Submitted by Mark Hanna
Courtesy of MarketMontage. View original post here.
The S&P futures had a sort of flash crash tonight dropping 50 points from peak to trough in the span of minutes on news that “Plan B” didn’t have enough votes and hence was off the table. A major blow to Boehner. Futures were down as low as 1391 which is about 1396 in the cash market (from a close of 1438 or so). Almost all of that came in a 1 minute span. “Flash crashy”. They have recovered about 1/2 of that in the past hour but certainly it is shaping up to be an interesting Friday coming off the back of a constructive session Thursday. I was just talking about this to some people the other day – the first thing I check most days now is political / central bank news every day (or night), rather than anything having to do with economics or stocks. It didn’t used to be like this – but this is what you have when your market is dominated by intervention policies.
Bigger picture this thing had no chance of passing the Senate so it was more for decoration but in theory “strengthened” the GOP’s hand. But since they could not even agree on this Plan B, there is no hand. So from what I’m reading it’s basically ball in Dem’s court.
From Politico:
- House Speaker John A. Boehner abruptly abandoned a partisan plan to avert the year-end “fiscal cliff” late Thursday after failing to persuade conservative Republicans to extend tax cuts for the vast majority of Americans and let tax rates rise for millionaires.
- With more than four dozen House Republicans either on the fence or signaling their opposition, Boehner (Ohio) and other GOP leaders shuttered the House floor moments before the vote was scheduled to begin. They disappeared into Boehner’s office and then summoned rank-and-file lawmakers to an emergency meeting that ended with a terse statement calling off the vote.
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