[rikdpola]

The key to this is to figure out when these fiscal cliff rescues are going to happen:

1) Extension of Bush tax cuts to middle class.
2) Extension of the 2% payroll tax pullback.
3) Postponement of "auto-cuts" that are supposed to kick in on January 1, 2013.
4) Extension of Bush tax cuts to high end earners.

I say the first three are a lock. Odds are 2-1 in favor of #4 as well.

So the big question is, when? Three possibilities:

1) Prior to election, so that Obama can take the credit. There's no way Congress let's him have #1 without #4. Obama would take this deal in a heartbeat, claiming the extension of tax relief for the rich is "only temporary in this difficult job environment." I'd peg this one for late September.
2) Lame duck session, November through January. I see #2 and #3 happening in December during the final hour, no matter who wins the election. It's their typical mode of operation: wait until the last minute.
3) After a new administration takes office. If they don't make a deal on #1 and #4 before the election, it will probably take place after the new administration. I say 2-1 odds in favor of pre-election, unless the Republicans really refuse to give Obama a deal, even though it's the deal they've been fighting for, i.e. tax cut extensions for all.

Another weak-spine maneuver will be that all of these moves will be voted as "temporary", probably through 2013.

When these events take place, it will be yet another round of assurance that our government does not have the wherewithall to deal with our fiscal situation. These are what will propel the next gold upleg. So put me down for a rocket period running from September through February.