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The last day of Summers, a good one for markets

Lawrence Summers
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Lawrence Summers

Recapping the day's news and newsmakers through the lens of CNBC.

All Summers in a day

Notes:

Stocks jumped and bond yields dipped today as elated Wall Streeters celebrated Larry Summers' withdrawal from consideration as Federal Reserve chairman. The former Treasury Secretary cited the likely uphill confirmation fight.

A new CNBC poll finds that Wall Street preferred the other top candidate, Fed Vice Chairman Janet Yellen, over Summers five to one, but by a two-to-one margin had expected President Barack Obama to name Summers. Poll participants felt Yellen more likely to continue the easy-money policies of current Fed Chairman Ben Bernanke, but some experts think she's more hawkish than widely believed.

The S&P 500 closed near a record high, just under the 1,700 mark, and its all-time high of 1,709.

Quotes:

"The market will, at the margin, see his withdrawal as one which prolongs unorthodox policy for longer—partly because it moves the more dovish Yellen up the favorites list for the new job."
—Deutsche Bank's Gael Gunubu

"The market, having wrongly assumed that Summers was more hawkish than Yellen, is now rallying off the false assumption."
—CNBC's Steve Liesman

Ben Bernanke, Chairman of the U.S. Federal Reserve
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Ben Bernanke, Chairman of the U.S. Federal Reserve

Blunting Bernanke's blunt instrument

Notes:

You've seen the previews. You've waited all summer—and through all the rumors about the "next" hawkish Fed chairman Larry Summers. Now the big moment is here—the storied September Fed meeting that will launch the great taper. Unless it doesn't.

Meeting on Tuesday and Wednesday, the Federal Open Market Committee is widely expected to reduce its $85-billion-a-month asset-buying program by $10 billion to $15 billion, and there is some evidence this has begun already. That would be a minor cut but would signal a large, though slow, change in direction as the economy recovers from the financial crisis. A bigger-than-expected taper could be tough on stocks and bonds.

Quotes:

"What's priced in is a taper [of] $10 billion. ... Any more than $10 billion is a surprise, and volatility can pop back up."
—Art Cashin, director of floor operations at UBS

"The reason why we're going to see the taper is not because of the declared 'big victory on the economy,' [but] because they're worried about what Mr. Bernanke called the cost and risks—the collateral damage if you like—of using such a blunt instrument to impact markets."
—Pimco CEO Mohamed El-Erian

President Obama speaks on Tuesday about progress in the economy since the financial crises began five years ago.
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President Obama speaks on Tuesday about progress in the economy since the financial crises began five years ago.

One thing Obama won't negotiate over

Notes:

Speaking on the five-year anniversary of the Lehman Brothers collapse, Obama said Monday that he will not negotiate with lawmakers about raising the U.S. debt ceiling.

In a blistering warning to congressional Republicans, the president said it would be not only irresponsible but the height of irresponsibility for lawmakers to cause another economic crisis just five years after the collapse of the nation's financial system. The government has been bumping up against its $16.7 trillion debt ceiling since May.

Quote:

"I cannot remember a time when one faction of one party promises economic chaos if it can't get 100 percent of what it wants. That's never happened before."
—President Barack Obama

Job seekers speak with an employment recruiter in Brooklyn, NY
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Job seekers speak with an employment recruiter in Brooklyn, NY

Unemployment gap widens to record

Notes:

The gap between rich and poor is well-studied, but it's not the only widening divide in the U.S. with repercussions for the economy. At 7.3 percent, unemployment is way too high, and it's much worse for some groups, like those with little education, than for others, like those with college degrees. Poor people are especially hard hit, with 21 percent unemployment for households earning less than $20,000 a year.

The rate is just 3.2 percent for those earning $150,000 or more a year. It's the widest gap since the government started collecting this data a decade ago. One factor is the large number of middle class people being pushed down into the ranks of the poor.

Quote:

"This was no 'equal opportunity' recession or an 'equal opportunity' recovery. One part of America is in depression, while another part is in full employment."
—Andrew Sum, director of the Center for Labor Market Studies at Northeastern University

Obamacare supporters and protesters gather in front of the U.S. Supreme Court to find out the ruling on the Affordable Health Act June 28, 2012 in front of the U.S. Supreme Court in Washington, DC.
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Obamacare supporters and protesters gather in front of the U.S. Supreme Court to find out the ruling on the Affordable Health Act June 28, 2012 in front of the U.S. Supreme Court in Washington, DC.

Obamacare: Just another cell phone bill

Notes:

What will those Obamacare health insurance policies cost? We still have a lot to learn, but one study indicates policies for young folks will be surprisingly cheap. Personal finance website NerdWallet looked at some of the second-cheapest plans to be offered—the so-called silver tierplans—and found that typical 20-somethings, after receiving a federal tax credit available to most young people, will pay about $101 a month in California and $114 in New York.

Low prices could lure millions of young people into the system, helping to reduce premiums for older people. Sixteen states and the District of Columbia will operate Obamacare insurance exchanges, which will open for business Oct. 1. The federal government will run the rest or partner with the states.

Quote:

"Health insurance can be as affordable for young adults as their cellphone bill."
—NerdWallet Vice President Christina LaMontagne

—By Jeff Brown, Special to CNBC.com

Market Insider with Patti Domm