We recorded this last Thursday at the Yahoo studios:


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shutdown months
Source: Yahoo





“It turns out the market really doesn’t care much if [the shutdown] is a day or a couple of weeks,” says Barry Ritholtz, chief investment officer of Ritholtz Wealth Management. “Where it becomes a concern…is if weeks turn into months. If it goes past three or four weeks, that could take a big chunk off GDP, effect consumer confidence and really have an impact on earnings.”


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Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

7 Responses to “If Shutdown Isn’t Resolved, Stocks Could Fall 20-30%”

  1. lore927 says:

    nice interview!

  2. rd says:

    Given the amount of margin debt that has built up over the past 2-3 years since the last nearly 20% drop, would a 20% drop just stay 20%?

  3. Willy2 says:

    - Exorbitant privilege also means that the US lives way beyond their means.
    - That “Exorbitant Privilege” has been MUCH larger between ~ 1995 and 2008.
    - In previous years when the gov’t “was shutdown” the financial situation was less precarious than now.

  4. Bob K. says:

    So in other words the market gets back to fair value.

  5. [...] The type of default that the media talks about the most, and indeed the most serious form, would be if the United States failed to make the payments on the interest due on its bond obligations or failed to have sufficient funds to pay off bondholders who wished to redeem their bonds when they reached maturity. According to reports, there will be at least two bond redemption/interest payment dates in October after October 17th. If the Treasury was unable to meet the obligations that the bonds set forth on either of those occasions then it would have serious and immediate consequences for world financial markets. Investors would likely start pulling assets out of riskier investments over concern on the implications that such a default would have, and interest rates on U.S. obligations, currently at or nearly a real rate of zero once inflation is taken into account, would likely skyrocket. Unless the situation were resolved immediately, it would, at least according to most major analysts, pose a serious risk of throwing the world economy into a crisis on a par with the 2008 financial crisis. (For a possible breakdown of how such a crisis could unfold, this detailed timeline by Reuters is an excellent guide.) One financial analyst has projected that a default could cause U.S. stock markets to lose between 20 to 30% of their value in a relatively short period… [...]

  6. panskeptic says:

    It’s a self-inflicted wound.

    We are supposed to be a model for the world of capitalism and democracy, and thanks to Ed Meese, the Koch Brothers and a bunch of other old, white, rich ultraconservatives who are trying to nullify the last election, we are turning into the Clown Car of the West.

    Raise cash and place your buy orders low. There’s little consolation otherwise.