If the Sunday morning talk shows were one’s only guide post as an investor going into Monday, sell would be the call after Geithner said there will be no deal unless the top tax RATES go up and Boehner said the negotiations have gone “nowhere.” Luckily we know the talk shows are for the cameras and that there is still an underlying belief that some sort of a deal, whether good or bad, will be hashed out as no one wants to see tax rates go up on the middle class (putting aside one’s belief on the top 2%).
Elsewhere, the apparent stabilization in the economic data coming out of China has done nothing to assuage the concerns of A share investors (H share investors have been more positive). The Shanghai index closed down for the 5th day in the past 6, by another 1% to the lowest level since Jan ’09. This even though the state enterprise weighted mfr’g PMI rose to 50.6 from 50.2 (est 50.8) to the best since April. The HSBC final mfr’g figure was little changed with the preliminary and the services index rose to 55.6 from 55.5, a 3 month high.
In Europe, following the EU blessing last week to release funds to the Spanish banking system, today Spain is officially asking for it with BN reporting that Dec 12th is when funds should be made available. The disbursement is as expected. What is still a mystery is if and/or when Spain the sovereign asks for help which for now them seem loath to do. The Greek stock market is up 1.5% after they gave details on their bond buying program. It’s sending the bond maturing Feb 2023, up a sharp 10% (which of course makes the buyback more expensive).
