Toyota

The market rose for the 7th straight day (and the day was so straight that...

What a Year It Was! If you followed my pieces in Zero Hedge during 2010 you made a fortune. Nailing it with every asset class allocation. Only one small hickey from a short yen position.

The electric battery gets its first real makeover in 152 years. Immense amounts of money are being made with the new battery technologies. Electric cars will take over 15% of the global car market, or 7.5 million units by 2020. At stake is nothing less than the viability of two economic systems. Will the operating instructions will come in English—or Mandarin. (BYDDF), (SQM), (XIDE)

• Foreclosures May Be Undone by State Ruling on Mortgage Transfer (Bloomberg)
• As expected, retail sales miss blamed on snow, although how icy conditions are preventing web surfing is beyond us: December retail sales dented by blizzard, frugality (Reuters)
• Boehner Vows to Cut Size of Government (FT)
• If at first you don't succeed... Obama renominates MIT economist Diamond for Fed Board (Reuters)
• PBOC Extending Biggest Cash Crunch Since Lehman (Bloomberg)
• Just a little more inflation: Coking Coal Contract Price May Rise 33% on Australian Floods (Bloomberg)
• Andy Xie: This year may start out looking like the last, dipping down later and then resurfacing with hope. (MarketWatch)
• Yes, banks really are doing everything they can to restore shadow banking: JP Morgan Markets Its Latest Doomsday Machine (or Why Repo May Blow Up the Financial System Again) (Naked Capitalism)
• BofA Introduces Fees to Replace Debit-Card, Overdraft Charges (Bloomberg) - we are confident Elizabeth Warren will have a lot to say about this...hopefully she has something to do as well
• Fed Should Stop Buying Bonds; It Is Falling Far Behind the Economy (David Malpass)

Ruh roh. After yesterday's euphoria around the new year wiping the economic slate clean, investors woke up and...

There are too many year-end top ten lists, so I'm not going to do that. I'm going to do 12. I've chosen those things from The Daily Capitalist's perspective that I thought impacted our lives here in the USA. These 12 events created a lot of buzz, things we were all talking about.

While the world is still unwrapping the surprise Christmas gift from China in the form of an interest rate hike of 25 basis points, this other piece of news with ample implications to the auto industry seems to have gone largely under the radar.

• Asian stock markets were mostly lower Tuesday on Europe's debt woes.
• China central banker: Loose monetary policy must change.
• Euro-zone economic sentiment indicator rose to 105.3 in Nov from 103.8 in October.
• Euro drops below $1.30 for first time since mid-September amid sov.debt fears.
• German unemployment sinks again in November as economic rebound continues.
• Fed bought $7.226B in Treasury debt on Monday, the tenth operation of QE2.
• India’s economy grew 8.9% in July-Sept quarter from year ago.
• Japan Unemployment rises, output falls, showing risk economy may contract.

Skip General Motors, which is getting over inflated through a combination of media and government hype. Today Toyota, the world’s largest car maker, has been slammed by the perfect storm. Toyota has become the BP of the auto industry. Since the company is Japan’s largest exporter, it would benefit greatly from any weakness in the yen. Buy when there is blood in the streets. (TM), (FXY).

• Dollar steady against euro, which buys $1.4211.
• Eurozone retail sales down .2% for second month in September.
• Gold rallied to $1,393.40, the highest ever, in after-hours electronic trading.
• Japan's central bank kept its key interest rate unchanged at near zero.
• "Material failure" or "faulty design" the likely cause of A380 engine blowout – Qantas CEO
• Amkor 3Q earnings fell 4% to $78M.
• BHP Billiton to build its Canadian potash business despite Ottawa blocking its $39B bid for Potash Corp.

Who really won this election? I did! There will be a major sell off next year, not just in stocks, but in all asset classes. The election results increase the certainty and the severity of this event. Volatility (VIX) will rise across the board. What The Election Means for Economic Policy. What the Election Means for the Markets.

Someone has to lose but, in this case, the loser is the Federal Reserve Bank of the United States of America – which plays the part of the perennial sucker as they are willing to sit down at the table and be taken for all they have two or three days a week. And why are they willing to be so generous? BECAUSE IT’S NOT THEIR MONEY!

A little knowledge of history can be a dangerous thing. We are trapped in a runaway Toyota, with the doors locked and broken, the accelerator stuck on the floor, careening towards a cliff at 100 miles per hour. Gridlock assures we can do nothing about it. Be careful what you wish for. This is what lost decades are made of.

• No surprise here: US foreclosure pipeline slows (FT): "Freddie Mac, one of the two government-owned entities that finance about half all US mortgages, says that homes are taking as long as eight months to work their way through its foreclosure pipeline, two months longer than was typical before the housing crisis began."
• Key Tax Breaks at Risk as Panel Looks at Cuts (WSJ)
• Hilsenrath still has that inside touch, and a way with words: "Why the Fed Wants a Tad More Inflation" (WSJ)
• As predicted a month ago: Bubble fear as rare earth prices soar (FT)
• Sarkozy Doing `Dirty Work' Means No Scapegoat as Ratings Slump (Bloomberg)
• Strike paralyses Greek rail network (Earth Times)
• Waiting Ships Number Up Again In French Oil Port Strike (WSJ)
• Napoleon Idiot Dynamite: The Fed must adopt an inflation target (Fred Mishkin, h/t Miles)
• Unsolicited fiscal advice from the unemployed: Now Isn’t the Time to Cut the Deficit (Christina Romer)
• To fix the economy, let bad banks die (LA Times)