Archived Story

As US default nears, investors shrug off threat

Published 11:03am Tuesday, October 15, 2013

NEW YORK — Warren Buffett likens it to a nuclear attack. Economists warn that government spending on programs like Social Security would plunge. The Treasury says the economy would slide into a recession worse than the last.

Yet you wouldn’t know that a U.S. debt default could amount to a nightmare from the way many companies and investors are preparing for it: They aren’t. The assumption seems to be that in the end, Washington will find a way to avert a default.

“Doomsday is nigh, and everyone shrugs,” said Nicholas Colas, chief market strategist at ConvergEx Group, an investment brokerage in New York.

Brian Doe, a wealth adviser at Gratus Capital Management in Atlanta, has 35 clients who’ve entrusted him with $50 million for safekeeping. He isn’t losing sleep over a potential default. Neither are his clients, apparently. Not one has called him about the issue, he said.

“I’ve not done anything,” he said. He puts the odds of default very low.

“We are not taking actions based on the worst-case scenario,” Marcello Ahn, a fund manager in Seoul said.

That worse case is inching closer. The Treasury says it will run out of money to pay its bills if Congress doesn’t increase its borrowing authority by Thursday.

Editor's Picks

Interactive performance art featured downtown

For the past couple of weeks, a temporary interactive art gallery has been operating in downtown Fergus Falls, right across the street from the Viking ... Read more

Man who lost home convicted of felony crimes [UPDATED]

A 29-year-old Underwood man was convicted of two felony-level criminal damage to property crimes Monday in two separate cases in Otter Tail County District Court. ... Read more

Offender released from county jail [UPDATED]

  A high-risk predatory offender is slated to be released from Otter Tail County jail Thursday and will be living in Fergus Falls, according to ... Read more

Another Voice for Rural Minn. ;Local Director elected to Minnesota Chamber board [UPDATED]

The director of the Fergus Falls Chamber of Commerce has been elected to the board of directors for the Minnesota Chamber of Commerce. She will ... Read more