Warning! Now Approaching Death Drop
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Remember fears about EU contagion? And questions over monetary policy in the U.S.? And let’s not forget presidential election drama. It sure has been a heck of a year when it comes to finding reasons to panic, but it isn't over yet. There is still one quarter remaining, and it looks to be a doozy.
Today, Moody's Analytics summed things up as follows: The Fiscal Countdown Begins.
If you haven't done so already, now would be a good time to cue up the soundtrack from Friday the 13th and let out an ear splitting scream that is sure to create panic around the office or, better yet, within your own family. Surely it is high time sirens rang out and, for the love of humanity, why hasn't someone activated the emergency alert system!
Hyperbole aside, if the Obama administration and House Republicans cannot agree on fiscal policy, the economy will be in recession by the spring of 2013, thinks Moody's Chief Economist Mark Zandi. He said going over the fiscal cliff or breaking the debt ceiling would have a widespread impact on the economy, and as you would expect it won't be the good kind of impact.
Investors have taken notice, sending the stock market lower by nearly 3 percent in 5 session.
"The focus is now shifting to the fiscal cliff," said Deutsche Banks' Francis Yared. He is recommending investor continue to hedge risks associated with negotiations, as questions remain how quickly a compromise can be reached.
On a positive note, if a deal is reached it could put an end to many headwinds faced by equity investors, at least from a macro standpoint.
"Overall, a successful resolution of the fiscal cliff is the last piece of the puzzle necessary to support our constructive strategic view for risky assets," said Yared.
Policy maker have don't much time to act. As Moody's put it, the countdown has indeed begun, and the truth is there really is no telling when a deal will be reached. On a bright note, many analysts are optimistic.
"Given the suffering that would occur if policymakers don't act, therefore, the most plausible outcome is that they will," said Zandi.
Investors are hoping Zandi is right. But just in case negotiations fail, it might be smart to keep your vocals warmed up to avoid injury associated with the resulting scream.
Today, Moody's Analytics summed things up as follows: The Fiscal Countdown Begins.
If you haven't done so already, now would be a good time to cue up the soundtrack from Friday the 13th and let out an ear splitting scream that is sure to create panic around the office or, better yet, within your own family. Surely it is high time sirens rang out and, for the love of humanity, why hasn't someone activated the emergency alert system!
Hyperbole aside, if the Obama administration and House Republicans cannot agree on fiscal policy, the economy will be in recession by the spring of 2013, thinks Moody's Chief Economist Mark Zandi. He said going over the fiscal cliff or breaking the debt ceiling would have a widespread impact on the economy, and as you would expect it won't be the good kind of impact.
Investors have taken notice, sending the stock market lower by nearly 3 percent in 5 session.
"The focus is now shifting to the fiscal cliff," said Deutsche Banks' Francis Yared. He is recommending investor continue to hedge risks associated with negotiations, as questions remain how quickly a compromise can be reached.
On a positive note, if a deal is reached it could put an end to many headwinds faced by equity investors, at least from a macro standpoint.
"Overall, a successful resolution of the fiscal cliff is the last piece of the puzzle necessary to support our constructive strategic view for risky assets," said Yared.
Policy maker have don't much time to act. As Moody's put it, the countdown has indeed begun, and the truth is there really is no telling when a deal will be reached. On a bright note, many analysts are optimistic.
"Given the suffering that would occur if policymakers don't act, therefore, the most plausible outcome is that they will," said Zandi.
Investors are hoping Zandi is right. But just in case negotiations fail, it might be smart to keep your vocals warmed up to avoid injury associated with the resulting scream.
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