Recap 12-20-11

Main Items:

  • Over the past few weeks there have been 97 negative preannouncements from companies in the S&P 500. This is compared to 26 positive preannouncements this quarter. Analyst expectations are now at $24.62 for the quarter, around 4% lower than the $25.67 reported in the third quarter. This would be the first earnings decline since 2008.
  • Housing Starts jumped to 685k in Nov vs 635k exp. Warmer weather may have helped, especially in the Northeast and West, and was concentrated in multifamily starts.

Overseas:

  • German IFO business climate index improved to 107.2 in Dec vs 106 exp and 106.6 prev.
  • German GfK consumer confidence was unchanged at 5.6 vs 5.5 exp.
  • Riksbank cut 25bps to 1.75% as exp. Some wanted a 50bp cut. CPIF inflation for 2012 was revised down marginally from 1.3% to 1.2%

Commentary:

WTF. Seriously.

The House Republicans seem to be drunk on power. They turned down a bipartisan Senate bill in an attempt to force the Senate and the President back to work so that they can pass something that only they want. Here is the voting breakdown – note that 13 Republicans, including Boehner, either didn’t vote or voted with the Democrats.
http://politics.nytimes.com/congress/votes/112/house/1/946?ref=politics
Are they shooting themselves in the head? Maybe House Republicans get what they want, and the stopgap financing bill doesn’t pass. Then in January, people start paying an additional 10bn per month in taxes. Just in time for the election season later next year.

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