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We begin today with some obligatory comments about the election and how we got it wrong. Obviously, I am very discouraged with the outcome of the election. The main mistake Spencer and I made (and others including Gallup, Rasmussen, Pew, Rove, Morris, etc., etc.) in our pre-election analysis was to significantly underestimate the turnout rates among Democrats. The widely-held view that Democrats were unenthused and wouldn’t turn out to vote, as suggested by numerous pollsters, was simply wrong.

We also we mistakenly believed that the 2008 surge in black, Latino, and young voter turnout would recede in 2012 to “normal” levels, as did most of the major pollsters noted in the previous paragraph. That didn't happen. These high levels of minority and young voter participation are apparently here to stay. Unfortunately, Obama won both the popular vote and the Electoral College comfortably. Following those opening comments, we turn our attention to the so-called "fiscal cliff" that is upon us.

I'm sure you have heard about the fiscal cliff, but today I will present you with the details, including how much it will affect the economy and how much it will cost you (based on your income level). I will also explain why I think the odds are greater that we will fall off the fiscal cliff this time. Given his election victory, I don't see President Obama willing to compromise much if at all.

If we do fall off the cliff, a new recession is very likely to happen next year, and that will almost certainly be bearish for stocks. Thus, the stakes are very high in this soon to be knock-down, drag-out!

Today we begin by focusing on the Congressional Budget Office's (CBO) latest long-term economic forecasts. Actually, we will focus most of our attention on the CBO's 2012 and 2013 forecasts, since going beyond the next year or two is really just speculation in these uncertain times. There is a lot to consider in the CBO's latest forecasts.

From there we move on to some scintillating news that many federal workers, including at least 36 members of Obama's own White House staff, are far behind in their income taxes owed to the IRS. How far behind? Can you say $3.4 billion? Yes, $3.4 billion and counting. President Obama says we all need to pay our "fair share" (ie - higher taxes on the rich), but I would suggest that he focus on those in his Administration and Congress that are behind on their tax payments.

Finally, I will examine last Friday's unemployment report which surprised just about everyone. There is a reason the unemployment rate is going down, but you may be surprised to learn why. I'll give you the straight story, plus I will review the latest economic reports at the end. Let's get started.

Do you think that you could keep your job if your employer ranked your job performance at only 11%? Probably not, but it seems that Congress is doing just that. A recent Gallup poll found that only 11% of Americans approve of the job Congress is doing, and a whopping 86% disapprove.

Since our legislators supposedly work for us, it looks like they are not making the cut. Adding insult to injury was a report saying that members of Congress actually got richer from 2004 to 2010, while the rest of the nation's wealth stayed flat or actually fell. So, while Congressional job performance got worse, their personal wealth grew.

One reason that members of Congress experienced asset growth while everyone else languished may be the fact that they can trade on inside information that they get as a member of Congress - and it's perfectly legal. Knowing the status of pending legislation, regulatory actions, committee hearings, etc. means that they have a leg up on the rest of us who are prohibited from trading on inside information. If more Americans knew about this, I suspect the 11% approval rate would drop quickly.

No, you're not going to have to hide this week's E-Letter from the kids. The F-word discussed in today's issue is 'fiduciary.' As you probably know, financial regulatory reform has been getting a lot of attention in the financial press lately. Unfortunately, many investors do not know that a provision to require brokers to act in your best interests rather than their own (a concept known as the 'fiduciary standard') was an early casualty of the financial reform effort, thanks largely to Wall Street's lobbying efforts.

There are some investment professionals who are bound to exercise fiduciary duty in relation to your investments, while others are held only to the less-stringent 'suitability standard.' However, many investors do not know what a fiduciary standard is, or how the absence of this duty can affect their investments. In this week's E-Letter, I'll compare the two standards as well as fill you in on why the large Wall Street brokerage firms are so opposed to brokers having a fiduciary duty to clients.