Chicago - How do you prepare for a financial cataclysm that may not happen?
That?s the question facing investors as an Aug.
2 deadline approaches for
Washington to raise the government?s borrowing limit or risk a U.
S.
default on its
debt.
Economists say...
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Chicago - How do you prepare for a financial cataclysm that may not happen?
That?s the question facing investors as an Aug.
2 deadline approaches for
Washington to raise the government?s borrowing limit or risk a U.
S.
default on its
debt.
Economists say a default could create a credit crisis similar to what happened
after Lehman Brothers went bankrupt in 2008, causing interest rates to rise and
harming the economy.
But the reaction in the stock and bond markets has been muted.
In theory, Treasury bonds should have a higher yield when investors think there?s a
greater risk they won?t get their money back, such as in the event of a U.
S.
government default.
So Wall Street appears to think a deal will be struck in time.
But the alarming
headlines are causing investors anxiety.
?We?re seeing clients growing nervous as they keep hearing about the deadline,?
says Oliver Pursche, president of Gary Goldberg Financial Services in Suffern, N.
Y.
He says investors are asking him whethe
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