ADP Employment Beats 4th Month In A Row, At 6-Month Highs

For the 4th month in a row (thanks to revisions revisions revisions), ADP Employment beat expectations. At 241k in December (above the 225k exp.) this is the highest print since June's peak (and occurs as both manufacturing and services PMIs showed faltering unemployment sub-indices). Small business appeared to add the most positions (less than 49 employees) as large businesses added the least with Services-producing firms dominant (even as Services PMI has plunged for 6 straight months). Will "good" news be bad news?

Frontrunning: January 7

  • Twelve shot dead in Paris (Reuters)
  • Eurozone Consumer Prices Fall for First Time Since 2009 (NYT)
  • Euro's Drop is a Turning Point for Central Banks Reserves (BBG)
  • How $50 Oil Changes Almost Everything (BBG)
  • Mercedes-Benz Moving U.S. Headquarters to Atlanta (WSJ)
  • Greek 10-Year Bond Yields Exceed 10% for First Time Since 2013 (BBG)
  • How Even Dairy Farmers Get Squeezed by Rigging in the $5.3 Trillion Currency Market (BBG)
  • AirAsia jet tail found underwater, black box may be close (Reuters)
  • Italy Unemployment Rises to New High (Bloomberg)

First Euroarea Deflation Since Lehman Sends Futures Higher; Brent Tumbles Below $50 Then Rebounds

Things in risk land started off badly this morning, with the worst start to a year ever was set to worsen when European equities came under early selling pressure following news of German unemployment falling to record low, offset by a record high Italian jobless rate, with declining oil prices still the predominant theme as Brent crude briefly touched its lowest level since May 2009, this consequently saw the German 10yr yield print a fresh record low in a continuation of the move seen yesterday. However, after breaking USD 50.00 Brent prices have seen an aggressive bounce which has seen European equities move into positive territory with the energy names helping lift the sector which is now outperforming its peers. As a result fixed income futures have pared a large majority of the move higher at the EU open. But the punchline came several hours ago courtesy of Eurostat, when it was revealed that December was the first deflationary month for the Eurozone since the depths of the financial crisis more than five years ago, when prices dropped by -0.2% below the -0.1% expectation, and sharply lower than the 0.3% increase in November, driven by a collapse in Energy prices.

Bild Warns German Govt Fears Greek Bank Runs, Financial System Collapse; Prepares For Grexit

It has been a busy few days for Germany. In the space of a week, they have warned Greece "there will be no blackmail," adding that a Greek exit from the euro was "manageable," only to hours later deny (clarify) these comments. This was then followed up with beggars-are-choosers Syriza demanding any ECB QE must buy Greek bonds (or else) - which Germany has flatly ruled out - only to see today that Syriza is practically guaranteed to win a "decisive victory" at the forthcoming snap election. So it with a wry smile that we note Bild reports tonight that the German government is preparing for a possible Greek exit, warning of financial system collapse, bank runs, and huge costs for the rest of the EU.

Will 2015 Be A Year Of Economic Disaster? 11 Perspectives

Will 2015 be a year of financial crashes, economic chaos and the start of the next great worldwide depression? Over the past couple of years, we have all watched as global financial bubbles have gotten larger and larger. Despite predictions that they could burst at any time, they have just continued to expand. But just like we witnessed in 2001 and 2008, all financial bubbles come to an end at some point, and when they do implode the pain can be extreme.

The War On Toddler Terrorists: Britain Forces Nursery School Teachers To Identify "Extremist" Kids

In case you aren’t aware, there is something called the Counter-Terrorism and Security Bill 2014-15, currently moving through the UK Parliament. Accompanying this bill, which is controversial in its own right, is a 39-page consultation document that directs nursery school staff and registered childminders to “report toddlers at risk of becoming terrorists.” Think this is a joke? Think again.

How Do You Say "Death Cross" In French?

It's not been a great couple of years for French President Hollande, with joblessness soaring to record highs almost unabated since he took office, he has now been forced to scrap his "super-tax" plan to solve the socialist utopia's problems.But joblessness is the symptom of the 'death cross' that is occurring in France as bankrupticies soar to record highs and firms' profitability craters. And as Bloomberg's Maxime Sbaihi notes, French households continue to use rising real wages to increase savings rather than consumption. There’s no reason why this should change as surveys indicate that consumers remain worried by the near-term outlook.

Europe's Monetary Madness

If you want to know where the global experiment in massive money printing is heading - just take a look at the monetary madhouse in Europe. And that particular phrase has full resonance once again as it becomes more apparent by the hour that Europe and the Euro were not fixed at all. Indeed, beneath the surface of Draghi’s “whatever it takes” time out, the crisis has been metastasizing into ever more virulent deformations.

The Last Bubble

Broadly speaking, as markets recovered from mid 2009 (amid extreme monetary policy experimentation around the world), economic growth and asset prices were in sync around the world. When markets faltered after the end of QE2 in 2011 and the Fed folded on moderation, investors around the world piled into US equity and credit markets chasing the 'easiest' money in the world. Then as China unleashed its own QE-Lite and the Fed confirmed the end of QE, tidal waves of fresh speculative capital flooded a small, illiquid market on the other side of the planet... and hey presto, The Last Bubble market was created.

ISIS Now Hiring Bankers: In Bid For Legitimacy, Rogue State Opens Bank

After seeking doctors, lawyers, and engineers, The Islamic State - expanding on its desire to launch a gold-backed currency - is reported to have opened its first bank in the Iraqi city of Mosul and delivered a budget for its 'territory'. All this is being done, according to Al Jazeera, in an effort to move beyond its image of a terrorist organisation and consolidate its aim of becoming a legitimate state (perhaps stop beheading western media?) "A strategy to make concrete decisions and actions to create a nation state is in place," notes one professor, but as another analyst explains, "ISIS is financing itself partly through a pyramid scheme, and this has begun to falter.”

Murderous Son, Who Killed His Hedge Fund Father Over $200 Allowance, Was A Mentally-Disturbed Princeton Economics Grad

The most bizarre story from the past weekend was the shocking murder of Tom Gilbert, 70, founder of the Wainscott biotech-focused hedge fund, who was shot dead in his Sutton Place apartment on Sunday Afternoon: shocking because the alleged shooter was none other than his Millennial 30-year-old son. What was certainly unclear at the time was what would be the motivation of a son to kill his successful and wealthy father, especially in such dramatic cold blood. We now know not only the motivation, but also the alleged psychopath's background: "Gilbert Jr. attended Princeton, graduating in 2009 with a degree in economics. Authorities said he had no recent work history."

Energy Crisis As Early As 2016

"...we believe the current low crude oil price could be overkill and result in the next “Energy Crisis” by early 2016. Enjoy these low gasoline prices while they last."

US Selling Another 170 M-1 Abrams Tanks To Iraq After ISIS Captured 40 Last Summer

Remember when shortly after ISIS' stunning and rapid ascent to power it was revealed that a key reason for the terrorist organization's blistering success were the M-1 Abrams tanks, armored transport trucks, Howitzers and countless Humvees made in the US, sold to Iraq and subsequently captured by ISIS? It appears that the US has decided to restock ISIS, if only indirectly. As Matthew Aid's Strategypage.com discloses, the US is now selling a whopping 170 M-1 tanks to Iraq in order to restock the 40 lost to ISIS last summer, and then some. And since ISIS will promptly recapture a substantial portion of this latest batch, the US now appears to have found a fully covert, backdoor ISIS-restocking supply channel: one where Iraq pays to US military contrators (using US taxpayer aid money) such as General Dynamics, and subsequently the inventory mysteriosuly finds its way to barbaian, headcutting terrorists.

Guest Post: 2015 - Grounds For Optimism?

Some are thinking that 2015 will be a repeat of 2014 with a few incremental changes, However, the interesting question to ask is, how has the ground shifted in 2014, if indeed it has? To our mind, the really interesting development of 2014 is that the world as a whole (with a few minor exceptions) has become quite lucid on the topic of what the United States, as a global empire, is and stands for. Another major shift we have observed is that a significant percentage of the thinking people in the US no longer trusts their national media. In case somebody out there in the media realm is tired of playing it safe and printing stuff that's only fit for wiping your Kardashian with, here are a some points for you to try to refute...

Analyzing The Secular Bull Market Thesis

Over the past couple of years there has been a rising chorus of individuals warming to the idea of a new secular bull market. This is not surprising given the seemingly unstoppable rise of asset prices since the financial crisis despite a litany of geopolitical and economic headwinds. But are the "ingredients" that spurred the previous two secular bull market periods in existence today?

Caught On Camera: Albuquerque Police Officer Shot Numerous Times, Survives

Albuquerque police officer Lou Golson was shot by a motorist during traffic stop. According to criminal complaints, Golson suffered a gunshot wound in the abdomen. A gunshot to the chest and two other gunshots to his left side did not penetrate his bullet proof vest, the complaint said. However, Golson broke a left femur and suffered a broken wrist during his fall.

This Oil Thing Is The Real Deal

It’s no longer about which factors bring down oil prices, that’s old news; it’s about what oil prices bring down. The oil price drop is a much bigger event than the US subprime housing crisis, it’s bigger than everything put together that happened in 2008. And this time, central banks are lame sitting ducks. Omnipotence is a harsh mistress. She tends to backfire.