By Chip Hanlon

I reported earlier today over at Red County how rumors were swirling that the Healthcare bill was alive and well in the House (h/t Erick Erickson, Redstate.com). Sure enough, we're finding out it's true.

Since I completely agree with last week's assessment by Larry Kudlow that the market was rallying on the belief that healthcare was dying, I now believe this about-face will effectively put a lid on the stock market for the summer.

Most investors realize this is an economy-killer. We can also know with certainty the CBO will again understate the true cost of any reform because of it fails to score increased tax hikes and other fees dynamically. In other words: the market will not be fooled.

Is this short post finally the capper to my mid-March article about the low? Yes it is.

I actually sort of like the odd technical strength the market has been exhibiting lately, but sometimes fundamental developments are too big to ignore, and this is one of those times. Investors can now step aside and take the rest of the summer off without fear they'll be missing much of anything. This development is that important, and it will do great harm to stocks if it actually passes in the Fall. We continue to hurtle straight toward the demographic time bombs of Social Security and Medicare, now we're going to enact this massive, new entitlement which will become the costliest of them all? Watch the value of your Greenbacks, folks.

Perhaps this healthcare takover will fail in September or won't make it out of the Senate but until then, expect little inthe way of upside from the market.

Separately, regarding the mark-to-market accounting changes which were such a key part of my bullish turn in March: the Wall Street Journal wrote a must-read article on the topic today titled, A Comprehensive View on Bank Profits

Don't dismiss this healthcare development as meaning the most socialistic elements of the President's plan have been taken off the table by the Blue Dogs; the bad stuff will be added back in during conference.

National Healthcare is a national disaster. Ignore today's developments at your own peril.