Comedy Central Takes On The Federal Reserve

Stephen Colbert destroys "Dr. Blankcheck von Moneypants." Must watch clip.

Extension Of TARP Now Official: TARP Maturity To Suspiciously Coincide With Mid-Term Elections

"I am hereby extending [TARP per] the authority provided under the Act to October 3, 2010. This extension is necessary to assist American families and stabilize financial markets because it will, among other things, enable us to continue to implement programs that address housing markets and the needs of small businesses, and to maintain the capacity to respond to unforeseen threats, as described above." Tim Geithner

Threat #1 - landslide change in the political landscape in 12 months

Albert Edwards: Here Comes The Next Leg Of The Bear-Market

"The equity bear market has not finished. The valuation bear market began in 2000 and we have only seen two Acts of a far longer and more disturbing play. The mega-rally in the equity markets this year is little different from what we saw in Japan during the mid-1990s. Even a structural bear could have made a lot of money in Japan playing cyclical rallies, but he/she needed to sell as the cycle turned downwards. Hence the topping out of some key US leading indicators may signal that the top of the equity rally is close. Look to exit risk positions." - Albert Edwards

Britain To Tax Banker Bonuses At 50%, Will US Bankers Now Drop Market Preemptively To Show Who Is In Charge?

In his pre-budget report, British Chancellor Alistair Darling said that he will now levy a 50% tax on banker bonuses. The new tax will be effective from today until April 5.The tax will hit virtually all financial companies, including subsidiaries of foreign banks . Thus a Goldman banker working in London will suddenly be faced with a much higher marginal tax rate that his associate in New York. This will either generate much transatlantic resentment, or expect a comparable move to the replicated by the IRS with the President's blessing, who has already lost control of the unemployment picture, so the last thing he can do to regain some popularity is to take Main Street's outcry direct to the southern tip of Manhattan.

Yet even as the likelihood of a copycat tax in the U.S. is increasing, the question is do the domestic trading desks now drop the market and show the administration who is really in charge? Because even the President's working group can not survive a concerted attack from every single financial entity in the world. And bankers are nothing if not efficient at marking their territory in the protection of take home pay. If that requires a 200 point drop in the S&P, so be it.

Daily Highlights: 12.9.09

• Asian shares were down Wednesday in the wake of weak US closing, Japan GDP nos.
• Dubai companies' bonds decline as credit swaps display 33% risk of default.
• Japan's economy grew 1.3% last quarter, less than initial estimate of 4.8%.
• China plans to require all the nation’s steel mills to have at least 1M tons of capacity
• Oil rises above $73 after expected US crude supply drop suggests demand recovery.
• 3M's 2010 profit forecast meets analysts’ estimates, says recovery is occurring “slowly.”

Absent Inventory "Bounce" Is Reason For Japanese GDP Miss

The world's second biggest economy just posted a dramatic miss in GDP expectations, and demonstrated how tendentious "developed" governments can be when fudging numbers in volatile economic times. And the biggest reason for the divergence: the mythical inventory bounce, which based on preliminary estimates was supposed to generate a 4.8% GDP. Alas,inventories never " bounced" leading to a disappointing 1.3% reading. Is the US next in line for major GDP disappointment? Or do we have mid-term elections to thank for continued GDP fudging for at least the next 12 months?