Tomahawk, WI 10/08/2013 (BasicsMedia) – iShares Barclays 20+ Yr Treas.Bond (ETF) (NYSEARCA:TLT) has a market cap of around $2.99 billion. There are reports that these ETFs will be experiencing new life, or at least that is where they are heading to. How true this is remains to be seen, but I think the projection is not far off the mark. The latest U.S. government shutdown is having an impact on various factors which influence how ETFs eventually perform and I don’t expect TLT to come out of this experience unscathed. Let’s take a look at the ways in which the future looks bright for ETFs.

 Investors have been pouring a large part of their finances into the equity market since the start of 2013. The situation has continued this way for the longest time and has been interesting mainly because times have not been e best for many other companies. The economy as well still suffers from the effects of the last financial depression of 2008. And now there are stories that ETFs such as TLT are projected to be on their way towards a very good future. The Fed is also expected to announce its scaling back activities which will have a further bearing on ETFs.

Homebuilder ETFs suffer a great deal when the government shutdown takes place. Where the government plays a crucial role in the activities of these activities, it cannot monitor the work going on here and this has grave implications. It was only in September that the homebuilding industry experienced a swing back after a short period of negativity. Things have now changed as a result of the shutdown being experienced by the U.S. government. Where borrowers were on the verge of applying or filing got home loans, the delays will affect the ETFs such as TLT.

 The reason why ETFs such as TLT could be affected by the shutdown is because it becomes impossible for them to verify any information which the government has on their investors or clients. The Internal Revenue Service data as well as Social Security numbers cannot be ascertained thus leading to delays in completing transactions between these ETFs and their clients. Several transactions are then delayed thus leading to some sort of crisis which may be transferred to other industries as well. A whole chain of events is triggered by the shutdown.

 The housing market has just been on a recovery after the mortgage crisis of 2008. What this shutdown is doing is that it is causing any confidence which the market has started showing towards the housing sector to evaporate. The housing sector has been slowly recovering from the effects of the last crisis which took place in 2008. Things are about to go bad for this industry thus making me wonder why some analysts are predicting good times ahead for ETFs such as TLT which can’t be totally delinked from the housing or mortgage business.

 Once the shutdown is over, TLT will have to work extra hard to regain whatever it has lost as a result of the government shutdown.

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