The fiscal cliff reason for market drop is the media’s narrative. The real reason the market is tanking is the re-election of 0bama. Business knows its screwed for four years. The media whores want people to think it’s the fiscal cliff to get the GOP House to cave to 0bama, Reid & Pelosi’s demands to significantly hike taxes while doing NOTHING about spending.
The media already has the two narratives ready to go:
“GOP House refuses to compromise; pushes America over fiscal cliff.”
“GOP House passes massive tax increases; middle class crushed.”
The “fiscal cliff” narrative on the stock market is meant to drive the next one about blaming the House for whichever disaster we get. It’s all part of the strategy of finishing the job in 2014 by turning the House democrat.
I agree - that’s what they will try. And I would agree about the pessimism, or gloom, in the business community.
Here in CA, the voters passed a massive tax the rich increase, and 2/3 Dem majority in both houses so Prop 13 is likely toast. CA leads the nation.
This decline and many future declines are in our future.
Everyone I know is hunkering down, postponing spending decisions.
Deflation is a real possibility and few realize that deflation has its own multiplier effect. So a 1% contraction today means a 2% next year.
The market was reflecting optimism of having fiscal savvy executives.
Obviously the market is tanking on Obama's re-election. The first issue to be dealt with as a result of that is the tax hikes about to happen along with sequestration (the "fiscal cliff). After that will be other hurdles which I mentioned in my previous post.
If the GOP was smart (yea, right!) they would simply state that they will vote ‘present’ & let the Dems do what they will. But at every stage of the collapse of our economy, they should point out: “This is what the Democrats have done.”
And keep on repeating it at every opportunity.