A Bold Prediction

We’ve been talking about the stock market this week, so why not end it with a bold prediction: Once the federal debt ceiling is raised, look for the stock market to utterly tank within two weeks, certainly within a month.

While there are many reasons why the market is taking at least a pause if not slouching towards a correction, the most important is the appetite for government debt. A time like this requires careful management and attention to consequences. We’re not getting it. What we have instead is mismanagement on an epic scale that will certainly spook the market and ultimately kill it.

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Bernanke in Charge

Another Federal Reserve policy meeting, another restatement of the QE3, another big rise on Wall Street.  The breakdown on the Fed’s continuing to buy $85 a month in treasury bills was predictable, if generally wrong and leaving just about everyone to speculate on why, regardless of how plainly the case was made.  Make no mistake about it, though – Ben is still in charge and things are going pretty well in many ways, at least until the showdown on the budget and debt ceiling.

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