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 One Year After Thai Coup, No End in Sight for Military Rule

Since carrying out the May 22, 2014 coup, the general has retired from the military but is still firmly in charge More

Goodbye, New York

This is what the fastest-growing big cities in America have in common More

Job-Seeking Bangladeshis Risk Lives to Find Work

The number of Bangladeshi migrants on smugglers’ boats bound for Southeast Asian countries has soared in the past two years 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.
Turkey's Main Opposition Party Hopes for Election Breakthroughi
X
May 22, 2015 10:23 AM
Turkey’s main opposition Republican People’s Party has sought an image change ahead of the June 7 general election. The move comes after suffering successive defeats at the hands of the Islamist-rooted AK Party, which has portrayed it as hostile to religion. Dorian Jones reports from the western city of Izmir.
Video

Video Turkey's Main Opposition Party Hopes for Election Breakthrough

Turkey’s main opposition Republican People’s Party has sought an image change ahead of the June 7 general election. The move comes after suffering successive defeats at the hands of the Islamist-rooted AK Party, which has portrayed it as hostile to religion. Dorian Jones reports from the western city of Izmir.
Video

Video Europe Follows US Lead in Tackling ‘Conflict Minerals’

Metals mined from conflict zones in places like the Democratic Republic of Congo are often sold by warlords to buy weapons. This week European lawmakers voted to force manufacturers to prove that their supply chains are not inadvertently fueling conflicts and human rights abuses. Henry Ridgwell reports from London.
Video

Video Class Tackles Questions of Race, Discrimination

Unrest in some U.S. cities is more than just a trending news item at Ladue Middle School in St. Louis, Missouri. As VOA’s Kane Farabaugh reports, it’s a focus of a multicultural studies class engaging students in wide-ranging discussions about racial tensions and police aggression.
Video

Video Mind-Controlled Prosthetics Are Getting Closer

Scientists and engineers are making substantial advances towards the ultimate goal in prosthetics – creation of limbs that can be controlled by the wearer’s mind. Thanks to sophisticated sensors capable of picking up the brain’s signals, an amputee in Iceland is literally bringing us one step closer to that goal. VOA’s George Putic reports.
Video

Video Afghan Economy Sinks As Foreign Troops Depart

As international troops prepare to leave Afghanistan, and many foreign aid groups follow, Afghans are grappling with how the exodus will affect the country's fragile economy. Ayesha Tanzeem reports from the Afghan capital, Kabul.
Video

Video Poverty, Ignorance Force Underage Girls Into Marriage

The recent marriage of a 17-year old Chechen girl to a local police chief who was 30 years older and already had a wife caused an outcry in Russia and beyond. The bride was reportedly forced to marry and her parents were intimidated into giving their consent. The union spotlighted yet again the plight of many underage girls in developing countries. Zlatica Hoke reports poverty, ignorance and fear are behind the practice, especially in Asia and Africa.
Video

Video South Korea Marks Gwangju Uprising Anniversary

South Korea this week marked the 35th anniversary of a protest that turned deadly. The Gwangju Uprising is credited with starting the country’s democratic revolution after it was violently quelled by South Korea’s former military rulers. But as Jason Strother reports, some observers worry that democracy has recently been eroded.
Video

Video California’s Water System Not Created To Handle Current Drought

The drought in California is moving into its fourth year. While the state's governor is mandating a reduction in urban water use, most of the water used in California is for agriculture. But both city dwellers and farmers are feeling the impact of the drought. Some experts say the state’s water system was not created to handle long periods of drought. Elizabeth Lee reports from Ventura County, an agricultural region just northwest of Los Angeles.
Video

Video How to Clone a Mammoth: The Science of De-Extinction

An international team of scientists has sequenced the complete genome of the woolly mammoth. Led by the Swedish Museum of Natural History in Stockholm, the work opens the door to recreate the huge herbivore, which last roamed the Earth 4,000 years ago. VOA’s Rosanne Skirble considers the science of de-extinction and its place on the planet
Video

Video Blind Boy Defines His Life with Music

Cole Moran was born blind. He also has cognitive delays and other birth defects. He has to learn everything by ear. Nevertheless, the 12-year-old has had an insatiable love for music since he was born. VOA’s June Soh introduces us to the young phenomenal harmonica player.

VOA Blogs

World Currencies

EUR
USD
0.8957
JPY
USD
120.93
GBP
USD
0.6393
CAD
USD
1.2199
INR
USD
63.470

Rates may not be current.