Australia

It all started off relatively well: oil and US equity futures were buoyant on hopes Iran and Saudi Arabia would break out in a bloody conflict any minute boosting the net worth of shareholders of the military industrial complex, and then, out of nowhere, like a depressed China in a bull shop, the "mainland" crashed the party and it all well south very, very quickly...

The unfolding correction of the visible excesses of the credit inflation - such as overinvestment and malinvestment - will destroy incomes and profits; the Great Unwind of the less visible effects, such as the sovereign wealth fund liquidations, are a giant pin aimed squarely at the monumental worldwide bubbles in stock, bonds and real estate.

The Muslim population of Britain surpassed 3.5 million in 2015 to become around 5.5% of the overall population of 64 million. In real terms, Britain has the third-largest Muslim population in the European Union, after France, then Germany. Islam and Islam-related issues were omnipresent in Britain during 2015, and can be categorized into five broad themes: 1) Islamic extremism and the security implications of British jihadists in Syria and Iraq; 2) the continuing spread of Islamic Sharia law in Britain; 3) the sexual exploitation of British children by Muslim gangs; 4) Muslim integration into British society; and 5) the failures of British multiculturalism.

This cannnot end well...

Russia adds another 700,000 ounces (22 tonnes) to gold reserves in November. Ally Kazakhstan increased gold reserves for 38th month –  to over 7 million ounces. Russia views gold bullion as “100% guarantee from legal and political risks ...”

It has been a seesaw session with U.S. stock index futures following their dramatic buying burst in the last half hour of market trading yesterday by first rising, then falling, then rising again alongside European equities both driven almost tick for tick with even the smallest move in the carry trade of choice, the USDJPY, even as Asian shares trade near intraday highs after China’s leaders signaled they will take further steps to support growth.

We now enter the “discovery” phase of financial collapse, where things labeled “capital” and “credit” turn out to be mere holograms. It’s not just the Federal Reserve; everything around us is backed into a corner as the rude discovery that capital is not what it has appeared to be is now underway, with the power to derail political systems and societies.

This weekend the force was strong with thirty (and forty, and fifty) year-olds, wishing to awaken memories of their youthful days with an admirable redo of the first Star Wars movie, first released nearly 40 years ago. But the force has never been stronger with Disney which is expected to rake in a record-breaking $238 million in opening weekend box office sales in the US and Canada, and a near-record $279 million overseas, a grand total of well over half a billion around the globe.

Following the latest BOJ statement, the market found itself wrongfooted assuming the BOJ was actually launching another episode of easing, sending the USDJPY soaring, until suddenly the realization swept the market that not only was the incremental action not really material, but even Kuroda spoke shortly after the announcement, confirming that "today's decision wasn't additional easing." The result was one of the biggest FX headfakes in recent days, perhaps on par with that from December 4 when EUR shorts were crushed, as the biggest carry pair first soared then tumbled and since the Yen correlation drives so many risk assets, also pulled down not only Japanese stocks but US equity futures.

Natural-gas fell to the lowest ever inflation-adjusted price in its history of NYMEX trading on Wednesday as extremely warm weather continues to limit demand. As we recently explained, the glut in nattie is worse than that facing the crude complex, and while the glut in oil is expected to continue for the next year or so before balancing in late 2016, the pain for liquefied natural gas (LNG) could be just beginning. As one trader warned "this market is in real trouble...just wait for the bankruptcies."

"The irony in this year’s batch of outrageous predictions is that some of them are “outrageous” merely because they run counter to overwhelming market consensus. In fact, many would not look particularly outrageous at all in more “normal” times – if there even is such a thing!"

• Fed Poised to Mark the End of an Era (Hilsenrath)
• Fed opens meeting to put an end to crisis era policy (Reuters)
• Fed's Historic Liftoff and Everything After: Decision Day Guide (BBG)
• Emerging Markets Gird for Fed Rate Increase (WSJ)
• What 7 Years at Zero Rates Have Looked Like (BBG)
• 5 Things to Watch at the Fed Meeting (WSJ)

The day has come when the boxed-in Fed has no choice: with the vast majority of the market expecting a rate hike, Yellen has to deliver or suffer a crushing confidence blow like no other. And deliver she will, with expectations that said hike will be "as dovish as possible." For now however, the market is desperate to convince itself that just as more easing and more QE were bullish for the market, so rate hikes are just as bullish. Recall from late 2013: "tapering is not tightening," then the 2015 version of this refrain is "tightening is not tightening."

With Nattie down 6% in early trading, the most in 2 months, pressing to new record lows and oil prices continuing their carnage, the energy complex is a mess. OilPrice.com's Nick Cunningham warns, while the glut in oil is expected to continue for the next year or so before balancing in late 2016, the pain for liquefied natural gas (LNG) could be just beginning...

• Oil prices drop towards 11-year lows on worsening glut (Reuters)
• Third Avenue Seen by Top Investors as Fueling More Carnage (BBG)
• Lucidus Has Liquidated $900 Million Credit Funds, Plans to Shut (BBG)
• Investor nerves tested with yuan, oil, Fed in play (Reuters)
• Junk Bonds Stagger as Funds Flee (WSJ)
• Seattle lawmakers set to vote on allowing Uber, other drivers to unionize (Reuters)