How The Stock Market Traded Before And After The Last 3 Policy Time Bombs

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		Home Tech Finance Markets Politics Strategy Entertainment Advertising Retail Sports Life Friday, September 27, 2013 How The Stock Market Traded Before And After The Last 3 Policy Time Bombs If Congress can't get a budget deal soon, then we may see the government shut down at least temporarily starting October 1. On top of that, the U.S. is once again inching toward the debt ceiling. Treasury Secretary Jack Lew said October 17 would be the deadline for Congress to raise the debt ceiling. "If we have insufficient cash on hand, it would be impossible for the United States of America to meet all of its obligations for the first time in our history," wrote Lew. "So far, investors have been complacent about the risks posed by the looming budget fight," said Nouriel Roubini. "They believe that – as in the past – the fiscal showdown will end with a midnight compromise that avoids both default and a government shutdown." "But investors seem to underestimate how dysfunctional US national politics has become," warned Roubini. "With a majority of the Republican Party on a jihad against government spending, fiscal explosions this autumn cannot be ruled out." "Little to no volatility premium is priced into the options market for the debt ceiling debates, in our view," said Goldman Sachs' Robert Boroujerdi noting the complacency. "S&P 500 put prices are near their lowest level since the financial crisis." Here's a chart from Goldman Sachs' Robert Boroujerdi showing how the S&P 500 traded before and after the last three incidents. "While past performance is not an indicator of future results, we find these case studies useful," he said. Read » Also On Markets Today: Here's The Chart That Destroys What Republicans Are Saying About The Deficit STOCKS FALL, GOVERNMENT INCHES CLOSER TO SHUTDOWN: Here's What You Need To Know Advertisement CHART OF THE DAY: Investors Aren't Worried About The Debt Ceiling Debate AT ALL CHART OF THE DAY: We Should Be Thankful For This Financial Innovation That Was Blamed For The Financial Crisis CHART OF THE DAY: How The Fed Chair Nomination Process Worked The Last 12 Times Share this: Facebook Twitter Digg Reddit StumbleUpon LinkedIn The email address for your subscription is: ipat39@gmail.com Change Your Email Address | Unsubscribe | Subscribe | Subscribe to the Markets RSS Feed Business Insider. 257 Park Avenue South, New York, NY 10010 Terms of Service | Privacy Policy

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