What a letdown. With the world’s eyes on the United States Congress last night, news that a deal on debt limits had been reached went down like a wet fart. Half the Republicans wanted to tax the poor to pay the rich. Half the Democrats thought Obama should ask China to pay the Social Security bill. In the end, they agreed to borrow a few more trillion dollars to make sure the brave boys in Afghanistan got their cheque next week.
That sparked a limp Wall Street rally that lasted about 40 minutes until reality set in. Manufacturing data confirmed that although the US still makes stuff like the Ford F150, other countries like South Korea, Germany and Mexico make cars that people can afford to buy and run. And nobody’s even buying them in the current climate.
The Dow headed south again, proving that a week’s huffing and puffing about potential US debt default was little more than a reason for spokespeople like finance guru Ticki Fullerton to get some air time talking about the end of the world as we know it.
10 year US Treasury bonds finished the session yielding 2.8 per cent, confirming that investors think the chances of a debt default are up there with an Elvis comeback. Gold remains strong. Australia’s Reserve Bank Board avoided being pelted with fruit by angry overcommitted X-Gen mortgagees by deferring the inevitable for another month.
Tonight, the Dow will tank again, and no doubt Europe debt concerns will overshadow any good news. Another normal day in the market.
*Image: Sibylla Delphica, Sir Edward Burne-Jones, 1868, Manchester City Art Galleries , England, HERE
