Permanent Value

Week in Review 10/2/13

Bruce Doole
October 2nd, 2013

U.S. Government Shutdown Investment Perspective

•We view the government shutdown as more of a sideshow than something very meaningful. This shutdown will probably not have long-term consequences.

• Assuming this will be resolved quickly, we expect any market impact to be limited. It’s our belief that markets are becoming more immune to Washington’s dysfunction.

• From a philosophical perspective, less government spending doesn’t necessarily mean the economy is worse off, but this presents yet another headwind to headline GDP growth in the U.S.

• Unfortunately, it is likely that we will continue to see this never-ending noise coming out of Washington with the U.S. set to reach its debt limit in October.

• The bigger risk, in our view, is that Washington proves to be so dysfunctional that it cannot take on longer-term structural challenges.


By Eric Stein, Global Income Group