Debt ceiling’s overlooked flash crash

Markets were remarkably unmoved by Washington’s political theater over the debt ceiling. The fall in stocks was limited. Any bounce from this weekend’s deal was quickly overshadowed Monday by more bad news on the U.S. economy. But, in an obscure corner of the stock market, investors did get a reminder of the risks still lurking in the system—in particular, Wall Street’s popular practice of depending heavily on short-term funding to finance long-term investments. At the height of the debt-ceiling uncertainty on Friday, a handful of mortgage real-estate investment trusts suffered a mini flash crash.