The Fiscal Cliff Isn't Our Only Problem
Posted at 12:15 p.m. on Nov. 21, 2012
The non-stop focus on the “fiscal cliff” is frustrating Barry Ritholtz, who lists five other issues that are driving the markets.
“1) Earnings are the weakest in 3 years 2) Portfolios have been poorly positioned for higher Capital Gains and Dividend taxes 3) Europe crisis unresolved, and getting worse 4) The 17% rally in first 3 quarters had markets ahead of themselves 5) The decreasing impact of Federal Reserve QE.”
“The fiscal cliff amounts to about $600 billion in friction spread out over the course of 12 months. Fair estimates are that it will cost about 0.50% off of GDP, now estimated to be about 2.0% for the calendar year 2013. I submit that these other factors weigh at least as much, if not more, in the markets current action.”