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Day 18 Santa Claus Rally and Fiscal Cliff looming. This is the daily report for trading the S&P 500 Emini Futures on the 27th December 2012 . If you want to follow the bots and the footprints they leave get a free trial at http://sceeto.com/user/register/ Well we are nearly there what will happen only the next few days will tell. Can't imagine that anyone could be so silly as to let this so called fiscal cliff happen. If it doesn't you can only imagine how much high frequency trading buy surges will happen. track them with sceeto.
courtesy of wikipedia creative commons licence
The term fiscal cliff has been used in the past to refer to various fiscal issues.[3] The term started being used in the current context near the original expiration of the Bush tax cuts in 2010.[3][4] In 2011, the term started to be used to refer to the deficit reductions that would occur in 2013 under current law.[3][5]
In late February 2012, Ben Bernanke, chairman of the U.S. Federal Reserve, popularized the term "fiscal cliff" for the impending 2012 fiscal crisis.[6] Before the House Financial Services Committee he described that "a massive fiscal cliff of large spending cuts and tax increases" would take place on January 1, 2013.[3][7][8]
Some analysts have argued that fiscal slope or fiscal hill would be more appropriate terminology because while the cumulative economic effect over all of 2013 would be substantial, it would not be felt immediately but rather gradually as the weeks and months went by.[3][6][9][10]
Legislative history
During a lame duck session in December 2010, Congress passed the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010. The act extended the Bush tax cuts for an additional two years and "patched" the exemptions to the Alternative Minimum Tax (AMT) for tax year 2011. This act also authorized a one-year reduction in the Social Security (FICA) employee payroll tax. This was extended for an additional year by the Middle Class Tax Relief and Job Creation Act of 2012, which also extended federal unemployment benefits and the freeze on Medicare physician payments.[11]
On August 2, 2011, Congress passed the Budget Control Act of 2011 as part of an agreement to resolve the debt-ceiling crisis. The Act provided for a Joint Select Committee on Deficit Reduction (the "super committee") to produce legislation by late November that would decrease the deficit by $1.2 trillion over ten years. When the super committee failed to act,[12] another part of the BCA went into effect. This directed automatic across-the-board cuts (known as "sequestrations") split evenly between defense and domestic spending, beginning on January 2, 2013. Also, the Affordable Care Act imposed new taxes on families making more than $250,000 a year ($200,000 for individuals) starting at the same time.[13]
At the end of 2011, the patch to the AMT exemptions expired. Technically, the AMT thresholds immediately reverted to their 2000 tax year levels, a drop of 26% for single people and 40% for married couples. Anyone over these reduced thresholds at the end of 2012 would be subject to the AMT. Therefore, more taxpayers would pay more unless some legislation was passed (as was done in 2007) that affects the exemptions retroactively.[11]
