Posted on | July 29, 2011 | 29 Comments
Drudge Report headlines:
When word came late last night that House Speaker John Boehner didn’t have enough GOP votes to pass his bill, I wrote:
The most obvious possible prediction: The Dow Jones Industrial Average will drop at least 200 points Friday.
Rather than merely predict such a result — talk is cheap — I decided to make the proposition interesting:
After Pete and I made our friendly wager last night, my buddy John Guardiano started giving me flak about it, saying that among other things I was “playing into the Left’s eagerness to stoke a market downturn so they can force House Republicans to capitulate.”
Here’s the thing: I’m not making a value judgment. It’s irrelevant, as regards my $10 bet, whether the House should or should not pass the Boehner bill. I’m just acting on the knowledge that the market hates uncertainty, which is why the DJIA lost a total 484 points in the past five sessions. And here are the headlines in Friday’s papers:
House Puts Off Debt Vote as Press by Boehner Fails
— New York Times
House Leaders Postpone Vote on Debt Plan
— Washington Post
House Vote on Boehner Plan Is Delayed
— Wall Street Journal
Are you getting my drift here? If the DJIA was losing an average 97 points per day before last night’s big flop, doesn’t it just make sense that Wall Street will be having a Freakout Friday Fire Sale today?
Drew M. at AOSHQ says: “Tomorrow (Friday) is 2Q GDP report day. Should be fun. And by fun I mean, awful.”
The initial reaction to the Big Boehner Bungle from both U.S. futures markets and the Asian markets indicated my common-sense hunch was right. But markets are notoriously unpredictable (otherwise we’d all be rich), so it’s anybody’s guess whether Pete or I will be smiling when the closing bell rings on Wall Street this afternoon.
If you think I’m going to win, you should hit Pete’s tip jar.
However, if you think Pete’s going to collect the bet, hit my tip jar.