Wells Fargo

• Goldman to Fidelity Call for Calm After Global Stock Wipeout (BBG)
• Turnabout on Global Outlook Darkens Investor Mood (Hilsenrath)
• EU Said to Weigh Extending Greek Loans to 50 Years (BBG)
• Second Storm Hitting Northeast Halts Planes, Schools (BBG)
• Small Banks Face TARP Hit (WSJ)
• As Sony prepares PCs exit, pressure mounts for reboot on TVs (Reuters)
• IBM Uses Dutch Tax Haven to Boost Profits as Sales Slide (BBG)
• ECB faces dilemma with inflation drop (FT)
• London Subway Strike Snarls Traffic as Union Opposes Cuts  (BBG)

People Powered Privacy Savior ... Or Honey Trap Pushed By the Central Banks and TBTF?

• Emerging-Market Rout Seen Enduring on Low Real Rates (BBG)
• After rocky January, markets eye data and central banks (Reuters)
• Europe will feel the pain of emerging markets  (FT)
• Lloyds delays dividend prospect after mis-selling charge (Reuters)
• Snow Set to Snarl New York Commute as U.S. Flights Halted (BBG)
• Rate Decision to Drive Yellen's Early Agenda  (Hilsenrath)
• Thai protesters move to downtown Bangkok in bid to topple PM (Reuters)
• China says Japan's 'hype' on air defence zone spreads tension (Reuters)
• Hedge funds seek 1.8 billion euros damages from members of Porsche's owning family (Reuters)

• Even Obama's fans has turning on him: "The Decline and Fall of 'Hope and Change'"
• European Stocks Drop, Head for Worst January Since 2009 (BBG)
• Euro-Area Inflation at 0.7% Builds Rate Pressure on ECB (BBG)
• Japan’s Inflation Accelerates as Abe Seeks Wage Gains (BBG)
• Unpossible - this is the USSA: Detroit Debt Proposal Favors Pension Funds (WSJ)
• Keystone Report Said Likely to Disappoint Pipeline Foes (BBG)
• YHOO still pretending someone cares about it: Yahoo says detected hacking attempt on email accounts (Reuters)
• How Google's Costly Motorola Maneuver May Pay Off (WSJ)
• Mexico Surpassing Japan as No. 2 Auto Exporter to U.S.  (BBG)

• Obama warns divided Congress that he will act alone (Reuters)
• Fed Decision Day Guide From Emerging Markets to FOMC Voter Shift (BBG)
• Fed poised for $10 billion taper as Bernanke bids adieu (Reuters)
• Bernanke’s Unprecedented Rescue Unlikely to Be Repeated (BBG)
• Argentina Spends $115 Million to Steady Peso (WSJ)
• Billionaires Fuming Over Market Selloff That Sinks Magnit (BBG)
• SAC’s Counsel Testifies at Insider Trading Trial in Unexpected Move by the Defense (NYT)
• Automakers Fuel Japan’s Longest Profit Growth Streak Since 2007 (BBG)
• Turkey Crisis Puts Jailed Millionaire at Heart of Gold Trail (BBG)
• Ukraine expects $2 billion tranche of Russian aid soon (Reuters)

• Emerging sell-off hits European shares, lifts yen (Reuters) - but not really if you hit refresh since the latest central bank bailout announcement
• Apple’s Holiday Results to Show Whether Growth Is Back (BBG)
• Israel attacked Syrian base in Latakia, Lebanese media reports (Haaretz)
• Abenomics FTW: Japan Posts Record Annual Trade Deficit as Import Bill Soars (BBG)
• When all else fails, Spain's hope lie in a 16th century saint: Saint “might help Spain out of crisis,” says interior minister (El Pais)
• Global Woes Fail to Send Cash Into U.S. Stocks (WSJ)
• IMF's Lagarde sees eurozone inflation "way below target" (Reuters)
• Minimum wage bills pushed in at least 30 states (AP)
• AT&T Gives Up Right to Offer to Buy Vodafone Within 6 Months (BBG)

• Emerging market sell-off raises specter of contagion (Reuters)
• China Bank Regulator Said to Issue Alert on Coal Mine Loans (BBG)
• Argentina to Ease FX Controls After Peso Devaluation (BBG)
• Pimco's Gross problem: who can succeed the 'Bond King'? (Reuters)
• Ukraine protesters seize building, put up more barricades (Reuters)
• Mideast Turmoil Dominates Gathering of Business Elite (WSJ)
• Central Banks Withdraw Dollar Funding (WSJ) - oh really?
• Samsung warns of weak earnings growth this quarter (FT)
• Three explosions rock Cairo, killing 5 (USA Today)

• Winter Storm Expected to Make Northeast Commutes Harder  (BBG)
•  Invasion of Spanish Builders Angers France Struggling to Compete  (BBG)
• Toronto mayor, caught ranting on video, admits drinking a 'little bit" (Reuters)
• IBM's Hardware Woes Accelerate in Fourth Quarter (WSJ)
• Sharp Divisions Come to Fore as Peace Talks on Syria Begin (NYT)
• Afghanistan cracks down on advertising in favor of U.S. troops (Reuters)
• Microsoft CEO Search Rattles Boards From Ford to Ericsson (BBG)
• Banks Sit Out Riskier Deals (WSJ)
• Netflix Seen Reporting U.S. Web Users Reach 33.1 Million (BBG)

• Hilsenrath: Next Cut in Fed Bond Buys Looms - Reduction to $65 Billion Could Be Announced on Jan. 29 (WSJ)
• China Workforce Slide Robs Xi of Growth Engine (BBG)
• Obama pulls the race card: Obama Says Race May Blunt Poll Standing in Interview (BBG)
• Chinese firm's IPO deal switches banks as chairman's daughter moves from JPMorgan to UBS (SCMP)
• China and Russia may hold joint naval drill in the Mediterranean (RT)
• Iran invite to Syria talks withdrawn after boycott threat (Reuters)
• Seven Chinese IPOs Halt Trading After 44 Percent Share  (BBG)
• U.S. military says readying plans for Olympic security assistance (Reuters)
• Thank you Bernanke: Investors Most Upbeat in 5 Years With Record 59% Bullish in Poll (BBG)
• From His Refuge in the Poconos, Reclusive Imam Fethullah Gulen Roils Turkey (WSJ)

"It's dangerous to be short still, but we might be building toward a moment where the market becomes quite vulnerable," warns Bill Fleckenstein who is finishing up the documentation on a new short fund he is about to start marketing. With the slowing growth of the Fed balance sheet, over 70% of the S&P's gains since 2011 from hope-driven multiple-expansion alone, bond and equity market sentiment at extremes, and (as Goldman warned) valuations anything cheap; it is hardly a surprise that, as Reuters reports, after years of hiding under their desks, short sellers are re-emerging - slowly. Whether outright short or long/short funds, the market-share of this corner of the business bottomed at approximately 25% in 2013, but in the last weeks, several S&P 500 companies have seen large increases in shares borrowed for short bets; and the "tide might be turning."

"The "common sense" justifications for these dramatic moves are now well documented. The Federal Reserve (Fed) model, which compares earnings yields on the S&P 500 Index (the inverse of price/earnings) with the Treasury yield, clearly signals to load up on stocks. Common sense also tells us that profit margins are at an all-time high, so clearly it's a good time to be buying stocks. Yellen's dovish background, common sense tells us, is yet further reason to expect continued loose monetary policy and accommodation. And, finally, common sense dictates that recent upward gross domestic product (GOP) revisions, lower unemployment numbers, and a successful holiday retail season, means that of course it's time to load up on stocks. Here's the problem: We don't buy the common sense. And so, like the philosopher boy above, we choose to ignore it. We suggest you do the same, but for good reason."

Day two of the bounce from the biggest market drop in months is here, driven once again by weak carry currencies, with the USDJPY creeping up as high as 104.50 overnight before retracing some of the gains, and of course, the virtually non-existant volume. Whatever the reason don't look now but market all time highs are just around the corner, and the Nasdaq is back to 14 year highs. Stocks traded higher since the get-go in Europe, with financials leading the move higher following reports that European banks will not be required in upcoming stress tests to adjust their sovereign debt holdings to maturity to reflect current values. As a result, peripheral bond yield spreads tightened, also benefiting from good demand for 5y EFSF syndication, where price guidance tightened to MS+7bps from initial MS+9bps. Also of note, Burberry shares in London gained over 6% and advanced to its highest level since July, after the company posted better than expected sales data. Nevertheless, the FTSE-100 index underperformed its peers, with several large cap stocks trading ex-dividend today. Going forward, market participants will get to digest the release of the latest Empire Manufacturing report, PPI and DoE data, as well as earnings by Bank of America.

Earlier we pointed out that mortgage origination at Wells Fargo - the bank's bread and butter - is crashing at an unprecedented pace, and as per the conference call, Q1 isn't looking any better. Naturally, it stood to reason that the bank would seek alternative business and product lines to supplant the declining revenue it used to generate when it would originate some $100 billion in mortgages every quarter, now half that number. However, not even in our wildest dreams did we predict just what this "alternative" product would be. Because, as the FT reports, Wells Fargo, the largest US bank by market cap, is currently exploring Bitcoin as just that revenue replacement source. Per the FT: "Wells’ anti-money laundering chief, Jim Richards, has launched a group to examine how it might safely offer Bitcoin-related services or banking arrangements to virtual currency entrepreneurs, according to people familiar with the initiative."

Remember when everyone said rising rates would not cripple mortgage origination and the lending pipeline? Well, tell that to the largest US mortgage lender, Wells Fargo...

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• Insert laugh track here: Spain GDP grows at fastest pace in almost six years (FT)
• Scandinavian Debt Crisis Waiting to Happen Puzzles Krugman (BBG)
• Fed Said to Release Plan to Limit Banks’ Commodities Activities (BBG)
• Thai Protesters Extend Blockade After Rejecting Poll Talks (BBG)
• China provinces set lower growth goals for 2014 (BBG)