by Peter Cooper, Arabian Money:
You might imagine that with the US Government shutdown this week there would be feverish activity on Capitol Hill to resolve the impasse. Not really, the two sides seem to be digging in for a longer battle with only some emergency legislation to pay 400,000 military passed by the house yesterday.
Stocks closed two per cent down for the week amid choppy trading. The VIX fear index is up from 13.12 on September 20th when the market topped out to 16.89. But when Congress last got into a fight over the debt ceiling two years ago the VIX hit 48.
VIX rising With the debt ceiling scheduled to be reached on October 17th a similar run-up in the VIX seems a fairly easy bet, unless the nation’s politicians suddenly get their act together. That may not happen until they see the deadline much closer and react to rising fear in financial markets.
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