12/21/2012 12:28 pm ET

Fiscal Cliff Plan B Failure Mildly Perturbs Stock Market

Why does John Boehner hate the stock market?

Markets around the world were shaken on Friday after the speaker of the House not only screwed the pooch in the fiscal-cliff standoff, but also married the pooch on top of a mountain, with flutes playing and trombones and flowers and garlands of fresh herbs.

Stock-market futures immediately collapsed in electronic trading late Thursday night when the news broke that Boehner (R-Ohio) had failed to get House Republicans to vote for his Plan B from Outer Space, blowing his all-or-nothing gamble to squeeze some concessions out of President Obama. Stocks fell in Asia, with Japan's Nikkei 225 index ending down about 1 percent.

Markets have calmed down a bit, and the losses are hardly apocalyptic (hi, Mayans!). The Dow Jones Industrial Average was down about 150 points at midday on Friday, or a little more than 1 percent. This is nothing like that time in 2008 when the House of Representatives said, "Eh, no thanks," to a bank bailout and caused the Dow to collapse nearly 800 points in a couple of minutes.

Most people in the market either figure that going over the so-called fiscal cliff of tax hikes and spending cuts due to take effect next year is not that big of a worry, or that a deal will soon be made to avoid it, Plan B or no.

There is a good case to be made for both. Now that Boehner has blown any leverage he had in talks, he has little choice but to surrender and cut a deal quickly

"Losing Plan B's cover makes it politically urgent for Republicans to cut a deal with Democrats," writes Bloomberg's Josh Barro. "The desperation that drove Boehner to try to pass Plan B will now drive him to be more flexible with President Barack Obama."

And if that doesn't happen, there are steps Obama and Congress can take next year to ease the pain of the cliff. For one thing, it seems reasonable to expect that Obama will move quickly to cut taxes for people making less than $250,000 a year, which should have bipartisan support.

The market has been mildly nervous about going over the cliff, encouraged by the near-constant panic-trolling of CNBC. And Boehner has made a habit of raising market anxiety. An anonymous source counts seven instances in the past month when the Dow has fallen immediately after Boehner has spoken in a fiscal-cliff press conference.

Still, the average of those declines, according to the source's count, has been 22 points, or less than 0.2 percent, making it not really even worth checking out the source's numbers. Brisk winds and high-frequency-trading robot farts move the Dow more than that.

Friday's stock drop has been Boehner's greatest hit so far, but the market's not panicking. For good reason.

-- Ryan Grim contributed to this story.