For my readers who own Treasury Bills in their portfolio, I paraphrase a JP Morgan summary because I cannot copy and paste it on my laptop.
"JPM projects the Treasury will exhaust all of it's borrowing resources on October 24th and deplete all available funds by October 31."
"JPM does not believe Treasury will sell it's semi-liquid assets or attempt to prioritize payments."
"Treasury coupons due in late-October/early November may be delayed and prices of the bonds/bills will decline (reason below)"
"In the event of a technical default, rating agencies are likely to temporarily downgrade the US Sovereign rating until the default is cured and they think the level of foreign buying of Treasuries will decline forcing interest rates higher."
"Some money market funds holding defaulted Treasury Bills may be forced to liquidate (sell) defaulted securities." Although in the detailed writeup, JPM states they believe most funds, if not all potentially, may hold the securities which are not receiving timely payments.
Depending on how much and the price those defaulted securities are sold at, those money market funds may break the buck for holding "riskless" assets. No asset is without risk, and I don't understand why anyone would own a bond in this environment (and I manage a bond portfolio).
I don't understand why responsible Republican's cannot understand the potential chaos this will cause. It is already causing market distortions. Every citizen is hurt financially when there is financial chaos. The 1% can afford the hurt, but there are 800,000 families that are losing income because of the government shutdown. This number will only go up if the debt ceiling is not raised and the government allowed to make all the payments authorized by the Congress.
As one of my salesman always says in his daily email, "Good luck out there."
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