Congress needs 'a violent move' in market: Bove
The stock market hasn't given lawmakers a reason to strike a budget deal, financial analyst Dick Bove said Tuesday.
"It seems to me that the market does send a signal to Congress concerning what people think is really frightening, and at the moment, the market is sending a signal to Congress, which is, 'Don't do anything. We don't care. It doesn't matter what you do because we've got all this money flowing in from the, if you will, Fed, and we've got reasonable economic outlook, and therefore you guys don't know what you're doing, but you're going to come to some resolution.'
"So, it's going to take a violent move, in my view, on the part of the market to get them to do something significant."
Bove, who is equity research vice president at Rafferty Capital Markets, made the comments on CNBC's "Fast Money" a day after he wrote in a note to clients that Congress wanted "to see the Dow drop 1,000 points."
(Read more: DC wants Dow to drop 1,000: Bove)
Congress, which has failed to pass a budget to end the partial government shutdown or authorize payments of U.S. debt obligations, needs a catalyst, Bove said.
"It's a reality," he said. "In other words, if you're going to get a congressman who's committed to his constituency to act in a certain fashion, to act differently than what he's promised he would do, he has to have a reason. Someone has to give him a reason, and the markets have not given him a reason—or her a reason—to change their point of view."
(Read more: Default would be 'horrendous': Wells Fargo ex-CEO)
Bove said lawmakers are "forgetting" that China holds approximately $1.4 trillion of U.S. debt in a portfolio of about $3.5 trillion.
"So, they've got 32 percent of their portfolio tied up in this particular instrument, you know, which is run by a management which is totally off the charts in terms of its ability," he said.
(Read more: 'The market's impervious to everything': Guy Adami)
Ahead of bank quarterly earnings reports, Bove sounded pessimistic.
"You can see fairly clearly that they're not showing any particular improvement related to stronger economic activity," he said.
"There is no activity coming from, if you will, the consumer or the business sector of the economy, other than in commercial real estate, which would indicate that, in fact, the economy is about to move upward very sharply, or that there has been some movement in the economy to this point as a result of the stimulative actions taken by the Fed. Basically, the earnings of these banks are very poor," Bove added.