We all know the routine for this week's stock market: fasten the saftey belts. This is going to be a rough ride. However, what many investors have forgotten is that about a year ago the Securities and Exchange Commission responded to the Flash Crash by implementing a series of new market circuit breakers to provide a first line of defense in the face of massive price gyrations.
READ Bill Singer's explanation of these new circuit breakers and how they may be tripped at New Stock Market Circuit Breakers May Be Tested: Here's What Will Happen
Below is an excerpt from Bill Singer's updated article: "The No Nothing Party and Woody Allen's Choice" (Forbes, Street Sweeper, August 6, 2011)
In the mid-19th Century, the United States saw the rise and fall of the Know Nothing party. In 2011, we witness the rise of the No Nothing movement, whose motto seems to be a "No" for everything and "Nothing" in terms of a workable solution that a majority of Americans will support. In the face of such intransigence, we have drafted deadlock, ideology, and dogma in lieu of pragmatic legislation.
I don't trust the political hacks from the Republican and Democratic parties to get this right - I simply trust that each elected official will persist in advancing partisan politics at the expense of our country's best interests. Similarly, I have no hope for anything meaningful from the Tea Party. Petulance is not a strategy for restoring the United States' full faith and credit. Last I looked, the nation's motto was E Pluribus Unum, not I Told You So.
As such, I renew with vigor my call for a national referendum on the future economic policies of our nation. Instead of appointing Congressional committees populated with partisan politicians, I would prefer that the Republican, Democratic, and Tea parties draft their specific versions of comprehensive economic reform legislation. I would then welcome the preparation of additional drafts with competing plans. For my part, I would urge serious citizens such as New York City Mayor Michael Bloomberg to become actively engaged in drafting competing plans.
Let us then submit those proposals to a popular vote with the requirement that the two plans receiving the most votes after a primary-type ballot would then be ultimately submitted to the American public for a vote within, say, 90 days. During that interim, Congress would be welcome to draft a super-majority counter-plan that would be listed on the same final ballot. It would be an interesting challenge to the House and Senate to see if they can forge a single piece of legislation that the public will support.
If Congress can't reach a bicameral super-majority for its own effort, then the resulting referendum would be a choice between the two plans that won the earlier primary. Whatever plan is ultimately approved by the largest number of votes would be promulgated into law. Once again, we will draw the Travis line in the sand of American politics. All Americans would then have a moral obligation to unite behind the legislation and see that it is timely implemented.
Okay, maybe not a perfect suggestion or even a great idea but, hey, I'm putting it out there to generate discussion and debate. Please, feel free to comment and add additional suggestions or options.