Globalists hate the idea of nationalism

President Trump when talking about the caravan and his moves to defend the southern border with Mexico recently stated:

“You know they have a word, it sort of became old-fashioned, it’s called ‘nationalist.’ And I said, really? We’re not supposed to use that word. You know what I am? I’m a nationalist, OK? I’m a nationalist.”

At the commemoration of the 100th anniversary of Armistice Day marking the end of World War I over the weekend French President Emmanuel Macron said this in regards to President Trump’s statement :

“Patriotism is the exact opposite of nationalism. Nationalism is a betrayal of patriotism by saying ‘our interests first, who cares about the others.’ We erase what a nation holds dearest, what gives it life, what makes it grace, and what is essential – its moral values.“

What is the alternative to nationalism and why has that word taken on such a negative connotation?

The definition of nationalism from a political standpoint is: A political, social, and economic system characterized by the promotion of the interests of a particular nation, especially with the aim of gaining and maintaining sovereignty over the homeland.

The first synonym is patriotism.

The flip side of nationalism is globalism, which Macron and other EU member leaders must need to subscribe to since they cannot defend their borders from what Brussels dictates to them.

Macron, Merkel et al have lost their sovereignty to unelected officials dictating policies of what France or Germany et al will do. Think of the refugees changing the face of Europe.

When does nationalism turn into an extreme form marked by a feeling of superiority over other countries? When the native citizens begin to feel powerless over dictates that they have no recourse from these rules affecting their lives.

Macron may be too young to remember — perhaps he should ask his wife — how American troops freed the French from occupation during the two world wars, since their patriots were unable to defend their homeland.

Now of course Brussels is quite worried that Trump’s tariffs will correct the many years that the EU took advantage of loop-sided US trade policies. So they sent their French puppet out to take a jab at the American president.

President Trump should remember you only take flak when you are over the target.


EU will bail out Italian banks to curtail China intervention

The June jobs number came in at an astonishing 287K, more than 100K from the analysts projections.

Need to dig into the data, but I believe the number may be skewed the same way May’s number was by the Verizon workers going on strike in May and settling in June.

In the grand scheme of things this number alone will not move  Janet Yellen off her pause on rate hikes.

US markets are breathing a sigh of relief before the jobs number release on Friday, since no European banks suffered a catastrophic loss this week.

As Deutsche Bank and multiple Italian banks including Monte Paschi of Seina, were able to keep their doors open for another week, institutional investors sold off the dollar slightly giving the beaten up crude sector a little push.

The fact that regulators allowed the Italian banks to stress test themselves — without anyone on the outside knowing what the stress levels were — and tell the world they passed is laughable.

The market news that China is offering “aid” AKA bail out to Italian banks in defiance of Germany and the EU. This is the biggest movement, because it comes as EU now has a rival messing with its policy. Coming off of Brexit, Brussels and Frankfurt may be forced to move on aid to Italian banks to “save face.”


Central banks greased Brexit with $1T 'liquidity'

So the numbers are out for Brexit. It will go a long way to explain why markets bounced so sharply after plunging on Friday and Monday.

The Bank of England provided its banks with more than $345B on Friday and Monday. The ECB put $399B to work for its large member banks including Deutsche Bank and the troubled Italian banking system.

The Fed’s numbers are not public yet but figure there was an additional few hundred billion in “liquidity” into the market, bring the total to almost a trillion dollars.

So there’s the foundation for the run up in equities on Tuesday and Wednesday. It was not investors flooding back after realizing Brexit was not the end of the world.

No the run up in stocks was all this additional “liquidity” looking for the best treatment.

While the stocks have moved higher this “liquidity” will dry up probably by the middle of the trading day Thursday as realization that Brexit has more questions than answers for the UK and EU.

Deutsche Bank failed its US stress test for the second year in a row.

As I wrote in my Banker Suicide story, the seeds for the troubled bank were sown in 2013 with the bank colluding and committing fraud in the marketplace. The banks leadership always took the easy way to create trading profits through manipulating markets and pricing instead of putting in the footwork of analytical research.

Each week the bank is dinged by regulators for a few million here in fines, which has totaled over a hundred billion dollars over the last year or so.

The bank will probably be the institution that lights the fuse for the next banking crisis explosion in the near future, in my humble opinion.


Greek Independence Day

As the Greeks prepare to vote for a modicum of financial independence on July 5th, the amount of hatred for the Greek government in the financial press is ratcheting up.

Not sure why, except  it is easy to demonize the leadership as charlatans reneging on the debt they owe. When you work with bankers, you will take their side so you can have lunch with them and gain access.

The current government did not take on this debt, it did not add to the debt with its spending. It has cut spending in an attempt to placate  the Trioka overlords since it came into power.

Greek Prime Minister Alexis Tsipras and Greek finance minister, Yanis Varoufakis came to realization early on that this was a debt that never could be repaid.

Now who put the Greeks in this situation?

Here’s a list and they are all equally culpable.

  • Greek leadership at the end of the last century. They wanted to be included in the euro and would do anything to get it.
  • Bulge bracket banks including Goldman Sachs and Deutsche Bank. These banks re-jiggered the astronomical debt Greece already had so that the country would qualify for euro entry. Debt became an assets, assets were monetized to get over the hurdle of being euro worthy.
  • German and French leadership. They needed some patsies in the euro so that the currency would not get too strong and hurt the number of Mercedes Benz, BMW and french wine being shipped overseas.

Greece should never have been included along with a handful of eastern European countries.

So now its up to the voters, who I hope will see that a little pain that comes with a No vote is better that living under the jackboot of the Germans for the next 3-5 years until the euro really implodes.

I will say this about the US jobs numbers released Thursday. Recession confirmed.

The number of part-time jobs added in June surged by 161K, while the number of full-time jobs cratered by 349K.

Its ObamaCare and the economy. Why hire a full-time worker and have to pay benefits, when you can hire two part-timers and pay nothing.

If you believe that is too partisan, then it’s the economy that is has employers not comfortable in bringing on full-time workers.

The US is still 800K short of the number of full-time workers it had in 2007. Although you here the White House talking up the jobs recovery, waitresses, bartenders and home health care workers are not equal to manufacturing and businesses in full-time jobs with benefits.

Hence we will see muted growth with the possibility of negative GDP number for the second quarter at the end of this month, which by definition is a recession. But they will change that definition to accommodate their data.

Happy 4th of July

Rotation into Europe

We are in the midst of the great rotation.

The selling of the US treasuries by large institutions and sovereign funds to cover European bets is entering the 4 day of trading.

Investors are pouring money into European — and German specificly — equities. Cash is finding better treatment in stocks for the time being as debt market readjust.

The EU is soaking up European debt with it QEuro program with Germany being the largest seller. Sub 2 percent on US 10-yr had many shopping for better yield across the pond.