Wall Street Journal

Earlier today, in what can only be summarized as an epic meltdown, NJ governor Chris Christie proceeded with an even more epic rant against House speaker John Boehner, in narrow terms, and House Republicans in broader, for killing the $60 billion Sandy Assistance bill, whose funding would have offset one full year of the just legislated tax hikes on the rich which would add $62 billion annually to the Treasury (or alternatively would have been unfundable for the next 2 months while the US struggles to pay its mandatory bills courtesy of having breached the debt ceiling). Alternatively, all Americans could just agree to accept less welfare and entitlement benefits to show their solidarity for New Jersey and fund the recovery of the Tristate area by a "shared sacrifice" instead of going the default route and demanding even more deficit spending - something that would naturally saddle the next generation with even more pain, not the current, far more entitled one - but in this country that is an absolutely ludicrous proposition. Below is a clip of the entire Christie performance which is a must see for sheer indignation entertainment value alone.

• Senate-Passed Deal Means Higher Tax on 77% of Households (BBG)
• Bipartisan House Backs Tax Deal Vote as Next Fight Looms (BBG)
• Fresh stand-off looms after US cliff deal (FT)
• Congress Deal Averting Tax Increase Curbs Risk to States (BBG)
• How Colombian drug traffickers used HSBC to launder money (Reuters)
• Danes Face New Reality in Struggle to End Crisis, PM Says (BBG)
• Ban on demanding Facebook passwords among new 2013 state laws (Reuters)
• Oil Climbs to Three-Month High as U.S. House Passes Budget Bill (BBG)
• Cameron seeks bold steps from G8 leaders (FT)
• China to outstrip Europe car production (FT)
• North Korea Picks Stronger Economy, South Ties as Top 2013 Tasks (BBG)

The return of inflation, in official Japanese liberal newspeak, will make the economy less sickly even if the strategy "has risks". One of these is war with China, if only as a (Japanese) crowd pleaser, and another is selling off Japan's over-one-trillion dollar holding of US Federal debt at exactly the right psychological moment to implode the US economy, already teetering on the brink of its fiscal cliff. Japan's endgame flirt with Neoliberal mindwarp, what we can call the "slogan based economy", has brought about a situation where War and Circuses is surely on the Japanese political agenda, along with Japan's threats to sabotage the global economy. The inventors of kamikaze suicide war now have an Old Guard of political deciders who are prepared to pilot the economy straight into the ground, while bleating about "national pride".

• Japan PM Abe wants to replace landmark war apology (Reuters) - to summarize Abe's strategy: crush the JPY even as China is alienated so much not a single Japanese export goes to Beijing. Brilliant
• Unthinkable Cuts Almost a Reality (WSJ)
• Signs of Negative Economic Impact Growing (WSJ)
• Carlyle Agrees to Buy Duff & Phelps for $665.5 Million (BBG)
• Greek retail sales slump deepens in October, recession bites (Reuters)
• Congress Dysfunction as Deadline Arrives Poses 2013 Risks (BBG)
• For Euro, All Eyes Are on Central Bank's Actions (WSJ)
• France Seeks New Path to High Tax (WSJ)
• Japan Rebuke to G-20 Nations May Signal Moves to Weaken Yen (BBG)
• Portugal braced for ‘fiscal earthquake’ (FT)
• Monti's reform path faces test beyond Italy elections (Reuters)
• South Korea’s Inflation Slows Even as Economy Gaining Momentum (WSJ)
• China factory sector strongest since May 2011 (Reuters)

My thoughts on what is headed our way

• 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)

To understand this endgame, we need to start with the financial and political basics of wealth and power in the U.S. Put these nine structural dynamics together and the endgame becomes clearly visible: Politically, a Tyranny of the Majority comprised of those who draw direct transfers/benefits from the Federal government, is ruled by the top half-of-1% financial aristocracy who own the majority of income-generating assets.  The minority, who pay most of the taxes (the 24.5% between the majority and aristocracy), will see their taxes rise as the aristocracy buys loopholes and exclusions while the bottom 50% pay no income tax. Financially, the Federal government’s spending has outrun the tax revenues being collected.  Structurally, Federal expenditures for entitlements (Medicare, Medicaid, Social Security, Veterans Administration, etc.) will rise as Baby Boomers retire en masse over the next 15 years, while tax revenues will stagnate along with earned income. There is no way to square these circles. What few dare admit, much less state publicly, is that the Constitutional limits on the financial Aristocracy and the Tyranny of the Majority have failed.

• 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)

• 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)

First it was Citi, then SocGen, now a third key investor has decided to pull their money from SAC - the once vaunted hedge fund which now everyone is now avoiding like the plague, and for which the only question now is "when" - when will Stevie close down shop, and will this happen before or after the paddywagons finally arrive  at 72 Cummings Point road. The WSJ reports: "Titan Advisors LLC recently told clients that it had decided to withdraw its entire investment from SAC, said clients who received phone calls from Titan.  "They've told us they still think SAC is a good firm but Titan doesn't need the headline risk, and we sure don't," said Tom Taneyhill, executive director of the Fire & Police Employees' Retirement System of the City of Baltimore, on Friday.  Société Générale SA, which has client money in SAC through its Lyxor asset-management arm, also decided to pull its money from SAC, The Wall Street Journal reported earlier this month. At the time, an SAC spokesman declined to comment. Titan's departure is significant given SAC's long-standing relationship with one of Titan's founders. Titan co-founder George Fox began investing in SAC in the mid-90s, several years after Mr. Cohen started what became the firm in 1992."

• 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)

• IMF Demands Partial Default for Cyprus (Spiegel)
• Boehner's 'Plan B' Gets Pushback (WSJ)
• Beijing criticises US ‘political checks’ (FT)
• White House Said to Tell Business Groups Talks Stall (BBG)
• NYSE tries to get hitched again: IntercontinentalExchange in talks to buy NYSE (Reuters) -> N-Ice coming?
• Greece faces ‘make or break’ year (FT)
• Fed rejects idea of consensus forecasts, "maybe forever": Fisher (Reuters)
• Rajoy Drives Spanish Revolution With Low-Cost Manufacture (BBG)
• Italian Senate Set for Budget Vote Before Monti Resigns (BBG)
• BOJ Loosens With Pledge to Review Inflation Objectives (BBG)
• Bowing To Abe, BOJ To Review Price Goal (WSJ)

• Republicans put squeeze on Obama in "fiscal cliff" talks (Reuters)
• Inquiry harshly criticizes State Department over Benghazi attack (Reuters)
• Banks See Biggest Returns Since ’03 as Employees Suffer (BBG)
• Italy president urges election be held on time (Reuters)
• Bank of England Says Sterling Hurting Economy (WSJ) - there's an app for that, it's called a Goldman BOE chairman
• China slowdown hits Indonesian farmers (FT)
• China dispute hits Japanese exports (FT)
• Market to get even more monopolized by the HFT king: Getco wins Knight with $2 bln sweetened offer (Reuters)
• MF Global Cases Focus on 'Letters' (WSJ)
• UBS fined $1.5 billion in growing Libor scandal (Reuters)
• Spotlight swings to interdealer brokers (FT)
• China Widens Access to Capital Markets (WSJ)
• With Instagram, Facebook Spars With Twitter (WSJ)

In March 2012, Okayama Metal & Machinery became the first Japanese pension fund to make public purchases of gold, in a sign of dwindling faith in paper currencies. Okayama manages pension funds for about 260 small and mid-sized companies in the Okayama area. "By diversifying currencies, we aim to reduce risks associated with them," said Yoshi Kiguchi, the fund's chief investment officer. "Yields become stable if you put small amounts into as many types of holdings as possible." Of its 40 billion yen ($477 million) in assets, the fund has invested around ¥500 million-¥600 million in gold, he said. Initially, the fund aims to keep about 1.5% of its total assets of Y40bn ($500m) in bullion-backed exchange traded funds, according to chief investment officer Yoshisuke Kiguchi, who said he was diversifying into gold to “escape sovereign risk”. Other pension funds in Japan are following their lead according to the Wall Street Journal. Japanese pension funds are diversifying into gold "largely to mitigate the damage from possible market shocks"... Mitsubishi UFJ Trust and Banking Corporation said it has secured more than Y2 billion in investments from two pension funds for a gold fund it started in March.