It is now just six days from August 2nd, the day the government of the United States of America either passes a bill increasing the debt ceiling or begins defaulting on said debt, which is fast approaching $15 trillion.
Through accounting gimmicks and "borrowing" from the pension funds of federal employees, the government has thus far avoiding making either the commitment to borrow more or claim deadbeat status and suffer a beating at the hands of the ratings agencies in the form of credit downgrades and subsequent higher interest payments.
Make no bones about it, it is time for the American people to come to grips with the reality that the officials in Washington are not doing the jobs they are paid to do, nor have they represented the best interests of the American people for quite a long time (at least the past 11 years).
If the debt ceiling is not raised, calamity will surely ensue, which is why both sides - Republicans and Democrats, except for a few ardent Tea Partiers - have repeatedly expressed sentiment that the debt ceiling must be raised by August 2nd, no matter the outcome of budget negotiations. In truth, both sides are coming to the realization that their parties are far apart and that no budget issues or long-term spending should have become tied to the debt ceiling issue. They are separate matters which should be dealt with separately.
Nonetheless, the politicians continue their annoying Kabuki theatre while the American public seethes over their inability to compromise, act like reasonable adults and do what they were elected to do.
Wall Street has taken notice as well, logging losses in each of the first three days of this week, with no end to the selling yet in sight. To say that our "leaders" have taken a walk to the end of the plank would be putting it mildly. This issue should never have gotten to this point and those wishing to play fast and loose with the US economy should be given a hearly heave-ho and be dutifully shoved off the plank and into the drink.
What both parties have done - though especially the Republicans, who picked this fight - is shrink from their responsibilities, putting politics ahead of their oaths. It is a shameful chapter in American governance which should never be allowed to be repeated, though the general consensus is that more of the same will be forthcoming as the 2012 election season heats up.
The leaders of both parties should be henceforth removed from office for putting the stability and good faith and credit of America at extreme risk. After that, the herd of politicians being led by money from various lobbyists should be summarily removed from office. The entire congress could run better with many fewer members, preferably none of those presently constituting that formerly-august body.
The American public want change, need change and have been promised change, but all it has gotten is a sordid soap opera of bad politics and even worse outcomes. We have reached the brink and it is very nearly time to throw off the yoke of oppression by the governors and take matters in hand in a more efficient and direct manner. Nothing gets done in Washington any more; maybe it's time to shut it down.
The wealthy barons of Wall Street, those who funded the campaigns and lined the pockets of these moronic, imbecilic politicians, should also be brought to task, something Attorney General Eric Holder seems reluctant to pursue. After all, Wall Street keeps him in nice suits and fancy offices. He should be impeached.
Today's losses on the major indices were the second-largest of 2011 (except for the S&P, for which it was the third-largest), surpassing the 68 points the NASDAQ lost on January 28, but less than the 77 point decline on February 22, though more than the 66 point loss on June 1.
The Dow dropped 166, 179 and 279 points, and the S&P fell 23, 28 and 30 points on the same dates, respectively.
Dow 12,302.55, -198.75 (1.59%)
NASDAQ 2,764.79, -75.17 (2.65%)
S&P 500 1,304.89, -27.05 (2.03%)
NYSE Composite 8,153.21, -178.46 (2.14%)
Declining issues slaughtered advancers, 5875-804. New highs on the NASDAQ numbered only 15, while new lows expanded to 89. On the NYSE, there were 28 new highs and 105 new lows. The combined totals of 43 new highs and 194 new lows puts this indicator clearly in the "sell signal" category. Volume was dynamic and huge. Make no doubt about it: this was a rout.
NASDAQ Volume 2,310,879,750
NYSE Volume 5,074,647,000
Commodities were rather tame throughout the equity carnage. WTI oil fell $2.19, to $97.40, from an artificial and fully inflated high point. Gold dipped $1.70, to $1,615.10, while silver fell a modest 13 cents, to $40.57. The losses in the precious metals are temporary, likely the result of margin calls. Eventually, if stocks continue to take on water, money will gush into gold and silver.
The delay in raising the debt ceiling was not the only issue making for a horrible day on Wall Street. Durable goods orders fell 2.1% in June, further evidence that the economy is slowing.
Tomorrow's initial unemployment claims reading from the BLS could be the proverbial straw that breaks this market's back. Should the number come in above 420,000, stocks could pick right up where they left off today, severely to the downside.