According to Jeff Macke | Breakout: Unless the debt ceiling
is raised the U.S.
will run out of cash sometime between February 15th and the middle of March. If
that fuzzy deadline doesn't make you tremble, you're not alone. The stock
market doesn't seem to care much either. Less than three weeks into the year
stocks are up more than 3% on the heels of a very strong 2012.
If the fiscal cliff didn't matter to stocks and the August
2011 debt ceiling debacle was just a buying opportunity, the question for
investors is whether or not the Next Big Government Crisis is a reason to
adjust their portfolios.
Hugh Johnson of Johnson Advisors says the debate itself, along
with the potential for spending cuts deep enough to cut economic growth, are
reasons for concern. In the context of what he thinks will be 1 - 2% growth, we
could easily edge into a recession in Q1 and the back half of the year. The
start of a recession is typically not a good environment for stocks. Johnson
says the smart play for traders going into the heart of the debate next month
is to be on the short side of the market. For those less inclined to jump in
and out of the tape, Johnson suggests dragging their feet on buying stocks
unless or until stocks pullback around 10%.....
Read more at http://finance.yahoo.com/blogs/breakout/debt-ceiling-theatrics-could-spark-10-sell-off-155943871.html
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