However, it only took about 12 hours since my last post for many of the guesses that I put forth to start hitting the wires. Here's the my summary - I believe Wall St. has told the White House and Congress that all of this "fiscal cliff" talk is freaking people out and that is why the market has tumbled for a week. This is not the case, in my opinion, but then again why let facts get in the way of a good story.
So, instead of working hard to get a deal struck in the next few weeks, the White House and Congress are in talks to take the easier path and (oh, goodness we'll get tired of hearing this phrase in about 48 hours) "kick the can down the road".
The markets have reacted positively to this rumor so far (remember the markets want the status quo - easy money and no spending cuts or tax hikes - good for their immediate bonus outlook, but bad for the future of the US).
Here's what the WSJ is reporting....
"White House officials are in advanced internal discussions about a plan to
replace the sweeping spending cuts set to begin in January with a smaller,
separate package of targeted spending cuts and tax increases."
By postponing the sequester cuts, Washington would essentially push
off a number of large deficit-reduction decisions into mid-2013. This would
include a long-term plan to replace the remaining sequester cuts, a plan to
overhaul the tax code, and separate decisions about how to restructure Medicare
The plan that has been discussed by White House officials is similar in many
ways to what lawmakers have discussed. It would terminate the spending cuts for
a period of six to 12 months, and replace the cuts with more targeted reductions
and revenue increases. House Republicans have proposed a similar model, though
they have called for terminating the cuts to defense programs only and haven't
accepted a deal to include tax increases as part of any package."
Remember that this will be sold to you as some sort of grand compromise when all it really is is a deferral of the deadline to make some hard choices.