Reality Continues To Creep In

Dec. 3 (Bloomberg) -- Brazil’s central bank raised reserve requirements on cash and time deposits to slow consumer lending that’s growing 20 percent annually and prevent a credit bubble. Interest-rate futures yields dropped.

This is what happens when Fed knowingly destroys the value of the dollar at the expense of other countries. They have a nasty tendency to protect themselves by tightening the flow of Fed-induced hot money. Look for more of this.

Dec. 2 (Bloomberg) -- Greece was warned it could receive a lower credit rating from Standard & Poor’s as proposed European Union rules threaten to hurt bondholders.

This is what happens when bureaucrats try to use bailouts as a way to avoid write downs and restructuring. Look for more of this as well.

Reality just crept into the markets too: NFP was terrible. Futures reversed sharply. I am hugely short but am now hedging slightly in the premarket. I dumped my long yen position yesterday and now of course wish I didn't. But that's hindsight.

Small support is at 1211 and 1205 on the futures.