STOCK MARKET WATCH -- Thursday, 18 December 2014

[Tansy_Gold]

[font size=3]STOCK MARKET WATCH, Thursday, 18 December 2014[font color=black][/font]

SMW for 17 December 2014

AT THE CLOSING BELL ON 17 December 2014
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Dow Jones 17,356.87 +288.00 (1.69%)
S&P 500 2,012.89 +40.15 (2.04%)
Nasdaq 4,644.31 +96.48 (2.12%)


[font color=red]10 Year 2.14% +0.06 (2.88%)
30 Year 2.73% +0.01 (0.37%)[font color=black]


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[font size=2]Market Conditions During Trading Hours[/font]
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(click on link for latest updates)
http://tools.investing.com/market_quotes.php?
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[font size=2]Euro, Yen, Loonie, Silver and Gold[center]

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[font color=black][font size=2]Handy Links - Market Data and News:[/font][/font]
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Economic Calendar
Marketwatch Data
Bloomberg Economic News
Yahoo Finance
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Bank Tracker
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Daily Job Cuts
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[font color=black][font size=2]Handy Links - Economic Blogs:[/font][/font]
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The Big Picture
Financial Sense
Calculated Risk
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Brad DeLong
Bonddad
Atrios
goldmansachs666
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[font color=black][font size=2]Handy Links - Essential Reading:[/font][/font]
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Matt Taibi: Secret and Lies of the Bailout


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[font color=black][font size=2]Handy Links - Government Issues:[/font][/font]
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LegitGov
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Earmark Database
USA spending.gov
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[font color=black][font size=2]Handy Links - Videos:[/font][/font]
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Charlie Rose talks with Roubini
Charlie Rose talks with Krugman
William Black: This Economic Disaster
Bill Moyers with Kevin Drum and David Corn
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[font color=red]Partial List of Financial Sector Officials Convicted since 1/20/09 [/font][font color=red]
2/2/12 David Higgs and Salmaan Siddiqui, Credit Suisse, plead guilty to conspiracy involving valuation of MBS
3/6/12 Allen Stanford, former Caribbean billionaire and general schmuck, convicted on 13 of 14 counts in $2.2B Ponzi scheme, faces 20+ years in prison
6/4/12 Matthew Kluger, lawyer, sentenced to 12 years in prison, along with co-conspirator stock trader Garrett Bauer (9 years) and co-conspirator Kenneth Robinson (not yet sentenced) for 17 year insider trading scheme.
6/14/12 Allen Stanford sentenced to 110 years without parole.
6/15/12 Rajat Gupta, former Goldman Sachs director, found guilty of insider trading. Could face a decade in prison when sentenced later this year.
6/22/12 Timothy S. Durham, 49, former CEO of Fair Financial Company, convicted of one count conspiracy to commit wire and securities fraud, 10 counts of wire fraud, and one count of securities fraud.
6/22/12 James F. Cochran, 56, former chairman of the board of Fair, convicted of one count of conspiracy to commit wire and securities fraud, one count of securities fraud, and six counts of wire fraud.
6/22/12 Rick D. Snow, 48, former CFO of Fair, convicted of one count of conspiracy to commit wire and securities fraud, one count of securities fraud, and three counts of wire fraud.
7/13/12 Russell Wassendorf Sr., CEO of collapsed brokerage firm Peregrine Financial Group Inc. arrested and charged with lying to regulators after admitting to authorities he embezzled "millions of dollars" and forged bank statements for "nearly twenty years."
8/22/12 Doug Whitman, Whitman Capital LLC hedge fund founder, convicted of insider trading following a trial in which he spent more than two days on the stand telling jurors he was innocent
10/26/12 UPDATE: Former Goldman Sachs director Rajat Gupta sentenced to two years in federal prison. He will, of course, appeal. . .
11/20/12 Hedge fund manager Matthew Martoma charged with insider trading at SAC Capital Advisors, and prosecutors are looking at Martoma's boss, Steven Cohen, for possible involvement.
02/14/13 Gilbert Lopez, former chief accounting officer of Stanford Financial Group, and former controller Mark Kuhrt sentenced to 20 yrs in prison for their roles in Allen Sanford's $7.2 billion Ponzi scheme.
03/29/13 Michael Sternberg, portfolio mgr at SAC Capital, arrested in NYC, charged with conspiracy and securities fraud. Pled not guilty and freed on $3m bail.
04/04/13 Matthew Marshall Taylor,fmr Goldman Sachs trader arrested, charged by CFTC w/defrauding his employer on $8BN futures bet "by intentionally concealing the true huge size, as well as the risk and potential profits or losses associated."
04/04/13 Matthew Taylor admits guilt, makes plea bargain. Sentencing set for 26 June; faces up to 20 years in prison but will likely only see 3-4 years. Says, "I am truly sorry."
04/11/13 Ex-KPMG LLP partner Scott London charged by federal prosecutors w/passing inside tips to a friend in exchange for cash, jewelry, and concert tickets; expected to plead guilty in May.
08/01/13 Fabrice Tourré convicted on six counts of security fraud, including "aiding and abetting" his former employer, Goldman Sachs
08/14/13 Javier Martin-Artajo and Julien Grout charged with wire fraud, falsifying records, and conspiracy in connection with JP Morgan's "London Whale" trade.
08/19/13 Phillip A. Falcone, manager of hedge fund Harbinger Capital Partners, agrees to admit to "wrongdoing" in market manipulation. Will banned from securities industry for 5 years and pay $18MM in disgorgement and fines.
09/16/13 Javier Martin-Artajo and Julien Grout officially indicted on charges associated with "London Whale" trade.
02/06/14 Matthew Martoma convicted of insider trading while at hedge fund SAC (Stephen A. Cohen) Capital Advisors. Expected sentence 7-10 years.
03/24/14 Annette Bongiorno, Bernard Madoff's secretary; Daniel Bonventre, director of operations for investments; JoAnn Crupi, an account manager; and Jerome O'Hara and George Perez, both computer programmers convicted of conspiracy to defraud clients, securities fraud, and falsifying the books and records.
05/19/14 Credit Suisse, which has an investment bank branch in NYC, agrees to plead guilty and pay appx. $2.6 billion penalties for helping wealthy Americans hide wealth and avoid taxes.
09/08/14 Matthew Martoma, convicted SAC trader, sentenced to 9 years in prison plus forfeiture of $9.3 million, including home and bank accounts







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[font size=3][font color=red]This thread contains opinions and observations. Individuals may post their experiences, inferences and opinions on this thread. However, it should not be construed as advice. It is unethical (and probably illegal) for financial recommendations to be given here.[/font][/font][/font color=red][font color=black]

[Demeter]

1. This sounds like the last 3 or 4 board meetings for the condo...

I never seriously gave thought to quitting before this year...but I've been making a lot of changes in my life....I hope none of them suicidal.

[Demeter]

2. Manufacturing War: A Primer By Martin Hellman

http://whowhatwhy.com/2014/12/15/manufacturing-war-primer/

Of course, the people don’t want war… But… it is always a simple matter to drag the people along… All you have to do is tell them they are being attacked, and denounce the pacifists for lack of patriotism… It works the same way in any country.

So said: Hermann Göring, Hitler’s right-hand man, before he committed suicide while facing the death penalty for war crimes in 1946.

Unfortunately, what might be called The Göring Doctrine has proved as tempting to democratic leaders as to fascist dictators. Witness these examples drawn from recent American history.

Remember the Maine?

In March 1962, seven months before the Cuban missile crisis, the Joint Chiefs of Staff unanimously recommended to Secretary of Defense Robert McNamara and President Kennedy that the United States use Göring’s prescription for dragging the people into war with Cuba. They suggested a number of false flag operations including:

We could blow up a U.S. ship in Guantanamo Bay and blame Cuba. … Or we could develop a Communist Cuban terror campaign in the Miami area, in other Florida cities and even in Washington. … fostering attempts on lives of Cuban refugees in the United States even to the extent of wounding anti-Castro Cubans.

While McNamara and JFK rejected these proposals, Bobby Kennedy resurfaced the idea during the Cuban missile crisis:

We should also think of whether there is some other way we can get involved in this, through Guantánamo Bay or something. Or whether there’s some ship that … you know, sink the Maine again or something. {Tuesday, October 16, 1962, 6:30 PM meeting in the Cabinet Room, recorded on JFK’s secret taping mechanism}.

While that suggestion was also rejected, the Göring Doctrine came into its own two years later, when the Tonkin Gulf incidents of August 2 and 4, 1964, provided the legal basis for the Vietnam War.

Remember the Gulf of Tonkin?

At the time, the Johnson Administration portrayed America’s full-scale, boots-on-the-ground entry into the civil war between North and South Vietnam as a response to unprovoked acts of communist aggression. But a now-declassified phone call that LBJ made to former Treasury Secretary Robert Anderson on August 3 reveals the truth: communist naval forces in the Tonkin Gulf were in fact responding to U.S. covert operations in North Vietnam.

Unbeknownst to the American public, Johnson told Anderson, American forces were already

blowing up some bridges and things of that kind, roads, and so forth. So I imagine they wanted to put a stop to it. So they come out there and fire and we respond immediately with five-inch guns from the destroyer and with planes overhead.

In other words, contrary to what he later told Congress and the world, LBJ knew that prior American actions had provoked this North Vietnamese attack. Equally startling is the fact that the second (August 4) Tonkin Gulf attack never happened at all—a conclusion reached by several sources. A formerly top secret NSA history states unequivocally: “no attack happened that night.” Adm. James Stockdale, who was overhead in a jet fighter sent to provide air cover for the American destroyers corroborates that this second attack never occurred:

I had the best seat in the house from which to detect boats – if there were any … but no wakes or dark shapes other than those of the destroyers were ever visible to me.

There something wrong out here. Those destroyers are talking about hits, but where are the metal to metal sparks? And the boat wakes – where are they? And boat gun flashes? The day before yesterday (August 2, 1964, the date of the first incident), I saw all those signs of small-boat combat in broad daylight! Any of those telltale indicators would stand out like beacons in this black hole we’re operating in.

During his over seven years as a POW in North Vietnam, Stockdale’s greatest concern was that his captors would realize he was flying air cover during the second “incident” and torture him into making statements which would hurt the war effort by proving that we had gone to war on false pretenses. Stockdale thought that war was inevitable, but was deeply disturbed that President Johnson had lied to win public support for it...In spite of the first incident being provoked by our covert operations and the second never even occurring, when LBJ went on television on August 4 to beat the drums for war, he portrayed the U.S. as the innocent victim of aggression in Vietnam:

… renewed hostile actions against United States ships on the high seas in the Gulf of Tonkin have today required me to order the military forces of the United States to take action in reply.

… it is my considered conviction, shared throughout your Government, that firmness in the right is indispensable today for peace; that firmness will always be measured. Its mission is peace. (August 4 television address)

Remember 9/11 and the Weapons of Mass Destruction?

The Göring Doctrine came into play again after 9/11, when the Bush Administration rallied public support for an attack on Saddam Hussein’s Iraq. This was done by continually linking Saddam to the terrorist attacks on the World Trade Center and the Pentagon. Several years later, when a reporter asked, “What did Iraq have to do with … the attack on the World Trade Center?” President Bush replied, “Nothing. … nobody has suggested in this administration that Saddam Hussein ordered the attack.” While Bush was technically correct, he was employing sophistry. A week before the invasion of Iraq, the Christian Science Monitor noted:

In his prime-time press conference last week… President Bush mentioned Sept. 11 eight times. He referred to Saddam Hussein many more times than that, often in the same breath with Sept. 11.

The overall effect was to reinforce an impression…that the Iraqi dictator did play a direct role in the attacks. A New York Times/CBS poll this week shows that 45 percent of Americans believe Mr. Hussein was “personally involved” in Sept. 11…

In a Knight Ridder poll, 44 percent of Americans reported that either “most” or “some” of the Sept. 11 hijackers were Iraqi citizens. The answer is zero.

And then there was the second of the shifting justifications for going to war. Speaking to the UN Security Council on February 5, 2003, Secretary of State Colin Powell spelled out the case for attacking Iraq because it was stockpiling weapons of mass destruction. The media at the time hailed this speech. But it was based on blatant fabrications. Powell’s Chief of Staff, Col. Lawrence Wilkerson, who worked on the speech, later lamented his part in crafting that speech:

I participated in a hoax on the American people, the international community and the United Nations Security Council.

Ironically, al Qaeda-linked groups, which were virtually non-existent in Saddam Hussein’s Iraq, today control large swaths of Iraqi territory and are threatening Syria as well.

Back to the Future?

Unfortunately, the West risks repeating the mistakes of Cuba, Vietnam and Iraq in the current Ukraine crisis. A bipartisan chorus of opinion inside and outside Washington has pinned all of the blame for the conflict on Putin. A New York Times editorial summed it up this way: “There is one man who can stop it—President Vladimir Putin of Russia.” Former Secretary of State Hillary Clinton, a front-runner for her party’s presidential nomination in 2016, has compared Vladimir Putin to Adolf Hitler–-implying that if the West doesn’t intervene in Ukraine, Americans may well be fighting Russian aggression on their own shores in the future. It has, paradoxically, been left to advisers to former Republican presidents to raise serious doubts about this rush to judgment.

For example, Ronald Reagan’s Ambassador to Moscow, Jack Matlock, wrote:

I believe it has been a very big strategic mistake – by Russia, by the EU and most of all by the U.S. – to convert Ukrainian political and economic reform into an East-West struggle. (emphasis added)

Dmitri Simes, who advised President Nixon on Soviet matters, stated in an interview:

I think the Obama administration’s approach to the Ukraine has contributed to the crisis. … there is no question in my mind that the United States has a responsibility to act. But what Obama is doing is exactly the opposite from what should be done in my view.

Henry Kissinger wrote:

The politics of post-independence Ukraine clearly demonstrates that the root of the problem lies in efforts by Ukrainian politicians to impose their will on recalcitrant parts of the country, first by one faction, then by the other. …

A wise U.S. policy toward Ukraine would seek a way for the two parts of the country to cooperate with each other. We should seek reconciliation, not the domination of a faction.

NOTE: Other historical examples of the malign influence of The Göring Doctrine on U.S. foreign policy can be found in Prof. Hellman’s 10-part series on Avoiding Needless Wars.

[Fuddnik]

4. The Goering Doctrine could be more accurately called the Bernays Doctrine.

That's where Goering learned all about propaganda. Freud's nephew, Edward Bernays, who helped get us into WWI. And went on to a glorious advertising and consumer manipulation career after that.

http://en.wikipedia.org/wiki/Edward_Bernays

[bread_and_roses]

36. Yup. Alex Carey

Alex Carey spells it out ... even more relevant today. Don't know if true, but WIKI says that stock market losses may have contributed to his suicide. Ironic, if so. For quick reference the WIKI

http://en.wikipedia.org/wiki/Alex_Carey

In 1988, Noam Chomsky and Edward Herman published their Manufacturing Consent: The Political Economy of the Mass Media in dedication to the memory of Carey. Claiming that it was Carey who had inspired their work, Chomsky has said, "The real importance of Carey's work is that it's the first effort, and until now the major effort, to bring some of [the history of corporate propaganda] to public attention. It's had a tremendous influence on the work I've done."[4] Journalist John Pilger has called Carey "a second Orwell in his prophesies".[5]

According to Noam Chomsky, Carey pioneered the study of corporate propaganda.[6] Much of Carey's work in this area remained unpublished and was cut short by his death.[6] In 1995, a collection of his essays (several of them previously unpublished) were published under the title, Taking the Risk Out of Democracy: Propaganda in the U.S. and Australia (University of New South Wales Press; reissued in 1997 by University of Illinois Press under the title Taking the Risk Out of Democracy: Corporate Propaganda versus Freedom and Liberty).

[Demeter]

3. The Oil Coup US-Saudi Subterfuge Send Stocks and Credit Reeling By Mike Whitney

http://www.counterpunch.org/2014/12/16/the-oil-coup/

“John Kerry, the US Secretary of State, allegedly struck a deal with King Abdullah in September under which the Saudis would sell crude at below the prevailing market price. That would help explain why the price has been falling at a time when, given the turmoil in Iraq and Syria caused by Islamic State, it would normally have been rising.” (Stakes are high as US plays the oil card against Iran and Russia, Larry Eliot, Guardian)

U.S. powerbrokers have put the country at risk of another financial crisis to intensify their economic war on Moscow and to move ahead with their plan to “pivot to Asia”.

Here’s what’s happening: Washington has persuaded the Saudis to flood the market with oil to push down prices, decimate Russia’s economy, and reduce Moscow’s resistance to further NATO encirclement and the spreading of US military bases across Central Asia. The US-Saudi scheme has slashed oil prices by nearly a half since they hit their peak in June. The sharp decline in prices has burst the bubble in high-yield debt which has increased the turbulence in the credit markets while pushing global equities into a tailspin. Even so, the roiled markets and spreading contagion have not deterred Washington from pursuing its reckless plan, a plan which uses Riyadh’s stooge-regime to prosecute Washington’s global resource war. Here’s a brief summary from an article by F. William Engdahl titled “The Secret Stupid Saudi-US Deal on Syria”:

“The details are emerging of a new secret and quite stupid Saudi-US deal on Syria and the so-called IS. It involves oil and gas control of the entire region and the weakening of Russia and Iran by Saudi Arabian flooding the world market with cheap oil. Details were concluded in the September meeting by US Secretary of State John Kerry and the Saudi King…

..the kingdom of Saudi Arabia, has been flooding the market with deep discounted oil, triggering a price war within OPEC… The Saudis are targeting sales to Asia for the discounts and in particular, its major Asian customer, China where it is reportedly offering its crude for a mere $50 to $60 a barrel rather than the earlier price of around $100. That Saudi financial discounting operation in turn is by all appearance being coordinated with a US Treasury financial warfare operation, via its Office of Terrorism and Financial Intelligence, in cooperation with a handful of inside players on Wall Street who control oil derivatives trading. The result is a market panic that is gaining momentum daily. China is quite happy to buy the cheap oil, but her close allies, Russia and Iran, are being hit severely…

According to Rashid Abanmy, President of the Riyadh-based Saudi Arabia Oil Policies and Strategic Expectations Center, the dramatic price collapse is being deliberately caused by the Saudis, OPEC’s largest producer. The public reason claimed is to gain new markets in a global market of weakening oil demand. The real reason, according to Abanmy, is to put pressure on Iran on her nuclear program, and on Russia to end her support for Bashar al-Assad in Syria….More than 50% of Russian state revenue comes from its export sales of oil and gas. The US-Saudi oil price manipulation is aimed at destabilizing several strong opponents of US globalist policies. Targets include Iran and Syria, both allies of Russia in opposing a US sole Superpower. The principal target, however, is Putin’s Russia, the single greatest threat today to that Superpower hegemony. (The Secret Stupid Saudi-US Deal on Syria, F. William Engdahl, BFP)

The US must achieve its objectives in Central Asia or forfeit its top-spot as the world’s only superpower. This is why US policymakers have embarked on such a risky venture. There’s simply no other way to sustain the status quo which allows the US to impose its own coercive dollar system on the world, a system in which the US exchanges paper currency produced-at-will by the Central Bank for valuable raw materials, manufactured products and hard labor. Washington is prepared to defend this extortionist petrodollar recycling system to the end, even if it means nuclear war.

How Flooding the Market Adds to Instability

The destructive and destabilizing knock-on effects of this lunatic plan are visible everywhere. Plummeting oil prices are making it harder for energy companies to get the funding they need to roll over their debt or maintain current operations. Companies borrow based on the size of their reserves, but when prices tumble by nearly 50 percent–as they have in the last six months– the value of those reserves falls sharply which cuts off access to the market leaving CEO’s with the dismal prospect of either selling assets at firesale prices or facing default. If the problem could be contained within the sector, there’d be no reason for concern. But what worries Wall Street is that a surge in energy company failures could ripple through the financial system and wallop the banks. Despite six years of zero rates and monetary easing, the nation’s biggest banks are still perilously undercapitalized, which means that a wave of unexpected bankruptcies could be all it takes to collapse the weaker institutions and tip the system back into crisis. Here’s an excerpt from a post at Automatic Earth titled “Will Oil Kill the Zombies?”:

“If prices fall any further, it would seem that most of the entire shale edifice must of necessity crumble to the ground. And that will cause an absolute earthquake in the financial world, because someone supplied the loans the whole thing leans on. An enormous amount of investors have been chasing high yield, including many institutional investors, and they’re about to get burned something bad….. if oil keeps going the way it has lately, the Fed may instead have to think about bailing out the big Wall Street banks once again.” (Will Oil Kill the Zombies?, Raúl Ilargi Meijer, Automatic Earth)

The problem with falling oil prices is not just mounting deflation or droopy profits; it’s the fact that every part of the industry–exploration, development and production — is propped atop a mountain of red ink (junk bonds). When that debt can no longer be serviced or increased, then the primary lenders (counterparties and financial institutions) sustain heavy losses which domino through the entire system. Take a look at this from Marketwatch:

“There’s ‘no question’ that for energy companies with a riskier debt profile the high-yield debt market “is essentially shut down at this stage,” and there are signs that further pain could hit the sector, ” senior fixed-income strategist at U.S. Bank Wealth Management, Dan Heckman told Marketwatch. “We are getting to the point that it is becoming very concerning.” (Marketwatch)

When energy companies lose access to the market and are unable to borrow at low rates, it’s only a matter of time before they trundle off to extinction.

(MASSIVE EDIT HERE--DEMETER)

Why is that? Why have Obama and Co. kept their mouths shut while oil prices have plunged, domestic industries have been demolished, and stocks have gone off a cliff? Could it be that they’re actually in cahoots with the Saudis and that it’s all a big game designed to annihilate enemies of the glorious New World Order?

It certainly looks that way.

Mike Whitney lives in Washington state. He is a contributor to Hopeless: Barack Obama and the Politics of Illusion (AK Press). Hopeless is also available in a Kindle edition. He can be reached at [e-mail].

[Hotler]

35. If this was posted over in Jones Town the Obama can do no wrong

crowd heads would explode. Hmmmmm maybe that would be a good thing. Now for how I feel after reading this post..............
I have no hope. I see no future. Sometimes I wish I could go to sleep and not wake up.

Fucking New World Order, I thought that was just a Bush family thing. How naive of me. How can Chaney the Bushes and the rest of the neocons not be proud of what Obama and the wreaking crew in Washington are doing these days, it truly must be a well choreographed act and behind the scenes they all are smiling and counting their money.

I really see no reason to go to the polls and vote any more.

[Fuddnik]

37. It's all choreographed for sure.

Obama's 2008 campaign won the marketing campaign of the year award.

It doesn't matter. Wall street is getting their man regardless. One side is a little better on social issues and thats it.

I TIVO'ed a Nader speech on LinkTV, before I went to the doctor. I'll watch it later.

Heads don't explode in Jonestown. After the Kool-Ade, they buy thorazine, for maintenance, by the truckload, and everything is fine.

[Demeter]

5. When Football Gets the Ax

http://www.nytimes.com/2014/12/16/opinion/joe-nocera-when-football-gets-the-ax.html?_r=0

The most unpopular man in Birmingham, Ala., these days is Dr. Ray Watts, the president of the University of Alabama-Birmingham. Earlier this month, Watts announced that the school was going to eliminate its football team. You can just imagine what happened next.

When Watts told the team that this would be their last season, one player, Tristan Henderson, angrily challenged him in a video that quickly went viral. Later, several hundred supporters chanted and cheered for the coach, and heckled and chased Watts and his police escort, according to Jon Solomon of CBSSports.com.

Mark Emmert, the president of the N.C.A.A., described Watts’s decision as “unfortunate.” A group of important donors wrote a letter to the chancellor of the Alabama university system, calling for an investigation into Watts’s decision. Another big supporter, a Birmingham restaurateur, canceled his $45,000 sponsorship of a television network that aired U.A.B. games and ended the use of his restaurant as the locale for the basketball coach’s weekly radio show. “This is so tragic,” he told a reporter. “It’s like a death.”

Watts, it turns out, is a Birmingham native who played football in high school and who attended the university. He gets how important football is in Alabama. But in pulling together a five-year strategic plan for the school, he came to the obvious conclusion that it simply made no sense to continue fielding a football team. (The school is also eliminating its bowling and rifle teams.)...MORE TALK OF TURNING ATHLETES INTO QUASI-EMPLOYEES


YOU SHOULD HAVE HEARD OR SMELLED THE STINK WHEN THE NEW PRES. OF U OF MICHIGAN SAID HE WAS GOING TO FOCUS ON ACADEMICS...NOT SPORTS! AND HE WAS PARTICULARLY FOCUSED ON THE ACADEMIC CAREERS OF STUDENT ATHLETES....

IT WAS A RIOT OF THE 1%ERS! THESE BRASH YOUNG PEOPLE SERVE AS GLADIATORS FOR THE WEALTHY ALUMNI--TO THE DETRIMENT OF THEIR OWN FORTUNES.

[Demeter]

6. Obama signs $1.1T spending package SLUDGE, CORRUPTION AND ALL

http://thehill.com/policy/finance/227368-obama-signs-11t-spending-package-averts-shutdown

President Obama on Tuesday signed the $1.1 trillion government spending bill passed by Congress last week into law, the White House announced.

His signature averts a government shutdown that would have otherwise been triggered if he didn’t sign it before midnight on Wednesday....

[Demeter]

7. U.S. Senate passes bill temporarily renewing tax breaks

http://www.reuters.com/article/2014/12/17/usa-tax-extenders-idUSL1N0U102Z20141217

Dozens of temporary tax breaks, including big ones for business research, wind power and foreign profits, were renewed by the U.S. Senate late on Tuesday, putting to rest worries that further delays in dealing with the so-called tax extenders might foul up the approaching tax-filing season. The Senate approved legislation sent from the House of Representatives that renews retroactively, back to Jan. 1, 2014, a 55-item package of tax breaks. Most of them expired at the end of 2013 and have since been in limbo.

The legislation, which passed the Senate 76-16, will be sent to President Barack Obama for signing into law.

In a floor speech before passage, Senate Finance Committee Chairman Ron Wyden said: "With this tax bill, the Congress is turning in its tax homework 11 months late...this package of tax incentives will last just two weeks before families and businesses are thrown back into the dark with respect to the taxes they owe. The legislation accomplishes nothing for 2015." In calling on Congress to provide greater certainty for taxpayers next year, Wyden added, "The Congress is about to pass a tax bill that doesn't have the shelf life of a carton of eggs."...The measure would be good through the end of this year. If Obama signs it, that would mean taxpayers could claim the tax breaks for the 2014 tax year, but Congress would have to debate them all over again in 2015.

The bill was projected to cost U.S. taxpayers $41.6 billion over 10 years. No new federal revenue sources were dedicated to fully offsetting that cost, which means it would increase the federal budget deficit. The extenders usually win short-term renewal and extension from Congress every year or two. Nearly half of the total 10-year estimated cost comes from the three largest items: a $7.6 billion credit for business research and development costs; a $6.4 billion tax break for renewable energy production plants; and a $5.1 billion tax exception that allows financial firms and other businesses to defer U.S. taxes on certain foreign profits. Another tax break, known as bonus depreciation, allows businesses to write off and deduct capital investments more quickly at an estimated 10-year cost of $1.5 billion.

[Demeter]

8. Oil surges in about-face as some bet sub-$60 Brent won't last

http://www.reuters.com/article/2014/12/17/us-markets-oil-idUSKBN0JV09S20141217

World oil prices jumped as much as 6 percent on Wednesday before closing off their peaks as weeks of nearly non-stop selling abruptly halted, and traders said failure to break below key chart support levels meant a long rout may be running out.

The surge came after weekly oil data showed a big build in crude stockpiles at Cushing. When prices failed to make a new low following the bearish data, speculators raced to buy up contracts or take profits on short positions, setting off a frenzy of buying that took on its own momentum.

"I think the market, after its free fall, is looking for any reason to spike up. You're going to see volatility here," said Daniel Flynn, energy analyst at Chicago's Price Futures Group.

The sudden spike on Wednesday caught traders and analysts by surprise, and many speculated on causes ranging from the surge in the value of the oversold Russian rouble to the U.S. decision to resume diplomatic relations with Cuba...

MORE TEA-LEAF READING

[xchrom]

9. The Ruble Is Weakening Again

http://www.businessinsider.com/r-russian-ruble-firms-before-putin-news-conference-2014-12

MOSCOW (Reuters) - Russia's ruble weakened against the dollar and euro in volatile trade on Thursday, reversing gains made at market opening, before President Vladimir Putin's end-of-year news conference.

At 8:22 a.m. GMT (3:22 a.m. EST), the ruble was around 3 percent weaker against the dollar at 61.92 after opening more than 1 percent higher. The ruble was also around 2 percent weaker versus the euro at 76.49.

Putin will hold his press conference at 9:00 a.m. GMT (4 a.m. EST, with the market hoping to hear support for the ruble, which has fallen around 45 percent against the dollar so far this year.



Read more: http://www.businessinsider.com/r-russian-ruble-firms-before-putin-news-conference-2014-12#ixzz3MEkbLchF

[Demeter]

29. Russian currency crisis

http://blogs.reuters.com/macroscope/2014/12/16/russian-currency-crisis/


After the central bank dramatically raised interest rates by 6.5 percentage points to 17 percent overnight, Russia has given up any pretence that it is not in the grip of a currency crisis. The rouble leapt nine percent versus the dollar in early Moscow trade but has since given up more than half those gains. A 1 point interest rate rise last Friday failed to arrest its slide, the economy is subsiding into recession and inflation is well above the central bank’s target at over 9 percent, with a weaker currency serving to push import prices higher. As of the end of last week, the rouble had dropped more than 40 percent since mid-year.

If this does not do the trick, the only options would be capital controls, which the Kremlin has said it won’t impose, for the central bank to continue burning through its reserves or give up the ghost and allow the rouble to find its own level. What is beyond Moscow’s control is the oil price, which has fallen again back towards $60, and the grip of western sanctions imposed over Ukraine.

It appears a Rubicon was crossed on Monday when the rouble and Russian stocks plunged to new lows on concern about possible new U.S. sanctions. A bill passed by the U.S. Congress after Russian markets closed on Friday set out tougher sanctions. Barack Obama has not signed it into law and has opposed further measures against Russia unless Europe joins in.

One big question is how much pain this level of interest rates will inflict on the Russian people. President Vladimir Putin’s high popularity ratings are based at least partly on bringing stability and prosperity to more Russians. The nearest recent parallel is Turkey which whacked up interest rates by more than four percentage points in January to defend the lira. Rates have eased back a little, but only a little, since so it’s likely that Russia will have to live with rates of this sort of order for some considerable time. Russia at least has around $500 billion of reserves to play with...

Ukraine has virtually none. Kiev said last week it was at serious risk of defaulting unless Western donors come up with more funds on top of the billions of dollars already promised. The IMF is in Kiev but won’t hand over the next tranche of a bailout package, worth $2.7 billion, until a budget for 2015 is ratified. Ukrainian Prime Minister Arseny Yatseniuk speaks in Brussels today on the priorities of his new government.

[Demeter]

30. Russia Crisis Hits Pimco Fund, Wipes Out Options

http://www.businessweek.com/news/2014-12-16/russia-crisis-hits-pimco-fund-wipes-out-options-as-ruble-sinks

After the single worst day in Russia’s nine-month-old financial crisis, the fallout is spreading across global markets.

Pacific Investment Management Co. is facing mounting losses on its Russian bond holdings; almost every bullish ruble option contract registered in the U.S. has been made worthless; and foreign-exchange brokers in New York and London told clients they’re no longer taking ruble trades. Sergey Shvetsov, a first deputy central bank governor, expressed astonishment at the scope of the collapse during a conference in Moscow.

“We couldn’t imagine what’s happening in our worst nightmare even a year ago,” Shvetsov, who oversees financial markets at Bank of Russia, said yesterday. He said the surprise interest-rate increase in the middle of the night, a 6.5 percentage-point move that failed to stem the run on the ruble yesterday, was a choice between a “very bad” option and a “very, very bad” option. The ruble sank beyond 80 a dollar, a record low, as panic swept across Moscow’s financial markets before it rebounded after Economy Minister Alexei Ulyukayev denied speculation the government would impose restrictions to stop Russians from converting cash into dollars. The currency ended the day at 67.9, down 5.4 percent on the day, while bonds and stocks also tumbled. The ruble fell 0.8 percent to 68.0150 at 1:36 p.m. in Moscow, as the Micex Index of stocks dropped 0.6 percent.

The speed of the ruble’s retreat indicates policy makers are losing control as the six-month tumble in oil robs President Vladimir Putin of the hard currency he needs to sustain an economy faltering under the weight of international sanctions tied to the Ukraine conflict. The selloff in Moscow is being felt in other developing nations, where investors are pulling money amid concern that Russia’s financial struggles and the tumble in oil point to a global economic slowdown....

Pimco Losses

Pimco’s $3.3 billion Emerging Markets Bond Fund has been one of the hardest hit. It held $803 million of Russian corporate and sovereign bonds at the end of September, equal to 21 percent of total assets, an amount that’s more than double that of the benchmark it tracks, according to data compiled by Bloomberg. The fund (PEBIX:US) has lost 7.9 percent in the past month, trailing 95 percent of its peers.

“The investment themes in Pimco’s portfolios are based on long-term ideas and views,” said Michael Gomez, the head of emerging markets at Pimco. “While emerging markets have been volatile, we think segments of the market offer compelling risk-reward opportunities for long-term investors.” Traders and investors in the currency options market were also caught off-guard by the ruble’s 52 percent slide this year. In a market with hundreds of bullish call options worth more than $15 billion combined, only one of them -- a $5 million contract expiring a year from now -- is still profitable at the current exchange rate. Every single other contract is now out-of-the-money because they gave traders the right to buy the ruble at exchange rates that are stronger than yesterday’s closing level, according to data compiled by the Depository Trust & Clearing Corp. from clients of U.S. banks.

The volatility is proving too much for some brokers. New York-based FXCM Inc., the third-largest currency broker for retail clients, will stop offering the ruble versus the dollar and begin closing its customers’ trades while Alpari UK stopped clients from taking new positions. Bloomberg Tradebook, a unit of Bloomberg LP, has also halted all trading in the ruble, a spokeswoman said.


Hedge fund Alden Global Capital is profiting from the turmoil sweeping across Russia’s financial markets. The $1.8 billion New York-based firm run by Randy Smith has been betting against the ruble for the past month and a half, according to two people familiar with the trade.

[Demeter]

31. Russian ruble firms sharply as government pressures exporters

http://www.reuters.com/article/2014/12/18/us-russia-crisis-rouble-idUSKBN0JV0L520141218?feedType=RSS&feedName=businessNews

Russia's ruble strengthened sharply on Wednesday after dramatic falls on the previous two days as the government pressured exporters not to hoard foreign-currency earnings and the central bank announced new measures to support financial stability.

The ruble was around 9 percent firmer against the dollar in volatile trading, with the market also boosted by central bank plans to ease concerns over approaching external debt repayments by Russian firms and stabilize the ruble.

Traders also saw targeted sales of foreign currency by exporters, in part because of upcoming monthly tax payments...

[xchrom]

10. 10 Things You Need To Know Before European Markets Open

http://www.businessinsider.com/european-markets-open-dec-18-2014-2014-12

"Considerable Time" Is Gone. The Federal Reserve removed the phrase "considerable time" from its policy statement, which was previously used to describe the amount of time between the end of the tapering of QE purchases and the first US interest rate.

Tumbling Oil Prices Pushed Chevron To Cancel Arctic Drilling. Chevron Corp is putting a plan to drill for oil in the Beaufort Sea in Canada's Arctic on hold indefinitely because of what it called "economic uncertainty in the industry" as oil prices fall.

UK Retail Sales Are Coming. At 9:30 a.m. GMT, UK retail sales figures for November will be released by the Office for National Statistics. Analysts are expecting a 4.4% bounce from the same month last year, giving a look at the country's economic conditions in the fourth quarter.

Swtizerland's Central Bank Brought In Negative Interest Rates. The Swiss National Bank just brought in a a -0.25% deposit rate. The SNB follows a policy of pegging the Swiss Franc to the euro, and with the euro depreciating, it must cut rates to follow the decline.

Petrobras' CEO Won't Resign. Saying she had President Dilma Rousseff's "trust," CEO Graca Foster said she and her board of directors would all be investigated as part of an independent audit ordered after investigators accused a corrupt network of laundering more than $4 billion of company money.



Read more: http://www.businessinsider.com/european-markets-open-dec-18-2014-2014-12#ixzz3MEl9KHRD

[xchrom]

11. Asian Stocks Rally

http://www.businessinsider.com/r-asia-encouraged-by-wall-street-bounce-upbeat-fed----2014-12

SYDNEY (Reuters) - Asian share markets rallied on Thursday after U.S. stocks enjoyed their strongest session this year when the Federal Reserve sounded upbeat on the economy and promised to be patient in removing policy stimulus.

The jitters of recent days also calmed a touch as Russia managed to stabilise its rouble, if only for now, and oil prices eked out a rare bounce. As risk aversion ebbed, U.S. bond yields rose and the dollar regained some lost ground.

In Asia, Japan's Nikkei <.N225> jumped 2.4 percent, while stocks in Australia <.AXJO> climbed 1.8 percent for its best day since late 2013. MSCI's broadest index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> lagged with a rise of 0.2 percent.

Wall Street rebounded after three days of declines after the Fed said it would adopt a "patient" approach to raising interest rates.



Read more: http://www.businessinsider.com/r-asia-encouraged-by-wall-street-bounce-upbeat-fed----2014-12#ixzz3MEonnq4f

[xchrom]

12. POLL: 80 PERCENT BACK PUTIN EVEN AS RUBLE FALLS

http://hosted.ap.org/dynamic/stories/E/EU_RUSSIA_PUTINS_PEOPLE?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2014-12-18-00-51-48

MOSCOW (AP) -- From a Western perspective, Vladimir Putin's days as president of Russia should be numbered: The ruble has lost more than half its value, the economy is in crisis and his aggression in Ukraine has turned the country into an international pariah.

And yet most Russians see Putin not as the cause, but as the solution.

The situation as seen from a Russian point of view is starkly different from that painted in the West, and it is driven largely by state television's carefully constructed version of reality and the Kremlin's methodical dismantling of every credible political alternative.

As Putin prepares to face his public in a much-anticipated televised news conference, an Associated Press-NORC Center for Public Affairs Research poll released Thursday found that about 80 percent of Russians still support him.

[Demeter]

26. Eat your heart out, Western Hacks!

[xchrom]

13. WHY THE FED THINKS US ECONOMY STILL NEEDS ITS HELP

http://hosted.ap.org/dynamic/stories/U/US_FEDERAL_RESERVE?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2014-12-18-00-05-51

WASHINGTON (AP) -- If you didn't know about the lingering damage from the Great Recession, the U.S. economy would appear remarkably strong.

The unemployment rate is a close-to-healthy 5.8 percent. Inflation is unusually low. Crashing oil prices are rewarding consumers with a tax cut of sorts.

Yet the Federal Reserve made clear Wednesday that it's eyeing those improvements with caution. The Fed isn't yet convinced it can start to pull away its stimulus of record-low interest rates.

Though the Fed has kept its key rate near zero for nearly six years to encourage borrowing, spending and investment, the economy has yet to fully repair the destruction from its worst crisis in 80 years.

[xchrom]

14. US-CUBA THAW COULD BENEFIT FARMERS, ENERGY AND TRAVEL FIRMS

http://hosted.ap.org/dynamic/stories/U/US_US_CUBA_TRADE?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2014-12-17-20-28-28

WASHINGTON (AP) -- Freighters once carried Cuban nickel and limestone to the port of New Orleans and North Dakota beans to Havana. Cuban families ate bowls of American rice, while U.S. tourists flocked to casinos and nightclubs in Havana.

The United States' commercial ties with Cuba were broken 54 years ago after Fidel Castro took over. Now U.S.-Cuba trade is poised to resume: President Barack Obama on Wednesday announced plans to re-establish diplomat relations with Havana, and economic ties are expected to follow.

Among those eager for access to a Cuban market cut off by an economic embargo are U.S. farmers, travel companies, energy producers and importers of rum and cigars.

"We've been positioning ourselves for this day for many years," says Erik Herzfeld, co-portfolio manager of the Herzfeld Caribbean Basin fund, which has been investing in "the cruise lines, infrastructure (companies), any company that we think will eventually have a role in Cuba." The fund rose $1.97, or 28.9 percent, to $8.78 on Wednesday.

[DemReadingDU]

34. also benefit banks and telecomunications, cigars and rum

12/17/14 Cigars, Rum and Credit Cards: What Is in U.S.-Cuba Agreement?

Credit cards
For the first time, credit and debit cards issued by U.S. banks will work in Cuba. American travelers to the island now have been forced to either carry large amounts of cash with them or acquire a credit card from a bank in another country.

Cigars and rum
Americans traveling to Cuba will be allowed to bring back a small amount of now-banned cigars and rum. The new provisions allow Americans to bring back up to $400 worth of Cuban goods, of which only $100 can be alcohol and tobacco.

Remittances
Americans will now be able to send $2,000 per quarter – up from $500 – to people in Cuba. Licenses that had been required for Americans sending cash to the island will no longer be required.

The Cuban Internet
Almost no ordinary Cubans have access to the Internet. Very slow web access is available at tourist hotels. The new rules allow U.S. companies to export telecommunications equipment to build a broader Internet infrastructure. At the same time, U.S. officials said, the Cuban government agreed to allow its citizens better access to the web.

http://blogs.wsj.com/washwire/2014/12/17/cigars-rum-and-credit-cards-what-is-in-us-cuba-agreement/

[xchrom]

15. FED RATE WORDING BOOSTS ASIAN STOCK MARKETS

http://hosted.ap.org/dynamic/stories/F/FINANCIAL_MARKETS?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2014-12-18-01-47-31

KEEPING SCORE: Japan's Nikkei 225 surged 2.3 percent to 17,210.05 and Hong Kong's Hang Seng added 1.1 percent to 22,829.86. Australia's S&P/ASX 200 rose 1 percent to 5,210.80. Markets in Taiwan and Southeast Asia also gained. China's Shanghai Composite added 0.4 percent to 3,072.71. Seoul's Kospi was down 0.1 percent at 1,897.50.

FED SPEAK: The world's most powerful central bank is edging closer to raising interest rates from record lows given a strengthening U.S. economy. But it will be "patient" in deciding when to do so. That was the message sent Wednesday as the Fed ended a meeting amid heightened expectation about a forthcoming rate increase. At a news conference, Chair Janet Yellen said she foresaw no rate hike in the first quarter of 2015.

THE QUOTE: "It was always important for the Fed to get the language right so as not to spook markets at such a fragile time and it seems it has done just that," said Stan Shamu, market strategist at IG in Melbourne, Australia.

RUBLE RUCTIONS: Russia also remained in focus on concerns about the impact of the recent slide in the ruble. The currency has lost more than 50 percent of its value this year as the oil price slump and Western sanctions over Russia's actions in Ukraine hit the Russian economy. After falling again Wednesday, the ruble recovered somewhat and was at 59.50 to the dollar.

WALL STREET: Stocks rose as oil prices showed signs of stabilizing from a big slump and the market's gains were extended after the Fed's statement. The Standard & Poor's 500 rose 40.15 points, or 2.04 percent, to close at 2,012.89. That was the biggest gain for the index since October 2013. The Dow Jones industrial average gained 288 points, or 1.7 percent, to 17,356.87. The Nasdaq composite climbed 96.48 points, or 2.1 percent, to 4,644.31.

[xchrom]

16. STUDY: WEALTH GAP LARGEST ON RECORD

http://hosted.ap.org/dynamic/stories/U/US_WEALTH_GAP?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2014-12-17-17-03-27

NEW YORK (AP) -- There's even more proof that the rich are getting richer while everyone else gets poorer.

In a new report, Pew Research Center said Wednesday that the gap between the nation's wealthiest households and middle- and low- income earners is the widest it has been since the government began collecting data 30 years ago.

Pew, which analyzed Federal Reserve data, said the median wealth of upper-income families was $639,400 in 2013. Middle-income households were worth $96,500, while low-income families were worth $9,300. Pew calculated wealth by adding a family's assets, including homes, cars and businesses, and subtracted it from debts.

To qualify as middle income, Pew said that a family of three needs to make $38,100, while to qualify as upper income, that same size family would need to earn $114,300. It adjusted that number based on the size of a family. Families of five, for example, need to earn $49,200 to be middle income and $147,600 to be considered upper income.

[xchrom]

17. Swiss National Bank Starts Negative Interest Rate of 0.25% to Stave Off Inflows

http://www.bloomberg.com/news/2014-12-18/snb-starts-negative-interest-rate-of-0-25-to-stave-off-inflows.html

The Swiss National Bank (SNBN) imposed the country’s first negative deposit rate since the 1970s as the Russian financial crisis and the threat of further euro-zone stimulus heaped pressure on the franc.

A charge of 0.25 percent on sight deposits, the cash-like holdings of commercial banks at the central bank, will apply as of Jan. 22, the Zurich-based central bank said in a statement today. That’s the same day as the European Central Bank’s first decision of 2015.

The SNB move follows Russia’s surprise interest-rate increase this week and hints at the investment pressures that resulted after that decision failed to stem a run on the ruble. Swiss officials acted as the turmoil, along with the imminent threat of quantitative easing from the ECB, kept the franc too close to its 1.20 per euro ceiling for comfort.

“This is not the magic bullet, but will buy them time,” said Peter Rosenstreich, head of market strategy at Swissquote in Gland, Switzerland. “This will relieve pressure from the floor in the short term, but not in the long term.”

[xchrom]

18. Bankers See $1 Trillion of Investments Stranded in the Oil Fields

http://www.bloomberg.com/news/2014-12-18/bankers-see-1-trillion-of-investments-stranded-in-the-oil-fields.html

There are zombies in the oil fields.

After crude prices dropped 49 percent in six months, oil projects planned for next year are the undead -- still standing upright, but with little hope of a productive future. These zombie projects proliferate in expensive Arctic oil, deepwater-drilling regions and tar sands from Canada to Venezuela.

In a stunning analysis this week, Goldman Sachs found almost $1 trillion in investments in future oil projects at risk. They looked at 400 of the world’s largest new oil and gas fields -- excluding U.S. shale -- and found projects representing $930 billion of future investment that are no longer profitable with Brent crude at $70. In the U.S., the shale-oil party isn’t over yet, but zombies are beginning to crash it.

The chart below shows the break-even points for the top 400 new fields and how much future oil production they represent. Less than a third of projects are still profitable with oil at $70. If the unprofitable projects were scuttled, it would mean a loss of 7.5 million barrels per day of production in 2025, equivalent to 8 percent of current global demand.

[xchrom]

19. Dollar Topping Most Estimates Bodes Ill for Profits: Currencies

http://www.bloomberg.com/news/2014-12-18/dollar-topping-most-estimates-bodes-ill-for-profits-currencies.html

The strongest dollar in more than five years is threatening to wreak havoc with the earnings of U.S. companies for a second straight quarter and into 2015.

Just this week, Atlanta-based Coca Cola Co., the world’s largest soft-drink maker, said currency movements will cut its pre-tax profit by 5 percent to 6 percent next year. Pfizer Inc., the biggest U.S. drugmaker, has said it “expects significant negative sales and earnings impacts from foreign exchange” this quarter.

While a rapidly rising dollar can be seen as sign of confidence in the health of the U.S., it can also make the goods made by American companies less competitive and render hedges designed to protect against steep moves less effective. The U.S. Dollar Index is poised to end 2015 more than 6 percent higher than the median estimate of strategists surveyed by Bloomberg on June 30.

“Corporations are going to have to pay a lot more attention to currency movements going forward,” Shaun Osborne, the chief currency strategist at Toronto-Dominion Bank, Canada’s largest lender, said by phone yesterday. “The dollar will continue to appreciate. It will also be a much more volatile environment.”

[Demeter]

27. I'm wondering how much it's costing us

To artificially depress the rouble and boost the dollar.

When somebody puts their whole weight on the scale, the distortions can bring down other governments and destroy economies...but there's always blowback.

[xchrom]

20. Germany’s Startup Phobia Sparks Plan to Spur Investment

http://www.bloomberg.com/news/2014-12-17/germany-s-startup-phobia-sparks-plan-to-spur-investment.html

Eleven years after the collapse of the Neuer Markt, Germany’s attempt to replicate Nasdaq, investors in Europe’s biggest economy are still wary about startups.

That explains why big data company Blue Yonder GmbH, founded in 2008 by nuclear physicist Michael Feindt, turned to New York private equity firm Warburg Pincus LLC this week for a $75 million lifeline to fund its expansion.

Concern about the lack of venture capital available locally to develop new businesses has prompted Economy Minister Sigmar Gabriel to devise a plan to build a new market for enterprises like Karlsruhe-based Blue Yonder and spur investment. He invited business and finance leaders to a meeting in Berlin today to advance the idea. Participants include Deutsche Boerse AG Deputy Chief Executive Officer Andreas Preuss, Deutsche Bank AG co-chairman Juergen Fitschen and Susanne Klatten, the Bayerische Motoren Werke AG heiress whose investment vehicle SKion GmbH acquires and manages holdings in companies, according to a person familiar with the invitees who declined to be identified as the meeting isn't public.

“Startups are the lifeblood of our economy,” Gabriel said in an e-mailed response to questions. “We have to do everything in our power to ensure that German startups get access to better funding sources and can develop into successful companies.”

[xchrom]

21. China is Planning to Purge Foreign Technology and Replace With Homegrown Suppliers

http://www.bloomberg.com/news/2014-12-17/china-said-to-plan-sweeping-shift-from-foreign-technology-to-own.html

China is aiming to purge most foreign technology from banks, the military, state-owned enterprises and key government agencies by 2020, stepping up efforts to shift to Chinese suppliers, according to people familiar with the effort.

The push comes after a test of domestic alternatives in the northeastern city of Siping that was deemed a success, said the people, who asked not to be named because the details aren’t public. Workers there replaced Microsoft Corp.’s (MSFT) Windows with a homegrown operating system called NeoKylin and swapped foreign servers for ones made by China’s Inspur Group Ltd., they said.

The plan for changes in four segments of the economy is driven by national security concerns and marks an increasingly determined move away from foreign suppliers under President Xi Jinping, the people said. The campaign could have lasting consequences for U.S. companies including Cisco Systems Inc. (CSCO), International Business Machines Corp. (IBM), Intel Corp. (INTC) and Hewlett-Packard Co.

“The shift is real,” said Charlie Dai, a Beijing-based analyst for Forrester Research Inc. “We have seen emerging cases of replacing foreign products at all layers from application, middleware down to the infrastructure software and hardware.”

[Demeter]

28. Ouch! That's gonna smart!

Losing both Russia and China in one year is going to bring globalism to its knees.

I always thought the American people would have to be rescued from our oppressors by outside nations. Maybe it's coming true!

[xchrom]

22. Dark Pools in Spotlight as EU Moves to Bolster Markets

http://www.bloomberg.com/news/2014-12-18/dark-pools-in-spotlight-as-eu-moves-to-bolster-markets.html

If you play poker with all your cards showing, you can’t bluff.

Traders accustomed to operating in Europe’s dark pools, where buy and sell orders are hidden, say a transparency drive by regulators may similarly deprive them of the secrecy they need to shield their trades from competitors. That could drain the liquidity, and the life, from some of the region’s biggest markets, they say.

The European Securities and Markets Authority plans to release draft standards as early as tomorrow that flesh out European Union law. Regulators say the rules, which seek to cap equity trading in dark pools and push more swaps trades on to regulated platforms, will make markets more resilient during crises and less prone to abuse. Some brokers counter that the move will backfire by making trading too expensive.

“The new transparency requirements in the non-equity markets have the capacity to introduce fundamental change to the way dealers do business,” said Peter Bevan, a financial regulation partner at law firm Linklaters LLP in London. “Pre-trade transparency is not such a novelty in the equity markets, but nevertheless there are important changes such as the availability of waivers for the so-called dark pools.”

The push to shine light into dark pools is part of a broader overhaul of financial-market rules that takes effect in 2017. While the updated Markets in Financial Instruments Directive, known as MiFID II, has been approved, a host of technical details are still needed for its implementation.

[xchrom]

23. Draghi Counts Cost of Outflanking ECB’s Home Nation in QE

http://www.bloomberg.com/news/2014-12-18/draghi-counts-cost-of-outflanking-ecb-s-home-nation-in-qe-battle.html

As Mario Draghi prepares to push the European Central Bank into quantitative easing, he’s counting the cost of alienating its home nation.

With the ECB president signaling that he’ll override German-led concerns on government bond purchases if needed, his institution is under attack in the country whose DNA inspired it. The outrage reflects concern that the Frankfurt-based central bank, which is modeled on the Bundesbank, is taking risks that its forerunner would never tolerate.

The Italian is now pursuing a charm offensive in the euro area’s biggest and most populous economy before the Governing Council’s Jan. 22 meeting to soften the blow as he presses on with stimulus. His challenge is to outflank the Bundesbank without risking a spillover into national politics serious enough to threaten German support for the single currency.

“The ECB has built up enough credibility on its own,” said Holger Schmieding, chief economist at Berenberg Bank in London. “That the Bundesbank may object to sovereign-bond purchases is largely taken for granted by markets. Tacit support from Berlin would neutralize Bundesbank objections in the German public debate.”

[xchrom]

24. Abe’s Pleas to Japan Inc. Unheeded as Firms Hoard Cash: Economy

http://www.bloomberg.com/news/2014-12-18/abe-kuroda-pleas-to-japan-inc-unheeded-as-companies-hoard-cash.html

Two days after Prime Minister Shinzo Abe secured a pledge from Japan Inc. to do their best to boost wages to revive the world’s third-biggest economy, data showed companies hoarding record amounts of cash.

Corporate holdings of cash and deposits rose 4.2 percent from a year earlier to 233 trillion yen ($2 trillion) at the end of September, increasing every quarter for the past six years, according to the Bank of Japan. At the same time, firms’ assets in direct investment overseas rose to a record 73 trillion yen.

While Abe and Governor Haruhiko Kuroda have urged business leaders to distribute more of the profits generated by the weak yen, companies aren’t buying into the plan. Declining capital expenditure helped drive a mid-year recession, households’ real incomes are falling, and firms trimmed their inflation outlook and aren’t sure the yen’s depreciation will last.

“The big cash holdings say Abe has a lot to do,” said Daiju Aoki, an economist at UBS Group AG. “Companies still have a deflationary mindset. That mountain of money has to flow into the economy in investment and wage growth to ensure the end of deflation.”

[xchrom]

25. Lower Oil Poses Bigger Risk for U.S. Workforce: Chart of the Day

http://www.bloomberg.com/news/2014-12-18/lower-oil-poses-bigger-risk-for-u-s-workforce-chart-of-the-day.html

Falling oil prices may have more of an effect on U.S. employment than they did when crude tumbled six years ago, according to Nicholas Colas, chief market strategist at Convergex.

As the CHART OF THE DAY shows, oil and gas jobs are a greater percentage of the U.S. labor force this year than in 2008, according to data compiled by the Labor Department. The comparison reflects the number of workers in energy extraction, field machinery, pipeline construction and support activities. Colas added a fifth classification, oil and gas well drilling, in a report published yesterday.

“Employment in the oil fields correlates directly with oil prices,” he wrote. The number of industry jobs fell about 20 percent between October 2008 and January 2010, according to government data cited in the report.

The earlier decline started as crude plummeted as much as 78 percent in New York trading from a record $147.27 a barrel, set in July 2008. This year, oil peaked at $107.73 on June 20 and later tumbled as much as 50 percent.

[Demeter]

32. Putin: Russia will bounce back within two years

IS HE HOPING THAT THE US ELECTIONS SHAKE SOME OF THE NUTS OUT OF THE TREES?

http://www.cnbc.com/id/102279310



Russian President Vladimir Putin blamed "external factors" for the country's ongoing economic problems on Thursday, but failed to reassure investors hoping for quick answers, sparking another bumpy day for the ruble.

Putin sought to reassure the country that it would overcome its present difficulties and return to economic growth by 2017 by the latest, as the global economy needs more of its oil.

However, he failed to reassure currency traders about the ruble's fate - the Russian currency's value sank by around 6 percent against the U.S. dollar as he spoke, before paring losses.

...The economic turmoil does not appear to have dented Putin's popularity. About 80 percent of Russians still support him, according to an Associated Press-NORC Center for Public Affairs Research poll released Thursday - ratings which most Western leaders could only dream of. Asked about the possibility of a coup by a journalist, he said: "There can be no stronger base than the support of the Russian people."

MORE

PUTIN DIDN'T QUOTE Friedrich Nietzsche, BUT I WILL:

Whoever fights monsters should see to it that in the process he does not become a monster. And if you gaze long enough into an abyss, the abyss will gaze back into you.

That which does not kill us makes us stronger.

You have your way. I have my way. As for the right way, the correct way, and the only way, it does not exist.

All things are subject to interpretation whichever interpretation prevails at a given time is a function of power and not truth.

Not necessity, not desire - no, the love of power is the demon of men. Let them have everything - health, food, a place to live, entertainment - they are and remain unhappy and low-spirited: for the demon waits and waits and will be satisfied.

In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule.

[Demeter]

33. Merry Christmas, Mr. Putin

http://www.businessweek.com/articles/2014-12-18/putin-gambled-on-russias-economy-ukraine-policy-and-lost#r=rss

...International capital markets have all but shut down to Russian companies—a serious problem, considering the $700 billion in external debt they hold. Because of sanctions and the retreat of lenders, companies can’t extend or refinance existing debts by borrowing. As debts come due, companies are paying them off, putting further downward pressure on the ruble as borrowers sell rubles to get dollars to cover the debts. Similarly, much of Russia’s projected $125 billion of capital flight this year is money flowing out to repay those loans coming due.

The combination of falling oil prices and a depreciating ruble puts a drag on state finances at a time when budget revenues are already under threat. The Kremlin will let some companies default on their debts, but surely not all; this will cost the state a big chunk of those billions in reserves. And playing favorites is no way to run a sensible monetary policy: The most dramatic run on the ruble came on Dec. 15 after Rosneft (ROSN:RU), the state oil company headed by longtime Putin adviser and confidant Igor Sechin, appeared to have borrowed 625 billion rubles ($9.2 billion) from the state and to have sold that cash as bonds to cover Rosneft’s own sizable debts. The move damaged the central bank’s reputation for independence; in crises, reputations often matter more than fundamentals. Sechin denied the company’s bond sale spurred the ruble’s collapse.

Putin is also deriving some political benefits from the sanctions, at least in the short term. As foreign lenders retreat, Russian companies are left with only the state to cover their debts. They then become more—and not less—beholden to Putin and prone to do whatever is necessary to prove their loyalty. After all, who else is going to give them the cash they need to survive? And as the ruble loses value, companies that earn rubles (banks, retailers, midsize businesses) will suffer, while those companies that earn dollars (energy producers and other natural resource extractors) will see their positions strengthen. Those that survive in this new environment will be the large, often state-run companies that sell Russia’s oil, gas, and metals abroad; private entrepreneurs will be weakened as an economic class and thus as a political voice....