J.P. Morgan: There’s a 15% chance of falling off ‘fiscal cliff,’

From Marketwatch: Congress isn’t really going to let the so-called fiscal cliff — the planned tax hikes and spending cuts that will be triggered at the end of the year if no action is taken — be triggered, will they?

According to a note published by J.P. Morgan, there’s a 15% chance they will.  “The  bottom  line  is  that  under  various  scenarios,  our  analysis  suggests  a  15%  chance of actually ‘falling off the fiscal cliff’ for as much as 6 months – that is, expiring  tax  provisions  plus  sequestration  push  the  U.S.  economy  into  recession in  the first half of 2013.  Interestingly,  we  think  the  likelihood  is  similar  regardless  of  who takes  the  White  House.    Of  course,  this  is  an  adverse  scenario  of  risky  assets and  we  see  the  downside  for the  S&P  500  SPX +0.84%  at  around  1100  (15%  downside  for equity markets),” said the analysts.

OK, but what’s the most likely scenario? “We think the most probable outcome is Washington ‘punts’ the fiscal outcome by 6 months, by delaying both i) the expiration of tax rates and measures and ii) sequestration,” they said….

Still concerned?  Find out more at http://blogs.marketwatch.com/election/2012/08/07/theres-a-15-chance-of-falling-off-fiscal-cliff-j-p-morgan-says/