by Marc Lichtenfeld, Senior Analyst & Healthcare Specialist, Smart Profits Report

Dear Smart Profits Report Reader,

“It’s all the same…
Only the names will change”
– Bon Jovi

Ah, “politics as usual” - I knew it wouldn’t take too long before this age-old scenario reared its ugly head once again.

Having swept into office on a tsunami-like wave of goodwill, President Obama saw it evaporate this week after the House of Representatives passed the $819 billion spending bill along traditional party lines.

Partisan politics as usual.

With a mandate from a highly expectant American public to back them, it was hoped that Obama and his Democrat-controlled Congress would enact some meaningful changes on Capitol Hill.

Alas, the bill appears filled with more pork than the dumplings at the House of Nanking.

The fact that House Republicans did not support the bill and that their counterparts in the Senate will likely do the same is bad for investors.

Wait a minute! You just said the bill is pork laden. How could opposing it be bad for investors? I’ll tell you why…

Washington Loves Whine With Its Cheese

Thanks to the large majority that the Democrats hold in Congress, the bill or one very similar is going to pass. No issues there.

But by having a divided Congress, Washington is basically telling the American people that, despite Obama’s warm, uplifting rhetoric, nothing has actually changed. The two political parties are still sniping away at each other with gusto, blaming each other for the nation’s problems - past, present and future.

But in order for the economy and the markets to stabilize and get healthy again, we need some darn consensus. You know, the idea that everyone is actually on the same page and are working to fix things.

I know… what a terribly old-fashioned, optimistic notion.

But make no mistake… this is critical to the fragile public psyche.

Confidence Breeds Cash

The market - and to some degree, the economy - is the product of emotion and sentiment. Yes, there are certainly structural issues and flaws that cannot be ignored, but the fact is that if people feel hopeful that change is coming and that progress is being made, they will start to open their wallets. And what will start with a trickle will eventually snowball and will get the economy moving again.