Sign up for free newsletter

 

Dr Laurence Wormald, SunGard

Effects of a US debt default will be profound


Dr Laurence Wormald (pictured), head of buy side risk research at SunGard, comments on the impact of the US debt ceiling…

US sovereign default is a very big deal, although the government shutdown has had only a mild effect on investors’ view of the US equities markets.  The VIX “fear index” is at 19% which is below where it was last December.  The biggest effect so far has been on short-term USD rates, which have already spiked from 2 basis points to over 9 bp yesterday.
 
Remember that the “Fiscal Cliff” was resolved with a short-term fix at 02.00 on 1 January, two hours after the “deadline” – markets are taking the view that a last-minute deal will be done. 
 
However, the effects of any default will be profound (the Chinese government has already called other nations to “de-Americanise the world economy”) and the losses to investors in the latest SunGard’s APT scenarios are up to 25% loss on global equities and the US currency, if default is followed by political deadlock for another week.

events
4 days 18 hours from now - London
5 days 18 hours from now - London
5 days 18 hours from now - New York
6 days 11 hours from now - London
listingsdirectory
Meyler Capital
Tue, 06/09/2016 - 15:57
Nasdaq
Tue, 30/08/2016 - 11:02
Edelman
Thu, 18/08/2016 - 10:14
training
Mon, 03/10/2016   - London
Mon, 03/10/2016   - London
Tue, 04/10/2016   - London
specialreports
other gfm publications