Does Wall Street Take a Government Shutdown Seriously?

Late Thursday afternoon, US stock indices took a decided turn to the downside as legislators in Washington DC failed to agree upon a plan to meep the US government operating past Friday night.

A favorite parlor game for the noise-makers in the nation's capitol, threatening to shut down the government because there's no budget or continuing resolution may have become passe´ to the general population, but Wall Street may take the issue a bit more seriously.

A partial shutdown of the federal government - because it doesn't really shut down critical operations or necessary functions - isn't taken seriously, though it could become a real issue, if it were, in fact, an absolute reality.

Considering the amounts of money the federal government handles on a regular basis, a complete shut-down would be devastating to the nation's economy. Imagine welfare, social security, and disability recipients not receiving their regular checks or direct deposits.

Imagine the nation's largest workforce going without paychecks for an extended period. Imagine the US Postal Service shut down, the entire military on leave, contractors idled, and an assortment of other regular activities closed, ceased, ended. The US treasury would cease operations, causing all US treasury bonds to become worthless.

Least of all, the bickering by members of congress would least be missed, since they are the supposedly responsible people.

An actual shutdown is a scary thought. Trying to scare the populace with a fake shutdown, caused solely by inter-party disagreements and politics, may be nothing now, but it could be seen as a conditioning effort for a true federal failure.

In such a case, the president would likely declare martial law, a necessary action to ensure civility, especially in cities. That's unlikely to happen at this juncture, but, the more the politicians play politics instead of enacting laws that do good for the American people, the closer the nations comes to a severe and lasting crisis.

Passing a two, three, or four-week resolution merely kicks the can down the road a little, making the government appear no better than that of a third-world banana republic.

If that's what's happening, all investors should take appropriate actions to safeguard not only their liquid assets invested in stocks and bonds, but also move to protect their friends and families.

The United States is headed for disaster if the congress and the news media continues on the destructive path of irresolution, political posturing, fear-mongering, and division.

Let's hope it doesn't begin to unravel further over the weekend.

At the Close, Thursday, January 18, 2018:
Dow: 26,017.81, -97.84 (-0.37%)
NASDAQ: 7,296.05, -2.23 (-0.03%)
S&P 500: 2,798.03, -4.53 (-0.16%)
NYSE Composite: 13,315.91, -36.48 (-0.27%)