Deutsche Bank

• Belgian Police 'Arrest' Public Enemy No.1 (Sky News)
• France Widens Crackdown at Home as Bombs Rain on Islamic State (BBG)
• Putin Goes From G-20 Pariah to Player at Obama Turkey Talk (BBG)
• Paris Attacks: 150 Raids as France Goes to 'War With Terrorism' (NBC)
• 'Rocket Launcher Found' In French Police Raids (Sky)
• Geopolitical worries lift oil after Paris attacks, but glut weighs (Reuters)
• Japan's economy falls back into recession again (BBC)

"They helped us understand what was going on beyond what you see on the screens."

We just got a confirmation that Ackman may not only not have been "brazenly intelligent" but was downright stupid when moments ago we learned that a District Judge in Santa Ana, California, David Carter, has said Valeant and Ackman must both face a lawsuit accusing them of insider trading in Allergan before making an unsuccessful takeover bid for the maker of Botox.

The ongoing failure of China to achieve any stabilization in its economy, after already cutting interest rates six times in the past year, and the prospect of a U.S. interest rate hike in December, had made markets increasingly jittery and worried which is not only why the S&P 500 Index had its biggest drop in a month, but thanks to the soaring dollar emerging market stocks are falling for a fourth day - led by China - bringing their decline in that period to almost 4 percent, and the global stock index down for a 5th consecutive day.

With the third quarter earnings season almost over, and 90% of companies having reported, here is a quick look at where we stand and what has emerged as the 4 main themes during earnings calls.

While the stock market had one of its best months in years, it was, like the jobs report, uncorroborated by almost everything else. The junk bond bubble, in particular, stands in sharp and stark refutation of whatever stocks might be incorporating, especially if that might be based upon assumptions of Yellen’s re-found backbone. As noted on several prior occasions, swap spreads have been sinking fast and to unprecedented levels. Though mainstream commentary will provide plausible-sounding excuses, mostly about corporate or even UST issuance, that is only because these places will not even consider that Janet Yellen has it all wrong; thus, they only search for possibilities that allow that narrative to remain undisturbed even though that narrative itself can never account for negative spreads.

"Barring disaster, this makes December liftoff a lock. It won’t stop the FOMC from being very dovish sounding and reiterating the commitment to a very slow path, as Evans did on TV a few minutes ago. The question is whether the market believes them if the numbers keep coming in on the strong side."

The USDollar Index is soaring (hitting its highest since early April and approaching 2015 highs) as the probability of a December rate hike hits 74%. This is not unequivocally good for a large number of American firms..

"We are expecting that to happen. It would be normal, and that would not indicate poor macroeconomic performance.”

"Before September we'd only ever seen negative 10y swap spreads for a period in 2010 although they did turn negative intra-day 3-years ago. It’s not quite up there with the flash rally/crash in Treasuries 13 months ago but it’s a very strange occurrence and one to watch and likely another product of regulation and liquidity."

• BOE Stays Cautious on Rate-Hike Timing as Inflation Outlook Cut (BBG)
• China Enters Bull Market (WSJ)
• Britain says Islamic State likely brought down Russian plane (Reuters)
• Dollar jumps as markets fix on December rate expectations (Reuters)
• Activist Investor Bill Ackman Plays Defense (WSJ)
• BOJ Survey Data Reveals Signs of Growing Inequality in Japan (BBG)
• UAW Warns of General Motors Strike If Workers Fail to Approve Contract (WSJ)

The story behind Malaysia PM Najib Razak's Goldman-backed slush fund just got even stranger as it now appears some $2.3 billion in mystery money tied to an ill-fated investment with the Saudis ended up being managed by an Australian penny stock pusher via a shady Cayman Islands account. 

There's a long way to go for the Saudis and the UAE to get back into the black and indeed, even Qatar is now set to post red ink...

When Saudi Arabia moved to Plaxico themselves last November by killing the petrodollar in an effort to bankrupt the US shale space and tighten the screws on Moscow, Riyadh set in motion a series of events that culminted in a 20% fiscal deficit and, most recently, an S&P downgrade. Now, the kingdom is not only running out of money, but water and food as well.