Investors preparing for a Black Monday?

Some investors appear to be preparing for a bad Monday morning, resulting from Boehner walking out of talks on the day of the self-imposed deadline by President Obama to get a deal to raise the debt ceiling.

As I've ranted for the past several months, Republicans aren't looking to raise the debt ceiling at all.  The media has been giving people including Wall Street the impression that a deal would be done, if at the last minute; I hold no illusions in my mind.

• First, we've had many House Republicans publicly object to raising the debt ceiling, including nearly every Republican presidential candidate.
• Second, we've had Republicans insist that their share of any compromise, was the act of lifting the debt ceiling, in itself.
• Third, Republicans have stated many times that they believe Democrats are spreading fears about the economy on purpose, and that the debt ceiling in place would have few negative effects on the economy, that in fact, the opposite would be true.
• Fourth, nearly every Republican politician voted for the Cut Cap and Balance bill that would have held the debt ceiling in place, anyway.
• Fifth, it's all about politics, because Republicans would have you believe that capping spending at 18% of GDP is reasonable, when Paul Ryan's own Path to Prosperity, the budget bill that House Republicans voted (and passed) previously, projected federal spending to continue at over 20% of GDP well over the next ten years.
• Sixth, when Boehner walked away on Friday, saying that the goal post was moved by President Obama, he was lying.  It turns out that the $400B increase in revenue came from the Senate's Gang of Six proposal, which the President had decided to back, and had presented it as early as this past Tuesday.  It was, and always has been, about politics of the Tea Party in the House.
• Seventh, no matter what anyone thinks, Republicans as late as today, continue to express their desire to CUT spending, without a single mention of raising the debt ceiling.  Boehner's spokesperson just said hours ago, "The Speaker is determined to tackle our spending problem in a significant way and, as he stressed last night, is committed to preventing a default on our debt."  Notice, not a mention about lifting the debt ceiling.

Even if leaders can find a possible agreement for a temporary increase in the debt ceiling, the Tea Party Republicans have definitively stated, without any reservation, that they will not vote for any debt ceiling increase without massive spending cuts.  It is dead, once it goes up for a vote in the House, and right now, there is barely enough time to get a vote on the floors of both the House and Senate, let alone a backup plan if this backup plan fails.

So you see, Monday morning is going to be hell.