Quick update on the debt debacle – or as John Stewart calls it: Armadebton. Looks like the Hollywood-esque market pricing we referred to on the blog yesterday has reversed course somewhat:

• T-Bills are finally starting to react – ZeroHedge explains it well. [such a divergence on the long end helped bring down Long Term Capital Mgmt… btw]
• Major stock indices all down close to 2% today.
• Bonds not a flight to safety, down slightly (rates higher).
• US Dollar up today (pricing in higher rates?).
• Curiously… Gold down slightly today as well.

The plot thickens. The Wachowski brothers would be proud. Taxpayers? Maybe not so much.