Here we go again. It really is quite amazing how many times our government can kick a can. The markets rallied today after word leaked out that President Obama was going to suggest that Congress agree on a small package of spending cuts and tax increases in order to delay the automatic spending cuts that will go into effect with the sequester. When he came out to speak, the president said he still prefers a grand bargain, but if one cannot be reached very soon, a smaller agreement should be reached that would buy time by delaying the sequester for a few more months. In other words, let's kick the can down the road.....again.
This is largely why investors have grown so bullish on stocks. They have learned that our politicians are incapable of making hard decisions; but they are very good at buying more time. And each time they delay an important decision, investors push stocks higher. I'm really getting worried that this is setting us up for a hard fall. I thought this would be a particularly good time to rerun the above cartoon I asked my friend Mark Stivers to draw back in 2009.
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