My general feeling that the sequestration would be allowed to occur was correct. The headwinds of a public that is slowly marching toward contraction in all things due to a steadily declining social mood is starting to bear out on the last group to feel its effects: the government. This is a continuing sign that social mood is indeed declining and the end result would be outright contraction. Even the Fed is starting to be affected by the same mood and its members are increasingly vocal about the dangers of a bloated balance sheet.
The fact that the stock market - in nominal prices only - is near an all-time high suggests that one or the other must catch up. Either long term social mood will need to start heading upwards, or nominal prices will eventually catch up to the downside. Since I no evidence that the larger direction of social mood is bottoming nor heading upwards, I assume prices have some catching up to do to the downside.
What of the 4 year rally in stocks and other assets? Again, the position maintained by this blog is that it is a counter-trend move to a larger downtrend. Indeed the wave structure since the 2009 low supports this notion. The wave structure counts best as a corrective structure since the 2009 low and not a large impulse. We only need to wait for the corrective structure to "finish".