Whatever happened to....

Tapering, the debt time bomb, US debt limit talks, EU crisis, need I go on?

In the US the Fed has been meeting and is due to report today on its latest findings and whether they will taper their bond buying sooner rather than later, or just keep things on hold again awaiting better data. Markets seem to be in hiding, waiting for the latest from Ben Bernanke. Each time he has reported, without giving too much away on what the Fed intends to do, markets have tended to want to sell off a little on the news or rather lack of it. I was reading yesterday that markets might actually be relieved once the Fed starts to taper as at least they would then be doing something. Markets would then no doubt move on to something else that they might worry about.

So, whatever happened to the US debt limit talks?

President Barack Obama won't negotiate with congressional Republicans over the U.S. government's borrowing limit, he said in an interview that aired Sunday.

Obama told ABC News' George Stephanopoulos that he would not cooperate with House Speaker John Boehner's demand for budget cuts in exchange for House Republicans' allowing the government to continue paying its obligations.

"I'm happy to have a conversation with him about how we can deal with the so-called sequester, which is making across-the-board cuts on stuff that we shouldn't be cutting, while continuing tax breaks, for example, for companies that are not helping to grow the economy," Obama said on ABC's "This Week." "What I haven't been willing to negotiate, and I will not negotiate, is on the debt ceiling."

Much of the federal government will shut down unless Congress passes a budget, or a temporary spending bill, by next month. Not long after that, the U.S. will run out of borrowing authority, with potentially catastrophic consequences for the world economy if the government defaults on its debts. Some Republicans want Obama to gut his own health care law in exchange for a functioning government.

http://www.huffingtonpost.com/2013/09/15/obama-debt-ceiling_n_3930243.html

This is a potential calm before the storm. US politicians have a habit of doing last minute deals, but they are usually dragged along by all sides to get the best political result that suits them. This is not what the markets want to see. So, we could be heading into a period of volatility after a period of relative calm. It's not an easy time to call the markets. US charts look more positive than the UK, but that could change quickly if some of these old fears take hold in the market again and it's been a while since that happened.