What's happening in the headlines can affect you as an investor. Here's what's going on, what you need to know, and what you should do.
The cold, hard facts
Nov. 23, the deadline for the congressional debt supercommittee to reach an agreement on $1.2 trillion in budget cuts, is rapidly approaching. As of yet, there's no deal in sight, and Reuters is reporting that the committee has no plans to ask for an extension.
After months of frequently rabid debate, a default on U.S. government debt was averted by an eleventh-hour congressional deal reached over the summer.
One the conditions of the deal was that a "supercommittee," made up of six Democrats and six Republicans, would come up with a plan to cut at least $1.2 trillion from the federal budget over the next 10 years. And if no deal was reached, the same amount in cuts would automatically kick in, half from defense alone.
"The clock's ticking," House Democrat and committee member Chris Van Hollen told MSNBC. "We've got just a little over two weeks, and that includes the time that it will take to put the final touches on any agreement that we might be able to reach."
One thing you need to know
Whether the supercommittee comes up with its own budget-cut plan or the automatic cuts kick in, defense is going to take a hit. There's just not enough discretionary spending in the budget to get to the massive numbers needed to address the national debt.
So with the deadline looming, and more than half a trillion dollars in defense cuts on the table, if you're not already in defense stocks, now's probably not the time to get in. But if you're determined, think about companies like Boeing
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Fool contributor and newshound John Grgurich loves his Reuters feed so much he wants to marry it, but he owns no shares of any of the companies mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a scintillating disclosure policy.