Sunday 14 December 2014

14th December 2014: That Was the Week That Was

Well what a week it has been...
The results of today's Japanese election (an overwhelming victory for Abe the King of Global Quantative Easing). The Associated Press wrote "Despite weakening popularity ratings, a recession and messy campaign finance scandals, the Liberal Democrats were virtually certain to triumph thanks to voter apathy and a weak opposition."
And there you have it: the apathetic Japanese people have spoken, or rather chosen not to. As a result, when the entire Japanese house of Ponzi cards comes crashing down for the final time, they will have nobody but themselves to blame. Which, incidentally, is the case in every other "developed" nation including Jersey.
Because UAE's Energy Minister Suhail Al-Mazrouei said OPEC will stand by its decision not to cut crude output "even if oil prices fall as low as $40 a barrel" and will wait at least three months before considering an emergency meeting.
In doing so, OPEC not only confirms that the once mighty cartel is essentially non-existant and has been replaced by the veto vote of the lowest-cost exporters, but that all those energy hedge funds (and not only) who hoped that by allowing margin calls to go straight to voicemail on Friday afternoon, their troubles would go away because of some magical intervention by OPEC over the weekend, are about to have a very unpleasant Monday - now that the next oil price bogey has been set: $40 per barrel.
But this is seen as a good thing by the average American Idiot according to the latest Index of Consumer Sentiment who cannot make the connection between jobs in shale oil exploration and the price of oil.
U.S. consumers also saw sharp drops in gasoline prices as a shot in the arm, and the survey added heft to strong November retail sales data that has showed Americans getting into the holiday shopping season with gusto. “Surging expectations signal very strong consumption over the next few months,” said Ian Shepherdson, an economist at Pantheon Macroeconomics.
When asked in the survey about recent economic developments, more consumers volunteered good news than bad news than in any month since 1984, said the poll’s director, Richard Curtin. "Their expectations run quite counter to recent price data."
Meanwhile the idiots in the US Senate late last night, (proving that the Senate can work on weekends when a piece of Citigroup-penned legislation is on the table), in a 56-40 vote (21 democrats, 18 republicans, 1 independent voting No), the Senate joined the House in voting itself $1.1 trillion for the next 9 months, with the bill now heading for the final signature: Obama's.
There is some argument whether the executive will join the legislative in confirming the US government is now (and always has been) merely a puppet of Wall Street, although we expect all it will take Jamie Dimon is just one more phone call of "encouragement" to Obama to make sure Wall Street's will is done in the White House.
The US also limited itself - at least on paper - to non-lethal assistance to the Ukraine, now the US is finally preparing to send in weapons, and potentially "military advisors" as well.
"On paper", because in late November hacked US documents revealed the extent of secret US "Lethal Aid" for the Ukraine army. And since America's under-the-table support for Ukraine's insolvent armed forces has been revealed, there is little point in pretending to keep a moral upper hand (especially in light of recent "other" revelations involving the US, most notably its intelligence services).
Russian MPs have demanded that the Kremlin take adequate measures including deploying forces into Ukraine in response.

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