Citigroup

• Turns out no free lunch after all: Greeks rage against pension calamity (Reuters)
• Athens banks told of debt buyback ‘duty’ (FT)
• U.N. Gives Palestinians 'State' Status (WSJ)
• Obama's Cliff Offer Spurned (WSJ)
• Republicans Reject Obama Budget as He Sells It to Public (Bloomberg)
• Macau Gangster Who Missed Boom to Be Freed After 14 Years (Bloomberg)
• China Economic Optimism Returns in Poll as Xi Beats Hu (Bloomberg)
• Spain May Escape European Bailout, Former ECB Board Member Says (Bloomberg)... but they won't
• After a bashing, BOJ weighs "big bang" war on deflation (Reuters)
• Recession Left Baby Bust as U.S. Births Lowest Since 1920 (Bloomberg)
• Japan unveils second Y880bn stimulus package (FT)

• As this has been priced in since September 13, it should come as no surprise to anyone: Fed Stimulus Likely in 2013 (Hilsenrath)
• Bowles Says Fiscal Cliff Deal Unlikely by End of Year (Bloomberg)
• Argentina debt repayment order frozen (FT)
• Obama Is Flexible on Highest Tax Rates (WSJ)... not really
• Geithner deployed for fiscal cliff talks (FT)
• Audit firms Deloitte and KPMG sued in HP's Autonomy acquisition (Reuters)
• Euro-Zone Budget Proposal Is Unveiled (WSJ)
• EU Nations Clash on Thresholds for Direct ECB Oversight (Bloomberg)
• LDP leader Abe: BOJ must ease until inflation hits 3 percent (Reuters)
• SNB’s Jordan Says High Swiss Franc Burdens Many Companies (Bloomberg)
• EU to launch free trade negotiations with Japan: EU officials (Reuters)

• Egypt protests continue in crisis over Mursi powers (Reuters)
• Greece hires Deutsche, Morgan Stanley to run Greek voluntary debt buy back, sources say (Kathimerini)
• Executives' Good Luck in Trading Own Stock (WSJ)
• Hollande Presents Mittal Nationalization Among Site Options (Bloomberg)
• Eurozone states face losses on Greek debt (FT)
• Spain's rescued banks to shrink, slash jobs (Reuters)
• EU Approves Spanish Banks' Restructuring Plans (WSJ)
• At SAC, Portfolio Managers Are Treated Like Stocks (BBG)
• China considers easing family planning rules (Reuters)
• European Court to Rule Over ECB’s Secret Greek File (BusinessWeek)
• And another top tick indicator: Asia Funds Buy London Offices in Bet Volatility Is Past (Bloomberg)
• Harvard Doctor Turns Felon After Lure of Insider Trading (BBG)
• Zucker Is Lead Candidate to Head CNN (WSJ) - it's not true until CNN misreports it
• Iran "will press on with enrichment:" nuclear chief (Reuters)

"After six years of declines, lending for so-called Helocs will rise 30 percent to $79.6 billion in 2012, the highest level since the start of the financial crisis in 2008, according to the economics research unit of Moody’s Corp. Originations next year will jump another 31 percent to $104 billion, it projected."

• OECD slashes 2013 growth forecast (FT)
• Fiscal Cliff Compromise Elusive as Congress Returns (Bloomberg)
• China’s PBOC Chief Search Spurs Focus on Finance Regulators (Bloomberg)
• Elected, but Still Campaigning (WSJ)
• Pentagon Readies Options for Afghanistan Force After 2014 (Bloomberg)
• Greece Wins Easier Debt Terms as EU Hails Rescue Formula (Bloomberg)
• Monti presses Cameron for EU referendum (FT)
• Welcome, Mr Carney – Britain needs you (FT)
• Argentina seeks halt to $1.3bn debt order (FT)
• Asean chief warns on South China Sea disputes (FT)
• South Korea Tightens FX Rules to Temper Won Surge (WSJ)

• Goldman Turns Down Southern Europe Banks as Crisis Lingers (Bloomberg)
• Euro Ministers Take Third Swing at Clearing Greek Payment (Bloomberg)
• Chamber Sidestepped in Obama’s Talks on Avoiding Fiscal Cliff (Bloomberg)
• Republicans and Democrats Differ on Taxes as Fiscal Cliff Looms (Bloomberg)
• Republicans bargain hard over fiscal cliff (FT)
• Catalan Pro-Independence Parties Win Regional Vote (BBG)
• Shirakawa defends BoJ from attack (FT)
• Run-off looms in Italy’s centre-left vote (FT)
• BOJ rift surfaces over easing as political debate heats up (Reuters)
• Barnier seeks ‘political will’ on bank union (FT)
• New BOJ Members Sought More-Expansionary Wording (Bloomberg)
• Osborne May Extend U.K. Austerity to 2018, IFS Says (Bloomberg)

• Rough start for fiscal cliff talks (Politico)
• Europe Fails to Seal Greek Debt-Cut Deal in IMF Clash (Bloomberg)
• Japan’s Exports Reach Three-Year Low as Recession Looms (BBG)
• Beggars can be angry: Greek leaders round on aid delay (FT)
• More financial blogs launching soon: Financial Times Deutschland closing (Spiegel)
• China's backroom powerbrokers block reform candidates (Reuters)
• BOE Voted 8-1 to Halt Bond Purchases as QE Impact Questioned (Bloomberg). In the US the vote is 1-11
• UK heads for EU budget showdown (FT)
• Eurodollars - another epic scam: How gaming Libor became business as usual (Reuters)
• Clinton Shuttles in Mideast in Bid for Gaza Cease-Fire (Bloomberg)
• Fed Still Trying to Push Down Rates (Hilsenrath)

• More QE could distort rather than deliver (FT)
• Soros Buying Gold as Record Prices Seen on Stimulus (BBG)
• EU Leaders Face Greek Aid Gap in Brinkmanship With IMF (BBG)
• Weak data point to bigger economic drag from Sandy (Reuters)
• Shirakawa Pushes Back With Criticism of Abe Unlimited Easing (BBG) But... but... Bernanke??
• French Downgrade Widens Gulf With Germany as Talks Loom (BBG)
• Japanese Poll Shows LDP Advantage Ahead of Election (WSJ)
• BOJ in the Balance as Next Government Picks Top Posts (BBG)
• Exchanges Get Closer Inspection (WSJ)
• Greece edges closer to €44bn bailout (FT)
• Japan Government to Spend 1 Trillion Yen on Next Stimulus (BBG)
• China’s Richest Woman Divorces Husband, Fortune Declines (BBG)

• Israel Ready to Invade Gaza If Cease-Fire Efforts Fail (Bloomberg)
• Petraeus: A Phony Hero for a Phony War (NYT)
• IMF'S Lagarde says Greek deal should be "rooted in reality" (Reuters) "rooted" or "roofied"? And where was it until now?
• ECB's Asmussen says Greece to need aid beyond 2014 (AP)
• EU makes budget plans without (FT)
• Japanese Poll Shows LDP Advantage Ahead of Election (WSJ)
• Shanghai Composite Dips Below, Regains 2,000 Level (Bloomberg)
• Bond investor takes big punt on Ireland (FT)
• Noda defends BoJ’s independence (FT) Indewhatnow?
• Inaba Says BOJ Could Ease More If Government Reins in Debt (Bloomberg) Actually it's the other way around
• Miles Says Bank of England Can Do More If U.K. Slump Persists (Bloomberg) So much for the end of QE
• US tax breaks worth $150bn face axe (FT)

• Israel Mobilizes Troops as Hostilities Escalate (WSJ)
• FHA Sets Stage for Taxpayer Subsidy With 2012 Deficit (Bloomberg)
• On eve of fiscal cliff talks, positions harden (Reuters)
• Japan PM Noda contradicts challenger Abe on BOJ (Reuters)
• Regulators cut JPMorgan's ability to trade power (Reuters)
• EU Should Reach Agreement on Greek Aid Next Week, Grilli Says (BBG)
• Moscovici rejects talk of French crisis (FT)
• Egypt Urges Push for Gaza Peace as Rockets Hit Israel (BBG)
• Leading Japan politicians draw election battle lines (Reuters)
• Fed Push to Tie Zero-Rate to Economic Goals Faces Doubts (BBG)
• China’s commerce minister voted out in rare congress snub (Reuters)
• China’s new leaders could have reform thrust upon them (Reuters)
• Both Sides of Gaza Border Brace for Further Conflict (WSJ)
• Fed Sees Hurdles in Housing Rebound (Hilsenrath)
• The Complete 2012 Business Schools Ranking (Bloomberg)

In the current Bernanke-Obama-Keynes toxic triangle (defined previously here) economy, blink too long and you will miss the latest bailout. While 4 years ago, it was America's M.A.D.-hostage taxpaying middle class that had no choice but to fund the trillions in direct Fed cash handouts and guarantees to bail out the banks, in the process saving and preserving the trillions in wealth for America's uber wealthy (the "1%") class, ever since then it has been the government's turn to rescue the country's lower and lower-middle classes (the "47%"), who, with no gun to their heads, decided to splurge during the height of the housing bubble (insurmountable mortgage payments and $0 down notwithstanding) and buy that aspirational McMansion that would make them so much more appealing in the eyes of the next door neighbor (who too could never afford their house in the first place). This has happened courtesy of a progressively more pervasive mortgage forgiveness plan, which has seen the total amount of debt funding a given home purchase shrink little by little each day. However, since there is no free lunch anywhere, certainly not when a bank's balance sheet is being impaired, like in 2008, someone is once again on the hook for this latest bailout. That someone, not surprisingly, is again America's middle class that lived within its means, that saved money while others splurged, and even put cash away for retirement, handing it over to various Pension investment vehicles.

This is what the most brand name US hedge funds bought and sold in the third quarter.

While the impact of the Fiscal Cliff remains front-and-center in everyone's mind, SocGen's Albert Edwards has another, more prescient, insight into why stocks are reverting. In his words, "commentators are worrying about an impending fiscal cliff, we have actually already stepped off the profits cliff." As we noted last week, the divergence between markets and macro suggest a rather ghastly echo of 2008; as the market is falling in line with the dismal outlook for profits (rather than the more upbeat macro economic data). As far as the latter, we are getting close to a cyclical peak - so macro surprises are 'as good as it gets' - and for the former (earnings outlooks), Edwards shows an unprecedented level of optimism about EPS going forward. As we proceed into the new year, Edwards expects "the combination of poor profits and poor economic data to prove toxic."

Now that The Show is over, we are left with the equivalent of a Sunday morning hangover following a binge of promises and lies. After the Supreme Court upheld the PPACA, a spate of mergers rippled through the managed health care realm, to ostensibly cope with smaller profit margins and  ‘compliance costs.’  But really, it’s because each firm wants to corner as much as possible of the market, in as many states as it can, to garner more premiums and control more disbursements and prices at the upcoming insurance ‘exchanges.’ Meanwhile the more hospitals are viewed as profit centers, the more their Chairmen will cut costs to maximize returns, and not care quality. They will seeks ways to sell underperforming assets, programs or services and reduce the number of nonessential employees, burdening those that remain. And if insurance companies can manage doctors directly, they can control not just costs, but treatment – our treatment. It’s not an imaginary government takeover anyone should fear; but a very real, here-and-now insurance company takeover, to which no one in Washington is paying attention.

Farce #1: “Market value” and “free markets” have become a joke.

Farce #2: Private, self-assigned, fake value is being traded for public money at 100 cents on the dollar.

Farce #3: Printed money is backed by nothing.

Farce #4: We have a “free” enterprise system dominated by monopolies that force people to buy inferior goods and services at exorbitant rates.

Farce #5: High-level financial crimes, no matter how egregious or widespread, are not being prosecuted.

Farce #6: Risk is gone. Now there is only liability borne by citizens.

Farce #7: Productivity has been supplanted by parasitism.