While the left continues to bash Trump as a racist for his stand against migrants, the Obama Administration argued before the Supreme Court yesterday for the same result. The Obama Administration was at the Supreme Court on Wednesday, urging the justices to strike down a court decision granting regular hearings to many migrants jailed on immigration grounds.

The press paints Trump as racist because his campaign promised a broad crackdown on illegal immigration. Acting Solicitor General Ian Gershengorn argued that the 9th Circuit Court of Appeals (California) distorted immigration statutes when it ruled last year that many immigrants in prolonged detention are entitled to hearings before immigration judges every six months.

The Obama Administration said that the “9th Circuit undid that legislative balance,” repeatedly stating that the 9th Circuit appeals court invented a “one-size-fits-all” policy by guaranteeing bail hearings that lawmakers never authorized. “This was a deliberate, categorical judgment by Congress,” said Gershengorn.

It is very interesting how the press is not bashing Obama for taking a hard stand against equal rights for illegal immigrants.

Well the emails are pouring in already since our post on the upcoming French elections where our model was showing that “Clearly, the socialists are finished.” We further stated: “They made a two election come back, but that was just a reaction reaching 51.63% compared to their peak at 51.76% in 1981. This suggests they will possibly be out of the final run or this will be their very last time. The 2017 election may simply be Conservatives v FN in 2017.” We warned that our model was shaping up to be a confrontation between the Conservative candidate Francois Fillon and the FN candidate Marine Le Pen.

In what is being called a shocking surprise announcement, President Francois Hollande of France on Thursday said he would not seek a second term next year. He is so unpopular, he is stepping aside in hopes that this will resurrect the Socialist party’s chances. This is the very first time since France’s fifth Republic was created in 1958 that an incumbent president will not seek a second term.

Our computer simply looks not at opinion polls, but at the market performance and the economy. This is three for three so far. It seems to be on a roll with its political forecasting. We have the Netherlands and Germany in addition to the Italian referendum. This is a global trend rejecting politics as we have known it.

More strong Japanese data pushed the Yen lower which in turn saw a 1% rally in the Nikkei, exporters and Japan Oil Exploration leading the spike. Obviously, tomorrows US numbers will dictate trading Friday but then we do have the Italian vote Sunday and ECB next week. China also had encouraging data pushing the Shanghai +0.75% better and the Hang Seng +0.4%. Even in late US trading the yen continues its decline but the Nikkei and China300 (futures) have given back around -0.5% as US stocks wobbled mid-session. Also worth a mention is the continued decline in the A$ wandering into the mid 73 trading level and remains heavy as we approach year end.

European markets did not know whether they should follow oil or currency today and so looks as though we saw a little of each. The UK’s FTSE reacted after David Davis comments were spotted in the Guardian newspaper – “Should the UK keep paying the EU to retain market access”. Interesting for a trading discussion but will have little impact over time. The DAX lost 1% as the Euro climbed but was also reflecting peripheral and core bond market weakness. Late in the day the Euro took flight after a tweet from French President Hollande stated he would not seek re-election.

US stocks opened better once again but all could change upon the NFP data release tomorrow lunchtime. Having seen a good run recently today we had the inevitable pullback which was led by the NASDAQ. Falling over 1% it tended to drag the larger indices with it but was only the DOW that managed to hold its own. Tomorrow will probably set the trend into Christmas as we await both the ECB and the FED. Gold traded in an $18 range closing only marginally lower having seen short-covering in the final couple of hours US trading.

Bonds continued their sell-off even as the new month opened. Treasuries led the way but today it started to hit core Europe and the Bund market. US 10’s were last seen trading +6bp weaker at 2.44%, while 2’s lost just 4bp closing the curve steeper at +129bp. In Germany Bunds start to lose ground gaining 9bp today closing at 0.36% closing the US/Germany spread at +208bp. Italy 10’s closed 2.05% (+6bp), Greece 6.40% (-6bp), Turkey 11.01% (+19bp), Portugal 3.74% (+7bp) and UK Gilts 1.49% (+9bp).

The inundated Chancellor Angel Merkel has always had her own team who poll her popularity regularly. She cannot let go of power and she is known for not standing for anything but herself. She will change positions whenever necessary to maintain her popularity. Merkel created this entire refugee crisis because she was being criticized for her hardline on Greece. Now, Merkel is changing direction promising to deport 100,000 refugees.

Merkel’s harsh actions toward Greece drew international condemnation. On July 15, 2015, Time Magazine wrote, “Berlin’s role as the enforcer in negotiations over Greece’s debt could cause lasting damage to Germany’s global image.” Images of elderly Greeks committing suicide in Syntagma central square in front of the Greek Parliament in Athens made the front pages in the international press. Pictures surfaced of retired Greeks who were moved to tears after they were unable to withdraw money from banks and unable to buy food. Merkel’s image was becoming that of a money-grubber without any humanity.

Then, the Washington Times wrote on September 10, 2015, “Angela Merkel welcomes refugees to Germany despite rising anti-immigrant movement.” Merkel created this crisis as a diversion because Germany was being viewed as the harsh enforcer of loans, which were structured to hide what Goldman Sachs had instituted to get Greece into the euro from the outset. The entire reason for the refugee crisis was simply the view of Merkel globally. She needed to reshape her image from the loan shark to the caring Mother Merkel. Europe is now paying the price because career politicians were simply concerned about her polls.

Merkel had refused to accept any responsibility and outright denied that the refugee issue was even the problem. A leaked document surfaced that 2,000 men assaulted and raped 1,200 girls across Germany on New Year’s Eve. This was not an act of terrorism or some normal crime wave that has ever taken place in ANY western country before Merkel’s refugee crisis. If the refugees were not the issue, then why create flirting courses to show Islamic men how to get lucky with Germany girls? Police even altered records in Cologne to remove the word “rape” from criminal reports to support Merkel.

Merkel now promises for her election next year that she will increase the rate of forced deportations as she comes against a collapse in support to third place. Mrs. Merkel’s decision to open the doors to refugees without any verification has undermined the entire security of Europe. You even have her policy imposed on Australia who hopes to dump their undesirables on the United States thanks to Obama.

This is the biggest crisis that Europe faces and Merkel has the audacity to try to stay in politics and fight her way back through the polls.

Last July, Hungary’s polls showed that the people will NOT accept more refugees. Hungary’s Premier Viktor Orban was told his nation could be kicked out “forever” after “seriously” breaching basic values of the EU. He built a razor-wire fence along Hungary’s southern border to keep migrants out and even told Brussels to help Christian refugees before Muslims. He further told them that they should sink empty migrant ships to save the Mediterranean.

Now, a Syrian refugee was sentenced to ten years’ imprisonment for participating in riots on the border with Serbia. The man had thrown stones on policemen in September 2015, in order to force an opening of the border at the Röszke crossing. This is classified as a terrorist act. The 40-year-old was one of the instigators of the riots.

Almost half of the about one million refugees who came to Europe last year came through Hungary. There were often chaotic situations at the national borders on the so-called Balkan route. Hungary finally cut off its border with the neighboring country of Serbia with barbed wire and passed laws, which included, among other things, imprisonment for the illegal crossing of the border.

QUESTION:

Hello Martin,

A year ago or so you said ‘ I highly recommend Europeans to hoard
Dollars instead of Euros.

I suppose that hasn’t changed. Do you see in the meanwhile a risk
for hoarding Dollars here in Europe ?

Are we even facing the Dollar Cash to be cancelled soon ?

Thank you very much for an answer.

Best regards
JB / Germany

ANSWER: The dollar is used globally. When they changed the $100 bill, they took advertisements on international flights to reassure people the old bills were still valid. US currency has never been cancelled so this is a cultural issue. It would be extremely difficult to cancel the dollar because it is the reserve currency. Now with Trump in town, we will see this potential to cancel the currency even less likely in the United States at least until 2018.

So my recommendation has not changed. Anyone hoarding cash should do so in dollars. To be safe, $20 bills would probably be best.

New research is giving new meaning to the term “fresh blood” and an additional motive to the legend of Dracula. In a recent study, U.S. researchers injected the blood of human adolescents into older mice who would be the equivalent of 50-years-old humans. Suddenly, their memory, cognition, and physical activity improved. “The treated mice ran around like young mice. Your ability to remember seemed improved and they were much more quickly able to find your way in a maze, as the animals from the untreated control group,” reported the New Scientist. The researchers also assume that the method can be applied to humans. This is a very interesting line of research. Maybe Dracula was on to something.

Merkel’s Federal Cabinet has decided on new plans to supply the population in disasters, reports the Reuters news agency. The draft law adopted on Wednesday according to participant data provides inter alia new powers of the authorities. According to this, farms or other foodstuffs can be confiscated in order to ensure the nutrition of the population. The emergency plans are to take effect if a large number of Germans can no longer cover the free market with food. Examples of catastrophes are martial conflicts, a large-area power failure, a pandemic or a stop with large-area radioactive radiation.

In the event of a supply crisis caused by natural catastrophes, power plant accidents or military incidents, the Ministry can only prescribe that only large retail outlets are opened. As a measure against looting, the law provides the submission of food under state supervision. In addition, usury prices should be avoided by means of fixed quantities or fixed prices. Prices were frozen in the USA during World War II whereas that was not the case during World War I.

Back in August, Germany urged its citizens to stockpile food in the event of a crisis.

Been a crazy day for many markets today but stocks have not really been one of them! Oil was the crazy sector today following yesterdays 7% price decline today we saw a healthy 9% appreciation on news OPEC plans a production cut. However, that was not until late European trading so lets just recap Asia first. The Nikkei closed almost unchanged on the day for cash but the fun and games started later in the US trading session. Shanghai lost near 1% as month end book-squaring took the blame while the Hang Seng saw small gains. Late in the day the JPY looked closely at trading with a 115 handle which encouraged 1.6% rally in the Nikkei futures.

European indices took their lead from the oil market with all core sectors closing stronger (+0.2% to +0.45%) across the board. Oil rallying near 8% certainly encouraged sentiment if nothing else. European economic data was almost inline against expectations but it was the US Chicago PMI and the ADP number that surprised dealers and none more so than the Bond guys. As we approach month end all will be watching key levels especially on 30yr Bonds, gold, core indices and DXY.

Despite the US cash markets opening at record levels we did see a small decline as the day progressed. As we opened the headline appeared that OPEC had agreed to cut production by 1.2Mln bpd. FED Beige book also better across the field but Fridays NFP will be key which is refreshing that we are going back to data watching rather than anything else. Next week we have ECB but many will be watching Sundays Italian election result and how BTP’s and the Euro reacts. Manufacturing in China and the US tomorrow while in Europe we see Unemployment. Most remain on the sidelines for majority of this year rally so should be interesting to watch the scramble into year end especially given the DXY strength (up 0.5% again today). DOW closes the month up over 5%.

Big sell-off in the fixed-income market continued today probably only saved by the fact that it is month end. US 2’s closed 1.12% (+3bp) bit 10’s lost 10bp closing at 2.38% (2/10 out at +126bp). In Germany bonds held marginally better with 10yr Bund closing 6bp higher (yield) at +0.27% closing US/Germany spread at +211bp. Italy closed 1.98% (+4bp), Greece 6.45% (-34bp), Turkey 10.82% (+5bp), Portugal 3.67% (+8bp) and UK Gilt 10’s at 1.41% (+5bp).

Private Blog Update for Bonds – Dow – Gold