Showing posts with label WALL STREET. Show all posts
Showing posts with label WALL STREET. Show all posts

October 1, 2013

GOVT SHUTDOWN


ny daily news



GREG SARGENT WASHINGTON POST

House Republicans are allowing the government to shut down, rather than permit a vote on continued funding of the government at sequester levels, which alone would (in a sane universe) have been a real victory for them. This puts Republicans in precisely the same position they were in before they caved to conservative demands and launched a series of anti-Obamacare votes that have proven futile. Remember, Congress will vote to fund the government soon enough. Dems are not going to meaningfully undermine Obamacare, which means John Boehner will have to figure out a way, very soon, of allowing a vote on funding for the government, untethered from the health law, even if it means making the Tea Party very, very angry.

How long Boehner is willing to postpone this will be partly influenced by how much damage the GOP is sustaining, as judged by influential party insiders. And on that score, today’s new Quinnipiac poll should set off alarm bells.
It finds that 58 percent of Americans, including 58 percent of independents, oppose Congress defunding Obamacare. Seventy two percent, and 74 percent of independents, oppose shutting down major activities of the government to stop the health law. On the debt limit, 64 percent oppose not raising it to block the law. All of this is in spite of plurality disapproval of Obamacare. Dems have opened a nine point lead in the generic House matchup, 43-34. Underlying structural factors mean even a wide lead probably won’t dislodge the GOP majority. But as Steven Shepard rightly notes, a shutdown could make things “volatile.”

[The poll] finds that ...54 percent say Obama is “honest and trustworthy”; 54 percent say he cares about people’s needs and problems; and he leads Republicans on handling the middle class by 51-38. While 50 percent say Obama isn’t doing enough to compromise with Republicans, 68 percent say Republicans aren’t doing enough to compromise with Obama. This may be the most important finding:
Which comes closer to your point of view; there is gridlock in Washington mainly because President Obama lacks the personal skills to convince leaders of Cnogress tow ork together, or there is gridlock in Washington mainly because Republicans in Congress are determined to block any President Obama initiative:
Obama lacks skills: 33
Republicans block 55
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These findings were taken before the government shutdown. There’s no telling how much worse public perceptions could get now that it’s under way, let alone how they’d be impacted by default and a resulting economic crash.


BUSINESS WEEKWall Street to Washington: 'What, Me Worry?'


Wall Street to Washington: 'What, Me Worry?'

....the market assumed a sense of serenity unseen in more than seven years. Volatility, as measured by the Chicago Board Options Exchange Volatility Index (or VIX) is down 9 percent year-to-date, to a level that is now 18 percent below its average since 1990, Bloomberg data show. The average daily change for the S&P 500-stock index narrowed to 0.45 percent in the third quarter, the smallest rate since the end of 2006. Compare that to the record 3.31 percent a day clocked in the final quarter of 2008, during the worst of the financial crisis.

The market recently hit all-time high, and is up by a third just since June 2012, a run that has pumped nearly $5 trillion into the capitalization of the Standard & Poor’s 500.
“I think the risk aversion is back to near historical lows mostly because of the no-taper decision by the Fed,” says Chun Wang of the Leuthold Group, referring to the Fed’s decision not to slow the pace of its bond-buying program. “The market still expects a last-minute resolution of the debt ceiling and the effect of the government shutdown to be minimal.” Leuthold’s Risk Aversion Index is near an all-time low.
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However copacetic Wall Street may be feeling about things, a protracted government shutdown would inflict real pain on the lackluster economy. Moody’s Analytics’ (MCO) chief economist Mark Zandi calculates that a three- to four-week shutdown would shave 1.4 percentage points off growth; without a shutdown, he was predicting a 2.5 percent annualized pace of fourth-quarter growth.