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This is an interesting note from BTIG’s Dan Greenhaus…We have had some very interesting meetings of late, where the focus of conversation has been (unfortunately for these bottom up managers) on fiscal policy and the looming 2013 fiscal contraction. These conversations have focused on how best to “solve” the longer term deficit picture facing the United States and what effect this might have on the investment process. We touched on this a while back and while its hard to make investment decisions today based upon tomorrow’s unknowns, keeping this debate in mind is a very, very good idea.
We’ve been talking about the 2013 meme a lot, so we’re glad to see others have the same concerns.
The bottom line is that the US government is already in austerity mode, but then in 2013 we’re getting automatic defence cuts, as well as a debt ceiling fight.
Should be fun.