The Fiscal Cliff Isn't Our Only Problem
Posted at 11 a.m. on Nov. 16, 2012
While all of the oxygen in Washington has been sucked up by the debate surrounding the “fiscal cliff,” Comstock Partners warns that there are many other issues that are contributing to a jittery market and sluggish global economy.
“Most importantly, the U.S. economy was a lot weaker than the consensus believes before Hurricane Sandy became a factor. In addition Fed policy is becoming increasingly ineffectual, earnings forecasts are coming down, Europe is officially in recession and China, as well as the other BRIC nations, is slowing down.”
“Although nobody knows the outcome of the fiscal cliff situation, it is likely to be settled, if not before year-end, then in the first part of 2013. However, even if this happens, the solution will probably entail some combination of lower government spending and increased revenues—-in other words, a tightening of fiscal policy.”