Nothing motivates people like fear. And there are few things more fearful in this world than losing enormous amounts of money. The equity markets have done a pretty dramatic about-face in the last 5 days on their way to losing 3.5%. High beta names have fared even worse with small caps down almost 5% in as many sessions.
There’s an unfortunate situation brewing here, however. This fear is likely to motivate the Congressman into action. Remember, rich people hate two things in this world – losing money and losing money. And Congressman are generally rich people so they hate losing money AND losing money. When they see their brokerage accounts diving due to their own actions they feel pretty silly – especially when the fix is fairly simple.
So, expect fear to motivate these rich people into action in the coming days (week?). And when they finally come to some agreement we can then begin to focus on how much this agreement is going to hurt the economy. Talk about cutting off your nose in spite of your face!