Not Default, Growth: Wall Street, Main Street and Even Washington Gets It Now
By Ralph Benko, courtesy of Forbes,
The signals were crystal clear that even without a deal Washington absolutely was not going to default. Being Washington it had to strut and dramatize. Assuming that the free market is even half as smart as we think, the bond markets would have come undone assuming even a hint of the U.S. falling into arrears with creditors. Instead, Bloomberg.com’s headline on Saturday spoke volumes: “Treasury Yields Tumble to 2011 Lows.”
Wall Street was just watching Washington’s Big Sitcom and passing the popcorn. Bloomberg, again, already had reported that reassurances had gone forth from the Treasury to the Big Banks that the federal government is not so stupid as to stiff its creditors. Treasury would apply the necessary cash receipts to paying its interest when due. According to Bloomberg’s Peter Cook and Cheyenne Hopkins:
