A fourth hedge fund appeared to be going down today in the junk collapse, as Avenue Capital Group (not Third Avenue Capital, which failed last week) — suddenly lost $1 billion and had to stop withdrawals from one of its larger funds. Avenue Capital Group is significantly larger, with $12 billion in total assets under management, than the hedge and mutual funds which have failed in the past week, and its demise presumably will take longer. According to ZeroHedge, it owns two mutual funds, etc., and it is run by a Bill Clinton personal friend, Marc Lasry.

Various market “experts” (vulture investors) such as Wilbur Ross and Carl Icahn have made statements that they see the junk credit collapse starting “to contagion” into the much larger investment-grade corporate credit market, whose debt values fell sharply from Dec. 10-14, followed by a “general rally” on Dec. 15.

The zero-interest debt bubble on which Wall Street has been feasting for years, continues to erode the real U.S. economy in 2015. More industrial contraction was shown when the Empire State Federal Reserve’s business conditions index for December (in New York and parts of New England) “rose” to -4.6 from -10.7 in November and -11.4 in October. Unfortunately, -4.6 is still a contracting industrial sector in that region. The contraction is now six months long, and with one month’s exception, has lasted throughout 2015. Labor market conditions showed the worst deterioration; the New York Fed’s employment sub-index plunged deep into job loss at -16.2, and the average workweek declined sharply.

The trend of contracting manufacturing across the country is virtually unbroken throughout 2015, with only the West Coast (as shown in surveys by the San Francisco Federal Reserve Bank) a partial exception.

“The United States and our partners are not seeking so-called regime change,” Secretary of State John Kerry told reporters in the Russian capital after meeting Russian President Vladimir Putin and Foreign Minister Sergei Lavrov. He announced that the meeting tentatively scheduled for New York on Friday of the Vienna group would go forward.

Kerry reiterated that the U.S. does not think Bashar Assad can bring peace to Syria, but that the focus now is “not on our differences about what can or cannot be done immediately about Assad,” but on reaching a peace agreement in which “Syrians will be making decisions for the future of Syria.”

This has been Putin’s policy all along — that Syrians, not foreign interests, must decide on the Syrian government. That concept was agreed to in Vienna, but Obama nonetheless continued ranting that “Assad must go.”

Kerry went further, and said that Syrian opposition’s demand that Assad must leave as soon as peace talks begin was a “non-starting position, obviously.”

There are still problems to resolve, such as which rebel groups in Syria should be allowed to participate in the transition process and which should be deemed terrorists. Jordan is working on finalizing such a list.

Russian Foreign Minister Sergey Lavrov, speaking to the press with Kerry after the meeting with Putin, hailed what he described as a “big negotiating day,” saying the sides advanced efforts to define what a Syrian transition process might look like.

Kerry also referred to Ukraine with a very different tone than Obama, who hysterically describes Russia as isolated and collapsing economically due to his sanctions policy — which has harmed Western Europe more than Russia. Kerry said: “We don’t seek to isolate Russia as a matter of policy, no,” and said that the moves toward peace in Ukraine can lead to the sanctions being removed.

Kerry also announced that the meeting in New York tentatively scheduled for Friday, comprising the nations that have met twice in Vienna to discuss the Syrian issue, will now go forward.