The Core
Why We Are Here => Water Cooler => Topic started by: ukgimp on January 12, 2019, 09:31:06 AM
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Whatever it actually means.
https://apple.news/AbJofL4G3SpSxSWpkrtODPg
USA currently in the lead over shambolic government with U.K. close second. 😂
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After decades of Congress kicking the can down the road ie: not doing their job, It is time for them to do their job.
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I think this week will be when the Markets start barking.
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Parks are getting back to normal.
One of the stupidest things is that when a shutdown occurs the gate rangers get furloughed, so people come, but no revenue comes in. This time they decided to staff the gate, take in revenue and use the revenue to keep emergency services running - law enforcement, garbage pickup, snowplowing.
This is finally happening and a lot of people are going back to work in time for the MLK holiday. It's one of the few smart things the Trump admin has done. At least it makes sense to me.
So for us, the effects of the shutdown now basically boil down to a PR problem more than an actual services problem.
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>>market
Massive flight delays are going to start to p##s people off too if this doesn't right itself. I honestly had no idea that TSA screeners made $24,000/yr and are being asked to work without pay. At the hotel that I work at, dishwashers start at $17/hr now and quickly move up to $18/hr and they certainly won't be asked to work without pay.
I also hadn't thought about the retirement issue. Lots of people still in the federal govt are eligible for retirement, including, apparently 1,900 air traffic controller. How long until they decide to just take their pension and Social Security instead of working for free? If that happens, air travel gets nasty.
https://www.pennlive.com/news/2019/01/us-aviation-system-starting-to-show-strains-from-shutdown.html
And... apparently celebrating national football championships is an essential service
https://www.independentmail.com/story/news/2019/01/13/clemson-football-president-trump-white-house/2558988002/
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The pension liabilities issue was only enhanced by QE, which drove down bond yields & forced pension plans out into riskier investments. Now that they are engaging in QT they are sucking liquidity out of the system, which should generally have the opposite impact on asset prices. Many companies which trade at rather low P/E ratios like AT&T also have massive amounts of debt. AT&T's current debt load is about 80% of their stock's current market cap, so multiply the P/E by 1.8 for a starting point & then of course there are all the various adjustments made to earnings.
https://www.barrons.com/articles/barrons-2019-investment-roundtable-part-1-51547262307
the Federal Reserve has engaged in quantitative tightening, or shrinking its balance sheet, to the tune of $50 billion per month. We are talking about the creation of an ocean of debt, while the Fed has raised rates nine times in the current cycle, in addition to quantitative tightening, which, according to some studies, equates to about two more rate hikes. The Fed wants to raise rates two more times this year, based on its dot plot [individual rate projections by the members of its policy-setting committee]. This is a problem for the stock market. U.S. manufacturing data has deteriorated. Mortgage applications are near an 18-year low. ... Backing off on quantitative tightening would be a big help to the markets, but it won’t happen with the S&P down less than 20%. Stocks would have to fall 30% from their peak for the U.S. central bank to consider this.
the impact of the central bank money printing has had an even bigger impact on emerging markets because they grew debts faster than developed markets.
I’m negative on emerging markets and have been for the past decade, during which they significantly underperformed developed markets. Emerging markets benefit most from quantitative easing. As interest rates collapsed, they became prolific borrowers on both a country and corporate basis. Second, liquidity risk in these markets is significant. A lot of money is chasing very few stocks and bidding up allocations, even if EM allocations haven’t gone up. There are very good companies in, say, India, but I own none because they don’t compete from an investment standpoint.
I think China has been responsible for something like 40% of the global credit growth since the Great Recession & about 22% of their housing units sit empty.
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The state of play - all 5 options and why none of them will work
https://www.usatoday.com/story/news/politics/2019/01/14/government-shutdown-how-will-it-end/2565793002/
I heard someone say that back on Dec 23 it would be like spending 5 minutes in a 2-hour line at Disneyland and then convincing your kid it wasn't worth waiting. Now it's like spending an hour and half in a two-hour line and convincing your kid it isn't worth waiting.
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I thought this could be a thread about Windows updates...
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Natives are getting restless...
Theresa reads a "locals only" Facebook group for Yosemite. Lots of federal employees. For those who don't have savings, desperation is starting to set in. The threads are mostly about how to find sources of money to pay for this or that.
The irony - the government of CA is stepping in and allowing federal employees who are working full-time to get unemployment benefits... even as they work 40+ hours per week for another government. But there's a lag time for those benefits to kick in and families struggling to survive on a government salary don't have big reserves and, like most Americans, can't miss more than a paycheck or two. Unlike most Americans, they haven't been able to apply for unemployment benefits because they are still full-time employees. They just don't get paid for their work
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I heard on the news this morning, half the IRS employees have been called back to work on income tax refunds without pay. Their union has filed suit saying requiring work on just an IOU is illegal.
We live in interesting times.
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The air traffic controllers and the TSA screeners have similar suits going.
The say it violates section I of the 13th amendment: "Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction."
And they may have case based on the 5th amendment: " nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation."
It sounds like the legal case there is pretty good, though with the current makeup of the Supreme Court, who knows.
Still, I expect one of those suits will win somewhere and work it's way up through the system, and forcing people to work without pay will be abolished. I predict this could happen as early as Dec 6, 1865.
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1865 😂
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>> For those who don't have savings, desperation is starting to set in.
I've been listening to an audiobook, Facts and Fears: Hard Truths from a Life in Intelligence, by James Clapper. He held several key positions in the American intelligence community, sometimes reporting directly to the president.
In discussing various budget shenanigans, shutdowns, sequestration etc. over the years, he made the chilling point that it's a not exactly a bright idea to put employees with high security clearance and access to sensitive information into positions of financial hardship.
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FBI employees turn to food banks, outside work as shutdown drags on (https://www.cnn.com/2019/01/17/politics/fbi-shutdown-food-bank/index.html)
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Government Shutdown Timeline:
See How the Effects Are Piling Up (https://www.nytimes.com/interactive/2019/01/08/us/politics/government-shutdown-calendar.html)
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I was wondering how this was going. What can the markets do?
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When the GOV is closed they can't spend our money or propose RULES & REGS.
Markets: see below
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The partial government shutdown, now in its second month, could cost the US economy in excess of $6 billion by the end of this week.
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Beth Ann Bovino, the chief US economist for S&P Global, estimated in a research note on January 11 that every week of the shutdown would shave about $1.2 billion off the US's gross domestic product.
https://www.businessinsider.com/government-shutdown-economic-cost-border-wall-2019-1
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Temp deal reached. No additional wall money (yet).
https://www.cnn.com/2019/01/25/politics/government-shutdown-donald-trump-nancy-pelosi/index.html
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I guess we could thank Roger Stone for the reprieve.
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>Stone
When La Guardia, Newark, & Philly airports started shutting down, I told Louise that it's really hitting the fan now.
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Yeah, the airports are an entirely different type of pressure than folks not getting their SNAP benefits.
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> folks not getting their SNAP benefits.
They can just get a loan. hhh
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You were correct RC
I don't expect Congress to do their job....so
February
https://legaldictionary.net/emergency-power/