The looming debt ceiling and current political gridlock (and White House tragic comedies) has me thinking less about politics and more about markets—or at least: markets and politics. Why? Because a crisis in one area can often lead to a crisis in the other. So let’s consider DC and Wall Street in a kind of thought blender and consider what the resultant mix might look like.

The S&P (at intra-day record highs) is now at 25X LTM net income, ripping like there’s no tomorrow (or September 30th), the Russell 2000 (also at intra-day record highs) is at greater than 90X and those mind-blowing, low-to-no-profit/FCF-tapping, historical little bubble machines (i.e. Netflix—at 225 LTM net income, Amazon—at 200X LTM net income and Tesla) continue their reason-defying ride beyond nosebleed levels and into the no oxygen zone.

In short, the bulls are giddy, just giddy. And they should be. As of today, the Dow is up, the NASDAQ is up. Everything is up, up and away.

So if you’re a bull, there’s no arguing that you get to smile—and continue smiling. Truly.

But even most bulls would have to admit these rising markets feel a bit weird…

Few of us (bear, bull, or middle-road), however, would have imagined such a post-Trump rally, especially when the night of his election saw the markets tank, only to revive, Lazarus-like, the very next day. Since then, stocks just keep roaring, with the Dow up 3200 points since the Trump victory.

I’ve tried to put my arms around this “Trump Stimulus” elsewhere. There’s no doubt that such campaign promises as lower taxes, greater military, immigration and infrastructure spending, disciplined “fat reduction” and swamp cleaning were and remain tailwinds of market optimism, much of which has been confirmed as well as priced into this post-election tape.

However, the question which remains for all Americans and investors, regardless of party or market view, is the same: Can these tailwinds continue and are there political risks we can see right now?

The concerns I’m looking at are these: a deteriorating political climate, a HUGE debt ceiling and a bloated market.

Most investors, red or blue, bull or bear, are trying to make sense of the almost daily bits of bizarre (i.e. “non-conventional”) that come of out DC. The first 6 months of Presidential tweets on everything from Comey to Sessions or the current (and indeed GOP-confidence-killing) repeal and replace nightmare seems to indicate that the swamp has never been, well, “swampier.”

Equally bizarre is the rising concern that even the most loyal Trumpies (like Sessions) or Republicans (from McCain to Collins and Mukowski, to Spicer and Scaramucci) just can’t seem to get along with each other, let alone with the Democrats, who appear to have a “No” gag-reflex for anything to which the other party says “Yes.”

But I don’t want to speculate on politics or polemics too long—the scent of swamp water bothers me, regardless of which party or personality seems to be hitting all time new lows in efficiency. The truth is there’s enough dysfunction across the board—from both branches and parties of government—for all of us to agree that DC is not working very well.

[And as for the Federal Reserve, also a DC-based story, that’s an entirely separate—though simultaneous–case study in coo coo…]

So what, if anything, does this DC mess mean for the markets? How can we sift through the fog and find a lighthouse of simple facts and cut to a financial chase without drowning in partisan opinions or just personal ranting? What can all of us, left to right, bear to bull, agree upon?

Well… A debt ceiling is upon us. We all stand before $20 trillion of national debt. Hardly a promising fiscal backdrop for the current state of legislative gridlock. As September 30^th approaches, the debt ceiling will need to be raised yet again…

Both parties know that a minimum of $1T is needed just to keep the lights on—from social security and Medicaid, the US Treasury and National Flood Insurance to walking tours at the Library of Congress. To get even this threshold amount passed, the White House will need to make some kind of deal with the Democrats, as even a GOP majority can’t get this passed alone.

But getting donkeys to work with intra-fighting elephants for a debt ceiling raise means most of what Trump promised –and what this rising market is depending upon—could fade like a summer sunset…I’m talking about tax cuts, Mexican walls, infrastructure investments and healthcare reform.

If repeal and replace, for example, is stalling today, just imagine what concessions Trump will have to make in the 11^th hour of September to bail out fat insurance companies and keep health care rates and exchanges from getting out of control?

And even if the White House could stomach compromises in any of these areas (and I’ve left out annual military spending), there are many within the woefully splintered GOP (Freedom Caucus budget hawks to Old School Conservatives) who would rather wait until pigs fly before bowing to such concessions and risking their own re-elections in 2018…

So what we have is not a mere issue of Mexican Walls, but a debt ceiling scenario akin to a Mexican stand-off. And such stand-offs remind us that something or someone eventually takes a bullet. In other words, there’s gonna be political blood on the ground, which means panic in DC.

Panic in DC, in turn, may just lead to a bit of panic in these all too bullish, oblivious and dangerously comfortable markets.

Yep, these markets are so complacent with a VIX at 8 that they forgot how that same volatility can quickly jump to 50+, as it did in 2015 when it was China, rather than the US, that faced a budget panic.

In short, the debt ceiling matters. Not just for the squawking bands of mediocrity in the Senate and House, but, alas for the aforementioned markets (bubbles) that have given America the perception of health despite a reality of debt.

And when perception fades and panic follows, we may be looking at a helluva a “fall” in October…