Thanks to the New York Times for this fine illustration. Read and weep.

Wall Street bonuses are generally paid at the end of the year, so to allow time for the usual meetings, performance is generally assessed through the end of November. This means a peak in illegal manipulation as managers attempt to add a few points to their performance. Even though the SEC is believed to frown on manipulation on the last day of the month, if ever there is a time when managers might risk a slap on the wrist, this is it. And the buy programs are rolling through. I didn’t check it myself, but someone I know said that the last day of November has not had a negative close on the Dow in the last 25 years.

It will be interesting to see if the funds holding Dell are able to rescue it by the close, currently it is down 13% or so in a strong market.

The actual data this morning was weak, except for the Chicago PMI which was stronger than expected.

George Santayana said: “”Those who cannot remember the past are condemned to repeat it.”

Roubini: You can call it whatever you like but one thing is obvious: the Fed easing is perceived by the stock market as an action aimed to prevent a recession from occurring and stock prices rally - in spite of worsening macro news that are signaling recession ahead - because of the hope - that I will show is only wishful thinking - that the Fed will be able to avoid such a hard landing. Thus, what has been mostly driving up the stock market in the cycles since last summers is Fed policy expectations of easing. The same pattern of market delusion and serial sucker’s rallies occurred in 2001: the economy entered in a recession in March 2001 but the S&P 500 index rallied by a whopping 18% in April and May because the market and investors expected that the aggressive Fed easing - that had started in January - would prevent a 2001 recession (the famed and deluded hope of a second half of 2001 “growth rebound” that never occurred).

The myth of the omnipotent Fed is all the more alarming because even the Fed believes it in the face of 94 years of counter-examples. The power of faith is amazing, isn’t it?

Edit: Futures are up tonight, apparently because Bernanke made a speech which hinted at further rate cuts. Well with T-bills at 2.8%, Ben, the rate cut has already happened. And by the way, now that cutting rates didn’t help, the solution is to cut them again? Like it will work now when it didn’t before? Because? Oh and Ben also said the decision will depend on data between now and the meeting. Ben, you have to be kidding. That has to be noise in terms of any trends, you can’t possibly project months out based on data over 8 days. At least Greenspan covered up the fact that he didn’t know what he was doing with doubletalk. Ben, you are an embarrassment.

What did the bond market know and when did it know it? Shouldn’t it have warned us? Or done something?

Treasury bills ($IRX) at 2.8%. 10year Treasury note ($TNX) at 3.9%. TED spread at 220 bps. Talk about a cry for help.

Just as a data point about the value of some of this paper, E-Trade just sold its ABS portfolio to Citadel for 27 cents on the dollar. What’s in your money market account?

The stock market seems to be the “triumph of hope over experience” once more. Rabid speculation in tech stocks is the theme once more.

• Commercial lending (industrial bank loans and commercial paper) peaked at about $3.3 trillion in August, according the Fed. By mid-November, such credit was down to $3 trillion, a drop of nearly 9 percent. Never (in the Fed’s records) has this credit category fallen so rapidly. Smaller declines preceded three recessions going back to 1975.
• Jobless claims are rising steadily. 352,000 this morning. We get employment next week, should be interesting.
• Durable goods orders yesterday were weak, down 0.4%. Especially weak was computer equipment, down 8%.
• The real estate collapse is spreading to commercial, where real estate deals are coming apart at the fastest pace since September 2001, because banks are tightening standards for loans, said Robert White, president of Real Capital Analytics, a New York-based research firm.

And on and on. The evidence is pretty overwhelming that a recession is either about to begin or has already begun.

For a total joke about the value of some of these economic releases, just look at the newly released new home sales data.

Sales rose 1.7% to a seasonally adjusted annual rate of 728,000 in October from a downwardly revised 716,000 in September, which was a 11-year low. September’s sales pace was originally reported as 770,000. August’s sales were also revised sharply lower to 717,000 from 735,000 estimated a month ago, and 795,000 estimated in the first release. Sales are down 23.5% in the past year. The October sales pace was much weaker than the 740,000 expected by economists surveyed by MarketWatch

For example, August was released at 795,000 and has now fallen after two revisions to 717,000, a roughly 10% reduction. And we’re supposed to believe they only fell another 1,000 in September and rose in October? Either fix the reporting system or delay the releases until you have some actual data, please. I’m getting really, really tired of this “put out a good headline and hope no-one notices the revisions.” I expect the actual number will turn out not to be much over 600,000 for October.