With no resolution in sight to lift the debt-ceiling, investors are scrambling to find ways to hedge themselves against what was once unthinkable: A U.S. debt default and loss of triple-A rating.
Further spooked by Friday's shockingly weak GDP report, the stock market appears headed for a sixth-straight decline. In recent trading, the Dow was down 0.4% but off its earlier lows.
As discussed here earlier this week, concern about Washington's dysfunction has been evident in a variety of markets, notably gold's continue strength, the rising cost of U.S. credit default swaps and the dollar's weakness vs. the yen and Swiss franc. Meanwhile, the CME now says it won't accept short-term Treasuries as collateral while The WSJ reports the $4 trillion repo market is at risk if the U.S. loses its triple-A rating.
But there's a lot of confusion on Wall Street about how to plan for Aug. 2, as The WSJ's Greg Zuckerman and I discuss in the accompanying clip.Read More »from Confusion Grips Wall Street Ahead of Aug. 2 Debt-Ceiling Deadline