In all the spirited rhetoric over the Republicans' failure to pass Obamacare repeal and confusion over what lies ahead, many pundits and market watchers seem to have forgotten that a far more imminent threat, one due exactly one month from today, is that the US government may shut down. As Axios pointed noted, citing a top Republican, after the GOP failure on healthcare, a government shutdown which looms when the continuing resolution runs out April 28 and coincides with Day 100 of the Trump presidency, is "more likely than not... Wall Street is not expecting a shutdown and the markets are unprepared." Axios further notes that the message CEOs took from Friday's fiasco, according to an executive at a money-center bank, was "Holy crap! We may be facing the same crap on a shutdown threat, and on the debt ceiling. Holy crap! We may not get tax reform, or a repatriation bill, or infrastructure spend, or substantial changes to regulations." However, while we agree with the quoted republican that by and large markets are unprepared, they are starting to realize that a government shut down is becoming an all too real possibility, as the following just released note from BMO's strategists Ian Lyngen and Aaron Kohli. The BMO duo note that they have been "fielding questions about ‘what’s next’ for the administration in terms of legislative proposals – tax reforms? An infrastructure program to ‘Repave America’?" Here is their response: While Trump would surely like the tax issue to be front and center, we’re starting to hear growing concerns that a government shutdown at the end of April may be a real possibility given the rise of the Freedom Caucus. Moreover, with the Democrats emboldened by their success in averting the repeal of Obamacare (at least for now), there is clearly less incentive to ‘play nice’ with the rest of Congress. In short, rather than clearing the way for tax reforms to take center stage, the healthcare bill mistakes might have more damaging implications for the effectiveness of the new administration than the Trump camp wants to admit. In considering the market impact from the healthcare bill, perhaps the question shouldn’t be ‘what happens when tax reforms and infrastructure gets passed?’ and rather ‘what happens when the government enters a partial-shutdown on April 28th?’ To the latter question, that would certainly be a bullish event for the Treasury market and risk-off more broadly. The most straightforward implications are that the gridlock and relative strength of the opposition in Washington will simply slow pro-business reforms so significantly that markets will effectively price them out. After all, if Congress cannot keep the lights on in the Capitol building, how much confidence will the market have in their ability tackle the weightier issues of tax and infrastructure spending. We’ll be the first to admit that we came into this year expecting that the debt ceiling debate would be a complete non-issue given what (at the time) appeared to be a unified Republican government. We were clearly a bit too optimistic, or politically naïve, and what’s currently playing out triggers flashbacks of the summer of 2011 when the US was downgraded by S&P as a polarized Congress wasn’t able to raise the debt ceiling quickly enough. While one might intuitively think that the risk of a downgrade would increase the cost to the borrower (i.e. higher yields), during the period of April 18, 2011 when S&P put the US on “negative outlook” to August 5, 2011 when the downgrade occurred, 10-year yields dropped from 3.40% to 2.56%. There were certainly a number of other more tangible drivers at play behind the rally as well; slowing economic growth, the Fed’s quantitative-easing program, falling inflation expectations, etc. – but our broader point is that the market’s reaction to another ‘head-to-head’ debt-ceiling debate will be bullish for the Treasury market. If for no other reason than what it suggests will ultimately be delivered in terms of other reforms. To be sure, traders have demonstrated an amazing ability to reallign the bullish narrative with any change in the underlying facts, so it is quite possible that we are just one month away from the market surging back to all time highs because a shut government is spun as positive for risk assets, the same Trump's healthcare bill failure has resulted in rising stock prices.
Why are we not profiling?
From The Daily Mail:
A furious mom has blasted the TSA officers who she says gave her disabled son an 'unnecessary' and 'horrifying' pat-down in a Dallas airport on Sunday.
Jennifer Williamson says that her son Aaron, who has sensory processing disorder, was detained for more than an hour at Dallas/Fort Worth Airport despite not setting off the metal detector.
And although she asked the TSA agent not to perform a pat-down, saying it would upset the boy, the agent went through with it anyway.Williamson then recorded the 'traumatizing' incident in a video that has now been seen more than 1.5 million times.
The video shows Aaron, red-faced, being patted down slowly over the course of two minutes by a TSA officer....
CNN host Brian Stelter is outraged Fox News had the audacity to cover a "local" story about two illegal immigrants allegedly raping a child at school.
Just when you though CNN host Brian Stelter couldn’t become any more of a “ridiculous figure” he found a new level of low to crawl to, during Sunday’s Reliable Sources. As had been extensively covered by the MRC, the liberal networks have been blacking out the rape of a girl on school ground by illegal immigrants in Rockville, Maryland, with Fox News being the only TV news outlet covering it in detail. But according to Stelter, that’s apparently a problem for Fox.
“Rapes and assaults and murders are local news stories on a daily basis. But when do they break through to become national news and when do they not,” he wondered at the top of the segment and before taking it to Fox.
He then immediately whined that “This week health care bill, the talks in the House dominated cable news coverage all over the place, but Fox News also focused heavily on another story and sometimes tying it to the President's immigration agenda.”
“Now on Fox, all roads lead back to media bias,” he chided, “So Tucker Carlson called out channels like CNN for not covering this story thoroughly, for not covering it extensively.” He also wrote off how Carlson slammed the Big Three networks for their lack of coverage.
In a pitiful attempt to turn Carlson’s assertion back on Fox News, Stelter slammed the cable news outlet for not covering another crime in Maryland. “But there was another story with Maryland ties that got little to no news coverage anywhere on Fox or any other channels,” he said, “This was about an army veteran, an alleged white supremacist who drove to New York and attacked a 66-year-old black man with a 26-inch knife, killing that man.”
“But this story received almost no coverage on Fox or CNN or anywhere else for that matter,” he admitted as he took another swipe at Fox for reporting the heinous rape of a 14-year-old girl, “Another example of a crime but not a crime that fit the political agenda of those pro-Trump hosts on Fox.” But for the lack of coverage he claimed that story had, both ABC and NBC reported on that tragic incident in New York last week....