Wells Fargo Advantage Funds' latest Portfolio Manager Commentary discusses the debt ceiling. (See also, "Wells Fargo Advantage Money Market Funds: Our perspective on the government shutdown.") They say, "As we write this, the news outlets are very much focused on the budget stalemate and potential government shutdown. We cannot foresee where this all might stand by the time this is published, but we see little long-term impact from such an event on the markets.... Some of the players have changed since 2011, and the debt ceiling is now $16.699 trillion instead of $14.29 trillion, but the Treasury still has the same tools that it can use to avoid a default on its debt. With $4.78 trillion of the $16.7 trillion in total federal debt held by other government units, and another $2 trillion in the Federal Reserve's (Fed's) portfolio, the potential for creative accounting solutions to address the debt ceiling issue is significant. The concern is that the Treasury has been deploying these tools since mid-May, and it is not clear how much additional room under the ceiling can be obtained in this fashion. Current estimates are that the Treasury may exhaust these approaches sometime in the mid-October to November time frame. We do believe an accord will be reached, and while the consequences would obviously be quite severe, we would assign an extremely low probability to a default or disruption in the market for Treasury securities." (Note: Watch for an analysis of money funds' latest Treasury bill holdings following the publication of Crane Data's Money Fund Portfolio Holdings late Wednesday and Thursday.) Finally, see Reuters' "Money funds avoid some U.S. debt on fear of repayment delays".

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