News / Economy

Markets Remained Relatively Stable Throughout Political Debate

Markets Remained Relatively Stable During Political Debatei
X
October 17, 2013 3:38 AM
The Wall Street financial markets have remained relatively stable throughout the protracted debate in Washington over extending the $16.7- trillion government borrowing limit. However, now that a last minute agreement has been reached to avert an unprecedented national debt default, VOA's Brian Paden reports that some investors are still anxious about how this recent crisis will affect America's financial standing in the long term.

Markets Remained Relatively Stable During Political Debate

Brian Padden
The Wall Street financial markets have remained relatively stable throughout the protracted debate in Washington over extending the $16.7- trillion government borrowing limit.  However, now that a last minute agreement has been reached to avert an unprecedented national debt default, some investors are still anxious about how this recent crisis will affect America's financial standing in the long term.
 
Stocks surged higher on Wednesday after Senate leaders reached a deal to raise the government debt ceiling.  The news came one day before the U.S. Treasury said it could run out of ways to avoid default on its debt.  Many investors say they have not been surprised by either the political brinkmanship on display in Washington or the announcement of last minute deals.
 
Ken Williams, a stockbroker with Blackwall Capital Markets, said it is just how business gets done in Washington these days.
 
“Unfortunately we'll hit our rocks and have our problems and scare everybody.  It's just like a roller coaster, aahh, oohh, eehh, but in the end, guess what?  It'll come out nice and smooth and you'll get off and you'll look behind you and say, 'what a ride,'” said Williams.
 
Offering an alternative view is Gennadiy Goldberg, a strategist with TD Securities, who feels that even the threat of a default drove some investors to pull money from short-term money markets. Goldberg is worried the Congressional drama could also undermine long term international confidence in U.S. currency markets and the dollar.
 
“The Treasuries [bills] are used as kind of a risk-free base rate for things. So obviously when your risk-free base is no longer risk-free, that will throw everything up in the air and have people reconsider how they see the U.S. dollar as a global reserve currency, how they see Treasuries as the risk-free assets,” explained Goldberg.
 
Goldberg also feels that not only has the U.S. financial reputation been tarnished, but in addition the national debt will actually increase because of the government shutdown.
 
“There is no reason to assume that this would have actually saved us any money. So the irony is that by shutting down the government, we're actually going to be paying more because you have to pay back the workers, you have to pay back your debt and essentially it will cost you more in the end,” said Goldberg.
 
Even though Wall Street investors were prepared for a last-minute deal, Goldberg feels political stand-offs in Washington are likely to make the markets more volatile in the future.

You May Like

Video Is West Doing Enough to Tackle Islamic State?

There is growing uncertainty over whether West’s response to ISIS is adequate More

China Crackdown on Dual Citizens Causes Concern

New policy encourages reporting people who obtain citizenship in another country, but retain Chinese citizenship; move spurs sharp debate More

Video Coalition to Fight Islamic State Could Reward Assad

Losing ground to Islamic State fighters, Syria's government says it is ready to cooperate with international community More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Is West Doing Enough to Tackle Islamic State?i
X
Henry Ridgwell
August 29, 2014 12:26 AM
U.S. President Barack Obama has ruled out sending ground troops to Iraq to fight militants of the so-called Islamic State, or ISIS, despite officials in Washington describing the extremist group as the biggest threat the United States has faced in years. Henry Ridgwell reports from London on the growing uncertainty over whether the West’s response to ISIS will be enough to defeat the terrorist threat.
Video

Video Is West Doing Enough to Tackle Islamic State?

U.S. President Barack Obama has ruled out sending ground troops to Iraq to fight militants of the so-called Islamic State, or ISIS, despite officials in Washington describing the extremist group as the biggest threat the United States has faced in years. Henry Ridgwell reports from London on the growing uncertainty over whether the West’s response to ISIS will be enough to defeat the terrorist threat.
Video

Video Pachyderms Play Polo to Raise Money for Elephants

Polo, the ancient team competition typically played on horseback, is known as the “sport of kings.” However, the royal version for one annual event in Thailand swaps the horse for the kingdom’s national symbol - the elephant. VOA Correspondent Steve Herman in Samut Prakan reports that the King’s Cup Elephant Polo tournament is all for a good cause.
Video

Video Coalition to Fight Islamic State Could Reward Assad

The United States along with European and Mideast allies are considering a broader assault against Islamic State fighters who have spread from Syria into Iraq and risk further destabilizing an already troubled region. But as VOA State Department Correspondent Scott Stearns reports, confronting those militants could end up helping the embattled Syrian President Bashar al-Assad.
Video

Video Made in America Socks Get Toehold in Online Fashion Market

Three young entrepreneurs are hoping to revolutionize the high-end sock industry by introducing all-American creations of their own. And they’re doing most of it the old-fashioned way. VOA’s Julie Taboh recently caught up with them to learn what goes into making their one-of-a-kind socks.
Video

Video Americans, Ex-Pats Send Relief Supplies to West Africa

Health organizations from around the world are sending supplies and specialists to the West African countries that are dealing with the worst Ebola outbreak in history. On a smaller scale, ordinary Americans and African expatriates living in the United States are doing the same. VOA's Carol Pearson reports.
Video

Video America's Most Popular Artworks Displayed in Public Places

Public places in cities across America were turned into open-air art galleries in August. Pictures of the nation’s most popular artworks were displayed on billboards, bus shelters, subway platforms and more. The idea behind “Art Everywhere,” a collaborative campaign by five major museums is to allow more people to enjoy art and learn about the country’s culture and history. Faiza Elmasry has more.
Video

Video Chinese Doctors Use 3-D Spinal Implant

A Chinese boy suffering from a debilitating bone disease has become the first patient with a part of his spine created in a three-dimensional printer. Doctors say he will soon regain normal mobility. VOA’s George Putic reports.
Video

Video Uneasy Calm Settles Over Israel, Gaza Strip

Israel and the Gaza Strip have been calm since a cease-fire set in Tuesday evening, ending seven weeks of hostilities. Hamas, which controls Gaza, declared victory. Israelis were more wart. VOA’s Scott Bobb reports from Jerusalem.
Video

Video India’s Leprosy Battle Stymied by Continuing Stigma

Medical advancements in the treatment of leprosy have greatly diminished its impact around the world, largely eliminating the disease from most countries. India made great strides in combating leprosy, but still accounts for a majority of the world’s new cases each year, and the number of newly infected Indians is rising - more than 130,000 recorded last year. Doctors there say the problem has more to do with society than science. Shaikh Azizur Rahman reports from Kolkata.
Video

Video Scientists Unlock Mystery of Bird Flocks

How can flocks of birds, schools of fish or herds of antelope suddenly change direction -- all the individuals adjusting their movement in concert, at seemingly the same time? British researchers now have some insights into this behavior, which has puzzled scientists for a long time. VOA's George Putic has more.

AppleAndroid

World Currencies

EUR
USD
0.7537
JPY
USD
103.79
GBP
USD
0.6032
CAD
USD
1.0957
INR
USD
60.522

Rates may not be current.