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The Three 'P's Of The Fiscal Cliff

Tyler Durden's picture


On the basis of a joint press conference following a one-hour chat, the S&P 500 is up over 2.5%; it seems there is little doubt that the fiscal cliff is front-and-center in people's minds. And yet, positioning is far from biased towards negativity and sentiment remains positive - the 'they will fix it; they have to, right?' meme is everywhere. As Morgan Stanley notes, however, a smooth resolution requires some of the same public officials who created the cliff to cooperate to avoid it. As far as hope of a short-term solution, Obama's Burma trip aside, Speaker Boehner has already indicated that it would be inappropriate to pass comprehensive legislation in the Lame Duck session, given that more than 100 current members of the House will not be returning next year; and as for any actual substantive change: the sequence most talked about is patch (stop-gap legislation) and promise (ten-year budget reduction), followed by a plan. In that regard, politicians’ solution to the 2012 fiscal cliff will be to create another one in 2013. Thus, only a portion of the uncertainty about policy will be resolved by the patch and promise, as much could go wrong with the plan.


Via Morgan Stanley's Vince Reinhart:

US politicians have purposely put the economy in harm’s way. On January 1, 2013, the federal budget contracts the equivalent of 5 percentage points of nominal GDP for the entire calendar year. This is not an act of nature but the accumulation of poorly drawn legislation, accounting gimmicks, and failed attempts at budget discipline. Added to that budgetary mix—which is all about flows of spending and taxing—is the need to increase the statutory limit on the stock of public debt. Without a hike in the debt ceiling, the Treasury will run out of cash in mid-February.


A smooth resolution requires some of the same public officials who created the cliff to cooperate to avoid it. If there is no such cooperation, then the budget lurches into contraction, at least until constituent pressure, adverse financial market dynamics, or the debt ceiling forces agreement.


As for timing, the mid-February debt ceiling is a binding constraint, so the two windows for action are the post-election, pre-year-end Lame Duck session of the Congress and the first 45 days or so of 2013.


As for substance, the sequence most talked about is patch and promise, followed by a plan. The patch would be stop-gap legislation extending most features of the current system accompanied by the promise of significant ten-year budget reduction legislated by a certain date later in 2013. In that regard, politicians’ solution to the 2012 fiscal cliff will be to create another one in 2013. Thus, only a portion of the uncertainty about policy will be resolved by the patch and promise, as much could go wrong with the plan.


Recognizing that there is significant overlap in the major consolidation programs in play, the negotiators could cut to the plan immediately. However, Speaker Boehner has already indicated that it would be inappropriate to pass comprehensive legislation in the Lame Duck session, given that more than 100 current members of the House will not be returning next year. Cutting straight to the plan probably means going over the fiscal cliff. In that scenario, elevated concern about falling off the cliff in 2013 could quickly turn to relief at the announcement of a comprehensive plan.


Here is the complication: An early plan most likely requires going over the cliff. However, the converse does not necessarily hold, in that going over the cliff does not guarantee a comprehensive plan. Confrontation and recrimination at the start of 2013 could give way to a quick patch with the promise of a plan later in the year. That is, sound and fury with no reliable output.


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Mon, 11/19/2012 - 12:44 | 2996060 bania
bania's picture

Austrian School graduate Felix Baumgartner

Mon, 11/19/2012 - 12:48 | 2996074 slaughterer
slaughterer's picture

"Patch, Promise and Plan."  Keeping Hopium Alive Since 2008.  

Mon, 11/19/2012 - 13:00 | 2996117 Manthong
Manthong's picture

We're all Europeans now.

Mon, 11/19/2012 - 14:27 | 2996316 TruthInSunshine
TruthInSunshine's picture

*AHEM* I've said it before, and it bears repeating, IMHO.


Where do all these people come from claiming "things are likely to get worse" before a "resolution of the fiscal cliff" is established," when in reality, things are going to get worse from a fundamental, macro & micro economic vantage point no matter what or what doesn't happen regarding the "fiscal cliff?"

The "fiscal cliff" is immaterial. It's a non-issue. It's a fruit fly or even smaller gnat on an 800-lbs Gorilla's ass. It's a sell-sider's straw man AND a sell-sider's red herring.

We're actually in an economic depression that's merely being hidden by deficit reliant government spending and a GDP bump that is an illusion as it's generated by debasement of currencies/fiat printing (real consumption& aggregate demand are falling, but because prices are rising in real terms at a rate higher than official BLS garbage in-garbage out equations indicate, GDP can still be shown to be flat or expanding, even if real consumption, aggregat deman AND real productivity are falling...).

The U.S. and many developed & emerging economies are contracting, and have been, for some time.

To understand what this now clearly entrenched, long term trend does to equity markets, pull up a chart of the Nikkei, circa-1989 forward.

There aren't/can't be any exceptions to what you'll see; the product of debt dependent "faking the numbers" until reality calls the bluff.


Somewhat off topic (but also somewhat related):  Take a look at just one piece of evidence I found this morning, that when taken together with many other factual examples (that one can compile consistently & nearly daily), supports a strong case that any alleged GDP growth or soft recovery during the last 4 years is an illusion based on debt re-leveraging:

Delinquencies Rise as Consumers Load up on Debt

Americans cranked up their use of credit cards in the third quarter, racking up more debt than a year ago, while also being less diligent about making payments on time, an analysis of consumer-credit data shows.


The average credit card debt per borrower in the U.S. grew 4.9 percent in the July-to-September period from a year earlier to $4,996, credit reporting agency TransUnion said Monday.

Even with record direct tax transfers to the American People, in the form of EBT/SNAP, UI/xUI, Social Security, SSI, Medicare, Medicaid, etc., they are resorting to credit card debt once again to bridge the gap between what they have and can't afford, in many cases just to meet the basics.

There's a brick & mortar massacre under way. JC Penney & Best Buy are not the exceptions to the new rule, but the examples of this now deeply entrenched trend born out of economic reality that can't be delayed any longer.

Mon, 11/19/2012 - 15:27 | 2996539 Cliff Claven Cheers
Cliff Claven Cheers's picture

I work in credit card collections for one of the tbtf banks .  I see it first hand.  There are so many delinquint borrows I can work 12 hrs a day every day taking one call after another.  I have talked to people from every corner of the country.

Mon, 11/19/2012 - 16:21 | 2996745 catacl1sm
catacl1sm's picture

What's your address? I want to send you a gift.

Mon, 11/19/2012 - 16:30 | 2996776 infotechsailor
infotechsailor's picture


I could not think of a better picture to accompany America's leap off the fiscal cliff than felix jumping out of his space capsule.

Thanks Tyler. I just spilled five bernanke bills worth of starbucks coffee.

Mon, 11/19/2012 - 19:44 | 2997346 The Alarmist
The Alarmist's picture

Felix fell to the earth because the laws of physics (gravity) cannot be violated.  Ben can print to the moon because the "laws" of economics have no such rationale constraints.

Mon, 11/19/2012 - 22:31 | 2997654 TruthInSunshine
TruthInSunshine's picture

Ben "Icarus" Bernank, who flew to close to the sun on wings made of cotton fiber & linen.

Mon, 11/19/2012 - 12:45 | 2996061 Ruffcut
Ruffcut's picture

Fucking fiscal cliff buzz term. The main street media abounds of bullshit.

Mon, 11/19/2012 - 12:56 | 2996102 Unprepared
Unprepared's picture

Yeah, I'm waiting for the "monetary hangover" to take over the headlines.

Mon, 11/19/2012 - 12:46 | 2996063 redpill
redpill's picture

Congress shouldn't even meet after the election, the last thing we need is 100 fired congress members trying to pass whatever pieces of pork or political paybacks they can before they are run out of town.

Mon, 11/19/2012 - 13:02 | 2996128 Matt
Matt's picture

Why do Americans need months for the peaceful transition of power?

Mon, 11/19/2012 - 15:20 | 2996511 redpill
redpill's picture

Historically it was in November because it was after harvest and before the harshest months of winter.  And election day is always on a Tuesday so that rural farmers would have time to travel to their polling places on Monday and not be forced to travel on a Sunday sabbath.  America is great at preserving traditions that are completely meaningless and obsolete.  It's only the important ones, like THE CONSTITUTION, which we have completely shat on.

Mon, 11/19/2012 - 19:46 | 2997354 The Alarmist
The Alarmist's picture

Historically it occured much later in the year due to the harshness of the winters.  They moved it up to January to reflect modern transport, but they didn't want to move it up so much that it would screw up the most important of our holidays, like Black Friday.

Mon, 11/19/2012 - 12:48 | 2996066 SheepDog-One
SheepDog-One's picture

Sure they'll just 'fix it', they 'have to'....$16 trillion in debt will just be 'fixed' by adding $10 billion new debt daily while raising your taxes. Good luck with all that. OH and heres a prayer, for whatever thats worth, that Chinamart employees actually do go on strike for Black Friday.

Mon, 11/19/2012 - 13:06 | 2996134 A Lunatic
A Lunatic's picture

Here is one man's plan............


Geithner: Lift Debt Limit to Infinity...

Mon, 11/19/2012 - 13:07 | 2996139 BraveSirRobin
BraveSirRobin's picture

Sure am glad we have him looking after things.

Mon, 11/19/2012 - 13:22 | 2996180 Titus Flavius C...
Titus Flavius Caesar Vespasianus Augustus's picture

Just you wait - there's going to be a new Treasury Secretary, and he's going to, for sure, be at least 2 things:


1. Worse than Geithner;

2. Jewish.



Mon, 11/19/2012 - 13:36 | 2996222 BraveSirRobin
BraveSirRobin's picture

You are such a raving anti-semite.

To find solutions, you may want to look for problems beyond Jews. Seriously, you are being blinded by your bigotry.

Mon, 11/19/2012 - 13:54 | 2996272 Titus Flavius C...
Titus Flavius Caesar Vespasianus Augustus's picture

Why do I "hate Jews" because I note that it is virtually certain that the nominee will be Jewish?  Do you think this sort of thing fools people with half a brain?

No - but I do think pointing out obvious and statistically curious massive over-representation is always valid.

2% of the population runs the fed, fdic, cbo, office of budget and management,  national economic council, council of economic advisors, irs, sec - and has and will again run treasury.

That's pretty much most federal agencies having to do with money.


Maybe you're being blinded by trying so hard not to be a bigot.


I suspect if all these people had Italian last names, there'd be lots of discussion about the "Mafia"
running the show.   But substitute 'Jews' and all of a sudden, otherwise intelligent people think it's suddenly "hate."


What utter horseshit.  Do you actually believe it?

Mon, 11/19/2012 - 14:40 | 2996391 BraveSirRobin
BraveSirRobin's picture

I find it really difficult to believe that 2% of the US population, and by extension a much smaller segment of the toal world population, can conspire to control everything. I think the world is so large and so complex, no one is actually in control of much of anything, no matter what they think.

The problems we face run much deeper and broader than any scapegoatable segment.

I think your bigotry is drawing your eyes and mind away from the true sources of the problem and potential solutions.

Mon, 11/19/2012 - 15:15 | 2996487 MachoMan
MachoMan's picture

While I strongly suspect he's an antisemite, you still haven't actually addressed the observation regarding the religious persuasion/membership of those government offices.

Mon, 11/19/2012 - 15:55 | 2996675 BraveSirRobin
BraveSirRobin's picture

My response:

(1) Who cares

(2) See posts below. It is inconceivable that 2% of the population can conspire to control everything.

(3) Do certain ethnicities or groups congregate in certain fields and professions? No doubt, but this in not proof of evil intent or even control. It usually has more to do with networking and social support structures.

He sees Jewish names and gets upset. I look at what people do, not at their last names, skin color, religion, etc.

For example, I disapprove of Barak Obama, not because he is a Muslim (that’s a JOKE), but because he is incompetent and proffers bad policies, which is no joke.


Mon, 11/19/2012 - 16:27 | 2996764 catacl1sm
catacl1sm's picture

During the reign of the Persian Empire, Jews were on the payroll of the court for banking.

Mon, 11/19/2012 - 14:53 | 2996413 blunderdog
blunderdog's picture

    No - but I do think pointing out obvious and statistically curious massive over-representation is always valid.

Maybe Jews are statistically significantly more intelligent than most of the global population, and their natural talents make it easy for them to excel in the financial industries.  Just a thought, anyway.

Mon, 11/19/2012 - 15:18 | 2996500 Titus Flavius C...
Titus Flavius Caesar Vespasianus Augustus's picture

A fair discussion of 'why' this has come about would have to list that as a possible reason, sure.

The point is to be able to note it exists.


I understand why people's Pavlovian response is to soapbox about antisemitism, but I expressly refute that tactic as false and hyopcritical.  If nothing else is presupposes a motivation for asking the question which may often be there... but doesn't necessarily have to be there.


Put differently:  When people immediately try to stop a debate or discussion with a canned response, I tend to suspect there's something they don't want discussed, not that they're bona fide moral sheriffs.




Mon, 11/19/2012 - 16:28 | 2996768 catacl1sm
catacl1sm's picture

Paid shills always jump in on those conversations

Mon, 11/19/2012 - 15:24 | 2996531 BraveSirRobin
BraveSirRobin's picture

I have had jobs where we all sat around in cube farms, and no one new what the guy in the next cube was doing. Then we would have meetings to figure out what everyone was doing, and try to make a plan and coordinate our activities. Then we would return to our cubes and everything runs their separate ways again. These were purportedly large and successful organizations, and believe me when I say we were making plans to dominate and control things. If anything good happened, it was either via luck, or the transitory superhuman efforts of one or two guys (not Jewish as far as I could tell).

If Jews are so much better at controling everything, maybe we should all recognize it and just give it over to them, because the rest of us suck at it. 

But one thing I can assure you of, little Tim Geightner is not in control. I do not think anyone is, or can be. Where other people see conspiracy, I see chaos and confusion, and the results of billions of daily interactions, the invisible hand, you know.

Mon, 11/19/2012 - 15:29 | 2996559 blunderdog
blunderdog's picture

    If Jews are so much better at controling everything, maybe we should all recognize it and just give it over to them, because the rest of us suck at it.

That's what I'm getting at--it may well be that we have done or are doing exactly that.

I have no interest in being Secretary of the Treasury or head of the Fed, for damn sure.

Mon, 11/19/2012 - 13:46 | 2996250 BraveSirRobin
BraveSirRobin's picture

But I still love ya man. You can take that to the bank, but I don't think they will deposit love.

Mon, 11/19/2012 - 13:53 | 2996270 fuu
fuu's picture

After 13 days you already have 55 posts!

Grats on your latest sock puppet account!

Mon, 11/19/2012 - 14:23 | 2996339 Titus Flavius C...
Titus Flavius Caesar Vespasianus Augustus's picture

First and only, jackwad.   Truth is no defense, though, eh?


Shouldn't you be busy calling people who are reporting on Gaza civilian deaths "antisemites" right now?



Mon, 11/19/2012 - 14:37 | 2996378 fuu
fuu's picture

Where did I call you an antisemite? Damage control much?

I will stand up for your ability to post whatever the fuck you want to post, ask around. I think we should still have Trav, Max, Johnny, Spaulding, Mynhair, Robo, Slewie etc.

I just like to point out the noobs who are not noobs.

Mon, 11/19/2012 - 14:49 | 2996407 Contra_Man
Contra_Man's picture

...As an aside;

Is it "noob", or "nobe", "nob" ... or "knobe"?  I'll just keep using "Dickhead" instead.

Mon, 11/19/2012 - 15:14 | 2996483 Titus Flavius C...
Titus Flavius Caesar Vespasianus Augustus's picture

I didn't say you called me an antisemite - I implied that you're the sort of fellow who'd call someone an antisemite for pointing out that Israel kills civilians.


The sort of fellow who would read without comment if I lamented how our drone strikes are killing lots of innocent people, but who decides to weigh in talking about noobs or otherwise run interference if it pertains to Israel or Jews.


To dumb it down a bit further for you:  You're full of shit.


but if you like playing the role of comment section Stasi - have at it, dude.


Meanwhile I'll read about Gaza up until Israel bombs and kills the last reporters sending copy and images from inside that Jewish-made concentration camp.



Which makes me an "antisemite."


Oh well.



Mon, 11/19/2012 - 15:40 | 2996616 fuu
fuu's picture

That's me, rocking the comments like the Staatssicherheit, it's a good thing you got a big bark, cuz you ain't got no bite.

Grats on the 13 days again.

Mon, 11/19/2012 - 15:38 | 2996611 Cliff Claven Cheers
Cliff Claven Cheers's picture

I hear ya bro. The Tylers still have my Sock Puppet account shut down.  I was not trying to spread any mis info just having some fun antagonizing.

Mon, 11/19/2012 - 16:30 | 2996774 catacl1sm
catacl1sm's picture

Did slewie get banned?

Mon, 11/19/2012 - 17:32 | 2996947 fuu
fuu's picture


Mon, 11/19/2012 - 12:46 | 2996067 q99x2
q99x2's picture

Look the US politicians saw how well the bailout saga worked for European stock markets so they created a similar market ramping situation here.

Is Greece going to default?

Mon, 11/19/2012 - 12:49 | 2996077 SheepDog-One
SheepDog-One's picture

Sure, we're all bankrupt, but at least our fake stawks are high.

Mon, 11/19/2012 - 16:30 | 2996778 catacl1sm
catacl1sm's picture

Stawks are hawt.

Mon, 11/19/2012 - 12:49 | 2996075 Winston Churchill
Winston Churchill's picture

Circular firing squad with artillery.

Mon, 11/19/2012 - 12:58 | 2996112 BraveSirRobin
BraveSirRobin's picture

I wish the end result of this is that we would all get blasted.

I think a better analogy is a circular firing squad with flame throwers, because in the end, we are all going to get burned.

Mon, 11/19/2012 - 12:58 | 2996081 slaughterer
slaughterer's picture

The "Pelosi Pump" in AAPL worked pretty well.  AAPL is up 5 NFLXs today.   

With the "Topeka Pump" we should get a few more NFLXs before EOW.  

AAPL longs: Nancita got your back. 

Mon, 11/19/2012 - 13:09 | 2996129 BraveSirRobin
BraveSirRobin's picture

"The "Pelosi Pump""

OMG, the vizualization made me instantly spew chunks. Good thing I had a trash can next to me.

Mon, 11/19/2012 - 13:18 | 2996168 slaughterer
slaughterer's picture


Mon, 11/19/2012 - 12:50 | 2996082 Ancona
Ancona's picture

There is no "fix"' for the debt parabola.....none. The only medicine that can cure it is the same medicine that will kill our economy. More cutting and austerity is what we need, and lots of it at that. If we shut down all unnecessary government and kept the essential 10 percent that remains, rein in social programs and return our soldiers from the four corners of the earth, close all foreign bases and leave, we could maybe level out the curve. Anything else is simply more bullshit.

Mon, 11/19/2012 - 12:55 | 2996100 NotApplicable
NotApplicable's picture

"...shut down all unnecessary government..."

Good luck with that. Local governments are creating all sorts of new services in order to attract federal grant money in order to fill gaping budget holes.

Never mind the services are all total failures, as there's always some externality for them to blame, which they could fix, if only they had a little more money and legal power to compel others.

Mon, 11/19/2012 - 16:04 | 2996634 Cliff Claven Cheers
Cliff Claven Cheers's picture

I can't understand why most of our policy makers don't seriously consider mass debt forgiveness.  I think it will crash and we will have a bretton woods 3 or a shanghai 1.  Steve Keen has been discussing this topic for a long time.

Mon, 11/19/2012 - 12:54 | 2996089 SheepDog-One
SheepDog-One's picture

'An early plan requires 'going over the cliff'.

Hey no problem, we're excellent BASE jumpers and wingsuit flyers! Death of BASE Jumper Dwain Weston -- Slammed Full Speed Into a Bridge - YouTube

Mon, 11/19/2012 - 12:59 | 2996113 NotApplicable
NotApplicable's picture

1.5M views for something I'd never want to see, let alone choose to view.

Some times I feel like I'm the only person left on the planet with empathy.

Mon, 11/19/2012 - 13:05 | 2996133 Matt
Matt's picture

It serves as an example, to deter others from participating in such nonsense, and to attract the reckless thrillseekers so they voluntarily eliminate themselves from the gene pool. Better than having reckless maniacs running government, military, corporations.

Besides: Empathy is the capacity to recognize feelings that are being experienced by another sentient or semi-sentient (in fiction writing) being.

I don't think he is feeling much. Right before that, he was feeling the thrill of a lifetime.

Mon, 11/19/2012 - 13:21 | 2996174 slaughterer
slaughterer's picture

I think I saw that Base death in the 2008 series of "American Gladiators" already.   You sure YouTube is not running re-runs?

The only thing Americans empathize with is exchange-value.  

Mon, 11/19/2012 - 12:54 | 2996094 Dr Paul Krugman
Dr Paul Krugman's picture

The Democrats have control of the political cards now, and there is no way the G.O.P. will make waves after one of the greatest bungled elections in America's history. 

Here is the thing - we need to lift the debt ceiling.  End of story.  If we don't, what then?  We spiral into an out of control depression.

I understand that rising deficits are hard on the stomach (I am sure just as hard as for gold bugs when over the last year gold has dropped several hundred dollars) but when a country is mired in reccesion or depression it is not time to try to pay back the debts.  What is needed is growth now, so we can pay the debts back later.

Sothe G.O.P. and Democratic parties will come together and make the right choice, and with Obama having four more years he will make the right choices, and Dr Bernanke will also make the right choices (even though it would be better if he gave his targets so to give confidence in his programs).

Economics is a science, and it is exact and precise and luckily for us the majority of people understand this.

Mon, 11/19/2012 - 12:55 | 2996098 BraveSirRobin
BraveSirRobin's picture

You know, I am actually starting to believe you actually are Paul Krugman.

Mon, 11/19/2012 - 13:03 | 2996121 Bay of Pigs
Bay of Pigs's picture

He's a great troll. That takes a lot of practice.

BTW, gold (and silver) turned positive YOY today, so it's not down "several hundred dollars".

Mon, 11/19/2012 - 13:21 | 2996176 Winston Churchill
Winston Churchill's picture

MDB's brother ?

Mon, 11/19/2012 - 15:48 | 2996658 Cliff Claven Cheers
Cliff Claven Cheers's picture

Did you see Krugmans piece today.  He is calling for 91% tax rates on the rich.  I seriously think we will resort back to that.  The gov will have to confiscate some existing wealth as well if we ever get serious about paying off the national debt.

Mon, 11/19/2012 - 12:56 | 2996104 SheepDog-One
SheepDog-One's picture

Fuktard Krugman, even you should know golds value is only measured in dollar terms by morons.

Mon, 11/19/2012 - 13:08 | 2996143 Titus Flavius C...
Titus Flavius Caesar Vespasianus Augustus's picture

Herr Doktor:


You keep using that word - 'science'.  


I do not think it means what you think it means.



Mon, 11/19/2012 - 13:35 | 2996219 Titus Flavius C...
Titus Flavius Caesar Vespasianus Augustus's picture

Thee who hath me junkest - are sucka m.c.s.


Mon, 11/19/2012 - 14:25 | 2996350 Titus Flavius C...
Titus Flavius Caesar Vespasianus Augustus's picture

Economics isn't a science.   Never was, isn't now.  Actual scientists know this.  It may be part of the problem that phDs in economics do not.

Mon, 11/19/2012 - 13:16 | 2996165 SmallerGovNow2
SmallerGovNow2's picture

"Growth" is not a solution.  There is and will be no more "growth" in the US.  Stagnation is the best new normal we can hope for.  Quit you're insane Federal Spending and get them out of the social business.  Constitutional Government period.  Anything more is the same slippery slope we've been on for decades now...

Mon, 11/19/2012 - 15:19 | 2996506 Titus Flavius C...
Titus Flavius Caesar Vespasianus Augustus's picture

Growth just means increased debt.


We'll get that.

Mon, 11/19/2012 - 15:33 | 2996584 MiltonFriedmans...
MiltonFriedmansNightmare's picture

Why is it assumed that growth is unabashedly desireable. Does growth of a cancerous tumor benefit a patient? I equate the current US economy to a cancerous tumor.  Growth is the last thing we should be hoping for.

Mon, 11/19/2012 - 16:35 | 2996788 catacl1sm
catacl1sm's picture

We may have spurts of growth here and there, but nothing real or like what we had over the past 10,000 yrs. Maybe after the Great Culling we can get back to growth or maybe people will realize that a steady-state economy is the only way to go.

Mon, 11/19/2012 - 13:21 | 2996177 ebworthen
ebworthen's picture

Economics is statistical alchemy, but I appreciate hearing from the chief necromancer of Keynesian lead.

Mon, 11/19/2012 - 13:30 | 2996207 fuu
fuu's picture

Still cruising for that blow job eh white man?

Mon, 11/19/2012 - 13:40 | 2996211 falak pema
falak pema's picture

economy is not a science, no more than my cat is a dog.

Its organic and interactive and never repetitive as humans are mutants; they change their habits as their perception and taste changes; and it affects consumption and investment decisions. Only the state stays immuable in corruption and self fulfillment, alas, when it holds power too long! 

If you think that technology and mobility don't change the consumption and economic mixes you are mistaken and it changes how the future economic game plays out. Just look at the last two decades and you see how everybody got the dominant paradigm wrong; now uncontrolable. Where is the scientific model to predict/avoid this decay. It drowned in pseudo-scientific certitudes, like yours or Friedman's. (If you are your avatar).

Mon, 11/19/2012 - 13:46 | 2996252 bugs_
bugs_'s picture

Now that we have single party rule it makes sense to just get rid of the debt ceiling.  As the spiral of out of control raising it gives the impression of bunglers running the show.

Mon, 11/19/2012 - 13:47 | 2996254 resurger
resurger's picture



Mon, 11/19/2012 - 12:53 | 2996095 q99x2
q99x2's picture

These kind of technical situations (fiscal cliffs) are the way to ramp a market through fraud so the elite can destroy economies beneath the CNBC false reality.

It is a conspiracy.

Mon, 11/19/2012 - 12:55 | 2996097 Gamma735
Gamma735's picture

It is all political posturing.   Every politician knows that there is no way we can tax enough to pay for 120 trillion in unfunded liabilities.

Mon, 11/19/2012 - 12:55 | 2996101 BraveSirRobin
BraveSirRobin's picture

We could try to tax China.

Mon, 11/19/2012 - 14:10 | 2996308 falak pema
falak pema's picture

insist on yuan reval and unpeg to $; insist on eco tax; insist on stringent quality controls for holisitic supply chain quality assurance; insist on reciprocity in terms of trade barriers and investment impediments. 

Mon, 11/19/2012 - 12:56 | 2996103 ebworthen
ebworthen's picture

Middle Class = Pork Politicians' Pincushion

Mon, 11/19/2012 - 12:57 | 2996107 slaughterer
slaughterer's picture

Looks like ES 1400 reset all over again before Black Friday.  

SPXU/FAZ/TZA/VXX holders in a sea of pain.  

Mon, 11/19/2012 - 12:58 | 2996109 Zer0head
Zer0head's picture

If you've got a direct connection to the newwires the words "fiscal cliff" are very profitable I would think that Boner' & co people are making a killing as they craft their statements and feed them to the media whores

Mon, 11/19/2012 - 12:57 | 2996111 Bay of Pigs
Bay of Pigs's picture

"A smooth resolution requires some of the same public officials who created the cliff to cooperate to avoid it"

Yeah, SMOOTH being the operative word. You know, like a plane crashing into a mountain is a "smooth" landing.

Mon, 11/19/2012 - 12:59 | 2996115 vote_libertaria...
vote_libertarian_party's picture

Pu-leeeez.  They will extend and pretend like they always have.

No real cost cutting.  A little revenue raise.


Still $1.x trillion in deficits.


Any clarifications/threats from the rating agencies yet?  We are at year 5 of trillion + deficits.  About tme for them to put out a few warnings.

Mon, 11/19/2012 - 13:27 | 2996192 SheepDog-One
SheepDog-One's picture

Yea where are the big mouth ratings agencies now....last year they were all screaming all day every day that unless something REAL was done they'd have no choice but to cut ratings. Now suddenly they have nothing at all to say about it?

Mon, 11/19/2012 - 14:36 | 2996380 dcj98gst
dcj98gst's picture

They have all been threatened by the FEDS.  They will not start to squeak because then the tyranical gov. will smash them.

Mon, 11/19/2012 - 15:41 | 2996630 chubbar
chubbar's picture

Two years ago all you read or heard about was how Ill, Cal, NY and a few other states were on the precipice of BK. Many stories on how Ill hadn't paid their vendors and they were all going BK as well. Now, nothing. Not a fucking word about any of those issues in the press. Did they all just magically vanish? The budgets just got balanced and the billions in debt were paid off? The fucking FED has to be in there printing money hand over fist. No other way these problems were pushed this far into the future given the state of affairs two years ago.

Mon, 11/19/2012 - 13:02 | 2996122 Segestan
Segestan's picture

A Fiat system managed with socialist ideology is by default.... a Cliff. It's not If but when we fail.

Mon, 11/19/2012 - 13:12 | 2996155 Titus Flavius C...
Titus Flavius Caesar Vespasianus Augustus's picture

It's not just a cliff.

It's a train robbery.


Things are certain to go off the rails, but only after the Usual Suspects get their hands on the transferable loot.




Mon, 11/19/2012 - 13:29 | 2996201 SheepDog-One
SheepDog-One's picture

It looks OK on paper, but pretty hard to stuff all those 1's and 0's into a bag. The 'money' is out there....problem is it only exists on computer screens.

Mon, 11/19/2012 - 15:46 | 2996644 Peterus
Peterus's picture

TPTB would certainly prefer to have more of the same. They had both huge bounty and long stability.

Will they try running away with whatever loot there is to be grabbed, or will they make a stand? After all there is always something that can take the blame and with vigorous action limited remaining opponents can be speedily eliminated.

Mon, 11/19/2012 - 13:28 | 2996198 falak pema
falak pema's picture

where do u see a socialist ideology today? 

The world wealth distribution is : 1% own 60%; its never been so steep since two hundred years, since nascent capitalism. 

Socialism is egalitarian by definition; no Oligarchs, no feudal orders, no offshore wealth hideouts. 

Never have the corporates made so much profit! Socialist? 

Under the carpet lies the hole; made by who...???

Mon, 11/19/2012 - 14:06 | 2996297 blunderdog
blunderdog's picture

It's not a real word--it's just a placeholder for "Satan" or "communism" or "evil spirits."

Mon, 11/19/2012 - 14:24 | 2996342 Segestan
Segestan's picture

You're 1% is made up of the remaining capitalist and the rising class of socialist elites. The game continues until the savers either perish or are victorious. Next 100 years will be seen as a dark age.

Mon, 11/19/2012 - 16:38 | 2996783 falak pema
falak pema's picture

...remaining capitalists and rising socialists...; thats like oil and water, they don't mix!

WHY is there this transfer from the so called capitalist class to the so called socialist elites...?

Tell me that, and you'll know your affirmation is inexact. A capitalist never shares power with his enemy, unless its FALSE mirrors and he PLAYS at being socialist.

And you buy that!

Yes if the next 100 years are tuff its 'cos capitalism of virulent nature has killed its OWN ideology; just like the POpes of old killed their own church in total corruption and inquistorial repression. History rhymes! As humans don't change.

Its your own heroes who have betrayed their own creed and now they pretend to be socialists!

Mon, 11/19/2012 - 15:41 | 2996629 Peterus
Peterus's picture

Socialism is a system where production is centrally planned (yea it's supposed to be "by all of the people jointly" but the people are always represented by the State), or where central authority has significant control over it.

USA's govt spends 43% of the entire GDP of this country and exerts huge control over the 57% that is spent by individuals (what they can produce, what regulations, etc). How is this not socialism?

It is only natural that bonds are created by representantives that hold power of the gun and crony businessmen that have to conform to their will (no will of society, obviously) but can also supply them with bribes, create jobs where particular politicians wants it ect. Eventually it goes to terminal state where government and cronies are pretty much one organism with revolving doors for people and systematic corruption for money, while the public is robbed of more and more while it is also briebed by "free stuff" each elections (ofcourse value of the free stuff cannot exceed what is being taxed in the first place).

If the corporations grow by their symbiosis with the state it is socialism. Well, you could call it "national socialism" - fascism - too.

Mon, 11/19/2012 - 14:55 | 2996422 Contra_Man
Contra_Man's picture

TVIX or UVXY dollar averaging program buying time yet?

Mon, 11/19/2012 - 13:30 | 2996208 tooriskytoinvest
tooriskytoinvest's picture

The House Of Cards Started To Crumble: We Have Reached A Tipping Point And That Things Are Only Going To Get Worse From Here

Mon, 11/19/2012 - 13:48 | 2996260 realitybiter
realitybiter's picture






Mon, 11/19/2012 - 14:02 | 2996290 1eyedman
1eyedman's picture

hhmmm...5% of gdp contraction in about $700B in spending cuts....which would mean about 350B less in new Treasury issuance?   so a contraction in the supply of new debt, which is money, and a part of the 'flow'....sounds amazingly bullish for Treasuries and amazingly bearish for anything requiring a greater fool to purchase....

Mon, 11/19/2012 - 15:29 | 2996556 Peterus
Peterus's picture

I think it's only 1/3 or 1/4 spending cuts and the rest in tax raises.

Mon, 11/19/2012 - 14:07 | 2996299 Cold Grub
Cold Grub's picture

  Fiscal Cliff ,   Green Shoots , on a go forward basis ......................You're driving me fucking crazy  !!!!!!!!!!

Mon, 11/19/2012 - 14:18 | 2996331 stiler
stiler's picture

you forgot the last "P" of the fiscal cliff, after Wily E. Coyote goes over the edge and that's *Poof*

Mon, 11/19/2012 - 14:22 | 2996340 monopoly
monopoly's picture

And the first step in cutting spending. Congress! They should take a 25% pay cut since most of them are multi millionaires (as Harry Reid says, "I made good investments)", a 50% cut in their million dollar expense accounts, pay into health care and at 65, medicare, just like the rest of us. And we cannot afford their retirement plan, so a 401K with their contributions only and finally, a cut in all retirement monies currently paid out by 15%. That would advise us that Congress truly has the people and the country in mind and Cares about US.

I know, I know, you all want to know what I have been inhaling. lol


Mon, 11/19/2012 - 14:58 | 2996430 blunderdog
blunderdog's picture

Congressmen are totally overpaid.  They shouldn't "earn" more than double the median wage (or thereabouts), and should receive the same healthcare options that the citizenry is so privileged to choose from.

They spend most of their time on someone else's dime anyway, so even at "only" $54,000 a year, they'd be living in far better style than most Americans can expect to achieve.

Mon, 11/19/2012 - 15:46 | 2996648 JosephConrad
JosephConrad's picture

Until such men as Soros, Paulson, Giethner, Bernanke, Summers, Friedman, Blankfein, Rubin, Prince, Greenspan, Corzine and Dimon are tried for FRAUD, CONSPIRACY, RICO VIOLATIONS, PERJURY, THEFT & INCOME TAX EVASION (to hide their Theft & Fraud), this nation will teeter on the brink of the Greek & Spanish citizens' response to the LOSE OF LIBERTY, the eviseration of JUSTICE and the THIEVES RUNNING FREE!

The biggest scam in the history of Finance & Economics is the FED & THE INCOME TAX both passed by WARBURG-BOUGHT WEALTH in 1912-1913. Wall Street Bankers are STILL ALIVE because AMERICANS are COWARDS & FOOLS!


Mon, 11/19/2012 - 16:00 | 2996685 Cliff Claven Cheers
Cliff Claven Cheers's picture

Most Americans could not even begin to understand what you just said.  They would not recognize any of the names above.

Mon, 11/19/2012 - 17:27 | 2996935 monad
monad's picture



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