Talk about a dysfunctional government in the US; I have a feeling both political parties are riding a speeding car towards a cliff, none of them wants to die but he who is last to jump out wins. Each party is using this issue to undermine the other. In the end, someone will look good for getting his way while the other will declare that it was he who sacrificed for the sake of the American people. If you want my opinion, they should be all voted out and replaced because all of this bickering is irresponsible towards millions of Americans who will be impacted if the deadline passes.
As much as I am disgusted as a Canadian, I have no doubts the level of disgust amongst American citizens must be many times higher than mine. Why shouldn’t they be disgusted? How are you supposed to feel when your leaders gamble with your economic security for partisanship points? Why can’t both parties agree on a solution half way between them? Isn’t financial responsibility in the interest of both parties or is there a conflict of interest in play?
Markets have been dropping so far in a controlled manner, there’s no panic yet. That might be because no one believes that anyone would self inflict another 2008 crisis willingly. However, I have a feeling that as we near the deadline, the lack of agreement will translate into bigger percentage drops. Are we going to see a 300+ point drop this week? Why not, Mr. Market will mount the pressure every day in order to quicken a resolution to the impasse.
If we do get past the deadline on the 2nd of August, it will get ugly. The salaries of these elected officials would turn out to be such a waste of public money.
Pinecrest Energy (TSXV:PRY) released an operational update today; it was great to hear that all production has been restored and that the company is still on track for its exit rate as drilling has resumed. The best part of it all is the 97 net sections of land in the Greater Read Earth Area. The company is currently incurring an extra $8 per barrel in transportation costs as they truck their production since the Rainbow pipeline remains shut. PRY reports Q2 on August 12 if I am not mistaken; I don’t expect it to be great and will certainly buy on any weakness because it will be temporary and overdone as usual. I updated the Slave Point light oil player sheet and PRY stands out for its high leverage to the play. The upcoming land sale on August 11 in the Red Earth area will have loads to say on the value of PRY’s land.
While many companies are on sale this week, I am anxiously waiting for the resolution of the debt limit in the US. If the limit is passed with responsible cuts/tax increases, I expect the market to go up from here. On the other hand, if the US defaults, it will be a totally different game.
What’s your take on all of this?