Terror has struck in the heart of Europe again. According to the latest reports …
Market Roundup
Two explosions rocked a departure hall at the Brussels Airport, with at least one being attributed to a suicide attacker. Those detonations killed 14 people at around 8 a.m. in Belgium, and injured more than 90.
A second explosion struck a train car in the Maelbeek subway station, a central Brussels metro stop that’s near multiple offices of the European Union. At least 20 people died in that attack, while more than 100 were wounded.
These attacks come just days after Salah Abdeslam, one of the main plotters/terrorists involved in the Paris strikes, was arrested. One hundred and thirty victims died in those attacks, carried out at night on Nov. 13.
Belgian transportation networks were completely locked down in the wake of the attacks, with flights in and out of the airport canceled. All subway, bus, surface tram and many train services, including the popular Eurostar and Thalys networks, were also shut down in the country.
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| Brussels is in the heart of Europe and is the home of NATO. |
It’s very tough wrapping your mind around these kinds of events. My thoughts obviously go out to the victims, and I hope that authorities will be able to prevent similar, future disasters. But the recent track record isn’t very encouraging.
One key problem is the unprecedented wave of migration from troubled countries in Africa and the Middle East. Many analysts fear terrorist operatives are slipping in unnoticed amid the flow of tens of thousands of legitimate refugees.
Experts also worry that Europe’s relatively open border system, and lack of effective intelligence sharing, could allow terrorists to continue planning and carrying out attacks like this one with relative ease. They also cite the insular nature of some of the immigrant communities, and the economic disillusionment many migrants face when they get to Europe, as reasons why intelligence agencies have trouble infiltrating terrorist networks.
Personally, I travel to Europe every fall for an investment conference hosted by the publishers of the German-language version of Safe Money Report. I’ve been to Munich, Cologne, Bonn, Frankfurt and Hamburg in the past half-decade as part of my work duties.
I’ve also spent time touring Prague, Berlin and Amsterdam during my downtime, not to mention London and Paris years earlier. I’ve traveled by air, train, tram, bus, taxi and subway and covered untold miles on foot. I don’t have any intention of changing my future plans.
But I’m sure plenty of tourists and businesspeople are doing so. At the same time, today’s attacks only serve to underscore the fact Europe faces multiple political, economic and humanitarian crises.
| “Today’s attacks underscore the fact Europe faces multiple political, economic and humanitarian crises.” |
Anti-immigration parties are gaining more ground in regional elections. Internal discord over bank bailouts and wealth transfers from richer to poorer countries is increasing. The U.K. is even contemplating a “Brexit” from the European Union.
That’s why investing significant amounts of money in European stocks or European ETFs is a dicey proposition. I would rather stay focused on lower-risk, lower-volatility, higher-yielding, less-economically sensitive companies here in the U.S. Holding safe-haven investments like gold in an uncertain world like this one, can also provide peace of mind and wealth protection.
Now, I’d like to hear from you. Will this latest attack impact your travel plans? If so, how? What do you think about Europe’s counterterrorism efforts? Are there additional steps that authorities could take to prevent attacks like those in Brussels and Paris? In the bigger picture, what does this say about the political and economic challenges facing Europe? Use the comment section below as a sounding board.
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My colleague Mike Burnick and I both recently wrote about the extreme volatility in the markets, and what it signals about stocks go next. Several of you also shared your thoughts about that subject in the past 24 hours.
Reader Anthony G. said: “Nature knows that there are too many bulls. The market is overbought. The bears will bring it back to balance.”
Reader Mike S. also sounded a note of caution, saying: “PE ratios are too high … corporate profits are shrinking … and this market is overpriced for reality. Look in the mirror and ask yourself about the market, and you’ll find it’s supported by the Federal Reserve.
“They are not man/woman enough to admit this. They support the market with manipulated interest rates. If we manipulated our business like the Fed, we would be in jail.”
Reader Rickard brought up the impact of central bankers on markets, saying: “It’s going to be incredibly hard for this market to fully break down. The Fed can’t let this market tank because if they do lose control, they don’t have any other tools to stimulate the market (given ZIRP, etc.). Previous bear market cycles like 2002/3 and 2008/9 have had interest rates much higher.”
But what can central bankers really accomplish? Reader Chuck B. thinks it isn’t much. His take:
“What tools does the Fed have to keep the markets from the tank when they decide to go there? There is no visible support for where it is now. Hopes and dreams? They are only good until they are dashed, and they will be, of course – sooner or later.”
Finally, Reader Al said: “U.S. markets may witness an influx of investments from Asia and Europe since only the blue-chip, well-capitalized companies with excellent balance sheets are stable enough to hold up against the financial debt situation and lack of global economic progress. The U.S. markets provide a better safe haven, although trillions of dollars in debt will raise its head sooner or later. A roller-coaster ride is in the cards.”
Thanks for sharing. The biggest issue I have with the kind of central bank intervention we’ve seen recently, and its impact on asset markets, is the timing. The massive interventions unleashed in 2008-09 came at the tail end of a bust phase in the credit cycle. Real estate prices had already tanked. The stock market had already crashed. The economy was already mired in the depths of a recession.
So when the Fed unleashed things like QE, and the Treasury did its bank stress tests, it worked because sentiment was wildly bearish and a lot of the systemic rot had been purged. This time, the European Central Bank and its foreign counterparts are unleashing bazooka after bazooka at a time when the asset markets are very close to their highs. The M&A, IPO, junk bond and commercial real estate markets have started to deflate, but they haven’t fully crashed yet.
That’s why I find it highly unlikely we’ll be up and off to the races again. It’s just not the right point in the cycle. Support for that view comes from the types of stocks and sectors that are doing well, versus those that are underperforming. It’s not technology, financials, materials, and the like rallying sharply to new highs. It’s utilities, telecoms, consumer staples and other defensive sectors leading the way.
Agree? Disagree? Have any other observations? Let me hear about them in the discussion section below.
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Idaho Democrats vote for their presidential candidate today, as do Republicans and Democrats in the states of Arizona and Utah. Donald Trump is expected to win Arizona, though Senator Ted Cruz may be competitive in Utah. Bernie Sanders is expected to deliver strong results in Utah and Idaho, though Arizona will be a tougher slog.
OPEC and non-OPEC members may freeze production at January levels even if Iran doesn’t participate, according to the Financial Times. Representatives from several countries will meet in Qatar on April 17 to see if they can hammer out an agreement. The problem is that a production freeze would lock in near-record levels of output, resulting in a limited impact on the world’s oil supply glut.
I’ve been warning about a top in the commercial real estate market for a little while now. Today, the Wall Street Journal reported that sales of CRE property sank to $25.1 billion last month. That was a 47% plunge from a year earlier, and a 46% drop from January, according to Real Capital Analytics. Pricing also appears to be leveling off after a large jump to sky-high levels in the past half-decade.
Do you believe the commercial real estate sector is topping out yet again, and if so, will the downside be as severe as we saw almost a decade ago? What do you think about oil prices and the chatter about a production freeze? Any thoughts on the latest round of primaries and caucuses? Share them below when you have a minute.
Until next time,
Mike Larson
Recommended Articles by Mike Larson:
Mike Larson graduated from Boston University with a B.S. degree in Journalism and a B.A. degree in English in 1998, and went to work for Bankrate.com. There, he learned the mortgage and interest rates markets inside and out. Mike then joined Weiss Research in 2001. He is the editor of Safe Money Report. He is often quoted by the Washington Post, Reuters, Dow Jones Newswires, Orlando Sentinel, Palm Beach Post and Sun-Sentinel, and he has appeared on CNN, Bloomberg Television and CNBC.
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Its time we develop an Energy policy that quits rewarding the Saudis and Iranians and become less oil dependent which does not mean a total non fossil fuel free country the aim of the greens but does mean that we maximize our own oil and gas reserves to increase supply while while while developing increase reliance on renewable related energy again with the aim of decreasing demand and reliance on fossil fuels while squeezing the real supporters of islamic terrorist and hit them where it hurts the pocketbook always follow the money why it took us so long to do so with DAESH I never could understand
I think Obama feels more sympathy with the terrorists than the victims.
I have already cancelled a European Cruise for this summer.
Europe’s counterterrorism plans don’t work for a number of reasons. First they don’t trust each other. Second they don’t coordinate with each other. Third, they don’t speak the same language. Don’t have the same political structures, etc. etc. Finally, the camels nose is already in the tent. The terrorists are now part of the local community. How are you going to root that out? Answer? you can’t.
Countries that do not control their borders are doomed to fail. The US without a border , without a culture, without a common language, will also fail in the long run. If the terrorists root in our neighborhoods, they will be protected as well.
Got that assessment right !
We already did, Oil barrel price is down where it had always to be. We let them to form cartels to get the money that strikes us today. We must stop behaving virginal and stand hard on floor space defending our civilization. The hell with them- where they always were- the inferno heat of the middle east region.
I was planning to travel just to same places the explosions are ocurring in the EU. My wife and I have decided to change travel destiny. The sad side of this terrible story is that these processes take decades.
If you cannot manage your civilization then you have none.
Angola which is a Catholic and Ancestors belief population in South West Africa has done it and is now bringing down the mosques. Japan does not even allow a Quran to be imported. It can be done. As long as you don’t care for Political Correctness.
The oil and stock rally is artificial. The market will soon correct this imbalance. The hard landing in china will be the catalyst.
We are running very short of storage space for oil. The refineries will be shutting down to adjust for making summer blend gasoline. This should put downward pressure on prices. Jim
Except that summer gas is always higher, due to the many different blends prescribed by state/local laws.
downward pressure on crude price because the refineries won’t be buying during the maintenance turnaround, but upward pressure on gasoline prices until they start up again.
oil is going to be trading in a narrow range for the next year or two. it can’t go much lower or the shorts get squeezed out, and it can’t go much higher or the frackers move in and put a lid on prices. gas at the pump should average what we’re seeing now, about $2/gal for the some time to come. this is heaven for the consumer. it can’t get any better than this.
Religion and politics are basically one and the same, except that religion speaks to people’s yearning for a higher way of life on the spiritual level, while politics while politics speaks to people’s yearning for a higher way of life on the physical level. It is very easy for the two to become intertwined. Judaism and Christianity have done it historically. Islam also, and it is younger than the others, so is still in that stage to a greater degree. They all confuse physical wants with spiritual desires.
A Lebanese friend tells me there is nothing the West can do or not do that will make them like us. All over the Middle East they are taught from cradle to grave to hate the infidel and the apostate. This isn’t going to change in our lifetimes. Jim
the intent of their cowardly attacks is to rally fundamentalist support. counter attacks on our part will only rally more to their cause. it’s why obama is on the golf course.
trump will spend even more time on the golf course.
Hi $1000 gold, your 1:32.
Exactly right, but it won’t work as a strategy. It is a pity that they only understand the way of the Warrior, force, and unless we uproot them all, there will only be repeats until they win totally, or Western Civilization disappears. Alas there is no middle ground for us who grew up with Rouseau’s “Age of Enlightment”. We have to follow the old cowboy adage “There’s no good….”. It’s either us or them.
DONT worry JIM,we are already hating the heathens
In the old days (Bush 41) an international coalition would be assembled and ISIS would be attacked. Hopefully the job would be finished this time. One might also look to the “bad” old colonial days when Lord Kitchener took care of the problem of the Mahdi at Omdurman in short order. A job half done is not done at all.
Obama is too busy playing golf or today….yucking it up at a baseball game with a mass murderer named Raul Castro. No time for defeating a global terror threat like ISIS.
When a half a dozen people can shut down whole cities and countries I don’t see where there is really much we can do about. Belgium has been a virtual police state since the Paris attacks. The perpetrator lived openly there for four months and they were completely unable to stop this attack. I don’t know if there is an answer. Jim
face it. world war 3 has already started. problems with isis and others will no longer exist when it’s over.
Historically, I think you’ll find that Jews and Christians started mare wars than Muslims, including wars among their own sects.
That proposition would be impossible to decide without hundreds of qualifications, e.g., what is a war? what about the varying lengths of time that these religions have existed? etc, etc, etc…….And then there are the atheists (Hitler, Stalin, Mao, etc.)
Perhaps it would be more appropriate to look at the founders rather than the followers….
Judaism founded by Abraham, a herdsman. Christianity was founded by Jesus of Nazareth, a teacher, carpenter (and much more, as claimed). Islam was founded by a warrior.
I don’t know, offhand what religion Mao followed, if any; but Hitler and Stalin at least began as Christians of different branches Jesus was a Jew. His followers founded Christianity, using some of His teachings as the basis. Christianity might be said to be a heretical offshoot of Judaism.
The Old Testament is partly a history of war among Jews and between Jews and others – sometimes as attacker, sometimes defender. Islam began in the Middle East, and spread across. North Africa, and into Spain and the Balkans, mostly during the European Middle Ages – sometimes via war. Christianity has a vivid history of war against Muslims and others, and among themselves, including the Crusades and the Thirty Years War of the 17th Century, among Protestants and Catholics.
This wa intended as a reply to F151.
Hitler, Stalin and Mao were all atheists. Islam was spread by force except in those rare cases where it was accepted without such. Christians fought the Crusades after the bloody torturous invasions of Europe by the Muslims circa the 9th Century. Were there internecine wars? Yes. Did they exceed the continued violence of the Muslims as you argued? I would say no.
Hi Chuck. Your 8:06. Islam, always, always expands via War. The philosophy is “It’s the edge of the sword” that is used to convert.
Please listen carefully, I grew up in the Middle East and I had to learn four languages and their histories in primary school and although Christian, had to learn parts of the Quran as well.
IT IS NOT “HARAM” (a sin) TO LIE TO ANYONE NOT OF THE FAITH OF ALLAH.
What the Mullahs tell you that Islam is not a warring political religion is a pure lie. Yes it is a religion of peace BUT ONLY BETWEEN THE CONVERTED not anyone else. All others who don’t believe in Allah are ENEMIES OF ALLAH. Therefor lying, stealing, raping, killing of the KAFFIRS (Unbelievers) is permitted and encouraged.
A Mohammedan who does not actively try to convert a X’an or a Jew, is a sinner. If he can’t convert him then he must kill him to cleanse his own sin! How’s that for a religion?
Please continue to take to your bosom these asps, but don’t be surprised if they bite you or your children later.
This is the HERE AND NOW, mister. Times change. Git with the program.
Right, Chuck. As far as I can see, what’s going on in Europe is The Crusades, part II. About a thousand years ago, the Christian Europeans tried to save the holy land from the Muslims. The Muslims are still trying to take over the holy land, while the Christians seek to subdue or eliminate them. The difference now is that the Muslims can get some payback in Europe, as they’ve gotten considerable funds from oil sales (which were obviously unavailable 1000 years ago).
This was supposed to follow Chuck’s 5:50 comment.
The market players are not using risk management. They are totally dependent on the central bank.
Why are we fighting what is called a War on Terror against militant Islam?
They are fighting a war against America and Western Civilization!
My thoughts are with all these innocent people who were murdered and injured. I dont think therre is any simple solution.. I do think EU countries need to strart sharing intelligence information which may prevent some of these attacks>>
I can see a new culture of strong leadership/dictatorship emerging which will be accepted by communities under attack. and which will be more brutal than anyone can imagine >
I dont wish this to happen but I am concerned that we are rapidly heading down this road>
J
This rotten economy I call pure capitalism and usurious finance is destroying Western Europe, The USA, and Russia to some extent. China and her satellite neighbors are the future economy. China, a dictatorship of sorts, started after Nixon’s visit to find the best American economy and emulated the HST administration economy that is a mixed economic system that regulates natural monopolies with long range goals and otherwise fosters free enterprise across the economy. Their economies grow as our economy and nation stagnates with massive superfluous humanity without jobs or future.
In answer to Mike, as I indicated above, religion and politics are birds of a feather, to large degree. One of the great actions of our Revolutio9nary forefathers, was to inscribe the idea of religious toleration into law, and this has largely spread throughout the Western nations. It allows Jewish, Catholic, Protestant AND Muslim clerics to join together for political purposes, as they did in Baltimore following last years riots. The Imams and Mullahs, however never learned the value of tolerance, and they teach their followers from the old intolerant book. Either they will take a lesson from the West, or they may see the destruction of their culture in something approaching Armageddon. That will set back the West, as well, as shown by some of the political rants we have heard.
This should have been posted after my 8:06.
The refugee crisis in Europe is tearing the continent apart. The ECB is trying to be the complete savior. It will surely fail.
The borrowing capacity of central banks is not infinite. The projects the capital is used for are nonproductive. The crony system shows that clearly.
Terrorist bombings are nothing new in Europe. When I was living in Germany in the early 1970’s, there were numerous bombings in Germany, France and several other countries. There have been plenty of other times when bombs were being detonated all over Europe. I certainly would not have wanted to live in London durring the early 1940’s!
I read that several sources, including Investors Business Daily state that the recent climb by stocks was caused by a number of short term traders, while many long term investment companies began reducing stock investments last July. I suppose the traders will now sell short and drive the markets down again, since there is little holding them up except retail buyers. Manipulation! Manipulation!