Shutdown Worries – Wall Street’s Blind Spot, K Street’s Greed, and Crazy Street’s Ignorance

Highlighting three concerns as we slide towards what promises to be a truly depressing few weeks.

Wall Street’s Blind Spot:  Remember all those Wall Street Players who were confident Romney could win – based at least partly on “insider” access to Romney’s internal polling?  They got blindsided by reality and the result was a nasty sell-off.  I worry that we are seeing the same complacency around the shutdown based on “insider” access to the Republicans on capital hill – because Wall Street is not talking to the true wackos.

  • I get a feeling that the usual “sources in Washington” are reassuring people this will all be worked out.  And I am damn sure those “sources” are talking mainly to reasonable-minded old school Republicans.  Which would be fine except the wackos are driving the bus.  And the wackos don’t seem to have any lines of communication to Wall Street (or observed reality for that matter).
  • But the real blind spot comes from deeper down in the lizard brain.  Admitting the wackos are driving the bus would force a lot of otherwise sensible people on Wall Street to re-think their personal/emotional commitment to the Republican party.  A smart investor focuses on harsh realities, no matter how unpleasant.  But who said Wall Street was peopled with smart investors (grin)?  A useful litmus test; if you think Chris Christie really has a shot at being the nominee, then you are probably on the losing side of the Republican civil war.

K Street’s Greed:  Running through recent commentary I’ve seen sotto voice allusions to the less-than-pure motivations of the conservative “activist” groups driving this process.  Ostensibly, they are pushing to de-fund Obamacare on principle.  Reading between the lines, it sounds like they are really doing it to scare up donations (and thus get paid).   If you found a magic button that gushes out money every time you pushed it, wouldn’t you keep pushing?  Scary stuff for the nation though.  But not as scary as…

Crazy Street’s Ignorance:  What is truly terrifying is the loud-and-proud ignorance of the wackos.  Here’s Representative John Fleming, Republican of Louisiana addressing predictions of huge disruptions if the US defaults on its debt:  “Economists, what have they been doing? They make all sorts of predictions.  Many times they’re wrong, so I don’t think we should run government based on economists’ predictions.”  What is he proposing – reading pigeon entrails?  Horoscopes?  This would be funny, if he weren’t talking about defaulting on our debt and halting Social Security payments.

Be very afraid.

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