The first Friday of every month is when the monthly jobs report gets released — but not this Friday. That’s because among those told to stay home with this partial government shutdown are the labor statisticians who normally crunch the numbers.
But that doesn’t mean the entire economy has stopped, or that all those who are unemployed have disappeared.
“Well we know at least 800,000 government employees are temporarily unemployed, that’s for sure,” says Bloomberg Government’s Nela Richardson. But as for the real jobs report, “I don’t think we’d see a big sea change and a big boost in employment this month. However, I think that we have bigger fish to fry in the economy right now: the shutdown, the impending debt ceiling debates are much more problematic to the world economy, to the U.S. economy right now than this tepid jobs report that could have been put out today.”
Meanwhile, the markets are remaining quite calm despite all this happening in Washington, D.C. “Traders I speak to are very calm,” says CNBC’s John Carney. “They’re confident that we will not have some sort of default on the Treasuries. They think when it comes down to it, one side or the other — probably the Obama administration — will either pull some rabbit out of the hat trick that allows us to, ‘Surprise — we don’t have to default on our debt” or they will compromise, perhaps not on Obamacare, but something like ‘We’re going to allow the Keystone pipeline,’ give Republicans a win…So there’s a possible deal people have talked about.”
We also have #longreads picks from the Wrappers — what you should be reading this weekend.
Nela Richardson says: “As a D.C.-based economist, I’ve been submerged in budget battle analysis this week. Here are some longreads for those, like me, who’d like to take a break from Washington dysfunction this weekend.”
- Eileen Pollack examines why there are still so few women in the sciences and finds the culture of academia may be the culprit.
- Gregg Easterbrook shows how private-public partnerships in the NFL are one-sided due to the huge amount of subsidies and tax breaks that city governments pay to private professional sports teams just to keep them in town.
- I can’t imagine losing billions of dollars but I think I’d have more fun doing it than Eike Batista, the eighth-wealthiest man on earth. Bloomberg Businessweek breaks down how Batista lost $34.5 billion in 18 months.
Meanwhile, John Carney says: “All debt ceiling, all the time.”
- Here’s some good news. The first time we came close to a debt ceiling driven default, everyone was new to the situation. This time around, we’ve got a bunch of people who have spent a lot of time crafting and honing ideas about what to do to avoid a default. Many of these ideas are very clever. There’s the famous Platinum Coin, made popular by Joe Weisenthal and Josh Barro. There’s my idea of Obama Bonds. Matt Levine (now of Bloomberg) has proposed Premium Bonds.
- But the most elegant and easiest way to get around the problem is what I proposed in the summer of 2011: the Treasury should just pay all of its bills and the Fed should just credit all of the accounts of those paid with federal government checks. No need to borrow, tax, mint, or issue anything.
- You’re likely to hear a lot about the credit default market in U.S. government bonds as we get closer to the default deadline. In some ways, this seems nuts. If the U.S. defaults won’t the world just go to Hell and we’ll all be fighting bears for salmon and running from zombies? Who cares whether you can collect on your CDS? Who would you collect from? Well, you absolutely must read Matt Levine’s explanation for how this market really works and why people are trading this stuff. Felix Salmon offers a clearer, if less technical and precise, explanation for why people trade in this. Mainly, it’s traders speculating.
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