Ciudadanos, Podemos,

PP, Socialistas,

Europe's periphery

Is getting slippery

O shun ye,

O run ye from mixed up Madrid.

New niño liders

Won Spanish voters

Ousted caste oldsters

Confounding los pollsters.

Ring out austeridade!

Ring in some novidade!

No real majoridade

From the electorade.

Rajoy's rejection in Spain's election

Causes dejection in stock exchanges.

All over Euroland, short-sellers in a band

Warn us that southern lands

All plot to offer voting for changes.

France, Portugal, Italy, Med states specifically

Can go Corbynard voting for lefties hard.

Let us sing gloria, without euphoria.

Spain's coalitions may find conditions.

Letting politicos keep their portfolios.

No new elections, avoiding perdition.

Sing goodwill to men of peace

I hope that Spain does not become Greece.

On other continents we are less confident.

Corruptly incompetent folks run down the dough.

Changing finances means high risks and chances

Dilma! Brasilia! Zuma! Pretoria! Clown advances.

How can these bozoes get back their mojos?

And at the hidden smart dough table

They merge whatever they are able.

Make new conglomerates

In auctions and aggregates

Building a Tower of Babel.

This Bethlehem or Bedlam road

Does not good outcomes bode

Save for the banker fees

If Spain does not go like Greece.

Rejoice with Rajoy

O tidings of joy!

Leave myrrh and frankensense

Gold is up some more cents!

*Abhimanyu Sisodia leads from India:

Morgan Stanley forecasts "slow but sustainable" growth of India's GDP at 7.5% in the current fiscal year to Mar. 2016, accelerating to 8.1% in FY17. Growth will be driven by capital spending, more consumption, and normalized exports while inflation to be under 5% for the next two years.

MS credits the Modi government's policies for improved macro stability.

If it works out, the forecast is good for Tata Motors (TTM). In a rare move in a competitive industry, TTM is teaming up with rivals Maruti Suzuki and Mahindra & Mahindra to develop components for electric and hybrid vehicles. This follows a Supreme Court ruling cutting down on Delhi diesel vehicles, likely to be applied to other cities. Automakers are combining to drive down costs while setting standards for a potential fast growth sector. India is promoting use of hybrids and electric vehicles, and launched the “Faster Adoption and Manufacturing of Electric” FAME scheme in April which provides $2 bn in heavy industry incentives to both manufacturers and consumers of electric and hybrid vehicles. Thanks to heavy R&D spending for Britain's Jaguar-Landrover leads in develop Indian clean cars.

TTM is also examining setting up an assembly plant in Nigeria where it has a surprising 15% market share with the largest product line, including John Deere (DE) tractors, for which it is the local distributor.

Bancos

*A lawsuit against the banksters of Banco Espirito Santo (BES) who put out a series of zero coupon bonds in the run-up to an April 2014 capital increase, used to secretly prop up BES's offshore Luxembourg holding company has been brought by US and European investors. They are seeking euros 105 bn in a case likely to hit the courts in 2016. The story was broken in today's Financial Times from London. The lead defendant is Ricardo Espirito Santo who headed BES, who is under house-arrest at the Boca de Inferno estate where the Duke of Windsor and Mrs. Simpson spent their honeymoon, not exactly a chain gang. The bank board claims that because its capital increase was approved by the Banco de Portugal, the central bank, they are not responsible. They also argue that the takeover of BES by the CB rather than its rotten accounts caused the collapse.

We have a horse in this race as among the buyers of the zero coupon bonds was our Portugal Telecom whose CFO, a BES appointee from the privatization, ordered the move without board approval. We may be well down the list of beneficiaries if the claim is upheld. It is being filed by Deminor Recovery Services, an investor rights operation, acting this time on behalf of institutional investors.

*The big chill in Spain of took down our share there, Banco Santander (SAN). SAN now yields 11.35% in euros. Of course if Spain goes down the drain the euro will also. It is up hoje.

*Like Volkwagen, Deutsche Bank (DB) thinks it is immune. The total of its illicit trades on behalf of Russian being boycotted by western countries over Ukraine has now reached $10 bn after another $4 bn was discovered, according to Bloomberg. The 1 bn euros set aside for reserves in Oct is not adequate now. What were they thinking?

Oilpatch News

*The death toll at the tailings dam in Samarco has risen to 17 with 2 more missing and presumed dead. Compared to what happened in Shenzhen, a large Chinese city, the Brazilians turn out to have been relatively cautious. It now turns out that the failed dam was wholly owned and managed by BHP-Billiton (BHP), but also used for waste from its mines elsewhere in Minas Gerais province by Vale (VALE). It is in order to force VALE to share in paying for the cleanup that so many court injunctions have been made.

And meanwhile, back in Brasilia, Dilma Rousseff is taking a page from Jacob Zuma's playbook, firing her respected austerity-minded finance minister, Jocquim Levy and replacing him with party hack Nelson Barbosa. The Biblical Joaquim, variously spelled, was the grandfather (avo) of the baby whose birthday falls on Friday, although Prof. Levy may not be a Christian.

*Delek Group (DGRLY) is being sued by Israeli Parliamentarians who were unable to vote down the accord with the government because it was imposed by decree for national security reasons. Members of the Knesset of the left are filing claims which probably will not get very far to impose new conditions to increase competition for Israel's miracle offshore Leviathan gas field. The court may rule them out of order without trial, saving DGRLY legal fees. But don't count on it.

As Delek had hoped to sell its Phoenix Insurance arm in Israel to Fosun International, it is among the sufferers from uncertainties about what the Chinese govt was up to when it took the Fosun chief into custody. Earlier, Delek was barred by the regulatory from selling Phoenix to Donald Trump's daughter Ivanka and her realtor husband. The Donald and Hillary Clinton both have sons-in-law with distinctly unsavory fathers.

Meanwhile Delek's board has passed an NIS 100 mn buyback scheme applying to our beaten-down common shares. Don't sell unless you are desperate for cash, because in the longer run even Israelis do not persist in shooting themselves in the foot.

*Ecopetrol (EC) is up, maybe because it is not in Mexico or Brazil but Colombia. EC's country did not win the Miss World cup but, nyah, nyah, nyah, the Philippines has no oil.

*Mexican Offshore Drilling US$ bonds are yielding nearly 17% as the issuing company, wholly dependent on orders from Pemex, is not getting the expected day rates, Eduardo Garcia writes in www.sentidocomun.com.mx

*BP (BP) bought Devon Energy sites in New Mexico and Colorado, presumably expecting higher natural gas prices. And it presumably got the fields cheaply thanks to having more cash than the sellers.

Drugs

*Royal Bank of Canada in a report on the drug industry cited Teva (TEVA) as a likely bolt-on buyer, also because it is less financially stressed than other drug firms after its modest M&A operations in 2015 and its ample capital. I have to admit I prefer bolt-ons to buyouts, but find the whole circus scary. Teva is up despite the lower shekel, presumably because Israeli risk is now perceived as lower than Euro risk.

Fundos

*European Equity Fund will pay out 7¢/sh on Jan 18, 2016 to shareholders of record New Year's Eve. On Jan. 4 you may want to sell EEF unless that Spanish electoral crisis clears up by then, which is unlikely.