Traders are getting jumpy as rumors of fiscal cliff deal come to fore then fade once again. A deal may be in the negotiation process which many pundits believe would include tax hikes on the so-called rich in exchange for immediate entitlement reforms. There’s no question both sides need to get something they want out of any deal.

Stocks are subject to unfounded rumors planted by algos and others to front-run and suck-in unsuspecting investors. Tuesday’s stock market ramp featured some late day selling after Harry Reid asserted republicans were “holding up middle class tax cuts” saying there will be no deal by Christmas. (That threatens to upset the president’s body surfing plans at Kailua beach.)  Meanwhile John Boehner repeated a previous comment that the president is “slow-walking negotiations”. But this is what they do—create enough pressure from one side to another until the other side blinks. Until a deal is done you can expect plenty of volatility on any rumor, planted or otherwise.

Below are two charts from a lengthy slide presentation authored by Mary Meeker from KPC (Kleiner, Perkins, Caufield & Byers). In it are some fascinating views of how our world might look in the decades ahead. No taxes on the rich or anyone will cure these imbalances—it’s the math.

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