A Dow drop of almost 200 points Wednesday could be the first tremor of panicky bears preparing to escape an economic conflagration that Congress seems intent on setting off. Will the markets be full of investors with their hair on fire today or Monday as the debt-ceiling deadline looms?
While the House and Senate continue to play chicken, Wall Street (Heaven help us all) looks like the last hope for sanity, as it was in September 2008 when the biggest single-day market crash ever spurred approval of the Paulson bank bailout for unfreezing credit after the House failed to pass it. A loss of $1.2 trillion in market value got their attention.
Now, as the Washington game goes on to avoid default, with the stakes even higher, will the “Greed is good” gang react any differently?
“Investors,” says a New York Times report cautiously, “are seeking alternatives to United States Treasury bonds as worries escalate that lawmakers will fail to reach an agreement…Some have shifted funds into corporate bonds, others are forgetting about yields entirely and parking their money in cash, and more are looking to those classic safe havens of yore, gold and the Swiss franc.
“Investors are getting leery of stocks…”