I find this article by Larry Levine, an active futures trader and a frequent guest at Bloomberg TV's market opening each day with Betty Liu fascinating:
"As if scripted from an over budget movie (say one that will cost $24 billion in 16 days of filming), at the 11th hour, or technically the 10th hour and 10th minute before financial Armageddon, the House gets the necessary 216 votes to pass the Senate bill to raise the debt ceiling with a final 285-144 tally. We have our dramatic Hollywood ending: The markets can rally, the pundits can pontificate and Congress can return to point fingers at each other as they live happily ever after.
But let me be clear, this is not remotely a solution but a short-term stop gap. By all accounts this compromise doesn't address the serious fiscal problems facing the U.S. including $17 trillion in debt. And it doesn't heal the breach between the parties. Worst of all, it perpetuates the sheer lunacy of our centrally planned markets.
While this may soon become a historical footnote, the government shutdown has taken at least $24 billion out of the United States economy, the financial ratings agency Standard & Poor's said Wednesday.
The firm said the shutdown caused it to cut its forecast of gross domestic product growth in the fourth quarter by at least 0.6 percentage point. The agency lowered its estimate for GDP growth to close to 2 percent from 3 percent.
The estimate represents a staggering cost to the economy of a completely self-inflicted political catastrophe. Unlike the 2008 economic crisis and other past recessions, the government shutdown had nothing to do with larger economic trends. The numbers show Washington's brinksmanship caused real damage beyond furloughed government workers and the Washington, D.C., region.
But again. the central planners want a Hollywood ending. Documentaries don't do well at the box office. This debt, like the rest, will be heaped on the pile and forgotten as we continue to kick the can down the road."
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