Saudi Arabia

• U.S. jobs market seen fairly healthy despite slowing economy (Reuters)
• China State Funds Said to Buy More Shares After Market Rout (BBG)
• Global Stocks Gain Some Respite (WSJ)
• U.S. Jobs Data Take on Added Importance With Markets in Turmoil (BBG)
• GOP Health Plans Are Works in Progress (WSJ)
• For economy czar of crisis-hit Venezuela, inflation 'does not exist' (Reuters)

The half-life of the latest "market supporting" intervention by the Chinese government: just about 12 hours.

As our situation in this country becomes more precarious, there are going to be far more flashpoints than anyone will be able to keep track of. It is inevitable that a fight between corrupt elements of the U.S. government and regular people will erupt.If internationalists were to get their way fully with the world and future historians write their analysis from a globalist perspective of the defunct American nation, they will probably say simply that our collapse was brought about by our own incompetence - that we were our own worst enemy. Yes, they would treat America as a cliché. They will of course leave out the destructive influences and engineered disasters of elitists, that would just complicate the narrative. My hope is that we do not prove these future historians correct, and that they won’t have an opportunity to exist.

The problem of reaching limits in a finite world manifests itself in an unexpected way: slowing wage growth for non-elite workers. Lower wages mean that these workers become less able to afford the output of the system. These problems first lead to commodity oversupply and very low commodity prices. Eventually these problems lead to falling asset prices and widespread debt defaults. These problems are the opposite of what many expect, namely oil shortages and high prices. This strange situation exists because the economy is a networked system. Feedback loops in a networked system don’t necessarily work in the way people expect.

Daniel Yergin and other experts say that U.S. tight oil is the swing oil producer of the world. They are wrong. It is preposterous to say that the world’s largest oil importer is also its swing producer. There are two types of oil producers in the world: those who have the will and the means to affect market prices, and those who react to them. In other words, the swing producer and everyone else.

Having correctly foreseen in September that "China's devaluations are not over yet" it appears Nomura's infamous 'bear' Bob Janjuah has also nailed The Fed's subsequent actions (hiking rates into a fundamentally weakening economy in a desperate bid to "convince markets that strong growth and inflation are on their way back"). In light of this, his latest note today should be worrisome to many as he warns the S&P 500 will trade down around 20% to 25% from current levels in H1, down to the 1500s and for dip-buyers, it's over: "I now feel even more certain that debt-driven asset bubble implosions cannot merely be 'fixed' with even more debt and another round of central bank-driven asset bubbles."

Earlier today everything changed when Saudi Arabia's unveiled what may be a stunning Hail Mary: one which is great news for the suddenly liquidity challenged Saudi government, and is very bad news for the future price of oil. According to the Economist, Saudi Arabia is contemplating taking Saudi Aramco - arguably the world's most valuable company - public. Here are the implications.

Saudi Arabia, which entered 2015 with virtually no debt and an FX reserve war chest that amounted to around three quarters of a trillion dollars, is now viewed as less creditworthy than a country where a coalition of socialists, left-wingers, and communists just overthrew the government.

Once China set the Yuan fixing some 0.5% lower, the biggest drop since the August devaluation, all hell broke loose and unleashed a global selling panic after China's stock market was promptly shut down less than 30 minutes into trading, then European shares dropped the most in more than 4 months as Asian equities plunges, as did US stock futures, the dollar weakened against the euro and the yen; crude plunged to fresh 12 year lows. Gold rose.

In a move that could very well lead Iran to take the "proxy" out of Yemen's proxy war, Saudi Arabia has reportedly bombed the Iranian embassy in Sana'a, injuring staff in what Tehran says was a "deliberate" attack. "My classmate and I were at recess when a huge explosion hit the neighborhood. We ran to the side and she fell to the ground in fear."

For more than four decades Washington’s middle eastern policy has been dead wrong and increasingly counter-productive and destructive. Washington’s Mideast policy is predicated on the assumption that the answer to high oil prices and energy security is deployment of the Fifth Fleet to the Persian Gulf. And that an associated alliance with one of the most corrupt, despotic, avaricious and benighted tyrannies in the modern world is the lynch pin to regional stability and US national security. Nothing could be further from the truth. The House of Saud is a scourge on mankind that would have been eliminated decades ago, save for Imperial Washington’s deplorable coddling and massive transfer of arms and political support.

On December 3rd, a month before Saudi Arabia carried out it largest mass execution since 1980 - subsequently setting the region on fire - Arjun Sethi wrote an article for Al-Jazeera titled: Saudi Arabia Uses Terrorism As An Excuse for Human Rights Abuses. According to Cora Currier at the Intercept: Al Jazeera’s headquarters in Qatar appear to have blocked the article outside of the United States because it is critical of an ally of Qatar.

Gold has has been one of the best months for gold in terms of monthly performance in the last 10 years. Bloomberg confirms that today.

• Obama, wiping tears, makes new push to tighten gun rules (Reuters)
• Global stocks hit by China worries, North Korea nuclear test (Reuters)
• Oil hits 11-year low, Saudi-Iran row cuts chances of output restraint (Reuters)
• North Korea says successfully conducts first H-bomb test (Reuters)
• Valeant Planning to Appoint New Leader as CEO Remains Hospitalized (WSJ)
• Treasuries Extend 2016 Winning Start With Growth Outlook Clouded (BBG)