It took just four days before the Federal government caved to Congress and admitted that it can't even operate in a partial, "non-essential" shutdown. A few short hours ago Defense Secretary Chuck Hagel ordered 400,000 furloughed Pentagon civilian employees - or about half the total defense employees - back to work. it is also roughly half of the total employees furloughed since the start of the government shutdown, which is now in its fifth day, and since both the House and the Senate are now gone until Monday afternoon, it appears the shutdown, even if now at half mast will continue for at least a week.
In a tragic development, the unidentified man who set himself on fire on the National Mall at about 4:30 p.m. on Friday in between the Air and Space Museum and the National Gallery, and who sustained burns to 80% of his body, has died. AP reports: "A District of Columbia police spokesman says a man who set himself on fire on the National Mall has died his injuries. Officer Araz Alali says the man died Friday night at a hospital where he had been airlifted. He says the man was so badly burned that he will need to be through DNA and dental records. The man poured a can of gasoline on himself in the center portion of the mall Friday afternoon. He then set himself on fire, with passing joggers taking off their shirts to help douse the flames." As AP adds, Police are investigating the man's possible motives for doing so. They will hardly find any, as the last thing the Obama administration needs right now is to start explaining why D.C. has become ground zero for America's own Arab Spring. Especially, if in a country in which fomenting class and social hatred once again boils down to racial characteristics.
Yesterday we described the various scenarios available to Treasury in the next few weeks should the shutdown and debt ceiling debacle carry on longer than the equity markets believe possible. As BofAML notes, however, the most plausible option for the Treasury could be implementing a delayed payment regime. In such a scenario, the Treasury would wait until it has enough cash to pay off an entire day’s obligations and then make those payments on a day-to-day basis. Given the lack of a precedent, it is hard to quantify the impact on the financial markets in the event that the Treasury was to miss payment on a UST; but the following looks at the impact on a market by market basis.
The last few days have been punctuated with fearmongery from Alexander and Clapper over the shutdown's impact on the NSA and the increased threat of terror this generates. However, as the Washington Times reports, things are a little different in reality. Pressed by the Democratic chairman of the Senate Judiciary Committee at an oversight hearing, Gen. Keith B. Alexander admitted that the number of terrorist plots foiled by the NSA’s huge database of every phone call made in or to America was only one or perhaps two — far smaller than the 54 originally claimed by the administration.
The irony of Jesse Ventura calling for a new "American Revolution" in a conversation with Brit Piers Morgan is not lost on us but the former Governor of Minnesota asks some awkwardly open questions in this 'colorful' interview. Ventura asked if the government's shut down, "That should mean we shouldn't have to pay any taxes, right?" He called for another American revolution to push back against the "corrupt system" created by Democrats and Republicans in Washington. He told Morgan the two-party system has legalized "bribery" for access, suggesting he's fed up enough to actually run for president in 2016. Ventura called both parties "gangs," and Morgan admitted he had to agree, adding that they're "overpaid, underworked children!" The discussion then veers from Obamacare, Ventura's run for President, and the JFK conspiracy.
Here's a new and very bizarre entry for the annals of "the dog ate it" excuses. According to Reuters, Montana man Wayne Klinkel, who last year pieced together the remnants of five $100 bills eaten by his one-eyed golden retriever, Sundance, is sporting a $500 check he says he received this week from the U.S. Department of the Treasury to replace the digested funds. Sundance sniffed the wad of bills out of a car cubby space while waiting for Klinkel and his wife to return from lunch, and the canine made the currency his lunch.
Why are young people in America so frustrated these days?
You are about to find out...
The system is failing, and young people are going to become even angrier and even more frustrated.
From algos to trading pschology and from market-maker's tricks to the quant models that dominate, Batur Asmazoglu provides an insider's view of a large sell-side bank FX trading desk. While the likes of Goldman's Thomas Stolper have proved it, Asmazoglu's first 'secret' is that "while many believe the big investment banks are very sophisticated, that is not the case at all."
Looking at the equity market and some of the background dynamics Citi's FX Technical group cannot help but be reminded of 2011. They also warn, despite the constant hope-driven rallies this week, there are also some aspects of what we saw in 1998 and similarities with 2000 that are worth noting. The bottom line, we have had the view for some time that we would see a much deeper correction in the equity market (in excess of 20%). Recent price action and developments might (just might) be suggesting that it is time to revisit that theme.
The standard wisdom on gold is that it does well in times of economic bad news such as in the 1970s, a period of stagflation and recessions, when the yellow metal rose from $35/oz to peak at $850/oz in 1980. But this time, Don Coxe, a portfolio adviser to BMO Asset Management, believes, things are different. In this interview with The Gold Report, Coxe explains why gold will rise when the economy improves.
"Work hard, play hard" is the adage often put forward to encourage that work-life balance so many find hard to come by. But judging from the time spent on daily activities, it would appear there is one message for the Japanese and North Americans... move to France!
What if the Treasury were to go over the X date (date beyond which the Treasury cannot honor all its payments) without the debt ceiling being raised? As BofAML notes, the Treasury estimates the X date to be October 17, though they believe that the Treasury may have enough cash and incoming tax receipts to last a few more days. In either case, the date is not too far out. Market concerns over possible postponed payment have been rising as indicated by the performance of October and November bills. What are the options of for the Treasury?