Furthermore, is it such a stretch to believe that Congress will simply delay these cuts again in March? The smart money would probably say no. The stunning problems of profligate deficit spending, ever-expanding national debt, and no plan to reduce spending, remain undiminished and undeterred.
Why should investors remain cautious? Because the deal agreed upon last night simply represents more of the same. This political stalemate is nowhere near done, and Washington continues to avoid the tough decisions that will get our country back on a sustainable fiscal track. (Read More: Why Companies Still Aren't Likely to Invest—or Hire.)
First and most importantly (by far), Congress and the administration refuse to address the problem of entitlements, which account for the overwhelming majority of our problem. Second, the $110 billion in mandatory spending cuts known as the sequestration has only been delayed for a couple of months. Combined with the need to increase the debt ceiling at around the same time, it appears as though we are in store for "fiscal cliff redux."
Keep your seatbelts fastened! This leadership vacuum in Washington is shameful. Our government has missed yet another opportunity to put this crisis behind us and move the economy forward. (Read More: What's in the 'Fiscal Cliff' Bill Passed by Congress?)
But, as long as spending cuts are delayed, the government cash spigots remain open, and share prices will likely be supported. It will be nice while it lasts, but woe to him without a seat when the music stops!
Michael K. Farr is President and majority owner of Farr, Miller & Washington, LLC. He is Chairman of the Investment Committee and is responsible for overseeing the day to day activities of the firm. Prior to starting FM&W, he was a Principal with Alex Brown & Sons.
Mr. Farr is a paid Contributor for CNBC television and has appeared on numerous broadcasts and has been quoted in global publications. He is a member of the Economic Club of Washington, DC, National Association for Business Economics, The World Presidents' Organization, and The Washington Association of Money Managers. He is the author of "A Million Is Not Enough," and "The Arrogance Cycle."