The longest Government shutdown in history is by definition “uncharted territory” and may push markets. Potential effects that may begin to “pile up”: no economic reports for markets to interpret, federal agency causing slowdowns in economic activity (TSA, USDA inspectors, etc), consumer/business confidence erosion, potential global investor impatience and avoidance of US dollars/treasuries (ugh! – especially if the shutdown begins to affect the upcoming debt ceiling debate). With no end in sight, the only “ray of light” from Washington has been a potential trade deal with China (who seems to need to make a deal). The 10 year T seems to have settled in a range of 2.70-2.80 lately, today at 2.75%. CMBS: With no pool having been securitized since before Christmas, originators are slightly “flying blind” looking for a level to price off of. Whisper talk on upcoming pools indicates some narrowing may be in the cards (AAAs at Swap + 95 as opposed to over 100 in December). All-in rates for full leverage loans is right about 5.00% (again). Stay tuned. By David R. Pascale, Jr. , Senior Vice President at George Smith Partners