Boehner: It’s Obama’s move; ‘Plan B’ collapses; We expect negotiations to continue into the new year.
House Speaker John Boehner on Friday insisted he isn’t quitting fiscal-cliff talks with President Barack Obama, a day after a Republican bill intended to pressure the president in negotiations blew up in the House.
“We didn’t have the votes to pass it,” Boehner said at a Friday morning news conference. “That was the will of the House.” See live blog of Boehner’s press conference.
Republican leaders’ decision on Thursday night to abort a vote on the bill, which would have extended current tax rates for most Americans, threw fiscal-cliff talks into disarray with just 10 days remaining until automatic spending cuts and the expiration of Bush tax cuts kick in. Read about collapse of Plan B vote.
U.S. stocks (SNC:SPX) dropped sharply at the opening Friday morning, and some analysts said a deal was less likely to get done this year. See Market Snapshot.
“Bottom line, it seems unlikely that any legislation to address the main fiscal cliff policies will be passed before the end of the year. We expect negotiations to continue into the new year. It may take the imminent threat of a breach in the debt limit in February, or March at the latest, to force an agreement,” wrote Lewis Alexander of Nomura Securities. Read more on Political Watch blog.
BofA: We’re Losing Hope For A Timely Fiscal Cliff Deal by
In a new note titled ‘No Cliffmas Miracle’ Bank of America’s Ethan Harris and Michael Hanson say there are five reasons that we should be “cautious on the prospects of a quick or comprehensive resolution to the fiscal cliff this year”:
- It is easy to put down general numbers and much harder to come up with specific proposals. ”On the spending side, gimmicky cuts like indexing entitlements to the chain CPI can only yield small spending cuts. On the revenue side, raising the top tax bracket (households with income over $400,000) increases 10-year revenues by less than $400 billion.”
- Raising the debt ceiling continues to be a ‘sticky issue’.
- The whole package will be “hard to swallow”. ”We see a high risk that when the whole package is presented, warts and all, there could be serious defections from both sides. We would expect the President and Speaker to ask for a simple up or down vote on the whole package to avoid endless additional haggling. Faced with this stark choice, protest votes are likely, in our view.”
- There is very little time. ”We continue to see an elevated probability (perhaps a one-in-three or one-in-four) that they cannot get a deal done by year end. The result would be either a temporary expiration of the whole cliff or a very short term extension.” The risk is that once the deadline has been set aside once, they could keep doing so until the stock market forces them to act.
- The myth that going over the fiscal cliff will be “relatively painless”.
If you depend on an early tax refund to help pay for large holiday credit card bills you could be out of luck.
Medicare is warning doctors – and millions of elderly patients – payments will be slashed in January unless Congress acts soon. A 27 percent cut to doctors is scheduled to be triggered if Congress doesn’t vote to waive spending cuts.
It costs 2 cents to make every penny! A nickel costs more than 10 cents to produce….
With the media fixated on the fiscal cliff, no one seems to be noticing the fact that the FDIC’s expanded 100% coverage for insured deposits ends January 1st, 2013.
Submitted by SD Contributor AGXIIK:
As of January 2013 the FDIC stops offering 100% coverage for all insured deposits. That amounts to $1.6 trillion in deposits, 85-90% deposited with the TBTF mega banks. Once the insurance ramps back to $250,000 the FDIC risk amelioration offered to large depositors will cause them to flee from the insecurity of the much reduced FDIC coverage. This money will rotate immediately into short term Treasury securities. The treasury, in order to handle this flood of money, will immediately offer negative interest rates. This financing will resemble the .5% negative interest rate offered by the Swiss and Germans on the funds flooding to their banks from Spain, Greece and Italy.
This will be a bank run much larger than the Euro banks flight to safety.
USA: Without ‘fiscal cliff’ deal, unemployment checks stop Dec. 29!!
Without deal, unemployment checks stop Dec. 29
About 2.1 million Americans will lose their extended jobless benefits on Dec. 29, leaving many on the brink of poverty, if Washington doesn’t renew them as part of a deal on the package of tax increases and spending cuts known as the “fiscal cliff.”
Mark Hulbert: Next few sessions particularly crucial per Dow Theory
The Dow transports are doing their part to generate a bullish signal from the venerable Dow Theory. Will the Dow industrials follow suit?
And what would it mean if they don’t?
What the Dow Jones Transportation Average (DJI:DJT) has done, of course, is to rally impressively.
Not only have the Transports closed above their September high, they are now just 10 points away from the even higher high that they hit last February — at 5,368.93. It could eclipse that level any day now.
Such surprising strength would certainly appear to be Very Good News. After all, as the old saying goes, the most bullish thing the stock market can do is go up.
But, at least in the case of the Dow Theory, I’m not so sure. Its approach to market timing is based on the joint action of both the Dow transports and the Dow Jones Industrial Average. Not only is this Theory unimpressed by strength in just one of the two averages, it views such divergences as potentially quite bearish….
Paul Volcker – “The straightforward central banking measures have lost their effectiveness. They have gone as far as they could go.”
“To get on a gold standard technically now, an old fashioned gold standard, and you had to replace all the dollars out there in foreign hands with gold, God the price, you buy gold, because the price of gold would have to be enormous (atlas-sized touchdown hand signal).” Paul Voc…
Consumer Confidence Plunges To Lowest Since July, Biggest Miss Since 2007
After theatrically soaring to a 5 year high in November, when the UMich confidence final print rose above the 82 level, the final UMich consumer confidence number just tumbled by a whopping 10 point down to 72.9, well below the expected 75.0 print, and below the preliminary read of 74.5….