People who follow this site, know that most of the information is reposts that I feel convey valuable information or have educational value. I very rarely state that this information is important and its consequences need to be understood by you on a personal level. The article below is the second nudge that I have received in the past hour concerning the “theater” going on in Washington, D.C. Watch the other hand right now and understand the possibilities outside of a government shutdown and debt default.
David DeGerolamo
From Zerohedge:
We all know how this latest installment of Beltway theater ends: the negotiations continue until the 11th hour and 59th minute or maybe just after midnight, followed by a market flush, followed by a prompt compromise which retroactively fixes everything that was wrong, and with the US debt ceiling being raised by another $1.1 trillion.
Below is Deutsche Bank’s Jim Reid commenting on precisely this.
Over the last 12-24 hours the small cracks that have appeared in financial markets over the last week have started to edge open a little bit wider. On the plus side this may start to help concentrate the minds of the politicians a bit more after another day of stalemate and lack of urgency. Our thoughts are that this will get resolved when either the market forces the issue with a big sell-off or when we get closer to an as yet unspecified hard-date as to when the US runs out of money. On the latter, one concrete thing we did learn yesterday is that Treasury Secretary Jack Lew will testify to the Senate Finance Committee tomorrow at 8:30am (ET) to discuss the debt ceiling including issues of how hard the 17th of October date is. This meeting may give us some improved clarity as to when 1 minute to midnight is going to be in this crisis. The perception is that it’s actually nearer the end of the month.
