I spent a lot of time studying derivatives. CDO's, Credit default swaps, interest rate swaps ie, ISDA(International swaps and derivatives association), ITRAXX (the exchange), etc. Who the main players were, positions, etc.
I also spent a lot of time studying what was going on in Europe and systematically every single time any country in Europe needed implementation of the global bankers agenda (print, print, print, ie technocrats) they forced the hand of the government through that countries bond market and equity markets. I'll give you an example, when Buscolini would not step down in Italy, Duetche Bank starting dumping Italian bonds furiously to drive interest rates up while simultaneously smashing their equity market. As soon as he stepped down and they implemented their chosen technocrat, they normalized everything as quickly as they created chaos. I could give a hundred examples, however, I'll give one more. When the Bundesbank said it was unconstitutional for the ECB to purchase debt via the EFSF, Germany experienced a failed bond auction the next auction. They quickly changed course.
Central bankers from Europe to America and their partners/participants JPM, GS, MS, Citi, Barclays, Royal bank of Scottland, Duetche Bank, Society General, and believe it or not, now PIMCO and a few others are all consistent in their agenda of flood the market with cash and extract as much as possible from the people, ie. higher taxes. By the way, JPM is the largest player in the derivatives market.
I would not be surprised to see bond yields rise and equity markets trampled in the US each and every time the Republicans stand up to force spending cuts. This is exactly what happened in Europe. The key is gauging the changes because as soon as the Republicans fold, any losses will quickly be recouped and then some. Its like the bankers celebration of we won and we will show the world that we are giddy with joy and the right choice was made. Its all really pretty simple, when the average Joe wakes up and sees that the DOW is up 500 points, the assumption is made that the right choice for the country was made. Its all an illusion. Good Luck
In the near term I would venture to say that you would want to be long the dollar, long TBT (short longer term bonds), short equities (especially the RUT and NDX) with the mindset to take profits when they come and get ready to flip the opposite direction for when the Republicans fold in which they will as we just experienced.
Lastly, the timeline is critical. The US hit the debt ceiling January first. The Treasury has 4 extraordinary measures in which they have used 2 to extend spending until mid February. So the deadline is mid February but if a stalemate occurs, the Treasury has 2 more extraordinary measures which pushes it out until end of March. Due to the nature of the seriousness of the matter, you can see press releases on the matter have already started. The Fed already stated they might stop buying bonds and GS basically said dump bonds. You can already see the stage being set. Good Night and Good Luck