17 October 2013
Shutdown over For Now: Obama signs bill to end partial shutdown, hike debt ceiling
US Congress has approved the Senate's bipartisan bill, ending the debt limit stalemate in Washington after 16 days of the US Federal Government shutdown. Debt crisis has thus been averted. A potentially crippling U.S. debt default was averted late Wednesday, as Congress passed legislation to end a two-week political battle that had rattled financial markets, splintered the Republican Party and showcased Washington dysfunction.
Labels: News
08 October 2013
US Debt limit overtaking US federal government shutdown as U.S. crisis focus
All buys on hold though DIA is closing to buy conditions.
Labels: News
01 October 2013
US federal government shuts down
The U.S. government began a partial shutdown at midnight for the first time in 17 years, putting as many as 800,000 federal employees out of work today, closing national parks and halting some government services after Congress failed to break a partisan deadlock.
A partial federal government shutdown would cost the U.S. at least $300 million a day in lost economic output at the start, according to IHS Inc. (IHS) That's a fraction of the country's $15.7 trillion economy, and the impact is likely to grow over time as skittish consumers and businesses stay on the sidelines.
During the partial government shutdown, many essential government operations would cease. Internal Revenue Service call centers would close and more than 90 percent of Environmental Protection Agency workers would stay home. National parks and museums would be shuttered.
Other services continue uninterrupted. Social Security and Medicare benefits would be paid. U.S. troops would remain at their posts around the world and would get paid under a bill Obama signed yesterday. Air traffic controllers and airport security screeners would keep working.
Delaying Obamacare
Twice yesterday, the House voted to send a bill delaying Obamacare to the Senate. Twice, the Senate rejected the House's plans.
Debt Ceiling
Congress and Obama have been at loggerheads on fiscal policy since Republicans won control of the House. They took several disputes to the brink, including a potential government shutdown in April 2011, the debt ceiling in August 2011 and the expiration of tax cuts in December 2012.
In each case, lawmakers reached an agreement to prevent the worst possible outcome. Most recently, the House passed a tax bill Jan. 1, hours after income tax rate increases took effect.
Boehner and Majority Leader Eric Cantor tried to avoid this fight, offering a first proposal last month that would have let the Senate send a spending bill without conditions right to Obama.
They faced an uprising from Republicans, urged on by Senator Ted Cruz of Texas, who insisted on language that would defund Obamacare.
The House scaled back its demands twice, each time running into a party-line blockage from Senate Democrats and Obama, who increasingly saw the spending bill as a prelude to the debt-ceiling negotiations.
The House's latest volley, passed yesterday evening, would delay for one year the mandate that individuals purchase health insurance and would end government contributions to the health insurance of lawmakers, congressional staff members and political appointees.
Democrats see a quick path out of this crisis. They want Boehner to allow the House to vote on the Senate's version, which would extend government funding through Nov. 15 and exclude any Obamacare conditions.
Republicans said they want to force Obama to accept some concessions on his signature health care law.
Political Fallout
Some strategists expect the shutdown to drive both parties deeper into their respective fighting corners as they assess the economic and political fallout, hardening positions at least temporarily before any resolution can be reached.
A partial federal government shutdown would cost the U.S. at least $300 million a day in lost economic output at the start, according to IHS Inc. (IHS) That's a fraction of the country's $15.7 trillion economy, and the impact is likely to grow over time as skittish consumers and businesses stay on the sidelines.
During the partial government shutdown, many essential government operations would cease. Internal Revenue Service call centers would close and more than 90 percent of Environmental Protection Agency workers would stay home. National parks and museums would be shuttered.
Other services continue uninterrupted. Social Security and Medicare benefits would be paid. U.S. troops would remain at their posts around the world and would get paid under a bill Obama signed yesterday. Air traffic controllers and airport security screeners would keep working.
Delaying Obamacare
Twice yesterday, the House voted to send a bill delaying Obamacare to the Senate. Twice, the Senate rejected the House's plans.
Debt Ceiling
Congress and Obama have been at loggerheads on fiscal policy since Republicans won control of the House. They took several disputes to the brink, including a potential government shutdown in April 2011, the debt ceiling in August 2011 and the expiration of tax cuts in December 2012.
In each case, lawmakers reached an agreement to prevent the worst possible outcome. Most recently, the House passed a tax bill Jan. 1, hours after income tax rate increases took effect.
Boehner and Majority Leader Eric Cantor tried to avoid this fight, offering a first proposal last month that would have let the Senate send a spending bill without conditions right to Obama.
They faced an uprising from Republicans, urged on by Senator Ted Cruz of Texas, who insisted on language that would defund Obamacare.
The House scaled back its demands twice, each time running into a party-line blockage from Senate Democrats and Obama, who increasingly saw the spending bill as a prelude to the debt-ceiling negotiations.
The House's latest volley, passed yesterday evening, would delay for one year the mandate that individuals purchase health insurance and would end government contributions to the health insurance of lawmakers, congressional staff members and political appointees.
Democrats see a quick path out of this crisis. They want Boehner to allow the House to vote on the Senate's version, which would extend government funding through Nov. 15 and exclude any Obamacare conditions.
Republicans said they want to force Obama to accept some concessions on his signature health care law.
Political Fallout
Some strategists expect the shutdown to drive both parties deeper into their respective fighting corners as they assess the economic and political fallout, hardening positions at least temporarily before any resolution can be reached.
Labels: News
19 September 2013
Next up for the market? Government shutdown!
From CNBC
The battle lines are being drawn, and the rhetoric is heating up for another fiscal battle royale that could jolt the stock market and maybe even shut down the government.
While analysts see the chances of a shutdown as fairly low, they do see the odds rising, as acrimony rises in Washington - between Democrats and Republicans-and Republicans and Republicans.
The GOP leadership has moved toward a plan to fund the government past Sept. 30, only if Democrats agree to strip funding from the Affordable Care Act. The bigger skirmish ahead is the debt ceiling, which House Republicans have vowed will not be raised.
The Treasury Department has said the $16.7 trillion debt limit will be reached in October, and Treasury Secretary Jack Lew said it will not be raised because it pays for expenditures authorized by Congress.
"I've gone up to a 25-percent chance" of a government shutdown, said Potomac Research chief political strategist Greg Valliere. "Last month, I was at 10 percent. I think (House Speaker John) Boehner and most of the leadership know this could blow up on them in the 2014 election, and they're leery about doing anything that radical."
About 40 conservative Republicans revolted against Boehner's plan to move forward with a resolution that would have kept the government running while Congress grappled with the debt ceiling.
"That's the one (debt ceiling) the market has to worry more about," said Valliere, adding he thinks the GOP leadership will ultimately avoid hitting the ceiling and causing a first-ever government default. "But I cannot give you a coherent, concise way of how they finesse this. I think it will get dicey. ... Jack Lew threw down the nuclear weapon. He said if we don't get a debt ceiling hike, people may not get their Social Security checks and we may not be able to pay the troops. The Republicans are playing with fire."
Barry Knapp, head of equity portfolio strategy at Barclays, said it may be the Democrats' intent to trap the GOP in a negative position and raise the public ire, since the Republicans have an improving chance in the mid-term election next year. "I think this is the last hope for the Democrats to take back the House," he said, noting they could "make the Republicans fall into a trap, make a mistake and get blamed for shutting down the government."
Valliere said the House will probably pass a continuing resolution to fund the government, tied to defunding the Affordable Care Act, also called Obamacare. But it will not make it in the Senate, and the two sides will come to a stalemate.
"I just don't see a government shutdown. I see a very small chance of a default. I think the chances are 50/50 that the Treasury could run out of money, and we would have a period of great uncertainty over what the Treasury could pay for," he said. "It's going to get to be early November before we get a debt ceiling deal. I think Treasury can limp through October but you're cutting it very close. The window of greatest market anxiety will be the last week of October, first week of November."
As for the market, it heads into October, a traditionally volatile month, with a possible fiscal crisis ahead. Knapp points out that during the fiscal calamities in the past couple of years, the Fed was either easing or moving toward more easing. This year the Fed may end up paring back its bond buying program, though it surprised Wall Street Wednesday by leaving its $85 billion monthly bond buying program in tact.
"I think (Fed officials) are very scared about ruining four years of work and especially with the shenanigans going on in the fiscal side of Washington, where these guys clearly don't care about people. They just care about which party is in power. I think that scared them as well," said Rich Bernstein, CEO of Richard Bernstein Capital Management.
Washington will fight one less battle than expected this fall, since former Treasury Secretary Larry Summers dropped out of the running for Fed chairman. Although Summers was President Barack Obama's choice, Democrats and Republicans were lining up against him. Wall Street now sees Fed Vice Chair Janet Yellen as the likely candidate to replace Fed Chairman Ben Bernanke, but the White House has yet to confirm that.
"There's plenty of scope for volatility," said Knapp. "The market likely got the candidate they want to be the next Fed chairperson. You have all these things that already occurred, and the market is at its highs. What's the next positive catalyst? It's hard to see one."
Now the fiscal debate is moving to center stage. "This is just reigniting the whole dysfunctional government thing. If there is a catalyst for the correction that everybody's been calling for since the beginning of the year, this is the one credible possibility for it," said Art Hogan of Lazard Capital Markets. Hogan said the market could quickly see a 5- to 10-percent correction if Congress pushes the situation to the edge. It could be worse if the government is shut down.
The battle lines are being drawn, and the rhetoric is heating up for another fiscal battle royale that could jolt the stock market and maybe even shut down the government.
While analysts see the chances of a shutdown as fairly low, they do see the odds rising, as acrimony rises in Washington - between Democrats and Republicans-and Republicans and Republicans.
The GOP leadership has moved toward a plan to fund the government past Sept. 30, only if Democrats agree to strip funding from the Affordable Care Act. The bigger skirmish ahead is the debt ceiling, which House Republicans have vowed will not be raised.
The Treasury Department has said the $16.7 trillion debt limit will be reached in October, and Treasury Secretary Jack Lew said it will not be raised because it pays for expenditures authorized by Congress.
"I've gone up to a 25-percent chance" of a government shutdown, said Potomac Research chief political strategist Greg Valliere. "Last month, I was at 10 percent. I think (House Speaker John) Boehner and most of the leadership know this could blow up on them in the 2014 election, and they're leery about doing anything that radical."
About 40 conservative Republicans revolted against Boehner's plan to move forward with a resolution that would have kept the government running while Congress grappled with the debt ceiling.
"That's the one (debt ceiling) the market has to worry more about," said Valliere, adding he thinks the GOP leadership will ultimately avoid hitting the ceiling and causing a first-ever government default. "But I cannot give you a coherent, concise way of how they finesse this. I think it will get dicey. ... Jack Lew threw down the nuclear weapon. He said if we don't get a debt ceiling hike, people may not get their Social Security checks and we may not be able to pay the troops. The Republicans are playing with fire."
Barry Knapp, head of equity portfolio strategy at Barclays, said it may be the Democrats' intent to trap the GOP in a negative position and raise the public ire, since the Republicans have an improving chance in the mid-term election next year. "I think this is the last hope for the Democrats to take back the House," he said, noting they could "make the Republicans fall into a trap, make a mistake and get blamed for shutting down the government."
Valliere said the House will probably pass a continuing resolution to fund the government, tied to defunding the Affordable Care Act, also called Obamacare. But it will not make it in the Senate, and the two sides will come to a stalemate.
"I just don't see a government shutdown. I see a very small chance of a default. I think the chances are 50/50 that the Treasury could run out of money, and we would have a period of great uncertainty over what the Treasury could pay for," he said. "It's going to get to be early November before we get a debt ceiling deal. I think Treasury can limp through October but you're cutting it very close. The window of greatest market anxiety will be the last week of October, first week of November."
As for the market, it heads into October, a traditionally volatile month, with a possible fiscal crisis ahead. Knapp points out that during the fiscal calamities in the past couple of years, the Fed was either easing or moving toward more easing. This year the Fed may end up paring back its bond buying program, though it surprised Wall Street Wednesday by leaving its $85 billion monthly bond buying program in tact.
"I think (Fed officials) are very scared about ruining four years of work and especially with the shenanigans going on in the fiscal side of Washington, where these guys clearly don't care about people. They just care about which party is in power. I think that scared them as well," said Rich Bernstein, CEO of Richard Bernstein Capital Management.
Washington will fight one less battle than expected this fall, since former Treasury Secretary Larry Summers dropped out of the running for Fed chairman. Although Summers was President Barack Obama's choice, Democrats and Republicans were lining up against him. Wall Street now sees Fed Vice Chair Janet Yellen as the likely candidate to replace Fed Chairman Ben Bernanke, but the White House has yet to confirm that.
"There's plenty of scope for volatility," said Knapp. "The market likely got the candidate they want to be the next Fed chairperson. You have all these things that already occurred, and the market is at its highs. What's the next positive catalyst? It's hard to see one."
Now the fiscal debate is moving to center stage. "This is just reigniting the whole dysfunctional government thing. If there is a catalyst for the correction that everybody's been calling for since the beginning of the year, this is the one credible possibility for it," said Art Hogan of Lazard Capital Markets. Hogan said the market could quickly see a 5- to 10-percent correction if Congress pushes the situation to the edge. It could be worse if the government is shut down.
18 September 2013
The debt ceiling cloud is looming over Congress and Obama once again
Debt Ceiling Deja Vu; Wall Street Better Watch Out, Says Task
The U.S. is nearing the roof of its spending limit - some economists estimate that it will be reached as early as mid-October. Congress will then have to decide whether to increase the limit or to default on the nation’s debts.
Congress last increased the debt limit in 2011 to $16.7 trillion after a harrowing debate that ultimately led to the downgrade of U.S. credit by Standard and Poor’s.
It looks as though a hearty debate is once again imminent -- House Speaker John Boehner (R-Ohio) has said that President Obama will have to negotiate spending cuts if he wants the ceiling raised. "For decades, the White House and Congress have used the debt limit to find bipartisan solutions on the deficit and the debt," he said in a news conference last week.
Obama, meanwhile, has said he is unwilling to negotiate. Gene Sperling, a senior economic advisor to Obama has echoed those sentiments: "As you heard the president say, he is not going to negotiate over the debt limit, that we should not be negotiating over whether to pay our bills."
Debt ceiling talks have been overshadowed by pressing issues in Syria and the debate over the next Fed chair, but the debt debate isn’t something that should be taken lightly by the government or markets, says The Daily Ticker's Aaron Task. “You could have a government shutdown and there could be all kinds of crazy ramifications from that and I just don’t think markets are thinking very clearly about that right now.”
Yahoo Finance Senior Columnist Mike Santoli points out that the debt ceiling is no longer the problem it was in 2011, “the deficit has been shrinking, the Fed has been taking down a lot of the treasury debt,” he says.
The U.S. is nearing the roof of its spending limit - some economists estimate that it will be reached as early as mid-October. Congress will then have to decide whether to increase the limit or to default on the nation’s debts.
Congress last increased the debt limit in 2011 to $16.7 trillion after a harrowing debate that ultimately led to the downgrade of U.S. credit by Standard and Poor’s.
It looks as though a hearty debate is once again imminent -- House Speaker John Boehner (R-Ohio) has said that President Obama will have to negotiate spending cuts if he wants the ceiling raised. "For decades, the White House and Congress have used the debt limit to find bipartisan solutions on the deficit and the debt," he said in a news conference last week.
Obama, meanwhile, has said he is unwilling to negotiate. Gene Sperling, a senior economic advisor to Obama has echoed those sentiments: "As you heard the president say, he is not going to negotiate over the debt limit, that we should not be negotiating over whether to pay our bills."
Debt ceiling talks have been overshadowed by pressing issues in Syria and the debate over the next Fed chair, but the debt debate isn’t something that should be taken lightly by the government or markets, says The Daily Ticker's Aaron Task. “You could have a government shutdown and there could be all kinds of crazy ramifications from that and I just don’t think markets are thinking very clearly about that right now.”
Yahoo Finance Senior Columnist Mike Santoli points out that the debt ceiling is no longer the problem it was in 2011, “the deficit has been shrinking, the Fed has been taking down a lot of the treasury debt,” he says.
08 February 2011
Below explains recent sharp divergence between US and HongKong / Singapore. HK got firm insider news.
China hikes interest rates again to damp inflation
The People's Bank of China announced Tuesday on its website that the benchmark 1-year deposit rate would rise by a quarter percentage point to 3 percent and the 1-year lending rate would increase by the same amount to 6.06 percent. The increases are effective Wednesday.
China hikes interest rates again to damp inflation
The People's Bank of China announced Tuesday on its website that the benchmark 1-year deposit rate would rise by a quarter percentage point to 3 percent and the 1-year lending rate would increase by the same amount to 6.06 percent. The increases are effective Wednesday.
Labels: News
