For whom the bell tolls
Are you listening? … There’s that familiar bell. But I’m starting to think of it as more like a fire alarm.
As the markets have gone up and down over the past 11 days, they have been warning the default-deniers that they’re not going to get the same pass as their global warming cousins. The impact won’t be in some distant dystopian future, it’ll be here and now.
It’s sending as message to people like Representative Steve King, “I don’t think the credit of the United States is going to be collapsed. We have plenty of money coming in to service the debt. When we stop servicing the debt – that would be default. We’re a long, long ways from that.”
Well, I’m sure you’re a smart man, but I’m afraid the investment community doesn’t agree with you.
And whatever you think about Wall Street, one way or another, everybody’s wealth, from the change in the cup of a street beggar to the retirement funds of 77 million Baby Boomers, depends on it.
And not only has the stock market been sending a message – every financial executive Congress invites to testify says the same thing. Here’s a collection of clips – and this is just from Thursday’s testimony.
“Unnecessarily triggering a voluntary default will result in a dramatic and possibly permanent damage to our economy and markets …”
“Resulting in higher mortgage rates and increasing the rate in buying a home…”
“The damage of a default who saves, invests, borrows or who has any stake in the economy…”
It sounds like an episode of “Breaking Bankrupt.” Unfortunately, this drama would only just be starting.