Republican Senators electing to use the “nuclear option” to pass Bush's Federal judge nomination will, at the very least, be a Constitutional crises. However, there will be a financial cost also. The Democrats has stated that they will shut down Captial Hill. Shutting down Captial will, in effect, start a classic “tug 'o' war” in the global financial system.
The equities side of the rope will probability take it as a positive sign. There is nothing better for equities than the same old policies. Equities love grid lock.
It will be hard to pin down the effects of a dysfunctional Captial Hill on the US Treasuries and the dollar. On one side of the rope will be those who will take it a positive sign. No new spending increases will result in a smaller US government deficit. Those on the other side of the rope will probability conclude that the “Full Faith and Value of the US Government” is too much of a risk.
The ultimate, worst case scenario would be massive social unrest to the point were Bush declares marshal law and sets himself up as the “Fuhrer” of the US Nazi party, formally known as the Republican party.
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