Each year the National Safety Council compiles a statistical list that ranks various fatality risks. The Odds of Dying report can peg your lifetime chances of croaking from cancer (1 in 7), car accidents (1 in 98), bee stings (1 in 79,842) and even a lightning strike (1 in 134,906).
If you ask people what they think the biggest risks facing investors are right now, chances are they'll tell you the uncertainty over what might come from the impending debt ceiling and sequestration budget cuts. And yet, a growing number of market watchers are starting to see this ''self-made crisis'' for the sham that it is.
"Congress likes to take these things right down to the wire, and I think that can lead to a lot of trepidation," says David Lefkowitz, senior equity strategist at UBS.
He refers to the unknown outcome of the negotiations as the "Big Wildcard" and accepts the fact that uncertainty will exist until some last-minute fix is put in place. However, when asked to calibrate the risk of a stalemate and whether Wall Street is prepared for that, Lefkowitz sees less risk.
"I think the market is pricing in that there will be a solution, at almost 100%," he says, meaning if there isn't, things could get really ugly. "If we see any type of concern that there's not going to be a solution, markets will pull back." Just how much, is anybody's guess.In the meantime, the two sides are wasting no opportunity to gouge their political opponents over every dime the government spends nowadays. Just look at the prolonged battle that occurred along the way to passing disaster relief for Hurricane Sandy victims — a process that historically has been done on the fly with a simple voice vote.
This is not to say the debt and spending debate isn't important, because it is. In fact, Lefkowitz says it is ''critical that the government get it right" and find a way to "stabilize the debt to GDP." If not, we will be right back where we started in a couple of years, he says, when Medicare and Medicaid expenses ramp up in 2016 and 2017.
- Politics & Government