Nouriel Roubini:

There are now signals of extreme illiquidity, risk aversion, credit worries and flight to safety in the US and Europe based on a wide ranges of indicators: swap spreads at all maturities (2, 5, 10 years), VIX and other measures of volatility and investors’ risk aversion, Libor spreads versus government bonds, Libor spreads relative to Fed Funds and other policy rates, TED spreads, Dollar and Euro Libor versus OIS spread, 3month Euribor versus ECB rate, Itraxx and CDX spreads, ABX and CMBX spreads, US 10yr Treasury yields below 4% and sharp fall of equivalent yields in Europe; sharp fall in short dated Treasury yields in the US, Europe and now even in Asia (Korea, China). Many or most of these indicators are now back to their extreme summer levels and some even worse.

And the futures are ramping higher on the strength of the positive spin on retail sales for Black Friday. Despite the evidence that people are buying less and were lured out by deeper discounting than ever before. It is hard to believe that stocks are at these levels under the circumstances. An unshakable faith in the omnipotence of the Fed, I suppose. We’ll see.