Black Friday

Black Friday is the day when the trademark US consumerism takes center stage for its annual manic, full-frontal exposure around the globe. Here is what it looked like around the US...

The S&P 500 closed at new record-er-est highs (a record 29th day above the 5DMA) providing just the right amount of confidence-inspiring 'wealth creation' to ensure you spend, spend, spend this weekend all those gas price savings (despite 9 of 9 macro data misses today). Dow and Trannies underperformed today as Nasdaq surged on AAPL strength. The USDollar fell for the 3rd day (first time in a month) and Treasury yields tumbled (down 5-8bps on the week) near 18 month closing lows. VIX traded briefly with an 11 handle and lost its inversion (1st day in 6). Gold prices flatlined for the 3rd day (as EURCHF fell) ahead of the Swiss gold referendum this weekend. Oil tumbled to fresh 4-year lows as OPEC hinted at no cuts and copper slipped to fresh 4 year closing lows. Late-day shenanigans sent stocks ripping higher... in a totally rational manner. Turkey prices are at $1.67/lb and have been remarkably stable over the past few years.

• National Guard, police curb Ferguson unrest as protests swell across U.S. (Reuters)
• Ferguson Reaction Across U.S. Shows Complex Racial Split (BBG)
• Democratic senator Schumer: Democrats Screwed Up By Passing Obamacare In 2010 (TPM)
• Veto threat derails Reid tax deal (Hill)
• Justice Department Investigating Possible HSBC Leak to Hedge Fund (WSJ)
• Merkel hits diplomatic dead-end with Putin (Reuters), and yet...
• Merkel Said to Reject Ukraine NATO Bid as Rousing Tension (BBG)
• HSBC, Goldman Rigged Metals’ Prices for Years, Suit Says (BBG)

• Grand jury expected to resume Ferguson police shooting deliberations (Reuters)
• PBOC Bounce Seen Short Lived as History Defies Bulls (BBG)
• Home prices dropped in September for the first time since January (HousingWire)
• UPS Teaches Holiday Recruits to Fend Off Dogs, Dodge NYC Taxis (BBG)
• US oil imports from Opec at 30-year low (FT)
• Hedge Funds Bet on Coal-Mining Failures (WSJ)
• Putin Woos Pakistan as Cold War Friend India Buys U.S. Arms (BBG)
• How the EU Plans to Turn $26 Billion Into $390 Billion (BBG)
• The $31 Billion Bet Against Brazil’s New Finance Minister (BBG)

Forget Black Friday and Q4 GDP... it appears, from the most recent forecasts that from Wednesday on this week, the eastern US faces a 'White Five-Day' as Accuweather reports "an increasing likelihood for a swath of heavy snow stretching from eastern Pennsylvania through New York's Hudson Valley and across much of New England before all is said and done." Furthermore, as WaPo notes, Wednesday’s possible storm has a chance to develop into a legitimate Nor’easter (though current models offer 3 scenarios).

• Banks Had Unfair Advantage From Commodity Units (Bloomberg)
• Report Notes Deals Between Goldman, Deutsche and Others Drove Up Aluminum Prices (WSJ)
• Goldman, Morgan Stanley Commodity Heyday Gone as Units Faulted (BBG) - because when you can no longer manipulate, you move on...
• Lenders Shift to Help Struggling Student Borrowers (WSJ)
• Immigrants face major hurdles in signing up to new Obama plan (Reuters)
• Distressed Debt in China? Ain’t Seen Nothing Yet, Buyers Say (BBG)
• Banking culture breeds dishonesty, scientific study finds (Reuters)
• Amazon Robots Get Ready for Christmas (WSJ)

The BTFDippier of the fast money is already rotating into a long-Europe mode: their entire thesis is that sooner or later the whales will have no choice but to follow the momentum chasers right back into Europe, because where else are they going to go: in the "safety" of the S&P's 19x GAAP P/E?  In theory this would be a great strategy, if only in a world in which nobody actually does any fundamental homework and the only thing that matters is frontrunning the next great sucker. In practice, it is fatally wrong. As the following observation from hedge fund Lyxor shows, while CTA and momentum strats have indeed bailed on Europe in recent months, the so-called smart money, the "global macro" funds never left.

"We could have started later, but then we wouldn’t be sure to get first in line," says Vickey Torres, camped outside the Beaumont Best Buy 22 days before Black Friday. "Some people say we’re crazy."

"It used to be called Black Friday, then it became Thursday, now it’s a week long...Maybe we should just call it November."

• Banks to Pay $3.3 Billion in FX-Manipulation Probe (BBG)
• Symbolic being the key word: U.S., China sign symbolic emissions plan, play down rivalry (Reuters)
• Europe (so really Russian sanctions) is the new "snow in the winter" - Carney Sees Europe Stagnation Impact as Growth Outlook Cut (BBG)
• Eurozone Industrial Output Points to Weak Third Quarter Growth (WSJ)
• Not everyone around Abe is insane: Kuroda Ally Flags Warning on Delaying Sales-Tax Increase (BBG)
• Hong Kong to scrap daily yuan conversion limit to boost stock investment (Reuters)
• Barclays Falls After FX Settlement Delay Reduces Discount (BBG)
• Some unhappy Yahoo investors asking AOL for rescue (Reuters)

By continuously intervening in all of the markets, the Fed has destroyed the information transmission system that is built into freely trading markets. Time is starting to run out for ability of the U.S. to keep kicking the can of collapse down the road. We’ve come full circle, only with China in the Midas throne this time around.  Eventually the world is going to revert back to a gold-backed currency system.  When this happens, the U.S. will be required to demonstrate that it possesses the amount of gold that it reports to own. The only caveat here is that we believe that the U.S. will start WW3 before it’s forced to reveal the truth about its empty gold vault. That’s how broken our system really is…

Our entire economic paradigm is built upon desperate measures. Zero interest rates, $3 trillion of QE, systematic accounting fraud, fudged economic data, and doling out subprime loans to auto renters and University of Phoenix wannabes have failed to revive our moribund economy. Delusions don’t die easily. But they do die. We are reaching the limit of this delusionary dream built upon debt, denial, and deception. Make sure you wolf down that Thanksgiving feast before 5:00 pm. There are HDTV’s to fight for at 6:00 pm.

"[A] crash is coming, and it may be terrific... The vicious circle will get in full swing and the result will be a serious business depression. There may be a stampede for selling which will exceed anything that the Stock Exchange has ever witnessed. Wise are those investors who now get out of debt."

Sticker shock. Expect to pay a lot. Hellishly hot in the summer and shockingly less sexy than advertised. But the city and local people, called Cariocas, are clean and the crime is greatly exaggerated. The Marvelous City is amazing in many ways. But if you look closely, you see the same old corruption and thuggery, the same painful poverty and injustice, that plague many states. And then there's the Brazilian prostitutes, called programas, who frequent the bars and brothels of Copacabana and Ipanema as well as Central Rio... People in Rio and Brazil are the same as anywhere. They want the same things. Happiness, diversion, laughter, distraction, the so-called good things in life. A slightly larger piece of the pie. The World Cup is just a showcase and a distraction. Bread and circus on a grander scale.

Orwell Much?