[quote=no_such_reality][quote=6packscaredy]What’s the worst case if they cannot compromise?[/quote]
Well, either Wall Street and the world investment community reacts the way they did to the shutdown and ignore it or the don’t.
Either we mint a trillion dollar coin or we default on our debt (or do we?) I don’t think we do, all they have to do is appropriate a modest sum to paying the interest.
So 50% investment collapse, or nothing.
Who knows. I tend to lean towards more chaos rather than less.[/quote]
We don’t need a trillion dollar coin to solve this problem. We need a continuing resolution to appropriate funds so the government can spend money. We’re still two weeks away from the trillion dollar coin issue, though there are some republicans that have suggested that doubling down on the hostage taking and include the debt limit as an additional hostage along with the continuing resolution.
At least part of the market took notice yesterday afternoon that this thing may not end soon. Oddly the bond market hasn’t bought into it yet. When it does, look for yields to spike and bonds to fall. And if nothing is resolved by the next FOMC meeting, Bernanke will delay tapering again, but the Fed won’t be able to buy fast enough to keep bonds from falling.
