As Oil Prices Plunge, Nigeria Exclaims It Is Not Zimbabwe

Having already raised rates and devalued the Naira (and widened its trading bands), the Nigerian currency continues to collapse to new record lows as crude crashes lower and lower. Having tumbled 11.5% since oil prices peaked, the Naira is holdinga round 184/USD - over 9% above the new peg and dramatically outside of the new trading bands of +/-5% as it seems capital flight is out of control. That is probably why, as Bloomberg reports, Finance Minister Ngozi Okonjo-Iweala has commented that Nigeria won’t resort to printing money or imprudent borrowing as it adjusts to lower prices of oil. “This is not the first time this country has gone through lower oil prices and it will not be the last,” she said - making it very clear that Nigeria is not Zimbabwe (yet).

Another Epic Squeeze: "Most Shorted" Soar Over 3% Off Today's Lows

While the S&P 500, Dow, and Trannies remain in the red (just), the meltup off the opening lows is something to behold as Small Caps are now +1.3% on the day. The driver of this muppetry... a huge squeeze of "most shorted" stocks once again that took them from down over 2.5% at the open to higher by more than 0.5% now... Stocks, though, have decoupled from credit and USDJPY in this last vertical ramp.

Interest Rates Have Nowhere To Go But Up... Right?

With interest rates near their lowest levels on record, they have nowhere to go from here "but up." This is the consensus of virtually all of the analysts and economists on Wall Street which currently suggests that rates will rise to 3.88% next year on the 30-year treasury. Is everyone still wrong?

Is This The Mystery Crude Oil Liquidator? The "God Of Crude Oil Trading" Taps Out

Two months ago, when the first tremors in the crude market appeared, we wondered, jokingly, if one of the biggest crude bulls, Phibro's (and formerly Citi's uber-well paid trader) Andy Hall was puking blood yet. "Any crude BWICs from Andy Hall yet?" But while we may have been joking, for Andy Hall things were only all too real. So real, in fact, he just lost his job according to Bloomberg.

OIL TRADER ANDREW HALL SAID TO LEAVE PHIBRO BY YR-END: SOURCES

So is Hall's unwind the source of what some say is a relentless, rolling liquidation within the commodity space?

Guest Post: Central Banks Create Deflation, Not Inflation

If there's one absolute truism we hear again and again, it's that central banks are desperately trying to create inflation. Perversely, their easy-money policies actually generation the exact opposite: deflation. Financial and risk bubbles don't pop in a vacuum--all the phantom collateral constructed with mal-invested free money for financiers will also implode.

VIX Spikes Over 16, Biggest 2-Day Surge In 2 Months As Credit Contagion Spreads

VIX has been unable to make lower lows as stocks made higher highs in recent weeks as it appears managers protected these insane gains of the last few weeks rather than piled in - beta-chase-style - as financial media would have us believe. VIX has broken back above 16 this morning adding to its biggest 2-day surge in 2 months and suggesting notably more downside for stocks from here. We suspect credit hedgers are spilling over into the equity protection markets as bond liquidty dries up and protection costs soar.

"We Tortured Some Folks": CIA Lied To Congress, Senate Torture Report Reveals

In what we are confident everyone will find to be absolutely shocking news, moments ago the Senate Torture report was released. The key finding, hold on to your hats, is that the CIA "misled" Congress. As for the timing of the release, which takes place at the same time as Jonathan Gruber (Ph.D) is being grilled in the House, it is hardly a coincidence that Obama does everything in his power to deflect attention to what took place under the Bush administration, commenting that "torture techniques did significant damage to America’s standing” in the world. So what did the droning of thousands of innocent civilians do to the same "standing"?

Small Caps Plunge Negative Year-To-Date (Again) As 10Y Slides Below 2.20%

10Y yields are back below 2.20% and 30Y below 2.85% - awkwardly close to the Bullard lows - and stocks appear to be waking up to the massive squeeze-driven decoupling in the last 6 weeks (as USDJPY tests below 118.00). Small Cap Russell 2000 has plunged back into the red year-to-date, and the rest of the equity complex is not "off the lows". Remember, it's all about the fun-durr-mentals.

USDJPY Collapses 350 Pips, Drags Japanese Stocks Down 700 Points

China's overnight destruction of $80 billion of eligible collateral from the great global carry trade has had destructive consequences on the massively crowded short JPY (long USDJPY) trade. Haviung already lost ground following the dismal downward revisions in GDP, USDJPY is down 350 pips from yesterday morning's highs (This is the biggest 2-day drop in USDJPY in 18 months.) and the Nikkei 225 is down over 700 points in the same period... Abe approval ratings are plunging-er.  Did the downward revision to Japanese GDP straw finally break the back of the Central Bank Omnipotence camel?

Citi Pays $3.5 Billion To Keep Its Employees Out Of Jail For Yet Another Quarter

Alongside the just announced revenue warning, Citi's CEO Corbat also announced yet another $2.7 billion in legal, related charges in 4Q, as well as another $800 million in repositioning expenses. This simply means that for yet another quarter Citi will be charged with billions in recurring, non-one time "one-time, non-recurring" charges which will be dutifully added back to non-GAAP EPS by analysts at all the other banks (whose criminal employers are now engaged in the same racket with the US government). But what it really means is that it cost Citi some $3.5 billion to keep its employees out of jail for yet another 3 months.

"More Scarecrows Than People": A Tragic Preview Of Japan's Terminal Collapse

A few weeks ago it was revealed that the mystery person behind the latest bout of monetary (if not so much fiscal) insanity in Japan is none other than Paul Krugman, a fact which has since assured the fate of Japan as a failed state: the demographically imploding country now has at best a few years (if not less) before it implodes into a hyperinflationary supernova. And for a very graphic, and tragic, preview of Japan's endgame - the direct result of following Keynesian and monetarist policies to a tee - we go to the AP, which looks at the village of Nagoro, located "deep in the rugged mountains of southern Japan once was home to hundreds of families" and finds that now, only 35 people remain, outnumbered three-to-one by scarecrows that Tsukimi Ayano crafted to help fill the days and replace neighbors who died or moved away. This and nothing more, is what all of Japan has to look forward to as it slowly (or very rapidly) fades away to nothing.

Venezuelan Bonds Crash To Lowest Price Since 1998

Bond prices in Venezuela have totally collapsed this morning - at 45c on the dollar, they are the lowest since 1998 - as the realization of the "abyss" they are staring into sparks an exodus from all credit positions in the country. VENZ 5Y CDS rallied 130bps which signals hedgers unwinding and the simultaneous sale of the underlying bonds implies broad-based capital flight (and profit taking) as 1Y CDS surges to record highs at 4830bps.

Willem "Gold-Is-A-6000-Year-Bubble" Buiter Joins Council on Foreign Relations As Senior Fellow

"Distinguished Economist Willem Buiter Joins CFR as Senior Fellow

Willem H. Buiter, a renowned macroeconomist and global chief economist at Citigroup, has joined the Council on Foreign Relations (CFR) as an adjunct senior fellow. His work will focus on geoeconomics, deglobalization, international financial institutions, and global economic governance. “We are thrilled to have someone of Willem Buiter’s experience and reputation joining CFR,” said CFR President Richard N. Haass. “His presence will make an already strong economics program that much stronger.” Buiter is the newest addition to CFR’s Maurice R. Greenberg Center for Geoeconomic Studies, which provides analysis on how economic and geopolitical forces interact to influence world affairs."

High-Yield Credit Crash Accelerates

High-yield energy bond spreads are crashing-er. Up 15bps to 880bps today, these are record wides and massively impact the economics of these firms - no matter how much investors want to ignore it. This is contagiously spreading across the broad high yield and even investment grade credit markets as high yield bond prices crash below the mid-October Bullard lows...