t******g
发帖数: 462 | 1 又长又臭，中统选举前后，巴朗错的厉害，估计压错宝了
大概说，no easy compromise,不过股市是跌是涨不知道，option好像便宜，可以买点
做保险
The stock market is bracing for a protracted fight over the fiscal cliff.
Apple dives, bond yields dip.
It looks like it's going to be a real cliff-dweller.
As long-time (and thus long-suffering) New York Mets fans may recall, the
Amazin's second manager, one Wes Westrum, outdid their illustrious original
skipper -- The Old Perfesser, Casey Stengel -- with his own malapropism to
describe long, drawn-out contests whose outcome was undecided until the very
end. Those lovable losers of the early-to-mid '60s more often than not came
out on the short end of those cliff-dwellers, just as the current crew of
overpaid underachievers consistently has for the past few years.
Financial markets, indeed the entire nation and the rest of the world, are
facing a real cliff-dweller, cliff-hanger, or whatever you care to call it
ahead of the year-end deadline when sharp tax increases and draconian
spending reductions will hit the economy in the absence of congressional
action and the president's signature. But with President Obama's re-election
, plus the unchanged control of Congress, with Democrats increasing their
majority in the Senate and Republicans holding onto the House of
Representatives, the people's representatives can get back to doing the
people's work to avoid the so-called fiscal cliff. So catastrophic would be
a failure to do so that the lack of an agreement by midnight New Year's Eve
simply is unthinkable, according to the conventional wisdom.
So much so, in fact, that the folks on Bubblevision have inaugurated a
campaign they've dubbed Rise Above, which purportedly means that Washington
should somehow rise above partisan politics to reach some kind of deal on
taxes and spending to avoid plunging over the fiscal cliff. One need not be
too cynical to realize that what they really want to rise above is the 14,
000 level on the Dow Jones Industrial Average -- and to bring their ratings
back to where they were when the Dow peaked in October 2007.
The stock market seemed to brace itself for a fight over the fiscal cliff by
plunging more than 3% Wednesday and Thursday, in the wake of the election
results, which, on the basis of history, should have come as no surprise.
Rising equity prices ahead of Election Day typically favor the incumbent, as
they reflect investors' expectations of better times ahead. Indeed, the
markets' predictions were far better than those of many pollsters and the
pundits. While it's not a flawless indicator, odds on Intrade.com, the
online site where traders can buy contracts on the outcome of future events,
showed Obama remaining around a two-to-one favorite -- even after his
lackluster performance in the first debate with GOP challenger Mitt Romney.
Moreover, rising consumer sentiment has augured well for incumbents; the
Thomson Reuters/University of Michigan gauge was on the upswing even before
the early-November reading came in at 84.9, well above the 83.0 consensus
forecast from Dow Jones, in Friday's release. But whether that level of
confidence is maintained as the cliff's edge is approached at year end is
another matter. And despite the incontrovertible fact that going over it is
entirely avoidable and would be hugely destructive, that doesn't mean it won
't happen -- even with the chirpy exhortations to "rise above" politics.
PRESIDENT OBAMA AND HOUSE SPEAKER John Boehner both made apparently
conciliatory comments, but fundamental differences remain. In his first post
-campaign statement, the president said Friday that he wouldn't accept any
deal that didn't involve higher taxes on the wealthiest Americans while
favoring extension of the Bush-era tax cuts for those not in the upper crust
. Boehner left open the prospect of higher tax revenue, but not higher
marginal tax rates, which, he argued, would hit small business hard and
retard growth.
On the surface, there would be room for compromise. Elimination or capping
of deductions could yield more revenue without hiking tax rates -- a seeming
distinction without difference, but not in the effects on economic
incentives. Boosting marginal rates drives a wedge between what one makes
and what one keeps, which makes one less likely to work, save, and invest.
Reducing or capping deductions for things such as mortgage interest or state
and local taxes would reduce the federal subsidy to live in a nice house in
a high-tax state (for somebody like me, for instance).
But that doesn't mean there will be compromise. In his Friday New York Times
op-ed column, Paul Krugman argued against Obama making a deal. "Republicans
are trying, for the third time since he took office, to use economic
blackmail to achieve a goal they lack the votes to achieve through the
normal legislative process," Krugman wrote. What's the answer? "Just say no,
and go over the cliff if necessary," added the Nobel laureate, who is
highly influential among Democrats. Tea Party types, too, may be no more
interested in finding a solution than in extending the ideological warfare
past the elections.
Even if pragmatic grownups -- and the president and the speaker fall into
that category -- do prevail and bring about a compromise to avoid the fiscal
cliff, the actions needed to start reducing the unsustainable budget
deficit wouldn't be painless.
Nancy Lazar, who along with Ed Hyman heads up International Strategy &
Investment, writes that a deal next month for a one-year deferral of a big
chunk of the cliff would still result in a $162 billion tax hike in 2013.
Moreover, since it would hit Jan. 2, the brunt of it would be felt in the
first quarter, during which ISI estimates that real (that is, inflation-
adjusted) disposable personal income would plunge at a 3.8% annual rate.
Without a deal, ISI estimates, heading over the cliff would slash real
disposable income at a 10% annual rate in the first quarter; consumer
spending would plummet at a 5% rate and plunge the economy back into
recession.
The fiscal cliff's tax hikes and spending cuts were designed to force the
executive and legislative branches to come to grips with the unsustainable
budget deficit. "Americans can be counted on to do the right thing -- after
they have exhausted all other possibilities," Winston Churchill is quoted as
saying. Washington demonstrated its talent in that regard in the debt-
ceiling fiasco of the summer of 2011, which led to both the current
conundrum and the downgrade of its former triple-A credit rating by Standard
& Poor's -- and a 17% plunge in the S&P 500. Similarly, stocks plummeted
nearly 800 points in late September 2008 when the House initially rejected
the TARP bailout bill.
It may take more days like Wednesday's 2.4% bloodletting in the stock market
to avoid the fiscal cliff. Rather than being driven by politicians rising
above partisanship, it is more likely that action in Washington will come
only if markets sink further. In the meantime, we have to live as cliff-
dwellers.
THE DOW INDUSTRIALS SHED MORE than 2% last week, their biggest percentage
drop since early June. Since its 52-week peak on Oct. 5, the Dow is off
about 6%. Still, it's up 5% for 2012, not bad but nothing to get excited
about given the gut-wrenching swings investors have had to deal with.
That's far less than the swings in the world's biggest, most popular, and
most intensely followed stock, Apple (ticker: AAPL), which has had its own
private bear market. From the $700 level in September, Apple has fallen
under $550, with some $150 billion in market capitalization evaporating
before the fan boys' eyes. Seabreeze Partners' Doug Kass, who sold the high
at $700, wrote Friday that he was buying after the slide, which put the
stock at just 11 times next year's earnings. But tax-conscious investors may
have been cashing in gains ahead of a likely rise in capital-gains levies
from the current, appealingly low 15% top rate to 20% or higher without some
fiscal-cliff fix (plus the 3.8% Medicare tax on investments for high-income
individuals).
The recent dip in stocks has been accompanied by a renewed decline in
Treasury yields, which had backed up amid signs of stronger risk assets and
better economic data. But the 10-year yield fell back to around 1.60% from 1
.80% last month as equities traded lower. Tuesday's election results also
mean no change in Federal Reserve policy anytime soon. Even if Ben Bernanke
leaves as central-bank chairman when his term is up in January 2014, as he
is rumored to want to do, Obama is likely to nominate somebody who is
similarly inclined toward easy money.
At such puny yields, Treasury securities aren't attractive for income but
mainly as hedges against risk assets, which will be vulnerable as the fiscal
cliff approaches. And Treasuries are richly priced already.
What's cheap are options because volatility is low from having been tamped
down by central bankers around the globe, who have declared their intention
to do whatever is needed to prevent crises. That has put the CBOE's
volatility index for options on the S&P 500, aka the VIX (for its ticker),
at relatively subdued levels. The so-called fear gauge ended Friday at 18.61
, and VIX futures are indicating continued quiescent levels below 20 for
November and December, our options maven, Steve Sears, reports. All of which
suggests insurance against a market storm is selling rather cheaply; you
might want to buy some. |
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