In the game known as “chicken” the outcome – winning and losing – is based upon someone being sane. If both parties to the game are crazy then, depending on how you look at it, either no one wins (It’s a tie!) or both get to be winners, as neither was “chicken”.
There is a great game, a battle of political machismo, a struggle for political survival, or a stand for political principal that is now taking place in the U.S. Congress. Either this is a fight to save the country from ruin, not to bring about its ruin, OR this is the final chapter of a once great country, one that can no longer function is a rational manner. You choose.
There may be a few unintended, but not unimaginable, consequences to a default. They may be drastic and long term. However, as far as I can tell from the lack of downward action of the stock markets, from stock sell-offs, most investors are sitting on the sidelines thinking this scenario is just business as usual: “Hey, the stockmarket recovered nicely from the Dow Jones Industrial average dip from 14,000 to 6,600 and everyone thought the end was near, so what’s a little default on the national debt?”
Interesting times.
Do you pull out of the stockmarket, now – before any dip – or do you stay in?
The stock market has apparently withstood house prices plummeting, the foreclosure crisis, 9.2% unemployment, vast trade deficits, the outsourcing of American jobs and more. The Dow Jones Industrials crashed – CRASHED – from over 14,000 to 6,600. The market appears immune to bad news.
Really?
Anyone recall the great economic engine called Japan? The same Japan that saw its stock market indices plunge and sit stalled for almost a decade?
Are you sitting on your hands – and your retirement accounts – whilst the modern “Senator Neros” play with matches?
My advice: Do something.
Either hedge your stock market bets, by making a few puts or calls, or put in a call to your Congressman or Congresswoman or Senator and tell him or her to “reason together” with the other side and save playing chicken for when it’s only their lives at stake.