- Lawmakers, Obama in last chance talks on "fiscal cliff" (Reuters)
- Obama Summons Congress Leaders as Budget Deadline Nears (BBG)
- Hopes for fiscal cliff deal fade (FT)
- Iran starts navy drills in Strait of Hormuz (Reuters)
- Looming Port Strike Deadline Pressures Obama to Intervene (BBG)
- Home Depot to Lowe’s Busiest Season Threatened by Strike (BBG)
- 'Whale' Capsized Banks' Rule Effort (WSJ)
- China tightens Internet controls, legalizes post deletion (Reuters)
- Goldman Sachs Buying Japan’s Exporters on Abe Policy Bets (BBG) and preparing one Goldman alumnus to take over the BOJ
- IPOs Slump to Lowest Level Since Financial Crisis After Facebook (BBG)
- Blackstone seen sticking with SAC despite insider trading probe (Reuters) - what a shock
- Mistry at Tata Helm as Investors Query $500 Billion Goal (BBG)
- High-Speed Traders Race to Fend Off Regulators (WSJ)
- U.S. Family of Mao’s General Assimilates, Votes for Obama (Bloomberg)
- Iron ore prices hit eight-month high (FT)... four months after plunging and crushing iron ore miners
- Obama seeks 60 Senate votes for cliff deal (MarketWatch)
- Need. Moar. InfinitQEeee: Japan PM adviser urges unlimited BOJ easing, higher price goal (Reuters)
- Yen Touches 16-Month Low Versus Euro Before Japan CPI (BBG)
- China consumers driving economic rebound (Reuters) - ot just year end window dressing to accompany the new Politburo
- Rajaratnam agrees to pay $1.5 million disgorgement in SEC case (Reuters)
- France should review 2013 deficit target with EU partners (Reuters)
- Monti-led poll alliance takes shape (FT)
- Bersani wants growth-oriented Europe (FT)
China Proposes Full Name Registration For Every User To Make Its Internet "Healthier, More Cultured And Safer"Submitted by Tyler Durden on 12/26/2012 08:55 -0500
With various "gun control" proposals flying fast and furious (precisely the reactionary kneejerk reaction Ron Paul warned would happen), some of which as brilliant as RFIDing every gun in existence, supposedly including the tens of millions of illegal and unregistered ones, it is perhaps appropriate to see how another authoritarian government - China - deals with its own equivalent of the touchy Second Amendment, its "First", or the right to free speech in a society which for decades has had none, and where the internet makes free speech regulation impossible (very much any gun control in a nation in which there is one gun for every person is impossible). China's solution, according to Reuters, the requirement of a real name registration for internet access for every person, "extending a policy already in force with microblogs in a bid to curb what officials call rumors and vulgarity...A law being discussed this week would mean people would have to present their government-issued identity cards when signing contracts for fixed line and mobile internet access, state-run newspapers said."
- Grand Bargain Shrinks as Congress Nearing U.S. Budget Deadline (BBG)
- Budget Talks Cloud Outlook (WSJ)
- Obama to cut vacation short to deal with fiscal crisis (Reuters)
- Stop-gap fix most likely outcome of "fiscal cliff" talks (Reuters)
- Aso Named Japan’s Next Finance Chief as Abe Primes Fiscal Pump (BBG)
- Aluminum Glut No Bar to Gains as Barclays Says Sell (BBG)
- Morsi signs controversial charter into law (FT)
- Children, many ill, would be victims of Russia ban on U.S. adoption (Reuters)
- Turkey Central Bank Unveils New Tool to Limit Bank Debt Risk (BBG)
- Refi Program Expansion Eyed (WSJ)
- India Joins Indonesia Facing Heightened Policy Dilemma (BBG)
With the market still hopeful of some deus ex resolution to the Fiscal Cliff will take place in the last few trading sessions of the year (one where the market itself will not have to be the catalyst for such a resolution, because once the selling starts in earnest, who knows if and when it stops, hence the loading up on prodigious amounts of puts), here is Iran out of left field, adding yet another known unknown to the inequality, announcing that it will begin six days of naval drills in the Straits of Hormuz on Friday. In other words a one year flashback deja vu, as Iran held a similar 10-day drill last December, when everyone was expecting an imminent escalation out of the endless Israel-Iran foreplay and was analyzing which were the new moon days allowing Israel unobstructed access to the greatest distraction of all - Iran's nuclear facility being moved under a mountain: a catalyst which Israel repeatedly said is the only reason to attack a weaponizing, nuclear Iran, and which took place some time in 2012. Now that the official window of opportunity is closed, will Israel tone back on the aggressive rhetoric? Hardly: after all that is precisely why the Syrian "outlet valve" has been put in play over the past 6 months.
One of the biggest complaints about gold - always a parallel currency to paper, and soon to be serial, once the world shifts to a post-paper currency reality in which faith in infinitely creatable electronic paper money is finally destroyed - is that it would be an impractical medium of exchange, as the traditional denominations are so large one would be unable to trade one ounce (and certainly one bar) for every day needs. This is also one of the main reasons various retail investors prefer silver over gold. All this may be changing courtesy of Swiss refiner Valcambi which has created a CombiBar, a credit-card sized, 50 gram block of 99.9 gold, which is precut, and which can easily be broken into one gram pieces which can then be used as forms of payment in an emergency. And since one gram of gold has roughly the value of two ounces of silver, it is a far more practical lowest common denominator unit of exchange than the traditional one ounce minimums in broad circulation.
- 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)
As DB's Jim Reid summarizes, "it is fair to say that newsflow over the next 72 hours will be fairly thin before we head into a tense final few business days of the year." It is also fair to say, that the usual tricks of the new normal trade, such as the EUR and risk ramp as Europe walks in around 3 am, precisely what happened once again overnight to lift futures "off the lows", will continue working until it doesn't. In the meantime, the market is still convinced that some compromise will appear miraculously in the 2 trading sessions remaining until the end of the year, and a recession will be avoided even as talks now appear set to continue as far down as late March when the debt ceiling expiration, not cliff, will become the primary driving power for a resolution. That said, expect to start hearing rumors of a US downgrade by a major rating agency as soon as today: because the agenda is known all too well.
Yesterday, the man planted by Goldman to be Italy's unelected leader in November 2011, officially stepped down and shortly thereafter his government was dissolved in advance of the February 25, 2013 elections. Yet Monti, under whose helm Italy has been in deep recession since the middle of last year, where consumer spending is falling at its fastest rate since World War Two and unemployment has risen to a record high above 11 percent, and whose candidacy is vastly unpopular with the Italian population, moments ago generously offered to continue being Italy's unelected leader: just the way Europe's political masterclass and its central bankers want it, if not so much Italy's people.
The collapse of the Fiscal Cliff talks should come as no surprise to anyone (except, of course, for all those "expert" political commentators virtually all of whom saw a deal by December 31: a full list of names is forthcoming). The reason: a simple one - a House torn, polarized to a record extreme, and a political environment in which the two parties, in the aftermath of a presidential election humiliating to the GOP, reached unseen before antagonism toward each other. In this context, it was absolutely inevitable that America would see a replica of last summer's debt ceiling collapse, which mandated a market intervention, in the form of a crash, and the wipeout of hundreds of billions in wealth - sadly the only catalyst that both parties and their electorate, understand. We had prefaced this explicitly in early November when we said that "the lame duck congress will posture, prance and pout. And it is a certainty that in the [time] remaining it will get nothing done. Which means, that once again, it will be up to the market, just like last August, just like October of 2008, to implode and to shock Congress into awakening and coming up with a compromise of sorts." Which of course brought us to Thursday night's mini-TARP moment. With all that said, there are those forensic detectives who are addicted to every single political twist and turn, and who are curious just where and when the Fiscal Cliff talks broke down in the past week. In this regard, the WSJ provides a useful timeline.
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).
OBAMA SAID TO NOMINATE KERRY AS SECRETARY OF STATE TODAY
Time to salute Kerry, John "Swiftboat" Kerry.
Iraq quadrupled its gold holdings to 31.07 tonnes over the course of three months between August and October, data from the International Monetary Fund showed on yesterday. The IMF's monthly statistics report showed the country's holdings increased by some 23.9 tonnes in August to 29.7 tonnes. That was followed by a 2.3-tonne rise in September to 32.09 tonnes and then a cut of 1.02 tonnes in October to 31.07 tonnes. There was no data for November. It is Iraq's first major move in years to bolster its gold reserves. More recently, Brazil raised its gold holdings by 14.68 tonnes, or 28 percent, in November, bringing its bullion reserves to 67.19 tonnes. The addition comes on the heels of an even bigger increase in October when the South American country added 17.17 tonnes to its reserves. In September, it increased holdings by 2 tonnes. Meanwhile Turkey cut its gold holdings last month by 5.84 tonnes to 314 tonnes from October. The country allows commercial banks to use gold as collateral for loans, and changes to its balance sheet are often connected to such activity.
It may not be apparent immediately, but in the aftermath of last night's epic collapse in fiscal cliff negotiations, which incidentally was perfectly obvious to anyone with half a brain and who experienced last summer's debt ceiling fiasco, which sadly excludes all paid political and financial - including sellside - commentators, all of whom expected a prompt resolution to this polarized issue as recently as a week ago, there is major behind the scenes panic. Because while banks would write profuse, long-winded essays to explain the logic and rationality of the "deal", now that they are all faced with adjusting their narrative the best they can come up with are two sentence fragments such as this one from Citi's Steven Englander "Problem is that it is the right wing of the Republican Party that wouldn’t give Boehner their support, making it less likely that he could win broad support among Republicans for a compromise with the White House. Also he will have to spend next couple of days negotiating with both his own party and the Democrats without knowing how much he can deliver." The answer: nothing at all. In fact as Scott Rigell said “I’m not sure the people who have been up here 20 or 30 years really understand what the next iteration of this process is”. He is speaking for pretty much everyone else who has now been made a total fool by the Black Swan that is Congress. As a reminder a 3 month delay resolution assures a US recession, and a ~20% or so minimum correction in the stock market, which has been priced for absolute perfection for months, and which will once again have to be used by Wall Street as a means to get a consensus out of DC. Just as we predicted over a month ago. Finally while we may have avoided the Mayan apocalypse, we do have a quad witching and a NASDAQ rebalance to look forward to. Enjoy!
- 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)