MARKET IMPACT A debt ceiling crisis means that the debt ceiling has been breached and the US Treasury has run out of ways to conserve cash to avoid the need for additional borrowing. At this point the Treasury can only pay expenses as the cash arrives, and it will not be enough, so tough choices must be made, such as whether to pay social security recipients or pay the interest on the national debt. A government shutdown occurs when authorized funding has  meaningful portion of Federal employees may be furloughed until funding is re-authorized.


  dollar, and, depending on the magnitude of the equity  bonds (yields lower, prices higher). This all reverses,  the crisis is resolved.


The Federal Reserve’s rate policy may be impacted,    has been resolved. And typically, the Fed will want to wait several months to assess the economic damage before considering a rate cut.


LESSONS FROM BREXIT What does UK Brexit crisis have to do with the US  inability of leaders to reach political compromises when the electorate is deeply divided without a   can you invite individuals of both views to the same  


As we can observe with Brexit, the consequence of an unwillingness to reach a compromise changes the political calculus. The political attention shifts from a focus on improving the economy to a focus on winning the next election, regardless of the consequences for the economy. That is, the political objective becomes one of establishing positions designed to win the next election rather than to   magazine, when faced with a maze, the goal is not to 


As we approach the Fall of 2019, the combination of breaching the debt ceiling and the US government running out of authorized funding will force a debate about the future path of government spending and require a compromise to be approved  Representatives, the Republican-controlled US Senate and President Trump. We are not forecasting a debt ceiling crisis or federal government shutdown, so much as warning that the odds are getting shorter and contingency planning is in order.


Blu Putnam 


All examples in this report are hypothetical interpretations of situations and are used for explanation purposes only. The   This report and the information herein should not be considered investment advice or the results of actual market experience.


27 | ADMISI - The Ghost In The Machine | May/June 2019


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32