Monday, September 30, 2013

Government Shutdown

The last time the U.S. had a government shutdown was from December 16, 1995 to January 6, 1996.
The reason behind the conflict was due to funding for Medicare and public health in the 1996 federal budget.  As a result the Dow Jones dropped from 5176.73 on December 15 to 5075 on December 18 the first Monday of the shutdown.  Stocks rebounded a few days after January 6, 1996 then collapsed once again. By the end of January stocks came back aggressively.

But this isn't 1995 we just came out of the worst recession since the 1930's.  Our economy is not healthy enough to handle a shutdown especially with unemployment at 7.3% and slow U.S. annual growth. The market is already showing the blow this will bring to a brittle economy the DJI closed at 15,129 a 128 point drop for the day.

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