Tuesday, October 01, 2013

So maybe if the government stays closed can we get Dow 36,000??

The market opened strong and held the gains throughout the day.  There was no real catalyst and frankly, I think the reaction of the market probably changes my forecast for a settlement.  A sharp decline in the markets might have brought both sides to the table and lit a fire under them to get a deal done.  However, sending the Russell 2000 to a new all-time high probably is not the kick in the pants that Congress needs.

I'm hearing more rumblings of tying the debt ceiling hike into any budget deal.  These two items have never been linked in the past, but through a quirk in the calender they are now both in the hands of the power brokers in DC.

The Treasury department is obviously getting a little skittish as the Treasury Secretary made the unusual comment late tonight that the Treasury department is using it's final extraordinary measures on the debt.  Right now everyone is very complacent on the debt ceiling hike - I said yesterday that it's a non-issue - however, we need to remember when everyone is complacent and on the same side of the bet things can go terribly wrong.

The high frequency traders took advantage of a lack of federal oversight today to crush the end of the day close and ramp stocks on now news in the final minute.  I kept looking at my screen thinking that I was getting bad quotes because the numbers moved so fast.

I've adjusted my thinking and now expect the shutdown to last 5-7 days.  Hopefully, this will include an agreement on the debt ceiling or else we'll be having a similar conversation in a week.

One of the funniest comments I read today was a mock tweet from the NSA that said

"Hey, we're a little short staffed here today.  Do you think you could just write down all of the websites you visit today and shoot us an email, okay?"

However, with a little help from you, your phone and your keyboard, maybe that won't be necessary.  Researchers from MIT and Georgia Institute of Technology have proven with some accuracy that an iphone's accelerometer can record the keystrokes you are making on your computer.

It's a fun, if scary, article that you can find here.


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