Debt ceiling showdown approaches 11th hour
Capital Ideas Podcast
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The Risks of Default on US Debt
The U.S. government has an account at the Fed, which is the fiscal agent for the Treasury. At some point that money will run out and there won't be any money to pay obligations. Even if it happened for a day, that would be an unsettling event psychologically for markets. The S&P sailed off 15%, 17% over a few weeks or months before bouncing back.
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