Options traders are presently getting their stakes in place in the United States stock market fearing that the nation’s economy might tumble down the fiscal cliff, as the upcoming 2012 Presidential voting is so nearby, and the outcome is pretty much uncertain.
In recent weeks, the stock market in the country has been comparatively tranquil in spite of huge ambiguity over the forthcoming November 6th 2012 U.S Presidential elections, and there are grave concerns that the economy could be pitched into a new recession due to considerable excise duty increase, and government spending reductions – the alleged “fiscal cliff” – because of hit near the beginning next fiscal year, unless Congress Party settles to annul or holdup them.
Option-Traders Going into Defensive Mood
Some of the Option-Traders operating in the nation have already started to build up defensive positions on all theses possible huge threats. In an atmosphere of subdued instability, the expense of accomplishing it is relatively less, making it extremely beneficial to pull out indemnity in case Washington stays deadlocked for a stretched out period after the voting and the stock markets are churned.
As recently reported by InTrade, present polls clearly reveal that the President Obama is most certain to be re-elected this time once again… But, anticipations are Republican Party should uphold power of in any case the legislative body, and probably acquire slight influence of the Ruling body as well. Mitt Romney’s, Presidential contestant from the Republican Party, resilient performance in the 1st of 3 debates against the preset President most recently has enhanced his chances; however, it has not been enough to set him well ahead of Obama in the ballot.
The greatest surprise would be occurrence of a legal conflict over who won the elections, clearly reflecting the fight that happened in the past between Al Gore and George W. Bush back in 2000. That could probably further damage the odds of negotiation in Washington, and frighten credit ratings groups, and shareholders operating in U.S. In the 2000 Presidential combat, Al Gore surfaced as the victor of the famous vote, but the outcomes in Florida constituency were challenged.
Legal disputes were unstoppable for about a month just before George W. Bush was announced as the victor in Florida by nearly 537 ballots, offering him a considerable margin in the U.S. Presidency and the Electoral College. It has been said that looking at the recent financial troubles, and fairly weak economy, the influence of any squabbled election this time, would probably be substantially greater.