The Holy See has announced this weekend that the planned recognition of Palestine as a state last summer, is now in effect. The move has drawn criticism from Israel. Equilibrio Informativo reports: “With reference to the Comprehensive Agreement between the Holy See and the State of Palestine, signed on 26 June 2015, the Holy See and the State of Palestine have notified each other that the procedural requirements for its entry into force have been fulfilled”, the Vatican announced Saturday.

Two months ago, and roughly 6 weeks before the Fed's first rate hike in 9 years, Janet Yellen warned that if the "outlook worsened, the fed might weight negative rates" adding that "negative rates could help encourage banks to lend."

North Korean leader Kim Jong-un was detained at London Heathrow airport for 12 hours before being deported after attempting to enter the United Kingdom in disguise and using a fake tourist visa, say Heathrow immigration officials. After arriving on an early morning Air China flight, his documents were questioned and he was taken into custody for further questioning.

Submitted by Peter Tchir of Brean Capital,

The Manufacturing Economy versus The Service Economy

As we start the new year, there is a debate raging within the market.  No the debate isn’t whether there is weakness in the manufacturing economy, that is taken as a given, especially after Friday’s awful Chicago Purchasing Manager number of 42.9.

No, the debate boils down to this:

The bears will argue that

The U.S. economy has always done poorly when manufacturing has turned this weak

 

With the Fed hiking rates in order to signal a "return of confidence" to the economy, one - the most important - aspect of a recovering economy continues to be absent: rising wages.

As the following chart showing the annual growth in wages of production and non-supervisory workers (who make up 83% of the US workforce) reveals, wage growth is not only well below the Fed's goal of 4.5%, at 1.7% it is below the Fed's goal of 2% inflation, suggestion that on a real basis wages would be declining if the Fed had attained its 2% inflation mandate.