Watch Politicians Pander To Wall Street/Money Printing For Four More Years Here

The hearing for the reconfirmation of the Honorable Chairman of the Year can be watched here live. Wall Street's emissaries can be vaguely seen in the background, taking notes of which Senator will not receive their bonus check this year.

Frontrunning: December 17

• Weil: Five lessons for next time banks come begging (Bloomberg)
• Wake up call for the Fed: ECB to start consulting banks, investors on collateral (Bloomberg)
• Ex-wife sues Steve Cohen, claims he was involved in insider trading (WSJ)
• Goldman driving YRC Trucking into bankruptcy, Hoffa says (HuffPo)
• Democrats blues grow deeper in new poll (WSJ)
• Whitney cuts Goldman Sachs, Morgan Stanley estimates (Bloomberg)

Peanut Butter Carry (Unwind) Time

The EURUSD 50 DMA of $1.41 is fast approaching, just as Goldman predicted. The dollar is now back to early September levels, as the predicted unwind of the carry trade is among us. Was the European implosion really all that unpredictable? With equities lagging, once the reality of the move is comprehended, look out below in stocks.

Guest Post: American Purgatory

We, the entitled society, morally and fiscally bankrupt have borrowed, spent, and bailed our way into a historical corner. Nero should be so proud. Our public trusts are nothing more than government sanctioned check-kiting operations shifting liabilities from one credit card to another faster than our creditors can say “Federal Reserve.” The Ponzi-scheme that is our fiat currency system is about to go the way of what was for a time the symbol of American superiority, General Motors. It used to be said that what was good for General Motors was good for our nation. As I claimed in 2005 that GM would go bankrupt I will now guarantee that the US government is soon to follow. How our ultimate entropy will take form I cannot say, but form it will. We will default. We will restructure. It will be at this point our arrogance will end.

Honeywell's Pension Underfunding Mea Culpa

Today's Honeywell investor presentation provided another example of the wholesale "kick the can down the road" mentality that has gripped America. And while this myopic approach to the future is fully expected out of the 218 patriots who voted to keep increasing America's debt ceiling, impending debt repudiation be damned, such a shallow view has traditionally not been expected out of corporate America. Until now.

So Much For The Taxpayer Profit In Citi: Treasury Shares To Be Offloaded Over 12 Months After Investors Balk At Overpriced Toxic Holdings

It was just a matter of time before the administration's covert plan of rewarding bank execs for massive failure by allowing them to load up their balance sheets with record risk once again, while paying out historic bonuses, blew up in Larry Summers' face. Today's attempt by the government to not only allow the failed Citi management team to pay itself an infinite amount of money more than it deserves for destroying one of America's landmark companies (why the hell is Vikram Pandit still in charge of the Titanic?) but to pretend that it "generated" another taxpayer win by selling off its shares at a profit, was aborted after hours, when Citi could barely find enough interest to sell $17 billion at the embarrassingly low price of $3.15, below that government's cost basis. This will preclude Obama from making a TV appearance tomorrow of how the US taxpayer made even more money by backstopping Moral Hazard. What the US taxpayer however did do, is funnel money straight out of its pocket, into that of Vikram's worthless lackeys. We somehow doubt this will make the teleprompter of whatever it is Obama will be praising in his TeeVeethon tomorrow.

Are Reg NMS And The Explosion Of Various ATS The Source For The Stock Market's Volume Explosion?

A useful chart from Themis Trading presents the exponential jump in stock volume since the adoption of Reg NMS and the appearance of various ECN/ATS middlemen, whose primary goal in life is to scalp spread... sorry, provide liquidity to an extent never seen prior to 2007. It is these very organizations, and the scores of micro traders who make money only courtesy of the resultant increased daily speculation and momentum escalation, that are now screaming about the implications of what proposed Reg NMS 2 would do to their top and bottom line, for obvious reasons. The explosion in volume of course is notsynonymous with an increase in liquidity, unless one counts the "huge" benefit that one gets by trading Citi in 20 different exchanges (Citi alone accounted for 20% of NYSE volume today). The "strange attractor" of HFT, in which a HFT dominated stock attracts more HFTstrategies with the flip of a switch, is the only "benefit" of magnified "liquidity", while the threat of massive systemic imbalance as every single trader jumps on the same side of the trade, as highlighted recently by traders such as Wilmott and many others, continues growing ever larger. It is time to take the market back from all these various tolling operations which provide absolutely no real benefits to the market.