US debt relief short lived in markets

[xchrom]

http://hosted.ap.org/dynamic/stories/W/WORLD_MARKETS?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2013-10-17-07-10-00

LONDON (AP) -- A day after the U.S. Congress stepped back from the abyss and avoided a potentially disastrous default, investor relief was checked Thursday by concerns over the cost of Washington's drawn-out political battle.

Even though Congress has agreed to raise the $16.7 trillion debt ceiling and end a 16-day partial government shutdown, the relief rally that started on Wall Street on Wednesday has largely petered out. The dollar was down sharply and stock markets drifted lower.

Investors around the world, including fund managers holding dollars and Treasurys, have been unimpressed by the political squabbling that has threatened the U.S. since 2011. The question is whether the brinkmanship will become the new normal.

After all, the deal cobbled together at the eleventh hour is just a short-term fix. It permits the Treasury to borrow normally through Feb. 7 and fund the government through Jan. 15. It would be no surprise to see a repeat of the political standoff in 2014, leaving the U.S. once again facing the prospect of a catastrophic debt default.

[Laelth]

1. k&r for exposure. n/t

-Laelth