Stocks have barely moved this morning, with the Dow Jones Industrial Average (^DJI 0.13%) down just three points and the S&P 500 (^GSPC +0.11%) down less than a point as of 10:08 a.m. EST.
Fiscal cliff watch
Both sides of this argument (i.e., the White House and Republican congressional leaders) look like they're bluffing as they draw lines in the sand that (they say) they won't cross. President Obama insists that tax rate increases on the wealthiest 2% of Americans must be part of a package to avert the fiscal cliff; Republicans will not abide any such increase, preferring to look for additional revenue by eliminating deductions and loopholes.
Either way, both sides are digging in right now, rather than negotiating. There appears to be little sense of urgency at this stage. Obama didn't sound hurried when he told business leaders yesterday that a deal could be done in a week if Republicans assented to tax hikes for top earners. Today, he takes his "campaign" on the road, visiting a middle-class family in Northern Virginia to illustrate the potential impact of tax increases on this segment of the population -- a skillful use of the president's pulpit to put pressure on Republicans.
The micro view
"Congratulations on making one of the worst teleconferences that I have ever heard to justify a deal." This was the opening salvo from BlackRock fund manager Evy Hambro during a call in which Freeport-McMoRan (FCX +0.29%) was attempting to justify its $20 billion tie-up with McMoRan Exploration (NYSE: MMR) and Plains Exploration and Production (NYSE: PXP). The deal would create the fifth-largest resources group in the U.S. and the fifth-largest miner in the world.
Mr. Hambro isn't the only Freeport shareholder skeptical of the merits of the acquisitions: Freeport's shares fell 16% yesterday, and they're down another 3.8% as I write. I think such skepticism is warranted. Megadeals like this one often have more to do with management's ego (and remuneration) than creating shareholder wealth.
