Okay, I’m no perma-bear (or perma-bull (or perma-anything, really)), but when news sites run articles with incendiary titles like “The ultimate sell signal” I can’t help but notice. The aforementioned piece argues that the decision by David Walker, the head of the U.S.’s General Accounting Office (GAO), and a stubborn and vocal critic of the U.S.’s financial predicament, to resign with five years left in his GAO-running term is tantamount to a clanging “sell bell” for U.S. markets.
Really? I mean, really? First, the idea that a bureaucrat’s personal decision, one way or the other, is even remotely connected to capital markets is patently silly. These people operate near politicians, not markets, and they come and go regularly with no economic ripples to be seen, other than maybe an infinitesimally lower tax burden until their replacement is hired.
Second, and perhaps more importantly, think about why Walker left. Sure, he gets to walk the policy walk, rather than just badger deaf, dumb, and blind politicians, and that’s nice. But more importantly, think about the pay raise he is getting. As lovely as it must be to hang around in a fusty Federal office with furniture containing more carbon-14 than does the Burgess Shale, that charm undoubtedly wears off quickly in the face of a 10x (I’m guessing) salary increase.
Net-net, the fact that a writer would impute “ultimate sell signal” status to something so fundamentally irrelevant to capital markets as the preceding is, if anything, a raging buy signal.