It looks like Congress is about to forfeit yet another opportunity to address the country's long-term fiscal problems before they get out of hand.
Financial markets discount forward expectations, thus, most current news is priced in already. This news - the "Super Committee" apparently has failed - has been priced in for quite awhile, possibly since day 1. Markets will likely decline early as individual investors take action but expect market activity will return to a focus on Europe very quickly.
The issues in Europe in the near term trump the "Super Committee" because these issues appear to be leading to a Euro slowdown and possible recession. That is likely to impact US growth moving into 2012 and could lead to a slowdown or recession here.
We write constantly about risk management. These events highlight why it is so important to portfolio management. Be prepared to hedge, if you haven't already done so, the risk of loss. There are times when managing against real loss is more important than managing for real gains.
