Renewed volatility and a drop in the stock market arrived, as expected, with the budget debate and partial government shutdown in Washington, D.C.
The partial shutdown surely has angered thousands from around the world who spent significant time and money on vacation and holiday travel to the nation’s capital only to find locked doors at the Smithsonian museums and closed entries to national monuments. We commend and respect the World War II veterans who, shortly after the shutdown began, moved aside the barriers barring entry to the WWII memorial so they could experience what was constructed in their honor. Washington could use a healthy dose of the humility and patriotism these men and women have demonstrated.
Not only has the shutdown affected these travelers, but national parks across the country, and even outside of our borders, have been shuttered. People making the trip to visit the American Cemetery on the beach at Normandy, France have been greeted by a locked gate with a sign indicating “Due to the U.S. Government shut-down this site is closed to the public.” One visitor was quoted as saying that our flag wasn’t even flying over our soldiers who gave their lives.
A partial shutdown of the U. S. government is certainly less than ideal, but a failure to increase the debt ceiling could prove much more damaging. The President and Congress are playing Russian Roulette, but with the business end of the game piece pointed at the country. The world is watching, and international communities and organizations, such as the International Monetary Fund (IMF), are not only having to be concerned about political risk in nations where this is normally a concern, but lately have at the top of their agenda the political risk right here in the United States.
While we anticipated the volatility due to political wrangling, we maintain our belief that any short-term downdraft in the market will eventually prove to be a buying opportunity. In fact, the greatest opportunity may have passed last week as the market saw significant recovery late in the week on news that congressional leaders were to meet at the White House in an effort to resolve their differences.
Although our elected representatives are currently choosing to be intransigent, we believe they will come to an eleventh hour agreement to increase the debt ceiling, if for no other reason than to preserve any hope of being reelected.