We Could Still Skirt the 'Cliff'
Equity markets suffered a tremor early Friday after House Republicans were unable to pass Speaker Boehner's "Plan B" proposal late Tuesday. This may well shape up as a "TARP moment" -- that is, a wake-up call to Congress, much as when the Troubled Asset Relief Program was forged in 2008. I still expect Congress to at least partially avert the "fiscal cliff" before New Year's.
By "partially" I mean legislation that would at least head off automatic tax-rate hikes and an alternative minimum tax (AMT) hit for 98% or more Americans, but perhaps not to avert the scheduled budget sequester. I broadly foresee or 2-in-3 odds on this -- yet I also continue to predict a 75% likelihood that any such result will be of very limited scope, and will thus disappoint the equity markets. To reiterate, this would result in a continued squabbling over spending in the next two months....764 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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