Politics Trumping Economics

traderchild

Junior member
15 1
Great Britain’s GDP was just revised up another 0.7%, off of strong manufacturing and construction numbers, further underlining steady overall growth. The BoE recognizes these positive data outputs and sports a hawkish stance on quantitative easing.

In other words –that’s a government responding positively to positive changes in its economy. There is a light at the end of the tunnel.

Meanwhile in America – we’ve decided we will never stop buying treasuries. You could count the number of people that expected a “full steam ahead” continuation with QE on one hand. And that’s because the consensus knows that the markets can’t be accommodated into perpetuity.

And then there’s the impending government shutdown. There’s absolute gridlock in Washington because both sides of the aisle are cut from the same cloth of the mafia. How can there be compromise in Washington? Watch MSNBC and Fox News back-to-back and tell me where the middle ground is.

It doesn’t exist.

Assuming our “leaders” refuse to speak to each other, the federal government will soon be worth less than some individuals on the pages of Forbes, after which, we’ll default on our obligations.

The markets seem to be responding as expected. And now one of two things will happen:
- The government drops its ego and decides to sustain its miserable existence just a little bit longer, and the market goes up.
- The government puts party politics over the lives of the people that built it and modern finance meets a grim but entertaining conclusion.

So…buy the dip?

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