PIMCO Shares Its Thoughts On The BAB Dilemma; Discloses How It Is "Protecting" Itself From A Worst Case Scenario

From Pimco, which is heavily invested in munis, and has a very vested interested in the extension of the BAB program:

• The initial catalyst for the selloff in the tax-exempt muni market
  was the sharp selloff in the U.S. Treasury market. Also, a significant
  increase in supply weighed heavily upon the muni market.
• It now appears that the BABs program could be in jeopardy, as a
  provision to extend the program has not been included in the current
  Senate tax bill.
• The supply of tax-exempt municipals remains robust at a time when
  many investors do not have the cash flow to add to their muni holdings.

November Budget Deficit $150.4 Billion, Worse Than $138 Billion Consensus, Biggest November Deficit On Record

The Treasury has released the November deficit, which at $150.4 billion was about $12 billion worse than expected. Total receipts were $148 billion, of which individual income taxes were $64.3 billion, while the government actually refunded $3.1 billion for corporate taxes in the month. While cumulative receipts since the start of the new fiscal year are better than in the prior year period ($135.7 billion compared to $109.1 billion), it is the expense side that is far more important: in November the government spent $299.4 billion, the bulk of which going to the Department of Health and Human Services ($72 billion), social security ($64 billion), and Defense ($57 billion). The department of education saw a whopping $7.6 billion in funding in November. What is more troubling is that the interest expense is starting to rise: in the two months ended November 30, the US government paid $43.5 billion compared to $40.8 billion last year. Of course, this is to be expected, as total US debt is about $1 trillion higher now than it was last year. And, as always, what is most notable is that in November total debt increased by $192 billion to $13.861 trillion from $13.669 trillion. In other words, we are now at a point that every dollar in receipts is matched by 1.3 dollars in incremental debt.

Watch Senator Sanders' 3 Hour (So Far) Long Filibuster On Taxes... Update: At 6:58PM Sanders' Speech Has Ended, Almost 9 Hours Long

Senator Bernie Sanders commenced a filibuster speech at 10:25 am this morning objecting to the proposed tax extension. Three hours later, and now joined by Mary Landrieu, the soliloquy (or is that duoloquy) continues. While the backstage dealing will likely not be impacted much if at all by this speech, it does provide for entertaining viewing. Bernie sure is passionate about the topic.

After Six Hours Of Deliberations, Sergey Aleynikov Found Guilty

Score one for the farce team. That scourge to market efficiency, fairness and integrity, Sergey Aleynikov, about whom we have written tomes, has been found guilty. The HFT code in question, that can "manipulate markets" is safe and sound, back with its true master, Goldman Sachs, which firm promises its malicious attempt to squeeze CDS traders in 2007 is completely irrelevant, and the sheeple once again don't understand that the firm's intentions were nothing but pristine.

Rydex Nasdaq 100 Bull/Bear Ratio At Highest Since Dot Com Collapse

And for another confirmation that the Nasdaq is now at the same extreme "irrational exuberance" levels last seen during the dot com crash, we read courtesy of sentimenttrader.com that the Rydex Nasdaq 100 bull/bear ratio is now the highest it has been since just before the dot com crash. "Traders in the Rydex mutual fund family have poured into the Nasdaq 100 long fund at the expense of the inverse fund on the same index. These traders now have 34 times more money invested in the long fund vs. the inverse fund, which is the highest ratio since the bubble days of 2000 and early 2001." And what is scarier, is that unlike during the dot com, investors are using leveraged methods to express their exuberance: "The Bull / Bear Ratio for the leveraged funds isn't quite as extreme...but it's close (on a relative basis)."

Foxconn Employees Exceed 1 Million

The Apple borg collective has its foot soldiers too. And it turns out if they were to be mobilized, they would represent the world's fifth largest army... at just over 1 million. Bloomberg reports that the number of employees who diligently bring you your iPad, now exceeds a whopping 1 million. This however, does not make the company the biggest employer in the world: Walmart is reported to have 1.8 million "associates" worldwide, but at Foxconn's rate of growth it would not surprise us if even the staple American company were to be surpassed very soon.