US House reject Debt Limit Increase: Bad news is Good news in this market, BAC, ALTE, SANM, MSFT, GOOG

Today house voted to reject President Barack Obama's request to raise the federal debt limit by $1.2 trillion, a symbolic act designed to let lawmakers oppose the increase while letting it take effect. Lawmakers voted 239-176 for a resolution rejecting President Barack Obama’s request to raise the legal cap on borrowing by $1.2 trillion.

This government is spending like crazy as if there is no tomorrow. This news is completely ignored by biased main stream media at this time. 

Yesterday, U.S. suspended investments into a federal employee retirement fund to avoid breaching the $15.194 trillion debt limit. Treasury Secretary Timothy F. Geithner has already warned US will default on Jan 27th, if US debt limit is not raised. President can veto to raise this debt ceiling. Last time there was huge drama when US debt ceiling issue was raised. Stock market declined by 10-15% in July -August. We should see another US downgrade by June/July of this year.

Today market rallied on the hope of hope that IMF will rescue Europe with 1 trillion to EFSF. Same news has been circulated 5th -6th time. Where is IMF going to borrow money ? US, UK has already denied of adding any fund to IMF. But this market likes excuse to rally on hope. Greece debt talk was failure today, but the news was projected as Greece will reach deal by weekend. 

As I have said in my previous article, this market is considering, "Bad news as good news, and good news as bad news"

UK hit 16 year high unemployment rate, drop in earning wage and reduced hourly work. US economic data came better then expected but it showed rising risk of Deflation which is happening because of printing free money. This Fed and Government is digging even bigger hole for the US economy, which they are not realizing at this time but by April/June it will see the reality.

After hours Xilinx missed estimate, missed revenue yet stock rallied up by 6%. ALTE is posting loss of 500 mln, yet stock rallied up by 5%, SANM profit fell 70%

If possible avoid this market or invest only if you can watch the market movement. 

Tomorrow economic data to consider are:

Consumer Price Index (8:30 AM ET):

Housing Starts (8:30 AM ET)

Jobless Claims (8:30 AM ET) 383k is expected, higher will be bearish, lower will be bullish sign.

Bloomberg Consumer Comfort Index (9:45 AM ET)

Philadelphia Fed Survey (10:00 AM ET)

EIA Natural Gas Report (10:30 AM ET)

EIA Petroleum Status Report (11:00 AM ET)