Once again oil is not even the biggest story today. It’s plenty big enough by itself to bring down large swaths of the economy, but in the background there’s an even bigger tale a-waiting. Not entirely unconnected, but by no means the exact same story either. It’s like them tsunami waves as they come rolling in. It’s exactly like that. That is, in the wake of the oil tsunami, which is a long way away from having finished washing down our shores, there’s the demise of emerging markets. And we're not talking Putin, he’ll be fine, as he showed again yesterday in his big press-op. It’s the other, smaller, emerging countries that will blow up in spectacular fashion, and then spread their mayhem around. And make no mistake: to be a contender for bigger story than oil going into 2015, you have to be major league large. This one is.
"[Shale Oil]Producers are inherently bullish," warns one energy-hedging firm, and that truth belies the weakness in the apparent hedging programs many over-optimistic energy firms are facing now. We hear day after day that, in the short-term, low prices can be handled "because they're hedged," but producers were so exuberant about the direction of oil prices they didn't do simple linear hedges (swaps or futures) to manage price movements, but instead, as Bloomberg reports, used the so-called "three-way collar." Simply put instead of a floor and a ceiling for prices, there is a 3rd (bullish) leg of low-strike sold puts that subsidized the cost of the hedge... unless the price of oil goes below that strike, in which case the hedge fails and, as a lot of producers are finding, they are now losing money.
Yellen doesn’t care about the economy. She cares about the US’s massive debt load AKA the BOND BUBBLE.
Around the world, unsustainable policies from the 20th century are beginning to fail in earnest. What will the future geopolitical landscape look like in their aftermath?
"My name is Jasmine and I support President Obama's move to give affordable auto insurance for everyone."
This is it, folks; this is the endgame right in front of our faces. The year of 2014 is the new 2007, with all the negative potential but 100 times more explosive going into 2015. Our nation has wallowed in slowly degrading financial conditions for years, hidden by fake economic statistics and manipulated stock prices. All of it has been a prelude to a much more frenetic and shocking event. We expect a hailstorm of geopolitical crises over the next year to provide cover for the shift away from the dollar. Ultimately, the death of the dollar will be hailed in the mainstream as a “good and necessary thing.” They will call it “karma.” They will call it “progress.” They will even call it “decentralization” and a success for the free market. But it will not feel like a positive development for the American public, who will suffer greatly as the dollar crumbles.
"...so many still maintain that America is the greatest nation in the world. They swear that America represents all that is good; freedom, democracy, merit based capitalism and the rights of the individual. That is true America does represent such things. However, it is fraudulent to consider our current nation America. America was a concept that promoted all that is good. And so it would seem that the nation in which they find themselves cannot be America. Their nation today represents the will of the political class at all costs, period. Their sole motivation is themselves. Very different from America. And so perhaps a renaming on the nation is required, at least until or if the people decide to take it back and reintroduce the world to the concept that is America for as discussed below you cannot destroy a concept and so there is hope to bring her back. But until then we need a name for this geographic region and its new societal system... It seems"Neoconica" is most fitting."
As previewed earlier today, in a vote whose outcome was widely anticipated, Greece's Samaras failed to get enough votes (200) to push through his choice for president, Stavros Dimas.
- GREECE'S SAMARAS FAILS TO GET VOTES TO ELECT PRESIDENT: TALLY
- GREECE'S SAMARAS LOSES FIRST OF THREE DEC. VOTES ON PRESIDENT
As a reminder, this is the first of three votes, in which the candidate needs 200 votes. ND and PASOK have together 155 seats in the Parliament, and they expected to win some votes from independent MPs and possibly also some votes from Independent Greeks and Democratic Left MPs. According to Greek media, the government expects to win a total of 162-165 votes for Dimas in the first round. The final vote: 160 For, 135 Against, and 5 Abstain. In other words, Samaras is a crucial 20 votes short of getting his candidate pushed through in 2 weeks, after which follow a messy election that according to recent polls may well be won by left-wing Syriza and its anti-bailout leader, Samaras.
If we had to summarize what's wrong with Corporate America and the entire U.S. economy, we can start with all the intermediaries between the provider and the customer.
It's a wonderful life on Wall Street, yet here is a holiday wish list to make it even better...
- Ruble Sinks to 80 a Dollar Defying Surprise Russia Rate Increase (BBG)
- Oil slumps near $59 for first time since 2009 on oversupply (Reuters)
- Oil sinks, Russian moves fail to quell nerves (Reuters)
- Fed Seen Looking Past Low Inflation to Drop ‘Considerable Time (BBG)
- Students Among Dead as Pakistan Gunmen Kill 126 at Army School (BBG)
- Repsol to buy Talisman Energy for $13 billion (Reuters)
- Indonesia’s Rupiah Erases Decline After Central Bank Intervenes (BBG)
- Anti-Islam Rally Grows as Immigrant Backlash Hits Europe (BBG)
- Saudi Arabia is playing chicken with its oil (Reuters)
Those who voted for the omnibus to avoid a shutdown fail to grasp that the consequences of blindly expanding government are far worse than the consequences of a temporary government shutdown. A short or even long-term government shutdown is a small price to pay to avoid an economic calamity caused by Congress’ failure to reduce spending and debt.
It never fails: every year we get a story of that one individual who, as simple survivorship bias would suggest, made a killing in the same market where 999,999 others lost (you won't ever read about them though). This year that someone is a 17-year-old from Queens who, according to rumors at Styuvesant High School in NYC where he is a junior, made $72 million by trading pennystocks, oil and gold. Meet Mohammed Islam, who as the photo below shows, is like most other high school kids... with a few exceptions: he rents a Manhattan apartment, drives a BMW. And eats caviar and apple juice. Allegedly.