Quick heads up.Some folks are attributing the market rally and the collapse of volatility to a Washington Post article by Greg Sargent arguing that the GOP isn’t united in their Debt Ceiling strategy as people might think.
Dave Lutz of Stifel Nicolaus passes along this segment in a quick note titled Why the huge drop in Volatility?
Seems the huge drop in Volatility can be attributed to 2 things. Bad earnings expectations already built in – and the “Cliff” threat coming off. From WTAW: “Boehner has now taken to saying that the GOP’s real leverage in the debt ceiling battle flows not from the debt ceiling, but from the threatened spending cuts in the sequester. But half of those are defence cuts, which Republicans are far more adamantly opposed to than Democrats are – All of which points to what may be the most important fact about the whole debt ceiling fight: GOP leaders want to be granted the presumption of leverage based on the threat of default, yet they are not prepared to deliver on that threat” – http://www.washingtonpost.com/blogs/plum-line/wp/2013/01/08/gop-disarray-over-debt-ceiling/