Let’s set the stage…
Jacob Lew, the Treasury secretary, just whispered that the next market crash begins no later than mid-October.
Of course, he didn’t say those exact words. But he did report that the Treasury’s “extraordinary measures” to avoid hitting the debt ceiling will be “exhausted in the middle of October.”
The debt ceiling is a legally imposed limit on federal debt. You may remember the 2011 debt ceiling talks and the drama around a government shutdown.
This led Standard & Poor’s to downgrade the U.S.’ credit rating for the first time ever. The market fell more than 15% while all of this was going on from April to August.
Well, we’re looking at something like that all over again as the government’s debt presses up against that ceiling.
Even though Lew’s whispering those words now, soon he’ll begin screaming about it. ...