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• 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)

It is only logical that a day after the S&P500 surged, hitting Goldman's 2016 target of 2,100 more than a year early because the US manufacturing sector entered into a recession, that Europe would follow and when Eurostat reported an hour ago that European headline inflation of 0.1% missed expectations of a modest 0.2% increase (core rising 0.9% vs Exp. 1.1%), European stocks predictably surged not on any improvement to fundamentals of course, but simply because the EURUSD stumbled once more, sliding by 40 pips to a session low below the 1.06 level.

"Let us be clear: We have no cash left. This is a distress call from a ship of 3.5 million American citizens that have been lost at sea."

Puerto Rico faces its moment of truth on Tuesday as the commonwealth must decide whether to default on GO debt and risk triggering a cascade of litigation. Meanwhile, Governor Alejandro Garcia Padilla is on Capitol Hill hoping to drum up support for a plan that would allow for some of the island's agencies to file for bankruptcy.

Even despite the saturation criminality that readers have already seen, many will still argue that we “need” these Big Banks, and that we even “need” fractional-reserve (no reserve) fraud.

"... As the tide of leverage goes out, the full extent of irresponsible lending becomes apparent. The previously virtuous cycle between risk spreads and fundamentals goes into reverse, with lower prices, defaults, and downgrades forcing leveraged investors to sell, leading to even lower prices."

S.AFRICA GOVERNOR KGANYAGO SAYS NO AMOUNT OF CENTRAL BANK INTERVENTION WOULD STEM MARKET-DRIVEN RAND MOVES.

So what happens to a market that’s balanced precariously atop the shares of a handful of “must own” companies when those companies lose their halos? Historically, the previously-strong sectors join the rest in a broad sell-off.

"The previous three times this metric fell that far into negative territory on the S&P 500 were Q1 1990, Q1 2001, and Q4 2007, coinciding with the start of each of the last three high yield default cycles"

Financial crises can happen quickly, like the bursting of the tech stock bubble in early 2000, or slowly, like the late-1980s junk bond bust. The shape of the crash depends mostly on the asset in question: Equities can plunge literally overnight, while bonds and bank loans can take a while to reach critical mass. China’s bursting bubble is of the second type. "If, as seems likely, the government has succeeded in getting funding to higher risk sectors by relaxing bond approvals," wrote Christopher Wood of brokerage CLSA in a recent note, "it is all rather scary, given the regulatory failures exposed by the A share boom-bust cycle."

Forgotten what 2008 was like? What's coming will be far worse.

With at least 83 percent of these companies' operating cash being spent on debt repayments - the highest on record - the renewed collapse in crude oil prices of the last month has renewed focus on the tidal wave of defaults that the credit market is increasingly pricing in (and stocks not).

Members,

Complex and volatile economic and financial situations in China and abroad are adding uncertainty to market. Members should remind investors to be prudent in judging market information and to be rational with investment decisions to maintain a smoothly running market.

The US E&P sector could be on the cusp of massive defaults and bankruptcies so staggering they pose a serious threat to the US economy. Without higher oil and gas prices — which few experts foresee in the near future — an over-leveraged, under-hedged US E&P industry faces a truly grim 2016.  "I could see a wave of defaults and bankruptcies on the scale of the telecoms, which triggered the 2001 recession."

Friday's nearly 6% plunge on the SHCOMP left some market participants wondering where the plunge protection team was hiding in the final minutes of trading. As FT reports, Beijing's so-called "national team" now owns 6% of the entire mainland market and as we saw in September, the paper losses on that kind of portfolio can add up quickly when things go south. The question now is whether the PBoC will step back in if we have a few more days like today.