 |
July 27, 2011, 07:09:34 PM |
|
The odds of default are miniscule. Geithner, Bernanke, and even the Whitehouse have said they'll pay on bonds even if the debt ceiling isn't raised. A more likely scenario is a downgrade. Even if the ceiling is raised, if it's done at the last hour and with no comprehensive budget plan, S&P has already stated they will downgrade.
Even in the case of a downgrade, it's entirely plausible that Treasuries still rally because in a flight to safety, really where else are you gonna go? Equities on the other hand may get slammed hard.
|
