No. of Recommendations: 14
I am firmly convinced that the Politicritters in Washington, D.C. will reach a deal on the Fiscal Cliff negotiations by December 26, 2012.

Why?

Because a bunch of those rascals have outsize equity portfolios and they know that "a deal" - any deal, not necessarily a "grand bargain" but just any kind of deal - is good for about a 200 point pop on the Dow.

The same critters are pretty sure that taxes on capital gains are going to be higher next year. Thus, they all will want to "sell on the news" that a deal has been reached.

Politicians will be taking profits hand-over-fist before December 31, and the best way to clench those profits is to reach a deal on a business day when their brokers are working and the markets are open as the Dow surges ahead on the news.

That's my thinking anyway.

;-)
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I thought the world was ending in 2 weeks, so Why sweat any cliff?

:)


Wooly.................. At least my T-Shirt says it is.......
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Because a bunch of those rascals have outsize equity portfolios and they know that "a deal" - any deal, not necessarily a "grand bargain" but just any kind of deal - is good for about a 200 point pop on the Dow.

You don't think their "blind trusts" are selling like mad and going short?

Steve
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That's one posability.

Another is, they came there mostly broke and know everyone leaves Rich.
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Oh heavens, another Nostradamus wannabe.
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I agree that will be a deal before Xmas, but not for the reason OP states. Even the Repubs understand that they have no leverage. The deal may involve increases in taxes on long-term cap gains and/or "qualified" dividends; but if so, it will be a small hit, maybe a hike to 20% from 15%.

Will the market breathe a sigh of relief and pop temporarily? Probably. It has ceased to amaze me how many times people say "it's already priced into the market" and yet it rarely is. At age 63, I've stopped yelling at market nonsense. It is what it is.
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Alternative theory -- they've already taken gains knowing that they are unlikely to have a deal, and now they have incentive to create a stock market meltdown to engage a better buying opportunity to re-enter.
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Alternative theory -- they've already taken gains knowing that they are unlikely to have a deal, and now they have incentive to create a stock market meltdown to engage a better buying opportunity to re-enter.


Cynic!! }};-D

In truth even if they do have an agreement it would take the staffers a couple of weeks to write it up (unlike our Ministers who simply say "make it so"). }};-()

The Diplomat in the family thinks the announcement will be made on Sunday or Monday 16th or 17th but I have no idea why she thinks that.


**** absolutely not signed ****
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"In truth even if they do have an agreement it would take the staffers a couple of weeks to write it up"

This is often stated, but not necessarily true. The grain of truth is that it does take a couple of weeks to write U.S. legislation of this magnitude. The catch is that nobody says you have to write the legislation exclusively after the negotiations are concluded. For one obvious example, we already have a bill that has passed the senate which extends middle class tax cuts. If the commprimise includes this tax cut, that portion of the legislation has already been written (of course it will be reviewed and may see some minor changes). I would be willing to bet that alternative modules are being pre-written now.

Believe it or not, that's a cynical assumption on my part! Lets put it this way: both sides are playing chicken, hoping for the other side to blink first, with disasterous consequences for everybody involved if nobody blinks. Imagine what a great advantage it would be to have the other side think that the practical deadline for agreement was 12/16, but for you to know that enough legistlative language had been written to make that deadline 12/18. When 12/16 rolls around, the opposition will be feeling great pressure to come to a comprimise, while you will be calm as can be.
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VUC: I would be willing to bet that alternative modules are being pre-written now.

You would win that bet. I know a staffer who is directing module scribblers, and has a nice piece of custom database s/w that tracks the "loose ends" dangling from each module that need to be fitted into the "mother module" and/or other modules.

It is no longer a "sausage factory". It is a "Steve's Discount Computers" store.


david fb
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Lets put it this way: both sides are playing chicken, hoping for the other side to blink first, with disasterous consequences for everybody involved if nobody blinks.

They want us to think that, but "no compromise" not only would not be all that disastrous but actually looks better than either side's current position.
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Lets put it this way: both sides are playing chicken, hoping for the other side to blink first, with disasterous consequences for everybody involved if nobody blinks.

They want us to think that, but "no compromise" not only would not be all that disastrous but actually looks better than either side's current position.


Getting a bit over the line here but using freedom of speech methinks considering the score in the "game" five weeks ago one side is driving a Mac truck while the other is in a a VW bug? The guys in the truck win either way and the current standoff is all about face saving?


Any <someone hacked my Fool account again> mouse
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"They want us to think that, but "no compromise" not only would not be all that disastrous but actually looks better than either side's current position. "

Right, if you are a fan of recessions. We just had a pretty significant one, so the consequences of recessions on real people's lives should be pretty fresh in everyone's memory.
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"They want us to think that, but "no compromise" not only would not be all that disastrous but actually looks better than either side's current position. "

Right, if you are a fan of recessions. We just had a pretty significant one, so the consequences of recessions on real people's lives should be pretty fresh in everyone's memory.


I'm not a fan of recessions. Which is why I want them to stop trying to make a much deeper one occur slightly later.
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