http://www.zerohedge.com/news/2012-12-28/obama-assign-fault-propose-plan-d-different-last-fridays-plan-c-live-webcast
Obama To Assign Fault; Propose Plan D, Different From Last Friday's Plan C - Live Webcast
We would expect the ingredients of the speech to be a pinch of self-denigration mixed with 6 fluid ounces of 'millionaires-and-billionaires', and a quart of "it's the other guys' fault." This coming from the man who precisely a week ago announced he would propose a "scaled down" plan, which today turned out was a complete lie: some leadership. Nevertheless. it will be interesting to see how his 'new' plan, same as the 'old' plan, is different from the 'new new' plan-to-come as he pushes the Senate to propose a 'new new new' deal that will really be a 'skinny irrelevant' deal - no doubt heralded by all asunder as a 'grand new' deal. Though it appears we should have no fear as McConnell and Reid are working on it and McConnell is "hopeful and optimistic." Farce!
For those who missed it, here is the WSJ rundown:
President Barack Obama said "the hour for immediate action is here" on a deal to avert the fiscal cliff. The president said he remains "optimistic" that an agreement can be reached in Congress before a looming year-end deadline to avoid tax increases and spending cuts.If Congress can't reach a deal, the president said Congress should allow a vote on a basic package that would preserve tax cuts for middle-class Americans while extending unemployment benefits for the long-term jobless and working toward a foundation for a broader deal. Senate leaders said they hope to reach a compromise that could be presented to lawmakers by Sunday, little more than 24 hours before the deadline.
and.......
http://www.zerohedge.com/news/2012-12-28/no-new-offer-obama-sends-es-sliding
Obama: "My Offer Is Nothing" - Stocks Plunge
Looks like today everyone in Congress was short. Here's why:
- OBAMA SAID NOT TO MAKE NEW OFFER IN FISCAL CLIFF TALKS
- OBAMA OFFER DETAILED BY SOURCE FAMILIAR WITH WHITE HOUSE MTG
- OBAMA SAID REITERATING PROPOSAL FROM LAST WEEK ON FISCAL CLIFF
- OBAMA PLAN INCLUDES RAISING TAXES ON EARNERS OF $250,000 AND UP, EXT OF UNEMPLOYMENT INSURANCE, ADDRESSES OTHER OUTSTANDING ISSUES-SOURCE
- So much for a deal, and so much for the invisible DJIA support at 13,000.
and AAPL from its Wednesday's VWAP to yesterday's VWAP... still trading? still think the professionals aren't dumping technically into every rip?
http://cdn.rollcall.com/news/boehner_not_interested_in_bill_that_most_of_gop_would_reject-220392-1.html?popular=true&cdn_load=true
Boehner 'Not Interested' in Bill That Most of GOP Would Reject
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The House will return for votes on Sunday, but Speaker John A. Boehner assured his conference that he is not interested in putting a fiscal cliff measure on the floor that would pass with more Democratic votes than Republican.
On the packed GOP members-only call, Rep. Duncan Hunter, R-Calif., asked Boehner, R-Ohio, whether he would allow Democrats to carry a bill if the Senate passed a bill to which most House Republicans would object.
“I’m not interested in that,” Boehner remarked, according to a source on the call.
The speaker’s intention to stay steadfast means a rocky final stretch before Congress plummets off the fiscal cliff. Senate Majority Leader Harry Reid of Nevada tried to put pressure right back on Boehner by asking him to take up the bill the Senate passed earlier this year that extends the 2001 and 2003 tax rates on the first $250,000 of American’s annual income.
Reid and Senate Minority Leader Mitch McConnell, R-Ky., argued on the floor Thursday afternoon over the procedure for the Senate-passed bill, showing that at least publicly, the two leaders are not close to each other’s positions. McConnell said the Senate-passed bill was a “glorified sense of the Senate” that was going nowhere because, as a revenue measure, it did not originate in the House, per the Constitution.
President Barack Obama, meanwhile, has said he wants Congress to vote on a pared-down version of a fiscal cliff deal, one most House Republicans would surely not support.
Either way, the House will be in session starting Sunday. Majority Leader Eric Cantor, R-Va., told members on the conference call that votes are expected at 6:30 p.m. on Sunday and the House may be in session through Wednesday Jan. 2, just a day before the 113th Congress resumes.
The rare post-holiday weekend session sets up what could be a last ditch effort to pass a plan to avert the fiscal cliff, and it means Congress could very well be in session on Monday, which is New Year’s Eve.
It remains unclear what Congress will vote on, but Boehner reiterated to his members what he Cantor, Majority Whip Kevin McCarthy, R-Calif., and Conference Chairwoman-electCathy McMorris Rodgers, R-Wash., said in a statement Wednesday.
“The House has acted on two bills that collectively would avert the entire fiscal cliff. We passed HR 8 at the beginning of August to stop all of the tax rate increases that are set to occur on Jan. 1 under current law. And we’ve passed legislation to replace the entire sequester with responsible spending cuts,” Boehner said according to a source on the call. “These bills await action by the Senate. And as I, Eric, Kevin and Cathy said yesterday in a joint statement: If the Senate will not approve these bills and send them to the president to be signed into law in their current form, they must be amended and returned to the House. Once this has occurred, the House will then consider whether to accept the bills as amended, or to send them back to the Senate with additional amendments. The House will take this action on whatever the Senate can pass — but the Senate must act.”
and.....
http://www.rollcall.com/news/pessimism_abounds_as_white_house_calls_cliff_meeting-220399-1.html?pos=hftxt
Pessimism Abounds as White House Calls Cliff Meeting
Lawmakers seemed as pessimistic as ever about averting the fiscal cliff Thursday evening despite the White House scheduling a meeting with the top four congressional leaders for Friday afternoon.
The White House announced that President Barack Obama would meet with Speaker John A. Boehner, R-Ohio; House Minority Leader Nancy Pelosi, D-Calif.; Senate Majority LeaderHarry Reid, D-Nev.; and Senate Minority Leader Mitch McConnell, R-Ky.
The last-ditch effort to avert the cliff caps two years of false starts and failed deal-making.
Boehner spokesman Brendan Buck said the speaker “will continue to stress that the House has already passed legislation to avert the entire fiscal cliff and now the Senate must act.”
And McConnell, speaking earlier on the Senate floor, ripped the president and Senate Democrats repeatedly — although he signaled he was prepared to try to reach a deal.
“I told the president I would be happy to look at whatever he proposes,” he said, but he warned, “Republicans aren’t about to write a blank check.”
He complained the talks should have happened weeks and months ago.
Reid complained on the floor that the House had left town and noted Republican leaders had repeatedly walked out of budget talks with the White House in the past two years. “You can’t legislate with yourself,” he said.
Reid, who earlier in the day suggested the nation appeared to be headed over the cliff, said he hopes the meeting bears fruit and a deal can be reached.
“It’s up to Boehner and McConnell,” he told reporters outside the Senate chamber.
Republican Sen. Bob Corker, R-Tenn., said the GOP had expected the White House to deliver a new proposal Thursday, which never arrived, and that the meeting with the White House was originally supposed to be in the morning and was later pushed to the afternoon. Corker said that suggests to him the meeting might be more for “optics” than for cutting a deal, and he said it’s becoming more likely that the next Congress will have to deal with the cliff. The failure to address a problem two years in the making is a total “dereliction of duty,” Corker said.
Corker said that in the end, however, no one doubts that 98 percent of taxpayers will avoid an income tax hike in the end — either with a last-minute deal or with a retroactive bill sometime early next year. He complained that Democrats still have not come to the table with significant entitlement reforms beyond changes to how the inflation rate is calculated for Social Security, tax brackets and other programs.
Several other senators expressed frustration with the lack of momentum for getting something done now, although Republicans including Sen. John McCain of Arizona, said they were encouraged that Obama has spoken to McConnell.
Sen. Roger Wicker, R-Miss., expressed hope that the Senate would be gone by New Year’s Eve. He cited “jet fumes and other spirits” as helping to aid the trip out of town.
http://www.zerohedge.com/news/2012-12-28/run-time-error-2147418113-catastrophic-failure
Run-Time Error -2147418113: Catastrophic Failure
Via Mark J. Grant, author of Out of the Box,
Apparently this is the message that popped up on the Congressional computer system when they were scheduling the last, last, last minute meeting before jumping over the cliff. The techies worked for hours I have heard but to no avail. What is interesting about this is that neither the computer geeks nor the people in charge of our government has any responsible position that is really useful to prevent the failure that is about to take place.The best that can even be hoped for now is some minor change in the rigging which may be heralded as “the fix to fix all fixes” but will be of little importance when considered in the light of day. I think the odds of any grand scheme that will honestly make a difference is equivalent to the value of a toe nail clipper when performing brain surgery.If all of the focus is on taxes, which has been the case to date, then all of the solutions considered are for a problem that is of a secondary nature. No one wants to be really honest you see. No one wants to confront the primary issue which is that the social programs in place or being considered are not affordable. If we cannot afford the debt we now have then we surely cannot afford new debt for new programs. Until and unless the focus of the debate shifts around to what is really important then no useful conclusion will be reached which is why I am bereft of any optimism at this point. I would also note that the leadership skills of those in Washington D.C., on either side of the aisle or in the White House, have all of the adroitness of a runaway barge on the Mississippi river. The demi-gods may go with the flow but that is about it.
“We penetrated deeper and deeper into the heart of darkness. It was very quiet there.”
-Joseph Conrad
The equity markets have not panicked yet but I fear that is coming. There is a double edged sword here and both equally able to cut you. The first is that we go over the cliff and nothing happens and stalemate is not averted and we join John Lennon in “Nowhere Land” and hope and prayers give way to loss of faith and the prayers turn from a better day to thoughts that Salvation may not come. The second is that some deal is struck and that the effects of compromise are worse than the original construct. The crux of the problem is at the core of the values of the country. Some people want a more socialized environment where wealth is spread and those that earn pay for the lifestyles of those than do not or cannot while the opposite camp rejects that notion except for a safety net which is far below the desires of the other camp. America is divided and the lines are distinct. The socialization on the Continent has infected the American shores and the “have nots,” larger in numbers, are squared off with the “haves” in a fight to determine the core values of the country.In the meantime the Fed buys, bonds compress and may compress more than I originally thought as a flight to safety takes place besides more demand than supply and panic ensues as an answer, if found at all, is not a solution but the hollow cry of the political banshee in the feckless wind. The drama may ring with “out, out damn spot” but I fear the dry cleaner is not functioning well these days and that being hung out to dry is all that may be reasonably expected.
“This thing that we call 'failure' is not the falling down, but the staying down.”
-Mary Pickford
and...
http://www.zerohedge.com/news/2012-12-28/same-cliff-different-day
Same Cliff Different Day
- Chicago PMI
- Consumer Confidence
- CPI
- Debt Ceiling
- Equity Markets
- Evans-Pritchard
- France
- Gross Domestic Product
- headlines
- Housing Prices
- Initial Jobless Claims
- Italy
- Jim Reid
- Nancy Pelosi
- New Home Sales
- Nikkei
- None
- President Obama
- Price Action
- Reality
- Volatility
- White House
We could say that news is actually relevant or matters in this "market" but we would be lying, just as we would be lying if we said that this market has not become so utterly predictable, with yesterday's late day market surge - on yet another ridiculous catalyst - visible from so far away, it was almost painful to watch it take place in real time. Sure enough, futures are now sliding back, and giving back much of yesterday's gains - but don't worry, in a day full of even more meetings and flashing red headlines, at least some combination of carefully phrased MSM words will set off today's algo-driven buying frenzy, guaranteeing yet another "retail investor" decides they have had it with this farcical "free market" casino for ever.
There was actual news out of Europe, where Italy sold 5 and 10 year bonds in the first underwhelming auction in months, placing just €5.88 billion of a maximum €6.0 billion target, at rates that were higher compared to the November auction: €3 billion in 10 Years sold at 4.48% compared to 4.45% in November, although the Bid to Cover was modestly higher at 1.47 compared to 1.18 previously; €2.87 billion in 5 Years sold at 3.26% vs 3.23% in November, and a virtually unchanged BtC of 1.29 vs 1.24 last. We also learned that the French economy grew by 0.1% in Q3, below consensus expectations of a 0.2% growth rate, with the surprise once again held in capital investment, or the lack thereof, which fell 0.3% Q/Q. Finally we learned that Spanish November retail sales tumbled 7.8% in constant prices, but somehow this was better than expected. A far bigger problem for Spain is that its housing prices are expected to continue tumbling as Telegraph's Ambrose Evans-Pritchard reminded (original Zero Hedge article from June).
As noted earlier, none of this actually matters. What matters is today's second to final episode of the Fiscal Cliff drama, summarized by Jim Reid best: President Obama is expected to meet with Congressional leaders at the White House today. The meeting will be attended by Senate Majority Leader Harry Reid, House Speaker John Boehner, House Minority Leader Nancy Pelosi and Senate Minority Leader Mitch McConnell. The President had a call with Reid, Boehner and Pelosi late Wednesday night to receive update on the negotiations but no details about the conversations have been given. As noted by the Washington Post, perhaps the most significant development is that McConnell, who has signalled an interest in cutting a deal, will be engaged directly in White House discussions for the first time. According to the WSJ, most officials believe any deal is most likely to emerge in the Senate so all eyes will be on the congressional leaders’ meeting later today ahead of a hectic (and cold) weekend ahead for those in Capitol Hill. Beyond that, the Dow Jones Newswires also noted that Republicans will hold a closed-door caucus meeting at 9am ET Monday.
And just in case political headlines were not enough, prepare to see massive market surges on flashing red headlines forecasting clear skies: "while the House may be in session from Sunday through to the 2nd of January, we may need to watch the weatherman for some cues on how travel plans will be affected by the Northeast winter snow storm that is causing havoc in many parts of the country."
What can one say: fun "market."
More from Jim Reid:
It was a session of two halves for US markets with ‘hope’ arriving late in the day to arrest the ever increasing pessimism of a deal before year end. With just five days left on the cliff-countdown calendar, yesterday saw the S&P 500 drop as much as -1.29% to hit an intraday low of 1,402 and the Dow cross below 13,000 for the first time since early December. These early losses were prompted by comments from Senate Majority Leader Harry Reid who said that it looks like the fiscal cliff is where the US is headed. Overall there has been little progress made over the last 24 hours other than more finger-pointing from both sides, which are still seemingly as far apart as ever. Hopes of an 11th-hour deal rose later during the day on reports that the House of Representatives will reconvene on Sunday (6.30pm ET). The news sparked a late rally to see the S&P 500 (-0.12%) close off the day’s lows and the Dow march back up to 13,096. The VIX index also recovered and finished the day unchanged after having reached a 5-month high of 20.9 at one point yesterday.
In the latest development after the closing bell overnight, President Obama is expected to meet with Congressional leaders at the White House today. The meeting will be attended by Senate Majority Leader Harry Reid, House Speaker John Boehner, House Minority Leader Nancy Pelosi and Senate Minority Leader Mitch McConnell. The President had a call with Reid, Boehner and Pelosi late Wednesday night to receive update on the negotiations but no details about the conversations have been given. As noted by the Washington Post, perhaps the most significant development is that McConnell, who has signalled an interest in cutting a deal, will be engaged directly in White House discussions for the first time. According to the WSJ, most officials believe any deal is most likely to emerge in the Senate so all eyes will be on the congressional leaders’ meeting later today ahead of a hectic (and cold) weekend ahead for those in Capitol Hill.
Indeed, while the House may be in session from Sunday through to the 2nd of January, we may need to watch the weatherman for some cues on how travel plans will be affected by the Northeast winter snow storm that is causing havoc in many parts of the country. Beyond that, the Dow Jones Newswires also noted that Republicans will hold a closed-door caucus meeting at 9am ET Monday.
Continuing on with the theme, DB’s Frank Kelly yesterday said that he remains hopeful that both sides will reach a significantly watered-down version of an agreement to delay spending cuts before year-end, although he notes that the sense of urgency amongst Congressional members has been lacking. Frank’s comments were made before all the overnight developments we mentioned above. For those interested in his latest take on the situation, Frank will again host a conference call today as part of a daily update series. His call and replay details are provided at the end of today’s EMR for those interested.
In reality the weaker data also weighed on yesterday’s price action. US consumer confidence fell short of market consensus (65.1 v 70.0) and was down for the second consecutive month reflecting fears of the ‘fiscal cliff’. The sharp decline in future expectations (66.5 v 80.9) caught our eye which also turns out to be the biggest one-month fall since August 2011 – a time when market volatility picked up sharply amid US debt ceiling and rating downgrade concerns. Although initial jobless claims (350k v 360k) and new home sales (4.4% v 3.3%) came in better than expected, risk sentiment was largely driven by the budget impasse.
Moving on to the overnight session, Asian equity markets are off to a reasonably positive start overnight as hopes of a deal are lifted ahead of the meeting today. The Nikkei (+0.8%) is stronger as the JPY hits a 28-month low against the greenback (86.5) as a disappointing industrial production (-1.7% v -0.5%) print boosted the case for more monetary accommodation. Elsewhere, Japan’s headline CPI fell -0.2% yoy in November which was in line with consensus.
Turning to the day ahead, data flow will be relatively thin with the main highlight being the Chicago PMI and US pending homes sales. Ahead of that, Italy is targeting to auction up to EUR3bn in each of 5yr and 10yr bonds and France will be reporting its final Q3 GDP and consumer spending numbers. Fiscal cliff developments remain the key focus though with the White House meeting later likely to take center stage. Meanwhile the Senate also convenes today at 9am US EST (2pm London).
and from Greece......
http://www.ekathimerini.com/4dcgi/_w_articles_wsite1_1_28/12/2012_476214
Three names on new Lagarde list related to former FinMin, report says
Three names on the new list sent to Greece by French authorities containing the names of Greek depositors at a branch of HSBC in Geneva are linked to former Finance Minister Giorgos Papaconstantinou, Skai television reported on Friday.
The new list of names was sent last week to Greek authorities after suspicions that a previous list -- handed over two years ago by then-French Finance Minister Christine Lagarde (currently managing director of the International Monetary Fund) to her Greek counterpart at the time, Papaconstantinou, and apparently lost in the process of an investigation for possible tax evasion -- had been tampered with.
The new list is being probed by prosecutors and has been submitted to Parliament as well so that it can conduct its own investigation into the names on the list and into whether the original list had been adulterated in any way.
According to Skai, the new list contains three additional names to the 200-odd on the original record. These three names are allegedly connected to Papaconstantinou, who had received the original list, and one of the three is said to have deposits at HSBC in Geneva of $1.22 million.
According to sources quoted by Skai, no other new names appeared on the new list that is being investigated by financial prosecutors.
http://www.ekathimerini.com/4dcgi/_w_articles_wsite1_1_28/12/2012_476189
Prosecutors send Swiss account list to parliament
Given to Greece for a second time by French authorities on December 21, the list contains hundreds of names of Greek account holders at global bank HSBC in Switzerland, which authorities want to investigate over suspected tax evasion. The affair has enraged the public and opposition parties already furious over the failure of consecutive governments to crack down on the rich and powerful, while years of recession have wiped out a fifth of economic output and hammered middle-class living standards. France originally handed over the list to Athens in 2010. But former Greek government officials did not act on it, fueling public anger and prompting suspicion that some names were erased before it was given to parliament earlier this year. To put an end to the confusion, Greek prosecutors travelled to Paris last week to re-obtain the original list. They spent six days cross-checking the two documents to find out if any names were removed. The prosecutors did not reveal if the initial list had been tampered with. “They compiled a most detailed report that was submitted to the Greece's highest civilian court with the request to be forwarded to parliament,” a court official told Reuters on condition of anonymity. The list originates from wide-ranging data stolen by a former HSBC employee, which Paris obtained. Greeks have dubbed it the “Lagarde List” after Christine Lagarde, the head of the International Monetary Fund who was French finance minister when the list was originally handed over. Greece has so far failed to convict any big names of tax evasion, fueling popular disenchantment with a political class that promised to force the wealthy to share some of the pain of the debt crisis. “The lies are at an end, our people seek the truth, judgment day nears,” Panos Skourletis, spokesman of Greece's main opposition SYRIZA party said on Wednesday.
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