By James Kwak
Markets Stumble on Deficit and Debt Worries
Stocks in the United States and Europe fell more than 1 percent on Monday in the wake of the publication late Friday of the results of stress tests on European banks, and as investors remained wary about the debt-ceiling talks in Washington.
Stocks Slump on Debt Fears
Stocks fell as the combination of anxieties about debt in the block of euro-using nations and a lack of progress in U.S. debt-ceiling negotiations sparked a selloff.
If people are worried about the debt ceiling, then why are short-term and intermediate-term Treasuries flat or slightly up? Presumably the mechanism by which a debt ceiling breakdown would affect stocks would have to go through Treasuries somehow.