Technically, there's still a bit of time left on the game clock. But realistically, the fiscal cliff tax-and-spend negotiations are clearly going nowhere, the 11th hour has passed, and it's time to assume the brace position and hope for the best.
Even if the President and House Speaker were suddenly able to find some common ground and miraculously bridge their differences, it still wouldn't matter since their respective backers in Congress would probably not back such a deal anyways.
So the bad news is, we're probably going over the cliff. The good news, or at least the unknown news, is that there's still some debate over what's waiting for us at the bottom.
My co-host Jeff Macke thinks the cliff dive is already priced into the market, and says in the attached video that "the big question now is whether or not you sell your stocks" ahead of a feared panic.
"From my perspective, I think you treat it like a buying opportunity if we go lower," Macke says, predicting that Wall Street's day of reckoning - as well as a deal - probably won't happen until February.
While I agree that an panic sell-off would be a buying opportunity, I think the matter is anything but priced in, and would point to numerous guests on our show and elsewhere who have maintained their belief that a last minute resolution would be reached. Where I am less in line with consensus is on the purported economic impacts of the mandatory tax, budget and benefit changes. While I know they would be bad for the economy and would likely lead to another recession by summertime, I don't think that would be a much worse outcome than if we were to siphon another trillion dollars out of the private sector and pour it into the cavernous black hole we call the annual federal budget deficit.
As much as Fed Chairman Ben Bernanke lives and breaths in a world consumed by economic fear and whose only focus seems to be protecting the fragile U.S. economy from taking any hits whatsoever, the same cannot be said for the budgetary offerings of his counterparts on Capitol Hill and the White House.
Where it all ends up is anyone's guess, but I am expecting nothing but finger pointing for the next two weeks, after which talks will resume in the New Year, and the two sides can try to legislate their way out of the crisis they created, while not fixing it.
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- Politics & Government
- Budget, Tax & Economy
- Jeff Macke