What happens this weekend will define how the markets behave when they reopen on Monday. There is no shortage of stern words prescribing the action that needs to be taken. But words aren’t enough, given the scale of the rout that began on Thursday.
The political haggling that preceded the deal on the debt ceiling doesn’t inspire confidence in the world’s biggest economy and its ability to lead the world out of another financial bind, so soon after the last one. Still, given the confusion in Europe over the hard things that need to be done to fix the problems there that threaten the rest of the world, it will be up to the US and President Barack Obama to start knocking heads together to arrive at a workable solution.
The world needs to find a way from what suspiciously looks like another financial brink, otherwise what happened three years ago will seem like a picnic.