Eye of the Storm or Are We Free to Move about the Cabin?

The Encyclopedia Britannica defines the eye of a storm as, “a central region of clear skies, warm temperatures and low atmospheric pressure”. The eye is surrounded by the eyewalls, which are the most dangerous part of the storm. It would not be stepping out too far in comparing the present situation in Washington, D.C. to that of a cyclone. In meteorological terms, the capital markets may have transitioned from the outer ring of the storm, through one side of the more turbulent eyewall and entered the relatively more tranquil eye of the storm on October 10, 2013. Last Thursday, House Republicans agreed to meet with the President and work on an agreement to at least temporarily raise the debt ceiling. Global equity markets reacted with glee, sending the major equity market indices up 2%, on average, to pre-cyclone levels. Those discussions broke down as we entered the weekend and began the new week without a deal.

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