No Christmas miracle for fiscal cliff
With political leaders on holiday break, talks to avert automatic tax increases and government spending cuts are at a standstill.
'Twas the day before Christmas and all through the House of Representatives, not a creature was stirring -- since House Speaker John Boehner told members to go home for the holidays last week without a deal on the fiscal cliff. Members of the Senate are also with their families, and President Barack Obama is in Hawaii for a vacation. The once unfathomable prospect of about $600 billion in tax hikes and government spending cuts coming into effect at the end of the year is becoming frighteningly real.
Not surprisingly, stocks were lower in Monday's holiday-shortened trading day. Declines will likely continue until a deal emerges. So much for the Santa Claus rally.
"There's a lot of uncertainty,"said Jacques Porta, who helps manage $627 million at Ofi Patrimoine in Paris, in an interview with Bloomberg News. "We’re at a political dead end. Everything has cooled off. The market has become cautious."
Make no mistake, everyone loses if the economy falls off the cliff. People with limited means are especially vulnerable. According to The Wall Street Journal, the overall tax burdens for households earning $10,000 to $20,000 would rise from an average of $68 to $605. The more well-to-do would feel the pinch as well.
Consumers are already cutting back on spending. A recent Bankrate survey found that a third of Americans are spending less because of worries about the fiscal cliff. So far, the worries have not been reflected in the economic data, according to Reuters, but it's still early days. Retailers are expecting holiday sales to be less robust than last year.
As the cliff grows closer, the caution could morph into panic. Even if politicians come to their senses at 12:01 am January 1, the damage to the credibility of the the U.S. government will be lasting. Remember, it was Congress' plan to create the fiscal cliff so it would have little choice but to take action to avoid it.
Eventually, this problem will be solved. But then Congress will then have to take up the equally contentious issue of raising the debt ceiling. Unless the Treasury's ability to borrow is expanded, the government would be forced to close and its credit rating may face further downgrades. The debt ceiling was expanded as a matter of routine until recently.
For investors, it looks like political turmoil will mean tough sledding into January.
You can thank John Boehner and his republican cronies for this holiday gift!
We shall return the gift in November of 2014!
setting term limits does NOT stop them from collection 100% benefits ....us hard workin americans work for 20 years or more in a company to see any type of benefits ...then u keep working or get a new job couse u still screwed
I REALLY DON`t THINK THAY(the # house) REALLY GIVE A DAMM.
Thay shouldn`t get PAYED IF THAY DON`T do there JOB.
I`D FIREthem ALL!!!!!!!!!!!!!!!!!!!!!
nothing will change because of all the favors owed. Agree with what is needed is a clean house.
Unfortunately the only way out maybe " Make an offer they can't refuse".
It is unfortunate that the same people from the top down keep getting re-elected and you all wonder what happened? Nothing will change unless we change it by voting out the incumbents. Don't complain that nothing changes unless you are all willing to take that first step and voting for new people. I know I did in the last election; but one cannot do it alone.
In 2006, Wiedemer and a team of economists accurately predicted the collapse of the U.S. housing market, equity markets, and consumer spending that almost sank the United States. They published their research in the book America’s Bubble Economy.
The book quickly grabbed headlines for its accuracy in predicting what many thought would never happen, and quickly established Wiedemer as a trusted voice.
A columnist at Dow Jones said the book was “one of those rare finds that not only predicted the subprime credit meltdown well in advance, it offered Main Street investors a winning strategy that helped avoid the forty percent losses that followed . . .”
The chief investment strategist at Standard & Poor’s said that Wiedemer’s track record “demands our attention.”
And finally, the former CFO of Goldman Sachs said Wiedemer’s “prescience in (his) first book lends credence to the new warnings. This book deserves our attention.”
In the interview for his latest blockbuster Aftershock, Wiedemer says the 90% drop in the stock market is “a worst-case scenario,” and the host quickly challenged this claim.
Wiedemer calmly laid out a clear explanation of why a large drop of some sort is a virtual certainty.
It starts with the reckless strategy of the Federal Reserve to print a massive amount of money out of thin air in an attempt to stimulate the economy.
“These funds haven’t made it into the markets and the economy yet. But it is a mathematical certainty that once the dam breaks, and this money passes through the reserves and hits the markets, inflation will surge,” said Wiedemer.
“Once you hit 10% inflation, 10-year Treasury bonds lose about half their value. And by 20%, any value is all but gone. Interest rates will increase dramatically at this point, and that will cause real estate values to collapse. And the stock market will collapse as a consequence of these other problems.”
See the Proof: .
And this is where Wiedemer explains why Buffett, Paulson, and Soros could be dumping U.S. stocks:
“Companies will be spending more money on borrowing costs than business expansion costs. That means lower profit margins, lower dividends, and less hiring. Plus, more layoffs.”
No investors, let alone billionaires, will want to own stocks with falling profit margins and shrinking dividends. So if that’s why Buffett, Paulson, and Soros are dumping stocks, they have decided to cash out early and leave Main Street investors holding the bag.
But Main Street investors don’t have to see their investment and retirement accounts decimated for the second time in five years.
Wiedemer’s video interview also contains a comprehensive blueprint for economic survival that’s really commanding global attention.
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Urgent: Should Obamacare Be Repealed?
This is so unbelievalbe that the can't agree...time to get rid of them all
........Obama spending our money again - in Hawaii!!.............
his arrogance NEVER ends! While just about everyone is cutting back, he's out flaunting his beach-gront vacation in Hawaii....while we all pay for everything including the AirForce one cost to tax payers of over 1 million dollars and that's just for the plane ride for his family and 37 full-time attendants.
Obama could care less about the people that voted him in....he and Michelle are laughing in your face about how cullible you were to vote that slacker in.
Wall street will not be affected much or for long period.Just look at DOW.
It has been playing between 13000 and 13350 since long .Investers investment is not
changing remarkably.Game is manuplated by big corporations,ceo's, financial institutions,
Banks and politicians
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[BRIEFING.COM] The stock market finished an upbeat week on a mixed note. The S&P 500 added just over a point, holding its weekly gain at 1.0% while the Nasdaq lost 0.4%.
The major averages began the day on an upbeat note, but relinquished their opening gains during the first 90 minutes of action. The early sentiment was boosted by a better-than-expected nonfarm payrolls report for February (175K versus Briefing.com consensus 163K), but a closer look into the report suggested that ... More
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The solid report comes a month after the retailer closed all of its Canadian operations.
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