Today's Headlines

Bloomberg:

• Greek Vote Puts ECB Funds at Risk as Crisis Memories Revived. Greece’s descent into political crisis is threatening the country’s financial system. The European Central Bank, already battling the risk of euro-area deflation, may soon have to decide whether to withdraw much of itsfunding for Greek lenders. Special rules on Greek assets accepted as collateral will become invalid if snap elections prevent the country from agreeing to a replacement for its bailout program by the end of February. The prospect of renewed Greek turmoil is reviving memories of the euro-area debt crisis, which started in the southern European nation in 2009 and spread until it threatened the survival of the single currency in 2012.

• Snap Election Risks Greek Lifeline; Nation's Stocks and Bonds Plunge on Government Defeat. Greece faces snap elections next month that risk severing the international lifeline that has supported the country since it sparked Europe’s sovereign debt crisis in 2010. Prime Minister Antonis Samaras said in a live broadcast in Athens today that he will recommend parliamentary elections are held on Jan. 25, almost 18 months before his coalition’s term was due to end. Samaras spoke after he failed in his third attempt to persuade lawmakers to back his candidate for head of state, forcing the legislature’s dissolution.

• Ukraine’s Talks With Separatists Yield No Deal as Clashes Flare. Talks between separatist officials and representatives of Ukraine’s military ended in Donetsk without an agreement as the authorities in Kiev accused rebels of reinforcing their positions in the country’s east. The negotiations will continue on Dec. 31 in Luhansk, another rebel-held stronghold in eastern Ukraine, a news website run by the self-proclaimed Donetsk People’s Republic, known by its Russian abbreviation DAN, reported, citing a local official it didn’t identify. The talks focused on a cease-fire, a prisoner swap, pulling back heavy weapons and implementing peace agreements, it said.

• Russian Economy Shrank in November for First Time Since 2009. Russia’s economy had its first decline since October 2009 last month as manufacturing and investment shrank when a currency rout pushed the ruble to a record low. Gross domestic product shrank 0.5 percent in November from a year earlier after a 0.5 percent increase in October, the Economy Ministry said in a report on its website today. GDP fell 0.2 percent from the previous month on a seasonally adjusted basis after a 0.1 percent advance in October. The economy of the world’s biggest energy exporter is facing its first recession since 2009 next year as oil, trading near a five-year low, and sanctions imposed over Ukraine stoke the country’s worst currency crisis since 1998. With oil prices at $60 a barrel, the economy may contract about 4 percent next year, according to Finance Minister Anton Siluanov.

• Emerging-Market Distressed Debt Loss Is Worst Since 2008. Emerging-market distressed debt losses are the worst this month since the global financial crisis. Bank of America Merrill Lynch’s Distressed Emerging Markets Corporate Plus Index fell 13.4 percent through Dec. 26, set for its worst performance since October 2008, as a tumble in the price of oil sparked a currency crisis in Russia. That brought this year’s decline to 19.7 percent, the most in six years. High-yield distressed securities in the U.S. lost 8 percent, the indexes show. Emerging markets accounted for 14 of the 56 global defaults this year in Standard & Poor’s coverage. 

• Search for AirAsia Jet Widens, but Did Delay Ruin Best Chance of Rescue?

• China Blocks Access to Google’s Gmail as Ban Escalates. China blocked access to Google Inc. (GOOG)’s e-mail service through third-party applications, adding Gmail to the list of services from the search company banned in the world’s largest Internet market. Traffic volume for Gmail dropped about 85 percent on Dec. 26 before falling further the following day and remains near zero today, according to data posted on Google’s Transparency Report page. 

• Europe Stocks Little Changed as Greece’s ASE Declines After Vote. European stocks ended little changed, erasing an earlier decline, while Greece’s ASE Index fell as the nation faces early elections after Prime Minister Antonis Samaras failed a third time to get enough backing for his presidential candidate. The Stoxx Europe 600 Index gained 0.1 percent to 344.27 at the close of trading in London, after falling as much as 0.8 percent. The Greek gauge slid 3.9 percent and as much as 11 percent, the most among 18 western-European markets. The retreat triggered a drop in Spain and Italy’s benchmark equity indexes. “This is bad news for Greece and the euro zone,” said Raimund Saxinger, who helps oversee $22 billion as a fund manager at Frankfurt-Trust Investment GmbH. “The next thing to watch is how the campaigning and the polls will evolve over the next few weeks.”

• Copper Reaches Four-Year Low in London on China Slowdown. Copper for delivery in three months on the LME fell 0.2 percent to settle at $6,290 a metric ton ($2.85 a pound) at 5:50 p.m. in London, after touching $6,230, the lowest since June 2010. 

• Oil Falls to 5-Year Low as Supply Glut Seen Lingering. Oil tumbled to the lowest level in more than five years amid speculation that a global supply glut that’s driven crude into a bear market will continue through the first half of 2015. West Texas Intermediate dropped as much as 3.3 percent, erasing an earlier gain spurred by an escalating conflict in Libya. Fires have been extinguished at three of six tanks at Es Sider, Libya’s largest oil port, which were set ablaze after an attack by militants, said National Oil Corp. spokesman Mohamed Elharari. Crude also fell as the dollar climbed to a two-year high against the euro, reducing the appeal of raw materials as a store of value.

Wall Street Journal: 

• Big Asian Debt Issuers Feel Pinch. Oil Price Drop, China Housing Slowdown Weigh on Energy and Property Companies. Asian companies issued record amounts of bonds this year, but some of that debt is turning sour as falling oil prices and a shakeout in China’s housing market hit energy companies and real-estate developers.

CNBC:

• No breather for Putin—or ruble—as Russia's economy slumps. (video)

ZeroHedge:

• WTI Hits $52 Handle As US Rig Count Tumbles To 8-Month Lows. (graph)

• Brazil's Economy Just Imploded. (graph)

• Just 5 Fun-Durr-Mental Charts. (graph)

• Dallas Fed Tumbles Below Lowest Estimate As Commodity Crash Comes Knocking. (graph)

• When Fearmongering Goes Bad: Greece Scrambles To Prevent Deposit Run Goldman Warned About In Its "Worst Case".

• Flight To Safety Sends 2Y German Yields To Record Low, -10bps! (graph)

• As Greek Bonds Top 12%, What Happens Next? (graph)

• Draghi's QE Plan In Jeopardy After IMF Suspends Aid For Greece Until New Government Is In Place.

Business Insider:

• Texas Business Executives Are Freaked Out About The Crash In Oil Prices.

• Shake Shack Just Filed For An IPO.

• Greece's Leading Prime Ministerial Candidate Could Throw Europe Back Into Crisis.

• There's A Massive Fire Raging At Libya's Largest Oil Port, And The Images Are Unbelievable. (pic)