There IS a tipping point somewhere out there. NOBODY actually knows where it is, but we are now a lot closer…

Financial crisis: Default by the US government is no longer unthinkable: “But, in the run-up to the US election in November, Democrats in Congress - and even some Republicans - may decide they're simply not having it. How much more can the US taxpayer take? It sounds insane, but the liabilities being taken on by the Fed and the US Treasury are now so enormous that the government itself could default. No?

Check out the chart showing the recent spikes in the US 10-year credit default swap. In other words, the market is now pricing-in the genuine possibility that the US will struggle to pay-back some of its long-term T-bills.

That possibility is still deemed to be quite low. But the ultimate financial question - until recently, unthinkable - is now being asked. Yes siree, the mighty US government could default. That's how much the world has changed.”

If you had to bet, do you think the (actual) smart money is 'going long' into this short covering rally in equities... OR using this sudden lift to discretely sell and quietly exit? The U.S. isn't even in a CONFIRMED recession yet...