Three things in life are certain: death, taxes, and political theater in Washington. Goldman summarizes: A holiday today, but a busy week starting tomorrow with passage of currency legislation, consideration and likely passage of bilateral trade deals, consideration of the President's jobs legislation, the proposed Volcker Rule, and continued private meetings of the fiscal "super committee" (no public meetings scheduled yet for this week).

As expected from any company that gets Bear Stearns'd (as we had predicted regarding said Bear Stearnsing), even as the CDS is now rapidly on its way to pari status with Belgium (and potentially could trade inside due to the implicit French support of the now insolvent bank), the stock, after two days of halts, has reopened with a "slightly bearish" bias, down 30% and plunging. Considering that there is no more common equity value left in the name, the stock will rapidly become an HFT whipping boy, and a penny-stock darling. For reference see FNM/FRE after their respectively nationalization (which sent the market soaring when it was announced back in August 2008... briefly).

Important Charts and levels to watch, as shorts feel the pain.

After another weekend on headlines coming out of Europe stock futures are up nicely and credit, while better, isn’t performing quite as well and sovereign debt yields are up across the board.  After a quick glance at the credit markets and the headlines, it seems once again that equities have gotten ahead of themselves.

Some thoughts and Pics from OWS

The epic case study of unprecedented corporate suicide just keeps getting better and better. In the meantime, the biggest loser is the Twitter account of the squatter @Qwikster who should have sold while he could.

Spot the odd 5 Year CDS out (hints included)

• Belgium to Buy Dexia’s Consumer Unit for $5.4B (Bloomberg)
• New $1.4 Trillion U.S. Stimulus Is in Sight: Douglas Holtz-Eakin (Bloomberg)
• Banks to be forced to boost liquid assets (FT)
• Trichet Reminds U.S. Euro Built to Last (Bloomberg)
• White House Aims to Lure More Foreign Investment (WSJ)
• Fannie and Freddie debt fuels anxiety (FT)
• Merkel and Sarkozy set euro deadline (FT)
• ‘Time short’ for eurozone, says Cameron (FT)
• Former PBOC Adviser: China To Continue Tight Monetary Policy (WSJ)

• Risk-appetite gathered pace during the European session after Germany and France demonstrated a united front in tackling the ongoing Eurozone crisis. Meanwhile, Russia said that it may help the EU and Spain with the debt crisis, and is ready in principle to buy the Spanish government debt
• S&P affirmed France's ratings at AAA, with a stable outlook, and affirmed Belgium's ratings at AA+, with a negative outlook
• Slovak government party SAS turned down a compromise offer from coalition partners on the EFSF ratification, however the Slovak Parliamentary Budget Committee recommended the EFSF approval
• Weakness in the USD-Index provided support to EUR/USD and GBP/USD
• The governments of Belgium and France agreed to nationalise the Belgian subsidiary of Dexia

We would point out that USD Libor is wider again this morning but at this point it is irrelevant: for a multi-billion core European bank to go insolvent "overnight" (nobody could have foreseen it and all that), and with Libor to still be trading under 1%, and specifically, under the USD FX swap line penalty rate, it means that the BBA market is either completely broken or criminally corrupt and colluded. Take your pick. So instead we will focus on what actually does matter in the market, such as the fact that ever more banks are exhibiting the fear and loathing discussed earlier this weekend, with an unprecedented scramble to dump every last eurocent in the "safety" of the ECB's clutches: as of Friday, a whopping €255.6 billion ($345 billion) in cash stood idle, and hence as far away as possibl;e from normal interbank liquidity, parked with the ECB: the highest since June 30, 2010. Expect this number to jump even more tomorrow when the Monday, aka "post-Dexia" number is released. And elsewhere, as expected, Belgium sovereign bonds are already starting to take on ever more water, as Belgium and France 10 year notes fall and the French 10 yield hits highest in over a month. Belgium and France govt bonds will be pressured as fallout from Dexia highlights risks and costs to state from banks’ exposure to peripheral debt, Padhraic Garvey, strategist at ING, writes in note. Specifically, the Belgium 10 Year yield is at +7bps to 4.05% while the 2-yr yield +4bps to 2.34%. At least the curve is not massively inverting just yet. In France, the 10 Year yield is +7bps to 2.83%, the highest since Sept. 2. The spread widening in these two countries will not stop as an imminent rating agency downgrade overhang is now a threat to bondholders of both countries. Said otherwise, the Dexia-Belgium CDS compression trade is alive and profitable.

Thank god for Dexia's implosion this morning, or else the world would be forced to pay attention to the fact that Greece is still as insolvent as ever and still without a formal Troika approval for disbursement of the critical 6th tranche that Greece needs or else. Also, were it not for Dexia someone might notice that two other banks bit the nationalization bullet in the past 24 hours as the contagion, not from Dexia, but from the fact that there is simply not enough money around: as a result Danish Max Bank and Greek Proton Bank just handed the keys to their HQs to their primary regulators, with the management teams quietly riding off into the sunset. They are the lucky ones: in a few months it won't be nearly as easy to find "nationalization" funding and keep your depositors away from the "tar and feathers" toolshed.

For the past 18 months, every time reality threatens to intrude in Europe, Merkel and Sarkozy rush onto the global stage for a repeat performance of their dog-and-pony show. The global media declares it an artistic triumph and the "solution" to Europe's insolvency. The fact that we've seen the exact same performance repeated again and again appears to be lost on the financial media, which never tires of declaring "this is the solution that will end the European bank crisis." A few days or weeks later, reality once again intrudes, the ugly truth of systemic insolvency rears its frightening head once again, and the Dynamic Duo of Eurozone political theater rush onto stage for another tiresome performance of their cliche-ridden dog-and-pony show. Few in the corporate media stop to even ask if the dog and the pony even have the power to summarily re-capitalize banks and all the rest of their grandiose pronouncements. Few dare observe that Merkel and Sarkozy might as well demand the seas divide; the situation is out of their control, and their theatrics are all in service of percepotion management, i.e. to foster the illusion they still grasp some meaningful control over the situation (they don't) and the the situation is controllable by manipulation of perception (it isn't).

All you need to read.