Volkswagen

• Gloomy mood prevails despite calmer commodities (Reuters)
• A Strong Dollar Hurts China More Than the U.S. (BBG)
• China Sets Yuan at Four-Year Low in ‘Stress Test’ (WSJ)
• Dow Chemical and DuPont Are in Advanced Talks to Merge (WSJ)
• Yahoo scraps plan to spin off Alibaba stake (Reuters)

Overnight market action has largely been a continuation of Tuesday's key themes with European stocks falling as a selloff in mining companies extended to a 7th day, even as metals prices rose and crude oil rallied modestly from a six-year low after yesterday's API crude inventory draw. U.S. equity futures have rebounded from modest declines, as emerging-market shares extended their losing streak to a 6th day while Asian stocks dropped to 2 month lows.

Actions – including the state’s best-intentioned ones (giving them the benefit of the doubt) - have consequences, not all of them foreseen and some of them contrary to what was (we assume) intended.

• Obama in speech to nation vows to defeat 'new phase' of terrorist threat (Reuters)
• Clinton Urges Social-Media Intelligence Sharing in Terror Fight (WSJ)
• Obama urges tech, law enforcement to address social media used for plots (Reuters)
• NATO says won't send ground troops to fight IS (Reuters)
• Le Pen Scores Historic Victory in France's Regional Elections (BBG)

• Yellen, in back-to-back appearances, could close out era of zero rates (Reuters)
• ECB stimulus hopes keep Europe stocks at three-month high (Reuters)
• ECB to Test the Limits of Its Bond-Buying Program (WSJ)
• Watch for U.S. recession, zero interest rates in China next year, Citi says (Reuters)
• Euro’s Loss Being Yen’s Gain May Be Headache for BOJ (BBG)
• Yahoo Board to Weigh Sale of Internet Business (WSJ)
• Islamic State Prevents Civilians From Fleeing Iraqi City of Ramadi (WSJ)

"Tengram has instructed its broker that it will not permit borrowing of any of its shares by short sellers who are only interested in reducing the value of the Company’s stock price for their short-term gain.  We urge each of you to contact your broker today and inform them that your shares may not be made available to be borrowed by short sellers.”

Without a rerun of last Friday's Chinese stock market rout, European traders could focus on what "really matters", namely how much of the ECB's upcoming 20 bps rate cut and €20 billion QE expansion (with Commerzbank saying Draghi may even hint at Europe's QE3) is priced in, and whether the ECB's actions are just modestly priced in, or more than fully, and just how big the "sell the news" event will be.The result: the Euro falls to a new 7 month low, the dollar spot index hits a new all time high, and European stocks and US futures stage another remarkable overnight comeback on the usual low volume levitation and central bank intervention.

Having announced in two brief tweets on Thanksgiving - just as we warned was very possible - that he would pull his shares from being available-to-lend, Martin Shrekli has sent the meteoric Volkswagen-like trajectory of KaleBios vertical once again. With short-interest having surged to 49% (from 5.6%), the yanking of his loanable shares has sent KBIO up 65% in the pre-market, back above $45 (from just 45c 10 days ago).

• Russia Takes Aim at Turkish Economy Amid Fighter-Jet Spat (WSJ)
• ‘Commercial scale’ oil smuggling into Turkey becomes priority target of anti-ISIS strikes (RT)
• Russia-Turkey Ties Are Headed Into a Deep Freeze (WSJ)
• France signals softer stance on Assad after Russia talks (FT)
• China Calm Shattered as Brokerage Probe Sparks Selloff in Stocks (BBG)
• China Stock Bulls Hit Breaking Point as State Dials Back Support (BBG)
• China's Bond Stresses Mount as Two More Companies Flag Concerns (BBG)

While US floor markets are closed for the Thanksgiving holiday (equity, rates and energy futures are open until 1pm Eastern), Europe and Asia (as well as US equity futures) were busy rebounding overnight on strength in the commodity complex following yesterday's news that China's metals producers have asked for a wholesale government bailout or the "QEmmodity" as we have dubbed it, for the first time since 2009, which together with news that China would soon start arresting "malicious metal sellers" has provided a push for commodity prices across the board.

• European stocks up, oil slides as concerns ease over Russia-Turkey tension (Reuters)
• ECB discusses two-tiered bank charges, broader bond buys (Reuters)
• New agonies, alliances as Fed debates post-liftoff plan (Reuters)
• A New Military Power Rises in the Mideast, Courtesy of One Man (BBG)
• Russia's Gazprom says halts gas supplies to Ukraine over payment (Reuters)
• Other central banks set to act, but Swiss policy cupboard bare (Reuters)

Just as we warned was possible, KBIO is going full Volkwsagen up another 150% today alone (up from $1 last Wednesday to over $45 today), the stock has just been halted.  And here is the punchline: According to Markit, the short interest of float is now 38%. Why is this a problem? Because Shrekli's investor "group" bought 70%.  This means that if Shkreli pulls all the borrow, there will simply not be enough shares for the shorts to cover.

With the ECB expected to announce a boost to QE and pushing rates even lower into record negative territory, perhaps Markit did not get the memo to double seasonally adjust the seasonally adjusted European manufacturing and services PMI survey data, when instead of providing cover for Draghi ("look, the economy is slowing down even more, surely you must unleash more printing") it reported that not only the Manufacturing PMI rose to 52.8 from 52.3, a 19 month high and above the highest estimate (range was 51.5 to 52.6), not only the Service PMI rose to 54.6 from 54.1, a 54 month high and also above the highest estimate (range of 53.5-54.4), but the Composite PMI soared to the highest level recorded since May 2011, rising from 53.9 to 54.4.