It's the "end game" in Washington. There has to be a deal by tomorrow, midnight, or the government shuts down. That's about it for news this week, and likely for the next couple of weeks. The markets are not going to be happy about a shut down. I do have some fun graphs.
The government shuts down. What does that mean? Air traffic controllers are still on the job. Unemployment, Social Security, and Medicare checks will continue to be written. The U.S. mail system will stay open, as will NASA. Most military and veterans bills will get paid. FDA food safety inspections might stop, but high-risk situations and meat inspections would go on. Parks and monuments will be shut down. Every week the government shuts down, 0.15% is shaved off of annualized GDP. This will hurt the economy, but won't be so immediately painful that both sides will rush to get things solved. Bank of America analyst Ethan Harris said, "As in the past, we worry that if they do cross the Rubicon—and start a shutdown—what will get them to turn back? If they have decided that the political calculus is in their favor, what will make them decide it no longer is? In our view, it might require either a major popular outcry or a major stock market correction. Recall that as the fiscal cliff approached at the end of last year, one popular view was that the fiscal cliff was really a “slope”—it would impact the economy slowly and that any damage could be easily reversed. That kind of attitude is what could cause a really damaging sustained shutdown."
Arctic ice hits its minimum in mid-September. How did it do? Much better than last year, as the last chart shows.
I supply the following charts, based on CDC and census data, without comment.
A British study into drugs found, to no one's surprise, that the drug which does the most damage to society is alcohol. But we've been drinking for several thousand years and we already tried outlawing it once. For that matter, we're currently trying to outlaw everything else, with pretty much the same results: you can buy anything you want, and crime is rampant in our cities.
College football programs are not allowed to pay their players. What would the players make if they did? The NFL gives their players about 47% of the total take, so here's the pay for each of the 83 players on each team if you presume they shared 47% of their college's football income:
Is there a new bubble forming in housing? Perhaps. Some economists, including Robert Shiller of Case-Shiller fame think so. The percent increase in some housing markets in the last 12 months is a bit startling. Interest rates are artificially low and most likely destined to stay there for at least a couple more years, and so as people come back to buying houses prices are moving quickly, especially in the areas hardest hit in the crash.