Remember that one keyword that oddly enough never made it's way into the president's largely recycled SOTU address - "Solyndra"? It is about to make a double or nothing repeat appearance, now that Ener1, another company that was backed by Obama, this time a electric car battery-maker, has filed for bankruptcy. Net result: taxpayers lose $118.5 million. The irony is that while Solyndra may have been missing from the SOTU, Ener1 made an indirect appearance: "In three years, our partnership with the private sector has already positioned America to be the world’s leading manufacturer of high-tech batteries." Uh, no. Actually, the correct phrasing is: "...positioned America to be the world's leading manufacturer of insolvent, bloated subsidized entities that are proof central planning at any level does not work but we can keep doing the same idiocy over and over hoping the final result will actually be different eventually." We can't wait to find out just which of Obama's handlers was may have been responsible for this latest gross capital misallocation. In the meantime, the 1,700 jobs "created" with the fake creation of Ener1, have just been lost. Yet nothing, nothing, compares to the irony from the statement issued by the CEO when the company proudly received taxpayer funding on its merry way to insolvency: " "These government incentives will provide a powerful stimulus to a vital industry and help ensure that the batteries eventually powering millions of cars around the world carry the stamp 'Made in the USA'." Brilliant - and no, they are laughing with us, not at us.
SOTU Post Mortem:
The best news possible: "Nothing will get done this year, or next year, or maybe even the year after that." Barack Hussein Obama
The worst news: Everything else.
Here is the text of President Barack Obama’s State of the Union Address as prepared for delivery at 9 p.m. ET. "Jobs" 33 vs. "Fat Cats" 0, Rich 3 vs Poor 1, Hope 2 vs Unicorns 0, Change 9 vs Tooth-Fairy 0, Mortgages 5 vs Apple 0, Main Street 1 vs Wall Street 3, China 4 vs Europe 1; DEBT CEILING 0
GroupThink! GroupThink! GroupThink!
Hope is soaring. But the toughest creature out there, the one no one has been able to subdue yet, has other plans.
European Indices are trading up at the midpoint of the session following strong performance from financials, however, Italian bond auction results dampened this effect after failing to replicate the success of the Spanish bond auction yesterday with relatively lacklustre demand. There has been market talk that this lull in demand for Italian bonds is due to technical error preventing some participants from bidding in the auction, but this still remains unconfirmed. Heading into the North American open, fixed income futures are still trading higher on the day having seen the Bund touch on a fresh session high and with peripheral 10-year government bond yield spreads widening ahead of the treasury pit open. Markets now anticipate the release of US trade balance figures and The University of Michigan confidence report.
Why Do We Write Again and Again About SOPA? Because It Would Kill the Internet and Free Speech ...
Just when we thought we may go through one full day without some escalation out of the greater Iran region, here comes the WSJ to inform us that Iran has decided to shove the MAD ball right back into America's court with news that Iran has sentenced alleged CIA spy, 28 year old Amir Hekmati, to death. "Amir Mirzaei Hekmati, born in Arizona to Iranian parents and raised in Michigan, was accused of Moharebe--or being the enemy of God-- the highest crime in Islamic law that carries the death penalty in countries where Sharia law is practiced. The prosecutor's indictment against Hekmati, read in court, said he was guilty of waging a war against God, spying on the Islamic Republic of Iran for the CIA and working for an enemy government, according to Iranian media reports." Needless to say, "the case, the first recent death penalty for an American in Iran, will likely increase tensions between the U.S. and Iran. The State Department has called for Iran to release Hekmati and give the Swiss embassy--the protectorate of U.S. interest in Iran--access to him." It appears Iran has decided not to proceed with those particular instructions.
Curious how the US, on a state by state basis, stacks up against the rest of the world, in terms of economic (and population) prowess? The following interactive graphic from the Economist should answer all questions about what state is equivalent to what country. With some surprises: as the Economist points out: "Who would have thought that, despite years of auto-industry hardship, the economy of Michigan is still the same size as Taiwan's?" On the other hand Montana Grungeville being equal to Greece in GDP - that we could live with...
The meeting between Merkel and Sarkozy on Monday is likely to be the main focus of next week, as well as continued debate of the Greek PSI. Overall, this process is likely to push the EUR lower in the next couple of weeks, while the missing details for better fiscal policy coordination are getting negotiated. On the macro side, IP in Germany will have slowed by 0.2% mom in November and consensus expects the aggregate Euro-zone IP to have contracted by the same amount. But we also get November IP in many other places, including the UK and India. Already released over the weekend, Chinese money supply data has been stronger than expected and the amount of new loans issues in December is clear evidence of policy easing.
How many of those millions of dollars in cars does the "Foreclosure King" still have? How is he able to stay so warm and cozy in his castle on the intercoastal in Ft.Lauderdale staring out at his 100 foot yachts and where is the Florida Bar in all this?
As if the situation in the Gulf was not enough on edge, here comes Europe with news, via Reuters, that EU governments have reached a deal to ban Iranian oil imports. The only thing pending is the determination of the starting date and other details. The result, as expected, is another leg up in crude. Sooner or later, this relentless rise higher will spill through to the pump, which according to the Michigan Bizarro confidence indicator will sent consumer optimism to historic levels. And now, the escalation hot grenade is back in Iran's court. Expect more missiles to be fired into the water and more rhetoric about Straits of Hormuz closure in 5...4...3...
China has set out to conquer the global automotive markets, but not by flooding them prematurely with Chinese-branded vehicles. It’s a government priority. And it’s through the back door
Quick summary of the week's main bullish and bearish headlines (as to the data behind the headlines, that's another matter)
While volume today will be rather abysmal with virtually everyone now gone, the robots will be quite busy kneejerking themselves to a variety of economic reports, starting with the final Q3 GDP revision, consumer sentiment, index of leading indicators and ending with FHFA. On the political front it is unclear if there is any progress to the payroll tax extension negotiations, which has huge implications for if not the Q1 market, then definitely economy.
Watch Jon Corzine's Follow Up Testimony On The MF Global Bankruptcy, Accompanied By MF's CFO And COOSubmitted by Tyler Durden on 12/13/2011 11:15 -0400
Even though he has had several days in which to "review his notes", the follow up testimony by former MF Global CEO Jon Corzine to the Senate Agriculture Committee starting momentarily will be replete with "I don't recalls" and "to the best of my knowledge" and will be largely devoid of all content, suffice to say it was not his intention to break the main law of broker dealers- no commingling. It will be even worse because today he will be joined by MF global's CFO and COO as well, all of whom will be completely clueless once again, and needless to say, shocked, SHOCKED, that they stole billions from their clients. Watch the full webcast below.