Saturday, September 21, 2013

What Mattered This Week?

There's a ton of stuff to choose from, isn't there? And the big ones, or at least the potential big ones, seem to be from the secondary headlines. I'll go with the Pope -- but I'll mention, too, carbon regulation and Iran.

What didn't matter? I don't know about not mattering, but I'm certainly on the side of those who believe the House CR was a maneuver to avoid a government shutdown, not a step on the way to one. I guess we'll see.

But as I said, there sure is a lot to talk about here. What do you have? What do you think mattered this week?


  1. re Why Aren't Dems Fighting on the CR?:

    perhaps Reid has had this under control the whole time?

    "Senate Democratic sources say Reid could increase the funding level in the House-passed resolution by using the same floor procedure he’s expected to use to remove language defunding ObamaCare.

    “He can also change the numbers,” said a Senate Democratic strategist.

    Senators and aides say Reid will manage the House resolution in such a way to allow Democrats to revise it with a simple majority vote.

    Senate Republicans on Thursday said they would vote to end debate on the House legislation — thereby advancing it — even if it allows Reid to later schedule a vote on an amendment stripping language defunding ObamaCare.

    “I can’t imagine why any Senate Republican would vote to block cloture or block motion to proceed on a bill they support,” Sen. Bob Corker (R-Tenn.) told reporters. “I’m assuming that what the House sends over is what we support.”

    Corker acknowledged this would allow Reid to later overhaul the bill with a simple majority vote.

    “Since you can amend a bill post-cloture, as long as it’s germane, with only a simple majority, it would seem to me that he has a way to make this work as he wishes,” Corker said.

  2. The anti-Obamacare stuff doesn't matter, though it is interesting. The Fed's decision not to taper, and their new projections do matter.

  3. Did you see Felix Salmon's post on taper?

    He suggests that the market change is a real valuation on quantitive easing. Not sure I agree, but it's a good data point that the Fed is helping the economy with tapering.

    1. Ugh; not helping with tapering, but that tapering reveals how quantitive easing is helping.

      Sorry 'bout that.

    2. That doesn't seem quite right. The price level of the market on any given day should roughly equal the value of the underlying assets; other factors, like expectations of other traders' behavior, can also influence prices over a time span as short as one day.

      Said differently, the S&P went up over 1% on Wednesday on the QE news; with no unambiguous bear signals it gave almost all of that back on Thursday and Friday. Hardly a ringing market endorsement of QE, it seems to me.

    3. The Friday, decline, though, may simply be due to jitters about a possible government shutdown and the debt ceiling, etc. (The actual danger of a shutdown--let alone default--may not be greater than it was, but the closer the deadlines get the more nervous the market is.)

    4. CSH, I think David T's point is really important, and would remind you that there have been severe market pull-backs last time the House gambled with the Full Faith and Credit of the US. This time, there's the triple whammy of default dangers, government shutdown, and major uncertainty in health care markets just when those markets have spent a couple years gearing up for the changes of Obamacare.

      The House is spewing uncertainty into the economy right now.

    5. Certainly possible, but as an explanation for Friday's price action you need to explain what new information is provided by Day ~T-24 to the debt ceiling vs Day ~T-25. Yes, a day ticks off the calendar, but not a day in which traders realistically might have expected this thing to be solved. Short of that, its hard to figure how the budget shenanigans led to new information causing Friday's market reaction.

      A more likely explanation for Thursday and Friday is this: the Fed's surprising decision to continue bond buying caught bears off guard; sitting on big short positions on S&P components (or the market), they scrambled to unwind those positions Wednesday, to mitigate against a short squeeze. When there was no follow through from market bulls, it was back to business as usual for those bears on Thursday and Friday.

      Long story short: no actual market endorsement of the Fed's decision, just a one-day nervous burst of buying.

  4. I'll go with yours: carbon regulation, Iran and maybe the Pope--we'll see if he retrenches or was "misquoted" in saying the Church has been obsessed with gays and abortion. The U.S. Church certainly has, it's changed so much since even the 50s let alone the post John XXIII 60s. It will take more than one comment to change that culture.

    1. I think the Pope may matter more than folks realize in part because they may be missing his point. We expect popes to speak infallibly, or at least authoritatively; words of sympathy for gays are seen as a sign of a potential change in policy, which notion the Vatican is quick to squash and the buzzosphere is apt to analyze.

      That's not the point, it seems to me. Suppose the Almighty One agrees with the Catholic view that homosexuality merits opprobrium. Well, that would be bad, I guess, but...join the club. The church welcomes thieves and murderers and coveters of thy neighbor's oxen into every pew of every church on every Sunday. Why, I take Francis to be asking, are we cool with those folks but gays need a scarlet letter?

      That's a pretty powerful question, and one that could potentially change the world, especially if many folks aren't aware that its what's being discussed.

    2. Sure. What commandment is the "Thou shalt not love thy neighbor?" 'Cause I guess that's the one the gays are breaking.

    3. That's part of the point, isn't it? The gay "sin", if a sin indeed, is something way short of what Moses brought down off of Mt. Sinai. But even if it were somehow a commandment-quality sin (quite a stretch, for the reasons you note), well, the church is full of such people, and no one calls those others out for their transgression.

    4. “Who is Jorge Mario Bergoglio?”

      “I ​​do not know what might be the most fitting description.... I am a sinner. This is the most accurate definition. It is not a figure of speech, a literary genre. I am a sinner.”

      As are we all. Christianity has always had a pretty expansive definition of what constitutes "sin", but it also has an expansive definition of grace and redemption. Unfortunately, when the religion gets mixed up with the politics, grace falls by the wayside because it's incompatible with the way politics works. Some sins are singled out - conveniently, the sins "others" commit and not the ones "we" commit - allowing the comfortable to afflict the afflicted in the name of a religion that seeks to do the exact opposite.

  5. What mattered: I'll add that UN weapons inspectors report on Syria has shut the Overton window for a mainstream perception that the chemical weapons attack was a false flag by the opposition. I suppose there will be a few Truthers out there, but everyone else knows this isn't WMD in Iraq again.

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