Why does my stomach hurt after each new government compromise?

I pay attention. And I understand the majority of people do not.

But at some point, does the duplicity, hypocrisy, and tomfoolery of the US Congress and Washington D.C. not become disgustingly obvious even to those pulling their heads out of the sand for a quick breath of air?

If wishing hoping praying could make it so.

I struggled to produce a title for this missive because I simply am dismayed by this new spoonful of BS that’s been served up as another necessary “compromise”.

And not because Congressional compromise is antithetical to the best interest of US citizens ...

And not because I didn’t expect lawmakers to kick the can again ...

And not because Republican wussies bent over and relinquished their principles again ...

And not because the deal doesn’t address the real budget issues threatening the country again ...

And not because lobbyists weaseled their way into the pockets of our politicians and the fine print of legislation again ...

All that is true. But it’s not entirely why I’m disgusted.

I’m disgusted because so many people don’t get it ... or don’t care enough so our representatives will actually get it. My septic tank for political excrement hath long since runneth over.

That’s why every little thing is so upsetting now.

I understand that people – even our representatives – are fallible. But we’ve reached a point where something good only comes out of Washington when lawmakers fail to do something they think needs to be done.

I heard a guy from Forbes.com on the radio the other day second-guessing his stance a few years back to rid Congress and their legislative ways of pork-barrel politics. Now, looking at recent political gridlock, the radio guest backpedalled, condoning earmarks and pet projects so Congress could actually get something done.

[Heavy sigh ...]

Here are some thoughts from some well-known persons regarding compromise:

If you just set out to be liked, you would be prepared to compromise on anything at any time, and you would achieve nothing

– Margaret Thatcher

The 'morality of compromise' sounds contradictory. Compromise is usually a sign of weakness, or an admission of defeat. Strong men don't compromise, it is said, and principles should never be compromised. 

– Andrew Carnegie

Compromise is but the sacrifice of one right or good in the hope of retaining another -- too often ending in the loss of both. 

–Tyron Edwards

Compromise, hell! ... If freedom is right and tyranny is wrong, why should those who believe in freedom treat it as if it were a roll of bologna to be bartered a slice at a time? 

-Jesse Helms

From the beginning of our history the country has been afflicted with compromise. It is by compromise that human rights have been abandoned.  

–Charles Sumner

There are two sides to every issue: one side is right and the other is wrong, but the middle is always evil. The man who is wrong still retains some respect for truth, if only by accepting the responsibility of choice. But the man in the middle is the knave who blanks out the truth in order to pretend that no choice or values exist, who is willing to sit out the course of any battle, willing to cash in on the blood of the innocent or to crawl on his belly to the guilty, who dispenses justice by condemning both the robber and the robbed to jail, who solves conflicts by ordering the thinker and the fool to meet each other halfway. In any compromise between food and poison, it is only death that can win. In any compromise between good and evil, it is only evil that can profit. In that transfusion of blood which drains the good to feed the evil, the compromise is the transmitting rubber tube.

–Ayn Rand

When Democrats and Republicans compromise ... we, the people, lose.

But in case you wondered who besides politicians win, consider the highly connected. The perks in this bill are just the latest in the persistent, pervasive and perverted revolving door between the Federal government and corporate interests. The Left likes to call it capitalism. The Right likes to call it socialism. But it’s corporatism, with some hints of fascism.

It’s good to think back and know President Obama was voted into office twice because he most certainly would rid us of the corporatism hollowing out the morality and morale of the country. Ohhhh ... my stomach. Does anyone have one of those little white paper bags you find in the seat-backs on an airplane? Ehhhhh...

While I'm already feeling queezy, let me say I hate the simpletons who try to make perfect comparisons between the US and Europe, particularly as it concerns debt and deficits. There are critical differences. But still we have Congressman telling us we’re going down the same road as Europe ... or we’re going to become Greece soon.

At best, these types, who should know better, are under-informed. At worst, they are fear-mongering. The estimable [cough] Senator from South Carolina, Lindsey Graham, warned on New Year’s Eve the US economy would collapse and the stock market would collapse if we were left to go over the cliff.

Seriously, white paper bag? Anyone?

Actually, though, we are becoming Europe ... in that we are now suffering through the same never-ending compromises and deals and agreements and resolutions and bills that inevitably kick the can further down the road. European officials have gotten quite good at it. And our politicians are too thick-headed to realize they are travelling down the same road as Europe.

Next up for the US is the debt ceiling ...

Republicans have “promised” not to accept any extensions if there is not a credible plan put forth to cut spending and shore up the budget.

I’d laugh if the thought of it didn’t give me dyspepsia (Google it).

The markets have so far reacted to the Fiscal Cliff deal as I expected. But history doesn’t bode well for the debt ceiling charades that are coming soon to a theatre near you.

Three days after the debt ceiling agreement that happened back in August 2011, Standard & Poor’s downgraded the U.S. credit rating.

Stock markets sold off sharply. They bottomed three days after the downgrade.

But in the mere 13 days after 1) Congress reached an agreement, 2) the President signed a budget act and 3) S&P downgraded the country, the S&P 500 lost as much as 20%.

Ouch.

But the good news: Stocks bottomed at that low point and rallied 37% over the next 12 months.

Frankly, I’m more worried about immediate debt ceiling ramifications than I was the fiscal cliff, especially if one of the ratings agencies comes out with a downgrade or a credible warning.

As always, it’s tough to say how investors will react.

The best we can do is look for clues and capitalize on trading set-ups with the greatest probabilities of success ... as investors react.

Often times this means ignoring the news-induced volatility.

And it means sticking to the methods of price analysis that have proven reliable in the past.

Without a doubt, the debt ceiling and ongoing debate in Washington will have an impact on the markets, and especially the US dollar. Though the outcome for the buck may not be as obvious as it seems now.

For those as sick to their stomachs as I am, Jack is going to take some time this month to teach individual investors how to succeed in the market without predicting the outcome of the next compromise.

His focus will be on the foreign exchange market. And his discussion will cover technical analysis, sentiment analysis and risk management. It’s all aimed at helping you become a better trader.

Take a minute and check it out.

JR Crooks

 

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