Are Markets Paused for Fear of a Government Shutdown?

August 27, 2017

 

On October 1st the U.S. Government will supposably shutdown unless Congress passes legislation be it a stop gap measure or a full budget – more than likely it will be a stop gap.  Why? Because the number one priority for our elected officials is getting re-elected.  Most of them are professional politicians and if faced with getting a real job would be on the street – there is very little most of them can do in real life.  Nonetheless, this issue is a concern since the President announced that unless he gets his wall that the government will shut down.  Of course he is pointing the figure at Congresses inability to work together and do the right things for the country and Congress points the finger back at him. 

 

Congresses deep divide appears to be widening, and President Trump has repeatedly criticized the Republican leadership of the House and Senate – is this how to win friends and influence people? No!  Treasury Secretary Steven Mnuchin has warned the federal government will reach the limit of its authorized borrowing on or about September 29th.

 

There are also concerns about the debt ceiling and will it be raised so Congress can keep printing money.  It would be nice if each time we needed more money we could print it like our Countries leaders do.  I was always taught to budget and spend within your limits. But Congress can’t and will not do that because each of them needs funding for special programs in each of their respective states to make certain that their constituents are happy and will re-elect them.  So the all work together to approve each other frivolous programs and all of them keep printing money – sending the country further in debt and keeping their jobs.  One day we will wake up when it is too late and the government will be doing as Greece recently did – telling everyone that the promised retirements and social security is being cut by 50% in order to keep America running.

 

All these events and more have the stock market in a state of unknown long term direction.  We are still in an overall bull market but we think we are dangerously close to a full-blown 5%+ correction.  That is making us more cautious on sending alerts that could blow up.  Please be patient – it does pay off – and wait for the next alert we are hoping it is exceptional.

 

 

 

 

 

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