Last summer US debt ceiling debate brought the downfall of US stock market. The news on US debt ceiling was carried out every minute. American people saw the true sides of Republican and Democrat and how inefficient was the President of USA. Mr. President kept threatening of using his veto power to raise debt ceiling. Finally it was raised to 15.194 trillion dollar on last day. This debt ceiling of 15.194 trillion dollar was once again breached in December but the media didn't even bother to discuss about it. The situation got so worst that US treasury started dipping into federal pension fund to avoid default. http://www.reuters.com/article/2012/01/17/us-usa-debt-treasury-idUSTRE80G20R20120117
US treasury issued warning that if US debt ceiling is not raised by 1.2 trillion dollar then US will default on Jan 27th. Today senate failed to block the debt limit by 52-44 vote in favor of raising the debt ceiling. Now Mr. President will use veto to raise Debt ceiling by 1.2 trillion on Friday. In that case, House and senate need to come up with 2/3 majority to get ride of veto. http://www.c-span.org/Events/Senate-Fails-to-Advance-Resolution-Blocking-Debt-Limit-Increase/10737427570/
All being said, the media coverage of this US debt ceiling was nothing. Kim Kardashian marriage got 4 hour of premier coverage, while this US debt ceiling was hardly covered as if it was non important event.
This government is all about bailout, spending, and no job growth. Unemployment dipping to 8.5% is not because of job growth but because of less participation in the labor market.
Tomorrow US GDP will be out tomorrow at 8.30 EST.
Jan 29 2010, GDP was 5.7% expected 4.5%, Dec 2009 : 2.2%
Jan 28, 2011, GDP was 3.2% expected 3.6%, Dec 2010 2.6%
Jan 27th, 2012 GDP ????, expected 3.0% Dec 2011, 1.8%
Jan 28, 2011, GDP was 3.2% expected 3.6%, Dec 2010 2.6%
Jan 27th, 2012 GDP ????, expected 3.0% Dec 2011, 1.8%
So any guesses for tomorrow GDP. The expectation is lowest in 3 year. So don't be surprised if US GDP is beaten.
The important level for tomorrow is S&P500 should hit 1310 level to trigger sell off.
Don't keep anything invested overnight. The market is expected to decline till Monday.
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