Gambling

• Fed Holds Off for Now on Bond Buys  (Hilsenrath)
• Bonds Show Return of Crisis Once ECB Loans Expire (Bloomberg)
• Greek Debt Talks Enter Third Day After ‘Substantial’ Discussions (Bloomberg)
• Sharp clashes at Republican debate ahead of vote (Reuters)
• Lagarde Joins Warning on Fiscal Cuts Before Davos (Bloomberg)
• Investors exit big-name funds as stars fail to shine (Reuters)
• Payday lenders plead case to consumer agency (Reuters) - the EFSF included?
• EU Toughens Fiscal Pact Bowing to ECB Objections, Draft Shows (Bloomberg)
• Minister Urges Japan to Use Strong Yen (FT)
• China Eyes Pension Fund Boost for Stock Market (Reuters)
• China Manufacturing Contraction Boosts Case for Easing: Economy (Bloomberg)

Whoever says there are no winners in the European banking crisis apparently has never woken up with a horse's head in their bed. According to a new report by Italian anti-crime group SOS Impresa, as reported by Reuters, "Organised crime has tightened its grip on the Italian economy during the economic crisis, making the Mafia the country's biggest "bank" and squeezing the life out of thousands of small firms, according to a report on Tuesday." You mean kinda like Intesa credit cards demanding a 39.95% APR: we knew we had seen that "life squeezing" thing before somewhere. Of course at least with the mafia you know that it will never rely on fake Libor fixings to pretend it is alive, or need an ECB bailout the next day due to being overly invested in US subprime mortgages (unless of course Goldman's rolodex stretches even further than we thought possible). It sure does, however, bring a new definition to the term "shadow banking"... or is that the old one, where nobody cared about repos, money markets, overnight drafts, and hyperrehypothecation and all the complexity could be explained away with a baseball bat. Yet the conclusion, no matter how defined, still strikes us as hilarious: '"With 65 billion euros in liquidity, the Mafia is Italy's number one bank," said a statement from the group, which was set up in Palermo a decade ago to oppose extortion rackets against small business." Because as we pointed out yesterday, it was companies which were responsible for bailing out banks in Europe. How long then until La Cosa Nostra provides a lifeline to UniCredit, but only if half the BOD is replaced with guys in tracksuits and buzzcuts? Actually, not too long we would wager...

Hosed by Ben and Timmah, Bammy and Congress ...

The slightest recovery in the EUR/USD unleashed another round of Animal Spirits, this time the Riverboaters started dryhumping junior bank stocks, credit card companies, and more consumer stocks.

If you ever needed confirmation that the airline industry is gambling with everyone's lives just so they can stop the profit bleeding and resume flight, here is the Telegraph confirming that airspace over Europe is anything but safe: "Flight training on RAF Typhoon jets was ''temporarily suspended'' today after safety inspectors found deposits of ash in one of the fleet's engines." And yes, these are sturdy military jets:we wonder how fragile passenger jets with GE turbofan engines are faring in their flights.

Not much happening today, other than more rotation out of stuff that bottlerocketed the last few days, into other "Hail Mary" near-bankrupt penny stocks such as newspaper companies, Yellow Freight, etc.

Once again, the lure of easy money lured the Riverboaters back into the casino for more action. Old timers like Art Cashin, who has been warning of a correction, are woefully inept at gauging the gambling fever which now grips so many fast buck hustlers these days.