Bloomberg on the status of US "excess pandemic savings."
Source: Bloomberg
The US is running 10% deficit with record low unemployment
Imagine the deficit in next recession, whenever it may come. Enjoy these positive real rates as long as they last. Source: Michel A.Arouet, Bloomberg
In case you missed it:
The past few months have brought a very significant tightening of US financial conditions; the Goldman Sachs Financial Conditions Index is now at the most restrictive point since November 2022. (HT GS) Source: HolgerZ, Bloomberg
The US Bond Market has now been in a drawdown for 38 months, by far the longest bond bear market in history
The US Bond Market has now been in a drawdown for 38 months, by far the longest bond bear market in history
Congress Averts US Government Shutdown Hours Before Deadline – Bloomberg
The US narrowly averted a disruptive and costly shutdown of federal agencies as Congress passed compromise legislation to keep the government running until Nov. 17. The legislation, passed in both chambers Saturday just hours before a midnight deadline, buys Democrats and Republicans time to negotiate longer-term federal funding. It doesn’t include new funding for Ukraine. President Joe Biden signed the bill late Saturday night, capping an extraordinary day in Washington that began with the country careening to what appeared to be an inevitable and prolonged federal funding lapse.
U.S. Banks are facing roughly $600 billion of unrealized losses which accounts for roughly 25% of total banking capital, near the highest levels in history
Source: Barchart, FDIC, Alpine Macro
The Timeline of U.S. Government Shutdowns ⏱️⏱️⏱️⏱️
House Republican leaders canceled a planned two-week recess as a government shutdown appeared more likely after they failed to pass a short-term spending bill with fewer than two days to avoid the shutdown. House Speaker Kevin McCarthy informed the GOP caucus of the canceled break at a closed-door meeting after more than 20 Republicans embarrassed him by voting with Democrats to defeat the bill. The government is scheduled to shut down at 12:01 a.m. ET Sunday if a funding bill is not approved by Congress and President Joe Biden. Source: Statista, CNBC
There we go again...
The game of chicken is on...The US government is now just 48 hours away from a SHUTDOWN. This comes less than 3 months after the largest debt ceiling crisis since 2011. Meanwhile, the government is borrowing over $14 billion PER DAY and spending $3 billion per day on interest expense alone. According to Goldman, a government-wide shutdown would reduce quarterly annualized growth by around 0.2% for each week it lasted after accounting for modest private sector effects. Goldman's baseline is that a shutdown could last for 2-3 weeks (the Trump government shutdown, the longest in history, lasted 35 days, from Dec 22, 2018 to Jan 25, 2019). - Meanwhile, Bloomberg also speculates that in an extreme tail event, the maximum hit to 4Q GDP would be a drag of 2.8% if the shutdown lasts for the entire quarter. Source cartoon: San Diego Tribune
