Goldman Sees 50% Chance Of A Government Shutdown

As we pointed out earlier, the chances of government agreeing any kind of debt ceiling deal (and avoiding a government shutdown) is dropping fast as USA default risk spikes and the Treasury Bill curve inverts. Goldman Sachs is now concerned also...

Uncertainty in The White House is starting to make investors realize the chance of successfully navigating the debt ceiling crisis without a government shutdown are dwindling...

Via Goldman Sachs,

Low approval ratings raise legislative risks.

 

In the near term, we believe there is a 50% chance of a brief government shutdown, as the president seeks to solidify support among his base by embracing more controversial positions, despite needing Democratic support to pass spending legislation.

 

That said, we expect that the debt limit, which needs to be raised around the same time, will prevent a longer shutdown from occurring.

It seems the credit markets are a little less sanguine than Goldman... 

 

As we noted earlier, sure, Congress has always come together at the 11th hour in the past.  They’ve raised the debt ceiling 78 times over the last 57 years.  So, won’t they just raise it again?

This time around, we have some reservations.  Quite frankly, this Congress has proven that it is not motivated to do what’s best for the American people.  Each representative has an illogical logic unto himself.  Just ask John McCain – he doesn’t know what he wants until the precise moment he votes.

What’s more, these days the debt ceiling has become ultra-politicized in Congress.  Big time horse trading must first take place before an agreement can be reached.  Big time bluster and chest pounding must take place too.

The point is, over the past six months this Congress has been incapable of getting a doggone thing done.  What makes you think they’ll somehow get their act together in just 12 days?

Comments

Money_for_Nothing Fri, 08/18/2017 - 14:36 Permalink

Trump can pick which agencies are open and which are closed. Obama kept all agencies open and sent in thugs to close open air monuments. Obama only won when Walmart helped him.

Money_for_Nothing Fri, 08/18/2017 - 14:39 Permalink

Notice the article won't tell you it is congress that has low approval rating. Trump's base is solidly behind him and would be willing to take a day off from work to run the alligators out of DC if he asked them to. Democrats are still advertising on Craigs list for mercenaries. If they don't get a good budget deal they run out of money they can borrow.

markar Fri, 08/18/2017 - 15:07 Permalink

"Get whitey" campaigns everywhere, calls for impeachment, threat of war w/N. Korea--a gov't shutdown would be the icing on the cake for a complete collapse of civil society and civil war.Prepare accordingly.

Rebelrebel7 (not verified) Fri, 08/18/2017 - 15:11 Permalink

What makes me think that Congress will get its act together in just 12 days?I'll take political survival for 500 Alex! 

Herdee Fri, 08/18/2017 - 15:15 Permalink

Trump will take control of the government expenditure process under emergency Treasury Dep't. measures and then axe half the lazy bastards in every level of the federal government. That way he can get the money into the military and infrastructure. When the Whitehouse controls the budget and the Fed he'll get things done directly.

ReturnOfDaMac Fri, 08/18/2017 - 15:45 Permalink

There WILL be a shutdown, 1 week or 2.  Squabbling factions of Repubs can never agree on anything. Ever. Couldn't even kill ACA they ran on for 7 years.  So there will be no limits and they will kill the debt ceiling completely.  Everybody knows debt is not important when republicans are in charge!

JailBanksters Fri, 08/18/2017 - 19:25 Permalink

My expert opinion is ...Maybe it will, Maybe it won'tIt's more like, just tell them anything to get the name in the News.There's a 50% the Earths going to be destroyed by a Meteor in the next 10 years.

Storm-Clouds Fri, 08/18/2017 - 19:56 Permalink

Government shutdown?

You know the dead don't care!

Did the Virginia Cops shutdown?

Did the Fergeson Cops shutdown?

Did the Berkley Cops shutdown?

Did you notice a pattern?

The dead don't care....

William Dorritt Sat, 08/19/2017 - 10:04 Permalink

Let the Govt live within our means, not the current 2xGovt Takes in approx $300B a month in Tax RevenueGovt needs approx $33B to service the debtThe only thing a govt shutdown demonstrates is that most of the Govt is completely unnecessary, which is why both parties freak out, they are blood sucking Vampires that have eliminated the Middle Class for pennies while making Trillions for their Masters.