Simone Foxman

US President Barack Obama is expected to tap Mary Jo White to head the Securities Exchange Commission in a press conference this afternoon. White, currently a partner at law firm Debevoise & Plimpton, is best known for her stint as an attorney for the southern district of New York from 1993 to 2002. Obama is probably choosing White for her experience in prosecuting white-collar crime, but she is better known for her work on terrorism. She started her career prosecuting the men who planned to bomb the World Trade Center in 1993 and ended it in the wake of the World Trade Center attacks on September 11, 2001.

Netflix reported today that its base of subscribers outside the United States grew from 4.31 million to 6.12 million in the final quarter of 2012, an increase of 42%. The Los Gatos, California, company had just 1.86 million international subscribers a year ago, meaning that it has grown abroad at an annual rate of 229%. Only 8% of Netflix’s subscribers in the fourth quarter of 2011 hailed from outside the US; now more than 18% do.

Next week the European Central Bank (ECB) will be the first of the world’s major central banks to start winding down its unprecedented monetary easing programs. These programs have led to record low interest rates worldwide, and we’ve written extensively on the sometimes peculiar effects of these low rates. But the ECB will become the first to actually reverse this program starting next week.

British Prime Minister David Cameron’s promise to hold a referendum on his country’s membership in the European Union was immediately hit with ridicule. As pundits were quick to note, Cameron seems to be angling not to leave the union (a poll showed that most Britons don’t want to, anyway) but to win the UK new freedoms in a changing Europe.

International Business Machines (IBM) reported earnings today that beat analyst estimates, causing shares to rally more than 3.3% in after hours trading. Earnings, which had been declining for the last few quarters, were flat year-over-year when adjusted for currency discrepancies, as the company brought in $29.3 billion in the fourth quarter. Though investors have reacted positively to the report, they might want to do a reality check: nearly all of IBM’s money-making software businesses are a decade old.

Markets have been riding a wave of optimism so far this year. Unfortunately, we’re about to rain on your parade.

Today, Verizon reported a $4.23 billion loss in its fourth quarter, due mostly to its costly pensions and benefits scheme. A shortfall in its pension fund also prompted AT&T last week to warn that it will take a $10 billion charge in its fourth quarter earnings, which it announces on Jan. 24—a sizeable setback against its expected $32.2 billion in fourth-quarter sales.

Central bankers these days seem to rule the world. While American legislators have become a byword for irresponsible economic stewardship in their “fiscal cliff” face-off, investors have become reasonably confident that Federal Reserve Chairman Ben Bernanke and European Central Bank President Mario Draghi will do what it takes to stimulate the US economy and save the euro, respectively.

The International Monetary Fund (IMF) has got some news, and it’s not going to please Germany and the other countries of the European north. In its latest report on the economic state of Greece, the IMF virtually admits that the current, hard-won plan to rescue the country—by lending it €130 billion ($173 billion) to help it bring down its debt burden to a target of 124% of GDP by 2020—simply isn’t good enough. Further, it projects a €5.5–9.5 billion funding gap, all of which Greece will have to face in 2015 and 2016. The fund writes:

With its Dreamliner planes grounded across the globe, Boeing’s fight for bragging rights as the world’s biggest passenger aircraft manufacturer  is at risk. The title of top supplier by order volume—which Boeing just clinched from Airbus for the first time in a decade for 2012—is something both companies mercilessly compete over. Depending upon the severity of the problems investigators uncover, they could be enough to cost Boeing that title going forward.

Citigroup has bragged repeatedly about its presence in markets across the world, calling its global presence “unrivaled.” The US-based bank takes pride in the fact that it operates in 71 countries and has more than 3,000 correspondent banks.

Yesterday Jean-Claude Juncker, who presides over meetings of European finance ministers, complained that the euro’s value has become “dangerously high.” The comments took many by surprise; it’s when the currency has been strongest that investors have shown the most faith in the euro’s continued survival. Indeed, growing faith that the euro zone will in fact stay together has left traders crowing about a “big leap in bullish sentiment,” in the words of Morgan Stanley’s currency team. The euro hit $1.34 on Monday—its highest value since February 2011.

Tomorrow, Jan. 16, US banks will release a flurry of financial statements and data in their third quarter earnings releases. Even to journalists who have to read these things every quarter, the numbers don’t really make sense. Earnings per share are far less important than what the banks themselves are invested in: Do they have exposure to excessive risk? Are they holding the right kind of assets? Are they lending to lots of people, are they making money on lending, or both?

Yesterday, the Office of the Comptroller of the Currency (pdf) and the Federal Reserve released enforcement actions against JP Morgan, the culmination of months of research into a more than $6 billion bad bet made by the bank’s so-called “chief investment office” (CIO) which spiraled out of control last spring.

Fresh rumors that Dell has been in talks with at least two private equity shops to take its business private have driven a massive rally in the company’s share price, up more than 12.7% to $12.28.

It’s been a year since the European Central Bank (ECB) all but bailed out the euro zone’s banks. In December 2011 and February 2012 the ECB provided them with a total of €1.02 trillion ($1.34 trillion) in the form of three-year cheap loans, as a way to encourage them to lend more to businesses, consumers and each other.

Although holiday shoppers spent $42.3 billion online this holiday season—14% more than they did at the same time in 2011—ComScore says that sales lagged sharply starting in early December. It believes that uncertainty generated by the fiscal cliff—the possibility that taxes would increase, government spending would fall, and Congress would have to debate the debt ceiling all over again—produced a “December swoon,” preventing online spending from reaching the $43.4 billion that was expected.

The US Federal Reserve has held interest rates incredibly low since late 2008, with the federal funds rate at or below 0.25%. It has taken unprecedented steps (like quantitative easing, or QE) to make money incredibly cheap for businesses, individuals, and banks. Until recently, most members of the Fed’s Open Market Committee (FOMC, which decides these things) have been adamant that, while these policies could do damage under other circumstances, they are necessary now to stimulate the economy.

Unconfirmed reports that Canada’s money melts when subjected to high heat have raised eyebrows about the Bank of Canada’s decision to begin printing polymer currency. It first started printing the plastic banknotes in late 2011, beginning with C$100 notes. Since then, a handful of residents have come forward, complaining that the notes shriveled up when placed in a tin can next to a heater or on a toaster, which of course is where all sensible people keep their cash. And so on Dec. 31, the bank released 134 pages of heavily redacted documents related to an investigation it conducted into the supposedly melting money, and said that discussing the matter further would pose a threat to national security.

What to watch for today

One of the deferred decisions in the fiscal-cliff deal the US Congress reached last night concerns another “cliff”. A plan called the Medicare Sustainable Growth Rate (SGR) attempts to control the spiraling costs of the government’s healthcare program for the elderly by capping payments to doctors, so that Medicare doesn’t grow faster than GDP. Every year since the SGR first slashed doctor pay in 2001, Congress, fearing the impact on elderly patients and on doctors, has waived the cuts. Every year, therefore, the cuts needed to keep the cost of Medicare costs on track grow bigger. Had this year’s temporary “doc fix” not been passed last night, Medicare payments to doctors would have fallen 27%.

The gridlock in Washington, DC is over—at least for now—and markets across the world are surging. The reaction is to be expected; economists have said the so-called “fiscal cliff”—a package of austerity measures that would have stifled government spending, increased taxes across the board, and instigated another debate about the federal debt ceiling—was the last obstacle preventing a recovery in the world’s largest economy.

Update 12:59 PM ET:

For most exchanges, there’s still one trading day left in the year, Monday Dec. 31, and it’s shaping up to be one of the most volatile we’ve seen in 2012. The cause: US leaders remain at an impasse over the so-called “fiscal cliff,” a package of austerity measures that would slash government spending, impose new taxes, and renew debates about the debt ceiling.