Not to pour cold water all over a 160+ point rally in the Dow, but we figured a deal, any deal, would be greeted warmly by traders. As it should've been. For what the market---and the economy for that matter---thirsts for is clarity. Many a CEO has been on the record of late stating "if you're going to raise our taxes, raise them. Just tell us what to expect so we can get back to business." And if raising what essentially amounts to a microscopic pimple on the butt of debt and unfunded liabilities too gargantuan and politically unthinkable to tackle supplies a little clarity, that, by itself, is a good thing.
Ah but what about government spending? What about addressing what any thinking individual who balances a checkbook knows to be the fundamental problem? Well, that's supposed to be next. But, alas, that's politically unthinkable as well. Make no mistake, they'll politic their way through, making some adjustments at the margin---accomplishing virtually nothing that might upset their supporters. In essence, business as usual.
If we're to ultimately grow our way onto a better path---if we're not to become Greece---I assure you, it will have nothing to do with anything transpiring on Capitol Hill over the next few weeks. But rather, it'll be on the backs of creators operating in an environment that allows them to take risks, to fully enjoy the spoils of their successes, and to suffer miserably (loss, not regulation, teaches prudence) when they fail.
For a cheerier look ahead, in case you missed it, read Our View Going Forward.
The Bottom Line – economically, and societally, speaking:
While there’s plenty in terms of geo-political risk to concern ourselves with at present, the future holds as much promise today as it has at any time in history. Yes, mistakes, particularly mistakes of policy, will be made. And yes, such mistakes will deliver hurdles and setbacks in the years to come. And yet future generations will witness the advancement of the human condition in ways we can’t even begin to imagine. The ultimate pace of that advancement will be determined by the extent to which we possess the freedom to pursue our individual objectives, and the freedom to conduct business in the global marketplace going forward.
In essence, the future---all the politicking notwithstanding---looks quite bright to me...
HAPPY NEW YEAR TO YOU AND YOURS!!