European debt crisis, US debt levels & end of QE3 were evident months ago, why are markets only reacting now?

Thanks, I'm just wondering why this only happened a few weeks ago|||They are reacting to a change in expectations, 1) that the us needs to keep printing money since the previous efforts have failed, and 2) the US house of Reps has refused to sign a blank check on the debt ceiling, requiring some sort of plan to start fixing this country. The President and the democrats just want to keep spending money so we are looking at a train wreck situation if the problem does not resolve itself by August 2 when the US will default on their bond payments.





Why does this matter to me? Because a default in US bond payments will make all treasuries lower substantially in value. Stock brokerage firms are required by law to hold their cash in treasuries, Banks have to hold part of their funds in treasuries. Money market funds hold part of their holding in Treasuries, Estates and Trust, based on the "prudent man rule" hold parts of their holding in US treasuries. Cash in these institutions will "break the buck" forcing them into insolvancy since there is no way that they could make up the difference, nor would they have any buyers nationally or internationally.





They talk on TV about future interest payments going up, that's not really the problem when you will have almost all the financial institutions in the country insolvent. And who would buy US debt from banks at a discount? It's like the 1930s banking crisis on a global scale since this will effect everyone that is holding treasuries (and that accounts for about every major nation in the world except North Korea and Iran)|||It was QE2 which ended in this month. The FED has had no word yet. It is debating about the debt ceiling and the principle of pay-as you-go.The President was caught to compromise. It might be really, based on his compromise concerning the tax-cut before,that the ceiling would be raised a little,and the Republican would gain some budget cuts.The market is in panic. The stock markets worldwide have been down since the beginning of June. Foreign mangers have had a net sale.The US economy with high unemployment rate,high inflation,high oil reserve, shows a negative sign. Even gold price is down.Where have all the dollar gone?