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Real Time Insight

As the week progresses, the financial markets could be more influenced by politics in Washington.  The debt ceiling and government funding are likely to be issues as the new fiscal year approaches on October 1st.

It appears that House Republicans are trying to score some political points related to the unpopularity of ObamaCare and grass roots sentiment favoring less government spending and debt.   At the same time, it looks like the Democrats are trying to leverage the potential positives of a government shutdown being blamed on the Republicans.   The government shut down in 1995 was a major political plus for the Democrats.

As usual, both parties in Congress tend to wait to the last minute to craft legislation and the parties remain extremely divided.  Media spin and political positioning seem more important than policy which is positive for economic growth and job creation.

RTI Questions:

1)  What do you think is the chance for a government shutdown?

a) Less than 25%
b) Between 25% and 50%
c) Between 51% and 75%
d) More than 75%

2) How much will the events in Washington impact this week’s price action in the S&P 500 in terms of absolute price change - positive or negatively [think resolution being a positive and crisis being a negative]?

a) Little - less than 1% impact
b) Moderately - 1% to 3% impact
c) Significant - greater than 3%

Let me know your thoughts below!
 

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