I'd like to welcome all those who've taken a moment to scroll through the blogs I've been posting on our new website over the past week. As I mentioned in the email I sent out, we will be using this blog as an avenue to inform and explain what is going on in the economy and stock market, and how these developments will impact how the stock market performs.
Having talked to several money managers and economists today via email, it appears that the Republicans and Democrats are close to a compromise on whether Congress will raise the debt ceiling limits so that the U.S. can avoid a default on our debt (which is held by other countries - mainly China). If Washington were unable to come to some sort of agreement by the first of August (which is the deadline), then the government would be unable to pay its obligations (social security and other entitlement programs). This is highly unlikely because if the debt ceiling limit wasn't raised, it would be a collossal problem for the economy and the stock market.
If the debt ceiling is raised, which my sources say is imminent, then the stock market would probably rally to the upside as the concerns over default would be taken off the table and give the markets some relief (at least in the short term). This of course would be the equivalent of putting a band-aid on a knife wound as we still need to cut government spending, increase economic growth, bring down the unemployment numbers, and see a rebound in the housing market. (All of these things are already on my Christmas list!).
Thanks again for taking the time to visit our new blog.
