Bartiromo on Sequester Panic: 'Wall Street Seeing This As Scare Tactics,' Stocks 'Near Record Highs'
CNBC's Maria Bartiromo made a statement Sunday about all of the fearmongering concerning the looming budget sequester that people on both sides of the aisle should pay attention to.
Appearing on NBC's Meet the Press, Bartiromo said, "I think Wall Street is seeing this as scare tactics because if the market really believed that the economy was going to be paralyzed on March 1 we would not be trading near record highs" (video follows with transcript and commentary):
MARIA BARTIROMO, CNBC: I think at this moment in time as we live from cliff to cliff, we do need leadership in terms of bringing the two sides together. I mean, I think that's what the public wants. From an economic standpoint, $85 billion is not really going to do much in terms of impact. I think Wall Street is seeing this as scare tactics because if the market really believed that the economy was going to be paralyzed on March 1 we would not be trading near record highs, and that's exactly where we are right now.
Nobody likes a sequester. For me it's more of a national security issue than an economic issue because they’re so blunt, these cuts in defense as well as discretionary. Nobody even knows what missions are going to be impacted. So from that standpoint, it is something to be said about national security. But from an economic standpoint, I think Wall Street, business has been anticipating this. This in not going to be a shocker, and it certainly is not going to have tremendous impact in terms of broad economic growth.
As NewsBusters has been noting for days, in relation to the total federal budget and the economy, these sequestration cuts are tiny and can't conceivably have any significant impact on the economy.
If this weren't the case, stocks would have been selling off in the months leading up to the March 1 deadline rather than rallying virtually to all-time highs.
Compare what stocks did during 2011's debt ceiling battle versus what they've been doing of late (courtesy BigCharts.com):
Notice that at the end of July 2011, the Dow Jones Industrial Average collapsed by over 15 percent as Congress and the President battled about expanding the debt ceiling.
By contrast, the Dow is up about twelve percent from last November's lows and about seven percent this year.
As Bartiromo said, this is a market saying traders don't think the outcome of this sequester fight - whatever it might be - is going to have the slightest impact on the economy or their investments.
If only the rest of the Obama-loving media would recognize this.