The Wall St Journal writes: Don't feel badly if you have been confused about the debt-ceiling debate during the last week. We are getting two very different messages about what missing the deadline might really mean. Washington is telling us that a failure to reach an agreement on future spending and raise the debt ceiling would be catastrophic. It is probably the only thing the majority of Democrats and Republicans agree on.
Wall Street, on the other hand, is telling us not only that the deadline isn't as dreaded as the politicians suggest, but that the actual chances of missing it are slim. Washington would never risk a debacle, the thinking goes. To back it up, the stock market, even accounting for Wednesday's drop, is off just 4.3% from its year-to-date high. Bond markets, where you would expect more anxiety, are unmoved.
Put another way, the lawmakers seem to be underestimating the markets and the markets seem to be overestimating the lawmakers. This conflicted view may be the rare case in modern history where Washington actually has a better grip on reality than Wall Street…
Find out more at http://online.wsj.com/article/SB10001424053111903635604576472650714241120.html?mod=WSJ_Markets_RightMostPopular
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