On the sequester and the potential for a US government shutdown

As you know, in mid-January I had said I expected a recession in Q2 as a result of austerity and a government shutdown in the US. Recently, however, I have moved away from that position as a baseline, largely because of the rebound in housing and the potential to avoid a shutdown. Housing impacts the economy by adding to GDP in all the housing-related sectors. But, more importantly, the floor on house prices moves people into positive equity, fuelling mortgage refinancing and adding to disposabl...


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