MarketWatch writes that the Senate on Tuesday approved legislation to raise the $14.3 trillion debt limit and immediately grant an additional $400 billion in government borrowing authority. President Obama signed the bill just hours before the deadline where the Treasury said it would stop paying the bills.
Whatever...…let’s focus on is life after this debt deal — specifically five ugly truths about our economy, our legislators and our nation’s future.
1. U.S. political dysfunction is only beginning. The so-called super committee that was part of the debt deal is a scary thing. The general idea is a 12-member debt-reduction commission, and while the berths were unfilled as of this column deadline, I have no doubt of the kind of people who will get a seat: the fattest fat cats in Washington. Say what you want about the inefficiencies of Congress, at least there were a few…
2. Forget about a seasonal boost to stocks this fall. The market has plenty of cleverly named schemes relating to the seasonal strength of the market around the end and beginning of the year. There’s “sell in May and go away” until October, the Santa Claus rally and the January Effect. None of these phenomena are 100% certainties, but all carry at least superstitious weight. Unfortunately, the recent debt legislation places a big lump of coal in investors’ stockings this winter by the aforementioned 12-member super committee. This group, charged with the daunting task of finding $1.5 trillion in debt reduction over the next decade, has perhaps the most Grinch-like schedule possible….
Find out the rest at http://www.marketwatch.com/story/5-ugly-truths-about-life-after-the-debt-deal-2011-08-04?mod=MWCommentaryandBlogs&mod=marketwatch
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