The president got his pound of flesh on taxes even as he was looking for more. Some significant deals were struck on dividends and capital gains for those making less than $400-450K. The disappointment is debt issues were shelved. This is what always happens since raising taxes is always the easiest thing to do vs serious deficit cuts bear on someone else’s ox getting gored. But, once Obamacare is in force taxes will rise further as Chief Justice Roberts ruled—“it’s a tax”.

So we got a relief rally of sorts in stock markets and portfolio managers will get a little more in the way of bonuses with the end of month & year “stick save”. Oh wait, many of them will have to pay more in taxes.

The following (Weekly Standard) is the deal worked out between VP Biden and Senate Minority Leader McConnell. Since It was inevitable with Obama’s reelection taxes would rise, perhaps this is the best possible outcome.

It’s not a mere side note that the House hasn’t voted on this and there’s been little in the way of reconciliation which “is” the process in legislation as noted HERE. Assuming that a positive vote on this takes place in the House, then we move to the next big deal—the debt ceiling. And, let’s not leave out more controversy as Obama continues to piss-off potential republican votes as he presses for even more taxes in 2013.  Finally, late breaking word is the House won’t be voting on any deal Monday thus going over the cliff if only temporarily.

The other positive news came from China where industrial production (PMI) 51.5 vs 50.5 previously. This kicked emerging market (EEM) and Asian stocks (AAXJ) higher despite fiscal cliff issues.

I’m not going to spend a lot of time on this as nothing is “buttoned down” yet except a sharp equity market rally and short squeeze.

Volume was heavy on this “fiscal cliff” day and like others I hope not to type that phrase again ever! Breadth per the WSJ was quite positive approaching a 90/10 day by some measures.

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