Greenhaus: There's a lot coming up but developments in Europe are the biggest events as far as we're concerned. They're the most dangerous risk. If you're expecting the ECB to announce that they'll start supporting the region's bond markets on Sept. 6, you're going to be disappointed. It's more likely that they wait for the German Constitutional Court ruling one week later and also wait for Spain to formally ask for help. The next three weeks are really crucial.
Kleintop: What could be a surprise? If the elections keep the same balance of power in Washington, the status quo. Within the market, there's an assumption that there's going to be a quick compromise on avoiding the fiscal cliff, because the stakes are so high. Democrats are expected to retain their hold on the Senate, and you're looking at a 56 percent chance that President Obama retains the presidency, according to Intrade. But the bottom line is that I don't think you're going to get the House, under the control of the GOP, to compromise very easily.
If elections line up the same players in the White House and in Congress, I don't think it's going to go very smoothly. Gridlock isn't good.
Kelly: The wild card is the fiscal cliff. What we really need to see is a fiscal ladder: You have to bring the deficit down, sure, but you need to bring it down gradually. Republicans and Democrats should be able to lower the deficit by 1 percent of gross domestic product each year. That's a ladder.
My greatest fear is we go off the fiscal ledge. If Congress is so unaware of the danger in cutting the deficit too fast, the economy will really suffer. They've got to get the dosage right.
Greenhaus: The biggest risk is the German Constitutional Court ruling. Although there's a low probability it says Germany can't participate in the European rescue fund, the ESM, there's still the potential for a global calamity here. The ESM needs everybody in, and Germany is the most important.
Another risk is the fiscal cliff. On Wall Street, the assumption is that it will be kicked down the road another six months. Almost nobody on the Street thinks anything else. They just don't believe Washington is that dumb.
People assume everything will work out. As you saw last summer, not everything works out.
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