No, that headline is not a typo or some sort of computer error resulting in a reprint of yesterday’s headline. It is, well, now, 24 hours later, October 15, at 11:30 PM EDT, and shockingly (or not so…?) we have no Debt Ceiling Deal. I might add that the discussion to re-open the government apparently is no longer the hot topic, it is the Debt Ceiling, which has received all the attention in the last 24-48 hours.
That’s right folks, tomorrow is October 16 and 1) No debt agreement has been reached and 2) Any such agreement must pass both the House and Senate, 3) Both of which must occur ideally before 00:01 HRS on Oct 17.
As noted earlier, some say Oct 17 is symbolic and not a “hard” date, others say Oct 17 but no set time (COB?), others have said Oct 17 is just hocus pocus make believe. By the way some of the hocus-pocus group are grown adults and elected politicians (Yes, I am scared too). I am taking the conservative approach and calling it one minute into Oct 17 as the deadline. Various TV commentators (CNN, FOX, etc.) are now stating that having things resolved by Oct 17 is basically impossible and to expect a “weekend resolution.” I am sure the ratings agencies and the world leaders, some who own some of our debt, will like that….
I wonder what would happen if my supervisor or the prosecutor told me “have this ready for trial by Date ABC”, as serious and grave consequences could occur if I did not comply. Then I made excuses and pointed fingers at others when my inability to make this deadline became apparent. I wonder what would happen if I told these folks “well, the date you gave me [Treasury Secretary Lew stated Oct 17 was a critical deadline] is just something you made up, I am not going to abide by it.” Or maybe I told them “I am working hard on the deadline, but will get back to you, by the way, I am happy with my own progress”. Or “I have determined that something else is more important, not your deadline.”
I wonder what my eval that year would look like ? My career potential after that ? My reputation ? I wonder how many cool TDY’s I would get in the future ? Maybe a PCS move to Eagle Pass Texas ? Etc.
So then, the question is, What is the USA’s reputation looking like, on the global scale ?
Enough soapboxing….
Some news shows have just now started to talk about “damage to 401ks” (the TSP is our version of the 401k) and how this will get voter’s attention, resulting in some politicians losing future elections. Fitch Ratings agency has come out and basically stated that the bickering back and forth between parties, and subsequent uncertainty, has caused Fitch to have their trigger finger ready to downgrade USA’s credit rating.
Today, the Dow Jones closed down 133 points. However I do not track the Dow, I prefer the SP 500. The Dow is only 30 companies. If one or two of them cough wrong, it affects the entire index. But news outlets and the general public watch the Dow (more so than they should, but…) and thus anytime the “Dow down 133” flashes across the screen, it is never healthy for sentiment. As I discussed in yesterdays post, yes, the Dow closed UP the last few days but as a pretty bright guy in my office told me today (as he shook his head…), he said there was no way he would chase a 5% gain if he might loose 50% during the chase. Pretty well said. As stated previously, depending on when you logged into the TSP site and processed your request, many folks got some gains on the way out, anyway.
On another note, I am 100% G-Fund until the market itself tells me that it is time to return to the stock funds, which by the way, will almost for sure not happen until this debt ceiling stuff is resolved. Yesterday’s post may have miscommunicated that I am 100% G-Fund, and that once the debt ceiling issue is resolved, I am then immediately returning to the stock funds. This is not what I intended to communicate and I apologize for any confusion. Legit question by the way, a few folks emailed me that question.
That is all for now folks, to recap, there is no debt ceiling agreement yet, and I am 100% G-Fund until further advised. Thanks everybody.
– Bill Pritchard
