Flying Pink Unicorns

The market yawns at health care reform

Memo to my conservative/Republican friends that are bitterly opposed to the health care reform legislation that just passed.

The fate of health care reform was in serious doubt when the market closed Friday.  As of 11:15 a.m. today, the first trading day after reform passed, the markets yawned.  The Dow is up a tiny fraction, as is the NASDAQ.  Virtually no movement at all on the dollar.  If this really were a dramatic, government takeover of 1/6 of the nation's economy, with dire consequences for the budget and the economy, wouldn't the markets have reacted negatively?  And if you want to say that the reaction is priced in already, well, then it must have been viewed POSITIVELY, because the Dow is up over the last several weeks, in the time that health care reform revived, and is WAY up since early in Obama's presidency.

Far more likely is that the market thinks that health care reform will not dramatically effect the economy in the short or long run.  Which is probably correct, though I think there will be a LONG term positive effect.  What we can be reasonably sure of is that the market does not see short or medium term sharply negative effects, or we'd see the Dow down 2 or 3 percent, at least.