Today is a slow day news-wise. I expect everyone is doing pretty much what I am: recovering from an overdose of good food and wine.

That’s the only conclusion I can draw from today’s headlines.

First, let’s look at the New York Times (NYT). “Insider Inquiry Inching Closer to a Billionaire” discusses the implication of Steve Cohen, one of the rock stars of the hedge fund and investing world, in insider trading. “Hewlett’s Loss: A Folly Unfolds, By the Numbers” is about Hewlett-Packard’s write-off of nearly $9 billion of the $11 billion purchase price of a company that was, apparently, an accounting fraud.

Yesterday, the stock market cheered the good news on the fiscal cliff negotiations—that everyone was being polite to one another for a change. The market melted back up to the level of, well, last week. Even with yesterday’s bump, though, we are still down about 3.5 percent in the past month, which suggests that investor optimism may be premature. Let’s think for a minute about what the fiscal cliff means, and what “solving the problem” might mean, to see whether this degree of optimism is warranted.

First of all, the fiscal cliff consists of two major components: tax increases and spending cuts. Within those two divisions, there are smaller items. On the subject of tax increases, for example, the impending expiration of the Bush-era tax cuts is getting all the press.

I am not a tax expert, and I don’t even play one on TV. In fact, I’m normally reluctant to weigh in on taxes, but there is one issue that doesn’t seem to be getting the attention I think it deserves: the expansion of the alternative minimum tax, better known as the AMT.

Briefly, if you are above a certain income threshold, you have to calculate your tax bill both the normal way and under the AMT rules, which limit certain deductions and typically result in a bigger tax hit. You then pay the higher of the two. This can be a nasty shock if you’re not expecting it, as the additional liability can run into the thousands.

Today, President Obama and Speaker Boehner, along with their teams, will sit down at the White House to try and figure out how to solve this thing. Encouragingly, everyone seems to be shutting up.

Hurricane Sandy was one of the largest storms ever to strike the United States, and, because of its path up the East Coast and into the country, it hit areas that are rarely affected by hurricanes. As a result of both of these factors, combined with the timing of the landfall and the tide, the damage was extensive and serious.

Markets got knocked again yesterday, as November proves to be a tough month. After the run of good news we had for a while, the bad, or at least worrisome, news is starting to pile up.

Remember when I said we would see more volatility as the negotiations played out in the press? Today’s front-page article in the Wall Street Journal (WSJ), “Obama Sets Steep Tax Target,” discusses how the President is using his proposed budget, with $1.6 trillion in additional revenue, as a starting bid. This is twice the additional revenue that he and Boehner were talking about in their last set of negotiations and is a nonstarter from the Republicans’ point of view. Surprise—stocks are down again this morning.

Obama is also reported to be under pressure from the left on the budget. Yesterday’s WSJ had “Labor Pressures Obama on Budget” on page A6, which was confirmed in today’s New York Times (NYT) with “Obama Tells Labor Chiefs He Won’t Yield on Budget.” Earlier this week, we saw the Republicans playing to their base; now we see the same with the Democrats.

Nothing concrete to report on today, but the discussion continues to get more interesting. One article in particular that is worth a look is an op-ed piece on page 9 of the Financial Times (FT), “How the US should avoid falling off the fiscal cliff.” It was written by Glenn Hubbard, current dean of Columbia Business School, former chairman of George W. Bush’s Council of Economic Advisers, and an economic consultant to the Romney campaign. He has some credibility when it comes to representing the Republican economic point of view.

And his points are both largely typical of that point of view and economically sensible—raising revenue is about raising average tax rates, not marginal rates; spending cuts should be a larger part of the solution than tax increases for growth reasons. It’s when you take a closer look at the details that it gets interesting. Let’s go to some direct quotes. Hubbard writes:

• “There are ways to raise revenue without increasing marginal rates. Tax deductions should be scaled back, especially in the areas of mortgage interest, charitable giving, and employer provided health insurance.”
• “The first step is to raise average (not marginal) tax rates on upper-income taxpayers. Revenue increases should come first from these individuals. This means closing loopholes.” He then goes on to discuss limiting deductions overall.