Christmas Eve Eve News Wrap-Up

Let's see what we can see...

In a refreshing change of pace for a European nation, Standard & Poor's has maintained it's AAA rating on French sovereign debt. "The stable outlook is based on our view of the French government's substantial achievements with its budgetary consolidation strategy, enabling it to meet its fiscal targets through 2013." There had been some serious concern about the nation's credit rating, mostly due to it's public debt[1], and the cost of insurance for their debt has tripled this year.

Ireland's High Court ruled that Allied Irish Banks can be taken over by the Irish government without shareholder approval. This clears the way for Dublin to pump 3.7 billion euros[2] into AIB, taking their ownership stake from 19% to 92% in the process. (There are, in other words, legitimate reasons why AIB was down about 12% in trading today.) The company will also be delisting from the main Irish and London exchanges.

On the lighter side, an anonymous source at Wikileaks has leaked all of the quarter million or so US diplomatic cables and military records to the Norwegian Aftenposten news service. Quis effluiet ipsos effluoes?[3]

[1] France's public debt stands at 77.60% of GDP, which is worse than Portugal, Italy, or Spain.

[2] Which is about half of the 6.1 billion euros it needs by February 28th to hit its mandatory 12% capitalization.

[3] Who leaks the leakers?

What's Going On This Morning?

Much of it is the "same old same old". The 85 billion euro Irish bailout isn't giving anyone in Europe any comfort. Sovereign bond investors are demanding an increasing premium to hold Spanish and Italian debt, because (in the words of Everett Brown, IDEAglobal European bond strategists) "Spain is almost too big to be bailed out whereas Italy is too big to be bailed out." Italian and Spanish bond yields are up, the euro is down, European equities are weak, and US Treasury prices are up.

North Korea Crazy [1] isn't making things any better as it announces construction of a uranium enrichment plant. But rest assured, the nation that shelled Yeongpyeong Island last week and then declared the US and South Korea to be "arch criminals disturbing peace and security" (for the crime of, y'know, calling Kim Jong-il a raging nutbar), will use it entirely for peaceful purposes. Oddly enough, their new mushroom cultivation technologies have not calmed anyone's concern.

Closer to home, the Street is watching with keen interest the "negotiations" between President Obama and the new Republican Congressional majority over whether or not to extend the Bush-era tax cuts. The president wants to extend them for the middle class [2], as he feels that the loss of some $700 billion in tax revenue would have a negative impact on the Federal budget. Meanwhile the Republicans want to extend them for everyone and then cut spending [3] to prevent the negative impact on the Federal budget.

[1] "BANG! There It Is" still in the top 10 a week after release.
[2] No word yet on how "middle class" will be defined.
[3] No word yet on what actual spending they would cut. Except probably NPR, which they seem to believe is staffed by Nazis.

Articles cited:
Euro debt contagion keeps markets uneasy (http://www.reuters.com/article/idUSTRE69K04L20101130)
DPRK says to actively develop nuclear capability for peaceful use (http://news.xinhuanet.com/english2010/world/2010-11/30/c_13628272.htm)
US-S. Korea Wholly to Blame for Escalated Tension and Danger of War (http://www.kcna.co.jp/index-e.htm)
New Mushroom Cultivation Technologies Developed (http://www.kcna.co.jp/index-e.htm)
Obama, Republicans in tax face-off at White House (http://www.reuters.com/article/idUSTRE6A44K020101130)

What's Happening Today? And Why Am I Tired?

Lots, as long as you're not looking for economic measures.

We've got a short trading day today - the equity markets close at 1 PM, and the bond markets at 2 PM.

It's Black Friday, so the Street will probably be holding its collective breath over the weekend to see how retail sales performed (or didn't, if the U of M's projections from Wednesday are any indicator).

The international markets are down over fears that Ireland will destroy the euro, that Portugal will destroy the euro if Ireland doesn't (Portugal is saying they're just fine, really, thanks for asking; it's almost exactly the language that Ireland was using as late as November 15, so surely we have no reason to be alarmed whatsoever), and that Kim Jong-Il and the North Korean Crazy [1] - who is, in his inimitably barking-mad fashion insisting that it is South Korea and the United States pushing towards war, pay no attention to my random artillery fire thank you very much - will destroy the Asian marketplace and part of Asia in the process.

Oh, and that morning fatigue you're feeling? It's probably due to L-tryptophan, an essential amino acid that cannot be synthesized by humans but is found in moderately large quantities in turkey meat (0.24 grams/100 grams of turkey, equal to chicken and 0.01 gram higher than beef). Most likely, you ate a lot of carbohydrates (stuffing and mashed potatoes and sweet potatoes) along with your turkey. All of those carbohydrates promote insulin secretion, which stimulates the uptake of many amino acids (l-tryptophan is not among them) into your muscles. This leaves you with more of the l-tryptophan in your blood. L-tryptophan converts into serotonin in your brain stem, which then turns into melatonin in your pineal gland. Melatonin promotes sleep, and now you have larger than normal quantities of melatonin in your brain.

Or, maybe, you just hit Black Friday this morning. Same end result, although the turkey made you less likely to have to kidney punch someone's grandmother over a toaster.

[1] With their latest release "Why Ya Gotta Make Me Hit Ya Baby?"