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Following last week's holiday-shortened week, which was supposed to be quiet and peaceful and was anything but thanks to OPEC's shocking announcement and a historic plunge in crude prices, we have yet another busy week of macroeconomic reports to look forward to.

The oil industry is no longer what it once was, it’s not even a normal industry anymore. Oil companies sell assets and borrow heavily, then buy back their own stock and pay out big dividends. What kind of business model is that? Well, not the kind that can survive a 40% cut in revenue for long. Cheap oil a boon for the economy? You might want to give that some thought.

The precipitous decline in the price of oil is perhaps one of the most bearish macro developments this year. We believe we are entering a “new oil normal,” where oil prices stay lower for longer. While we highlighted the risk of a near-term decline in the oil price in our July newsletter, we failed to adjust our portfolio sufficiently to reflect such a scenario. This month we identify the major implications of our revised energy thesis.  The reason oil prices started sliding in June can be explained by record growth in US production, sputtering demand from Europe and China, and an unwind of the Middle East geopolitical risk premium. The world oil market, which consumes 92 million barrels a day, currently has one million barrels more than it needs.... Large energy companies are sitting on a great deal of cash which cushions the blow from a weak pricing environment in the short-term. It is still important to keep in mind, however, that most big oil projects have been planned around the notion that oil would stay above $100, which no longer seems likely.

A look at the global capital markets as if analysis matters.

The final days of US empire are fast approaching. Perhaps its end will pass slowly and gradually, or perhaps the event will unfold rapidly and catastrophically. Maybe chaos will break loose, or maybe its demise will be organized well and proceed smoothly. This nobody knows, but the end of empire is coming as surely as day follows night and sun follows rain. Overexpansion, overreach and over-indebtedness will take their toll—as all past empires have discovered.

Recently we posted the following article commenting on the impact of USD appreciation and dollar circulation among oil exporters, as well as how the collapsing price of oil is set to reverberate across the entire oil-exporting world, where sticky high oil prices were a key reason for social stability. Following today's shocking OPEC announcement and the epic collapse in crude prices, it is time to repost it now that everyone is desperate to become a bear market oil expert, if only on Twitter...

• 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)

While there has been no global economic outlook cut today, or no further pre-revision hints of "decoupling" by the appartchiks at the US Bureau of Economic Analysis,  both European and US equities are pointing at a higher open, because - you guessed it - there were more "suggestions" of "imminent" QE by a central bank, in this case it was again ECB's Constancio dropping further hints over a potential ECB QE programme, something the ECB has become the undisputed world champion in. The constant ECB jawboning, and relentless central bank interventions over the past 6 years, led to this:

• GERMANY SELLS 10-YEAR BUNDS AT RECORD-LOW YIELD OF 0.74%

The punchline: this was another technically "failed" auction as it was uncovered, the 10th of the year, as there was not enough investor demand at this low yield, and so the Buba had to retain a whopping 18.8% - the most since May - with just €3.250Bn of the €4Bn target sold, after receiving €3.67Bn in bids.

Following the four-way pre-OPEC meeting between Russia, Mexico, Venezuela, and Saudi Arabia, Venezuela's foreign minister warned:

*NO AGREEMENT ON OUTPUT REDUCTION AT 4-WAY MEETING: RAMIREZ

And oil prices slipped notably. "The most important thing is we are talking," Ramirez noted... but markets are not waiting.

• Ferguson in Flames (Reuters)
• Ferguson Cop Told Grand Jury He Feared for His Life (BBG)
• Sharpton: Grand Jury Announcement ‘An Absolute Blow’ (Daily Caller)
• Gunshots echo as violence returns to Ferguson, protests across U.S. (Reuters)
• BoJ members warned on costs of more easing (FT)
• Hagel Exit Shows Obama Has Taken Power Away From Pentagon (BBG)
• Ukraine leader, under pressure from West, pledges new government soon (Reuters)
• Eurozone Stagnation Poses Major Risk to Global Growth, OECD Warns (WSJ)
• ECB’s Coeure Says Officials Won’t Rush as They Debate All Assets (BBG)

All the stimulus, all $50 trillion or so globally, has been thrown into the fire, and look at where we are. There’s nothing left, and there won’t be another $50 trillion. Sure, stock markets set records. But who cares with oil at $40? Calling for more QE, from Japan and/or Europe or even grandma Yellen, is either entirely useless or will work only to prop up stock markets for a very short time. Diminishing returns. The one word that comes to mind here is bloodbath.

While OPEC has been mostly irrelevant in the past 5 years as a result of Saudi Arabia's recurring cartel-busting moves, which have seen the oil exporter frequently align with the US instead of with its OPEC "peers", and thanks to central banks flooding the market with liquidity helping crude prices remain high regardless of where actual global spot or future demand was, this Thanksgiving traders will be periodically resurfacing from a Tryptophan coma and refreshing their favorite headline news service for updates from Vienna, where a failure by OPEC to implement a significant output cut could send oil prices could plunging to $60 a barrel according to Reuters citing "market players" say.

"We are living in an aberrational world. It’s all driven by an orgy of money printing...it sure feels to me that we’re nearing the day that it spins out of control. By the end of this year or by the start of next year, without QE, the market is going down."

"To maintain your sanity, you need to turn off the hype machines of some of the financial media like CNBC."

Halliburton’s takeover of Baker Hughes is setting out to be the oil and gas merger of the year. One of the largest such deals in years, it has not, however, met with unanimous approval. From antitrust concerns to management frictions and negative market forces, this has not been a smooth ride. And with a $3.5 billion break-up fee promised to Baker Hughes by Halliburton should the merger fall through, failure would come at a hefty price. Here are five reasons why the deal might still capsize.