World Markets Drop as US Teeters on Fiscal Cliff
Investors alarmed by failure to reach deal
By Rob Quinn, Newser Staff
Posted Dec 31, 2012 4:55 AM CST
Anybody awake in there?   (AP Photo/J. David Ake)

(Newser) – Can American lawmakers hammer out a deal in time to avoid the fiscal cliff and toast the New Year? Investors worldwide are betting no. Uncertainty about budget negotiations and the future of the US economy drove down Asian markets on the last day of the year and European markets also saw falls in early trading, the AP reports. Lawmakers announced yesterday that talks had hit yet another roadblock.

The cliff's combination of tax hikes and spending cuts could put the US back in recession and while it could be possible to keep them at bay temporarily even without a deal, missing the deadline will seriously damage investor confidence, the chief of investment firm Lycean Holding predicts. "I think the market reaction to that will be very negative. This means the US will never be able to bring its house in order. And the deficit will continue to accumulate," he says. "No meaningful reform and no solution in sight. You can throw confidence out of the window."

Next on Newser: Kanye: Kim's Having My Baby
More From Newser
My Take on This Story
To report an error on this story,
notify our editors.
World Markets Drop as Fiscal Cliff Nears is...
Show results without voting
You Might Like
Showing 3 of 35 comments
Dec 31, 2012 4:06 PM CST
congratulations to the winners of the cliff debates...all financial and investment bankers you can now buy up all the cheap stock.............hold on, once this is done, they will retro a tax bill .. and you guys will make billions always average americans will get screwed againnnnnnn.......time to start putting them in jail and convict some of treason which I hope would be punishable by a death sentence......
Dec 31, 2012 4:00 PM CST
I am beginning to feel like Im flying now that weve been pushed off the cliff by the idiots that keep electing these idiots..........Lets call all of them home for the holiday and put them in local jails for the criminals they are. We could replace them with only non lawyers.
Dec 31, 2012 12:30 PM CST
Who cares about investor confidence? If you have a solid opportunity for profit to sell, you can create confident investors. There's never going to be total certainly on the market and people who'd only invest with that are wussies. We do not need to rely on "investor confidence" for the strength of our economy, what we need are more entrepreneurs, more people with vision, courage and leadership who will create things worth investing in.