Knowing the market was on pins and needles, Harry Reid gave stocks a nudge last week, sending the major averages spiraling into the close. It didn't take a lot of words, but they were the kind that sent investors scurrying for the exits.
"We're not making enough progress on the fiscal cliff."
While I'm happy President Obama finally met with small businesses, the White House is using grade school bullying techniques that the cool kids use to punish the not-so-cool kids. Non-stop campaigning is probably how the office operates from now on as it works for the incumbent who spent more time blaming Bush than fixing problems. Hey, it worked... but it didn't work. If the goal is to stay in office, it is a great strategy and one that calls on a lot of energy. But we are talking about a fiscal cliff and tax breaks on the middle class because the economy is a wreck.
"We have to get away from the happy talk and start talking about specific things..."
The happy talk has already faded Senator Reid, but it is still silly season when it's all about finger pointing and warning about the mean guys ruining Christmas. That public relations thing is won... piling on now is about as far from talking specifics as possible. At some point, all the players will have to congregate in a room - if the recently vanquished feel like they have nothing to lose they might hold firm. But we all have a lot to lose. I heard the word compromise a bunch right after the election just like I heard the word "pragmatic" a lot after the previous election. I wanted to believe it back then, and I don't see it right now.
In the meantime, Main Street is set up to do some self-recovery if allowed, and if it can pierce through the haze of woe and victimhood. Consumer confidence trends are higher with yesterday's tally, the highest in four years. Household debt continues to tumble and now sits $1.3 trillion lower than its 2Q08 high. Home prices have hit terra firma and delinquencies are down for everything except student loans, which continue to soar in general. I suspect many students and parents figure some unsuspecting taxpayer earning more than $250,000 a year will have to foot the tab (how their own children go to college remains a mystery unless they can claim to be Native Americans).
Despite the feel good nature of recent surveys, I still contend this is a "Dropout Nation" where living in the moment trumps beating the bricks for a job or saving for things like a house or retirement (yes, I know surveys say a bunch of people are ready to buy and that's great - better when it actually happens).