Financial markets lived through one more crazy week. Starting fr om Wednesday, 7 November, traders on practically all trading platforms across the world organized a grand sell off. As a result, indices of the leading global platforms dropped more than 1.5% by the end of the previous week.
The US was the main troublemaker. Presidential election that took place on 6 November in this country ended with a convincing victory of the incumbent president – democrat Barack Obama. However, the end of political uncertainty only amplified economic uncertainty in this country. The lack of political consensus in the country wh ere the president and the majority in the House of Representatives are democrats, while the majority in the Senate belongs to republicans reinforced expectations that the so-called “fiscal cliff” would be implemented. This is a question of
automatically curtailing the US budget expenditures and tax exemptions for the total of USD 607 billion (almost 4% of GDP) starting from 1 January 2013. Since the correlation of forces in the country’s leadership did not change, it means that the likelihood of reaching a compromise also remained unchanged.
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