Buffett: Expect an Eleventh-Hour Deal on the Debt Ceiling
Financial markets continued to sour on Thursday afternoon as traders tried to take shelter from the political trench warfare that is once again raging in Washington. It is now day three of the partial shutdown of the U.S. government and policymakers appear no closer to reaching an agreement on a stopgap funding measure that would turn the lights on and send 800,000 furloughed federal employees back to work, to say nothing of a plan to deal with the debt ceiling.
While the shutdown is unfortunate, it’s the possibility of default that really has economists and market participants concerned. Many observers feel that any damage done by the shutdown will ultimately be modest, but that a default could cause catastrophic harm. The million (billion? trillion?) dollar question is: are policymakers simply engaging in brinksmanship, or will the nation actually fall into disaster?
Warren Buffett, chairman and CEO of Berkshire Hathaway (NYSE:BRKA)(NYSE:BRKB), weighed in on Thursday. Speaking to CNBC, Buffett said that “We will go right up to the point of extreme idiocy, but we won’t cross it.”