The day is not done in this area of the world but from what I can tell the planet survived the Mayan apocalypse. The same can’t be said for fiscal cliff negotiations. Boehner’s “plan B” never got to vote since it didn’t have the votes. Republicans just don’t want to be accused of raising taxes especially when there aren’t any serious spending cuts in the mix. It’s just that simple really. The baton was passed to Harry Reid who just couldn’t grasp it knowing they were ill-prepared for any plan to vote for or against.

On the one hand it’s good there are disagreements since you wouldn’t want anything rammed down the people’s throat without discussion. At the same time the WH and congress have had plenty of time to discuss things since Simpson-Bowles. That report was promptly put in the dumpster. It should have gotten a vote but none of the parties wanted to touch it. Therein is the shame of it all. So a pox on their houses!

Now the parties will leave on holiday which shouldn’t be permitted given their failures. But who’s to stop AF One and others from hightailing it? Not a soul. Meanwhile, Bernanke & Co will keep the money printing presses running should the cliff result in a disruption. The only problem there is running out of ink.

Stock markets sold-off hard (futures limit down overnight) on the news but, for the most part, still are clinging to gains on the week. Leading stock sectors lower came from across a wide spectrum. Bonds (TLT) were higher. The dollar (UUP) was stronger on a (cough) flight to quality while gold (GLD) oddly rallied modestly. Commodities (DBC) were flat overall while basic metals (DBB) rallied slightly.

To complicate matters Friday was quad-witching meaning spooky things can occur with prices manipulated by odd mechanical objectives (option strike prices, expirations and so forth) having nothing to do with basic investment practices.

Obscured by the theatrics were some mixed economic data. Durable Goods Orders rose (.7% vs .5% expected & prior revised higher to 1.1%) while ex-Transportation (1.6% vs .2% expected & prior 1.9%). Personal Income rose (.6% vs .3% expected & prior .1%) while Spending rose (.4% vs .4% expected & prior 1.2%). Both these data points were heavily influenced by Hurricane Sandy it’s said. University of Michigan Consumer Sentiment weakened (72.9 vs 75 expected & prior 74.5).

Overseas news featured an expected resignation from Italy’s Monti. In the UK GDP worsened (.9% vs 1% expected) while the BOE wants banks to raise their reserve requirements which logically would reduce lending.  

Volume on this pre-holiday week of trading (along with quad-witching) was heavy. Breadth per the WSJ was quite negative.

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