There's been a lot of talk about the coming fiscal cliff, and Edmundo Braverman and TheKing have both done a great job in explaining what is going on and some of the current options available to law makers. Luckily for us at WSO, they've taken the time to explain what the fiscal cliff is comprised of, rather than what I tend to see in the news media, which is the likelihood of going over the fiscal cliff.
The opinions vary considerably on the question of the probability of going over the fiscal cliff. On Tuesday, Reuters reported that Washington insiders saw a 50-50 chance of going over the cliff a large increase from an AEI report on December 10th that put the probability at roughly 25%. And, of course, because this is such an exact science, Stan Collender put the probability at 75% right in between on the 14th of December. Since I hate being left out of the fun of making predictions, I've decided to thoroughly research, meticulously calculate, and triple check all my assumptions in order to give the WSO readership my "expert" opinion. Without further ado, the probability that we will go over the fiscal cliff is...
I did quite a bit of detailed analysis to come to this conclusion, and one of my major findings was politicians are ridiculously narcissistic. So, it doesn't really matter if the body politic will likely blame one or the other for going over the cliff, the mere perception that the citizens might blame Republicans and/or Democrats is enough to propel the two sides to a deal. What that deal will eventually be (or if it's even preferable to going over the cliff) is anyone's guess (and far more interesting), but will we actually go over the cliff? Nope, not a chance.
What do you monkeys think? What's the probability that we go over the cliff? Or, better question, when we don't go over the cliff, what do you think the resulting deal will look like?
tl;dr - It's really all in the title with some nonsense analysis thrown in. And sorry about the Taylor Swift reference, that awful song has been stuck in my head all week.