Almost no one on Wall Street believes Tim Geithner and Barack Obama when it comes to the debt ceiling.
The administration has been insisting that if Congress doesn't agree to raise the debt ceiling the government will begin to default on its obligations on Aug. 2. Even after every major Wall Street firm announced the government probably has at least another week before it ran out of funds to keep up with all obligations, the Obama administration stuck to the Aug. 2 deadline.
This is causing major credibility problems for the administration. Way too many people on Wall Street think the administration is just lying about the debt ceiling.
"It's all a political bluff. There's no way Geithner lets Treasurys default," a senior bond trader at one of Wall Street's most prestigious firms told me Wednesday.
This is one reason markets haven't panicked. Traders just don't believe that any cataclysm is coming. If anything, they're keeping an eye out for anything that looks like a fear-driven sell-off that they could play as a buying opportunity.
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