GE Capital

• Obama's Counsel Was Told of IRS Audit Findings Weeks Ago (WSJ)
• North Korea fires sixth missile in three days (Reuters)
• Enron No Lesson to Traders as EU Probes Oil-Price Manipulation (BBG)
• Don't cry for me, Eurozone: Thinking the Unthinkable - Quitting a Currency (WSJ)
• H-1B Models Strut Into U.S. as Programmers Pray for Help (BBG)
• Gold Bear Bets Reach Record as Soros Cuts Holdings (BBG)
• Yahoo has agreed to pay $1.1 billion for Tumblr (WSJ)
• JPMorgan Holders Led by Chairmen-CEOs to Vote on Dimon (BBG)
• Apple faces grilling over US tax rate (FT)
• Nissan to Sell First Joint Minicar to Expand in Japan Market (BBG)
• Fierce battle for corporate loans sparks US bank risk concerns (FT)
• Microsoft Updates Xbox as Apple to Facebook Gain in Games (BBG)

• UK economy shows 0.3% growth (FT)
• Texas University Fund Sold $375 Million in Gold Bars (BBG)
• Spain Jobless Rate Breaches 27% on Recession Woes (BBG)
• Letta calls for easing of austerity policies (FT)
• Italy Led by Letta Brings Berlusconi Back as Winner (BBG)
• Fed Debate Moves From Tapering to Extending Bond Buying (BBG)
• South Korea wants talks with North on shuttered industrial zone (Reuters)
• Republicans advance bill to prepare for debt ceiling fight (Reuters)
• Republicans claim White House failed to warn on severity of cuts (FT)
• Xi meets former US heavyweights (China Daily)
• Next BoE chief Carney says clear framework key to policy success (Reuters)
• Chinese roll out red carpet for Hollande (FT)

After digesting the opinions of the shills, shysters and scam artists, I am ready to predict that I have no clue what will happen during 2013. The fog of uncertainty is engulfing the nation, making consumers hesitant to spend and businesses reluctant to hire or invest. Virtually all of the mainstream media, Wall Street banks and paid shill economists are in agreement that 2013 will see improvement in employment, housing, retail spending and, of course the only thing that matters to the ruling class, the stock market. Even among the alternative media, there seems to be a consensus that we will continue to muddle through and the day of reckoning is still a few years off. Those who are predicting improvements are either ignorant of history or are being paid to predict improvement, despite the overwhelming evidence of a worsening economic climate. The mainstream media pundits, fulfilling their assigned task of purveying feel good propaganda, use the 10% stock market gain in 2012 as proof of economic recovery. The facts prove otherwise... Every day more people are realizing the con-job being perpetuated by the owners of this country. Will the tipping point be reached in 2013? I don’t know. But the era of decisiveness and confrontation has arrived. The existing social order will be swept away. Are you prepared?

• Foreign Hostages Die in Algeria’s Battle With Terrorists (Bloomberg)
• The latest bank to soon join the currency wars: McCafferty Says BOE Must Keep Open Mind on New Policy Tools (Bloomberg)
• US debt talks complicated by timing (FT)
• BOJ eyes open-ended asset buying, agrees new inflation goal (Reuters)
• AmEx Says U.S. Card Income Fell 42% as Loss Provisions Increased (BBG)
• Call to raise age for US’s Medicare (FT)
• Obama Promise to Raise Middle Class Living Already Seen in Peril (BBG)
• China Exits Slowdown as Quarterly Growth Tops Forecasts (BBG) - actually, as new Politburo says to make it appear that way
• Britain to drift out of European Union without reforms (Reuters)
• Republicans weigh interim debt-limit hike (FT)
• Abe's aide says Japan shouldn't fret if yen falls to 100 vs dlr (Reuters) ... and it was 90 just a few days ago
• PBOC May Seek More Liquidity Operations (Dow Jones)

In what is likely the fist major under the radar profit warning of the current quarter, GE chief, and Obama Job Tzar, Jeff Immelt warned during GE's annual outlook meeting held earlier in Manhattan that the "economic uncertainty" in the current quarter has resulted in an investment "pause" that has resulted in a slowdown of corporate sales. Put into numbers, GE is now calling for about 8% growth this year, from a 10% forecast barely two months ago. Read: Q4 sales, and thus earnings, are set to be a major disappointment. And while no superstorms were blamed in this particular sales warning, the fiscal cliff did feature prominently. As the WSJ reports, "[Immelt] said ongoing jitters over the so-called "fiscal cliff" of tax increases and government spending cuts contributed to the trend." Then again, it is just as likely that the tapped out US consumer, whose savings rate is tumbling, whose real disposable income is now declining on a year over year basis, and whose real wage growth is decidedly negative, would be tapped out even if Obama and Boehner were not playing constant cat and mouse. But whatever the reason for the slowdown may be, one thing is certain: "Clearly, there has been an investment pause in certain industries," Mr. Immelt said. "We've definitely seen a slowdown in the fourth quarter." Bring on the spin brigade.

The fallout in the aftermath of last week's infamous tweet by Jack Welch in which he dares to accuse the BLS of manipulating labor data (the same BLS which has already been purposefully caught leaking data, but never actually caught red handed manipulating it: after all things like these don't happen, Liborgate notwithstanding), something which it did (although the one thing that nobody dares to say is "why" because if suddenly it becomes clear that if this most critical of economic indicators is fudged, then every other one must be) has begun. Moments ago, in response to perceived political badgering by Fortune and Reuters, Jack Welch, the CEO of Chairman of GE from 1981 to 2001, just after the company's stock peaked at $593 billion, the outspoken critic of Obama has decided to sever ties with both the CNN-controlled publication and with the Thomson Reuters organization, and instead going forward will use the WSJ as a platform. What drove Welch over the edge is the now traditional media response of attacking the person instead of the argument whenever the status quo is threatened, in this case predicated by articles by both Fortune and Reuters.

• World on track for record food prices 'within a year' due to US drought (Telegraph)
• Foxconn halts production at plant after mass brawl (BBC)
• Germany Losing Patience With Spain as EU Warns on Crisis Effort (Bloomberg)
• Fed Recovery Doubts Spur Investor Bid for Treasuries (Bloomberg)
• Japan protests as Chinese ships enter disputed waters (Reuters)
• In Shark-Infested Waters, Resolve of Two Giants Is Tested (NYT)
• China jails Wang Lijun for 15 years (FT)
• China closes in on Bo Xilai after jailing ex-police chief (Reuters)
• European Leaders Struggle to Overcome Crisis Stalemate (Bloomberg)
• Politicians 1: Austerity 0 - Portugal Gives Ground on Worker Contributions (WSJ)
• Obama Controls Most of His Money as Republicans Have More (Bloomberg)
• Coeure Says Not Clear That Further ECB Interest-Rate Cut Needed (Bloomberg)
• France Seeks Labour Overhaul (WSJ)

Lot of noon / afternoon official chatter on the wires, but eventually nothing highly conclusive.

And oops… I still have the Blues.

Someday, it will go down in history as the first trial of the modern American mafia. Of course, you won't hear the recent financial corruption case, United States of America v. Carollo, Goldberg and Grimm, called anything like that. If you heard about it at all, you're probably either in the municipal bond business or married to an antitrust lawyer. Even then, all you probably heard was that a threesome of bit players on Wall Street got convicted of obscure antitrust violations in one of the most inscrutable, jargon-packed legal snoozefests since the government's massive case against Microsoft in the Nineties – not exactly the thrilling courtroom drama offered by the famed trials of old-school mobsters like Al Capone or Anthony "Tony Ducks" Corallo. But this just-completed trial in downtown New York against three faceless financial executives really was historic. Over 10 years in the making, the case allowed federal prosecutors to make public for the first time the astonishing inner workings of the reigning American crime syndicate, which now operates not out of Little Italy and Las Vegas, but out of Wall Street.

In the first of two major bankruptcy stories du jour (the next one coming up shortly), we learn that AFA Foods, best known for being the maker of "pink slime", and a portfolio company of labor unions and Clinton afficionado Ron Burkle and his PE firm Yucaipa, has just filed for bankruptcy. The reason? The sudden public realization what pink slime is, and just how prevalent it is - perhaps it is best to think of it as the Bernie Madoff of the food industry - it was always there, yet it took a wholesale shift in public awareness and consciousness for the firm to realize it would have been prudent to come up with a slightly different name for its ground-beef product. As for whether or not the company is going to the pink sheets, well no. But one thing is certain: the management team is about to get a pink slip.

Deals from last week tell me that we are are again in a credit bubble.

The most profitable business of the future will be producing Space Available and For Lease signs. Betting on the intelligence of the American consumer has been a losing bet for decades. They will continue to swipe that credit card at the local 7-11 to buy those Funions, jalapeno cheese stuffed pretzels with a side of cheese dipping sauce, cartons of smokes, and 32 ounce Big Gulps of Mountain Dew until the message on the credit card machine comes back DENIED.  There will be crescendo of consequences as these stores are closed down. The rotting hulks of thousands of Sears and Kmarts will slowly decay; blighting the suburban landscape and beckoning criminals and the homeless. Retailers will be forced to lay-off hundreds of thousands of workers. Property taxes paid to local governments will dry up, resulting in worsening budget deficits. Sales taxes paid to state governments will plummet, forcing more government cutbacks and higher taxes. Mall owners and real estate developers will see their rental income dissipate. They will then proceed to default on their loans. Bankers will be stuck with billions in loan losses, at least until they are able to shift them to the American taxpayer – again.

The last week has offered an amusing display of the difference between the cheerleading corporate mainstream media, lying Wall Street shills and the critical thinking analysts. What passes for journalism at CNBC and the rest of the mainstream print and TV media is beyond laughable. Their America is all about feelings. Are we confident? Are we bullish? Are we optimistic about the future? America has turned into a giant confidence game. The governing elite spend their time spinning stories about recovery and manipulating public opinion so people will feel good and spend money. Facts are inconvenient to their storyline. The truth is for suckers. They know what is best for us and will tell us what to do and when to do it....  The drones at this government propaganda agency relentlessly massage the data until they achieve a happy ending. They use a birth/death model to create jobs out of thin air, later adjusting those phantom jobs away in a press release on a Friday night. They create new categories of Americans to pretend they aren’t really unemployed. They use more models to make adjustments for seasonality. Then they make massive one-time adjustments for the Census. Essentially, you can conclude that anything the BLS reports on a monthly basis is a wild ass guess, massaged to present the most optimistic view of the world. The government preferred unemployment rate of 8.3% is a terrible joke and the MSM dutifully spouts this drivel to a zombie-like public. If the governing elite were to report the truth, the public would realize we are in the midst of a 2nd Great Depression.

And like that, this year's Davos World Economic Forum has come and gone, having achieved nothing except allowing a bunch of representatives of the status quo to feel even more self-righteous and important in the world's biggest annual circle jerk, in which fawning journalists ask the questions their cue cards demand, knowing too well their jobs are on the line if they ask anything even remotely provocative (and with the price of admission in the tens of thousands of dollars, one wonders just how many Excel classes these "journalists" could have taken as an alternative, in order to actually do some original math-based research, yes, shocking concept, to present to their readers instead of merely regurgitating others' talking points). Bloomberg TV has compiled the best video summary of the highly irrelevant soundbites by economists, CEOs and other people of transitory power, who provide absolutely no original insight into anything, and in which ironically it is Mexico's Felipe Calderon who summarizes it best: "we have a timebomb the bomb is in Europe and we are working together to deactivate it before it explodes over all of us." Lastly, we provide a quick glimpse into current and previous guests of Davos to show just how utterly worthless is the "braintrust" of those present.

European indices as well as major currency pairs are trading in slight negative territory at the midpoint of today’s session due to profit-taking and cautious sentiment dominating the market, with the worst performing sector being Oil & Gas showing volatile trading this morning.  In European macro news, Greek PSI talks are closer to coming to a conclusion, with a source saying that the haircut announcement is likely to be today.