Friday, December 28, 2012

Day 19 Santa Claus Rally - Oh No Fiscal Cliff Saved In The Nick Of Time ???

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 Day 19 Santa Claus Rally - Oh No Fiscal Cliff Saved In The Nick Of Time ??? Well the markets dropped a little today. Check out the video. This is the daily report for trading the S&P 500 Emini Futures on the 28th Dec 2012 .
Well the HFTs were active today when Obama had the Fiscal Cliff meeting but it still didn't drop as much as I thought it would. If there is going to be a soloution to this crisis caused by people then high frequency traders have already bought the market cheap. If you want real time trading signals for tracking hfts go to there is a very generous free trial.

Fiscal Cliff Definition courtesy of Wikipedia Creative Commons Licence
In the United States, the "fiscal cliff" refers to the economic effects that could result from tax increases, spending cuts and a corresponding reduction in the US budget deficit beginning in 2013 if existing laws remain unchanged. The deficit—the difference between what the government takes in and what it spends—is projected to be reduced by roughly half in 2013. The Congressional Budget Office estimates that this sharp decrease in the deficit (the fiscal cliff) will likely lead to a mild recession in early 2013.

The laws leading to the fiscal cliff include the expiration of the 2010 Tax Relief Act and planned spending cuts under the Budget Control Act of 2011. Nearly all proposals to avoid the fiscal cliff involve extending certain parts of the Bush tax cuts or changing the 2011 Budget Control Act or both, thus making the deficit larger by reducing taxes or increasing spending. Because of the short-term adverse impact on the economy, the fiscal cliff has stirred intense commentary both inside and outside of Congress and has led to calls to extend some or all of the tax cuts, and to replace the spending reductions with more targeted cutbacks. The protracted negotiations over this have also generated heightened policy uncertainty over the eventual tax and spending landscape in the US.

The Budget Control Act was a compromise intended to resolve a dispute concerning the public debt ceiling. Some major programs, like Social Security, Medicaid, federal pay (including military pay and pensions), and veterans' benefits, are exempted from the spending cuts.[note 1] Spending for defense, federal agencies and cabinet departments would be reduced through broad, shallow cuts referred to as budget sequestration.

The United States public debt would continue to grow even if the fiscal cliff occurs. However, over the next ten years, the smaller deficit will lower projected increases in the debt by as much as $7.1 trillion or about 70%, resulting in a considerably lower ratio of debt to the size of the economy. For the first year (from fiscal year 2012 to 2013), federal tax revenues are projected to increase by 19.63%, while spending outlays are expected to decline by 0.25%.[1](table-1.6)[note 2] These changes would raise 2013 tax revenue to 18.4% GDP, above its historical average of 18.0% GDP, while reducing spending to approximately 22.4% GDP, still above the 21.0% GDP historical spending average.[2]. 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