Mexico

In 1985, the Saudis chose volume over price to defend their market share against new production from the North Sea, as well as cheating/discounting from other OPEC members in a period of weak demand. The Saudis had warned the world of their intentions, but many thought “it was merely an elaborate warning designed to scare other OPEC countries and restore discipline.” The parallels with today’s market structure are hard to miss, and the Saudi’s essential playbook remains the same...

Despite numerous interventions by Mexico, Russia, and Nigeria, the free-fall continues in their currencies. The Russian Ruble is the poster-child (down 40% since June alone - testing 58/USD today) but the crash in Mexico and Brazil is accelerating in the last week. Default risks are surging for all of the Oil-Producing nations with Russia topping 450bps (5Y CDS) .

Sometimes I wish I could just passively accept what my government monarchs and their mainstream media mouthpieces feed me on a daily basis. Why do I have to question everything I’m told? Life would be much simpler and I could concentrate on more important things like the size of Kim Kardashian’s ass... The willfully ignorant masses, dumbed down by government education, lured into obesity by corporate toxic packaged sludge disguised as food products, manipulated, controlled and molded by an unseen governing class of rich men, and kept docile through never ending corporate media propaganda, are nothing but pawns to the arrogant sociopathic pricks pulling the wires in this corporate fascist empire of debt.

One of our old rules of trading is that whenever a major asset class, index, or other benchmark has a sudden, rapid move in price, something blows up. Sky high. That’s because people get used to regimes. They get used to a certain state of affairs with a lack of volatility. They become complacent. Maybe they stop hedging. Maybe they allow themselves to have unbounded downside risk. Maybe they start gambling. So what's going to blow up?

Brent Crude crossed below $65 for the first time since 2009 this morning and WTI began to slide as inventories showed a bigger-than-expected build. But it was Saudi Arabia's oil minister al-Naimi who sparked the latest dump:

*NAIMI SAYS `WHY SHOULD I CUT PRODUCTION'?

And with that WTI plunged to a $60 handle on heavy volume...

• New Normal headlines: Global stocks up on hopes of China policy easing (Reuters)
• China inflation eases to five-year low (BBC)
• U.S. Lawmakers Agree on $1.1 Trillion Spending Bill (WSJ)
• U.S. Braced for Blowback as CIA Report Lays Bare Abuses (BBG)
• CIA tortured, misled, U.S. report finds, drawing calls for action (Reuters)
• CIA Made False Claims Torture Prevented Heathrow Attacks (BBG)
• Oil Resumes Drop as Iran Sees $40 If There’s OPEC Discord (BBG)
• OPEC Says 2015 Demand for Its Crude Will Be Weakest in 12 Years (BBG)
• Greek yield curve inverted as politics raise default fears (Reuters)

• China’s Stocks Sink Most Since 2009 as Turnover Jumps to Record (BBG)
• Greek Stocks, Bonds Tumble (WSJ)
• China tightens LGFV funding screws (BBG)
• Crude Rebounds From Five-Year Low Amid Shale-Oil Spending Curbs (BBG)
• Sexual threats, other CIA methods detailed in Senate report (Reuters)
• U.S. Takes Security Precautions Overseas Ahead of CIA Report (WSJ)
• Light-Speed Treasury Trading Governed by Rules Dating to 1998 (BBG)
• Delhi to ban all internet taxi firms after Uber rape claim (Reuters)
• Supreme Group Fined $389 Million for Overcharging Pentagon (WSJ)

It wasn't just China's long overdue crash last night. In addition to the Shanghai Composite suffering its biggest plunge since August 2009, there has been a sharp slide in the USDJPY which has broken its uptrend to +∞ (and hyperinflation), and around the time Chinese gamblers were panicking, the FX pair tumbled under 120, although since then the 120 tractor beam has been activated. Elsewhere, the Athens stock exchange is also crashing by over 10% this morning on the heels of news that the Greek government has accelerated the process to elect the next president and possibly, a rerun of the drama from the summer of 2012 when the Eurozone was hanging by a thread when Tsipras almost won the presidential vote and killed the world's most artificial and insolvent monetary union. And finally, the crude plunge appears to have finally caught up with ground zero, with ADX General Index in Abu Dhabi plunging 3.5%, also poised for the biggest drop since 2009. In fact the only thing that isn't crashing (at least not this moment), is Brent, which did drop to new 5 year lows earlier under $66, but has since staged a feeble rebound.

The slump in oil prices has BP "concentrating minds on making the organisation more efficient" which means, as The FT translates, the 'unequivocally good news' of lower oil prices is accelerating plans for the oil giant to reduce its headcount. The Sunday Times reports, BP is to ax middle managers and freeze projects as Brian Gilvary, the finance director, said: "what you’ll see with this simplification plan is that headcounts are starting to come down across all of our activities in upstream, downstream and in the corporate centres — essentially the layers above operations." Gilvary added that the company would slash the oil price assumption used to set its day-to-day budget.

In a healthy, moral and civilized society defined by the rule of law, police can play an important role. They should be people who come from the communities they promise to “protect and serve.” They should view themselves as a part of these communities, not as something separate and distinct. Police should see their jobs as having a great degree of risk, and must be willing to accept that risk. This means not pretending to be a solider at war, not choosing the most violent solution to every problem, and not viewing the citizenry as milk cows ready and willing to be drained of their assets via civil forfeiture.

Unfortunately, this isn’t the state of the police in America in 2014, and it’s quickly becoming obvious to everyone.

"The nation was leery of a national bank with seemingly endless power to manipulate the money supply and the Second National Bank of the United States was attacked by both the expansionists and the sound money opponents. It was during this period that future President Andrew Jackson shaped his anti-Bank views in Tennessee while his future hard-money arm in the Senate, Thomas Hart Benton (Old Bullion), shaped his views in Missouri, two of the hardest-hit states. The debate over central banking, and the concern over deflation and inflation, continue two hundred years later."

The world economy is slowing down and the authorities are fretting.

• Thanks Fed: Meet the high schooler who made $300K trading penny stocks under his desk (Verge)
• Protesters block NY streets after officer cleared in chokehold death (Reuters)
• U.S. Plans Probe of New York Police Chokehold Death (BBG)
• Sharpton Leads Civil-Rights Meeting on Chokehold Decision (BBG)
• Staten Island on Edge Over Grand Jury Decision In Death of Eric Garner (WSJ)
• Draghi Tests Speed Limit as ECB Awaits Stimulus Evidence (BBG)
• European Stocks Approach Seven-Year High Before Draghi Statement (BBG)
• Britain targets multinationals that try to dodge taxes (Reuters)
• Oil Trains Hide in Plain Sight (WSJ)

The ink on Barack Obama's Chuck Hagel termination letter hasn't dried yet but already the US president's new, and seemingly far more hawkish advisors, are having their warmongering presence felt. Case in point: the Eastern European theater of (Cold) war, where Military.com reports that the new Army commander in Europe plans to bolster the U.S. armored presence in Poland and the Baltic states and keep rotations of U.S. troops there through next year and possibly beyond to counter Russia. Lt. Gen. Frederick "Ben" Hodges, who replaced Lt. Gen. Donald M. Campbell  earlier this month as commander of U.S. Army Europe, said the Army was looking to add about 100 Abrams tanks and Bradley Fighting Vehicles to the forces in Eastern Europe.

Houston, we have a problem-er. With a third of S&P 500 capital expenditure due from the imploding energy sector (and with over 20% of the high-yield market dominated by these names), paying attention to any inflection point in the US oil-producers is critical as they have been gung-ho "unequivocally good" expanders even as oil prices began to fall. So, when Reuters reports a drop of almost 40 percent in new well permits issued across the United States in November, even The Fed's Stan Fischer might start to question his lower oil prices are "a phenomenon that’s making everybody better off," may warrant a rethink. New permits, which indicate what drilling rigs will be doing 60-90 days in the future, showed steep declines for the first time this year across the top three U.S. onshore fields: the Permian Basin and Eagle Ford in Texas and North Dakota's Bakken shale.