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The "fiscal cliff" is what is driving stocks down right now, says Wharton's Jeremy Siegel. Any...
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Friday, November 16, 2012, 7:31 PM ETThe "fiscal cliff" is what is driving stocks down right now, says Wharton's Jeremy Siegel. Any sort of deal, even one that extends tax rates slightly higher than they are now, is easily going to buy you 500 to 1000 points on the Dow. (Video)
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My guess is it's because CNBC and the other media "experts" have decided to make it an issue,therefore it's an issue.
The Federal Debt limit is going to be breached very soon. I recall about 18 months ago when there was a major crisis promoted by the media because of the limit this time around I haven't seen much if anything,written on it.
FC has been in the background for a year. The reason for the recent market index plunge is of course the disappointment with the Obama victory. TRI's measure of animal-spirits-plus had been signalling GDP as high as 4.7% in 2013Q2. I expect the outlook to wane dramatically over the coming weeks and months. As the prospect for a robust economy wanes, so also does the chance of growing revenues and guidance...
TRI chart: http://bit.ly/pfbeJm
Exactly! We've retreated to the land of Mitt Fit Boys. Republican investors have taken all their toys off the table and won't come out to play because they didn't get their capital gains free ride. HAHAHA So sad!
Note to Santa: Please don't send Rudolf and that Dentist wannabe out to gather them up until I've purchased a boat load of their left-overs to sell back to them.
Merry Christmas!
BUT, he is correct.
As soon as we get another 'kick the can down the road' agreement, the market is going to run.
If for no other reason than it can't go down appreciably with the Fed pumping hundreds of billions into a deflationary system which has no use for the money other than to inflate financial assets.
But this too shall pass. Probably by the end of 2012, or early in 2013.
And then Mr Segal better hope his assets are well secured in things hard and precious. Cause you ain't never seen a hangover like the one that will end this party.
Of course, the selloff from Nov. 7th is actually quite mild. Besides, we now have the Plunge Prevention Team (PVT), uncle ben, and irrational exuberance all in place, all the time.
I'm still waiting for the hyperinflation....just a matter of time...right??
Jeremy Siegel is talking is book. And his book is Wisdom Tree, his equity-based ETF business.
Ironically, the best path for his other book "Stocks for the Long Run" is to just let the Fiscal Cliff to happen, and let the stock market reset to the new reality.
Siegel seems to clearly be on the side of kicking the can down the road in order to capture short term gains.
Roubini did see the 08 crash coming. Like someone said you cant fight the fed but sooner or later the fed can't fight reality. And the same people who got caught with their pants down in 08 wont this time. A bad story is a bad story no matter how much lipstick you put on it and repeat it over and over again
Is he bogged down in his unlimited self esteem?
taxpayer not the 47% receiving a check or debit EBT card. Work hard pay more; work harder pay even more. Wealth of Nations should be required reading for every politician; one thing is for sure Obama never read it.
The so-called Fiscal Cliff is a automatic mechanism introduced during the last 'Grand Bargain' between the status quo D's and R's. Last time, the D's and R's agreed to increase spending, but keep taxes low (embrace deficit spending)-- with the caveat that they would put in this automatic mechanism to force a balanced budget if the 2 sides couldn't agree on a budget.
Avoiding the Fiscal Cliff is essentially a way for Congress to bypass dealing with automatic deficit reduction.
These guys shouldn't be seen as 'heroes' for solving anything-- they're simply trying to find more creative ways of kicking the can down the road.
You know, like those fellers in Europe are doing.
The investing masses are still largely ignorant of how big of an impact money supply has on markets, and the fiscal cliff is a very quick contraction in rate of money supply growth. Long-term, we need this contraction in the rate of money growth, but to have it happen overnight is going to have more than a minor impact on the economy.
It will actually be much more useful to achieve this sort of contraction via spending cuts, as well, since that would lower the overall tax burden. That is to say, it would shift more money back to the private sector, which is still capital starved right now. But the fiscal cliff is about 5 dollars of tax increases for every dollar of spending cuts, so it will only result in a minor increase in overall government spending (the true tax burden) and a major increase of money being redistributed back to the Federal government, and away from the private sector.