Commentaries

November Market Commentary

By: admin / November 26th, 2012

Although the re-election of President Obama was a decisive victory for his supporters, the celebration may prove short-lived as both camps in Washington faced the complex challenges of dealing with tax reform, deficit reduction and revenue enhancements. All wrapped up in time for the holidays, the “fiscal cliff” and its impact on taxpayers and the economy appeared to only increase anxiety across all income levels.

In a unique approach to quantifying this anxiety, two professors and a Ph.D. candidate from Stanford University and the Booth School of Business at the University of Chicago, launched a website at “policyuncertainity.com.” Their research and methodology is explained in detail on the website and we encourage our readers to visit the site as a useful component in trying to decipher exactly what is behind all the noise surrounding the “fiscal cliff” and what the debate can mean for all. To quote the opening paragraph under the “results” section of the website: “As measured by our index, we find that current levels of economic policy uncertainty are at extremely elevated levels compared to recent history… Since 2008, economic policy uncertainty has averaged about twice the level of the previous 23 years.”  So, while the election proved decisive in one sense, we respectfully submit that the victory might resemble the adage of the dog chasing a car. What does the dog do when he catches it? The President and his Administration now own the economy. 

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