Yesterday I said “The reason why I am mentioning this again is that I believe it will become a bigger story this coming week. Oh sure, the European insolvency drama will continue and could still be a market mover, but I think the media will focus a little more on the ‘group of idiots.’ Pardon, I meant ‘supercommittee’ and its lack of agreement.”
It became a big story this morning when investors sold off stocks in anticipation of a further debt downgrade from one of the other ratings agencies. The Dow was down almost -350 points at its low. For those you who said S&P was crazy to downgrade the USSA because of its non-stop profligate spending and a dysfunctional Congress (yeah, we’re looking at you “old-codger-of-Omaha”) the staff of Standard & Poor’s would like to say something: WE TOLD YOU SO!
By my count this is four attempts to slash a few bucks from the TRILLIONS the government spends every year. Let’s see what we have here…
1. Remember the Bowles and Simpson commission? The National Commission of Fiscal Responsibility and Reform recommended cutting $4 trillion dollars over 10-years. Result? IGNORED.
2. Pete Domenici and Alice Rivlin recommended $6 trillion in cuts in their Debt Reduction Task Force. They were IGNORED.
3. Apparently these numbers were too large for our dysfunctional Congress so the next attempt by “The Gang of Six” at that point recommended the lowest cut of $3.5 trillion and was…IGNORED.
4. S&P cut the debt rating of the USSA.
5. And now the “stupidcommittee” pardon, “supercommittee” can’t even cut $1.5 billion over 10-years. DYSFUNTIONAL, indeed.
But don’t worry, “this time” the so-called cuts will happen anyway. There are automatic cuts built in, just in case the so-called supercommittee failed to meet the deadline, which it did. So the cuts are guaranteed…yeeaaaaah, sure they are.
Would you like to know just how dysfunctional Congress really is? It was reported today that Senator John McCain and Congresswoman Maxine Waters are both working on ways to STOP the automatic cuts.
Trade well and follow the trend, not the so-called “experts.”
President & Founder- Trading Advantage