By Charles and guest's WASHINGTON (AP) - the United States congress and the White House can significant softening "fiscal cliff", even if they fail to reach a compromise on December 31, the initial effect. However, they can't control a thing, is a financial market reaction, this may be may be a panic selling, caused the global economic downturn, the stock market's unpredictability is perhaps the biggest wild card of political showdown fiscal cliff. President Obama's re-election gave him a strong hand, because more and more republicans will admit that. Some Democrats want December 31 deadline pass, a broad-based tax increase pressure, because rash republicans more in the update of deficit reduction negotiations. The chief worry about Obama's supporters, however, Wall Street will be so dislike or disappointed, the stock market will crash former Congressman can prove their new found that will reduce the fiscal cliff of the most severe measures, including deep, the board spending cuts, defense chief Leon · palmer inside tower said, can be significant damage to the country's military posture. Some republicans think, fear, good temper of the President to bargain. Since the election, Obama and republican house speaker John boehner held on Sunday the first meeting between them in just 2 of the spokesperson, underscoring the line after the communication remains open. The formulation of the so-called cliff the main tax increases and spending cuts is actually a gentle slope, because the policy change with the passage of time, will gradually cancel. Washington insiders said, the congress and the White House in January or February, move quickly undo many, but not all, tax increases and spending cuts. However, the financial markets, deal with emotions and research, the reason and commitment. If the New Year headlines scream "talks collapse," an emotional selling may threaten the President's hope sustained economic recovery in his second term, even if the republicans blame the deadlock. "No one can predict the market reaction,", D - Tennessee Congressman Jim cooper said, some republicans surprise, the White House did not make clear to appease Wall Street, if on December 31 deadline was breached, and alarming increase tax and spending cuts, also won't play a pile of all at once. A few liberal critics this kind of circumstance, "if we walked past the so-called fiscal cliff period and all effective budget cuts and tax increases, management personnel can minimize the damage," Washington post "columnist said no one but celine dion from last week." Obama also announced publicly, he will be put off any cuts, congress will eventually shall not harm some people's theory. He can ensure that the bond market know his plan, ahead of time should be cool... Everyone (especially Wall Street) down. "Some financial blog agree. Business insider Joe Weisenthal:" although it will be bad to make spending cuts and tax increases completely go to take effect, if the matter is settled in early January, things will be it doesn't matter, write so far, in the stock market is to stay calm. S&P 500 index rose 12%, this may be because investors think, temporarily in the cliff trip not too harmful one year. A fall into the pit lawmakers thinking to quickly minimize economic damage and a deficit reduction of compromise, escape them in December. Or, it is possible, investors see the most pessimistic tone around the fiscal cliff talks as attitude, will give way to the last minutes of trading. If this is so thinking - and, if in December 31 deadline, not be destroyed - Obama's fear may be fulfilled: the expected transaction may produce significant share price fall, if it doesn't happen. Because it sounds bad, some liberals think it is necessary to give up their forced many republicans against Obama said to the rich, the higher tax rate is the key to cut the deficit. Representative Peter Welch, vermont's Democrats say, temporarily in the cliff, it will not be so bad, pointed out that in on September 29, 2008 what had happened. The house of representatives rejected Suggestions by the crisis of the impact of the financial industry rescue plan that investors by surprise. Republicans strongly opposed to the plan, even though the President George w. bush's support. The dow Jones index fell 777 points, the biggest one-day drop points ever. Four days later, the house of representatives passed a bill to slightly modified save city, shake the market reaction, Welch said, similar market crisis next month's fiscal cliff, the deadlock, "what will force congress, eventually to take action." A few congressmen of any other party are eager to predict how the stock and bond market will react to failure, in order to achieve a fiscal cliff conform to the end of this year. "Let us not pretend to market fully understand politicians or politician's fully understand the market, Congressman George miller said, D - California, service in congress 37 years.
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