Policy uncertainty is at year highs

 

 We use the policy uncertainty index developed to look at the uncertainty currently facing the market.The index includes news, tax code changes and disagreement of economic forecasters.

The levels have come down since the crisis in 2008 but they are again on the rise. If you look at 2012 we have have hit the highs for the year. The combination of the election and fiscal cliff have provided a Fall of uncertainty and these are not truly captured by the policy uncertainty index. The magnitude of the problem is also not captured. There is a reason for the conservative asset allocations.