It’s not just manufacturers who are apprehensive about the “fiscal cliff” looming at the at the end of the year. According to an October 16th news story in The Street, the financial services sector is scared as well. According to a survey of fund managers by the Bank of America Merrill Lynch taken earlier this month, 72 percent of respondent said that the impact of the pending expiration of tax rate cuts and new spending cuts has not be “substantially priced into global equities and macroeconomic data,” i.e., people don’t believe it’s going to happen.
Moreover, an increased number of fund managers (42 Percent, up from 35 percent in September and 26 percent in August) said that the impending fiscal cliff is the no. 1 tail risk for the market. Washington—it’s up to you. We have a fiscal crisis heading our way and it is imperative that Washington act as soon as possible to derail the $500 billion hit to our already weak economy set for January 1.