Think about america of America can’t pay its payments. That might be a reasonably scary proposition. This sounds inconceivable, but it surely’s not with out precedent.
What this might do to the economic system and the inventory market is anyone’s guess, however there may be most likely much less trigger for alarm than you may suppose.
That’s as a result of the market does job of pricing in danger occasions which have a date related to them. Threat normally occurs when buyers get blindsided by information they didn’t anticipate or information that’s worse than anticipated.
The desk beneath reveals all of the current authorities shutdowns alongside the S&P 500 throughout that point. Efficiency was inexperienced throughout the board throughout the shutdown interval, and even within the months main as much as it, solely 2011 noticed a big decline.
The federal government has till June to determine its shit out. In the meantime, January simply had a heck of a run. One doesn’t have an entire lot to do with the opposite, however there you may have it.
I respect danger. I don’t imply to trivialize this. However with all that buyers have to fret about proper now, the debt ceiling may be very far down my checklist.
Additional studying:
How worried should we be if the debt ceiling isn’t lifted?
