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Reply #2


Response to alp227 (Original post)

Mon Dec 24, 2012, 04:12 PM

2. Nonsense. The markets have been mostly up since the election and are currently trading

in a mostly flat range. The markets have already anticipated this "cliff" nonsense and have already factored that into the pricing.

"Going over the cliff" is mostly a neutral proposition fo the market. If we let all the laws expire and did absolutely nothing, there is definitely an upside to the market in that we would essentially eliminate the deficit with EVERYBODY paying the Clinton rates. That would be a strong upside for the market. The downside pressure would come if the wisdom of the market was that we would plunge into recession, soon followed by another hostage-taking event over the debt ceiling. (However, is EVERYBODY is paying the Clinton rates, then we probably don't need to increase the debt limit anyway.)

But we aren't going to do "nothing". There will be some deals made in January and the market will carry on just fine.

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