expected to pass in Congress this week, however this shutdown could lead to a delay of Friday's release of this month's Non-Farm Payroll report. This will fund the government to at least November 15th, giving more time for Congress to create a CR which extends through the entire 2014 fiscal year. Goldmans estimate a 2-day US govt shutdown will hit Q4 GDP (annualised) by 0.1 percentage points and one week by 0.3 percentage points, however the more important issue for Congress to address will be the debt ceiling as the US is expected to exhaust borrowing capacity on October 17th.
One main concern of a delay to both a 2014 budget and raising the debt ceiling is the possibility of a credit rating downgrade of the US sovereign, although overnight Moody's said that a government shutdown wouldn't affect debt service and that a debt cap failure would lead to perceived default risk and that failure to raise the debt limit is worse than a shutdown.
It is worth bearing in mind that several members of Congress are likely to speak to the press throughout today as they arrive for discussions and the Senate vote, and as is often the case, any deal between the Senate and House is likely to be either overnight or within the next two days. Although a US government shutdown is a risk event for financial markets, many analysts have noted this week's voting is overshadowed by debt ceiling negotiations which will begin shortly after. These talks will have a much greater impact on market sentiment as a delay to increasing borrowing capacity risks a US default as the worst case scenario.
EVENTS OVER THE WEEKEND:
- Shutdown seen as unavoidable without talks
- U.S. 4Q GDP seen reduced by as much as 1.4 percentage pts. depending on shutdown’s duration
- Latest House plan authorizes 10 wks of spending starting Oct.1 only if most provisions of Obama health law delayed a year
- Senate Democrats, President Obama say they will reject any measure that includes provisions tied to Obamacare
- Yday, Senate Majority leader Harry Reid D-Nev. says chamber has acted on Continuing Resolution, adjourns until today 2pm
- Govt shutdown odds now at 90%, Democrat Collender says
ECONOMY:
- In case of govt shutdown, Labor Dept says it will issue jobless claims data (scheduled Thursday 8:30am)
- SEC says EDGAR system, crucial enforcement will continue
- Treasury says it will operate debt programs and manage cash, USPTO says it will stay open “a few weeks”
- Commerce Dept says it won’t issue economic data
- Bearish impact on U.S. economy “significant” if shutdown lasts, Morgan Stanley says in note
- Shutdown means Fed will have to prolong QE: BNP Paribas
CONTRACTORS:
- "Notable" cos. tied to potential continuing resolution moves; H.J. Res. 59 would fund govt at “close to current levels” according to Sept. 27 note from Bloomberg Industries analyst Brian Friel: BLL, BAVA@DC, BA, CACI, ERICB@SS, XLS, GD, GSK@LN, HRS, LMT, NOC, NOVN@VX, RTN, SAN@FP, TTEK, URS
- Top 20 tied to defense, healthcare, infrastructure, IT:LMT, BA, GD, RTN, NOC, UTX SAIC, BA/@LN, LLL, HII, MCK, Bechtel (2213Z@US), BAH, URS, CSC, DYN, HUM, HNT, Triwest Healthcare (1893Q@US), TXT/BA joint venture
- Health Exchanges begin enrollment tomorrow there’s a partial shutdown of govt.
- Fannie, Freddie don’t face direct shutdown effect: Moody’s
- Senate bill ends protection Sept. 30 for Monsanto, Dupont on bioengineered seeds: BI’s Friel
- USD begins week buffeted by increasing possibility of U.S. government shutdown
TRADING RECOMMENDATIONS BASED ON DEBT SHUTDOWN CATALYST:
Barclays
- Go long USD/CAD 2w2w FVA; relatively low USD/CAD volatility and its exposure to U.S. economic outlook make this an attractive hedge against U.S. political risk from debt-ceiling negotiations and a potential spike in market volatility
Credit Agricole CIB
- Risk aversion is rising, U.S. equities and USD are falling
- Near-term prospects for USD are bleak, with limited potential for any upside unless budget deal is reached; safe-haven currencies, in particular JPY, will be buoyed in this environment
- In terms of high-beta currencies including Asian currencies, any positive impact from the fact that U.S. yields are capped will be outweighed by rising risk aversion leaving most Asian currencies vulnerable
Bank of Tokyo-Mitsubishi UFJ
- If no resolution is reached, partial govt shutdown will kick in on Oct. 1, which could prompt USD selling against majors although stronger against Asia
- Beyond govt shutdown, bigger issue is how they move toward debt limit when govt runs out of cash on Oct. 17; under such circumstances, BOT-Mitsubishi UFJ’s one-week USD/JPY forecast is a wider 96.50-100.00 on safe-haven JPY bids
Westpac
- Expects USD to continue to trade on the “backfoot” vs its peer core currencies during a govt shutdown; event risk early in the week is negative for USD
- Failure to raise debt ceiling would mean the U.S. govt must pay all its bills out of current revenue, risking default and downgrade and probable chaos in markets
Source: RanSquawk, Bloomberg
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The $300 billion/year nobamacare giveaway begins Tuesday. The tax increases needed to fund this are right around the corner (for the remaining 50% that work). That's the next battle after this.
Let me guess... Boehner and Cantor get some vague promise of future concessions from Obama and Reid, so they bring a clean CR up for a vote. It passes with Dems and a few Repubs voting for it... It has been that way for the original Obamacare vote, every budget vote, every CR vote, and every debt limit vote. Until Boehner and Cantor step aside, or grow a backbone, why is this going to be any different?
A clean CR won't be enough. They will have to agree to undo the sequester to get the democrats to not shutdown the goverment, and then blaming the GOP for it.
Perfect, let it rip and let the people realize who this Muslim really is working for
US: Collapse Countdown
Latest NEWS:
http://tersee.com/#q=government&t=text
Shutdown of all non-essential government.
It says it all.
I see plenty of TSA people loafing around in groups at airports, but their categorized as essential.
There is so much pork in government jobs it's incredible.
Barclays.. "How to Trade the gov shutdown.". this whole thing is nutz. If they were alive during 1912 they would be taking bets on how fast the Ship would sink or stay afloat.
I seriously doubt the government is going to decide to stop spending money that does not exist. They go through this nonsense to remind us how important it is for them to steal everything in sight and print tons of money. However, it has the opposite effect on me. It makes me wish DC was built in the caldera of an erupting super volcano so it really would shut down.
Do I get those hiked up insurance premiums back if the bill is delayed? How about am I still forced to switch to a costlier plan by January 1st?
Or do the 'exceptions' only apply to politicans and high-paying lobbyists?
You have a better chance of winning the lottery than seeing the U.S. Govt. actually shut down.
I'll offer 50 million to one odds that you're wrong.
A shut down has happened 17 times since 1977.
The problem is, it doesn't stay shutdown.
R: 'That's coming out of your pocket money!'
D: 'Yer mom ...'
R: 'This time I mean it!'
D: 'Yer mom ...'
Shut it down.
"non-essential" personel should be defined as anyone making more than 60k/year.
Bring on the shut down... going long popcorn!!!
"NONESSENTIAL GOVERNMENT WORKERS" WILL BE SENT HOME......
why are there ANY "NONESSENTIAL" GOVERNMENT WORKERS....???????
Amen brutha'
If only they had not spent all those billions on tanks, ammo, and weapons for Homeland Security. They could stay open for another 15 minutes.
THE "gdp" WILL BE EFFECTED..... what useful good or service does the government provide in the first place??? oh i forgot FEDERAL RESERVE NOTES (yeah i know the fed i snot a part of the govt)...
The fact that someone can even ask this question shows the depth of our cynicism. Why are folks upset at the government when it's what the American people have obviously selected through their votes an politicies? The loss of critial thinking is near complete and Americans don't want a leaner, saner State. That a nothing like Obama could get 51% of the vote with high unemployment tells it all.
Ironically, bureaucrats are "carrying out the will of the majority". We've lost the faculty of critical thinking and never once consider that this spending which must continue is phone debt. For the talking heads it's more a case of conditioning than ideology - the "spend and forget about it" system is the only one they know.
The government has become a bloated pig. High percentage of wasted money.
How about shutting down anything with three letters like the NSA, IRS, DHS & CIA?
Better yet... real threats to liberty like the FDA, DEA, and ATF.
You could include some four letter agencies in there. FDIC, PBGC, USDA...
Five or six letters, shut 'em down: McCain, Nancy, Peter King, Obama, Biden, Diane, Harry, General Keith Alexander, Meuller, Janet, Lindsey, Boner, Cantor, Pistole, Holder............they kind of blend together into one grey oppressive blob.
congressional shoe shine and barbershop WILL remain open
RINOs and Tea Party fakers will save the day.
After all, a MAJORITY of RepubliCRATS in the Senate just voted for cloture (meaning to kill) on the previous bill.
Goldmans estimate a 2-day US govt shutdown will hit Q4 GDP (annualised) by 0.1 percentage points and one week by 0.3 percentage points
LOL can you imagine what the hit to gdp will be when the budget is forced to be balanced? At least 10-15%!
Why are there so many "non-essential" personnel? Just another example that proves what a rip off D.C. is.
The most non-essential personnel these days seem to be the president and the entire administration as well as CON-gress.
Fire them all and take the FED RES scum and all the alphabet organizations along with them.
D.C. needs an enema...cuz with a government like this, who needs enemies???
Lets see. 800,000 "overpaid" government "workers" are going to get some time off during the week, at the beginning of the holiday marketing psyop. I predict measurably higher than expected retail sales for the quarter.
Also big plusses for movies and adult beverage sales.
No worries about getting the economic data if the government shuts down, we publish better, faster, and cheaper than the government does it.
We do this by gleaning all of the info from the Social Tape.
The Social Tape is comprised of data generated by various online activities performed by the consumers.
So, if the government can’t get the Jobless Claims, or Construction Spending, or Motor Vehicle Sales, or Non-Farm Payrolls, etc, out the door, you can find the reports here:http://earlyannouncement.com/.
How cool is that ? Just another example of private industry doing the job better than the government can.
Dow & S&P sinking as we speak! But why are gold & silver going down? Shouldn't they be going up?
and everyone should recall that when "non-essential" personnel get laid off, the first thing they all do is claim unemployment benefits. So they get a paid vacation no matter what, and the government scum use that to hold the country hostage.
Next they'll be shutting down air traffic controllers, letting murderers out of prison, etc. It's all extortion to fuck with the people.
They know they're going to fold like they always do. Poser- Boehner especially. I believe he said "My question isn't about who is going to resign. My question is who is going to jail over this scandal?". Well John Boehner, who went to jail over the IRS Scandal?-Nooooooobody!!!!!!
When is the damn VIX going to spike? 17.5 is just barely exciting. No more of a bump than the Taper tragedy.
Don't worry for the guys in that plane they all have a golden parachute.
After taxes and health care, my wife and I take home half what we pull in and have a home we cannot sell cuz the middle class has been completely strip mined of their wealth. Shut the fucker down. If you cannot keep a budget after fucking me and my wife outta half our pay, FUCK YOU.
It'll be great to be able to fly or get on the bus or go to a ball game and not be felt up by the monkeys at the gates.
They talk about a ratings downgrade if we have a shutdown but let's not forget that last time they raised the debt limit and prevented a shutdown we got downgraded because we raised the limit and didn't cut deficits.
We'll get downgraded either way or not at all. The shutdown won't matter.
Egan-Jones and S&P were punished for their downgrade, so I wouldn't look for anyone to be stupid enough to do that again.
Ah, excellent point. I forgot the DOJ brown shirts responded to that.
Boner is using this shutdown to kill the Tea Party. He thinks they pushed for this and the "Shut Down" will blow up in their face. Boner thinks he can use public angst to bury the Tea Party and oppostion to Progressivism once and for all.
Obama care is doomed to fail anyway , I don't get why he doesn't give up.
He won't give up because it is the only way to usher in single payer health care. He has to follow the playbook of his masters.
Much ado, about nothing. They'll reach a "last-minute" compromise, and the media will all gasp, and marvel, at how their great president was able to guide the nation through these troubled waters.
It amazes me that the politicians that say we must take urgent action to stop global warming because the planet is warming by .1C every decade and the planet will not support human life in 1,000 years; doesn't have any urgency in stopping global financial destruction which will plunge the planet into financial ruin in a decade or two.
The majority of today’s politicians are bought and paid for by special interests; they think and see no further than the next election. They will spend any amount of money as long as it goes to those that keep them in office.
“Men who think in lifetimes are of no use to statesmanship.” ---H.G. Wells
They thought they were choosing Obama…the black voters, and the majority of Hispanics, environmentalists, homosexuals, feminists, public union members, abortionists and clueless leftists of every stripe.
But Obama was only the cutout advertisement outside the door.
Inside were the ruling factions: Goldman Sachs, JP Morgan, and their entourage from Big Pharma to Big Oil to the military-war industry and every Fed favorite.
You wanted gay marriage, but also got bankers wiping out savers to become obscenely rich. You wanted more women, blacks and Hispanics appointed to key positions, but you got Fed policies destroying small business and good paying fulltime jobs in the private sector.
You voted for Obama? You got Lloyd Blankfein.
The Founders took pains to keep factions from seizing control of the government (specifically detailed in Madison’s Federalist No. 10). But they didn’t prepare for a calamity like the Federal Reserve.
James Madison argued and planned for a republic form of government because a democracy, he said, would enable special interest factions to control the government with “improper or wicked projects” (and in this, he actually listed “a rage for paper money”).
With a republic, powerful factions would be less likely to gain control than in a democracy… “less apt to pervade the whole body of the Union than a particular member of it; in the same proportion as such a malady is more likely to taint a particular county or district, than an entire state.”
The Founders despised democracy as a form of government because a majority of the people, or factions that join together to form a like-minded majority – such as Obama’s pro-welfare constituency aided by a supportive media and corrupted political parties giving the impression that the people as a whole favor the contrived-majority policies - could be misled to override the best interests of the common good.
But, coupled with his distaste for democracy, Madison did issue a warning against corruption dangers in a republic: “men of factious tempers, of local prejudices, or of sinister designs, may, by intrigue, by corruption, or by other means, first obtain the sufferages, and then betray the interests, of the people.”
The word “betrayal” came down hard on us this past weekend as members of Congress and a President delivered their loyalties to the “wicked” factions and betrayed the very citizens whom they had sworn to support.
The new Americans came to these shores to escape the tyranny of the European monarchies. But American prosperity in its first decades was too much for the European factions to resist. And the Warburgs, Kuhn Loebs, and the Rothschilds came to take it.
And they did.
Corrupted political parties, a prostitute media and a bought Congress have given the banker faction almost universal control.
The welfare state may think Harry Reid works for it as he allows the government to shut down to save Obamacare. But his real masters are the bankers who own the Fed. And it is their policies that destroy jobs and culture, hold people down on welfare, perpetuate urban ghettos, bankrupt cities, destroy businesses and savers and promote war. In short, the bankers use the factions that elect and support Harry Reid to tighten their control on the nation and to destroy it as a republic…like a squid tightens the tentacles on a diver’s air hose.
When Bush was president, all you heard on the news when gas prices went up was, there goes Bush's buddies in Big Oil screwing over the American people. After O got elected, gas prices have been higher for longer and you don't hear a peep.
The media is part of the ruling class and promotes the plutocrats' agenda.
According to EIA data, the average price of a gallon of regular unleaded gasoline in the United States was $1.838 on Jan. 19, 2009--the day before Obama took office.
The average price for regular unleaded gasoline on Sept. 23, 2013, was $3.47.
Michael Green from the AAA NewsRoom writes that “the national average price at the pump has fallen for 22 straight days, which is the longest streak in 2013.”
Sept. 23’s price is “a nickel less expensive than one week ago, seven cents less than one month ago and 35 cents less than the same day last year.”
In short, nothing in the markets is stable.; everything is up in the air.
The Top Ten Most Expensive Average Gas Prices:
Hawaii - $4.31; California - $3.99; Alaska - $3.95; Connecticut - $3.85; New York - $3.79; Washington - $3.74; Idaho - $3.73; Oregon - $3.69; Vermont - $3.68; and Rhode Island - $3.66.
Georgia has the lowest average price at $3.30.
High prices for gasoline levitates most all prices. Yet Bernanke “worries” about price deflation. Price deflation for whom, one asks? If it’s not for the buyers, it must be for the sellers, i.e., his buddies.
http://newsroom.aaa.com/tag/gas-prices/
Good time to join and contribute.
http://www.youtube.com/watch?v=_sjvc6baor8
Most effective way to fight. Go TEA!
The government aircraft never left the ground, shutting down the engines won't matter.
Will Republicans shut down GPS, so they can fuck the whole world?
Yeah butt.....
It's NOT actually a total shutdown is it?
Obomba Still getting paid
His Personal slaves are still gettin' Paid (A Blackman with Slaves, funny)
All the Criminals in Congress are still gettin' paid
All the Military are still gettin' paid
So the only ones NOT getting paid are the very Tax Payers that are paying all the above.
A free black man was the first slave holder in this country. He went to court to fight for the right to own a slave.
http://en.wikipedia.org/wiki/Anthony_Johnson_(colonist)
The Jews actually controled more slaves than anyone else, and now we are all slaves to the Banks. Who owns the Banks, Oh yeah that's right, the Jews.
One of the Biggest slave traders was TADA the Monsanto Family, yes the same ones. The same Jews that created the Agent Orange Chemical Waepon that killed Millions and is still creating birth defects to this very day.
Yet another episode of "Extend and Pretend".
Unfortunately, I don't see control of this country changing from parasites to producers until the entire comedy show collapses and the parasites try to enforce their will on producers by force.
Insane, yet entertaining.
SHUT 'ER DOWN! The whole damn thing.
Time for the states to seceed from the United State_ and turn over the @$$#01e$ wearing elephant & jackass costumes to their foreign creditors as payment in full of the debt they created.
Be warned Burticus, once kaos replaces the power structure, there wont be such thing as 'state' anymore. States can only COexist with a hierarchical power structure and a small group of (elected or non-elected) leaders.
The solution will be to find another country.
Wish you the best of luck with that.
No, the solution will be to CLAIM YOUR OWN COUNTRY. Call it Mylandistan or Republic of Getoffmylawn. Every man and woman, free and land-owning, without interference, regulation or taxation. A nation of nations held by individuals or groups.
The brave new world of anarchy.
Yeah, I know, I'm a dreamer, but one has to have dreams.
Whatever the mind of man can conceive and believe, it can achieve. - Napoleon Hill, Think and Grow Rich
If the Repubs cave, and Chalky and his thugs get what they want, the GOP as a party is over. Amerika is sick of Dem-Lite; they will be gone the way of the Whigs.
http://vegasxau.blogspot.com
SHUT IT DOWN! If that's what it takes to bring an end to this bloated spending tyranny, then SHUT IT DOWN!
Raise the roof... err I mean ceiling one MOAR time!!!
The government has become a laughable sideshow.
time for the statists to come up with another word-speak term for "unnessential employees". I mean, it's raysist to furlough those poor, poor, poor souls who are so discriminated against.
We could at least start up a public sector union just for them, right?
"Workers Association for the Support of Tyrannist Employees" union, or WASTE for short.
/sarc
Judging by the speed of this morning's gap lower and it's extended length (5mins), I'd say the correction is over. Things feel more than comfortable yet again since there's no power on earth that could defeat the BTFD, BTFATH montra. Bring in the aliens!
Honestly, would anyone notice if it shut down?
Republicans: "The Party of Tank-Your-Business."
It's not my Daddy's Republicans. Not at all.
"U.S. 4Q GDP seen reduced by as much as 1.4 percentage pts. depending on shutdown’s duration"
Isn't there an offset to this? Wouldn't that have a positive effect on the private sector? Or is thie "the uncertainty principle" problem?
Italy has its government shut down very often and Italians continue business and life anyway.