Investors nervous about debt ceiling deadline, but remain calm

A Businessweek article suggests that while investors are nervous about the impending debt ceiling deadline, they're remaining in the market and staying calm. In fact, they see it as a catch-22 type of situation. Businessweek explains:

“I talked with (Frederick) Cannon to understand the conflicting signals and what to watch.

Cannon says investors believe that Congress will fix the problem and raise the debt ceiling if there’s a market crash—which, in turn, would increase stock prices. For people holding long positions, that outlook gives little incentive to get out of the market if it’s going to go back up. For investors considering shorting the market in a bet that it will fall, there’s little incentive to get into the market because they also think it will rise.”

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