Forward Markets: Macro Strategy Review

by Jim Welsh, Macro Strategy Team, Forward Markets Editor's note: This was written before the end of 2012 so the Congressional cliff dance result is not reflected in this article. Happy New Year! We would like to wish you and your family a year of good health and contentment in 2013. And we will do our best to add a bit of prosperity. The U.S. economy may get a lift in the first quarter of 2013 from an unlikely source - the fiscal cliff. This may be hard to believe but in the upside-down world of disincentives, it's likely to be a pleasant surprise. As we discussed last month, the Congressional Budget Office (CBO) uses static accounting to estimate future spending and tax receipts for the next 10 years. The CBO assumes taxpayers will make the same choices year after year, irrespective of tax increases or decreases. That's not how it works in the real world, however. Most human beings ar...