OptionsHouse

Options Trading News

October 8, 2013  Tue 8:26 AM CT

SPX: SEE CHART GET CHAIN FIND STRATEGIES
The end of the world is really hard to pin down, isn't it? What day does it end? Does it end immediately? Does it end with a bang? With a whimper?

These are the central issues. The Treasury secretary is almost too confident that everything will be resolved. The House speaker is equally confident.

What the heck makes them so confident? The only thing that seems to get everyone focused is a drop-dead deadline, and we don't have one because of the peculiar nature of money in and money out with the federal government.

Frankly, anyone who says what the world will look like on Oct. 18 doesn't really know. You would have to anticipate what the ratings agencies have to say and what the money in the till would be and whether Jack Lew can really prioritize things.

Then we don't really know when the government needs to actually raise money. Is there an alternative way to raise money that we don't know about? Is there a way to sell property that could quickly raise money? Sell gold? It is just hard to figure out what happens Oct.18.

TheStreet.com logoBut we do know what happens if we have to issue paper and we are not allowed to. Business just stops. It just stops everywhere. Every part of the world.

I think you could even argue that we will be in a cash economy because everyone has to figure out what they really own and what they are allowed to own and what can't be owned, as so many businesses assume that Treasuries are risk-free.

The idea of even one day of skipped interest payments is horrendous. But what comes in that day? What do they have in the till that day vs. what can come out?

Is it better to just stop Social Security checks? I would think so. Stop Medicare payments? Absolutely. Is that the hidden agenda of some?

All I know is that it is unthinkable for the U.S. to not pay its debt. It just puts us at the bottom of the heap and puts every institution that owns Treasuries at risk. Which is pretty much everyone.

You can argue that because so many have them, we can, in a sweeping way, declare that everyone's going to be fine. But I just don't see how that happens.

Until we know more, it is unthinkable. Maybe it can be thinkable if the president says what the plan is.
Right now, though, we just have an abyss and nothing to fill it.
Share this article with your friends


Related Stories

SPX

Futures decline with global markets

April 17, 2015

U.S. equity futures are lower this morning, continuing the market's negative reversal in the last 90 minutes of yesterday's session.

SPX

Inflation, consumer data on deck

April 17, 2015

Inflation data, consumer sentiment, and earnings reports dominate today's calendar. GE, Honeywell, Seagate Technology, Comerica, and Reynolds American will issue results.

SPX

Futures pull back after strong rally

April 16, 2015

S&P 500 and Nasdaq futures are down about 0.3 percent. Europe is lower across the board, led by a 1.5 percent drop in Germany, but Asia was up overnight with a 2.7 rally in Shanghai.

SPX

Housing data, bank earnings due

April 16, 2015

Goldman Sachs and Citigroup lead the pre-market earnings lineup. On the economic front, housing starts, building permits, and initial jobless claims are all due at 8:30 a.m. ET.

SPX

Stocks higher after ECB statement

April 15, 2015

S&P 500 futures are up 0.25 percent, and markets are up about half a percent across the Atlantic after the European Central Bank issued its monetary-policy statement as expected.

OptionsHouse

Premium Services

Education & Strategy

Investor deficiency in premium collection

Most investors have heard about selling options as a form of income generation. You hear it from brokers and financial advisors as a way to generate income without selling off pieces of your nest egg, dwindling through your retirement accounts, and then being stuck figuring out how to financially afford the rest of your life...

View more education articles »