We hear that the "markets" have to get over the "uncertainty" of a short term debt plan instead of one that moves beyond the "election." This is the latest cynical attempt to make the reality of the financial irresponsibilies of the White House go away until AFTER the next election. Let's look at the markets to see how stressed out they are compared to six weeks ago when the parties were not close to the latest deadline. The S & P 500 Index was at 1265.42 on June 15th. Yesterday the index finished at 1331.94.
Let's look at the treasury bond market and see how much interest rates on government bonds have changed over the last six weeks. On June 15th the ten year U.S. treasury note yield was 2.97%. Yesterday, after six weeks of news conferences with the president threatening default, economic catastrophe, and higher rates, the yield on the ten year treasury note yield was 2.95%.
Whatever is being said in Washington.......at least for now the markets are NOT listening.
Catastrophe is Looming - Somebody Tell the Markets!
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As the alleged August deadline nears we will see the president and all the king's men, who have promised an end to the world, desperate to cut ANY deal. They'll gladly take a deal with NO NEW TAXES. Why? Here's why; democrats desperately need a deal to help cover up their deliberate falsehoods of financial Armageddon.
The impending downgrade of U.S. debt instruments can logically presume to have already been priced into the market. The Tea Party republicans, instinctively more market savvy, are completely aware that once the August 2nd deadline comes and goes and there's no Armageddon they will then be in a position to systematically crucify the doomsday scare tactics of their political adversaries. The only defense the democrats would have would be to point to the fractionally higher interest rates and maintain that Armageddon is still on the horizon. Don't be surprised when the Doomsday-Crats move the projected end of the world to... JUST BEYOND NOVEMBER 2012.
After today's market response to the gridlock in Washington, it would appear that the short term carnage is just the beginning. While most investors would agree that short term market fluctuations are common, investor confidence will be shaken by the events unfolding. Don't be so sure the electorate will hold all conservatives harmless for their role in the process. All that being said, it's difficult to understand how this president could standby and allow the country's credit rating wane rather than embrace the concept of passing an amendment to the constitution that would mitigate the possibility of any future debt crisis. Wouldn't such an achievement be truly historic? Wouldn't Obama get the credit?
Mr. Anonymous, the only thing this president is interested in achieving is a total collapse of our capitalist system. The man is a hopeless ideologue who cares more about social justice than perpetuating a system that rewards risk takers and doesn't "spread the wealth". He could care less if this debt crisis evolves into a default. He needs confrontation in order to demonize his enemies. A compromise would result in something getting done and him continuing to be held accountable for a dismal economic performance. By most Americans, Obama owns the economy. His best chance at re-election is to find a way to share the blame WITH the republican party. This whole episode reminds me of an NFL replay I have seen more than once. A wide-receiver is running a pass route down field on a crucial play. As he makes his cut into the open he loses his footing and begins to fall. Knowing that he's going down and will be unable to make the catch he cleverly reaches out to grab the defensive back guarding him and pulls the defensive player to ground on top of him. The referee sees the wide-receiver falling with the defensive player on top of him and instantly throws a yellow flag for pass interference. Obama's policies have caused the economy to lose it's footing. He's failed miserably. The only thing he can do now is take someone else with him. He can't run on his record so he needs an alternative enemy to blame for his bad leadership.
The president fails once again. With exception to disposing of Bin Laden, we've had no leadership from this president. His entire presidency has been a series of secret deals, cabinet appointments of tax evaders and sworn Marxists and a tax jihad again the business community in our country. He claims to want jobs but instead implements policies that make it virtually impossible for any prudent business man to hire. Next to collapse will be our health care system. It's a certainty that many doctors will either close their doors or choose another career path. He had an opportunity to reduce real costs of through tort reform. He favors lawyers over doctors. He also lied by promising we could keep our doctor and our existing health plan if we like it. Unemployment is rising, our national debt has skyrocketed and the only explanation we get for all of his missteps it that it's his predecessor's fault. Not long ago he himself said that it would be bad to raise taxes in a weak economy. Now he threatens to cut off social security payments, default on the national debt and plunge the nation into financial "Armageddon" unless the congress, that we just elected to reduce spending and balance the federal budget, doesn't send him a bill with tax increases in it. Why doesn't he instead threaten to turn our own nuclear arsenal against us while he's at it?
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