Why hasn't the "fiscal cliff" been factored into the market already? (or has it?)

Quote from DinkinFlicka : While market declined after the election, a lot of the articles and posts I read mentioned that the decline was less to do with the election and more to do with Europe's declining economy and Draghi's comments. Those articles went on to say that the market had predicted Obama to win and that his win was already factored into the markets. If that was the case, why is there so much hoopla about this fiscal cliff? Shouldn't that have been factored into the market months ago since we new exactly when the "fiscal cliff" was going to happen?

Why would you think it would be factored in "months ago" when the biggest uncertainty factor was the Presidential election. It is being factor in right at this moment.
I don't believe the market successfully predicted the election result, if that's true then you won't see that much drop in defense/financial sector.

http://www.forbes.com/sites/ricku...explained/

The news doesn't explain the market. You have it backward. The market explains the news and by the time you read about X or Y happening, the move has already begun and may be over.

And yes, the equity market picked Obama months ago and I profiled it on this very forum, even posting specific trades that happened to work out beautifully.

As far as the fiscal cliff is concerned, my take is Obama's reelection was confirmation the risk trade would continue. Since the S&P has doubled since the day he took office in 2009, I read it as market makers taking a piece of that cake before they get positioned for what will probably be another run to the upside as the kooks in DC do absolutely nothing about anything until they are forced to by the markets at the last minute. Also, whatever is left of retail is selling in anticipation of a capital gains draw down after the new year.

How much will be given back on the down side before another run up? No idea. It may also be the first shot across the bow signaling the Bernanke put is dying, which in that case, the downward move could be vicious.

A lot of the Rich will invest overseas if the taxes on investments increase. Foreign taxes on Dividends and Capital Gains will remain the same and most will be lower in taxes. Obama wants more money to spend, so he's going to agree to cut budgets like he has been doing, spending like a fool, and increasing inflation, debts, and taxes all at the same time. This has been happening all along for the last 4 years, and will again happen for another 4 years.
Expect no more dollar menus, no more Savings account Interest, Gas prices doubling after the next 4 years. And lots and lots of utility "Customer surcharge fees" and "Service Charges".

All worker-consumers will be squeezed until they are dependent on handouts. Then the Government will seize complete control based on the dependency of the people. The liberals will regulate the country like American Communists and any big and small corporations left in it.

Lol. Its ok chicken lil, the world hasn't ended