Budget Battle is now Center Stage

The budget battle will now start to overwhelm QE talk.  A real Washington and countrywide conversation will involve putting everything on the table and end up sharing the pain.  They are not even in the ball park at this point.  Cutting entitlements, raising retirement ages, and increasing the progressiveness of income taxes will have to happen at some point.  At the moment the proposals are too one sided to get anything done,

It is probably important to mention that the majority of our computer models on the S&P 500 have not flashed a sell signal since QE talk started last September.  As such the situation continues to get more ripe for a change in perspective.