Led by a 4.3% collapse in Germany's DAX index, European Stocks plunged 2.5% today which is the worst start to a year ever. European credit markets spiked higher in risk. 10Y bund yields tumbled over 6bps and peripheral sovereign risk spreads jumped 10-15bps. Not a good start for Draghi and his pals...

Germany led the collapse...

Which has driven Stoxx 600 - the broadest European stock index - down over 2.5% for its worst start to a year ever!!

Charts: Bloomberg

Despite a bloodbath in US equities, gun stocks are soaring this morning (Smith & Wesson up 7% and Sturm, Ruger up 3%) as ABC News reports, as we detailed yesterday:

• *OBAMA MAY TAKE GUN CONTROL EXECUTIVE ACTION TOMORROW

With the Oregon standoff continuing, it appears "the world's greatest gun sales-man" has done it again.

From an escalating crisis in Saudi/Iranian relations to crashing markets in China, the prospects for peace and prosperity in the new year seem dim.

With the world once again gripped by the latest Middle East snafu in which suddenly every Gulf State has found itself in the worst diplomatic crisis with Iran in 30 years which, incidentally, started after Saudi Arabia executed a Shiite cleric in its biggest mass execution yet, unleashing righteous Iranian anger at its action, many have forgotten - if only temporarily - about Europe's biggest crisis at the moment: the onslaught by over one million refugees, who are desperate to escape from the political disaster that are the broken states of Syria and Iraq.

A funny thing happened at 1101ET. Amid the deep plunge in stocks, 'someone' suddenly traded an enormous block of e-mini S&P futures which appeared to stall the sell-off (for now). This followed a similar (but smaller) block trade at 1042ET which also extracted all the liquidity from the market momentarily and enabled a brief rally.

That is twice we have seen a big block followed by a rally in futures...

and a close up shows the shocking ripple as liquidity was sucked away by the huge block trade...