On Tuesday rapper Snoop Dog suggested all the players in the Washington showdown should just chill out and smoke a joint. While I'm not sure how many if any lawmakers took his advice to heart, there is one page from his book they've embraced and that's giving us the same stuff under different names. Once again Washington has passed bills that are nothing more than the same as before, which insures more drama is right around the corner. Their rap never changes, and we can only anticipate rhetoric becoming harsher as both sides gear up for the next round.
It will be interesting to see if there is real negotiating on spending and debt between now and the January and February deadlines for continuing resolution and the debt ceiling. I sense the administration is looking to use its (slight) public relations victory to push immigration, and all the stuff that dominated the headlines will recede to the background. In the meantime, the market has to contend with other realities.
·The economy already sucked big time!
·The global economy is determined but still rebounding slowly.
·Corporate earnings look soft.
·Fed policy and whether all that printing will even make a difference for Main Street.
The American economy has been held back by terrible fiscal policy with social aims that have less to do with rewarding individual effort than erasing wrongs or yesteryear. Corporate America is sitting on a mound of cash, but that's not their goal. Inherently, they are looking for the backdrop that allows them to grow their business without retribution. Now those policies will continue under the cover of fresh excuses about the government shutdown.
Instead of admitting its fallacy and getting pushback from Main Street and Wall Street the White House has a new source of blame for lackluster job growth. Of course, it's one thing to focus on day to day political victory or advantage and to create prosperity. That is a shame and something people with noble goals should consider before executing inelegant plans of attack. In other words be smart... don't make people sympathetic to the inevitable failure of the new healthcare law or buy the notion an economy that's sucked for five years now sucks because of the drama in Washington.
It's early with earnings but one thing is clear, the Street can no longer look the other way with companies that miss top line estimates (see IBM).
The broad market probably trades sideways in a tight range. Still taking cues from Washington and still hoping a ceasefire on the War on success happens... but it becomes less likely every time the GOP acts on emotion without regard to outcome.