Government Shutdown Day 2: A Little More of a Serious Mood

Yesterday, Money Daily closed its post with the thought that bad things happen when people are complacent.

Today, some of those bad things may have already begun and the complacency of yesterday has turned to concern, today.

Over the previous weekend and into Monday and Tuesday, conventional thinking (the kind that usually amounts to being dead, 100% incorrect) was that the shutdown would last a day or two. Today, there's a growing consensus that the US government shutdown will linger at least until the end of this week, probably through next week and quite possibly meld right into the debt ceiling deadline of October 17, as Treasury Secretary Jack Lew has pegged that date at which time the US will have to start picking and choosing which bills to pay, emergency measures exhausted.

It's estimated that the US economy is losing $100 million per day for each day the government shutdown - partial as it may be - continues. There's another school of thought that believes the number is higher and the cumulative effect will bring the total to much more damage than $100 million a day, as the prolonged furloughs of non-essential government employees drags on and uncertainty over the economy in general grows deeper, mistrust of the government extends and decision begin to be made with the thought of a govern-less world a possibility.

Businesses will become more and more reluctant to spend, individuals will be frightened (which is probably the intention of this entire charade, anyhow), systems will begin to break down and the fabric of society will unravel even further than it has over the last five years of crisis management.

It appears that the politicians are steadfast in their beliefs and unbudging, so this could get a bit more serious every day.

Hang on to cash, gold, silver, gasoline, extra stores of food, water and shelter.

Good luck. (There may be a bank holiday coming your way.)

Dow 15,133.14, -58.56 (0.39%)
Nasdaq 3,815.02, -2.96 (0.08%)
S&P 500 1,693.87, -1.13 (0.07%)
10-Yr Note 2.63%, -0.02
NYSE Volume 3,173,658,500
Nasdaq Volume 1,710,665,875
Combined NYSE & NASDAQ Advance - Decline: 2314-3232
Combined NYSE & NASDAQ New highs - New lows: 280-55
WTI crude oil: 104.10, +2.06
Gold: 1,320.70, +34.60
Silver: 21.90, +0.722

Government Shutdown Day One: Who Cares?

Believing that the federal government shutdown - which began at 12:00:01 EDT Tuesday - would have no ill effects on the economy in general or stocks in particular, investors piled into high-risk assets, with the NASDAQ marking one of its best daily gains of the year.

Alternatively and somewhat counter-intuitively, precious metals sold off dramatically, with gold and silver monkey-hammered back down in an effort by the controlling cartel of central bankers to assure the world that all was safe, despite the globe's biggest and most important economy beset by problems stemming from its politicians.

The overall tone from the pols in the nation's capital is so unambiguously passe as to create some doubt that the impasse over the continuing resolution and the poorly-executed launch of state-by-state health insurance marketplaces for ObamaCare are anything but passing glitches that will soon be amended, such as Wall Street would like to believe.

However, every day that the government is shut down creates less-favorable conditions for the continued success of the world's reserve currency, the US Dollar, which fell modestly, according to the Dollar Index (DXY). Confidence in the leadership in Washington has hit an all-time low, not just from the general population but in foreign capitals as well.

Theatrics aside, Republicans and Democrats appear very far apart ideologically, though the perception one gets from idea leaders in the media is that the shutdown will last only a very few days, which is somewhat hard to believe, considering that the two sides aren't even communicating with each other, everybody in Washington seemingly on an unexpected holiday.

This farce of politics and money will not end well for those in power. The American public has had just about enough from Washington politicians, whose hubris knows no bounds and who operate without any sense of decency, wishing only to score political points in order to cripple the opposition.

With any luck, the politicians will not find a way out of the morass of deceit and despair they have wrought. And now, the countdown to the upcoming debt ceiling deadline can begin. October 17, the day upon which the government will supposedly run out of money, is not far off.

When people become complacent, trouble usually comes looking.

Dow 15,191.70, +62.03 (0.41%)
Nasdaq 3,817.98, +46.50 (1.23%)
S&P 500 1,695.00, +13.45 (0.80%)
10-Yr Bond 2.65%, +0.03
NYSE Volume 3,181,675,250
Nasdaq Volume 1,749,596,125
Combined NYSE & NASDAQ Advance - Decline: 3998-1566
Combined NYSE & NASDAQ New highs - New lows: 416-41
WTI crude oil: 102.04, -0.29
Gold: 1,286.10, -40.90
Silver: 21.18, -0.533

Front-running the Government Shutdown... from Behind

In keeping with the spirit of the day, the staff and writers of Money Daily took most of Monday off, but will be back with a better-than-bare-bones edition on Tuesday, probably.

Since the government shutdown of all "non-essential" services (and there you have it in a nutshell, if some government services are non-essential, why have them at all? A good place to start cutting.) is part farce and part fantasy, we shall endeavor to not overly satirize the proceedings.

Mail will still be delivered, planes will fly (and land, we hope), and welfare checks and food stamps will continue to supply the Free Sh-T Army.

Nothing much will change in any large way, unless the shutdown lasts for more than a few weeks and bumps up against the semi-artificial deadline set by Treasury Secretary Jack Lew of October 17, the date at which the government will run out of money and not be able to borrow more.

Then it may be time to break out the MREs and bottled water.

Monday's Results (pre-shutdown)
Dow 15,129.67, -128.57 (0.84%)
Nasdaq 3,771.48, -10.12 (0.27%)
S&P 500 1,681.55, -10.20 (0.60%)
10-Yr Bond 2.6150%, -0.0040
WTI crude oil: 102.33, -0.54
Gold: 1,327.00, -12.20
Silver: 21.71, -0.123

Government Shutdown in 3... 2... 1... Is All Hype and Bad Theater

Stocks started the session in the red and stayed that way all day.

Pundits say the sell-off (Dow, S&P down six of the last seven sessions) is due to either the threat of a government shutdown or overvaluation.

The latter is probably closer to the mark, if only because the government taking a few days off next week isn't going to affect stocks very much; maybe a couple of select companies, but in general, a government shutdown is a big, fat nothing-burger, with fries.

However, as the current casino games are being played, stocks will rise the moment a deal is struck in Washington, hoping to pull in more retail suckers investors with indices at close to all-time highs and many stocks ridiculously valued, many of which are listed on the NASDAQ.

If the federal government does shut down, it will only be for a few days. By then the Republicans will save face, saying that they don't want any more suffering by ordinary people. The truth is they don't really care about ordinary people, except when they're within fifty feet of a voting booth and said politician's name is on the ballot.

The showdown in Washington is just another example of how servile and juvenile our federal government has become. It has far overstepped the bounds of the constitution and now plies the media in order to torment the citizenry.

Thank goodness it's Friday and one can tune out most of the noise and the nonsense.

And, someday, we'll actually have functioning, rational markets. Sure, someday.

Dow 15,258.24, -70.06 (0.46%)
Nasdaq 3,781.59, -5.83 (0.15%)
S&P 500 1,691.75, -6.92 (0.41%)
10-Yr Bond 2.62%, -0.02
NYSE Volume 3,224,407,000
Nasdaq Volume 1,664,139,000
Combined NYSE & NASDAQ Advance - Decline: 2278-4160
Combined NYSE & NASDAQ New highs - New lows: 169-46
WTI crude oil: 102.87, -0.16
Gold: 1,339.20, +15.10
Silver: 21.83, +0.065

Washington's Paper Tigers Just Do It and Churn

You've got to be kidding, right?

This non-market, completely underpinned by the $1.02 Trillion annual Bernanke Put, despite the usual theatrics from Washington's paper tigers who can stand around, do nothing, occasionally take to a podium to swear at the other side and eventually cave in to their bankster bosses, still hasn't made new highs.

Sad, really, even as Nike led all indices higher today, especially the Dow, now a worthless contraption engineered to be a perpetual motion machine. If the Dow doesn't go up, they'll just kick out the losers and put in a couple of winners, keeping everybody indexed and happy as clams.

The government isn't going to shut down, nor is it not going to raise the debt ceiling.

Relax. Buy stocks. You will thank Money Daily in December, just before you relinquish 20-40% of your gains to the government. That's how it works, and, if it doesn't, the government will fine you, a la JP Morgan or maybe some Japanese auto parts makers. Fines are the new tax because most intelligent people have already figured out how not to pay ordinary taxes.

Peace.

Dow 15,328.30, +55.04 (0.36%)
Nasdaq 3,787.43, +26.33 (0.70%)
S&P 500 1,698.67, +5.90 (0.35%)
10-Yr Bond 2.64%, +0.03
NYSE Volume 3,008,154,250.00
Nasdaq Volume 1,755,595,375
Combined NYSE & NASDAQ Advance - Decline: 3943-2527
Combined NYSE & NASDAQ New highs - New lows: 256-38
WTI crude oil: 103.03, +0.37
Gold: 1,324.10, -12.10
Silver: 21.77, -0.12