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Net Net: Promoting innovation and managing change

Did Wall Street make the next budget crisis worse?

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This could be the longest three months of the year for investors.

Washington's 11th-hour deal to avoid a U.S. debt default and get the government running again ends the most recent chapter of political dysfunction but hardly closes the book.

Straight ahead is a 90-day period in which three warring factions have to put together a lasting budget agreement or face another crisis similar—or perhaps worse—to the one just passed.

Is Washington hurting Wall Street?
Is Washington hurting Wall Street?

If an agreement cannot be reached, the government faces another shutdown by Jan. 15, followed by a possible default on Feb. 7.

(Read more: Trouble may be only starting for investors)

This time, Wall Street may take more notice.

"Despite the policy uncertainty, US equities are less than 1 percent off the (S&P 500's) all-time high," Tina Fordham, senior political analyst at Citigroup, said in an analysis. "Why didn't investors sell into the crisis? Markets have come to expect that politicians will step back from the brink with day-of-deadline agreements, as happened in 2011 and elsewhere."

Indeed, if the market didn't get what it wanted, it at least got what it expected from the most recent Washington mayhem.

Namely, it all along had figured there would be no default. In turn, the market rippled and roiled along the way but never tumbled the way one might expect in the face of a such a dire potential outcome.

(Read more: Wall Street not listening to Washington anymore)

That refusal to collapse came despite warnings from various quarters, including President Barack Obama himself, that Wall Street was taking the crisis too lightly.

Fordham thinks the Street's refusal to impose discipline on Washington—through a market tumble that would have instilled some sense of urgency in the situation—may be inviting more trouble down the road.

"The very lack of market pressure removed a key catalyst to force action in Washington, thereby allowing politicians to step ever closer to the brink," she said. "Going forward, investors are left with a paradox: by discounting the political risks, they may actually end up raising the probability that the risk outcome will occur."

Amid the political volatility, market participants have hung their collective hat on the Federal Reserve and its digital monetary printing presses.

(Read more: Fiscal deal could bring tax, entitlement changes)

The U.S. central bank continues to create $85 billion a month that it uses to buy Treasurys and mortgage-backed securities. The market recently grew scared that the Fed might soon begin tapering off its quantitative easing program, but the Washington turbulence means that QE likely "is being pushed into 2014," analysts at Strategas said in a note.

Betting on the Fed, though, is a risky proposition.

At some point, the central bank, as it always has in previous easing cycles, will find itself pushing on the proverbial string where the effectiveness of its cheap-money policies wanes.

Fordham's Citi colleague, chief U.S. equity strategist Tobias Levkovich, warned in a separate note that the dual fiscal and monetary moves—a temporary budget agreement, and delay of the seemingly inevitable tapering—are "eerily similar" and pose more trouble ahead.

(Read more: Cramer: US is a laughing stock around the world)

"When the Fed decided not to trim back its bond-buying program in September, the stock market was buoyed briefly only to face the continuing resolution/debt ceiling lift standoff which took share prices down again in early October," Levkovich said. "The latest agreement though only punts an immediate risk to a few short months away and thus should not give rise to much optimism."

—By CNBC's Jeff Cox. Follow him on Twitter @JeffCoxCNBCcom.