Wall Street falls off cliff, Congress, President on holiday

Congress goes home without a deal. Just as the Administration intended.

WASHINGTON, December 21, 2012 – As we predicted in yesterday’s column, Congress turned out the lights and went home. The President is packing up for another expensive vacation. And this morning, the market is tanking. Bulls cranked up the optimism all week, but last night, the house of cards came tumbling down. Off the cliff time, as we’ve been predicting all along. Sorry about that.

House Speaker John Boehner couldn’t even get his own troops in a row to pass his “Plan B,” even after Grover Norquist told his robot Congressmen they could do so. As usual, Harry Reid had already flipped the bird at Boehner and shut down the Senate for the holidays earlier in the day. And the President, of course, had his veto pen at the ready for Plan B, knowing it would never get past Reid’s absolutely do-nothing Senate. Seriously, why do we pay these guys?

After the failure of Plan B hit the wires, Dow futures immediately plunged some 200 points, and the drop affected Asian markets, which turned sharply down. This morning it was our turn to take a hit, and all the averages are broadly and sharply down this morning as we write this, about 10:30 a.m. EST.

We’ve actually been doing a little unaccustomed nibbling, mostly at Schwab ETFs, but we’re really not selling anything, having bought a smidge of protection with a quick in-and-out move in SDS, the sinisterly named double-short S&P 500 ETF. Lost a little money on that one when the market snapped back a bit, but no matter. Had the plunge continued, we might have needed the position.

As it is, the cliff-dive has backed off a bit, but today is almost certainly likely to be a down day, particularly if the Mayan Calendar seems at some point to be correct. In which case, if we saw it coming, we’d short the whole market and jump into Armageddon with a final, glorious profit.

We’re going to go out now and run some errands. With Congress gone, nothing much will happen except posturing. Wait, doesn’t the same thing happen when Congress is here?

At any rate, there are rumors of a brief return next week for a last-ditch effort to do something about the cliff. We’re kind of fed up at this point. The American people voted like Europeans and particularly like the Greeks on November 6, and they asked for this, frankly, so they had ought to get what’s coming to them for not paying attention and listening to political advice from Sean Penn, Cheryl Crowe, and that dean of political pundits, Barbra Streisand, members of the 1% who will shelter any tax hike by writing off their new and improved wardrobes.

We could go on, but there’s scarcely any point in venting. What’s done is done, and after a mini-charade potential next week, it will be up to the new Congress to kick the can down the road again after the New Year flips the calendar if not the Harry Reid bird. And likely, that’s just what they’ll do.

Go shopping. Uncle Ben wants you to spend anyway. So be good citizens and do what you’re told. It’s a wonderful life, eh?

 

Disclaimer: The author of this column maintains several active trading and investment portfolios and owns residential and investment real estate.

Any positions mentioned above describe this author’s own investment decisions and should not be construed as either buy or sell recommendations. The current market is highly treacherous and all investors travel at their own risk, so caution should be exercised at all times.

Illustrations, charts, commentary, and analysis are only the author’s view of current or historical market activity and don’t constitute a recommendation to buy or sell any security or contract. Views, indications, and analysis aren’t necessarily predictive of any future market or government action. Rather they indicate the author’s opinion as to a range of possibilities that may occur going forward.

References to other reporters, analysts, pundits, or commentators are illustrative only and do not necessarily represent an endorsement of such individuals’ points of view. If specific investment vehicles are mentioned in any article under this column heading, the author will always fully disclose any active or contemplated investments in said vehicles.

 

Read more of Terry’s news and reviews at Curtain Up! in the Entertain Us neighborhood of the Washington Times Communities. For Terry’s investing and political insights, visit his Communities columns, The Prudent Man and Morning Market Maven, in Business.

Follow Terry on Twitter @terryp17

 

 


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Terry Ponick

Now writing on investing, politics, music, movies and theater for the Washington Times Communities, Terry was formerly the longtime music and culture critic for the Washington Times print edition (1994-2009) before moving online with Communities in 2010.  

 

 

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