Update: ES moves down a whopping 1 pt when Boehner says "we are broke."
Update 2: Boehner ends about 3 minutes in, nothing notable to report: the GOP is waiting for a proposal from the White House, which in turn is waiting for a proposal from the GOP. And so on.
If the past few days' silence from D.C.was supposed to indicate progress in Fiscal Cliff talks between the GOP and democrats, then will today's impromptu press conference by Boehner be spun as even more indicative of progress? This may be complicated when he admits, once more, there has been none to talk of. Luckily, Boehner has long since served his duty, with his November 16 conference when he and Pelosi single-handedly stopped the market from plunging to 2012 lows, and AAPL from getting a 4 handle. All his subsequent appearances have been quite superfluous. Watch him live below.
It’s as if they are trying to poison the well.
The man who singlehandedly fought the administration over the idea of converting Fannie and Freddie into the latest taxpayer-funded handout machine, FHFA head Ed DeMarco, and refused to write down Fannie and Freddie home loans in yet another Geithner-conceived debt forgiveness scheme, whose cost like any other non-free lunch will simply end being footed again by yet more taxpayers (what little is left of them), appears to have lost the war, and with the second coming of Obama appears set to be replaced as head of the FHFA. The WSJ reports that "The White House has begun preparations to nominate a new director to lead the agency that oversees Fannie Mae and Freddie Mac as soon as early next year, according to people familiar with the discussions. This would pave the way for President Barack Obama to fill what has become one of the most important economic policy positions in Washington." And so the impetus for as many as possible to default on their mortgage in a wholesale scramble to obtain debt forgiveness, will soon take the nation by storm, while the contingent liability will be transferred to those who still believe that taking out debt should be a prudent activity and one that takes into account future cash flows. In other words, the solvent middle class - those who were prudent stupid enough to save when they should have simply be doing what the government does and spend like a drunken sailor, preferably on credit, will soon be punished once more. And like it. Because according to the new broke normal "it's only fair."
Tim Geithner's time is almost done, but the former NY Fed head is only one of very many whose position is expected to be replaced in Obama's second term (just so there is a non-continuous chain of command if and when the time comes for the people to demand an explanation for the state of the US economy from the talented Mr. Geithner). Who else is out and who is expected to be in? The following list attempts to cover all upcoming rotations at the top of the US cabinet. What is not attempted is a prediction of where in the private sector people such as Geithner will end up: that is considered largely self-explanatory.
We have maintained (here and here) for quite some time that the only true "consumer confidence" statistic one should look at is that of gun sales. The bottom line is, as Mike Krieger so rightly points out, people do not hoard guns when they are confident about the future of the country, and gun sales have never been better. More evidence emerged as Smith & Wesson just announced record financial results.
Any legacy that Obama might have had will have been converted into something like Herbert Hoover’s.
- MSM discovers window dressing: Fund Managers Lift Results With Timely Trading Sprees (WSJ)
- White House Unyielding on Debt Limit (WSJ)
- Obama, Boehner talk; Geithner prepared to go off "cliff" (Reuters)
- Republicans urged to resist tax rises (FT)
- China looms large over Japanese poll (FT)
- As predicted here two months ago, Greek Bond Buyback Leads S&P to Cut to Selective Default (BBG)
- Japan opposition LDP set to win solid election majority – polls (BBG), but...
- Japan Opposition LDP’s Main Ally Cautions Abe on BOJ Pressure (BBG)
- U.S. and Europe Tackle Russia Trade (WSJ)
- King Seen Maintaining QE as Osborne Extends Fiscal Squeeze (BBG)
- Syria pound fall suggests currency crisis (FT)
- Irish budget seeks extra €3.5bn (FT)
- U.K. Extends Cuts Due to Poor Outlook (WSJ)
- ECB Seen Refraining From Rate Cuts as Yields Sink on Bond Plan (BBG)
The use of economic pain to expand governmental control of a nation is not a new concept. It has been a tool successfully used many times in history. The reality that "taxing the wealthy" does not increase revenue or promote economic growth is lost on the 80% of Americans that are economically uninformed and are just struggling to maintain their current standard of living. The path over the "fiscal cliff" is bad for the economy, the average American family and the stock market. However, for the White House, going over the "cliff" is the next move in this elaborate game of chess which will clear the path towards completing Obama's long term objectives of complete socialization of the American economy.
As President Obama addresses a room full of small business 'patriots' we thought his 'confidence' about consumers and housing might have been tempered a little by this chart from Bloomberg Businessweek... We can't wait for the Q&A... Live audio below...
The Bank of Korea increased gold reserves 20% last month to diversify investments, boosting holdings for the fourth time since June 2011 and underscoring increased demand by central banks according to Bloomberg. The bank added 14 metric tons in November, bringing the total to 84.4 tons, the bank said in a statement today. By value, holdings increased about $780 million to $3.76 billion, equivalent to 1.2% of total reserves, the bank said. “Gold is a physical, safe asset,” the Bank of Korea said in the statement. The precious metal “is a way of diversification, which helps reduce investment risk in terms of foreign-exchange reserves management,” it said. The Bank of Korea bought 16 tons in July, 15 tons in November 2011 a further 25 tons over a one-month period from June to July last year.
With AAPL -2% and stocks at the lows of the day, we wonder whether Obama has bought puts or calls today... President Obama sits down with Bloomberg White House correspondent Julianna Goldman at the White House today for his first television interview since the election to discuss the fiscal cliff - now just four weeks away.
*OBAMA SAYS NO FISCAL CLIFF DEAL `WITHOUT TAXES ON THE RICH'
Live stream below
- Two weeks ago here: The Latest Greek "Bailout" In A Nutshell: AAA-Rated Euro Countries To Fund Massive Hedge Fund Profits... and now on Bloomberg: "Hedge Funds Win as Europe Will Pay More for Greek Bonds" (BBG)
- Oracle sends shareholders cash as tax uncertainty looms (Reuters)
- GOP Makes Counteroffer In Cliff Talks (WSJ)
- Iran says captures U.S. drone in its airspace (Reuters)
- IMF drops opposition to capital controls (FT)
- Vogue Editor Wintour Said to Be Possible Appointee as U.K. Envoy (BBG)
- Juncker Stepping Down French Finance Minister to Head Euro Group? (Spiegel)
- Australia cuts rates to three-year low (FT)
- Europe’s banking union ambitions under strain (Reuters)
- EU Nations Eye New ECB Bank Supervisor Amid German Doubts (BBG)
- Frankfurt's Ambitions Get Cut Back (WSJ)
- House Republicans Propose $2.2 Trillion Fiscal-Cliff Plan (BBG)
Quiet session so far, with a notable move higher in the last block of trading in China pushing the SHCOMP for its first gain in 6 days, and off post-2008 lows. What precipitated the buying is irrelevant, although we got a good glimpse into the state of the Chinese economy thanks to Australia prior where the RBA cut rates by 25 bps to a historic low 3.00% (a move that sent the AUD higher), a level last seen during the financial crisis, and confirming that not all is well for the Chinese derivative economy despite loud promises from the Chinese politburo that growth is back. Bypassing the bullish propaganda were Renault Nissan's Chinese car sales for November which fell by 29.8% Y/Y. Some "recovery" there too. In Europe, the status quo continues, with chatter out of Germany's Merkel who begins her 2013 election campaign today, that Germany wants a strong Eurozone (it doesn't), and a strong Euro (it doesn't), but that nobody can predict when the Eurozone crisis will end (not even Hollande or Monti who did just that yesterday?). Otherwise sentiment there is still driven by the formal Spanish re-request of aid (and imminent receipt of €39.5bn in bank recap funds) from the EU by mid-December. As a reminder Spain did this originally in June but the algos were so confused yesterday they thought this was an official sovereign bail out request sending risk soaring only to tumble later (only in the New Normal is admission of sovereign insolvency a "good thing"). Nonetheless, despite the massive overvaluation of European markets (more on that later), the EURUSD continues to the upward momentum (in the process further curbing German exports and assuring the German recession), and was last seen trading up to 1.3075, about 30 pips higher.
There is little detail (more to come) but Boehner's office has just released his rebuttal to Obama's so-called 'un-serious' offer. These numbers do not appear like any change - just as Obama's was no change - so much for compromise. It seems politicians now have zero-beta for the algos - who have given up now the month-end is over...
- *BOEHNER DESCRIBES WHITE HOUSE PLAN LAST WEEK AS `LA-LA LAND'
- *BOEHNER SAYS HE'S OFFERING `CREDIBLE PLAN' ON FISCAL CLIFF
- *BOEHNER SAYS PLAN DESERVES `SERIOUS CONSIDERATION' BY OBAMA
- *HOUSE REPUBLICANS PROPOSE $1.4 TRILLION IN SPENDING CUTS
- *REPUBLICAN PLAN INCLUDES $800 BILLION IN NEW REVENUE
Full letter below
- Union solidarity rubs up against slow economy in LA port strike (Reuters)
- Geithner predicts Republicans will allow higher tax rates (Reuters). And "no risk" of a US downgrade, "no risk"
- Geithner takes hard line on fiscal cliff (FT)
- Narrowing LDP lead points to Japan post-election confusion (Reuters) - not to mention, USDJPY plunges if LDP loses
- Vietnam Says China Must Avoid Trade Weapon in Maritime Spat (Bloomberg)... and real one, one hopes
- Greece unveils bond buyback plan (FT)
- ECB Can’t Deliver Spain Spread Rajoy Wants, Wellink Says (Bloomberg)
- UK’s euro trade supremacy under attack (FT)
- Merkel Signals Debt Write-Off Possible as Buyback Begins (Bloomberg)
- ECB's Noyer Says Bond-Buying Plan 'Is Bearing Fruit' (WSJ) - as long as just plan, and not execution.