The mess is here

Dollar Weakens, Default Risk Rises as U.S. Debates Debt Limit; Stocks Drop

By Stephen Kirkland

The dollar weakened to a record low versus the Swiss franc and the cost of insuring U.S. debt rose to a 17-month high after President Barack Obama dueled with House Speaker John Boehner over the borrowing limit. European stocks fell, while Standard & Poor’s 500 Index futures gained.

The dollar depreciated against all but one of 16 major peers monitored by Bloomberg at 7:15 a.m. in New York, slipping to less than 80 centimes versus the franc. Credit-defaults swaps on U.S. debt increased one basis point to 57 basis points. The yield on the 10-year Treasury note added two basis points, and Portugal’s yield jumped 21 basis points. The Stoxx Europe 600 Index sank 0.3 percent. S&P 500 futures gained 0.2 percent as Ford Motor Co.’s earnings beat estimates. Oil rose 0.6 percent.

Obama said yesterday the U.S. may experience a “deep economic crisis” if leaders fail to reach a compromise and the nation defaults, while Boehner said the president “wants a blank check” to keep spending. 

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Comment: The mess is here and it won't go away even if an agreement about the debt limit should be reached. We're entering the age of darkness as mistrust rules and everything is uncertain.