The market is sending a message to congress and the President alike to stop being Republicans, stop being Democrats and start being Americans! Enough political wrangling and do what’s right for the country. Europe is also having the same effect, but it is clear that they will solve the problem, at least in the short term by kicking the proverbial can. Once the debt talks are over and Europe is off the front burner, the market will focus on earnings which will push stocks to new highs.
That said, the European problem is the same one we have: Bad demographics and too much debt. We all have too many older people attempting to live off the system and not enough young workers to support them. Toss in the massive hangover from a debt infused spending binge, which has left nobody with any money, and you’ve got a “Goliath” size crises that’s not going away anytime soon. I discuss these issues in-depth in my new book – Facing Goliath: How to Triumph in the Dangerous Market Ahead.