Futures have been weaker since early in the morning as The Wall Street Journal highlighted how determined the GOP was to force a discussion on spending cuts around the debt ceiling issue. House Republicans may be willing to shut down the government, Politico said.

So why are stocks at new highs? Last week, I asked, "Whatever happened to the wall of worry?" There was a great story in Politico over the weekend about how OVER Wall Street is with Washington's drama. "The market's new attitude toward the continuing brinkmanship? Wake me when it's over," the story begins. Crisis as the new normal.

The problem is, this indifference is predicated on the idea that lawmakers go to the edge, but ultimately strike a deal. If that doesn't happen, markets will react very quickly.

What happened to the wall of worry? Barclays and a number of other shops are pondering exactly that question this morning. Consider:

1) The Volatility Index is near new lows, as are other indicators of volatility;

2) U.S. markets are up big: the S&P 500 at five-year highs; Russell 2000 and S&P MidCap Index at HISTORIC HIGHS;

3) China is showing signs of recovery, and Hong Kong stocks are at new highs;

Is China improving? December exports increased 14.1 percent, highest level since last May and well above the 5 percent increase that was expected. November was up only 2.9 percent. Imports were up 6 percent.

This will help gross domestic product numbers — in the third quarter it was 7.4 percent. The fourth quarter could come in better than that, perhaps as high as 7.8 percent.

The Aussie dollar is up, the U.S. dollar is down, and big global material companies are trading up.

A better than expected earnings season? It's early, but I see signs that things may be a little better than some were expecting:

1) Alcoa was surprisingly bullish on China, talking about growth in automotive, heavy trucks, and building and construction, and beverage packaging;

Groundhog Day for earnings. Fourth-quarter earnings started last night with Alcoa. We are going to begin a dance that is very old. Companies know how to play this. Analysts are willing accomplices.

We are not expecting much: A modest 3.2 percent increase in earnings for the S&P 500 index, and a roughly 3 percent increase in revenues. That may be enough to argue that third-quarter was the earnings trough, but it's a pretty modest upside.

Regardless: A familiar pattern is developing. Analysts had high hopes for fourth-quarter earnings a few months ago — back on Oct. 1, analysts were anticipating growth of 9.6 percent, which is has now dwindled to 3.2 percent.

While yesterday seemed like a yawner to stock traders, stay awake! Many sectors have had huge moves at the end of the fourth quarter and are continuing to rally into the first quarter.

Consider where the following indexes ended last week:

S&P 500 5-year high
Russell 2000 Historic high
MidCap Index Historic high
Transports 1.5-year high
Airlines 2-year high
Home Builders 4-year high

Dividend payers: you're getting more, but it's still not much.

Just got off the phone with the good folks at Standard and Poor's. The topic: dividends in 2012.

Good news: they were good. Bad news: they weren't nearly as good as they could have been.

(Read more: S&P Retreats From 5-Year High Ahead of Earnings)

Earnings season is coming: Was the third quarter the earnings trough?

"Slowdown in earnings" was a major theme for bears last year. Earnings had strengthened beginning in 2009, and were spectacular for 2010 and 2011, then growth began slowing, clocking in at a measly 2.4 percent for the third quarter. Fourth-quarter estimates, according to Capital IQ, are now at a mere 3.3 percent, as well.

Helping earnings this quarter: Lower energy costs. Hurting: A two percent increase in the dollar.

The key to earnings season are banks ... analysts are expecting a better than 10 percent increase in earnings.

Is the bond rally finally over? The biggest failed trade of 2012 (short Treasurys) may finally be showing some traction in 2013.

Ten-year Treasury note yields are at the highest levels since April last year and seem poised to break through 2 percent; volume has increased in bond exchange-traded funds of all sorts since the start of the year.

The U.S. dollar index is up 1.4 percent since the start of the year; the yen is at a 2.5-year low against the dollar. Gold is at a 4.5-month low.

Why is the bond market moving? It's not because of fear of imminent, dramatic inflation. As Greg Valliere at Potomac Research Group remarked this morning: "Our take is that rates are climbing because the threat of a recession just got far less likely in the wake of the 'fiscal cliff' deal."

Well, that didn't take long. Forget the rally; all the headlines were about fears of the looming mini-"fiscal cliff" coming.

Let's agree on one thing: get rid of the word "fiscal cliff." So 2012. We need a new term.

So what do we have? I vote for Ethan Harris at Bank of America/Merrill Lynch, who calls what we are facing the "Three Gorges" — the sequester, the debt ceiling, and the continuing resolution of the fiscal year 2013 budget.