Stocks slid lower as last week's market bounce from the European summit proved to be ephemeral.

The market has come to expect that almost all European "meetings to end all meetings" will simply yield…more meetings.

The necessary fix is clear (fiscal union) but the path getting there is going to be a long, hard slug.

In the meanwhile, volatility in the markets will reign supreme.

Eventually, once Europe has made the hard decisions and the necessary structural reforms (as it must; there are simply no alternatives), a much more muscular and robust Continental union will emerge.

Clarion calls sounding the death of Europe are missing the bigger picture.

These are the birth pangs of a leaner, meaner Europe.

The Euro lost more value against the U.S. dollar, closing under 1.32; this is to be expected and the weakening trend is likely to continue into next year.

In the corporate bond markets, volumes are light with real money accounts apprehensive about adding risk at year end.

A lot of accounts fell below their benchmarks sometime between August and October so they are just keen to see the year finish.

Liquidity will remain challenging as we move further along through December.

The only players actually taking any substantial risk are hedge funds that are looking at some of the market dislocations as an opportunity as some real money players continue to sell some of their riskier assets.

The FOMC (Federal Open Market Committee) meeting scheduled for tomorrow should not surprise anyone.

The Fed (the Board of Governors and not the FOMC) may reduce the discount rate (from 75 basis points to 50 bps) in line with the recent reduction in the rate on central bank swap lines.

It would appear incongruous for foreign institutions to have lower borrowing rates compared to domestic banks.

The Fed's statement will also likely incorporate recent positive surprises in macroeconomic data while pointing out the downside risks to the economy.

It was a very interesting year for the markets but next year may prove to be more interesting yet.

Francis Fukuyama's call in the 1990's on the end of history was correct in that it marked the end of an era.

We are entering a new age, the beginning of history, shaped by the hidden hand and sculpted by that most pithy of truisms: "Demography is destiny."