Gross Buying Bonds Tops Boehner’s Default Warning: Reality Check

U.S. financial conditions held at about the highest levels since before the worst financial crisis since the Great Depression as debt investors brushed off House Speaker John Boehner’s warning that America is on a “path” to defaulting on its debts.

While the Bloomberg U.S. Financial Conditions Index fell 0.08 to 1.2, that’s above the average of 1.11 this year and compares with the high in 2007 of 1.266. The gauge measures stress in the markets by combining everything from money-market rates to yields on government and corporate bonds to volatility in equities. During the debt-ceiling debate of August 2011, the index fell as low as negative 1.631.