General Electric

My how the 'over-levered and cross-collateralized debt-is-wealth' mighty have fallen. Eike Batista, Brazilian entrepreneur, was the 7th richest man in the world in 2011 but as Forbes recently noted, he is the 'biggest loser' on their list (losing an incredible $2mm per hour), ending 2012 in 100th place after his biggest holding - OGX Petroleo E Gas  - slumped 80% in the last year (and a stunning 43% in 2013 alone) which means his net worth has plunged 20% YTD (according to Bloomberg). While he has the yacht, cars, speedboat, and jets to go with someone who apparently has a net worth of $9.9bn, he now has one more thing to worry about...

*BILLIONAIRE BATISTA SAID TO FACE COLLATERAL CALLS FROM BANKS

As Bloomberg notes, the billionaire faces demands from creditors to boost collateral as his other company MPX Energia saw its stock fall to record lows (as cross-collateralization leads towards a vicious circle). "Doubts about the group continue," one analyst notes as net debt at Batista's six publicly traded units more than tripled last year, "he really has to something to prove he isn't having a cash problem." On the bright side, we are sure his girlfriend will stay with him.

The Biggest Welfare Queens of All ...

“We’ve become more concerned recently”

• One in four Germans would back anti-euro party (Reuters)
• EU Chiefs Seeking to Stave Off Euro Crisis Turn to Cyprus (BBG)
• Ryan Says His Budget Would Slow Annual Spending Growth to 3.4% (BBG)
• Goldman leads decline as Wall Street commodity revenues plummet (Reuters)
• South Korea and US begin military drills (FT) and North Korea cuts off hotline with South Korea (Reuters)
• Karzai Inflames U.S. Tensions  (WSJ)
• Algorithms Get a Human Hand in Steering Web (NYT)
• Meeting Is Set to Choose Pope (WSJ)
• More U.S. Profits Parked Abroad, Saving on Taxes (WSJ)
• Banks rush to redraft pay deals (FT)
• Fugitive Fund Manager Stuffed Underwear With Cash, Fled (BBG)
• Post-Newtown Gun Limits Agenda Narrows in U.S. Congress (BBG)
• China Hints at Shift in One-Child Policy (WSJ)

Instead of asking the endless question of "who should pay for healthcare?" Time magazine's cover story this week by Steve Brill asks a much more sensible - and disturbing question - "why does healthcare cost so much?" While it will not come as a surprise to any ZeroHedge reader - as we most recently noted here - this brief clip on the outrageous pricing and egregious profits that are destroying our health care quickly summarizes just how disastrous the situation really is.  A simplified perspective here is simple, as with higher education costs and student loans: since all the expenses incurred are covered by debt/entitlements, there is no price discrimination which allows vendors to hike prices to whatever levels they want. From the $21,000 heartburn to "giving our CT scans like candy," Brill concludes "put simply, with Obamacare we’ve changed the rules related to who pays for what, but we haven’t done much to change the prices we pay."

• Spain’s Deficit Widened to 10.2% on Bank-Rescue Cost (BBG) - or as Rajoy would say, when one excludes all negatives, it was a surplus
• Monti Austerity Pushes Italians Toward Parliament Upheaval (BBG)
• Russia accuses U.S. of double standards over Syria (Reuters)
• Euro Area to Shrink in 2013 as Unemployment Rises (BBG)
• UK, China central banks to discuss currency swap line (Reuters)
• Italy Court Rejects Challenge to Bailout of Monte Paschi (BBG)
• Japan's Abe to showcase alliance, get Obama to back Abenomics (Reuters)
• Russia’s missing billions revealed (FT)
• China Home-Price Gains May Presage Policy Tightening (BBG)
• Fed unlikely to curtail stimulus despite rising doubts (Reuters)
• Banks face fines up to 30 per cent of revenues (FT) - just as soon as Basel III is passed (i.e., never)
• J.C. Penney Can Raise Billions Under Revised Credit Line (BBG)
• Cost of Dropping Citizenship Keeps U.S. Earners From Exit (BBG)

Presented without any comment (see original Titan letter here), and google translated to add Babel fishing insult to an already injurious, or is that hilarious, exchange between a hard core capitalist and a socialist... perfect ignorance, admiration of Obama, trade tariff threats, oh, and don't mention the war.

• Obama Paints Wider Role for Government in Middle Class Revival (BBG)
• Obama to Seek a New Trade Deal With EU (WSJ)... or this is strawman why 2016 GDP will be higher
• Mobile phone sales fall for the first time since 2009 (Telegraph)
• Sequester Looms, No Deal in Sight (WSJ)
• Neither US party swallows a compromise (FT)
• Embattled Economies Cling to Euro (WSJ)
• For China, Spending Is Harder Than It Looks (WSJ)
• Bank of England's Sir Mervyn King says recovery in sight (BBC) - just a little more inflation first
• G7 fails to defuse currency tensions (FT)
• Japanese Leader Urges Firms to Boost Wages (WSJ) - so does the US one
• Fed Bank Chiefs Back Money-Fund Overhaul (WSJ), or force everyone out of MMFs and into stocks

• 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)

China’s monthly data dump was the main macro update overnight, which however with ongoing mockery of the Chinese data "goalseeking" and distribution methodologies, most recently by the likes of Goldman, UBS and ANZ, had purely political window dressing purposes for the new Chinese politburo. Sure enough, that all the data came precisely Goldilocks +1 was enough to put a smile on everyone's face. To wit - Q4 GDP growth came in just higher than consensus (+7.9%yoy v +7.8%). On a full year basis the economy grew by 7.8%, also a tad above expectations. Then we got industrial production, also just higher than expected (+10.3% v +10.2%) and retail sales - just higher as well (+15.2% v +15.1%). Much more important than meaningless, jiggered numbers, was the announcement from the PBOC that in light of the entire world going "open-ended" on easing, China - which now can't afford to lower rates for fears of rampant inflation together with importing everyone else's hot money - announced it will start short-term liquidity operations as additional tool for controlling liquidity, engaging in a reverse repo on a daily basis, which will have a maturity of less than 7 days. This way the central bank will be able to reacted almost instantly to any inflationary spikes across the economy, as it too has no choice but to ease although not by the conventional inflation targeting methods now used by everyone else.

We are living in the United States of Delusion. The delusion has four key sources. The irony is that clinging to delusion rather than face the necessity of deep cuts in borrow-and-squander budgets will lead to the involuntary reset of the entire system, depriving every vested interest of their share of the swag. Is delusion a sustainable state? No. Thus we can confidently predict that causality, factuality and karma will eventually sweep aside delusion and all those who cling to it.

The Big Winners:  Big Banks and Big Companies

• Global Currency Tensions Rise (WSJ) - in other words, when everyone eases to infinity, nobody eases
• EU to give Spain, France more time to cut deficit (Reuters) - But not because their economies are not "recovering" fast enough, oh no.
• As we expected, Grupo Bimbo considering a bid for Hostess' snack cakes and bread brands (NY Post)
• Time for bus-control: Eleven children killed in latest Chinese bus crash (Reuters)
• Greece Should Write Off Billions of Overdue Taxes, Report Says (BBG) - not all taxes in perpetuity?
• India clamps down on gang-rape protests, PM appeals for calm (Reuters)
• But Meredith Whitney said... Push for Cheaper Credit Hits Wall (WSJ)
• For Greece, last major austerity package, says eurozone official (Kathimerini)...  "unless there is another one"
• Americans Miss $200 Billion Abandoning Stocks (BBG) ... and two flash crashes... and $15 trillion in artificial central bank props
• Goldman Sachs Takes Long View Over Payouts (FT)
• Cliff Would Strike Low Incomes Hard (WSJ)
• Afghan policewoman kills US police adviser (AP)
• For Sale in Japan: Electronics Assets (WSJ)

Presenting Dave Collum's now ubiquitous and all-encompassing annual review of markets and much, much more. From Baptists, Bankers, and Bootleggers to Capitalism, Corporate Debt, Government Corruption, and the Constitution, Dave provides a one-stop-shop summary of everything relevant this year (and how it will affect next year and beyond).

• This is signal, the rest is noise: Russia's Putin set for stand-off with EU on Syria, energy (Reuters)
• Boehner's Budget 'Plan B' Collapses (WSJ)
• Boehner has few options in "fiscal cliff" mess (Reuters)
• Maya "end of days" fever reaches climax in Mexico (Reuters)
• Monti Praised by Merkel Favored Less by Taxed Italians (BusinessWeek)
• China probes Yum Brands' KFC over safety of chicken productsa (Reuters)
• Looting in Aregentina: 400 Border Guard officials deployed to Bariloche over looting (BAH)
• Regulatory 'Whale' Hunt Advances - Comptroller Expected to Take Formal Action Regarding JPM's Trading Fiasco (WSJ) - but no punishment
• U.K. Banks Seen Sacrificing Lending to Meet BOE Demand (Bloomberg)
• US banks face rise in bad loans cover (FT)
• Daily Gun Slaughter in U.S. Obscured by Newtown Rampage (BBG)
• China Restricts Bond Sales by Risker Companies (BBG)