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China To Launch Yuan Swap Trading With Russian Rubles On Monday

Iit was only this week that Bloomberg reported that "China Offers Russia Help With Currency Swap Suggestion." But in order to fully backstop Russia away from a SWIFT-world in which the dollar reigns supreme, one extra step was necessary: the launching of direct FX trade involving the Russian and Chinese currencies, either spot or forward - a move away from purely theoretical bilateral FX trade agreements - which would not only enable and make direct currency trading more efficient by sidestepping the dollar entirely, but also allow Russian companies to budget in Chinese Yuan terms. It is no surprise then that this is precisely the missing step that was announced overnight, and will be implemented starting Monday.



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Frontrunning: December 26

  • Japan inflation slows to 14 month low, output slips (Reuters)
  • Russia says ruble crisis over as reserves dive, inflation climbs (Reuters)
  • Ruble rebounds sharply from lows as exporters sell dollars (Reuters)
  • Xbox, PlayStation Networks Attacked, Hackers Claim Credit (BBG)
  • Sony’s ‘The Interview’ Packs Theaters Without Violence (BBG)
  • Oil edges above $60 as Libyan output slumps (Reuters)
  • Shoppers’ Late Rush Gives Hope to Retailers (WSJ)
  • Japan says close to deal with South Korea and U.S. on North Korea defense (Reuters)
  • NYPD Arrests Seven for Threats After Slayings of Officers (BBG)


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Chinese Stocks Soar To 4 Year High On Stimulus Hopes As Japan's Economy Implodes; US Futures Rebound

One group of Federal workers that is definitely not taking the day off, is the trading desk located on the 9th floor of the New York Fed, responsible for such things as preserving the "fair" value of the bond and the stock market and avoiding any sharp downward moves. Because if there is one thing on the "national security" agenda that must be avoided at all costs, it is a drop in the S&P in today's trading session - after all now is when the official Santa rally begins and judging by the futures, which after a steep selloff in the last minute of trading on Wednesday have restored all their losses and then some, we may finally hit Goldman's year end target of 2100, for 2015.



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"We Are Taking A Stand For Freedom" - New Yorkers Explain Why They Are Waiting In Line To See "The Interview"

And just like that Americans got punk'd again. From one of the countless New Yorkers waiting in line to see The Interview: "We are taking a stand for freedom. We want to show the world that Americans won't be told what they can and can not see. If we want to see a movie we'll go see a movie and make up our own minds.... I came to express my very strong support for the free expression of ideas."



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Russia, China, Or America? "An Oppressed People Ruled By Others For Others"

"I find it so disturbingly illogical that we Americans are willing to die so that our political class can enjoy ill gotten riches and power yet we cower when it comes to defending our great nation against the political class, something our founding fathers pleaded for us to do.  The truth, which the political class legislates so hard for us to overlook, is that they are powerless without us.   It is us that fight their fights, fund their wars and enforce their laws that enslave us yet we bow down and call them Mr. President and Madame Secretary.  And so I ask each and everyone of you, when will we wake up and recognize that we are the power and the wealth and that the political class has only managed, through deception, to harness our strengths and pass them off as their own?  For until that day of awakening, we will continue to live as an oppressed people ruled by others for others."

 



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Black Teen Shot Dead Over A Pair Of Air Jordans

In what police called "a random act of 'I want something that person has and I am going to take it from them," a black teenager was shot and killed after attempting to rob a man of his $200 Air Jordans. After being unable to purchase the 'limited edition' shoes, 16-year-old Jawad "JJ" Jabar and 2 other Middletown, Ohio schoolmates, brandished a firearm at a man (of unknown color) who had just bought a pair. The man, who had a valid concealed carry permit, shot once and killed Jawad. Since the dead black teenager was not killed by a white policeman, we doubt there will be any protests, Al Sharpton commentary, or mainstream media blitz.



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Every Parents Guide To The Holidays (In 1 Simple Chart)

For about the first 22 years, being a parent at Christmas is a net losing proposition. But after that...



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Correcting Scrooge’s Economics

As Charles Dickens himself admits, Ebenezer Scrooge is a thoroughly peaceful man, guilty of no true crime, who has robbed no one. Therefore, we must conclude that his wealth is a sign of his ability to please at least some people, and as Michael Levin notes: “Dickens doesn't mention Scrooge's satisfied customers, but there must have been plenty of them for Scrooge to have gotten so rich.” As a miser and businessman, Scrooge provides numerous valuable services to the community including, as Walter Block has shown, driving down prices and making liquidity available to those who, unlike the wrongly maligned misers, have been either unwilling or unable to save in comparable amounts. His business prowess notwithstanding, however, a closer look at Scrooge’s economics suggests some significant blind spots in several areas. Scrooge, as displayed in many of his comments and observations, misunderstands some key economics concepts.



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Artist's Impression Of American Santa

Over-burdened...



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College Students Across America Protest Santa Claus

After weeks of preparation by an umbrella group that calls itself the Santa Claus Repudiation Organization Offering Greater Education, students at campuses across America spent Christmas Eve protesting what they consider a dangerous symbol of everything that is wrong with the world today.



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Caught On Tape: China's 'Not-So-Shadow' QE

Who needs helicopters? While China slashes reserves and unleashes its stealth-QE ('Pledged Supplementary Lending' - PSL), the streets of Hong Kong's salubrious Wan Chai district were awash with freshly-minted notes when a security van overturned spilling 15 million Hong Kong Dollars to the wind... We await the 'accidental' overturning of a security-van in Ferguson soon (if this works) to 'quell the masses'.



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SF Fed Warns US Equity Valuations Will Be Cut In Half In Next Decade

When "the retirement of the baby boomers is expected to severely cut U.S. stock values in the near future," is the ominous initial sentence from no lesser maintainer-of-the-status-quo than the San Francisco Fed's research department, one begins to recognize the Federal Reserve's overall need to hyper-inflate asset prices at whatever cost for fear of the 'wealth' destruction looming. As the following study reports, projected declines in stock values - based on the latest demographic and valuation data - have become even more severe. Our current estimate suggests that the P/E ratio of the U.S. equity market could be halved by 2025 relative to its 2013 level.



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Japanese 10Y Yield Drops To Record Low; 2s Sell Subzero After BOJ Indirectly Buys Record Foreign Stocks

While the rest of the world was preparing to celebrate Christmas, China was busy easing its economy into growth, and its stock market into low earth orbit, by lowering non-bank deposit reserve rates to zero as reported previously, while Japan was enjoying the consequences of the BOJ monetizing 100% of all gross JGB issuance, when overnight the Japanese Ministry of Finance not only sold $22 billion in 2 Year paper at a negative yield of -0.003%: the first time ever a government note (not bill) has sold at a negative yield, but the Japanese 10 Year yield dropped to 0.31%, declining below the previously all time low hit on April 2013 when the BOJ first announced its unprecedented QE program.



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Why Holiday Gifts Receive More Ughs Than Oohs

Behavioral economists study human errors. People don’t always make the best choices for themselves, so there’s good reason to doubt whether they will always make the best choices for others. If you’ve ever received a useless gadget, a horrendous tie or some kind of bowl, you’ll know that when people buy Christmas presents, they can blunder badly.



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A Happy, If Unhedged, Christmas, And Open Thread

Oh the economy outside is frightful,
But my 80-inch Big Screen's delightful,
And since our economy’s got no place to go,
Let It Blow! Let It Blow! Let It Blow!!



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