STOCK MARKET WATCH -- Monday, 29 October 2012

[Demeter]

27. What Fiscal Cliff? Obama Planning Another "Tax Cut" Fiscal Stimulus

BUT WILL HE GET TO PUT IT INTO EFFECT?

http://www.zerohedge.com/news/2012-10-28/what-fiscal-cliff-obama-planning-another-tax-cut-fiscal-stimulus

Since it would appear that QEternity has ostensibly failed in its main goal of pushing the stock market higher (and mortgage rates lower), the White House seems to be scrambling. Obama administration officials have concluded that the economy, while improved (apparently), is still fragile enough to warrant another bout of stimulus. The same old kitchen sink is being thrown at the problem as they are now resorting to the same fiscal stimulus that has also failed time and time again (as we noted here). As WaPo [SO]strawmans[/SO] reports the White House is discussing the idea of a tax cut that it believes will lift American's take-home pay and boost a still-struggling economy (citing people familiar with the administration's thinking).



Once again we expect 'economists' to come up with counter-factual forecasts.



We can't help but get the terrible feeling of deja vu here (paging Christine Romer). Electioneering? for sure; Will we hear "We have a plan"; of course; but in reality for this to make any sense (in the debt-deleveraging balance sheet recession that we find ourselves in), we must wipe from our minds for one moment the looming fiscal cliff (that our politicians seem stuck with irreconcilable differences), the debt-ceiling/deficit/AAA downgrade debate, and the utter failure of linear-Keynesian model forecasts for stimulus effects in the past.

MORE FUN AND GAMES AT LINK, INCLUDING THIS