Congress lives up to its 10% approval rating.
Every time our Congressional leaders get a chance to show they can work together for the good of the country they find a way to screw it up. Yesterday, both parties failed to hold up their part of the vote for a package to ease the banking credit crunch. Between the biting partisan speech that Speaker Nancy Pelosi gave on the floor, and the childish republicans changing their votes in protest, our so-called leaders demonstrated again where their interests lie. Many are more concerned with their re-election. Of the 18 congressional incumbents that are in close races this November, only 3 voted for the proposal.
On a positive note, perhaps the failure will allow Congress to go back to the drawing board and come up with a new and improved plan that will eliminate the wasteful pork that was included in the original proposal.
As far as the financial markets are concerned, uncertainty causes chaos. We feel that yesterday was a knee-jerk reaction to the failed vote. Overnight, the overseas markets looked at it as such and refused to participate in the selloff.
Respected names in the financial arena feel that a deal will be worked out soon once the House reconvenes on Thursday. Our analysts state that company stock prices are oversold and cash positions are quite high now. As in past reactionary selloffs, many bargains present themselves.
Equity markets correct, stabilize, and move on to new highs. We don’t expect this time to be any different.