Financial Markets and Economy
Inflation-Hit Venezuela Is Pulling Its Largest Bill From Circulation (Reuters)
(CARACAS)—Venezuela, mired in an economic crisis and facing the world’s highest inflation, will pull its largest bill, worth two U.S. cents on the black market, from circulation this week ahead of introducing new higher-value notes, President Nicolas Maduro said on Sunday.
Here's why stocks have been on a tear since Trump's election (Business Insider)
A month after the election, we've taken a closer look at how markets have moved since then as well as some idea of why those moves have happened.
How Will Stocks React to the Fed Meeting? Watch Twitter (The Wall Street Journal)
The president-elect has been happily moving stocks via Twitter since even before the election. Twitter, it turns out, can also tell investors what the market will do next, at least on specific days.
Inside China’s Global Spending Spree (Fortune)
The high-rise coastal city of Dubai plays host to all kinds of luxury oddities: indoor ski slopes, gold-bar vending machines, vast artificial archipelagoes shaped like palm trees. But six miles inland, something just as unusual, if far less gaudy, is taking shape—the first coal-fired power plant in the Middle East.
Hong Kong’s Money Market Squeeze Sends Sell Signal on Stocks (Bloomberg)
Funding costs surged for a 10th day on Monday to a 2009 high as the Federal Reserve prepares to tighten monetary policy, making it more expensive to borrow to buy stocks. With the squeeze starting to spill over into other markets, Australia & New Zealand Banking Group Ltd.’s Raymond Yeung says it’s signaling concern about a cash exodus.
World's Biggest Money Manager Says 2017 Could Be Painful (Reuters)
BlackRock cut its view on the outlook for U.S. Treasuries further in a publication distributed on Monday, warning investors to prepare for “pain.”
Some Bangladesh Bank officials involved in heist – investigator (Reuters)
Some Bangladesh central bank officials deliberately exposed its computer systems and enabled hackers to steal $81 million from its account at the Federal Reserve Bank of New York in February, a top police investigator in Dhaka told Reuters on Monday.
China Files WTO Complaint Against EU, U.S. Tariff Methods (Bloomberg)
China complained to the World Trade Organization to force the U.S. and European Union to stop using example prices from other nations in anti-dumping probes on its goods.
The US jobs market is 'overheating' (Business Insider)
In a note on Monday, Sløk took exception to the idea that there is underlying labor market slack in a pool of workers waiting outside of the labor market. Federal Reserve Chair Janet Yellen has even noted that there may be a group of people who are listed as outside the labor market that want to find a job but have been discouraged.
Hedging Is an Afterthought for Traders With S&P 500 Near Record (Bloomberg)
Fresh off three straight record closes and with call volume at all-time highs, options traders are adding to bullish bets on the S&P 500 Index. They’re paying the least since July 2014 to protect against a decline in the SPDR S&P 500 ETF Trust before Wednesday’s Federal Reserve rate decision.
A Dilemma for Humanity: Stark Inequality or Total War (NY Times)
Last year the typical American family experienced the fastest income gains since the government started measuring them in the 1960s. But the top 1 percent did even better, raising their share of income higher than it was when President Obama took office.
U.S. Household Net Worth Reached Record $90.2 Trillion in Third Quarter (The Wall Street Journal)
The wealth of U.S. households climbed to a record $90.2 trillion in the third quarter, driven by a powerful buildup in both real estate and stocks.
Here's How Trump Could Blow Up The Entire Bull Market (Forbes)
Trump is proposing a top corporate tax rate of 15%, and the Ryan plan essentially calls for 20%. The proposed corporate tax reduction will really have a far greater impact than any of the proposed personal income tax cuts.
OPEC Oil Output Said to Rise Ahead of January Historic Cut (Bloomberg)
OPEC boosted production in November, according to independent estimates, as Nigeria, Libya and Angola all pumped more oil ahead of the group’s Jan. 1 deadline to cut its collective output, a person familiar with the data said.
Bearish Money-Market Wagers at Record Before Fed Meeting: Chart (Bloomberg)
Speculators in the world’s most actively traded money-market futures are positioning for further interest-rate hikes after Wednesday, when the Federal Reserve is expected to conclude its two-day policy meeting by raising its benchmark to between 0.5 percent and 0.75 percent.
Trump says China is not a market economy. That’s a big deal. (The Washington Post)
Way back in 2001, in China’s view, the United States promised it would treat the Asian country as a “market economy” starting in December 2016. President-elect Donald Trump indicated on Dec. 8 that “China is not a market economy,” and the issue could escalate already-tense trade relations between Beijing and Washington.
Bill Gates, Jeff Bezos, and other investors are launching a $1 billion green energy fund (Business Insider)
Bill Gates, Jeff Bezos, and a consortium of high-profile investors are backing a new $1 billion (£790 million) venture fund that will invest in clean energy technology.
It Turns Out Spending More Probably Does Improve Education (The Upshot)
Educators, politicians and unions have battled in court over that crucial question for decades, most recently in a sweeping decision this fall in Connecticut, where a judge ordered the state to revamp nearly every facet of its education policies, from graduation requirements to special education, along with its school funding.
US Private Equity Firms Dial Back Pace Of Investing In Canada (Value Walk)
In 2015, no fewer than 159 private equity firms with headquarters in the US cut a deal with a Canadian company, a clear high for the decade. That pace has slowed considerably even as general Canadian PE activity has declined, with 105 US firms active within the country through the end of October.
Tesla Stock Price Target Slashed, SolarCity Worth Only $15 A Share: DB (Value Walk)
Tesla stock has received multiple bearish analyst reports since the SolarCity deal was first announced earlier this year, and now that shareholders have approved it, there’s another price target cut.
Our problem isn’t robots, it’s the low-wage car-wash economy (The Guardian)
The headlines were inevitable, once Mark Carney uttered the word automation. Robots, the Sun told us, are set to “steal 15m jobs from Brits”. Sadly, our main problem is not robots; still less the artificial intelligence technologies that will power them.
Hong Kong Arrests 29 in Corruption Probe Linked to Four Banks (Bloomberg)
Hong Kong arrested 29 current and former staff of five financial institutions, including four banks, for alleged bribery connected with obtaining confidential customer information to market personal loans, the city’s anti-graft agency said.
Money Under Fire – A Reminder Of The Great Wealth Transfer Underway (Value Walk)
One serious predicament we face is that the current leaders in the halls of monetary and political power do not appear to understand the dimensions of our situation. The mind-boggling part about it is that the situation is easy to understand.
Money Managers Have Never Been More Sure That Interest Rates Will Continue To Rise (Zero Hedge)
In August of 2014, amid tapering QE and talk of normalization, speculators in the world's most liquid money-market instruments went all-in with record bearish bets on eurodollar futures.
Trump says he's turning away 'billions' but has 'the right' to do business deals (CNN Money)
President-elect Donald Trump, saying he "has the right" to still do business deals, told Fox News he's turning down "billions of dollars of deals" to avoid potential conflicts of interest.
Tailing 10-Year Auction Prices At Highest Yield Since September 2014 (Zero Hedge)
After this morning's disappointing 3 Year auction, which priced just inside the When Issued, today's second auction, a $20 billion reopening of 10 Year paper, was just as anticipated, especially in light of the intraday rally heading into the 1pm auction.
How Investing In Preschool Beats The Stock Market, Hands Down (NPR)
If you got 13 percent back on your investments every year, you'd be pretty happy, right? Remember, the S&P 500, historically, has averaged about 7 percent when adjusted for inflation.
Moody’s: E&P Earnings Will Grow 30% In 2017 (Value Walk)
The only sector Moody’s has a positive outlook on the next year’s exploration and production. The credit ratings agency is forecasting EBITDA growth of 20% to 30% through 2017 from the 2016 trough.
The Dow Is The Most Overbought In Over 20 Years (And Options Traders Have Never Been More Bullish) (Zero Hedge)
The Dow Jones Industrial Average has only been more overbought than it is today four times in the last one hundred years.
Oil Fades From OPEC Exuberance On Fund Flows, Storage, & Contango Concerns (Zero Hedge)
The overnight exuberance in crude oil futures markets has faded notably as the day has worn on. While news of supply cuts are unquestionably bullish (should one choose to believe it or not, remember the Saudis admission "we tend to cheat"), but the last few days have also seen a plethora of bearish-biased news that for now is being ignored.
Global Bond Rout Returns With A Vengeance, Sending 10Y Yields To Highest In Over Two Years (Zero Hedge)
The global bond rout returned with a bang, sending 10Y US Treasury yields as much as six basis points higher to 2.53%, the highest level in over two years. The selloff happened as oil prices surged by more than 5% following Saturday's agreement by NOPEC nations agreed to slash production, leading to rising inflation pressures.
RBC Warns January Is Setting Up As A "Massive Mean-Reversion" Month (Zero Hedge)
Following Friday's report by RCB's Charlie McElligott which sought to answer "THE" question every investor is asking, namely "what could derail this rally", today's the cross-asset strategist has released a follow up analysis in which he warns that even though the bond battering continues – and is likely to continue for a while – the market is now being set up for a "massive mean-reversion" counter-trend rally as soon as January.
Companies
Disney Wins Bid to Shut Sanitized Movie Streaming Service (Bloomberg)
Walt Disney Co. won a court order shutting down a Utah-based video-streaming business that lets subscribers pay $1 to watch Hollywood movies stripped of nudity, violence and profanity.
Amazon's Bezos Will Attend Trump's Tech Roundtable; Elon Musk No Longer "Too Busy", Will Also Attend (Zero Hedge)
As we detailed earlier, despite the public spat between Amazon boss (and Washington Post owner) Jeff Bezos and the president-elect, the tech heavyweight has agreed to attend Trump's meeting of tech-industry executives this week.
Technology
Microsoft Ventures launches new fund for AI startups and backs Element AI incubator (Tech Crunch)
Microsoft Ventures today announced two steps that point to how the tech giant’s VC arm wants to get involved in artificial intelligence in a big way. First, it’s now going to pursue investments through a special fund dedicated to AI startups that focus on “inclusive growth and positive impact on society.”
JetSmarter raises $105 million to help you jet set (Mashable Asia)
JetSmarter, a private jet marketplace, raised $105 million in a Series C round, the company announced Monday. That places the company as tech's newest unicorn since it reached a $1.5 billion pre-money valuation.
The Pros and Cons of Robot Managers (Harvard Business Review)
How would you feel working for a robot? Although the idea may sound far-fetched, not least because the automation of jobs is usually discussed vis-à-vis unskilled labor rather than management-level positions, it is actually more feasible than most people think.
Politics
If Trump Abandons the TPP, China Will Be the Biggest Winner (Harvard Business Review)
The phrase “Thucydides Trap” refers to the likelihood of tensions and even war between an established power and a rising challenger. Even before Donald Trump’s election to the U.S. presidency, the relationship between the U.S. and China was often cast in these terms, with analysts such as Graham Allison concluding that war was not an unimaginable outcome.
Beijing 'seriously concerned' about Trump's comments on One China policy (Politico)
China’s Foreign Ministry is “seriously concerned” about President-elect Donald Trump’s statement Sunday questioning the U.S. commitment to respecting of Beijing’s “One China” policy.
White House suggests Trump benefited from Russia hacking (CNN)
(CNN) – The White House strongly suggested Monday that Donald Trump was the beneficiary of Russian meddling in the US election, pointing to Trump's own ties to Russia as evidence of Moscow's intentions.
Reid: FBI director's letter cost Democrats the election, Senate (CNN)
Senate Minority Leader Harry Reid said Monday FBI Director James Comey was "heavily involved as a partisan" in the weeks leading up to the election and that Comey's actions handed the presidency to Donald Trump.
The Gambia: life goes on in Banjul as Yahya Jammeh clings to power (The Guardian)
Soldiers stood watch on the streets of the Gambia’s capital, Banjul, on Sunday as most residents went about daily life despite concerns after the president, Yahya Jammeh, said he would not accept election results that would force him to step down after 22 years in power.
Roger Stone: Trump Was Torturing Romney All Along (InfoWars)
Trump was interviewing him to torture him, Romney crossed a line, he didn’t just oppose him he called him a phony, fraud, conman etc.
Sarah Palin hits CIA after Donald Trump bashes intelligence agency: “I can keep an eye” on Russia (Salon)
Former Alaska Gov. Sarah Palin, who briefly became an iconic political figure when she was tapped to be the Republican Party’s vice presidential nominee in 2008, is weighing in on Twitter about the CIA’s official assessment that Russia hacked into the Democratic National Committee in order to help Donald Trump win the 2016 election.
McConnell, Warning of ‘Dangerous’ Debt, Wants Tax Cut Offsets (Bloomberg)
President-elect Donald Trump’s race to enact the biggest tax cuts since the 1980s went under a caution flag Monday as Senate Majority Leader Mitch McConnell warned he considers current levels of U.S. debt “dangerous” and said he wants any tax overhaul to avoid adding to the deficit.
Whoa: John Podesta wants electoral college to get intelligence briefing before next week’s vote (Hot Air)
So Team Hillary’s not only all-in on the dubious theory that Trump wouldn’t have won if not for Russian hacking, they’re also all-in on the inane never-gonna-happen scenario of an electoral-college revolt.
GOP’s big overreach is coming: Another terrible new plan to “save” Social Security by destroying it (Salon)
One of the many quirks of the 2016 presidential campaign was that both major-party candidates ran on explicit promises to not ruin Social Security.
Dr. Scott Gottlieb, a partner at one of the world's largest venture capital funds and a former deputy commissioner at the U.S. Food and Drug Administration, is being considered by President-elect Donald Trump to run the agency, according to sources close to the transition team.
‘It’s Like a Powder Keg That’s Going to Explode’ (Politico)
Norm Eisen has become an unlikely media darling. Since Donald Trump’s victory on November 8 opened a debate about how the president-elect would keep his vast business interests separate from his new public obligations, Eisen has emerged as one of the two most prominent government ethicists calling for Trump to take drastic action to avoid scandal or worse.
Donald Trump: “Nobody really knows” if climate change is real (Salon)
Somehow our president-elect is still on the fence about the existence of climate change. In an interview with Fox News on Sunday, Donald Trump — who years ago tweeted that global warming “was created by and for the Chinese in order to make U.S. manufacturing non-competitive” — said he’s “studying” the concept because “nobody really knows” whether or not it’s real.
Socialism for the Rich, Capitalism for the Poor: An Interview With Noam Chomsky (TruthOut)
The United States is rapidly declining on numerous fronts — collapsing infrastructure, a huge gap between haves and have-nots, stagnant wages, high infant mortality rates, the highest incarceration rate in the world — and it continues to be the only country in the advanced world without a universal health care system.
Life on the Home Planet
Global concentrations of methane are spiking (Think Progress)
When it comes to climate change, carbon dioxide usually dominates the conversation — but it might be time to start paying particular attention to another greenhouse gas.
The 5 biggest winners and losers at the box office in 2016 (Business Insider)
Though there were some surprise box-office giants like Disney’s “Zootopia” and Fox’s “Deadpool,” which just added to the predicted success of movies like “Captain America: Civil War” and “Fantastic Beasts and Where to Find Them” (not to mention the huge coin “Rogue One: A Star Wars Story” will get soon), the industry also had numerous failures in its sequels (“Independence Day: Resurgence,” “Teenage Mutant Ninja Turtles: Out of the Shadows”) and reboots (“Ben-Hur,” “Ghostbusters”).
Hordes of Geese Die on a Toxic Lake in Montana (NY Times)
BUTTE, Mont. — The recent death of thousands of snow geese on a toxic artificial lake here high in the Rocky Mountains once again underscored the devastating environmental legacy of more than a century’s worth of copper mining.
In February, astronomers made a monumental discovery. Almost 100 years after Albert Einstein first predicted them, researchers detected gravitational waves — ripples in space time that had radiated out from the merging of two black holes.
The poorest 10% of Vietnamese students performed better on an international exam than the average American teen (Business Insider)
The Organization for Economic Co-operation and Development (OECD) released the results of its 2015 global rankings on student performance in mathematics, reading, and science, on the Program for International Student Assessment, or PISA.
Unhappiness more likely to result from poor mental health or being single than economic factors, major new study finds (Independent)
Economic factors are not the biggest cause of unhappiness — failed relationships and mental illness play a far greater role, a major new study into the “origins of happiness” has found.
Brightest Supernova Ever Seen Was Produced by a Black Hole (Scientific American)
An incredibly luminous outburst that astronomers had previously classified as possibly the brightest supernova ever actually might have been caused by the explosive death of a star torn apart by a giant black hole, a new study finds.
