Renminbi

• China turmoil sends oil, stocks sliding (Reuters)
• China's Stock Traders Go Home After 29 Minutes (BBG)
• Yuan hits weakest since Feb 2011 on fresh low midpoint (Reuters)
• Stocks Extend Rout, Oil Slides on China as Soros Warns of Crisis (BBG)
• China's 29 Minutes of Chaos: Stunned Brokers and a Race to Sell (BBG)
• North Korea Uses Bomb Test to Boost Dictatorship (WSJ)

"With the macro backdrop more vulnerable today than at any time since the financial crisis, and the S&P 500 and NASDAQ still near all-time highs, we anticipate a downside move to 1900 on the S&P within the first two months of the year. We reiterate our view that Crude and Energy remain structurally broken and possess significant downside from current levels which will only agitate and exacerbate the ongoing collaps."

A world where money is decentralized means a world where nothing you’ve ever seen before will become the new norm and the new norm is unlikely to include a scrap of paper issued by a bankrupt government.

How much do you think your paper currency will be worth 23 centuries from now? Or even 23 years? Or potentially even 23 months?

"The solution to uncertainty is cheaper valuations. If problems are priced in, investors can afford to look through near terms concerns and focus on the longer term. Worryingly, we have exactly the opposite situation today. Average stock valuations are close to historical highs – so we have lots of risk and little in the way of valuation cushion.... Time for a US rate rise then?"

With just 72 hours to go until Yellen decides to soak up to $800 billion in liquidity, suddenly we have China and the Emerging Market fracturing, commodities plunging, and junk bonds everywhere desperate to avoid being the next to liquidate.

"A flip to fiscal stimulus is the most likely catalyst for a Great Rotation out of “deflation plays” into “inflation plays”, undoubtedly the biggest investment decision of 2016. Sadly it took the New Deal and WW2 to end the dominance of “growth” over “value” in the 1930s."

China burned through some $40 billion in FX reserves in November in support of the yuan while the headline drawdown came in at a whopping $87 billion inclusive of valuation effects. It was the third largest decline in history and suggests that despite a misleading $11 billion increase in October, capital flight continues unabated.

• Global Stocks Edge Higher on Expected ECB Stimulus (WSJ)
• Moment of truth as Puerto Rico faces crucial debt payment (Reuters)
• Obama urges Turkey to reduce tensions with Russia, stresses support (Reuters)
• Russian Media Takes Aim at Turkey (WSJ)
• Support Grows for U.S. Commando Raids to Fight Islamic State (BBG)
• Yuan Drops as SDR Approval Seen Prompting PBOC to Reduce Support (BBG)

The IMF’s Executive Board decision today means that the yuan will be included in the SDR basket from Oct. 1, 2016, effectively anointing the yuan as a major reserve currency and represents recognition that the yuan’s status is rising along with China’s place in global finance. The weight in the basket will be 10.92%, larger than JPY and GBP. However, as politically-motivated as this decision may have been, now comes the hard part for China.

In a statement, the People’s Bank of China thanked the IMF for the recommendation and said it was “an acknowledgment of the progress in China’s recent economic development, reform and opening up”.

If you close your left eye, the US dollar is strong. The labor market has recovered to its pre-crisis levels. The US is affluent and free. But if you close your right eye, the dollar is astonishingly overvalued based on nearly every objective metric that exists, police forces have turned into federally-funded paramilitary units, and a grand surveillance state now dominates over the citizens, and many of the basic freedoms guaranteed by the Constitution have become watered-down aphorisms rather than inalienable rights. That’s our world. It is simultaneously full of risk AND reward. The important thing is to look with BOTH eyes.

While the world was following the tragic events unfolding on Friday night in France where hundreds of innocent civilians were killed or injured, an important economic development took place at the IMF, whose staff and head Christine Lagarde, officially greenlighted the acceptance of China's currency - the Renminbi, or Yuan - into the IMF's foreign exchange basket, also known as the Special Drawing Rights. Here are the initial early responses by various Wall Street analysts.

There is “a barbarous relic” in our global monetary system. It is the U.S. dollar: the worthless, monetary relic of an empire in decline.

An "independent" commission of the World Anti-Doping Agency has found that Russia engaged in state-sponsored doping and more importantly, recommended that Russia’s track and field athletes be suspended from Olympic competition in 2016.  The "Independent" commission was led by  Canadian Dick Pound. Joining him on the commission was Richard McLaren, another Canadian lawyer and a long-standing member of the Court of Arbitration for Sport, as well as Günter Younger, head of department of cybercrime with Bavarian Landeskriminalamt. So two Canadians and a German made up an "independent" commission that now wants to bar Russia from the marquee event of the upcoming olympics.