Greece was expected to report by noon (5 EST) whether its political parties have agreed to accept austerity proposals, according to a deadline set by Prime Minister Lucas Papademos.

Less than an hour before the deadline, however, a Greek official told Reuters that there is no deadline today.

Via FT’s Chris Adams:

• All notion of a deadline vanishes: Greek official says no deadline on Monday for political leaders to respond to bail-out terms (!) – RTRS
• Greek govt official says only deadline is for Greek govt, EU/IMF inspectors, political leaders to reach a deal before Eurogroup meeting -RTR
• Which all means, as we knew, that EZ ministers will meet if/when a deal is reached, which will be the moment when a deadline is reached. QED

See here who gets clobbered if Greece defaults >

Meanwhile European markets are mostly lower,  lead by the Cac 40 down over 1%.

Dow futures are down 64 points and S&P 500 futures have dropped 8 points.

Asian markets had a better day  catching up to a strong rally in the US on Friday, with the Nikkei up 1.1 percent to a three-month high.

It is a risk off day, tweets WSJ’s Richard Barley, with bunds taking back all of Friday’s sell-off and the yield on the US 10-year declining 7 basis points to 1.86 percent.

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Being in the top one percent nationwide requires you to have a household income of $383,001. These people are affluent but they aren’t exactly fat cats.

But the top one percent in the following ten cities is loaded, according to Sentier Research.

The highest cutoff is in Stamford, Conn. — America’s hedge fund capital —  where you need a household income of $906,006 to be in the top one percent. That’s right, you could bring home $900,000 and still be grouped with the 99 percent.

Here are the cities where it means something to be in the 1 percent:

What people should be talking about when it comes to inequality is the upper 0.1 percent, which has seen really impressive income gains in recent decades.

[Chart provided by Sentier Research, which tracks information about household income arount the country.]

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Asian markets are mostly higher, with Shanghai up 1.2% and the Nikkei up 0.6%.

European markets are flat.

Dow futures point to a small drop at the open.

For the year, the S&P 500 is up 5.38 or 0.43%. Even if it finishes in the green, this will have been a throwaway year for stocks.

Gold has recovered to $1562 per ounce after falling to around $1520 yesterday. The euro is also bouncing back against the dollar.

Somehow the Dow remains one of the best performing stock markets of the year.

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In a single minute there are over 695,000 status updates on Facebook. That’s just one example of the mind boggling scale of online activity.

The following infographics show a bunch of other incredible things that happen in 60 seconds (via Barry Ritholtz).

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There have been no big crises in Asian markets today to spoil your Christmas vacation.

Most of the region is trading higher, led by the Hang Seng up 1.27%. The Nikkei, which was closed Friday, ended up 1.1%.

Shanghai, however, was trading down 0.7% and Korea’s Kospi finished down 0.6%.

The Santa Claus Rally for is on track for the U.S., with the DJIA up 2.06% this month. Another nice seasonal trend is that the five trading days before New Years and the two after have seen positive returns 31 out of the past 41 times, according to Marketwatch.

Economic releases this week include Case-Shiller and several Fed manufacturing surveys. Calculated Risk has a complete guide..

Don’t Miss: 16 Of Wall Street’s Sharpest Minds Predict Where Stocks Are Headed In 2012

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Shorting the euro is more popular among hedge funds than ever, according to Societe Generale’s Hedge Fund Watch.

Short positions on the euro, which is trading around $1.30, passed the previous peak in June 2010, when it was trading at $1.19.

Hedge funds also like shorting the pound, buying the yen, shorting natural gas and buying crude oil. Of course you might not want to follow hedge funds after a year of poor returns and steady outflows.

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Every December Saxo Bank puts out ten outrageous predictions for the coming year, in order to draw attention to outlier risks.

Some of Saxo’s 2011 black swans came true, including the US 30-year falling to 3% and gold rising to $1800.

Here’s the new list (via Pragmatic Capitalism):

1. The stock of Apple Inc plummets 50 per cent from 2011 high

Going into 2012, Apple will find itself faced with multiple competitors such as Google, Amazon, Microsoft/Nokia, and Samsung across its most innovative products, the iPhone and iPad. Apple will be unable to maintain its market share of 55 per cent (three times as much as Android) and 66 per cent on the iOS and iPad.

2. EU declares extended bank holiday during 2012

The December EU Treaty changes prove insufficient to solve EU funding needs – particularly those in Italy – and the EU debt crisis returns with a vengeance by mid-year. In response, the stock market finally caves in and drops 25 per cent in short order, prompting EU politicians to call an extended bank holiday – closing all European exchanges and banks for a week or more.

3. A yet unannounced candidate takes the White House

In 1992, Texas billionaire Ross Perot managed to take advantage of a recessionary economy and popular disgust with US politics and reap 18.9 per cent of the popular vote. Three years of Obama has brought too little change and only additional widespread disillusionment with the entire US political system, and conditions for a third party candidate have never been riper. Someone with a strong programme for real change throws his or her hat in the ring early in 2012 and snatches the presidency in November in one of the most pivotal elections in US history, taking 38 per cent of the popular vote.

4. Australia goes into recession

The effects of the slowing up-and-coming Asian giant ripple through Asia Pacific push other countries into recession. If there ever was a country dependent on the well-being of China it is Australia with its heavy dependence on mining and natural resources. And as China’s demand for these goods weakens, Australia is pushed into a recession, which is then exacerbated as the housing sector finally experiences its long overdue crash –a half decade after the rest of the developed world.

5. Basel III and regulation force 50 bank nationalisations in Europe

As 2012 begins, pressure will mount on the European banking system as new capital requirements and regulatory pressure force banks to deleverage in a great hurry. This creates a fire sale on financial assets as there are few takers in the market. A total freeze of the European interbank market forces nervous savers to make bank-runs, as depositors distrust deposit guarantees from insolvent sovereigns. More than 50 banks end up on government balance sheets and several known commercial bank brands cease to exist.

6. Sweden and Norway replace Switzerland as safe havens

As we saw with Switzerland, becoming a safe haven in a world of devaluing central banks presents a number of risks to a country’s economy. The capital markets of both countries are far smaller than Switzerland, but the Swiss are aggressively devaluing their currency and money managers are looking for new safe havens for capital. Flows into the two countries’ government bonds on safe haven appeal becomes popular enough to drive 10-yearrates there to more than 100 basis points below the classic safe haven German Bunds.

7. Swiss National Bank wins and catapults EURCHF to 1.50

Switzerland’s persistency in fighting the appreciation of its currency will continue to pay off in 2012. With Swiss fundamentals –particularly export related – continuing to suffer mightily in 2012 from past CHF strength, the SNB and government bear down further to prevent more collateral damage and introduce extensions to existing programmes and even negative interest rates to trigger sufficient capital flight from the traditional safe haven of Switzerland to engineer a move in EURCHF as high as1.50 during the year.

8. USDCNY rises 10 per cent to 7.00

As marginal returns from building million-inhabitant ghost towns diminish and exporters struggle with razor-thin margins due to the advancing CNY China gets to the brink of a “recession”, meaning 5-6 per cent GDP growth. Chinese policymakers come to the rescue of exporters by allowing the CNY to decline against a US Dollar – buoyed by its safe-haven status amid slowing global growth and an on-going Eurozone sovereign debt crisis – and send the pair up to 7.00 for a 10 percent increase.

9. Baltic Dry Index rises 100 per cent

Lower oil prices in 2012 could lead to an increase in the Baltic Dry Index as operating expenses go down. Brazil and Australia are expected to expand iron ore supply, further leading to lower prices and therefore higher import demand from China to satisfy its insatiable industrial production. In combination with monetary easing this leads to a massive spike in iron ore demand.

10. Wheat prices to double in 2012

The price of CBOT wheat will double during 2012 after having been the worst performing crop in 2011. With 7 billion people on the earth and money printing machines at full throttle, bad weather across the world will unfortunately return and make it a tricky year for agricultural products. Wheat especially will rally strongly as speculative investors, who had built up one of the biggest short positions on record, will help drive the price back towards the record high last seen in 2008.

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California’s pension system is living in a fantasy world where investment returns average 12.5% annually and there’s enough money for everyone.

Unfortunately that’s not going to happen. A big study from Stanford Professor Joe Nation along with California Common Sense analyzed the need for major cuts to CalPERS, CalSTRS and UCRP.

The largest union, CalPERS, has a 82% chance of a budget shortfall in the next 16 years.

More highlights via Eric Savitz at Forbes:

• The June funded ratio, which measures assets to liabilities. is only 74% for CalPERS even using a high-rate of return assumption for its investments. Assume a 6.2% return, and the funded ratio drops to 58%. On the same basis, the funded status is 60% for CalSTRS and 72% for UCRP.
• The total unfunded liability for all three systems is close to $300 billion at a 6.2% rate of return; assume a 7.75% return and the shortfall is still $142.6 billion, “or nearly $12,000 per California household.” Using a low-risk discount rate, and the total unfunded liability balloons to $498 billion.
• The reports contends it is “highly unlikely” the funds can invest their way out of the issue; to do that, CalPERS would have to average 12.5% a year for 16 years.

Every day California delays major reform — screw the legal obstacles — costs $3.4 million.

Would you sleep soundly with these odds?

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Villagers in Wukan, China have chased away local police and government after a mass protest against corruption.

The Telegraph’s Malcolm Moore filed a report and is tweeting from inside the besieged village.

The situation has been brewing for months, with violent riots breaking out in September too. People are upset over local corruption, particularly regarding seizures of agricultural land to build housing developments. Initially it seemed like the protest movement was working as the government agreed to review all land deals going back to 1976.

Moore tweets: “At the edge of town, around 100 palatial three and four storey houses now upsetting villagers – they were built on farmland. #Wukan:

Wukan is now under siege and blockade, with around ten days of food remaining, according to Moore.

The Chinese government tolerates some government protests as long as they aren’t directed against the central government. Beijing now has three options, according to commentary by China Geek’s C. Custer:

1. Come to the rescue of the down, declare the local government officials corrupt, put them on trial and restore order peacefully. This is, I suspect, exactly what the people in Wukan want.
2. Come to the rescue of the officials and provide them enough manpower to completely crush the rebellion. This would be easy, but would attract a lot of negative attention internationally, and there’s a risk of it leaking online domestically, too.
3. Do nothing for the time being, and see if the officials can regain control on their own, or if the rebellion spreads.

Here are a few pictures of the rebellion from Weibo (via China Geeks).

Don’t miss 16 facts about China that will melt your mind >

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A nice little rant from fund manager John Hussman earlier this week about the stimulus-driven market (via Mish):

Frankly, I am concerned that Wall Street is becoming little more than a glorified crack house. Day after day, the sole focus of Wall Street is on more sugar, stronger sugar, Big Bazookas of sugar, unlimited sugar, and anything that will get somebody to deliver the sugar faster. This is like offering a lollipop to quiet down a 2-year old throwing a tantrum, and expecting that the result will be fewer tantrums.

What we have increasingly observed over the past decade is nothing but the gradual destruction of the ability of the financial markets to allocate capital for the benefit of future growth. By preventing the natural discipline of the markets to impose losses on poor stewards of capital, and to impose interest rates high enough to force debtors to allocate the capital usefully, the world’s policy makers are increasingly wrecking the prospects for long-term economic growth. The world’s standard of living (what we can consume for the work we do) is intimately tied to its productivity (what we can produce for the work we do). That productivity requires our scarce savings to be allocated to productive physical capital, and to productive human capital (primarily education).

Nietzsche famously said “What does not kill me makes me stronger.” The corollary is “What constantly rescues me makes me weaker.” The world will only stop looking for bailouts when policy makers stop handing them out.

Hussman also puts the odds of a U.S. recession at over 80% based on a composite of recession indicators.

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