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" In a bear market, one can have only one of three positions also: aggressively short; modestly short or neutral. In our retirement funds here at TGL we began last week and indeed we began the year modestly long but by the weeks’ end we had shifted to modestly net short. We have had no choice. The market’s voice was loud and very clear." - Dennis Gartman

The man who ran into a police station in northern Paris wearing a fake explosive vest, waving a meat cleaver, and shouting "Allahu Akbar" on the Charlie Hebdo anniversary once lived in a German refugee center and may have been involved in the New Year's Eve "sex mob" attacks. Walid Salihi used at least seven aliases while roaming around Europe committing what police say was a string of petty crimes including, but probably not limited to: "touching women's behinds at the disco," strangling a roommate, attacking a "passerby," and beating up a homeless man. 

Just 11 days into 2016, Goldman has been stopped out of one of its 6 "top trades for 2016" following a 5.4% loss on its "long large-cap US banks" trade as these "relatively well-priced, trading just above book value" assets turned out to be relatively unwell priced...

BANZAI7 FOOD, BEVERAGE AND CENTRAL PLANNING WARNING...

• David Bowie, musical legend behind Ziggy Stardust, dies at 69 from cancer (Reuters)
• With No Powerball Winners, Jackpot Grows to Estimated $1.3 Billion (ABC)
• Stock Gains Short-Lived as Chinese Volatility Hurts Oil, Metals (BBG)
• China's yuan spikes higher, but stocks tumble (Reuters)
• Arch Coal Files for Bankruptcy (WSJ)
• Yuan Loan Rates Soar in Hong Kong as PBOC Halts Currency's Slide (BBG)
• China stocks close down at lowest level since September (Reuters)
• Fed Eyes Margin Rules to Bolster Oversight (WSJ)

Initially both European stocks and US equity futures were grateful that China has picked at least one asset class to prop up overnight, and rose in an extremely illiquid market with European shares gaining for first time in 4 days, as S&P futures rise even as the MSCI Asia Pacific ex-Japan index just fell to the lowest level in more than 4 years. However, as of moments ago the Stoxx 600 had faded all its earlier gains and was trading near the flatline, as an algo takes out all stops on the top and bottom once more, and looks set to move on to US futures shortly.

Many were excited on Thursday to see a spike in the silver price. We were not quite so exuberant, and in 13 hours the market took back the entire move and more.

Chinese stocks are trading at the lows of the day after Overnight HIBOR rates (Hong Kong's interbank borrowing rate) exploded a stunning 939bps to a record high 13.4%. It is clear that banks are utterly desperate for liquidity and/or are extremely concerned about one another's counterparty risk. This has dragged HSCEI down 5% (to its lowest since Oct 2011).

Unique among the countries on earth, the US government insists that its laws and dictates take precedence over the sovereignty of nations. Neoconned Washington claims that as History chose America to exercise its hegemony over the world, no other law is relevant. Only Washington’s will counts.

Somebody had to do something...

Our balance sheet - the strongest in recent history - represents a significant advantage as we continue to identify high value growth opportunities across the products and geographies we operate in. Maintaining out investment grade rating with the international rating agencies is a vital part of this strategy.

- Noble Group 2014 Annual Report, p. 27

Germany is rapidly descending into chaos on the heels of a wave of attacks allegedly perpetrated by refugees in Cologne on New Year's Eve. A PEGIDA protest had to be broken up by water cannon-wielding riot police on Saturday and in an eerie twist of fate, the seven decade ban on publication of "Mein Kampf" expired this month.

One thing my years in Washington taught me is that most politicians are followers, not leaders. Therefore we should not waste time and resources trying to educate politicians. Politicians will not support individual liberty and limited government unless and until they are forced to do so by the people.

"The Fed got it wrong when it predicted a drop in oil prices would be a big boon for the economy. It turned out the world had changed; the US has a lot of jobs connected to the oil industry."

- SF Fed President John Williams

In principle, the BRRD, or “bail-in directive” as it is also known, is quite a good idea. The fact that lending money to fractionally reserved banks or even merely depositing it with them, involves risks needed to be firmly reestablished. One simply cannot expect that banks and their creditors will be bailed out by taxpayers at every opportunity. Besides, the admission that there are risks in banking that have hitherto been glossed over or have even been lied about was long overdue. However, Europe’s governments are now likely to find out that the current monetary system with its fractionally reserved banks is actually incompatible with this admission, so to speak.