Net Net: Promoting innovation and managing change
Net Net: Promoting innovation and managing change

DC wants Dow to drop 1,000: Bove

Dick Bove
Jin Lee | Bloomberg | Getty Images

Financial analyst Dick Bove thinks gridlocked politicians are asking for a market sell-off.

"What do they think will convince the American public that they as our leaders must act? It is becoming very clear that what they want is panic in the equity markets. They want to see the Dow drop 1,000 points," Bove wrote in a note to Rafferty Capital Markets clients Monday.

"An event of this nature would be blasted around the world by the media and it would constitute a threat that all Americans could understand. Once the public's attention was obtained and focused, Congress and the President would act to resolve the current issues."

(Read more: Don't fret over Wells Fargo mortgage drop: Bove)

Bove: 'Good news, bad news' for banks
Bove: 'Good news, bad news' for banks

Bove urged investor caution.

"The message to shareholders is 'Watch Out!' Buying shares at the present bravely arguing that this crisis will pass without harm to anyone is not a good strategy," he said. "The only good strategy at the moment is to get out of the way. The politicians will get the panic they seek."

Bove's comments echo those made to CNBC recently following President Barack Obama's interview with John Harwood.

(Read more: Obama: 'I amexasperated' over gridlock)

"They feel that a severe market sell-off would be helpful to break the logjam," said Greg Valliere, chief political strategist at Potomac Research Group in Washington. "It would be helpful in making the Republicans sue for peace. Obama and [Senate minority leader] Harry Reid believe that."

(Read more: Wall Street wonders if Obama wants aselloff)

—By CNBC's Lawrence Delevingne. Follow him on Twitter @ldelevingne.