No One Is Showing Any Leadership: Ostwald

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Oct. 16 (Bloomberg) –- Monument Securities Global Strategist Marc Ostwald discusses the U.S. debt ceiling, saying that it’s pointless and there are other ways to control debt with Mark Barton and Anna Edwards on Bloomberg Television’s “Countdown.” (Source: Bloomberg)

Talk about the u.s. debt ceiling.

You have certainly achieved that today and the lessons we can learn from the republic back in the 1920s. in germany, specifically.

Yes.

It is reminiscent throughout the 1920s and 1930s. it is basically what i'm tried to say with these comparisons is that it is a good example of people facing a task with which they do not seem to be able to deal with it.

It is party politics.

There are serious at -- issues that tend most of the u.s. has a debt ceiling that should be the first thing they should get rid of.

It does not exist anywhere else.

There are ways to control debt, as we have seen in europe.

There are austerity measures.

Having a debt ceiling that people can play around with for their riches -- purposes is pointless.

We are all staring at this and wondering how could anyone let this get so far?

We have probably had a lot of just say this.

People are still opting for the belief that they will come to their senses.

Are you entertaining the thought that they won't come to their senses?

We have got a deadline that is tomorrow.

I think there is a risk that they don't. 60-40 basis.

That is pretty big.

[laughter] some people were saying 95-5. that also tells you about the dulling effect on market reaction and it's ability to react.

That is an excess of 10 chilean dollars.

And how 00 $10 trillion.

-- $10 trillion.

The danger is that the markets will say even if we get to tomorrow and there is no deal done, even if they have a technical default, it will be resolved.

If they default on one security, that does not mean it will do anything else.

Does it not make it more likely though?

Yes, but on an individual basis.

I would be surprised if they defaulted.

In essence, an overdraft account of government and the banking sector.

If they default -- it is worth thinking about.

There was a time when this would have cost more concern in the markets.

One guest was making the point that there are still actors that have to abide by triple a poor doublea -- or double a. that would have trigger affects.

By moving get down, you have got them done at the same level as s&p. people cannot say it is a triple a. moody's and fitch -- those people -- yes, they would have to do something.

I do not think it is major in that sense.

I think it is major in the sense that it is unbelievable that we have got to this stage.

Look at the behavior of the politicians.

You would be surprised if they were not downgrading them.

Thank you.

This text has been automatically generated. It may not be 100% accurate.

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