Fiscal Cliff Prediction - Jan 1, 2013

[Edward64]

What do you think will happen?

[Shkspr]

I think a bunch of people who have no clue what they're talking about are going to get a LOT of airtime on TV news shows for the next few weeks.

[Swaggs]

What I think will happen: The GOP House leadership and the Senate/Obama will not be able to work it out and the Bush tax cuts will expire. Then, they will agree to a modified version of the Bush tax cuts (probably raise the rates on the top 1-2% and keep everyone else's the same as under the Bush cuts). They will retroactively apply the cuts to apply to the 2013 tax year and everyone will take a victory lap (The GOP will once again claim that they cut taxes and the Dems will get to claim that they took care of the middle class and increased revenue).

[duckman]

My prediction? Paaaaiiiinnnn.

[stevew]

I wonder what the business payroll strategy is going to be on Jan1. Immediate raise in withholding for workers? I wonder if people will get gut punched when the amount of withheld taxes taken out of a paycheck increases by. (Guessing here?) 70% or so?

[sabotai]

Originally Posted by duckman

My prediction? Paaaaiiiinnnn.

[stevew]

Dola. If so they better tell workers ahead of time.

[SirFozzie]

Prediction? The Right Wing of the Republicans take it to the very last moment before agreeing to a deal that raises taxes over $400-$500K in return for some spending cuts

Second favorite: We go "over the cliff" with Obama, Pelosi and Reid winning the battle. Soon after the new congress is sworn in, the Democrats get a pretty good sized win, they still raised taxes over $400-500K, but with less spending cuts.

reasoning with the blame breakdown pointing nearly 60% at the GOP Congress, and the 65% of exit pollers that said that the wealthy should pay more in taxes, even with the house organsof the GOP screaming bloody murder, Obama will be able to barnstorm and sell the public on standing tall.

[stevew]

Isn't the other logical move for the incoming democrats/existing ones agreeing to nominate some non-insane moderate republican for speaker(assuming he can get the 30-40 votes necessary). Tell Boehner to go fuck himself.

[SirFozzie]

The problem is that A) That there aren't that many moderates left and B) No one will want to get primaried by doing so.

[Passacaglia]

Status quo, and they'll agree to put off a decision until 1808.

[Drake]

Originally Posted by duckman

My prediction? Paaaaiiiinnnn.

I initially read that as "Palin" and for a single, terrifying moment...threw up in my mouth just a little.

[Comey]

Originally Posted by duckman

My prediction? Paaaaiiiinnnn.

I kept looking for the like button. Then I realized where I was.

[Desnudo]

Originally Posted by duckman

My prediction? Paaaaiiiinnnn.

[CrimsonFox]

[molson]

If we're going off the fiscal cliff I hope they give wall street a little notice and don't keep their hopes up until the last second. That could be a really ugly day in the stock market if it's taken as really sudden bad news.

[CrimsonFox]

Originally Posted by Shkspr

I think a bunch of people who have no clue what they're talking about are going to get a LOT of airtime on TV news shows for the next few weeks.

This, definitely. Just another catchphrase to say when they want to smear the opposition.

[Edward64]

Kinda surprised no one here thinks the GOP will win the fight.

[RainMaker]

Originally Posted by Shkspr

I think a bunch of people who have no clue what they're talking about are going to get a LOT of airtime on TV news shows for the next few weeks.

I agree. CNN touted out Erick Erickson the other day. A guy who claimed Romney would win Colorado, Virginia, and Florida. Put Ohio as a toss-up. How all these groups would pile into the polls to carry him to victory. Basically they are getting the pulse of the nation from someone who is completely out of touch with it.

Now there are many others that these networks give credence too, I just wish the media would start filtering out the bad ones.

[DaddyTorgo]

Originally Posted by molson

If we're going off the fiscal cliff I hope they give wall street a little notice and don't keep their hopes up until the last second. That could be a really ugly day in the stock market if it's taken as really sudden bad news.

It's long since priced into the market's expectations.

[Marc Vaughan]

Originally Posted by DaddyTorgo

It's long since priced into the market's expectations.

That won't stop the market tanking at least a bit as the large corporations/investors do their best to put pressure on the Government not to hit them too hard with any changes which are being considered (at the same time said people will also make counter bets which will profit as the market falls, ensuring that they come out best and its only pension funds and suchlike which lose money*).

*Cynical me, surely not

[Marc Vaughan]

Originally Posted by Edward64

Kinda surprised no one here thinks the GOP will win the fight.

I don't see how they can tbh - if they don't reach a compromise then the cliff hits and the President wins, at that point a compromise is enevitable as even the GOP aren't going to vote against Tax Cuts being put in place for the 99% .....

As such its in their best interests to agree a deal and trumpet whatever concessions they can get and how they were willing to work with the administration for the good of the nation etc.

(I half expect scenario one to occur with the GOP sticking their heads firmly in the sand until the deadline passes - in much the same way they convinced themselves they were going to win the election etc.)

[DaddyTorgo]

Originally Posted by Marc Vaughan

That won't stop the market tanking at least a bit as the large corporations/investors do their best to put pressure on the Government not to hit them too hard with any changes which are being considered (at the same time said people will also make counter bets which will profit as the market falls, ensuring that they come out best and its only pension funds and suchlike which lose money*).

*Cynical me, surely not

True. But it won't be based on fundamentals.

[Edward64]

I kinda like debtpocalypse.

Fiscal Cliff? Slope? Debtpocalypse? It Means Austerity - NYTimes.com

Staff members termed it the “debtpocalypse,” or “debtmageddon.”

[sterlingice]

Originally Posted by stevew

Isn't the other logical move for the incoming democrats/existing ones agreeing to nominate some non-insane moderate republican for speaker(assuming he can get the 30-40 votes necessary). Tell Boehner to go fuck himself.

That's the thing, tho. Boehner isn't some crazy fringe-y guy. He has to advocate for his party, but he's a wheeler and dealer. If anything, he has to watch his back from the right not from the middle.

SI

[sterlingice]

Originally Posted by Edward64

Kinda surprised no one here thinks the GOP will win the fight.

There is always option C) or whatever letter we're at:

The GOP bluffs, Obama caves a ton, and we could have done this six months ago. It's not like we haven't seen this before on a number of fronts. He's just no good at making deals or being a poker player.

SI

[sterlingice]

Originally Posted by molson

If we're going off the fiscal cliff I hope they give wall street a little notice and don't keep their hopes up until the last second. That could be a really ugly day in the stock market if it's taken as really sudden bad news.

Man, I wish we had known about this in advance. Boy, they could even give it a catchy title like "Fiscal Hill" or something like that and give wall to wall news coverage about it from now until it's resolved. Then maybe we'd have some warning about it and be able to price in risk.

SI

[Grover]

Originally Posted by sterlingice

Man, I wish we had known about this in advance. Boy, they could even give it a catchy title like "Fiscal Hill" or something like that and give wall to wall news coverage about it from now until it's resolved. Then maybe we'd have some warning about it and be able to price in risk.

SI

lmao.

[CrimsonFox]

Originally Posted by sterlingice

Man, I wish we had known about this in advance. Boy, they could even give it a catchy title like "Fiscal Hill" or something like that and give wall to wall news coverage about it from now until it's resolved. Then maybe we'd have some warning about it and be able to price in risk.

SI

"Fiscal Wall" sounds better.

They wouldn't have to change their street name to "Cliff Street"

[ISiddiqui]

Either kick it down the road or Obama wins.

Though I figure that the top % will likely have theirs expire one way or another.

[molson]

Originally Posted by sterlingice

Man, I wish we had known about this in advance. Boy, they could even give it a catchy title like "Fiscal Hill" or something like that and give wall to wall news coverage about it from now until it's resolved. Then maybe we'd have some warning about it and be able to price in risk.

SI

You really think 100% of the risk is priced in already and if we actually pass that date with nothing happening, Wall Street will just have a ho hum kind of day? I don't believe that. I think everybody expects this to be resolved or put off. If it actually happened, there would be some pretty huge short-term reactions to it.

Edit: By "warning" I mean maybe it becomes clear that they're just going to let this happen and aren't too worried about it. If everybody expects a deal, but then at the last minute nothing happens and both parties publicly freak out and blame the other side for causing a catastrophe, Wall St will freak out too, at least in the short term.

[sterlingice]

True, it's facetious to say all risk is factored in. I'm sure it's factored in something like a sum of:
20% * cost(Over "cliff" and then deal)
10% * cost(Deal in GOP favor)
10% * cost(Deal in Dem favor)
40% * cost(Expected compromise)
20% * cost(unknown- so just remove from equation)

And the true cost will be one of those actual costs and subtract or add the difference between the risk cost and actual cost.

However, this also assumes a rational market and we have anything but. It's more just a bunch of crooks out to screw people for short term gain.

SI

[SirFozzie]

I'm hopeful that we have the frame work of a deal here. Of course, I'm at least a bit partisan, I would like to see more revenue hikes and closing of subsidies to mature industries and less spending cuts, but I think this will avoid the austerity bomb.

Inside the talks: Fiscal framework emerges - Jim VandeHei and Mike Allen - POLITICO.com

[Edward64]

Looks like Thelma & Louise.

[DaddyTorgo]

We're going over.

[stevew]

The milk Armageddon is going to be really bad for places like schools and institutions

[PilotMan]

Someone brought up the point a while back that going over was inevitable when Boehner couldn't get any support for his plan. For the Dems they basically get the big parts that they want and the Reps save face by not voting for a tax increase.

The question in the following days then becomes "what can we do to moderate the damage?", and it becomes voting for a tax cut instead of a tax increase.

[sterlingice]

And the day is "saved" with the 61% saying "kick the can" being most correct!

SI

[cubboyroy1826]

Yet another reason to be throughly frustrated with politics in the US no matter which party you favor. Neither side has the back bone to do what needs to be done for fear of losing their jobs at the next election.

[sterlingice]

Isn't that out fault, to a point? If we have people going "vote the bums out" every time they do something, then their incentive is to basically do nothing.

SI

[cubboyroy1826]

It is to an extent our fault but doing nothing should not be rewarded either.