Gene Inger's Daily Briefing (highlights)-
for Mon., October 14, 2013
Compromise is the primary catalyst - to resolve Washington's dilemma, as well as 'complete' on the ongoing stock market response to a perceived realization by all parties that something must be done to sidestep Default. Confidence in the financial system is shaky; if not yet crushed. So imagine what would happen if we actually Defaulted. Not to say we aren't broke in many ways; not to say that an inevitable reckoning doesn't remain out there; so for now a 'CR' will basically be little more than a 'stay of execution'.
This will largely depend on what occurs over the next few days (as we've outlined). As of now; so far Senator Chuck Schumer inadvertently put it best when he said; 'we've got to stop this; because the stock market would drop'. Given that the average Senator of either Party is estimated to hold a million or more in his personal portfolio; I can see why Congress would finally feel a pinch if the bottom falls out. The latest survey says 60% of Americans would be in favor of NOT re-electing any member of Congress. Gee; I'm surprised the number is so low. Seriously; with no Saturday deal; I'm thinking we'll get Euro/Yen dropping and even with bonds closed for Columbus Day, the S&P will likely be hit hard. The key point may be data-day on Tuesday.
Alternatively; raising the Ceiling would (reserved for our members). Adopting more Debt to pay-off existing Debt is not a solution; akin to a near-deadbeat paying credit-card minimum payments, asking his bank not only to reduce his interest rate, but also raise his credit-card limit. Banks love those customers; as they never catch-up. (More).
Obviously, it's a delusional belief to think Washington can hit the brakes on new debt creation without bringing on economic catastrophe; but no worries they won't really do that. Even Ron Paul might find a door slam approach too draconian for this environment. It's absent even moderate domestic growth, so behind the bravado (balance reserved).
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Gene Inger's Daily Briefing
Started by
Chris G
, Oct 16 2013 04:16 PM
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