Tuesday, July 26, 2011

Don't Believe in A Default?

I, too, can't believe that a default, even a short-lived one, is in the cards. But is that because we can't believe it, or can't bring ourselves to believe it, simply because such an event is unfathomable based on history and the might of the United States.

All of which got me thinking: Just five years ago, who would have believed that:

The global economy would plunge into its worst slump since the Great Depression.
The global financial system would be brought to the brink of collapse.
Bear Stearns Cos. would disappear from the Street, Lehman Bros. would fail, and Merill Lynch & Co. (the banker with the bull logo) would be sold to Bank of America.
The American dream would be shattered as the U.S. housing market melted down and foreclosure became an oft-heard word.
Countries such as Greece, Ireland and Portugal would be deadbeats, and the 17-member euro zone in tatters.
The U.S. dollar would become an also-ran, and the Canadian dollar, then just above 88 cents, closing in on its modern-era high of $1.10 U.S.
That GM and Chrysler would file for bankruptcy protection.
That more than 200 million people would be unemployed globally, according to the International Labour Organization.
That global interest rates would remain so low - near zero in the United States - for so long.
That "bailout" would become a household term.

The Republicans and Democrats continue to squabble today as the clock ticks ever more loudly, with no deal in sight. And perhaps the markets need to adjust their willing suspension of disbelief. 


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