“The stock market would plunge 33% if the [US] government defaults: Moody’s”
September 23, 2021
“”Stock prices would be cut almost in one-third at the worst of the sell-off, wiping out $15 trillion in household wealth. Treasury yields, mortgage rates, and other consumer and corporate borrowing rates spike, at least until the debt limit is resolved and Treasury payments resume. Even then, rates never fall back to where they were previously. Since U.S. Treasury securities no longer would be risk free, future generations of Americans would pay a steep economic price,” said Zandi, referring to the potential fallout in asset markets…”
33%? That’s it? That’s not as bad as I would expect. If that’s the worse case scenario all the doom and gloom about the stock market crashing is mostly hype. The stock market crashed way more than 33% during the great depression. The biggest problem with the stock market crashing is the consolidation of markets.
Also investors can take advantage of this if it happens.Every needs to keep reserves for something like this. If the markets did crash just buy up stock for cheap. Of course You’d have to wait until markets bottom out but that’s not to big of a problem.Stock would be so cheap your timing wouldn’t have to be perfect.
Also companies that have no debt would be in great shape in my opinion. Those companies and companies that have the most debt (they’d be much more risky) would be the prime targets. Also let me tell you all something very important. If the U.S. were to default so would Japan and the U.K. Or at least that’s what I’ve read/heard a long time ago. No country would want the short end of the stick in that situation so I expect that assumption to more than likely be true.