Obamacare

While Cruz's speech was entertaining (and gained media attention), there is one thing they agree on

• *SENATE VOTES 100-0 TO ADVANCE BILL TO KEEP GOVERNMENT OPEN

Which means the Senate invokes cloture on the motion to defund Obamacare - setting up 30 hours of debate before another vote on the motion (Cue Cruz again?)... but

*CARNEY REITERATES OBAMA WILL NOT NEGOTIATE ON DEBT CEILING

It's possible that the liberal's ultimate objective of achieving a single payer system, might well prove to be their undoing.

Having taken the floor at 2:41ET Tuesday afternoon,. Senator Ted Cruz's anti-Obamacare filibuster-lite has now become the 4th longest filibuster in Senate history, as The Washington Times repots, topping the 1908 speech by Sen Robert La Follette Sr.. Overnight, he read excerpts from both Ayn Rand's “Atlas Shrugged” and from Dr. Seuss’ “Green Eggs and Ham” on the floor, cited approvingly the words of wisdom from actor Ashton Kutcher and hit TV show “Duck Dynasty." Mr. Cruz will not be able to reach the third-longest filibuster in history, a 22-hour and 26-minute affair in 1953, because under the rules, the Senate will have to adjourn its session at noon.

Early weakness in Asia driven by US-follow thru selling and ongoing concerns about the us fiscal showdowns as well as the debt ceiling, if not by actual news, resulted in a red close in both the Nikkei and SHCOMP, as well as other regional indices such as the Sensex. This then shifted to Europe, where however stocks reversed the initial move lower and are seen broadly flat, with Bunds remaining bid on the back of month-end, as well as coupon and redemption related flows. However the move higher in stocks was led by telecommunications and health care sectors, which indicates that further upside will require another positive catalyst. There was little in terms of fresh EU related macroeconomic commentary, but according to a report published by the European Banking Authority, the EU’s biggest 42 banks cut their aggregate capital shortfall with respect to the “fully loaded” 2019 Basel III requirements to €70.4bln as of December 2012. This is amusing since not one European bank has actually raised capital, but merely redefined what constitutes capital courtesy of a liberal expansion of RWA, Tier 1 and various other meaningless definition which works until such time as the perilous European balance kept together by the non-existent OMT, is tipped over.

When Obamacare was thought up it was more than just a presidential pledge to woo the poverty-stricken Americans into believing (and voting) that healthcare should be provided for all and sundry and that any Tom, Dick and Harry could get through life by being provided for by the state.

For those willing to share in the next few hours of defund-Obamacare discussion from Senator Ted Cruz (tag-teaming a little with Rand Paul) as he talks his way through the night (having started at 2:41pm ET) - ending only when he is "no longer able to stand," or the 15-hour Senate floor limit; the following link provides the blow-by-blow (water works and all).

• Iran Icebreaker Set at U.N.  (WSJ)
• Chrysler Feud Triggers IPO Filing  (WSJ)
• JPMorgan Chase, 12 More Banks Said to Be Sued Over Libor (BBG)
• Regulator sues Morgan Stanley, eight others over faulty securities (Reuters)
• Monte Paschi Seen Boosting Cost Goals to Meet EU Demands (BBG)
• Here we go again - "not enough funds": CFTC chair Gary Gensler warns on fund cuts to police derivatives (FT)
• Congress Fuels Private Jails Detaining 34,000 Immigrants (BBG)
• KKR, Sycamore looking to buy Jones Group this week (NYPost) - take with lots of salt
• Fiat rethinks alliance with Chrysler after IPO filing (Reuters)
• Young Invincibles Caught in Crossfire Over Obamacare Cost (BBG)
• Mayfair Office Squeeze Spawns New London Real Estate Hubs (BBG)

Everything was proceeding according to central-plan with a gradual rise in risk and a decline in the USD until 4 am Eastern, when the German IFO Business Climate data was released and missed across the board (107.7 vs Exp. 108.0; Current assessment 111.4 vs Exp. 112.5; Expectations 104.2 Exp.104.0), reminding everyone now that Merkel is cemented for the near future, the immediate prerogative for Europe is to get the EUR lower, one way or another. A returning bid to the dollar also has pushed 10 Year yields under 2.70%, while once again sending various EM currencies sliding, and bringing back cross asset volatility to a world whose Sharpe ratio over the past several months has plummeted into negative territory. Increasing concerns about a government shutdown (misplaced) will likely prevent a solid bid from developing under markets.

New Revelations Are Breaking Every Day

The German elections came and went, with Merkel initially said to have an absolute majority, but in the end being forced to design a Grand Coalition. Still, the punditry has been tripping over each other desperate to make that result (or any other result) positive for Europe , which despite now paving the way for policy continuity, together with the latest round of less than impressive Eurozone PMIs (following the strongest China HSBC PMI in 6 months) failed to inspire appetite for risk in Europe this morning where stocks have traded mixed. What is amusing is that everyone expected, the second Merkel gets reelected things in Europe would start going pump in the night - sure enough, the Italian FTSE-MIB is underperforming in early trade amid reports that Italy's economy minister Saccomanni threatened to step down if the country does not stick to its pledges it made to the European Commission. However to a certain degree, the negative sentiment towards Italy was offset by €4.8bln of coupon payments and €24.1bln of redemptions from Italy which is eligible for reinvestment this week. With a second Greek 2-day strike in one week scheduled for Tuesday and Wednesday, look for Europe's catalytic event to unclog, now that the German political picture is set, culminating with the 3rd (and 4th) Greek bailouts and probably more: after all Europe now needs a lower EURUSD (recall Adidas' warning), and that usually means a localized crisis.

Dispassionate macro overview.

Who do da Healthcare Voodoo!!! Who do da Vichy DC Doodoo? 

President Barack Obama travels to Missouri Friday to tout the gains made by the auto industry and criticize Republican proposals on defunding his signature health-care plan. As the WSJ reported earlier, president is speaking at a Ford stamping plant in Liberty, Missouri, highlighting the growth of auto manufacturing on his watch. We suspect more than a few words will be spilled explaining how he feels about what The House just did to Obamacare...

As expected, the House Republicans just passed a vote to defund Obamacare with 230 Yeas and 189 Nays. And now the vote deadends as it will go no further in the Senate, and Obama will obviously veto it. Luckily, since the person in charge of the US economy is not on the Hill but in the Marriner Eccles building, this entire theater is irrelevant.