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Treasury Bills Begin To Fear Government Shutdown, Goldman Explains
Yields on very short-dated T-Bills are up notably over the last week hinting at the potential tonight's Cromnibus Bill to fail and the potential for government shutdown therefore looms. Whatever the outcome, Goldman does not expect a prolonged shutdown like the one that occurred in 2013...
As Goldman explains,
Attempts to pass full-year funding legislation for almost all of the federal government appear to be unsuccessful this evening, increasing the risk of a short-term partial shutdown of the federal government for the second time in just over a year. Whatever the outcome, we don't expect a prolonged shutdown like the one that occurred in 2013, because (1) the issues in dispute are not central to the bill and can be more easily addressed, and (2) there appears to be sufficient political support for a short-term (e.g., three-month) measure, even if the year-long measure stalls.
Separately, following a review of the Monthly Treasury Statement (MTS), we are reducing our Q4 GDP tracking from 2.6% to 2.3% in light of lower-than-expected defense spending.
Q: The federal government runs out of funding at midnight, but neither chamber has passed spending legislation. What's going on?
House and Senate leaders had negotiated a spending package that provided funding for nearly all federal agencies through fiscal year 2015 (FY2015), with a temporary spending bill to fund the Department of Homeland Security (DHS) only through February due to Republican concerns regarding President Obama's recent executive actions on immigration. This combination "omnibus" funding bill for nearly every agency combined with a "continuing resolution" (CR) for DHS has become known as the "CRomnibus."
The package had the support of several key Republican and Democratic leaders in the House and Senate, but faces opposition from some members of both parties. Several Democrats and a few Republicans have concerns regarding a provision related to derivatives regulation, pension law changes, and a few other items. Several Republicans oppose funding DHS even through February and prefer a shorter extension or a provision to block the President's executive action on immigration. Some members of Congress have also expressed more general dissatisfaction with the process used to negotiate the bill and the short time the details of the bill were public before the vote was scheduled.
Q: Will the government shut down?
It still seems unlikely. While there is a possibility that there could be a short-term lapse in spending authority, the more likely outcome is a last-minute extension of funding lasting a few days to a week. This would give lawmakers time to either modify the existing full-year bill or pass a shorter-term (e.g., three-month) extension if no agreement on the full-year bill can be reached.
Q: If a shutdown does occur, how long would it last?
Probably not long. Unlike the 2013 shutdown, which lasted for more than two weeks, any shutdown as a result of the current impasse seems more likely to last hours than days, for two reasons: first, the disputed items in the bill are not directly related to funding the government. Instead, they were added because the spending bill was seen as the most likely vehicle to get them passed. But if it becomes clear that the bill will not be able to pass with those items added, they can be removed. Second, even if the full-year legislation does not pass due to concerns over other policies that have been attached or the duration of funding for the Dept. of Homeland Security (DHS), there is broader support for at least a short-term extension of funding until these issues are worked out.
Q: Does it make any difference what method is used to fund the government?
It makes a small difference in two ways. First, providing funding under continuing resolutions can be disruptive for federal agencies, because starting new construction or projects is often restricted under CRs and because there is less certainty regarding funding levels. Second, a failure to enact long-term funding would create another fiscal deadline in early 2015, which could increase uncertainty ahead of that next date. That said, the overall funding level (not including emergency spending) for the current fiscal year is capped by sequestration at $1.014 trillion. So while there could be minor changes regarding how funding is distributed under a short-term extension compared with a long-term bill, the overall path of federal spending is likely to be similar regardless of which method is used.
Q: What happened to federal spending in Q4?
After a sharp increase in defense spending in Q3, federal spending in Q4 looks likely to reduce GDP growth by more than expected. The Monthly Treasury Statement (MTS) for November released yesterday (December 10) showed very weak defense spending in November, following a very high number for October. There were complicating factors in both months--retirement-related payments in October, and one fewer than normal pay periods in November--but after normalizing for those factors and making neutral assumptions regarding December, federal spending is tracking at -12% for Q4 at an annual rate. We had already assumed a 5% decline due to the unusually high level of defense spending in Q3 and residual seasonality in BEA's estimate, which tends to produce lower-than-expected growth in Q4 and Q1 and higher-than-expected growth in Q2 and Q3. As a result of federal spending through November, we are reducing our Q4 tracking estimate from 2.6% to 2.3%
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Two words... Not Again!!
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will be a long night for those who participate .. those who commentate will stay drunk..
http://hedgeaccordingly.com/2014/11/the-impact-of-oil-prices-on-high-yie...
Does your neighbor's hot daughter make $63/hr working from home?
There was a "prolonged" shutdown in 2013?
No so as anyone noticed, unless they were trying to go to a national monument or park. Nobody running the place, but strangely, plenty of guys there with guns to tell you that you weren't allowed to enter.
Government workers received extra vacation time...
There was a fake one in 2013
Are the preprinted signs ready yet????
They keep a warehouse full of them just in case. They just need to stencil on the year and out the door they go.
No Mas visitors to the " Blanca Casa" for 2 quincenas ? SSDDScotty..err Boner...you cunt I need more fucking power.err more fucking money...or this bitch is gonn be shit down
More power Capin? you mean shut down?...Oooock..the lithium crystals are fucked and so are you ..youcoonet keep expecting meto save your tired ass...everytime the fucking shutdown threat comes
Fuck you Captin...err Barry..Its gonne be shut down...we gonna keep it shut down...maybe its time for Captin to break out that vintage false flag at this point, right Captin? maybe time to get FEMA over here on the fucking transporta, bring them Barry coffin liners for all the Sheeple
I vote for a CR (continuing resolution), at 90% of sequestration levels. Cause the horrible, crippling sequestration didn't cause any pain in the federal bureacracy.
Full faith and credit.
Repost:
4 & 1/2 hours till shut down.
This tension should be more like Ferguson. Status Quo is corruption. Congress is bought & paid for. Money does this.
Journalists should Revolt for their souls or the soul equivalent. /s
- The Idea of America is dead, killed by congressional spin... goes back at least to 1963 or 1945 National Security Act.
Freedom, Liberty, Equality, and Justice for all. Not foreign or European wars. We were formed not as a Military republic. We hold that all nations can be sovereign and chose their own government... free from US covert action to overthrow the government and suppress the workers or unions.
These things we hold to be self evident.
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dubbed “CROmnibus” as it is a combined continuing resolution (CR)[1] and Omnibus spending bill
So again US Congress gives up the US Constitutional Powers
- Budget Powers
- Legislative Powers to Lobbyists & President
- War Powers to Lobbyists & President
An omnibus bill is a proposed law that covers a number of diverse or unrelated topics. Omnibus is derived from Latin and means "for everything".
The "Great Deception!!"
- MSM reports today it is $1 Trillion Dollars
- But actually closer to $3.5 Trillion since:
- MIC = $900 Billion
- MEDICARE/MEDICAID = $1 Trillion
- Social Security = $1 Trillion
And oh don't let's look at the Corruption, racketeering, Organized Crime represented in the Continuing Resolution & Onmibus Bills... Enabling US Corporate Monopolies, the Monopoly Banking System... and Corruption of Politics through Money.
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- Foreign Policy
- Military Global Footprint, US MIC Perception by the greater world, Policy on Dirty Wars
- Domestic Policy & Domestic Spying
- Federal Budget is a nightmare...exponential growth wo a budget or congressional signatures
- Jobs, Compensation, Economy, cost of Tech Schools & College, Cost of Health Care
- Monopoly control over credit & money creation
- Loss of state of Justice
- Prevalence of Fraud, Waste, Abuse, no prosecutions, Socializing the risk & losses of key industries
Deal with Reality... is very broad, eh?
AH breads and circuses!