Holland Heats Up, Belgium Burns As French Yellow Vest Protests Spread Across Europe

Authored by Robert Wheeler via Daisy Luther’s Organic Prepper blog,

Editor’s Note: When I watch the Yellow Vest protests in France, and now in other parts of Europe, I can’t help but wonder if this is where we, too, are headed here in the United States. Between widespread political divisiveness and an economy that is truly suffering – despite what you see on the news – people here are also fed up. Is it only a matter of time before people in the US take to the streets by the hundreds of thousands and say, “Enough?” It’s truly essential to watch what’s going on in Europe to get a glimpse at our potential future – and to prepare for it. ~ Daisy

As protests continue to rage in France, discontent is festering elsewhere in Europe at the same time. What began as a routine protest deep in Paris has swelled to over a hundred thousand people and approximately five locations throughout the country. Anger over yet another eco-fascist “gas tax” seems to have been the straw that finally broke the camel’s back.

This, of course, was combined with other problems too: constant foreign military adventures, falling wages, rising costs of living, rising costs of healthcare, privatization of essential services, cultural disruption as a result of heavy migration, and growing unemployment as a result of Free Trade globalist policies.

France is now facing the possibility of martial law or greater unrest and violence.

It’s not just France dealing with Yellow Vest protests.

And the discontent being seen in France is also being felt elsewhere in Europe – most notably Belgium and the Netherlands. Although receiving much less media attention, the “yellow vests” have taken to the street in Belgium over many of the same concerns as their counterparts in France.

But while the French version of the protests was set off by the proposed increase of fuel taxes and ballooned into a movement addressing greater issues, there was no straw to place on the camel’s back in Belgium. There were no new fuel taxes announced or any other new policy that was receiving coverage in the media or causing discontent with Belgians at the time. The Belgian government is increasing the cost of fuel but the policy is not a new one. Belgians already pay the highest state taxes for fuel in Europe.

Interestingly enough, it seems that the “final straw” for Belgian was imported from France.

For all intents and purposes, it appears that the Belgian and Dutch protests are the reverberating waves of discontent that comes with such an “integrated” society in Europe whereas the indignities suffered by the populations in one Sovietized EU “democracy” are grievously felt in another Sovietized EU “democracy.”

It is also reminiscent of the French Revolution when British oligarchs were constantly on guard for signs of discontent with the dreadful conditions in that country, lest the same thing should take place in England.

So Why Are The Protests Taking Place In Belgium?

For the most part, the protests in Belgium are inspired by the same situation in France, i.e.; falling wages, rising costs of living, rising costs of healthcare, privatization of essential services, cultural disruption as a result of heavy migration, and growing unemployment as a result of Free Trade globalist policies.

France 24 summed up a number of Belgian economic grievances when it writes,

The demonstrations in both countries come from the same sense of struggling to make ends meet every month.

It began, in both countries, with the government increasing the cost of fuel. Belgians, for instance, pay the highest state taxes on diesel in Europe. The French government backed down on the proposed fuel tax increase, and Belgian ministers did the same, announcing the fuel prices would not be index-linked from 2019. But in both countries, the protests have continued.

According to Eurostat, the European Union’s statistical body, tax-to-GDP ratio rose across Europe in 2017. France tops the list, with tax revenue accounting for 48.4% of GDP, and Belgium follows close behind with a tax-to-GDP ratio of 47.3%.

Economist Philippe Defeyt told Belgian media RTBF that while the cost of living has increased in Belgium, so too has the average income – apart from the lowest-earners, who have been squeezed even tighter.

retired man told RTBF that he receives a pension of €1,350 a month. “I get it on the 23rd of the month. It’s now the 8th and after I’ve paid insurance, rent, energy bills – which cost €150 – I only have €200 left for living expenses,” he said.

A Facebook group for Yellow Vests in Belgium lays out some of their demands to the government: lowering the retirement age, decreasing fuel excise duties, decreasing the cost of electricity and water, the choice of referendums at all levels of legislative decision-making, increasing pensions, improving public services and increasing purchasing power. The average price of electricity has risen €10 in the past year. Protesters describe a general “ras-le-bol fiscal”, or financial despair.

It’s a similar story in Belgium: in Brussels, salaries are €300 higher than the average salary in the rest of the country. With a capital that also doubles as the capital of Europe, Belgian citizens are frustrated by what they see as their lawmakers’ inability to solve problems closer to home.

One protester gestured to the European institutional buildings behind him while talking to a NBC Euronews reporter. “There, in ‘Europe’, they’re having fun, they’re laughing,” he said. “The people who make the laws are the ones driving us further into the ground. We have empty pockets. We shouldn’t be called the ‘yellow vests’, but the ‘empty pockets’.”

The protests in Belgium have been largely peaceful, but there have been some violent clashes as well. On December 8, police in Brussels blockaded a zone which houses the European Commission and European Council which essentially blocked in the protesters. When a group of protesters attempted to break through the barricade, there were clashes between them and the police. Around 400 people were arrested at the protest with three police being injured.

Police fired tear gas and water cannons at the protesters calling for Prime Minister Charles Michel’s resignation. Some protesters threw paving stones, fireworks, flares, road signs, and other objects at police.

There seems to be people deliberately escalating the violence.

As was the case in France, there seemed to be the presence of anarchist wreckers whose only purpose was to fight with the police. Many of the Yellow Vest protesters denounced the “casseurs,” (translated “breakers”) and dissociated themselves from the violence.

It should be noted that while anarchists typically disrupt and discredit any protest they involve themselves in, it has been demonstrated in the United States that intelligence agencies and police will send in agents disguised as anarchists to do just that. One such instance was seen during the infamous WTO protests in Seattle in 1999.

It should also be mentioned that Belgium has been undergoing a quiet debate as to its future. As Wouter Verschelden writes for Politico, Belgium is debating which “club” it wants to belong to – Macron or Orban.

The latter refers to Viktor Orban, the Prime Minister of Hungary. Orban is bucking the Soviet-style EU system, George Soros’ influence over media, society, and academia, unfettered immigration, and radical leftist manipulation of culture. While Orban has made many moves that are concerning in terms of the rights of individuals, he has also kept his country free of the social upheaval and violence accompanied by hordes of immigrants and has done what he can to prevent Soros-funded organizations from disrupting the country and the culture any further than they already have.

When compared to a country like France that also violates human rights on an hourly basis while also suffering under terrorist attacks, racial and religious violence against native French people, and a stagnant economy, many Europeans are wishing their country had taken the nationalist track, not the internationalist one.

Protests in The Netherlands

There have been Yellow Vest protests in the Netherlands as well though the protests have drawn much smaller crowds and there have been no reports of violence.

In stark contrast to French President Macron, Dutch Prime Minister Mark Rutte has expressed sympathy for the protests, indicating that there will be “more money to spend” for the Dutch people and acknowledging the problems they are facing. Notably, however, there hasn’t been any explanation of how they will have more money to spend or what the Dutch government is going to do in order to ensure it.

At this point, the Netherlands protests seem to be more of acknowledgment of the Dutch crisis moreso than a mass movement against it.

Where are the European protests headed?

While no one knows just where the French and now, apparently, European protests are heading, there is clearly the sense on the part of the protesters and ordinary Europeans that they are losing their countries. They’re losing it to a globalist agenda whether it be Free Trade, immigration, eco-fascism, high taxation, low wages, or a confluence of all and more of those issues.

Only time will tell whether or not these protests will fizzle out, be co-opted, or succeed.

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Trump Distances From Cohen, Threatens GM, “Hopes” Fed Won’t Hike Any More

In his latest wide-ranging interview President Trump on Thursday lashed out at three adversaries du jour, starting with his former attorney Michael Cohen was Trump claimed a “low-level” employee who did limited legal work as he sought to distance himself from his longtime associate.

“He did very low-level work,” Trump said in an interview with Fox News. “He did more public relations than he did law. You would see him on television and he was OK on television.”

The comments appeared to undercut Trump’s claim made hours earlier that Cohen who yesterday was sentenced to three years in prison, “was a lawyer” and as a result “has great liability” for campaign finance law violations, according to The Hill.

Asked why he hired Cohen in the first place, Trump pointed to a favor from “years ago” when Cohen was on a condominium committee that oversaw the approval of Trump World Tower in Manhattan. “I thought he was a great guy. I thought he was really a nice guy,” Trump said. “He was really supportive, and I liked him, and he was a lawyer, and because of that I did it. And you know what, in retrospect, I made a mistake.”

Separately, in the same interview Trump once again criticized General Motors’ plan to cut jobs and said the automaker won’t be “treated well.”

“I think she’s making a big mistake,” Trump said of GM CEO Mary Barra, adding “I don’t like what she did, it was nasty. It doesn’t really matter because Ohio is under my leadership from a national standpoint. Ohio is going to replace those jobs in like two minutes.”

The largest U.S. automaker’s recent decision to cut up to 14,000 jobs that span three states has brought the company controversy with lawmakers from the region and drawn the president’s ire.

“To tell me a couple of weeks before Christmas that she’s going to close in Ohio and Michigan, not acceptable to me,” Trump told Fox News. “General Motors is not going to be treated well.”

Turmp then took aim at GM’s plan to focus on electric cars, predicting that “all electric is not going to work.”

Trump then said he would seek further reductions in the tariff China charges on U.S.-made automobiles. “It’s not acceptable, 15 is still too high.”

* * *

Finally, Trump took aim at his adversary in the Marriner Eccles building, saying that “he hopes the Fed won’t be raising rates anymore.”

Trump explained that according to him the U.S. is almost at a “normalized interest rate, and yet” the economy is “soaring”, which of course is confusing considering the same “soaring” economy can’t handle rates above 2.25%.

It was Trump’s latest criticism of the central bank’s policy, which came in just one week before the next Fed meeting. According to consensus the Fed is likely to raise its benchmark interest rate by a quarter-point to a range between 2.25% and 2.5% at the end of their meeting on Dec. 19, while the Fed has telegraphed it will keep rising rates at least three more times in 2019 although the market has now largely priced out any more Fed hikes next year.

 

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“We’ve All Become Skeptics In Life”… But Not In Our Trading?

Authored by Richard Breslow via Bloomberg.com,

There are a lot of good explanations for why market volatility has risen. I’ve always been a market structure advocate, but it is hard to argue with those citing changing rate regimes, geopolitics, algorithms and the rapid cycling of the newsflow.

Whatever your preferred reasons, most traders accept the notion that it is here to stay. And for reasons I don’t quite understand, are continuing to have a really hard time adjusting to this now common wisdom.

The notion of good versus bad volatility is strictly modern. In the past, the distinction would have been rejected outright. Maybe you would get caught in an utterly unexpected move on a short-term basis, but no one would have complained if it stayed “crazy” over time. Of course, to be fair, back then we still had the benefit of order books which made even the hairiest of situations more definable. And ultimately less scary. Hence my preference for the market structure point of view.

Traders who are active managers have been underperforming their promises to others and their own expectations. And, it has manifested itself by causing them to commit a sin against a lesson taught in Trading 101.

They are repeatedly alternating between feeling obligated to trade purely in the hope of making money rather than waiting to seize a conviction opportunity and throwing up their hands and doing nothing. And doing nothing in the sense of giving up rather than exhibiting the patience and deliberation required of a disciplined approach.

Active investors aren’t playing the market, they are being played by it. Price action is described as risk-on or risk-off on any given day, as if it has significance, when it is really just chasing whatever is the latest price action. And figuring that someone else must know something. Ranges don’t get exploited for the repeated opportunities they present as market sentiment ratchets-up at the extremes. Often with no meaningful fundamental reason. Fading moves seems to be a lost weapon in the trading arsenal.

We’ve all become skeptics in life, but for some reason not in our trading — until its too late. And then there is panic as overextended, low-conviction positions have to be covered. You can’t expect self-inflicted “bad volatility” to take the blame for a faulty process.

Hindsight makes for easy trading, but it is painful to look at the chart of the S&P 500 tracing out a sine wave since early October between 2600 and 2800 and accept the fact that the preponderance of traders seem to have found this an unhappy, even an untradable, episode.

And the reason this sorry state of affairs has come about has nothing to do with the list of complaints above, but because no one feels they can afford to believe in anythingYet, in short blasts, take things at face value.

Every societal and market issue has been infused with cynical compromises, can-kicking and window dressing. It started at the top and has seeped down to all aspects of life.

Most definitely to the detriment of investors as well as the population at large. It’s hard to trade when you feel things are out of control.

This problem is much bigger than just adjusting one’s trading practices. It’s a major reason contributing to the rise of populist movements, fueled by a misguided application of “Anything but.”

And in a new twist, this week, we have had two political leaders make the case for getting what they wanted by promising to leave.

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Ron Paul Says the Time for Marijuana Federalism Has Come: New at Reason

Today, 33 states have legalized medical marijuana while ten have legalized recreational marijuana. The majority of Americans now live in states where some type of marijuana is legal. Further proof of changing attitudes is that in 2016, Donald Trump’s stated support for respecting state’s authority over marijuana policy not only did not damage his campaign, it did not even cost him support from the religious right.

In this year’s elections, medical marijuana was legalized in the conservative states of Utah and Oklahoma while recreational marijuana was legalized in Michigan. Texas Representative Pete Sessions’ use of his powerful position as chair of the House Rules Committee to block legislation prohibiting federal government from jailing sick people for the “crime” of using medical marijuana in accordance with their state laws may have played a role in his defeat. Voters, especially young voters, are increasingly turned off by conservatives who favor individual liberty and federalism when it comes to guns and Obamacare but favor a federal police state when it comes to marijuana.

Former Republican congressman and presidential candidate Ron Paul thinks it is time for Congress to make sure the attorney general believes in marijuana federalism, and to pass federal law guaranteeing it.

View this article.

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Watch Live: Clinton And Uranium One Whistleblower’s “Explosive” Testimony On Capitol Hill

Several whistleblowers along with Judicial Watch’s Tom Fitton – all of whom have compiled a trove of information on the Clinton Foundation and/or Uranium One, are testifying before the House Oversight and Government Reform Committee today. 

In addition to Fitton, the panel will hear testimony from Philip Hackney, Associate Professor of Law at the University of Pittsburgh who spent five years at the Office of the Chief Counsel of the IRS in Washington D.C. 

Also testifying will be DM Income Advisors managing partner Lawrence W. Doyle, and JFM and Associates prinncipal John F. Moynihan. 

Rep. Mark Meadows (R-NC), Chairman of the House Freedom Caucus, told Fox News‘s Martha MacCallum on Monday night that the whistleblowers have “explosive” allegations to share.

Watch live at 2pm EST: 

As we noted on Tuesday based on reporting by The Hill‘s John Solomon, the whistleblowers – who are former federal criminal investigators, have allegged that the Clinton Foundation was “engaged in illegal activities and may be liable for millions of dollars in delinquent taxes and penalties.” 

We may also hear about revalations of pay-for-play at Thursday’s hearing – as the Obama State Department, headed at the time by Hillary Clinton, authorized $151 billion in Pentagon-brokered deals to 16 countries that donated to the Clinton Foundation – a 145% increase in completed sales to those nations over the same time frame during the Bush administration, according to IBTimes

Meanwhile, Solomon reported on Tuesday that one whistleblower who submitted 6,000 pages of evidence through a firm composed of former federal law enforcement investigators, MDA Analytics LLC., has provided evidence of potential tax crimes as well as a “culture of noncompliance.”  

That submission made with the IRS, and eventually provided to the Justice Department in Washington and to the FBI in Little Rock, Arkansas, alleges there is “probable cause” to believe the Clinton Foundation broke federal tax law and possibly owes millions of dollars in tax penalties. That submission and its supporting evidence will be one focus of a GOP-led congressional hearing Thursday in the House.

The foundation strongly denies any wrongdoing. But it acknowledges its own internal legal reviews in 2008 and 2011 cited employee concerns ranging from quid pro quo promises to donors, to improper commingling of personal and charity business. –The Hill

We will update this article with highlights from Thursday’s Congressional testimony. 

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No, Replacing NAFTA Doesn’t Mean ‘MEXICO IS PAYING FOR THE WALL!’

|||Polaris/SIPA/NewscomFrom the earliest days of his primary campaign, President Trump promised he would build a wall across the southern border and make Mexico pay for it. On Thursday, Trump declared that the United States–Mexico–Canada Agreement (USMCA) would allow him to finally fulfill that promise. The only problem is that this is not true. If the wall gets built, it will still be Americans who foot the bill.

Early talks about the border wall lacked specificity. In January, a payment solution explored by Congressional Republicans had America paying for the wall up front. That wasn’t what Trump promised, and so the president tweeted in response that Americans would be reimbursed, perhaps with a 20 percent tax on imports from Mexico. Critics responded that such a tax—and thus the wall itself—would be paid for by American consumers.

On Thursday, Trump announced that the USMCA promises substantial savings over the North American Free Trade Agreement (NAFTA), and that means Mexico really is paying for the border wall.

But saving money is not the same as receiving it. Americans will still foot the bill, while possibly watching still more jobs head overseas. Reason‘s Eric Boehm predicted that certain provisions in the agreement will lead to higher manufacturing costs, which would lead companies to move production outside the U.S.

Unless Trump finds another way to charge Mexico for an American infrastructure project, Americans can fully expect to pay at least $18 billion for the first phase of the wall. They can also expect to pay at least $48.3 billion in repairs throughout the wall’s first decade. The actual cost will likely be much higher, as initial estimates rely on “unrealistically cheap construction costs.”

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Trump Trashes Mika Over Homophobic “Butt Boy” Slur; MSNBC Pulls From Thursday Show

President Trump lashed out at Mika Brzezinski on Thursday after the MSNBC host used a homophobic slur during a live interview with Senator Richard Durbin (D-IL). 

While discussing the killing of journalist Jamal Khashoggi and remarks made by Secretary of State Mike Pompeo, Brzezinski said: 

“I understand that Donald Trump doesn’t care. He doesn’t care. But why doesn’t Mike Pompeo care right now? Are the pathetic deflections that we just heard when he appeared on Fox and Friends, is that a patriot speaking? Or a wannabe dictator’s butt boy?

MSNBC attempted to censor the comment, only to hit the mute button too late. Closed Captioning did not contain the phrase.  

In response to the comments, President Trump tweeted on Thursday: “If it was a Conservative that said what “crazed” Mika Brzezinski stated on her show yesterday, using a certain horrible term, that person would be banned permanently from television. She will probably be given a pass, despite their terrible ratings. Congratulations to @RichardGrenell, our great Ambassador to Germany, for having the courage to take this horrible issue on!”

Brzezinski was notably absent from Thursday’s show.

This is the second MSNBC host to come under fire for bigoted comments. In December of last year, host Joy-Ann Reid apologized for a series of homophobic and anti-Semitic blog posts from 2007-2009, only to turn around and blame hackers who “manipulated material from my now-defunct blog.” 

In December, Mediaite reported on the offensive content, noting that “Reid wrote a dozen blog posts in 2007, 2008, and 2009 that contained homophobic conspiracies and anti-gay jokes.

Reid wrote numerous bigoted blog posts smearing, mocking, and attacking former Florida governor Charlie Crist. These rants included calling Crist “Miss Charlie” and sarcastically using the tags “gay politicians” and “not gay politicians” — despite the fact that the twice-married, heterosexual man has never come-out as gay.

Reid went on to spread the crackpot conspiracy theory that Crist was actually a closeted gay man who refused to come out for fear that his sexual orientation would hurt his political career. Additionally, the AM Joy host claims Crist’s marriages to women are part of this elaborate cover up.

As bad as the conspiracy theory is in itself, Reid doesn’t just suggest Crist is gay — she assumes he is gay and proceeds to attack him for it. “Miss Charlie, Miss Charlie. Stop pretending, brother. It’s okay that you don’t go for the ladies,” wrote Reid in a 2007 post. –Mediaite

And after a quick apology, MSNBC put a bow on the whole thing and let Reid keep her job. As such, we assume Mika will be back on the air in no time.  

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The boogeyman is coming for you… no matter where in the world you are

The anti-terrorism unit suited up.

This was an international affair… a deal between the USA and New Zealand, two members of the Five Eyes intelligence alliance.

Helicopters, tactical suits, high caliber firearms—the whole shebang. They busted in the doors and successfully raided the multi-million-dollar compound.

What was this… capturing the next in line after Bin Laden? Busting an international human trafficking ring?

Actually, elite New Zealand law enforcement was acting at the request of the United States to arrest a guy named Kim Dotcom.

Kim Dotcom is a large, jovial man of German-Swedish origins. He founded Megaupload, an online platform that allowed us to basically watch movies online for free.

Unfortunately for Kim, a lot of that content included American movies, with American copyrights.

US artists didn’t get their money, which meant the US government didn’t get its tax dollars.

But Kim Dotcom was a German citizen hanging out in New Zealand. So tough luck for the USA, right?

Wrong. US jurisdiction extends globally… and the government is getting its pound of flesh.

Violate US copyright laws, and get your door kicked in by a SWAT team, even half a world away.

Then there was the Australian, living in London who shared leaked, classified and sensitive documents with the public.

I’m talking about the founder of WikiLeaks, Julian Assange.

He walked into the Ecuadorian embassy in London six years ago, asking for asylum. There was a Swedish warrant out for his arrest, alleging rape charges. He faced extradition to Sweden, and feared he would then be turned over to US authorities… who wanted Assange taken down for exposing the extent of the spying the US government was carrying out on its own citizens.

For years it was suspected that there was a sealed US indictment against Assange. Last month, the proof emerged when the US accidentally revealed the filing, but not the specific charges.

So, we’ve got a Aussie journalist who might get arrested in the UK (which has an extradition agreement with the US) for a crime allegedly committed in Sweden… all because the US government has a hard on for this guy.

But this journalist made the mistake of providing the world with the valuable insight that the authoritarian US government was surveilling its own citizens.

And, again, the US wants its pound of flesh.

Just recently, the US has once again flexed its global might to throw someone in jail.

As you’re likely aware, Trump is in the middle of some tense trade war negotiations with China.

Interesting timing that the Chief Financial Officer of the Chinese tech company Huawei, Meng Wanzhou, was just arrested at the request of US authorities. The company allegedly violated US sanctions against Iran by selling technology to the country.

But here’s the thing… Wanzhou wasn’t on American soil. She was arrested in Canada. The Canadian government is bringing the US case against Meng, who could be extradited to the US to face charges.

So a Chinese citizen, working for a Chinese company, complying with Chinese law, was arrested on Canadian soil… because she allegedly violated US law. (She was recently released on bail – after a 3-day bail hearing, and two weeks in jail).

We know these webs of where the “guilty” is from, where they were living, where they were arrested and on whose behalf is all confusing.

The point is, if you challenge the US government, prepare for your new accommodations in a 6 by 8 foot cage.

It’s crazy. You know I actually had pork the other night, yet somehow Saudi Arabia hasn’t arrested me for violating its laws against non “halal” food.

The US going after Dotcom and Assange is bad enough. But truth be told, these guys poked the bear.

Assange published sensitive, American documents which authorities claim has threatened national security.

Dotcom’s platform made American artists lose out on their royalties.

I still don’t think it’s right to apply American law worldwide… but what do you expect America to do? It’s not surprising.

But the USA’s latest move should disgust anyone with even a distant memory of what freedom was.

If the company did business with Iran, this has nothing to do with the United States. It’s not illegal according to Chinese or Canadian law to do business with Iran. That’s a US law.

If the US wants to escalate trade wars or impose more tariffs to punish the company… fine, whatever.

But to bring criminal charges against company leadership just for doing their job is a terrifying development, even for the brazen US world police.

The USA is the self-declared dictator of the planet. Forget sovereign nations, US law applies worldwide.

And they will kidnap and extradite you from New Zealand, London, Canada, or wherever else they can get their hands on you.

If they want you, they will get you.

Source

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“Mission Critical” – Revisiting The ‘Most Important Chart’ In Markets

Authored by Sven Henrich via NorthmanTrader.com,

As markets are on the cusp again with only a few trading days remaining before year end it is time to revisit the most important chart in markets. I’ve shown this chart in various forms for the past year and it shows the relationship between $SPX and the 10 year yield in context of the broader economic cycle as expressed by the unemployment rate.

The chart is mission critical as it highlights where we are in the broader macro sense:

Let me highlight several key components of the chart:

Previous bull markets ended when multi year channels or wedge patterns broke their long term trends. Currently $SPX is at risk of breaking its 2009 trend. It may save it again for the third month in a row into year end and, if it does it, it has room to rally again. But be clear, when this trend line breaks, and it eventually will, the price consequences will be substantial as evidenced by previous breaks.

Notable here too is that the lows following the 1987 crash marked the beginning of a multi decade trend line that initially found support at the 2002/2003 lows, but then was broken the downside during the financial crisis in 2008. This trend line has remained resistance to this day, firstly in 2014 and 2015 and then again earlier in January 2018 and September 2018. All of the attempts to break above this trend line have failed.

The combination of the 1987 trend line and the 2009 trend line have formed a massive rising wedge that is narrowing dramatically.

Also note the break of the most recent bull markets, 2000 and 2007, coincided with the 10 year peaking near its multi decade trend line dating back all the way to 1982. It is during these yield peaks we’ve witnessed the end of recent economic cycles as shown by the change in the unemployment rate. Low unemployment rates have no history of sustaining themselves. They can extend but they can’t sustain.

When business cycles end central banks (for decades now) have reacted with lower rates to combat recessions. The unemployment rate is currently at 3.7% while recession risks have been rising and many economists and CFOs are now expecting one to arrive in 2019 or 2020.

2018 also saw a yield scare as the 10 year pushed toward 3.2%. But it’s actually the rejection of yields from that particular level that serves as a warning sign.

Hence it is particularly notable that the 2018 yield scare ended precisely at the 1982 trend line repeating a familiar historical script and that is the Fed is looking to pause its rate hike cycle into 2019.

What’s the message of this chart?

Simple: Unemployment will rise at some point and $SPX will break its trend line eventually. Be it this month or at some future month to come. Both things will happen and the 36 year history of this cycle chart implies that the Fed will eventually have to intervene again. Because they’ll have no choice. And then the cycle repeats itself. One problem though: With each cycle the system ends up carrying more and more debt and the Fed’s ability to generate sufficient ammunition to deal with the next downturn becomes ever more limited.

These trend lines matter big time, they are mission critical. Right this moment.

You can see how everything in markets centers around these trend lines and the synchronicity of it all can’t help but impress.

$NDX:

$DJIA:

$DJW (Dow Jones Global Index):

Perhaps markets have never needed a Santa rally more than now. Perhaps the Fed realizes this. We’ll find out next week.

*  *  *

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Surprisingly Strong 30Y Auction Sees Second Lowest Dealer Takedown On Record

After two medicore, tailing auctions earlier this week, the Treasury concluded the the sale of coupon paper this week with a bang, selling $16BN in Notes in a 30Y reopening with a bang.

The high yield of 3.165% stopped through the When Issued by 0.2bps, a far cry from last month’s 2.3bps tail, and the lowest yield for the long bond since September as the curve has repriced the newly dovish Fed as well as the growing economic slowdown in the US.

The Bid to Cover meanwhile jumped from last month’s 2.058, one of the lowest on record, to 2.308%, right on top of the 6 auction average.

However, the surprise – as has been the case recently – was in the internals, where as noted previously the mystery slump in Direct takedown is now long gone, and in December, Directs took down 11.5%, up sizably from 2.9% in November, and above the 9.3% auction average. And while Indirect demand was solid worth 66.4% of the auction, the highest take down since Januiary’s 71.5%, it was Primary Dealers that was the outlier this time, as in December they were left with just 22.1% of the auction, the second lowest allotment on record.

Overall, surprisingly aggressive demand for 30Y paper especially in light of recent relatively poor auctions, and the clearest indicator yet that according to the buyside the US economy is clearly slowing down.

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