Something will Happen in Washington

The Thanksgiving rally was good for everyone and seemed to push into the background the fact that the deficit will take some kind of hit in the next month.  No doubt it will be a combination of revenue increases and espense cutbacks.  I saw the movie “Lincoln” over the holiday. it is a good movie and may provide insight to the political processes that surround major hurdles. 

A couple of articles over the weekend that probably bear reading on the deficit issue are:

http://www.nytimes.com/2012/11/23/business/a-starting-point-for-tax-reform-what-reagan-did.html?smid=pl-share

http://www.nytimes.com/2012/11/23/us/politics/congress-looks-at-ways-to-leave-top-tax-rate-as-is.html?smid=pl-share

As to thr markets, the bounce forces are in play and the 1360 to 1390 S&P trading range got stretched a bit to the 1405 area last week and could on a good day get stretched even more to the trap entry point of 1419.  Nevertheless these are bounces as Europe shows the way on the effect of austerity and living with less.  No change in our positions since lightening our short T-Bond positions last week.

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