Yesterday the Markets dropped big as they have been doing since this 'crisis' began to escalate. Today they opened up on good economic news, then dropped as the debt ceiling crisis again took center stage.
Traders already know Boner's plan won't get to Obama's desk--if it gets out of the House--and they know Reid's plan won't get thru the House as is. Those certainties can be traded on and money can be made. What cannot be traded on, in any positive sense, is the monetary downgrade of basically all US debt, public and private. There is only one direction on such a trade: down, and everyone would be trying to get into the same elevator car at once.
The voters are finally watching, and while they don't know policy or politics, they do know that an 'up' market is good while 'down' is bad. President Obama can guarantee a rally tomorrow by announcing tonight that he will use one of the various "Constitutional" remedies available to him to avoid a ruinous default.
I'm getting the feeling after listening to Bill Daley and other Administration officials, that the President has reasoned that he will possibly be impeached by the T-House of un-Representatives, should he exercise the limits of his authority. I mean, torturing people is legal but saving the world from Depression is an impeachable offense in T-House World.
But such an impeachment, particularly if Obama boosts the Markets by announcing no default, would congeal his now-shaky support and burnish his image with the fence-sitting independents, who lean with any decisive action. It would probably guarantee his re-election next year.
Besides, my housekeeper, who does not follow politics and gets her 'news' 5 minutes per day on Network TV, thinks the President should 'grow a pair' and do what needs be done. She doesn't know who is right. She doesn't particularly care. She just wants to see everyone pay attention to jobs and the price of food and gas: what is important to her family.