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O tempora o mores

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  • The US government shutdown began at midnight. The direct effects of this are relatively slight, but the shutdown means that government economic statistics will not be published. Without economic data how can economists work? Civilisation is crumbling.
  • The best case scenario is that after a couple of days tried before the court of public opinion, Congress will pass some kind of continuing resolution. The worst case scenario is that this merges seamlessly into debt ceiling negotiations. Bonds seem sanguine about the latter risk (yields declined).
  • In Japan PM Abe leaked (again) what he is about to officially announce an 8% consumption tax and a JPY6tn package (including lower corporation tax). The stimulus package, however, included measures that have already been announced and new measures are closer to JPY5tn.
  • Japan's Tankan business sentiment was somewhat softer in the details, as was the Chinese official PMI data (signalling perhaps a weaker 4th quarter). Euro and UK PMI data are due. The US ISM data will be published (as it is not government) but the volatility of this has risen relative to the real economy. O tempora o mores.

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