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It Begins: The Destruction of Syria's Chemical Weapons

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lawhawk10/08/2013 8:29:25 am PDT

So, the shutdown is about to have greater effect on everyone. The data that the government collects and disseminates to the public is not there for a variety of commodities. First there’s the pork and other agricultural products. That’s a huge thing since figuring out fair market value is, well, important.

If the shutdown isn’t resolved soon, the Energy Information Agency will stop reporting its data on oil and gas, which affects, well, everyone.

The pork market may seem trivial to the operation of the American economy, but the same basic problem will be reverberating throughout the commodities sector. The Energy Information Agency is still up and running today, but should run out of cash around Friday, at which point the anything-but-trivial oil and gas markets will be stricken with the pig industry’s problems.

Will disruptions in commodity markets disrupt the ability of other firms to get supplies and earn profits? We would get our first hint in Friday’s producer price index release, except of course there won’t be a producer price index release on Friday. Nor will we get the import and export price index release scheduled for Thursday. Those indexes are the lead-up to the big consumer price index report that’s supposed to come out on Wednesday, Oct. 16, but probably won’t as the shutdown drags on and on.

The markets rely on data, and when you’re not getting data, the markets will do what they think is appropriate. They’ll hunker down, or they’ll make assumptions. They’ll speculate. They may send prices far higher than if they had the data.

If those decisions are wrong, it could have significant and lasting effects on a whole lot of people.