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Bunk Bed and a Low Fan
Written by Steve | Published: |
When I was a kid I remember having an awesome bunk bed in my room. I particularly recall an instance where my brother and I were throwing pillows back and forth at each other.
I climbed up the bunk ladder to get away from the rapid fire pillows.
However, as I was taunting my brother to try and hit me he flung a pillow so hard that not only was I unable to dodge it; I tried to stand up quickly forgetting the ceiling was very close to the top bunk. I banged my head against the ceiling and then in pain flung my arm out only to have the ceiling fan tag the back of my wrist at full speed.
Needless to say, this was a painful experience.
There has been a lot of talk about the debt ceiling lately and how that could affect the markets and the millions of retirement accounts out there.
Although these debt ceiling conversations come around frequently if they don’t finish the political jockeying by the x-date (or the day the treasury runs out of money) this can put the market in disarray dropping values of assets.
If you look back at this chart from 2011 when the debt ceiling was not renegotiated in time the market dropped approximately 17% in 15 days.
In this other chart you have the amount of credit default swaps that have been placed recently and it is almost double the amount of CDS than in 2008.
Essentially the market is nervous and purchasing credit default swaps so they can get paid in case the government defaults.
Yikes! Not a lot of confidence shown from that chart.
So how are you addressing this?
Please do not be an ostrich and bury your head in the sand.
If you would like to talk through this and review your position, reply to this email and we will find a time on my calendar before the “x-date”. It’s coming up quickly so do not delay. We can get in front of this if you act fast.