Reality

We don’t have a dog in this fight.  San Bernardino doesn’t change the calculation.  ISIS will eventually collapse under its own homicidal and parasitical weight, probably with the help of one or more of its neighbors, whose inactivity and divisiveness we currently underwrite. Then ISIS will be replaced by something better... or worse... it is impossible to know in this region.  In the interim, we and our European friends should focus our efforts on isolating ourselves from the madness.  And we certainly should not go out of our way to draw further fire.

Just as we saw in the August collapse, US financial stocks appear to be facing the harsh reality that other markets already recognize. While US financial credit markets have been anything but exuberant for weeks, equity options markets have now turned their bullish backs on the banks as Bloomberg reports the ratio of bearish to bullish options on the S&P Financials ETF has climbed to the highest level in a year this week, reflects rising demand for protection against losses as NIM hopes collapse and Fed "error" probabilities increase.

Just when you thought it was safe to go short: "We are, for the first time in years suggesting… indeed, we are stating it rather clearly… our belief that the global bull market that began in the spring of ’09 ended, in retrospect, in the very first days of summer of last year. We shall, henceforth, look to err bearishly of equities, holding long positions in some equities, but erring on balance to the short side of the global equity market."

And with that we can finally close the book on slippery central bank semantics on what precisely it is that they do, and what it is they plan to achieve.

US factory orders have never dropped this far for so long without the US economy overall being in recession. November's 4.2% YoY drop is the 13th consecutive monthly drop. Revistions to durable goods data shows a 1% drop in new orders ex-defense in November after rising 1.4% in October.. and as a reminder, this data was buoyed by a 46.9% surge in defense aircraft and parts orders to all-time highs. Traders better hope for moar war or the reality of the economy will peak out from behind the military-industrial complex veil.

All we can do is point out the risks, so that people can at least prepare on an individual level. A major lesson everybody should take to heart from the Cyprus experience is this: when the next crisis strikes, do not believe any of the promises uttered by government or central bank officials. You will be lied to in the critical moments, and you could stand to lose a lot if you believe the lies.

• Today’s fixing was a big surprise, and impression is that upside risks to USD/CNY have grown
• PBOC’s actions are conflicting: there was suspected intervention yesterday and sentiment stabilized, but it set such a low fixing today
• Will help loosen monetary conditions; still, risk of capital outflows could increase concurrently
• Expect 5%-10% depreciation by end of the year, though this depends on the pace of PBOC’s intervention and health of macroeconomy

Evangelicals, Tea-partiers, Progressives, Libertarians, Ghettofied Blacks, Unionized Labor, and other groups will be tapped and lured by the career politicians in the two parties to receive their financial support and vote, in most instances without political voice… Our system of Presidentialism may have served us well in the past but its rigidity in the political process denies the multiple voices that need to be heard in a democracy, nor offers the required tools for political compromise.  Sadly... here we are, stepping into 2016 with the possible political prospect of having to elect as chief executive of this nation either a lady with questionable trust-credentials or a boisterous charlatan.

Many people start a new year with renewed optimism. However, "New Year, Same Problems" is the meme of 2016... and recent trading has dashed some of that optimistic 'This time it's different' hope.

Taking away from the government its power of compelling the citizenry to accept money that it monopolistically controls and abuses may serve as an important legal and economic change to force the government and those who live at its spending trough to face the reality of the welfare state’s ideological and fiscal bankruptcy before it is too late to avert a complete collapse of the society.

"The next step will be, once they've tested it with several flights, they will bring down some of their fighter air power - SU-27s and SU-33's - and they will station them there permanently. That's what they're likely to do."

Last year amid China’s ongoing financial crisis, the government there tightened some forms of capital controls (curiously while loosening others). For any Chinese citizen with savings right now, it’s pretty obvious what’s happening. And they want to get their money out of the country. Bitcoin has been a popular alternative in China because people can easily cross borders with vast sums of money encrypted inside their mobile phones. But there’s a new tactic that Chinese are using now: domains.

Because the sectarian divide is set to become the key geopolitical issue in the weeks and months ahead, we thought it an opportune time to present the following map from Goldman which does a nice job of delineating the Sunni-Shiite split in the Mid-East.

For Americans between the ages of 20 and 24, the share of those sidelined over the past decade because they were in school increased, unsurprisingly, during the decade that included the Great Recession. What's more unusual is that the share of 20- to 24-year-olds who say they're retired doubled from 2004 to 2014.