Sunday, July 24, 2011
Failure to reach agreement threatens global markets
Congress has failed to reach any agreement of raising the debt ceiling, forcing a powerful sell-off in the futures markets. We will open down hard in the morning, unless an agreement is reached overnight, which is unlikely. The President has called an emergency meeting with Congressional leaders to try to find a short-term solution to raise the debt ceiling by a small amount, to avoid default. I think we will get the band-aid solution, but the bigger issue will be whether or not Congress can agree on a real solution that includes a balanced budget requirement, which Republicans are demanding.