Business Insider 
Nov 19, 2012
A year ago, Goldman Sachs’ David Kostin said the S&P 500 would end 2012 at 1,250 .
And he’s sticking to that call.
This implies stocks fall 8 percent from here.
“Uncertainty swirling around the ‘fiscal cliff’ that must be resolved by year-end, the pending jump in capital gains taxes at the start of 2013, and the debt ceiling that will be reached in late February represent clear and present downside risks to the market in the near-term,” writes Kostin in his US Weekly Kickstart note.
Kostin thinks a fiscal cliff deal will get done by year end. But past experience tells him that a deal will come as close to the end of the year as possible.
Debate regarding a two-year extension to the 2001/2003 Bush income tax cuts was not resolved until December 17th, 2010. Last year’s decision to extend payroll tax cuts was not finalized until December 23rd, 2011. The current challenge is significantly more complex. Divergent views on tax policy, defense spending, and entitlements need to be resolved in a short lame-duck session of Congress. Political platitudes about compromise will abound during the coming weeks but some disagreements will surely arise. We assign a 55% likelihood that an agreement is reached by year-end.