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Shutdown

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Submitted By visco
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Recently, finance headlines have all been about the US government shutdown and debt ceiling. Last Oct. 1, the US experienced its 1st government shutdown in 17 years. Since the shutdown of Oct. 1, the US stock market had been down almost every day while global stock markets experienced a roller coaster ride. This changed last Thursday when a glimmer of hope started to surface. Over the weekend, American politicians engaged in marathon discussions to solve the US government shutdown and the US debt ceiling problem.
Despite the gravity of the situation in the US, some of our readers and investors are still not familiar with it. They have been asking us how this will affect our economy and stock market. Philequity Corner was conceived with a mission of educating the investing public. As part of our educational mandate, we shall discuss in this article the problems that the US is experiencing. Moreover, we shall explain how these might affect the global economy, global stocks and in particular, the local stock market.
What is the US government shutdown?
A government shutdown takes place when the US Congress fails to allot funds for the incoming fiscal year. This last happened in October 1995 and this current shutdown started in Oct. 1. To date, the US government has been shut down for almost two weeks already. The shutdown closed certain parts of the US government that are deemed non-essential. Some examples of these are national parks and monuments, certain services for veterans and medical research into life-threatening diseases. Because of this shutdown, around 800,000 employees of the federal government were furloughed without pay and suspended indefinitely until government funding is reestablished.
What are the effects of a US government shutdown?
A prolonged government shutdown would hurt an economic recovery that is still quite fragile. This will be quite

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