Power lines near Ulm, Germany, in 2006. (Alexandra Beier/Reuters) The week of October 4: a higher debt ceiling, higher energy prices, spending, American banking with Chinese characteristics and much, much more.
So, where were we? I was just getting ready to write about the debt ceiling (and, I suppose “the coin”), but the day was saved, if only for a few weeks, by the agreement to raise the debt limit by enough to see the country through until early December. Assuming that everything goes through (a House vote lies ahead), investors can relax, at least for a little while.
That said, while both sides are blaming the other for the impasse that brought the U.S. closer to a cliff than it should have been (NR’s editorial on that topic can be found here), no one should be under the illusion that running into that ceiling would be anything other than a disaster, with unknowable longer-term consequences. Once the dominoes begin to fall . . .
Writing in the Wall Street Journal on Thursday, James Mackintosh had a fascinating piece on how the markets had been beginning to get uneasy about what might happen: