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Meanwhile …

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A continuing resolution which re-opens the federal government was passed along with a debt ceiling increase that keeps everything hummin’ along until February. It’s good news, at least until the next manufactured crisis comes. We can’t be sure what kind of economic damaged was done in the 16 day shutdown until … well, until the workers in the government that tabulate this stuff get back to work.

So what stories have we missed during the obsession over the limits? Quite a few, actually. Here’s a rundown of some of the interesting stories that were easily lost over the last two weeks.

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Appalling Behavior

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As we continue to slouch towards a default of the US Government, the situation remains appalling. There is no apparent movement and many in Congress don’t seem to take the situation seriously. “I think, personally, it (a default) would bring stability to the world markets,” said Rep. Ted Yoho (R-FL), claiming that it would show that the US is serious about its debt problem. Nothing would change the mind of someone this willfully stupid about how markets work and what US debt (and US Dollars) represent to global markets.

But that’s just one Congressperson from one district, right? No, it’s not that simple. This is appalling behavior all around that threatens America’s economy, prestige, and ultimately our ability to function at all in any kind of organized way. I’d like to make it clear what appalls me, personally, about how this is playing out and why it’s not just a partisan issue.

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Ready to Panic?

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What does it take for international markets to panic?  With the debt ceiling due to be hit in a little more than a week, the short answer is that the “full faith and credit of the United States” is still worth quite a lot.   We’re only starting to see the first signs of a panic as an auction of 1-month TBills sold at a net rate of 0.355%.  If that doesn’t impress you, it’s worth noting that it was one third that a week ago.

Stocks started falling, too, with the DJIA losing just over a percent.

Allright, it’s not much.  Gold isn’t budging above $1330 or so per ounce and benchmark 10yr TBills are still comfy at 2.64%.  These are probably the best standards to watch for signs of panic as the stalemate goes nowhere.

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The Tough Quarter Starts

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If you’re a fan of NFL football, you know that the fourth quarter is when all the action comes in most games.  The teams that win consistently are the teams that get tougher in the last 15 minutes week after week.  The economy is no different, relying on the holiday season to make or break any given year.

Last year, Hurricane Sandy made for a wet and limp holiday season.  There are many good reasons to believe that 2013 will be much better – except, of course for the government shutdown.  We don’t know where that will leave us until long after it’s over.  But as we check in with Barataria’s predictions for the year we can get some idea where we stand heading into the critical last quarter.

Except, of course, for the final unemployment stats.  But let’s check out what we can and see how we stand for now.

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Opportunity Costs

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I’m too upset by the prospect of a government shutdown to write anything coherent.  It happens.  So I dug through the last time we had this problem potentially looming in 2011 and found this piece.  It’s not only still relevant, but it ties into our recent piece on the Triple Threat of forces on our economic health that no one is really dealing with.  I hope you enjoy this repeat from 31 August 2011.

You can’t have your cake and eat it, too.  It’s a silly old saying with a huge dollop of folk wisdom hidden in the middle of it.  But money spent is sometimes more than just money gone – in an integrated world it’s a choice to make one connection when another one might have been a better choice.

Rather than just measure how much money is going in and out, it might be better to understand what we could buy with the same money.  The technical term for this is “Opportunity Cost”, or what we give up by making the choices we do.

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