xfinity customer service simple, easy, awesome. not my thing. right now the dow is down just a bit in the first hour of trading. we re getting new information on the state of the economy. new numbers out this morning on just how much it s growing. cnbc s senior economics reporter steve leaseman is following all
have averted the sequester. but wall street seems to be getting use to the crises now. today despite the president s dire warnings about the sequester, the dow and s&p are at five-year house. nasdaq is at a 12 year high and the dow is essentially a trading day away from its all-time high set in 2007. what is going on here? joining me, steve leaseman, also the other half of steve. columnist for the washington post. so guys, i m a little perplexed here. becky, let me start with you. wall street, do they just not believe washington anymore. we re on our fifth one. have they discounted all of the hype over this next crisis? i think this one s actually a little bit different, chuck. we ve been talking to a lot of strategyists and a lot of investors who actually say, a
lot of them, increasing number of them, that they think succession will happen and still positive on stocks. i m scratching my head because particularly if you look at the defense stocks and consumer stocks, you think that there is going to be a crunch. when you get austerity, there are the repercussions that come with that. it surprises me to see the stock market looking at this and saying, whatever. steve, do you think that part of this is wall street just assumes washington will figure it out, that there is even if sequestration kicks in on march 1st, that they re smart enough to realize, oh, that s right, the government runs out of funding at the end of march, they re probably going to work out a deal. right. so if you bet armageddon, last two times, you essentially lost money. but at the end of the day, if you had your money on the short side of the market or weren t in the market, you lost money because as you said, washington
essentially flinched when it came to the abyss the last couple times. and i think there s a feeling here, and this sort of came off the elections, and certainly after the fiscal cliff debate that the republican side was not going to play this thing all the way out to the bitter end, that it had realized that that was not good for the party s image and so there s a sense that it won t go to the bitter end this time. i think wall street is okay when it comes to sequestration. i think the continuing resolution and shutdown of the government would be a whole different story. steve, am i being too cynical on how wall street is reacting right now? couple other things to consider, first of all when you re looking at the dow. these are big global companies. they get at least half of their revenue from overseas. so the u.s. stock market reflects something beyond the u.s. economy. the second thing tomorrow is
investors is so short-term. but steve, does wall street understand they could play a roll here, oddly enough, a constructive role by sending a message to washington? the market doesn t act that way. i think it s really interesting to go back to the fourth quarter gdp report which you remember was negative, but the market didn t panic. and what the market did was look through that number and saw that the private sector was doing pretty well. consumer spending was up. the reason it was negative was in part because of a decline in government spending. and i think the market saw that fourth quarter report and it s kind of like a visit from the ghost of the economic future, in the sense that that s what our economy is going to look like. and i think that the debate that steve pearlstein started there was what was the impact if we started to cut spending because