Market Overview

Manny Pacquiao, Floyd Mayweather, and the Fiscal Cliff

by Michael Comeau, Minyanville staff writer

 

For years, boxing fans have wanted one thing: To see Manny Pacquiao fight Floyd Mayweather.

It would have been monumental for the sport of boxing for fans to see two top pound-for-pound guys fight while both are still in their primes. Without a doubt, it would be the biggest pay-per-view event in history, eclipsing the May 5, 2007 fight between Mayweather and Oscar De La Hoya.

But aside from the dollars going to the promoters and fighters, a Manny Pacquiao vs. Floyd Mayweather fight would have given boxing fans something they need desperately: Faith. Faith that the promoters can put together the superfights fans really want, and faith that the sport is not on the way out.

However, Pacquiao's camp and Mayweather's camp could never come together to make a deal, having disagreements over the revenue split, drug testing, and other issues.

They just didn't make it happen. 

And then Saturday, December 8 came.

Juan Michael Marquez brutally knocked out Pacquiao in the sixth round. That put Pacquiao 0-2 in 2012. Previously, he hadn't lost since 2005.

So what does Pacquiao's slide have the fans thinking?

Simple -- that he's no longer at the absolute pinnacle of the sport.

That means the real magic of a fight with Mayweather is gone.

So the fans feel rightfully robbed of a fight they should have gotten years ago, and that's awful for boxing.

The saga of Manny Pacquiao and Floyd Mayweather is a perfect metaphor for the political wrangling over the fiscal cliff.

We've gotten to the point where just about every American with a passing interest in politics and the economy knows the US government is on a completely unsustainable path in terms of spending.

The process of figuring out where to make cuts and increase tax revenues is incredibly complex because in every possible case, someone gets hurt, either directly or indirectly. And every special interest has something to protect.

But as painful as it is to figure out the least-worst route to sensible fiscal policy, the government's inability to just get a deal done has a far-reaching consequence: Destroying faith in the system when the system doesn't have much to go around -- just like the sport of boxing did in failing to get the Pacquiao/Mayweather fight done.

Think about where we are.

The S&P 500 (INDEXSP:.INX) is up over 110% from the March 2009 low, yet nobody has any faith in the economy, stock market, or financial system. Everything feels like it's held together with duct tape, bubble gum, and artificial liquidity courtesy of the Federal Reserve.

Heck, look at Apple (NASDAQ:AAPL). It's easily the most revolutionary company in the history of consumer electronics and still generates enormous growth, yet it can't get a bid because nobody's putting money in the market.

And does anyone else find it unusual that brokerage firm trading volumes collapsed after the market doubled?

I don't want to get into the business of arguing which side's more wrong in this mess, but this is the message they're sending to the American people: We're strapped to the tracks with a freight train barreling straight toward us, but we don't have the ability or will to get off our butts to do something about it.

All paths lead to America having to accept a lower standard of living in the form of higher taxes and/or less services.

So let's just get on with it before all faith in the system is lost.

I loathe blind patriotism, but apathy may be worse. And apathy, if not outright disgust, is what the fiscal cliff divide is generating among those of us that want to see this country move forward on a sustainable path.

 

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The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

Posted-In: News Econ #s

 

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