What's Government Good for Anyway? - Target (NYSE:TGT)

Minnesota's state shutdown has crimped plans by many to travel to the land of 10,000 lakes. In addition to simply impacting state workers in the area, it appears that the shrunken government will also hurt anyone who needs help from the state's government. Parks and rest stops are closed according to a

local paper

which means that gas stations along the highway might be seeing customers who just want use the bathroom. Companies with their headquarters in the state of Minnesota might see an impact from this continued government downsizing. TCF Bank

TCB

, the company so tied to Minnesota that it derived its name from the Twin Cities of Minneapolis and St. Paul, is not only headquartered, but also has a significant number of branches in Minnesota. With everything in Minnesota impacted by the closure of the state government, this could really harm residents and businesses who rely on the bank across the state.

Politico

reports on an obvious obstruction that this shutdown will cause, and it has the potential to turn mild-mannered Minnesotans into a raging, rioting mass. Many companies need to renew their alcohol licenses and cannot because there is no government to issue them. This presents a serious problem to Minneapolis, which is an active city for microbrewers. Larger Minnesota companies headquartered in Minnesota could also have operating problems if they came across an issue that required the assistance of a state government. Target

TGT

is headquartered in Minneapolis, and since incorporation is a state level activity, the Minnesota shutdown could constrain them. Target is #33 on the Fortune 500 list according to

CNN Money

and this means they play a key role in the United States economy. If they needed to restructure at a high level, they could face difficulties from the paused government that holds their documents of incorporation.

ACTION ITEMS:

Bullish:

Investors who believe that all government is a bad thing might want to consider:

Perhaps gas stations will see a light profit from Interstate drivers who have to stop and use the facilities. Keep an eye on Shell RDS

Bearish

Investors who believe that some government is good may consider:

TCF Financial might suffer the most from the shutdown. A regional bank is ensured by the federal government, but still needs support from the state level institutions to conduct commerce. Since there are so many TCF branches in Minnesota, the big impact will hit on that level.

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