With U.S. Congress unable to break the deadlock that began last week over the raising of budget and debt ceilings, concerns have been spreading over a looming financial apocalypse that would affect not only the U.S but also the world market, possibly sending it into depression. Failure by the U.S. to pay its debt on 17th October, in less than ten days, will play havoc on stock markets the world over in an unprecedented financial default in modern history, and is even predicted to “undermine the role of the U.S. in world economy,” Mohamed El-Erian, C.E.O of Pacific Investment Management Co. told Bloomberg. On Monday, the impasse sent European shares into a four-month low and pushed both oil and the dollar down, causing rattled investors to keep “their money off the table just in case the unthinkable happens,” according to Richard Hunter, head of equities at Hargreaves Lansdown.
Sources: Bloomberg, Reuters