Welcome to Thoughts on the Market.

I'm Michael Zezis, Head of Public Policy Research and Municipal Strategy for Morgan Stanley.

Along with my colleagues bringing you a variety of perspectives, I'll be talking about

the intersection between U.S. public policy and financial markets.

It's Thursday, September 9th at 10.30 a.m. in New York.

It's a season of confusion in Washington, D.C. as negotiations on fiscal policy hit a

fever pitch.

Media reports suggest Democrats are still far apart, potentially trillions of dollars

apart, in fact, on planned spending levels.

Adding to the confusion is the lack of context and the information we publicly receive.

With negotiations going on privately, all we learn is through the hints in the new window

of press leaks.

So when a key Democratic senator says they oppose a certain level of spending, are they

talking about gross spending, or are they talking about net spending, or deficit expansion.

Unfortunately, until there's a resolution to these negotiations, successful or not,

we'd prepared to be confused for some time.

But that doesn't mean there aren't a few signals inside the noise.

Here's three points we feel comfortable hanging our hats on.

First, on taxes, it already appears the worst outcomes for companies will be avoided.

It's long been our base case that the White House would be unlikely to get the request

to raise the corporate tax rate to 28%, rather a hike to 25% seem more likely given the

stated preference of key Senate moderates and the political benefits of using deficits

...