Consumer Prices Fall By Largest Amount Since 1947

Yesterday, I mentioned how the PPI was showing signs of deflation. Today, the CPI backed up that notion. October CPI fell -1.0%, which somehow is the largest drop in decades. Moreover, the owner's equivalent rent component was flat yr/yr, which seems silly. So the real change in consumer prices was likely more pronounced than the headline figure suggests.

The Big 3 auto companies are testifying before the Senate in an attempt to secure government loans. It is a sad state of affairs for those companies. Painful to watch. I am torn where I fall on the debate. I don't want to see good money thrown after bad, but the economy certainly doesn't need them to go BK right now.

Citigroup is liquidating a hedge fund which managed $4.2 billion at its peak, but has lost -53% of its value. Bloomberg.com had an interesting story on how much cash has already been raised by the big hedge funds (more on this later). Let's hope they're done selling.

Asian markets were lower overnight. The Yen is slightly lower today. Oil is flattish near $54.25. The 10-year yield is lower again, hitting 3.45%, highlighting growing concern with deflation, not inflation.

The VIX is up +2% to 69. And the put/call ratio opened at an incredibly high 1.99.