Skeptics believed the collapse of the deficit reduction super committee had been “baked in” to Wall Street prices. The cynics predicted there would not be much market reaction if the group failed to come up with a ten year deficit reduction plan.
This may have been wishful thinking.
Word of the super committee’s demise has sent the Dow down 300 points — and falling.
President Obama, who was on an international holiday – oops, on an overseas mission – remained completely aloof to the super committee negotiations. He desperately wants to chastise Congress after its failure.
This may be a crucial White House political miscalculation. When things go bad most people seem to punish those who are at the top. In this case, the guy at the top is you know who…
The next chapter to play out is a probable downgrade of U.S. credit by credit rating agencies.