Debt ceiling
I believe as it stands now, there will be no default using a backdoor provision ( aug. 2) . The market may initially applaud this and bounce but I believe that in the following weeks and months, the market will go lower due to the fact that a comprehensive agreement cannot be reached for long term financial structural problems which will only get worse. At some point there will be a day that the market realizes without this comprehensive financial reform, the U.S. will not be able to pay it's debt without going into a recession or depression or massive inflation.
Unfortunately, the politicians have let the country down and without cooperation, there is no hope.
I had thought that given the gravity of the situation, there would be some resolution, but even with the clear collapse of our financial system, the ideological differences are too great to solve our problems.
Again, I do not know what will go up or down during the coming crisis, but being in defensive, dividend paying stocks that did not fall very much in 2009 such as McDonalds, would be a start and of course shorting the market as some point might be advantageous depending on the scenario. I have bought vxx ( volatility) calls. Possibly too soon, but I don't think that today's bounce will last.
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