Phil Grossfield's Blog


The Fiscal Cliff Explained

cremebruleeMy Schedule…and A Little Extra:   The “Fiscal Cliff” refers to tax increases and spending cuts to sharply reduce the deficit in 2013.  Without getting into the details, which I would have a difficult time explaining anyway, the new tax and spending laws, if not adjusted before the end of the year, will increase unemployment and ultimately put America into a major recession in 2013 – we’d be jumping off the “cliff.”  In short, there have been several compromises to tax increases and spending over the last several administrations…these compromises are set to expire.  We have to do something or the deficit will continue to rise at a daunting pace.  But our economy, and arguably the world economy, is as fragile as the topping on a delicate crème brulee…if we increase taxes and reduce spending too quickly and too sharply, most predict a very unfavorable outcome.  And that is why there are heated debates about we need to do and to what extent.  Please feel free to reach out to me…I’d love to hear your thoughts….

My Market Watch:  Bonds are holding steady currently down -6bps since rates came out.  All the focus is on the fiscal cliff discussions.  From what I’m reading, a successful fiscal cliff resolution would bode well for the stock market and is likely to worsen rates.  I would have some serious conversations with your clients now to explain the situation.  Moreover, you need to put your skill set to use by getting them to understand that locking in is protection guaranteed but floating is a dangerous game these days.  I trust you know how to do this expertly.    My Disclaimer

My Schedule: Available all day until 4:00p and then done.

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