Traders Cooperative

[royg1927]

smartone,

Impending fiscal drag for 2012 remains intact. The deal does nothing to extend the various stimulus measure which will expire next year: we continue to believe federal fiscal policy will subtract around 1.5%-points from GDP growth in 2012.

The last two lines are what you pasted into your post.

Now that I look at the entire sentences, I'm not sure just what they mean. Does the whole thing mean that there will be no new effect from the just passed law and a 1.5% haircut was already baked in?

How do you interpret it?

Whichever, if "federal fiscal policy will subtract around 1.5%points from GDP growth in 2012", that's a severe result that I don't think I've heard bandied about by the TV talking heads or politicians of either stripe. I've thought that the administration and lots of stock market voices have been expecting the recovery to continue, although not as rapid as wished. Right now I guess we're hanging around upper 1%s or mid 2%s. Is that anywhere close to what you hear? Now where JPM says "subtract 1.5% from GDP growth in 2012", does that imply 1.5% down from whatevwer the present number is? Essentially down to no growth? Recession situation? Shazam!!!

What do you think?