Anyone who would play this market over the next three weeks is simply playing the personalities. This one's too easy: The Republicans will give on tax rate increases (operative word, rate) on the "wealthy", and the spending-reform can gets kicked yet further down the road. Why am I so certain? Well, we're talking politicians, and the polls say a no-deal deals the most damage to Republicans. Yes, I know, if the economy doesn't deliver --- and the debt continues its (present-pace) expansion --- over the next four years, historians will dub these the dreaded Obama years. But sitting politicians aren't the least bit concerned with the opinions of generations to come --- bottom line; they have their seats to worry about. Therefore, falling off the cliff is a virtual impossibility.
Now, clearly, no semi-reasonable human being, who remains uncaptured by the political process, and/or unafflicted by extreme naiveté, can fathom good things economic coming from running trillion-dollar deficits ad infinitum. So what does that say about today's poll-respondent? Well, naiveté we'll agree on, but if you at all doubt political capture, think about it:
How do union members (auto workers, steel workers, tire workers, teachers, federal employees, nurses, teamsters, electricians, etc., etc., etc.) feel about government spending?
How do attorneys feel about regulations?
How do real estate agents feel about homeowner bailouts?
How do unemployed folks feel about government spending?
How do welfare recipients feel about government spending?
How do life insurance salespersons feel about estate taxes?
How do retired folks feel about social program reform?
How do compliance consultants feel about regulations?
How do accountants feel about tax simplification?
While both parties no doubt find support in the above list (save perhaps for one or two), the two sides nonetheless believe they stand divided on the essentials. I say NOPE! Some want bigger government and aren't ashamed to admit it, the others want the goodies that come from bigger government, whether they admit it or not. Like I said in Chameleons, deficit spending is a bad thing, that is until some of it lands on your doorstep.
And, sadly, at the end of the day, what they believe will ultimately serve their personal ends --- bigger government --- would be their undoing. Greece, Spain, Italy, Portugal, etc. are proof positive...