(Read more: See It Again: Green Eggs and Ted Cruz)
We've seen this game of brinksmanship in Washington before. Recall the debt ceiling fight during August 2011, which was resolved in the 11th hour, but still led to a downgrade of the U.S. credit rating and volatility in the markets. In December 2012, the threat of going over the "fiscal cliff" and sequestration created market volatility, but was also addressed last minute. In both instances, these problems arose because policymakers continued to kick the can down the road instead of working together to address the nation's finances.
(Read more: Boehner tries to herd Republicans to avert shutdown)
The market has no real reason to rally at the moment. Why anyone thinks it should go substantially higher considering the state of affairs in this country is beyond me. Meantime, earnings seasons starts in two weeks. The financial sector is warning of a slowdown in revenues. Consumers are tapped out and the holiday shopping season has not yet begun, but Wal-Mart Stores and other retailers are already warning of slowing sales.
To prepare, some retailers are launching discount days and free coupons to "come shop." Are you kidding??? It is going to be a long quarter as analysts try to handicap the shopping season. Remember it usually kicks off on the Friday after Thanksgiving, but I bet we will be hearing about weekly "specials" starting next month. It's exhausting, but the analysts will tell us how great the shopping season was, especially when you add in an extra 54 days.
(Read more: Americans downbeat on economy ahead of DC battle)
Remember, the new fiscal budget year begins on Oct. 1, 2013, and as of Thursday, there is no funding in place, but the Senate did vote on a stop-gap measure on Wednesday to keep the government running until they can all play nice in the sandbox. Expect the show to go on in D.C. for a couple of more days, but in the end, neither side wants to be seen as being so incredibly shortsighted or uncompromising.
Assuming that we get some kind of a budget, then watch the antics as they address the $16.7 trillion debt ceiling, which we are about to breach within three weeks. Treasury Secretary Jack Lew is warning that we have until Oct. 17 to figure it out.
The sticking point? Obamacare (as if you were unaware). Republicans want to defund or at least get some cuts while the Democrats will have nothing of it. So expect them to dig in their heels until 11:59:59, when they will miraculously come to an agreement that lets both sides save face while those bozos just kick the can down the road some more.
(Read more: 8 things to know about Obamacare)
I say strip them all of their private congressional "Cadillac" health-care plan, lump them in with the masses and then see how fast they agree on the terms. And while we are at it, if they can't come up with a budget or figure out how to deal with the debt ceiling then they should be the first ones to have their paycheck held back. Better yet, why don't we "furlough" them too? Can you just see the headlines: "Obama furloughs Congress!"
I mean, at some point someone has to be held responsible, no? And while neither side wants to see a complete breakdown of the process, everyone will get plenty of TV time to make their case. All of this uncertainty will continue to weigh on the markets giving investors the opportunity to reprice risk.
The U.S. markets continue to feel a bit soft in the near term so I still am of the opinion that a test of the 50-day moving average has to happen. The weakness in the stock market has been in light of low volume, so the real test for the markets will be when volume picks up.
Fears over the Fed's inability to "control the yield curve" will prove to be one of the directional drivers as well as the debt ceiling, Obamacare, weak 3Q earnings, continued confusion over Fed tapering and leadership, and extreme political divisiveness.
This being said, if you are a long-term investor then remember, weakness in the market is opportunity and if you continue to believe that 2014 will be that "turnaround year" then do not expect any major break to the downside and watch as any dips will be well bought, particularly given the outlook for the bond market.