Fiscal cliff

Couldn't find a thread relating to this subject.

Any impact on stock market if nothing is concluded by 31/12 ?

This was what happened back in July 2011 during the "debt ceiling crisis"...
This time around, it would bring even greater reaction to the stock market given that the Democrats and Republicans still cannot get their acts together.. so much for political brinkmanship

http://www.huffingtonpost.com/2011/07/25...08351.html

(30-12-2012, 09:44 PM)cfa Wrote: Couldn't find a thread relating to this subject.

Any impact on stock market if nothing is concluded by 31/12 ?

It would be unthinkable if nothing comes out of the current frantic last minute discussions going on in Washington. Some compromise will be reached. And it will be declared a breakthrough for sure. None of the parties would want to commit political suicide. It will be a self inflicted wound on the American people and the world. It would negate the effects of QE3 too!

Everybody assuming last minute the republicans and democrats they will cut out a deal like several times before. Will the unthinkable happen?

Asian markets seemed to react a positive outcome of this Fiscal cliff in past trading days.

http://www.cfr.org/international-finance...ces/p24751

The stock market also was thrown into frenzy in the lead-up to and aftermath of the 2011 debt limit debate, with the Dow Jones Industrial Average plunging roughly 2,000 points from the final days of July through the first days of August. Indeed, the Dow recorded one of its worst single-day drops in history on August 8, the day after the S&P downgrade, tumbling 635 points.

A deal will be strike, unless they are all out of their mind..

Playing the Devil's Advocate - perhaps some austerity is good for the long-term health of the US Economy?

(31-12-2012, 12:17 AM)Musicwhiz Wrote: Playing the Devil's Advocate - perhaps some austerity is good for the long-term health of the US Economy?

I agree absolutely. Fiscal cliff is exactly the way America can reduce its debt at a rate whereby no need of QE infinity is needed. Unfortunately the fat cats want the music to continue and the inflation to be imported to Asia.
Welcome to the never be busted Singapore property bubble.

What's the big deal? Just raise the debt ceiling.
Europe down.
Japan down.

Where is the safe haven?
US dollar!

10 years treasury interest rate 1.71%
30 years treasury interest rate 2.88%

Just like Singaporeans getting low interest loans to buy houses, you can't blame US from borrowing more if the rest of the countries are willing to lend.