WSJ - May all Americans be more rational and therefore productive in this New Year.
Lets us see what our market is likely betting on.
."Today, the economy would take a more direct hit from some combination of tax increases and spending cuts that appear likely to occur with or without a deal. And while economists say a recession could ensue if lawmakers fail to reach a deal, even a patchwork solution would leave enough issues unresolved to exert a substantial drag on the economy, weighing on corporate profits and the stock market.
The depth of the current fight also points to the possibility of another damaging experience when Washington turns early in the new year to raising the government's borrowing limit of $16.4 trillion. The government will hit that cap on Monday, but the Treasury Department can use a series of emergency measures to buy at least two months of room. That leaves the risk of a debt default—a potentially cataclysmic event for global financial markets, as it was in 2011—on the table as lawmakers tussle over potential spending cuts.
Fraying consumer sentiment and wobbly markets suggest concerns already are mounting. The Conference Board late last week said its measure of consumer confidence fell in December after reaching a five-year high in November. The research group said Americans' outlook for the economy "plummeted" despite a positive view about current economic conditions.
Investors remained fairly calm earlier this month, but nerves began to show last week. The Dow Jones Industrial Average on Friday fell 158.20 points, or 1.2%, to 12938.11, its biggest one-day point and percentage decline since Nov. 14. Though stocks have fallen for five straight days, the Dow still is just 4.9% from its five-year high hit in October, and only 8.7% below its 2007 record. That means it has plenty of room to fall if investors grow worried."
I personally like LINE far better than the general trailing SP500 PE at 14 or the forward at PE12. Market seems to be betting Obama wins with meaningless tax increases and no change in the clear and present danger of deficit spending and printing exceeding $2 trillion a year. Any one with common sense knows this cannot be sustained. Further than government; most especially delusional Progressive government, cannot and will not efficiently allocated our savings to positive return investments which create growth.
But for many behavioral reasons the Pros who set stock market prices will bet they can time jumping off. So the market does like continuing economic insanity in the short term. However, irrational markets are something responsible leaders fear rather than encourage.
Well to remember Progressives are about will not rationality or reason. This makes them dangerous even if we could transform them into superior people.
Why would you not like Line at this level? Can anyone explain? If the fiscal cliff talks continue and an agreement is made to keep the gains tax rate at 15% (only expanded for 400K) then what has changed with Line to explain this fall off? Is it some other surprise management has not released yet?