B+

At this point, many readers may be thinking to themselves that it can’t get any worse. 

In a supreme twist of irony, Bear Stearns is back - maybe not the firm itself - but the people who were in charge of its distressed and junk bond trading group, and just like the summer of 2007, it is an ex "Bear"-run hedge fund that was the first to gate, just as the credit cycle is turning and the default cycle has begun, as we explained last week, just one day before everyone's attention finally focused on junk debt.

The doors are closing for investors looking to get out before the Crisis hits.

"As the leader of a military brigade, I am not fully satisfied with the government's action, and we are here to say that Iraq's patience has run out."

"We call on the Security Council to demand that Turkey withdraw its forces immediately and not to violate Iraqi sovereignty again."

It was a relatively calm overnight session in which European stocks wobbled modestly, Japan was up, China was down following its weakest fixing since 2011 as the PBOC continues to aggressively devalue since the SDR inclusion (stoking concerns capital outflows are once again surging), EM stocks stocks were weak and the dollar was unchanged ahead of today's retail sales data and next week's Fed meeting, and then suddenly everything snapped.

"What’s it like playing chess with Obama?" asks a top aid of Russian president Vladimir Putin. Putin replies, "It's like playing chess with a pigeon. First it knocks over all the pieces, then it shits on the board, and finally it struts around like it won."

This afternoon we got another completely amorphous claim from The Pentagon regarding the death of a “senior” ISIS commander when Special Presidential Envoy for the Global Coalition to Counter ISIL (whatever that is) Brett McGurk took to Twiiter to announce the death of an Islamic State FinMin.

After yesterday's rollercoaster session in both the S&P and in oil, where initially stocks soared alongside oil, only to promptly tumble as stops were taken out and as the refiners' inventory strategy was exposed after the DOE's latest weekly numbers were released, it has been a quieter session so far, though maybe not for China where stocks jumped at the open only to fizzle and close at the lows in what appears to be ever less intervention by the market manipulating "National Team."

Why does most brand-name beer taste like swill? Why has the standard of living across most of the Western world fallen by more than half over the past 40+ years? 

“I’ve always known about your and your people’s complete lack of trust in me and the PMDB. A lack of trust that is incompatible with what we’ve done to maintain personal and partisan support for your government.”

• Anti-Trump Effort Launches Super PAC (WSJ)
• Muslims decry Trump's proposal to keep them out of US (AP)
• Debate Heats Up Over No-Fly List, Gun Sales (WSJ)
• OPEC Takes Down Oil Majors as Lower-for-Even-Longer Kicks In (BBG)
• Chinese Companies Are Trapped in IPO Logjam (WSJ)
• Republican Ted Cruz vaults into first place in new Iowa poll (Reuters)

The left is now mixing terrorism and mass shootings to push a narrative to eviscerate the Second Amendment. We once again have rehashed stories about the AR-15 rifle, which isn’t as powerful as a hunting rifle and rarely used in crimes. And we have the media endorsing gun control policies that would require gun bans and confiscation. They’re insinuating parts of it, but the brash call to ban guns entirely is coming.

As one hedge fund favorite long crashes (Chipotle is down 9% in the pre-market), so another hedge fund favorite short is about to spike (once it reopens for trading). JAB Group has decided that now is the time to offer a 78% premium to current prices to buy Keurig Green Mountain for $92 (note that is still down over 40% from its highs a year ago). The stock is currently halted at $51.51 leaving the 12% short interest biting their nails at the prospect of major losses and a good 'volkswagen-ing'.

"While funding continued to be available, such a large negative basis indicates potential market dislocations. And this may call into question how smoothly US dollar funding conditions will adjust in the event of an increase in US onshore interest rates. Similar pricing anomalies have also emerged in interest rate swap markets recently, raising related concerns."

"... if nominal growth is 3 percent and the debt GDP ratio is 300 percent, the implied equilibrium nominal rates is around 1 percent. This is because at 1% rates, 100% of GDP growth is necessary to service interest costs."