(Please join me in welcoming two of the world’s most respected investment analysts to the Weiss Research team! Boris Schlossberg and Kathy Lien (click here for bios)Â — both regulars on CNBCÂ — are widely quoted and sought after by cautious investors the world over. We believe their insights will help make 2016 among your most profitable years ever! — Martin Weiss)
Europe is under attack. Its economy is facing its greatest threat since World War II. Two times last year, terrorists successfully hit Paris and, according to the German police chief, thousands of ISIS radicals are entering Europe and planning more attacks.
Market Roundup
As ISIS is losing ground in the Middle East, it has made Europe target No. 1. The terrorist organization is smuggling thousands of extremists amid the flow of refugees, forcing Europe to choose between protecting humanitarian values and maintaining security. It is the largest refugee crisis of our generation and the greatest threat to the world since 9/11.
Another global terror attack was reported today in Indonesia (details still developing; see Other Developments below). But, after the recent Paris tragedies, should ISIS “flip the switch” now in Europe in a Mumbai-style attack, where there were 12 coordinated shooting and bombing attacks over a four-day period, the Continent will convulse into crisis not seen since the days of the World War.
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| Is there a future for the euro currency and the European Union as a whole? |
Borders will be sealed, threatening the entire fabric of the European Union. The great unification project will come under attack as everyone retreats to national identities. This is where the great flaw of monetary union without political union will be truly revealed and the euro currency will face its existential moment.
Hopefully this won’t happen. But the world is relying on intelligence agencies to thwart a growing number of attempts and, in the past year alone, they have let too many terrorists slip by.
To avoid a repeat of any scenario, European nations are spending money on tighter security measures, such as more processing centers and border fences, which translate into greater public spending at a time when the debt-to-GDP ratios in places such as Belgium and Greece already exceed 100%.
The challenge of absorbing all of the refugees is occurring at a time of weak European growth. In the third quarter of last year for example, the eurozone economy expanded by a mere 0.3%, while the U.S. grew 2%. Productivity has always been a problem in Europe, but the population is aging and the Continent could face the same issues as Japan.
| “The challenge of absorbing all of the refugees is occurring at a time of weak European growth.” |
And let’s not forget Greece. That country will be making headlines again this year because the Syriza-led government is taking too many pages out of the books of left-leaning U.S. economists. There’s significant opposition to their pension, tax and other structural reforms, so we wouldn’t be surprised if everyone starts talking about Grexit again.
And then there’s Russia. In 2015, that country’s brazen intervention in Ukraine shattered Europe’s illusion that conflict on the Continent was long-gone history. The EU was forced to enact sanctions, straining relations with Russia. By midyear, EU leaders will need to decide whether to scrap or extend those sanctions. Sclerotic growth, the refugee crisis, ISIS aggression and Russian tensions could lead to xenophobia in Europe — an attitude that is never good for trade or economic activity.
But not all is lost for Europe. If there are no additional geopolitical disruptions in the coming year, Europe could continue its recovery. Navigating that path can be tricky and in the coming weeks we will show you some opportunities.
Best wishes,
Boris and Kathy
(Editor’s Note: Boris and Kathy will have the next installment of their week-long special series Friday morning.)
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Regular columnist Mike Larson takes a look at your recent comments:
What’s going on in China? Where are our markets headed? And how about the NFL returning to Los Angeles? Those were some of the questions you were discussing online in the last day.
Reader Carmelo said that what’s happening now in our markets is the inevitable result of too much funny money during the boom. The comments: “It has been, and still is, a drugged economy. That’s the reason that it needs a severe dis-intoxication cure.”
But Reader Gordon said investors shouldn’t be blind to opportunity. His comments: “Get in there and buy in the morning. Buy on the dips. Don’t be drips. It’s the greatest buying opportunity of a lifetime. Let the bear trap catch you by the wallet.”
When it comes to China, Reader Al said: “China must resolve itself as either capitalist or communist. The capitalist moves it has launched in the past decade are indeed applaudable, yet they remain entrenched in a communist society, controlling and discriminating their populace.
“When I read analysts’ financial views and opinions, I cannot help but think the big picture of democracy and indeed opportunity for global citizens is overlooked, especially in regards to China. Saudi Arabia, India, and Russia (to name only a few) also play the game of lip service regarding their autocratic rule.”
Reader Donald L. added: “Too many investors thought of China as an industrialized national economy, which it is not. At best it is a sub-contractor you deal with as needed and for as long as it benefits you.
“When they change the rules, as they often do, be prepared to change suppliers. Long term reciprocal arrangements with countries, like companies, are built over time and based on mutual trust and best interests.”
Finally, in regards to the latest move in the pro football world, Reader Pete C. said: “I have thought for quite some time that L.A. needed a team again – it’s just too big of a market not to have one!”
Reader Chuck B. added: “So L.A. steals two teams from elsewhere. This will be the second time they take away from St. Louis — didn’t they build a new stadium to keep the Rams, a few years ago?
“Maybe it is time for the NFL to think about adding six more teams — one in each division. Aside from St. Louis and San Diego, there are other cities that might like teams. Offhand, Silicon Valley/San Jose, San Antonio, Orlando, Memphis, Raleigh/Durham and Norfolk/Virginia Beach/Newport News come to mind as perhaps having the populations to support teams.”
Thanks for taking time out of your busy day to comment on these important issues. It’s very clear that market action and the economic backdrop in China are at the forefront of the minds of global investors. I believe the country is undergoing a severe liquidity squeeze, coupled with massive capital outflows — and its “amateur hour” responses to those threats are killing confidence.
We’re getting dramatically oversold here as a result of the news. But at least as of yesterday, you could argue we still haven’t seen true panic selling (though we’re getting closer). That’s probably the biggest missing ingredient to a short-term, oversold bounce … even as I believe we’re in a longer-term bear market that will result in lower stock prices.
If you haven’t weighed in yet, you’ll find the discussion section lower down on this page. I’d love to hear from you.
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Several apparent ISIS terrorists attacked the Indonesia capital of Jakarta with guns, grenades, and suicide bombs. But only two civilians were reported killed and 20 wounded in the attacks that targeted a major commercial thoroughfare. Five assailants were also killed, while four were arrested.
Shares of France’s Renault SA (RNSDF) plunged as much as 20% in Europe after government antifraud investigators raided the firm’s facilities. Reports suggest officials were investigating whether Renault tried to circumvent emissions testing requirements like Germany’s Volkswagen (VLKAY).
The federal government is trying to pierce the veil of secrecy over big-ticket, all-cash real estate purchases in cities popular with foreigners. In March, the Treasury Department will start requiring “beneficial owners” to be revealed for large residential property purchases in New York and Miami.
Buyers can currently hide behind limited liability companies, shell firms and other entities to avoid having their names in public property records and media reports. But the government is concerned that criminals and corrupt foreign government officials are abusing that privilege to use the U.S. real estate market to launder dirty money.
The Powerball rollover frenzy is over! Three separate tickets sold in California, Florida, and Tennessee all had the right combination of five regular numbers (4, 8, 19, 27, 34), plus the Powerball (10). Winners will share a jackpot that turned out to be close to $1.6 billion, the most of any lottery, anywhere in the world, ever. Did you win?
What do you think about the government’s effort to find out who really is snapping up all these multi-million condos and homes? How about the news that other auto manufacturers may have cheated on emissions testing? Do you expect more attacks like the one in Indonesia? Let me hear about it in the comments section below.
Until next time,
Mike Larson
{ 48 comments }
I am a former American diplomat and international businessman now retired in Europe with my European wife. The lack of fast action by EU leaders to get immediate control of the refugee crisis resembled their endless bunggling with the Greece crise. And now the one strong leader in the EU, Merkel, is crumbling fast. I know a ranking Swedish doctor who is so fed up with the Swedes along the refugees and the way they are handling it he is planning to leave Sweden. And you don’t see to realize to a signifcant degree what an exit of the UK from the EU would do to the EU…I think the EU is in deep trouble. And for instance I know from a reliable source that of the permanent residents of Brussels, the capital of the EU, not counting the EU bureaucrats who come and go and the 300,000 who visit Brussels each day from around the globe and Belgium, that of the permanent residents 50% are Muslim…which is proabably why it was revealed in recent weeks that the recent attacks in Paris were directed and run by EU muslim residents in Brussels. I see very little for the next EU generation in Belgium when the Muslim use democracy to take control of the capital of Europe.
Where are Boris and Kathy getting their data? Most financial commentators agree that the trend is your friend. But not of this site. – Edelson has one chart that he has often referred to in the recent past forecasting gold up about 10% or around $1300/oz. by the end of March. While I sincerely hope so, I am now also skeptical since the forecast falls amidst so much of this site’s hocus-pocus marketing.
Have you followed the pattern in gold? Wall Street and the paper gold manipulators allow it to climb to almost $1100 an ounce and then bang knock it down to 1050 or slightly lower. Its the same is silver. Just when you think its getting legs bang it is cut down. This is a discouragement tactic being used to take the shine off of precious metals but then the alternative fiat money is suspect to. It is locked in this trading range thanks to the above. I hear talk about investigating all the shenanigans in the precious metals market but up to this point the trading range has suited the investigators therefore nothing will be done. If you had bought on the dips like I suggested you would have made money if you sold on Thursday. Friday hmm a whole new day. I see Renault is now coming under government scrutiny how many other car companies are shaking in their boots waiting their turn to share the wealth with the government. I think this lying and cheating extends well beyond the auto sector.
Hi J.R. Thanks for your comments. According to recent statistics, the muslim population in the EU prior to the refugees influx, shows that due to population explosion (more births of muslims that Europeans) of the muslims, within 10 years the EU countries will be completely dominated by the muslims. Now with the refugee crisis in full swing, I’m certain those numbers will be even greater sooner. Which tells me that the EU is on an unsustainable course. The sad part is, of which I am convinced, when the EU goes down, they will bring the U.S. down with it. Much of our US banks investments are tied into the EU. What affects them, will eventually (probably shortly) affect us.
It is sad to see what Europe is doing to itself. I was particularly shocked to see what Merkel did (and is doing) regarding the Muslim migrant situation. I previously thought she represented competence and prudence. Not anymore. I fear that Europe will experience more violence and poverty as a consequence of poor economic policies and exceedingly idiotic immigration policies. I believe that introducing vast numbers of people whose belief systems are historically antithetical to democracy and tolerance is the epitome of folly. In short, Europe seems to be destroying itself. It amazes me that the outcry, though growing, is as small as it is. It appears this is all changing. I hope political leaders will come to the fore to “right the wrong.”
J. Shannon, Obama, etc. are doing the same thing here. Will Americans ever wake up to the evil being done to our great Country? The destruction being wrought on Western Civilization by its “leaders” (elites) is beyond imagination. “The way for evil men to win is for good men to OBEY.” This 1400 year war is now being won by the Muslims! Look what Iran has just done to our Navy and its sailors. Our prestige and standing in the world is now down underneath the belly of a snake. Everyone has to be laughing at us!
Wait till the warm weather returns so will the hordes in their bathing suits looking to be absorbed fed, bedded and free food. Halal only please and no water bottles with Red Cross markings on them. Who said locusts were a plague?
I certainly hope the EU countries taking in refugees have stringent entrance procedures. Even if they do, it is almost certain some ISIS members will infiltrate. As far as the EU suffering economically for the burden of the refugees, each country must mobilize a plan to assimilate, train, and absorb them into the work force, otherwise, a lack of a plan A as well as a plan B will result in a huge economic burden.
None of that is going to happen in Europe….just as it never happens here. The ONLY solution is to close the borders. Merkel is a GRAVE danger to the German people and culture.
Merkel is just revealing the other side of her personality we all have 2 sides. Ma Frau Merkel is finally showing her maternalistic side.
When you take into account all the encredibly dumb and destructive things the Europeans have done to themselves over the last hundred years it’s a wonder they are still viable in any form. But, they have shown themselves to be extremely creative and resilient over and over again. With their rich cultural history as a road guide I can’t help but but think they somehow manage to snatch victory from the jaws of defeat one more time. Rank social and economic policies and a few refugees are nothing compared to what they have overcome in the past. My money is on them. Jim
Not in Europe’s current form. They need a north/south split, productive v’s dependent. No one society can survive by running up debts on another societies credit card bill. On an entirely different matter, the markets are a welcome change.
I believe we are exaggerating the impact the flow of people from the middle east will have on Europe. Like all populations theres only a small minority that are fundamentalist and a smaller number that want to do harm .
If the checking system is adequate then Europe should be able to cope withe flow of displaced peoples.. I think we are now a global world and we have to accept and help peoples that are caught in war that they do not support and allow children to grow up in a normalised way.The alternative is that we will continue in a global sense to produce radicals that have no hope .
I think commentaries should focus on the small minority that may try to cause trouble and not the large majority that want to contribute and benefit from Europe .
John
To form a cohesive society requires many elements including your compassion. The larger the change, then the greater the time period is required for assimilation. Leaders can not make these decisions ahead of the will of the people to accept change. In the more serious cases this only invites conflict. To impact a societies culture with forced change is not an easy thing for many to accept
I agree, Howard. It is a source of conflict – greater or lesser.
exactly! wouldn’t you then apply your idea to what US is doing everywhere, which is trying to stuff its warped form of democracy onto others???? doesn’t seem to work too well, in Irak, Libya, Syria, etc…., even amongst friends “sometimes we have to force them to accept what we want” (paraphrased from Obama).
America and Canada are lucky to be protected by large bodies of water on either side a natural defense against immigrants. Their flimsy boats usually sink before arrival. I see now a large group of Cubans are gathering in Costa Rica to put their foot on American soil. Should be an interesting year. Big business must be salivating at all the cheap labor headed their way. Won’t be long till wages are $10 a day like in the country where I now reside. Talk about a level playing field.
The refugee crisis is much larger than you appear to think it is. There are internal displacements and trans border displacements, the largest being in the Middle East, Africa, and from Central America to the north. These displacements and emigrations are of a magnitude previously unknown as the human population continues to increase at accelerating rates. If these masses of people are terrified into leaving their historical homes and heritages there will inevitably be extremists using those emigrations as a cover for their infiltration into traditionally permissive and welcoming societies and cultures. There are fundamental differences in their theologies which certainly have to be acknowledged.
Re: “immigrants going to Europe” – or anywhere else.
A true “immigrant” will tend to assimilate into the host country. People come from Europe and most other (non-Muslim) countries and become “Americans” within a generation. Muslims who emigrate tend NOT to assimilate. They live in their own cities and neighborhoods, they don’t adopt the hosts laws and customs and their desire is to remake the host into their image. Check Lancaster England and Detroit, MI, for starters. Sweden is almost overwhelmed. Their religion is different, their dress and customs are different, their holidays are different, their language is different. And, in general, they won’t change. WE can change to accept their ways, but not the other way around. True for any country to which they “immigrate”.
Christianity went through a time in which different views of the “correct” ways of belief and behavior even led to wars between ostensibly Christian nations, and with peoples of different religions, of course. Islam, a younger religion, may be going through something of the same kind in this time. Of course, people don’t fight with sword, pike and arquebus, anymore. We have far more destructive weapons, though even those killed millions in their time. Events of this time merely emphasize that religions are simply a form of politics, and can lead to exactly the same sort of outcomes as any other political differences. Both tend to be based on mythical teachings, instead of practical reality. There is little difference between Mr. Obama’s dreams and those of the Imams.
Or Mr. Trump’s, dreams, for that matter.
Good thoughts Roger, sad but true.
Right on Roger – Thanks for saying it so well! Even the peaceful and moderate muslims are afraid to stand up to the fanatics, so they wind up becoming a part of the problem that the fanatics create. (If you stand against them, you are considered worthy of death according to their Koran). Sad situation.
Well said Roger. In the past immigrants came to a different nation seeking a better life so they changed to become more like the people of the host nation. Now they come to divide and conquer. Multiculturalism, diversity, tolerance of evil will destroy any nation. Any nation that gives up its national sovereignty is doomed.
Mule
Here in Australia we are facing the same issues. We have a clutch of politicos who are afraid to say what needs to be said for fear of being called racist even though Islam is obviously not a race.
New political parties are starting here, but the end result if we don’t act quickly to round up the terrorists will be a civil war such as exists in the Middle East.
The Left will then have to decide which side they are on…
The only thing that they fear is not getting re-elected. All else means nothing. Every morning they get out of bed and check which way the political winds are blowing so they can hitch a ride. Sometimes I think God created politicians out of all the animal dung on earth. To this day the smell still sticks to them.
I would like to point out that the USA started the mess in the Ukraine by kicking out an
elected leader. The warmonger John McCain was involved.
The USA and NATO have violated an agreement with Russia in which NATO agreed to stop its’ membership drive eastward and Russia would not react to the fall of the Berlin
Wall. Funny how the USA reacted to Cuba where as NATO can do the same to Russia
via the Ukraine and is demonized for reacting.
love it: you’re so right in pointing out FACT rather than western propaganda fiction.
The west have picked up from Goebels (or was it Lenin)… “if you tell a lie often enough it will become the truth”…Another very appropriate nugget of truth that came from Mark Twain that “it’s easier to fool people than to convince them they have been fooled” implies that most people will negate the true facts you list.
The above (Bill’s comment) is Putinist troll propaganda to justify his invasion of, and interference in a sovereign state.
Welcome, Boris and Kathy !
Martin is lucky to get you…..he should now get rid of the clown Larry E.
God bless and good luck !
Larry is entertaining. I am still waiting for the surge in gold prices.
This market reminds me of the Power Ball lotto. They finally had 3 winners, everbody else is a sucker. (<: But the people running the lottery,,, they're all doing great.(<:
Mule
Yes the government.
With WW2 follow the money. All wars are for profit.
Very well said , leftist ideology apart from having very nearly destroyed western civilization in the past offers no path to commonsense logical rational thinking, freedom, true peace nor sustainability , Left wing thinking is pure insanity , Left wing thinking is a true mental deficiency ….
Mike,
Has long has you have no one on the end of these futures contracts gold will hit a wall?
Has for to listen to any of your media when they are all owned by Rothschild you have to be kidding.
HuH?
Europe is suffering and.. you seem to like it.
Europe is suffering because of your stupid leaders and we have the same problem in the U.S. so we will all be in the same boat together soon.
Joe and the difference you see between Europe and the U.S. is? We are not only bring them in by the thousands we also have open borders, so we are worse than Europe.
…..more boilerplate !….
Kathy and Boris
Nice summary, but not actionable.
Dana
All the major indexes are in correction territory, below 10% down. The Dow and S&P500, based on dominant stocks, are down about 12%, while the more representative Nasdaq is down about 18%. Many companies, especially in the energy field (the Nasdaq has many of these) are heavily in debt. That is doubtless why the Nasdaq is closer to the 20% down bear level. Unless earnings improve and let companies pay off that debt, many of them are going to be in serious trouble with the banks, and the news will drive the indexes into bear figures very quickly.
America and its present Aristocratic Party, headed by our own King & Queen, has reached the bottom level of “The Dumbing Down of America”. We used to have Three Hundred Million Americans who thought and acted like the Americans we knew and loved, with the ethics and the brains who, over the years, built it up to the greatest country in the world. Now, we have slowly become “a fourth-world disaster country” heading for the “Junk Pile” with about 140 other countries that are already there and most have been there for years and years. So, say “Good-BY” as “we all go down the chute”…ending up as a country of slaves. Alas, again, history repeats itself, over and over and over, again and again.
Headlines should be ISIS invading Europe
It is so surprising that you have identified some very apt points of view
We need more people like your self to stand for what is the truth
the world is under serge and it is not going to get any better fast we must realise the fiscal pressures that underlie the governments of today and how corrupt they are
Unfortunately we are not being told the truth in reference to political issues and internal
extremities of how leaders desire to have control of the masses.
Its so hard to find the truth. Jesus said DO UNTO OTHERS AS YOU WOULD HAVE THEM DO UNTO YOU. Another most profound commandment He said A new commandment I give unto you is love others as I have loved you.
Jesus said I AM THE WAY THE TRUTH AND THE LIFE
If each and every one operated on just these two what a different world we would have
unfortunately man made religions get in the way
Muslims do not “immigrate” ; they colonize.
For centuries our ancestors had to fight to keep Muslims from taking Europe. Now they’re being invited in and Europe is being handed over to them.