Even in recent weeks, Fed policymakers remained split over whether the economy is finally ready for higher rates. On the one hand, the unemployment rate has fallen sharply from 10% in 2009 and monthly job growth has averaged well over 200,000 the past two years, developments that led Fed Chair Janet Yellen to state that a rate increase was likely before the end of 2015. Still, many Americans continue to work part-time even though they prefer full-time jobs or have given up looking for work, though the ranks of such Americans have fallen. Partly as a result of this surplus labor supply, wage growth has only recently shown signs of accelerating beyond the tepid 2% annual pace that has prevailed throughout the recovery.  Broader inflation has been stuck well below the Fed's annual 2% target, both because of meager pay gains as well as low oil prices and a strong dollar that has kept imports cheap for U.S. consumers. The Fed reiterated Wednesday that it expects energy prices and the dollar to stabilize. In September, global economic troubles, which has combined with the rallying greenback to clobber exports, and related market turbulence stayed the Fed's hand.  Citing those forces and feeble inflation, Fed board members Daniel Tarullo and Lael Brainard were among those who have argued for caution, saying the risks of moving too soon and derailing a still-vulnerable recovery outweighed the hazards of waiting and possibly having to raise rates more rapidly to catch up to inflation.  Since October, though, the mood has shifted. China's economic troubles eased somewhat and failed to spread to other emerging markets, stock markets rallied, and U.S. job growth rebounded strongly in October and November from a late-summer slump. As result, momentum for a rate hike began building, both among some Fed policymakers and in financial markets.

Controversial plans for an EU Border and Coast Guard force are to be set out on Tuesday - part of an EU drive to curb the record influx of migrants.  Some national governments are wary of granting the EU new powers in such a sensitive area of sovereignty.  The European Commission is proposing a force with a stronger mandate than the EU's current Frontex border teams.  Poland says it will oppose any move to send in EU border guards without the host country's approval.  Polish Foreign Minister Witold Waszczykowski said such powers "would mean that this would be an undemocratic structure, not controlled by the member states".  But he said strengthening Frontex "is necessary in every sense"....Frontex - an EU agency based in Poland - is already poised to send border guards to Greece, where almost 800,000 migrants have arrived by sea this year. Most of them are refugees from Syria, Iraq and Afghanistan.  Frontex says its role is to help enforce border controls, but the deployed officers work "under the command and control of the authorities" in the host country.   The deployment on the Greek islands near Turkey will boost the number of land and sea patrols, meaning more migrants will be identified and properly registered, a Frontex statement said.  Of those who have come ashore this year only one in five was intercepted by border guards, Frontex said.

Russia claims to have the strategic depth to sit out a long siege. It is pursuing an import-substitution policy to revive its industrial and engineering core. It can ultimately feed itself. The Gulf Opec states are one-trick ponies by comparison.  The deputy premier, Arkady Dvorkovich, told The Telegraph in September that Opec will be forced to change tack. “At some point it is likely that they are going to have to change policy. They can last a few months, to a couple of years," he said.  Kremlin officials suspect that the aim of Saudi policy is to force Russia to the negotiating table, compelling it join Opec in a super-cartel controlling half the world’s production.  Abdallah Salem el-Badri, Opec’s chief, came close to admitting this last week, saying the cartel is no longer big enough to act alone and will not cut output unless non-Opec producers chip in. Russia is in effect calling Opec’s bluff, gambling that it has the greater staying power. It cannot easily cut output since its main producers are listed companies, answerable to shareholders. Any arrangement would have to be subtle.

Mr Dvorkovich gave an oblique answer when asked whether Russia would ever do a deal. "We are not going to cut supply artificially. Oil companies will act on their own. They will look at market forces and decide whether to invest more or less. If prices stay low, it is in the nature of oil companies to stabilize production, or even to cut production," he said.  Whether Russia really can withstand the strain for years is an open question. The economy is in deep recession. Output has contracted by 4pc over the last year. Real incomes have fallen by 9pc. The latest gambit may in reality be a negotiating ploy.

Truth and dicussion...about QE . UE and the Dollar

There is no jobs growth. The total hours worked in the US economy is the same as 15 years ago and most of the other economic indicators have been going south for months. The Fed is trapped and there is no way they can raise rates other than by a purely token amount without sending the whole thing rapidly to the dogs; in fact a recession next year is odds even if the Fed does nothing. We will get Big Bust 2 within the next 18 months...THERE WILL BE NO RATE RISE! Yellen knows full well you can't taper a Ponzi, so unless Goldman Sachs has massively shorted the markets and ordered its central banker minions to hike rates to crash the markets, Yellen will come up with yet another in her endless list of excuses to punt yet again on a rate hike. THERE WILL BE NO RATE RISE. Period. It's not like the Fed has any credibility left to lose. ..According to some soothsayers, there will be a 0.15% Fed rise BUT....after New Year there will be some more easing, say....$50 Billion. This time around the money printing will be in subsidies for the middle income earners. If the FED does not do this there will be turmoil and public protests. The Obama admin does not want this, not after the California shootings and most probably some more in the Christmas holiday season. The Obama gov needs the support of the public NOW more than ever....The Fed exists solely to further enrich the already super-rich. That means facilitating the looting and asset-stripping of the "middle income earners" (a soon to be extinct class) as part of the Fed's "No Billionaire Left Behind" monetary policy. The Fed will NEVER subsidize or otherwise give a damn about "middle income earners," much less savers, pensioners, and non-speculators, with whom it is in a state of undeclared financial warfare...The whole casino economy is built around perceptions. There are no relations between economic fundamentals and the value of the stock markets or the amount of public and private debt. A simple lack of confidence or misplaced rumor can cause a panic among investors. And then there's the trillions of debts owed in US dollars by entities who don't use the U.S. dollar as there native currency., Yellen will not raise rates in the absence of some exogenous event, i.e. a phone call from Goldman Sachs or the bond market going haywire as "investors" belatedly realize Yellen & her central banker cohorts are going to inflate away all government and TBTF banker debts and liabilities. 

THE AMERICAN WAY...

A company doesn’t find its way on Fortune‘s 100 Best Companies to Work For list by skimping around bonus time. That goes double for Houston-based Hilcorp, which landed at No. 20 on this year’s list on the strength of its generous bonus policy. The company told us earlier this year that if employees meet certain goals, that every one of them would receive a generous $100,000 bonus.  Well, it would appear that Hilcorp employees have fulfilled those goals because the firm just issued the bonuses as an early Christmas present, according to a report on KTVU in Houston.  “It’s just a true gift and I don’t think that myself along with everyone is not going to give less than 100% every day,” receptionist Amanda Thompson told the TV station.  This isn’t the first time that Hilcorp employees have been treated so generously by CEO Jeff Hildebrand. Fortune described the company’s attitude toward compensation earlier this year:  A “we are all in this together” culture, installed by Jeff Hildebrand when he founded this oil and gas company in 1989, manifests itself in open book management, rich bonuses averaging 33% of pay and outrageous rewards for meeting certain goals. In 2011 every employee received a voucher for $50,000 to buy a new car, or $35,000 cash (prorated based on hire date).  Fortune has reached out to Hilcorp and will update this story if the company responds.

The US Fed has delivered a nice blow "Christmas present" to Main Street businesses. The US Fed has NEVER cared about Main Street, it ONLY cares about Wall Street. The collapse of the US economy will accelerate, while the Fed pushes out fake statistics pretending things are OK...Yellen says policymakers have raised rates now "to keep the economy moving along the growth path its on ... we would like to avoid a situation where we have left so much accommodation in place for so long that we overshoot those objectives", meaning they are forced to "tighten abuptly" and risk undermining the recovery.  She says that while policymakers are "reasonably close" to achieving one part of their mandate: full employment, she recognises they are "significantly short" of achieving the second part: keeping inflation at 2pc. Policymakers will monitor the data closely in the coming months, though there is no formula on how policymakers would proceed with future rate hikes. Inflation stood at 0.2pc in October, well below the Fed's 2pc target. Yellen repeats that much of the recent downward pressure on inflation has come from "transitory factors" such as falling oil prices "that we expect to abate over time".  She says "diminishing labour slack" is expected to put "upward pressure" on inflation in the coming months. Yellen also reminds everyone that it takes time for monetary policy to filter through to the economy.  If policymakers delayed rate hikes for "too long" they may have to tighten "relatively abruptly to keep the economy from overheating and inflation from overshooting". This could push the economy back into recession, she says. She says "even after today's increase the stance remains accomodative", with the FOMC expecting "gradual increases in the Federal Funds Rate.

 

It's all good news....

Cheaper oil has initiated a historic wealth transfer effect of about $1 Tillion a year between net oil importers and oil exporters reversing decades of historical trend. The US alone gets $200 billion, and Europe and Asia (especially India and China) are even bigger beneficiaries of this massive wealth transfer by cheap oil.  This is what's called an economic stimulus - but from cheaper oil prices. The Middle East and Russia with constrained sovereign funds are the ones getting stuck with the bill.  Thank you cheap oil and carry on "drill baby drill!"  The crisis of 2008-9 is far from over. The policies of Neoliberal extremist ideology have created the worst inequity in human history and essentially a form of neo-feudalism.  What has been shown beyond doubt is the existential crisis of the economics profession. Not Stiglitz nor almost any other economist predicted the crisis. All their phony fake "scientific" "economic models" have failed because - as much as economists try to make it look differently - economics is at best a soft social science - not another form of physics.

Thousands of main stream economists have clearly sold out to the very powerful Neoliberal establishment and simply produce papers and models to suit power.  The economics profession has completely discredited itself and can't be trusted to produce accurate economic analysis. The profession is clearly operating under false assumptions and, for example, refuses to engage with psychologists and socialists to take into account actual human behavior rather than just postulating that everyone is rational all the time.  Stiglitz is the darling of the left just now but he is just as discredited as the rest and his views are a result of study in a field which has no basis in reason or rational thought.  Look for example at the Chicago School, when the crisis hit they said -- so what our work has nothing to do with predictions or accurate analysis of the economy - we just do theories and the crash of the economy is not our problem. Statements of this magnitude of self-aggrandizing baloney abound if the field of economics.  The issue of the total failure - in the most fundemantal ways - and refusal to accept their failure reaches the very core of Western thought and is corruptly eating away and the very foundations of Western economics.