Japan

At this week’s close, the FANG stocks were valued at just under $1.2 trillion, meaning they have gained $450 billion of market cap or 60% during the last 11 months - even as their combined earnings for the September LTM period were up by only 13%. In a word, the gamblers are piling on to the last train out of the station. And that means look out below!

What do you do when you're a government statistician and the economic data doesn't say what you want it to say? Why you "adjust" it of course.

Importantly, while the "bias" of the market is to the upside, primarily due to the psychological momentum that "stocks are the only game in town," the mounting risks are clearly evident. From economic to earnings-related weakness, the "bullish underpinnings" are slowly being chipped away.

• US dollar sell-off: Nov’15 Global FMS shows “long dollar” most crowded trade
• EM rally: China deval complicates rally but humiliated EM ripe for bounce as Fed hike expectations peak
• Positioning less "bearish": risk rally is "narrow" and vulnerable to quick profit-taking in event-rich December: deteriorating RSP/SPY ratio

"We've had 12 consecutive years of silver deficits" which "can begin to apply upward pressure to prices in subsequent periods" - Thomson Reuters

"So much of what we now accept as routine in financial markets would have been thought impossible prior to the 2008 crisis ?- the next logical stage in the global currency war will be direct fx intervention!"

- Albert Edwards

While the initial EUR response was as expected, dropping about 30 pips (but already rebounding on concerns that the Draghi bazooka may truly be empty this time - after all what else can he surprise with as CA's Valentin Marinov said), German Bunds, especially the short-end, were quick to give Mario Draghi the middle finger and the 2Y has dropped to a fresh record low of -0.389%, because all they heard was that the ECB will monetize even more debt.

Yesterday, there was pent up expectation that the ECB's latest minutes, by being structurally dovish and thus the opposite of the Fed's own minutes, would unleash another round of EUR weakness. This did not happen, and instead not only did the EUR jump during the day, but the USD saw an unexpected round of all day weakness. Many were surprised by this response. It turns out Mario Draghi was merely biding his time, and in a speech released moments ago, titled "Monetary Policy: Past, Present and Future" delivered at the European Banking Congress, Draghi pulled another "whatever it takes" card, and promptly sent the Euro currency reeling, if only for the time being.

China’s producers couldn’t get the prices they wanted anymore, as early as 4 years ago, and that’s where deflationary forces came in. No matter how much extra credit/debt was injected into the money supply, the spending side started to stutter. It never recovered.

The Fed has created a dead end street for everyone not in their .1% clientele... We’re all muppets to the banking cabal running this morally and financially bankrupt military empire of debt.

1. Top Trade #1: Long USD vs short EUR and JPY
2. Top Trade #2: Long US 10-year ‘Breakeven’ Inflation
3. Top Trade #3: Long MXN and RUB versus short ZAR and CLP.
4. Top Trade #4: Long EM ‘External Demand’ vs. Banks stocks
5. Top Trade #5: Tighter Spread between Italy and Germany Long Rates
6. Top Trade #6: Long large-cap US Banks relative to the overall S&P500

While it is still unclear just why the FOMC Minutes which are said to have made a December liftoff "more likely" unleashed a dramatic market rally, one which sent both stocks and TSYs higher, the sentiment continued overnight, with both Asian stocks surging on the US momentum, as well as Europe, where the DAX gapped solidly above the 200 DMA as most European shares advanced, led by resources, travel stocks. U.S. futures continue their ramp higher, and at last check were another 8 points, or 0.4%, in the green.  But if the Fed Minutes were enough to unleash the latest leg in this rally, than the ECB's own minutes due also today, should send futures back over 2100 without much difficult, regardless of their actual content.

"The equilibrium, for now, is QE infinity – but political risk could be the breaking point"...