Fiscal Cliff: What to expect and how the market may react
Remember, often the stock market's reaction to a positive outcome is negative. The share market fell after TARP in 2008, the Spanish bailout, the last US mid-term elections and after the presidential election The world seems to be a much safer place. Several stock markets are just slightly off their 52-week highs. Many of the world’s problems appear to be solved, but they may just have passed out of sight. Europe is still in a severe recession. China’s slowdown apparently bottomed, but the renewed growth is due to factors which will make its bad debts, real estate bubble and shaky banking system worse. Still these little issues are being ignored. The one major concern is the coming calamity in the US, known as the “fiscal cliff”. The fiscal cliff is an imaginary deadline, but one with real consequences. It is the result of an earlier stalemate and continues for the same reason. Ten years ago during the Clinton administration the debt of United States stood...
