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Stocks: Investors on edge over the cliff

Tonawanda

Tonawanda

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"Investors' nerves are wearing thin as gridlock continues in the fiscal cliff negotiations"

I wouldn't expect much to change if a deal is made. Its already built into the current positions. If it isn't made, who knows how bad it could be, especially now with the president adding a new deadly issue with a January deadline.

January could be a very ugly month for the stock market.





Premarkets: Investors on edge over the fiscal cliff - Dec. 20, 2012
 
Is it not amazing that neither the demorats nor the republicants are proposing any real (i.e. immediate) spending cuts, yet both are anxious to decrease taxation, allow unemployment extensions, raise the debt "ceiing" and simply borrow and spend more. The DC congress critters are all worked up to avoid actually doing their jobs, lest "the cliff" law, that they passed, and Obama signed, force them to do what they already agreed to do - really cut spending and raise taxes. No they can't!
 
I'm worried that going over the cliff is already priced in.
 
Blue_State said:
Didn't we do this about a year and a half ago?
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Yes, and unless some long-term deal isn't done we will be seeing this EVERY year from this point on.
 
Blue_State said:
Fantastic. What a waste of government.
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Well congress approval rate isn't in the single digits for nothing. The problem is the majority of people don't think "their" incumbant in congress (or the presidency) is the problem, so the same idiots keep getting voted back.
 
"Going over the cliff" will give Obama what he truly wants, but won't say. He wants taxes to go up on EVERYBODY and see cuts to military spending, so he can then propose a "tax cut for the middle class." (How is it a cut when it's been at these rates for a decade?) Republicans can't vote against that tax cut.

Voila. Tax increase on the wealthy with NO entitlement cuts.

Of course, that's like throwing a bucket of water in the ocean, so we continue our spiral. Then he goes after pensions and IRAs, then he raises taxes to European levels, and then......no more America left as we once knew it.

George Soros Saul Alinsky are pulling the strings. Obama is the puppet out front.
 
Tonawanda said:
"Investors' nerves are wearing thin as gridlock continues in the fiscal cliff negotiations"

I wouldn't expect much to change if a deal is made. Its already built into the current positions. If it isn't made, who knows how bad it could be, especially now with the president adding a new deadly issue with a January deadline.

January could be a very ugly month for the stock market.





Premarkets: Investors on edge over the fiscal cliff - Dec. 20, 2012
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So you don't think that investor outlook will change given a change in the economic environment, even though those positions to which you refer are based on this specific issue?

And what of people that have taken the position of a deal being made?

Blue_State said:
Fantastic. What a waste of government.
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This isn't really true. The only reason it has been an issue is because we are in a precarious economic situation and austerity is being pushed hard by the right. Once we get out of this situation and move back into an upswing (which we are starting to but haven't gained momentum yet) this issue will be less important.
 
Khayembii Communique said:
This isn't really true. The only reason it has been an issue is because we are in a precarious economic situation and austerity is being pushed hard by the right. Once we get out of this situation and move back into an upswing (which we are starting to but haven't gained momentum yet) this issue will be less important.
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Shouldn't they be moving forward? Not reliving the issues over and over? That would be equivalent of the supreme court rehearing cases it already ruled on.

Their past actions were only a stop gap. They need to make real solutions and deal with the problem at hand.

And of course, blame the right, it has nothing to do with the left.
 
Erod said:
"Going over the cliff" will give Obama what he truly wants, but won't say. He wants taxes to go up on EVERYBODY and see cuts to military spending, so he can then propose a "tax cut for the middle class." (How is it a cut when it's been at these rates for a decade?) Republicans can't vote against that tax cut.

Voila. Tax increase on the wealthy with NO entitlement cuts.

Of course, that's like throwing a bucket of water in the ocean, so we continue our spiral. Then he goes after pensions and IRAs, then he raises taxes to European levels, and then......no more America left as we once knew it.

George Soros Saul Alinsky are pulling the strings. Obama is the puppet out front.
Click to expand...

It's a conspiracy.
 
Khayembii Communique said:
So you don't think that investor outlook will change given a change in the economic environment, even though those positions to which you refer are based on this specific issue?

And what of people that have taken the position of a deal being made?



This isn't really true. The only reason it has been an issue is because we are in a precarious economic situation and austerity is being pushed hard by the right. Once we get out of this situation and move back into an upswing (which we are starting to but haven't gained momentum yet) this issue will be less important.
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I think your a little overly optimistic. Obama will have added by the time he is out of office over 10 trillion to our national debt for a grand total of 20+ trillion. In return what we have is an anemic GDP of 2%. But if that is not bad enough this huge debt will drag our economy down. Instead of tax dollars being recycled and invested in our economy it will go to pay debt. This does not paint a rosy picture for me.
 
Blue_State said:
Shouldn't they be moving forward? Not reliving the issues over and over? That would be equivalent of the supreme court rehearing cases it already ruled on.

Their past actions were only a stop gap. They need to make real solutions and deal with the problem at hand.

And of course, blame the right, it has nothing to do with the left.
Click to expand...

Well there really isn't a problem. It is a manufactured issue. The problem isn't with the deficit, it's with employment and GDP growth. Right now the government should be concerned with assisting in getting the economy moving again, going through the remains of the housing bubble, consolidating and concretizing Dodd-Frank so that banks know what to expect going forward in terms of regulation, and so on.

Focusing on the deficit right now is the height of stupidity. Why do you think everyone is so worried about the fiscal cliff?

Born Free said:
I think your a little overly optimistic. Obama will have added by the time he is out of office over 10 trillion to our national debt for a grand total of 20+ trillion. In return what we have is an anemic GDP of 2%. But if that is not bad enough this huge debt will drag our economy down. Instead of tax dollars being recycled and invested in our economy it will go to pay debt. This does not paint a rosy picture for me.
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The federal budget is approved by both congress as well as the president. Blaming Obama for the budget deficit is rather silly in that context.

Also, the federal deficit does not cause GDP growth to slow. This is very obvious and supported by rudimentary economics and a cursory study of the federal budget deficit/surplus and GDP growth over time.

Finally, debt is not a drag on the economy necessarily, and certainly not for the reason you state, simply because the debt is financed through the issuance of securities and not taxation.
 
I disagree with the position in the OP that a deal is already baked into the market numbers. I think the lack of a deal is more likely baked into the numbers. Regardless, the big players make money whether the market goes up or goes down which is why you see all the churning as they game each other.
 
Fisher said:
I disagree with the position in the OP that a deal is already baked into the market numbers. I think the lack of a deal is more likely baked into the numbers. Regardless, the big players make money whether the market goes up or goes down which is why you see all the churning as they game each other.
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What?

Yes, many HF's practice a market neutral strategy but wtf does that have to do with "churning" and what does "as they game each other" even mean?
 
Khayembii Communique said:
Well there really isn't a problem. It is a manufactured issue. The problem isn't with the deficit, it's with employment and GDP growth. Right now the government should be concerned with assisting in getting the economy moving again, going through the remains of the housing bubble, consolidating and concretizing Dodd-Frank so that banks know what to expect going forward in terms of regulation, and so on.

Focusing on the deficit right now is the height of stupidity. Why do you think everyone is so worried about the fiscal cliff?



The federal budget is approved by both congress as well as the president. Blaming Obama for the budget deficit is rather silly in that context.

Also, the federal deficit does not cause GDP growth to slow. This is very obvious and supported by rudimentary economics and a cursory study of the federal budget deficit/surplus and GDP growth over time.

Finally, debt is not a drag on the economy necessarily, and certainly not for the reason you state, simply because the debt is financed through the issuance of securities and not taxation.
Click to expand...

Let me try and put it in basic terms. We well soon have a 20+ trillion nation debt, and when you have to dig deep down in your pocket to begin paying that money back, guess what? You have less money to spend for discretionary goods, further the government is taking tax dollars to pay debt instead of infrastructure and and the like. Add those together and that is a huge drag on the economy.

Now think where is this money going to come from to pay the debt, first even with a tax hike on the rich Obama will still be borrowing over 1 Trillion annually, thus where is the money going to come from to balance the budget let alone to pay down the debt. The next president has to raise taxes on everyone and seriously cut spending to even get near balancing the budget. That's a trillion dollar turnaround per year, now you have to add more taxes and cuts to be able to start paying down the debt.

All you have to do is look at Greece and Spain and that is where we're headed. Of course there are some that think there is no end to the money supply. We have been living high on the hog on 20+ trillion of steroids. When the flow of this addiction stops this economy is going in the tank.
 
Born Free said:
Let me try and put it in basic terms. We well soon have a 20+ trillion nation debt, and when you have to dig deep down in your pocket to begin paying that money back, guess what? You have less money to spend for discretionary goods, further the government is taking tax dollars to pay debt instead of infrastructure and and the like. Add those together and that is a huge drag on the economy.
Click to expand...

I've already covered this. Government doesn't finance spending through taxation, it issues debt securities. It doesn't need to pay down its debt. In boom times it can choose to do so through various means, including taxation, but again, spending itself is not financed through taxation. This is not necessarily a drag on the economy, as I have already said.

Now think where is this money going to come from to pay the debt, first even with a tax hike on the rich Obama will still be borrowing over 1 Trillion annually, thus where is the money going to come from to balance the budget let alone to pay down the debt. The next president has to raise taxes on everyone and seriously cut spending to even get near balancing the budget. That's a trillion dollar turnaround per year, now you have to add more taxes and cuts to be able to start paying down the debt.
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Except the budget never needs to be balanced and the debt never needs to reach 0, which is your flawed fundamental premise.

All you have to do is look at Greece and Spain and that is where we're headed. Of course there are some that think there is no end to the money supply. We have been living high on the hog on 20+ trillion of steroids. When the flow of this addiction stops this economy is going in the tank.
Click to expand...

Greece and Spain are completely different scenarios than the United States, and to compare them is to show your complete ignorance of the difference between apples and oranges.
 
Samhain said:
I'm worried that going over the cliff is already priced in.
Click to expand...

That wouldn't be bad for the market in the short term, but a big negative for our wallets. Maybe that is the plan?
 
Erod said:
"Going over the cliff" will give Obama what he truly wants, but won't say. He wants taxes to go up on EVERYBODY and see cuts to military spending, so he can then propose a "tax cut for the middle class." (How is it a cut when it's been at these rates for a decade?) Republicans can't vote against that tax cut.

Voila. Tax increase on the wealthy with NO entitlement cuts.

Of course, that's like throwing a bucket of water in the ocean, so we continue our spiral. Then he goes after pensions and IRAs, then he raises taxes to European levels, and then......no more America left as we once knew it.

George Soros Saul Alinsky are pulling the strings. Obama is the puppet out front.
Click to expand...

So tell us good sir... if George Soros and Saul Alinsky are pulling strings to make this happen, what do they gain out of it? Except higher taxes on themselves?
 
Khayembii Communique said:
I've already covered this. Government doesn't finance spending through taxation, it issues debt securities. It doesn't need to pay down its debt. In boom times it can choose to do so through various means, including taxation, but again, spending itself is not financed through taxation. This is not necessarily a drag on the economy, as I have already said.
Click to expand...

Like I said there are some that think there is no end to the money supply, just keep borrowing and spending into oblivion. Your right Obama is financing spending through debt at the tune of over 1 trillion a yr. and of course it doesn't have to pay down the debt just keep paying interest to China. In boom times, can you tell me when the next boom is going to happen?

Except the budget never needs to be balanced and the debt never needs to reach 0, which is your flawed fundamental premise.
Click to expand...

Of course not, to a guy that thinks there is an endless supply of money you would never have to balance the budget, just keep borrowing a trillion plus a yr until eternity. How stupid of me.

Greece and Spain are completely different scenarios than the United States, and to compare them is to show your complete ignorance of the difference between apples and oranges.
Click to expand...

Ignorance, complete ignorance is on your part, to think we can continue to borrow a trillion a yr for eternity is complete ignorance. To think Greece and Spain who no one will lend money too, and that we could never be in the same spot is complete ignorance.
 
Born Free said:
Like I said there are some that think there is no end to the money supply, just keep borrowing and spending into oblivion.
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Well, that straw man is certainly not what I said. I made a very clear truism that you are now running with to your own unfounded conclusions.

Your right Obama is financing spending through debt at the tune of over 1 trillion a yr.
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No, the federal government is. Obama does not have 1 trillion dollars a year. In fact, he only makes about $400,000 IIRC.

All joking aside, though, the government has been doing this for quite some time and started many presidents before Obama. It just gained prominence under Bush because of their deficit spending.

and of course it doesn't have to pay down the debt just keep paying interest to China.
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It doesn't pay interest to China, it pays interest to all bondholders. I don't see what is wrong with this; maybe you do, but then again you apparently don't know much about how US Treasury Bonds work.

In boom times, can you tell me when the next boom is going to happen?
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I don't see how this is relevant unless you believe that the US economy will never pick up again at which point I would say you are delusional.

Of course not, to a guy that thinks there is an endless supply of money
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There is no such thing as an endless supply of money.

you would never have to balance the budget, just keep borrowing a trillion plus a yr until eternity. How stupid of me.
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Again straw man. You people love going off on this unfounded tangent every time this is brought up. I wonder why you can't simply engage what I have said? Hmmm...

Ignorance, complete ignorance is on your part, to think we can continue to borrow a trillion a yr for eternity is complete ignorance.
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Straw man.

To think Greece and Spain who no one will lend money too, and that we could never be in the same spot is complete ignorance.
Click to expand...

Greece and Spain are completely different scenarios than the United States, and to compare them is to show your complete ignorance of the difference between apples and oranges.
 
poweRob said:
So tell us good sir... if George Soros and Saul Alinsky are pulling strings to make this happen, what do they gain out of it? Except higher taxes on themselves?
Click to expand...

Well, one is dead, one has already made his billions that can't be taxed again. Soros loves to screw with the financial markets. He's everything liberals should hate because he's the classic venture capitalist and Wall Street manipulator, yet you love him because he supports liberal candidates.

This makes it much harder to BECOME a billionaire. Keeps the membership low for those that already are.
 
Erod said:
Well, one is dead, one has already made his billions that can't be taxed again. Soros loves to screw with the financial markets. He's everything liberals should hate because he's the classic venture capitalist and Wall Street manipulator, yet you love him because he supports liberal candidates.

This makes it much harder to BECOME a billionaire. Keeps the membership low for those that already are.
Click to expand...

So Soros is just trolling, is basically your argument?
 
Tonawanda said:
"Investors' nerves are wearing thin as gridlock continues in the fiscal cliff negotiations"

I wouldn't expect much to change if a deal is made. Its already built into the current positions. If it isn't made, who knows how bad it could be, especially now with the president adding a new deadly issue with a January deadline.

January could be a very ugly month for the stock market.





Premarkets: Investors on edge over the fiscal cliff - Dec. 20, 2012
Click to expand...
I spend about 3-4 hours a day trading and I think it has less to do with the fiscal cliff and more to do with Bernanke's recent announcement that the fed will be printing more bucks. Sh*t went wild after that. The fiscal cliff the investors saw coming and priced in ahead of time.
 
Khayembii Communique said:
So you don't think that investor outlook will change given a change in the economic environment, even though those positions to which you refer are based on this specific issue?

And what of people that have taken the position of a deal being made?
Click to expand...

I'm not sure what you are asking.

If investors were priced in assuming a deal would be made, and it was made, not much would change for them in the short term.

If investors did not anticipate a deal, and it was made, their outlook would likely improve and they might invest improving the market.

However, would a deal, or no deal change the economic environment? Perhaps in the minds of the investors. There are battles to be fought in January, and in my opinion will that will keep consumer confidence down.
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