Archive - Dec 25, 2012

Is gift giving during Christmas and Hanukkah a wasteful practice by which we just crave status from friends and family? Is it a harmless, even joyful, practice to bestow goodwill and joy on the ones we love? Is it a giant commercial venture by which retailers encourage us to part with dollars in an orgy of gift giving by folks who ought to be guarding their earnings rather than spending? Is it a necessary part of our economy that drives production and wealth? Is it a religious act? Or is it a joyous celebration of the material, which, when you think about it, is a celebration of life.

The most hopeful thing in my mind is that the Status Quo is devolving from its internal contradictions and excesses. It is a perverse, intensely destructive system with horrific incentives for predation, exploitation, fraud and complicity and few disincentives. A more human world lies just beyond the edge of the Status Quo. I know many smart, well-informed people expect the worst once the Status Quo (the Savior State and its corporatocracy partners) devolves, and there is abundant evidence of the ugliness of human nature under duress. But we should temper this Id ugliness with the stronger impulses of community and compassion. If greed and rapaciousness were the dominant forces within human nature, then the species would have either died out at its own hand or been limited to small savage populations kept in check by the predation of neighboring groups, none of which could expand much because inner conflict would limit their ability to grow.

To some, such as those few whose daily net worth is still a function of the policy vehicle formerly known as the 'market', it is a merry Christmas (at least until such time as the recoupling between central planning and reality once again inevitably occurs). To others, such as the 50 million (by now) Americans on food stamps, and billions of others around the world living in conditions of poverty, it is not so merry. But no matter one's current state of one's mind, there is always hope that the future will bring better days: after all that is what reflective holidays such as today are all about. We too hope that there is hope, if at the same time realizing that ever more of the promise of the future is packaged away in chunks of debt and securitized in order to fund an unsustainable present. We open up this open thread to readers to share their hopes and concerns about the present and the future.

Aside from the occasional deranged FX algo which today has decided to take out all its pent up binary anger on the GBPUSD, everything else today is closed. Everything, except, of course, for InTrade which come holiday, rain or apocalypse, is a true OTC market and is open all the time 24/7, non stop. Of particular interest is InTrade's market on "The US debt limit to be raised before midnight ET 31 Dec 2012" which moments ago once again came closer to reflecting reality and not the clueless gibberish of "expert" political pundits, and plunged to a contract low 10.1% probability (and price) which considering the late stage in the game, and that at this point the Fiscal Cliff is beyond any 2012 resolution, let alone the debt ceiling, is 10.1% too high (as forecast here nearly two months ago). And like a true market, one can naked short on InTrade. So for all the habitual gamblers out there just itching for some global futures market to reopen somewhere: have at it (but mind the brief squeeze at the next appearance of the "we have a deal" rumor, only to be refuted by the sad political reality of this country moments later). 

Gravity took hold, and ass over teakettle she went.

Frankly we have no idea what this is all about, because as far as we are concerned, CNN long ago became a politicized, ratings-starved farce, wrapped in a joke inside a humiliation (after once upon a time being the only go to place for objective breaking news), but it is rather funny. The Hill reports that "a White House petition calling for the deportation of CNN personality Piers Morgan, a U.K. citizen, over his recent comments criticizing U.S. gun laws rocketed past the 25,000 signatures it needed for an official response Monday. As of this writing, nearly 40,000 people had signed a petition demanding “Mr. Morgan be deported immediately for his effort to undermine the Bill of Rights and for exploiting his position as a national network television host to stage attacks against the rights of American citizens.” A petition on the White House's “We the People” website needs 25,000 signatures in the first month of being posted to earn an official administration response. “I don't care about petition to deport me,” Morgan tweeted Monday. “I do care about poor NY firefighters murdered/injured with an assault weapon today. #GunControlNow.”

On a long enough timeline, the number of presents under the tree drops to zero...

With the market still hopeful of some deus ex resolution to the Fiscal Cliff will take place in the last few trading sessions of the year (one where the market itself will not have to be the catalyst for such a resolution, because once the selling starts in earnest, who knows if and when it stops, hence the loading up on prodigious amounts of puts), here is Iran out of left field, adding yet another known unknown to the inequality, announcing that it will begin six days of naval drills in the Straits of Hormuz on Friday. In other words a one year flashback deja vu, as Iran held a similar 10-day drill last December, when everyone was expecting an imminent escalation out of the endless Israel-Iran foreplay and was analyzing which were the new moon days allowing Israel unobstructed access to the greatest distraction of all - Iran's nuclear facility being moved under a mountain: a catalyst which Israel repeatedly said is the only reason to attack a weaponizing, nuclear Iran, and which took place some time in 2012. Now that the official window of opportunity is closed, will Israel tone back on the aggressive rhetoric? Hardly: after all that is precisely why the Syrian "outlet valve" has been put in play over the past 6 months.

UPDATE: GBP -160pips now

It seems that while all the good boys and girls of the world are opening gifts and starting to drink heavily on this festive day, something is afoot in the GBPUSD FX pair. With not a creature stirring apart from a few algos, the transatlantic cross has gone steadily bidless - now down 90 pips in a well coordinated dribble-down algo battering. Happy Christmas Johhny-5...