“This Market is a Mystery”
I have been trying to figure out why the market in the face of enormous stupidity and dysfunction, remains so strong. Also, today in the face of what could be a temporary reprieve (now a fait accompli), opening the government and increasing the debt ceiling, why didn’t we see people taking profits; selling on the good news (I guess they did a bit this morning).
The answer to the first question is pretty easy, “been there, done that.” The players did not believe, even under the most extreme partisanship and stupidity that we would be allowed to go over the cliff.
A major change may be afoot!
This episode in D.C., because it was so foolish and unnecessary, may have tilted a majority of Americans toward a more moderate course and that voice was heard, loud and clear.
The country is tired of confrontation and ‘government by crisis.’ The polls, which have been very unkind to the Republicans and the President, have been read and digested. President Obama does not have to run again; ergo, he is in a much better position to advocate for things like entitlement reform. The House does have to stand again in November of 2014!
The past month may have been a “Little Big Horn” event for the “My Way or the Highway” crowd (a.k.a. The Tea Party). Not that they will be voted out of office, their districts are custom made, gerrymandered to be populated by like-minded folks. They just may not hold the same sway over the party as they did before the current impasse, as many in Congress have more heterogeneous districts to contend with.
My hat is off to Mitch McConnell, who himself faces a “Tea Party” primary challenge (5/20/2014), for hammering out an agreement with Harry Reid (not his best friend). The same holds true for all the Republican Senators and Congressmen who made a tough political vote last night. My wish is that the Democratic response to this gesture is done with humility and magnanimity. Hopefully, this will break the hyper-partisan fever that has gripped our body politic over the past few years.
The media goes Blah, Blah, Blah…
In the meantime, the media in its usual negative bent is beginning to portray this as a stop-gap measure, kicking the can down the road. We will have to go through this all over again when we approach the February 7, deadline. Another train wreck is at hand.
I don’t agree. I think this last month’s combat may have been so bloody, so waring on the public and so politically costly that a more civil and sensible resolution may be at hand. The market we are seeing may be in response to a more secular change away from extreme confrontation and crisis to government by objective . Fix taxes. Fix the Affordable Care Act. Fix spending. Do a grand bargain, not with conflict, but thoughtful negotiations. It may also be in response to some better-than-expected third quarter earnings reports.
Yes, we do need a correction; but, I think the events of the past few weeks (extreme as they have been) are important and may actually put us on a better track.
What do you think?
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