US Air Raid Kills Notorious ISIS Executioner; Syria Says Army Positions Hit

The Pentagon has announced US forces in Eastern Syria have killed a key ISIS leader responsible for beheading an American aid worker and former Army Ranger

“Earlier today, coalition air forces conducted precision strikes against a number of ISIS leaders in southeast Syria. Those targeted included Abu al-Umarayn,” anti-ISIL special presidential envoy Brett McGurk said in a statement late on Sunday. A Pentagon spokesman further confirmed, “Al Umarayn had given indications of posing an imminent threat to coalition forces and he was involved in the killing of American citizen and former US Army Ranger, Peter Kassig.”

ISIS claimed it beheaded Peter Kassig in a video in 2014.

In 2014 Abu al-Umarayn had overseen several executions of westerners captured in Syria, including American aid worker Peter Kassig, who was shown in a “Jihadi John” (or Mohammed Emwazi) execution video. Unlike other ISIS and al-Qaeda execution videos, the beheading itself wasn’t filmed, just the aftermath which included a masked Jihadi John standing over a severed head saying, “This is Peter Edward Kassig, a US citizen.”

Kassig had been abducted on his way to the Syrian city of Deir al-Zor on October 1, 2013 while part of a humanitarian group he founded which sought to supply food and supplies to internally displaced Syrians. He had entered Syria at a time when the western press had romanticized the “rebels” (the FSA in particular) as “freedom fighters” yet who in reality were cooperating with ISIS, resulting in a number of high profile kidnappings of western aid workers and reporters. 

Umarayn was considered a senior ISIS official still organizing operations even as ISIS has gone largely underground with the rapid advance of Syrian and Russian forces across the country. 

Peter Kassig with refugee supplies in Syria, via SBS News

The Pentagon further said the airstrikes in eastern Syria killed “several other ISIS members” — something which the Syrian government is now disputing, as also on Sunday state-run SANA news reported US coalition jets fired “several missiles” targeting Syrian Army positions in  in the eastern Homs countryside south of al-Sekhneh, causing “material damage” but no deaths or injuries, according to the report. 

Syrian media stated the following

The US-led “International Coalition” launched a new aggression against positions of the Syrian Arab Army in Homs eastern countryside in support of the terrorist organizations, on top of Daesh (ISIS) which is a tool to implement its schemes in the region.

Both Syria and Russia have long accused the American military presence in eastern Syria  which now standings at multiple thousands of troops and support personnel occupying a region the size of Croatia  of protecting remnant ISIS pockets instead of rooting them out. This, say Syrian and Russian sources, is to continue to fuel a jihadi insurgency against Damascus and Iranian allies as a proxy force and buffer. 

The Pentagon denied the Syrian government charge that its operations were in support of ISIS and not aimed at rooting out the terror organization.

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Carmaker Shares Surge After Trump Mysteriously Tweets China Will Reverse Auto Tariffs

Long-suffering European auto stocks ripped higher on Monday as they headed for their best session in over two years following a late night tweet from President Trump claiming that China had agreed to lower its punishing 40% tariff on US-made cars. Ironically, shares of German companies like Daimler and BMW outperformed US auto stocks because many of the cars they export to China are manufactured in the US.

“China has agreed to reduce and remove tariffs on cars coming into China from the U.S. Currently the tariff is 40%,” Trump said.

Adding some confusion to the president’s claim, a top Chinese trade official declined to comment on the Trump tweet during a morning press conference, which failed to dent the upward momentum. Trump tweeted after China and the US agreed to a “temporary” 90-day trade truce where China agreed to buy more US agricultural products to try and help narrow its trade surplus with the US while Trump agreed to suspend a planned increase and expansion for US tariffs.

Autos

Beijing raised tariffs on U.S. auto imports to 40% in July, forcing many carmakers to hike prices in a major hit to the roughly $10 billion worth of passenger vehicles the United States sent to China last year. Last week, China called for a “negotiated solution” to the trade standoff, saying its tariffs on US-made cars would be only 15% if not for the trade spat (Chinese policy makers earlier this year had agreed to lower tariffs on US cars before the trade war erupted in the spring).

As Bloomberg pointed out, a reduction in Chinese tariffs would benefit Daimler and BMW more than US carmakers like General Motors and Ford, as the German luxury brands dominate the top 10 list of car imports to China.

Car

Meanwhile, Chinese carmaker shares pared their gains, while shares of Chinese car dealerships climbed, as the threat of increased competition weighed on carmakers’ shares.

Elsewhere, Angela Merkel said around midday in Europe that a planned meeting between Germany auto company leaders and Trump on Tuesday wouldn’t focus on tariffs which probably means that the only thing they will take about is, you got it, tariffs.

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World Stocks, US Futures, Crude Soar As Trump, Xi Deliver Early Christmas Rally

The Grinch may have stolen Thanksgiving profits, but Christmas came early for markets with world stocks rising over one percent and pushing emerging currencies higher against the dollar, as S&P futures jumped as much as 2%…

… and the Shanghai Composite soared 2.9% after the U.S. and China agreed to halt new tariffs for 90 days. Commodities spiked and the dollar rebounded from session lows. The MSCI’s all-country world index rose 0.9% in its sixth straight day of gains and hit its highest level since Nov. 9 while emerging equities rose 2.1% and were set for their strongest day in a month.

The gains came after China and the United States agreed during a Saturday dinner at the G-20 in Argentina to halt additional tariffs on each other. The deal prevents their trade war escalating as the two sides try to bridge differences with fresh talks aimed at reaching a deal within 90 days. If no deal is reached, Trump warned that the US will resume escalation, and hike tariffs to 25% from 10%.

“We have a deal. That’s wonderful news for global financial markets and signaling the start for a year-end rally in risky assets,” said Bernd Berg global macro strategist at Woodman Asset Management. “We are going to see a rally in emerging market and U.S equities, EM currencies and China-related assets like Australia. I expect the rally to last until year-end.”

Oil soared 4% higher after dipping below $50 briefly last Friday, jolted by efforts across the globe to support prices as Saudi Arabia and Russia extended their pact to keep production low (although without providing details ahead of this week’s OPEC+ meeting, while Canada’s largest producing province ordered unprecedented supply cuts. Optimism was dented slightly after Qatar said it was quitting OPEC, just as the group prepares to meet this week.

The risk-on mood initially drove the U.S. dollar as much as 0.4% lower against a basket of currencies before trimming some losses. The greenback was already under some pressure from the recent shift in the Fed’s policy communication to a slightly more dovish stance. Comments by Federal Reserve Chair Jerome Powell were interpreted by markets as hinting at a slower pace of rate hikes.

Emerging currencies were among the main beneficiaries of dollar weakness, with an MSCI index up 0.6 percent. It was led by China’s yuan which rose one percent for its biggest daily gain since Feb. 2016.

The euro pared a gain after data showing manufacturing activity slowed, with factory growth stumbling again in November, as business confidence remains the weakest in 6 years.

“Such positive sentiment won’t fade very soon … (the 90-day) period is not short, it’s long enough to soothe market sentiment,”  trader at a foreign bank in Shanghai told Reuters.

Powell was scheduled to testify on Wednesday to a congressional Joint Economic Committee but his hearing is expected to be postponed to Thursday because major exchanges will be closed on Wednesday in honor of former U.S. President George H.W. Bush, who died on Saturday.

While some have speculated that the trade war truce would bring back more hikes on the table, others disagreed: Florian Hense, economist at Berenberg, said the market rally would not bring a return to a more hawkish Fed stance. “We would need to see some rebound in economic activity to lift expectations of more rate hikes,” he said.

Maybe not: in a Bloomberg TV interview, Fed Vice Chairman Richard Clarida said the US economy is in “good shape” and the outlook is “very solid” as the central bank is focused on meeting its dual mandate. He added that the concept of a “Powell Put” isn’t a useful concept, noting that the Fed could operate somewhat above 2% inflation goal.

More importantly, Clarida said that the dot plot of Fed interest-rate forecasts “is not going anywhere”, though it may evolve.

Back to markets, where Asian shares kicked off the gains, with Chinese mainland markets rising more than 2.5% while Japan’s Nikkei gained as much as 1.3% to a six-week high.

Miners and automakers led gains in the Stoxx Europe 600 Index after President Donald Trump said in a late-night tweet that China agreed to “reduce and remove” tariffs on imported American-made cars.  The tweet sent the Dax 2.5% higher as auto stocks were set for best day in 2-1/2 yrs on Sino-US trade truce. Just before midnight on Sunday, Trump tweeted that China had agreed to remove car import tariffs, even though in a briefing in Beijing a few hours later, China’s foreign ministry spokesman Geng Shuang declined to comment on any car tariff changes.

Trump gave no other details in his late-night tweet, which came shortly after he agreed with Xi to a truce in the trade war during a meeting at the Group of 20 summit in Argentina.  Shares of German carmakers Daimler AG and BMW AG rallied Monday morning after the U.S. trade deal with China. Trump’s comments, if ratified, would also hand automakers like Tesla a potential reprieve after higher levies hit sales in the world’s biggest car market.

China said last week that tariffs on U.S. autos would be 15 percent if not for the trade dispute, and it called for a negotiated solution. Chinese officials discussed the possibility of lowering tariffs on U.S. car imports before Xi met Trump in Argentina, according to Bloomberg, but the magnitude and timing of such a reduction were unclear, the person said.

In EMs, South Africa’s stock market was on course for its best day in four years, while Russian stocks climbed with the ruble as oil-production curbs spurred the biggest jump in Brent crude in two years. The peso advanced after a report that the new government was ready to re-purchase bonds issued to build Mexico’s City new airport

Meanwhile, in rates, ten-year Treasury yields rose back above 3 percent; the Australian curve bear steepens with 10-year yield three basis points firmer. Mexican peso rallies 1.3%, rand 1.1% stronger; won rose to its strongest since October.  Germany’s 10-year government bond, the benchmark for the euro area, was set for its biggest one-day yield jump in a month, rising four basis points to a high of 0.347%. Yields on riskier southern European bonds fell across the board, with Italian yields sliding as much as 10 bps to new two-month lows.

Italian

As noted above, WTI (+4.1%) and Brent (+3.9%) were both stronger following the positive US-China trade news and reports that Russia and Saudi Arabia are agreeing to extend the OPEC+ agreement; although no production cut figure has been announced so far. Additionally, Qatar, which produces approximately 600,000 BPD of oil, has announced that they are withdrawing from OPEC as of January with this being in-line with their long-term plan. Separately, Canada’s Alberta province is to reportedly mandate a 9% oil output reduction, which amounts to 325,000 BPD, in order to ease a supply glut with this to come into effect from January.

Gold (+0.7%) was firmer, albeit off of a 3-week high of USD 1232.30/oz reached earlier in the session; after gaining support from the dollar being weighed on by positive US-China trade news from the G20 summit. Steel and copper prices have also benefited from the positive trade news, with Chinese rebar steel increasing by its 7% exchange-set trading; with copper’s London benchmark prices nearing a two-month high. Elsewhere in commodities, Chicago soybeans rally as much as 3.2%. Base metals gain with LME copper up 2%; Dalian iron ore 3.4% stronger.

In other news, Italian PM Conte stated they are examining several options for a budget deal with the EU in which a solution could be made within days. Later it was reported, that Italian PM Conte is reportedly preparing for a deficit of 1.9%-2.0%, while Italian Deputy PMs Salvini and Di Maio are said to be ready to accept new target, according to Messaggero.  Italy’s Deputy PM Salvini says that the EU cannot ask for a 1.9% target.

In the latest Brexit developments, UK PM May was reportedly under renewed pressure as the DUP threatened to abandon support for her in a confidence vote if she failed to get her Brexit deal approved in Parliament. May’s chief Brexit adviser Oliver Robbins secretly warned her the PM that customs backstop is a “bad outcome” for the UK which will see regulatory checks in the Irish Sea and put security co-operation at risk, according to the Telegraph. UK Secretary of State for Environment, Food and Rural Affairs Gove, has told Conservative rebels that there was a “real risk” of a second Brexit referendum if they don’t back PM May’s deal with Brussels.

In geopolitical news, South Korean President Moon and US President Trump agreed to revive momentum regarding negotiations for North Korea denuclearization. In related news, South Korean President Moon said a visit by North Korean Leader Kim to Seoul is still open and possible this year, while US President Trump is said to be targeting a summit with North Korean leader early 2019.

Expected data include manufacturing PMI and construction spending. Finisar, Coupa Software, RH and Smartsheet are among companies reporting earnings.

Market Snapshot

  • S&P 500 futures up 1.7% to 2,805.50
  • STOXX Europe 600 up 1.8% to 363.80
  • MXAP up 1.9% to 156.55
  • MXAPJ up 2.3% to 502.97
  • Nikkei up 1% to 22,574.76
  • Topix up 1.3% to 1,689.05
  • Hang Seng Index up 2.6% to 27,182.04
  • Shanghai Composite up 2.6% to 2,654.80
  • Sensex up 0.05% to 36,210.60
  • Australia S&P/ASX 200 up 1.8% to 5,771.16
  • Kospi up 1.7% to 2,131.93
  • Brent futures up 5.3% to $61.79/bbl
  • Gold spot up 0.8% to $1,230.66
  • U.S. Dollar Index down 0.5% to 96.84
  • German 10Y yield rose 1.1 bps to 0.324%
  • Euro up 0.4% to $1.1362
  • Italian 10Y yield rose 0.9 bps to 2.846%
  • Spanish 10Y yield fell 1.1 bps to 1.491%

Top Overnight News

  • U.S. President Donald Trump said China has agreed to “reduce and remove” tariffs on American cars from 40 percent currently. He gave no other details in the late-night tweet, which came shortly after he agreed with President Xi Jinping to halt the imposition of new tariffs for 90 days as the world’s two largest economies negotiate a lasting agreement. In a briefing in Beijing a few hours later, China’s foreign ministry spokesman Geng Shuang declined to comment on any car tariff changes
  • Oil rebounded from the biggest monthly loss in a decade after Russia and Saudi Arabia agreed to extend their deal to manage the crude market into 2019 and Canada’s largest producing province ordered an unprecedented output cut
  • Leaders of the world’s largest economies agreed the global system of rules that’s underpinned trade for decades is flawed, in a post-summit statement Saturday that the White House quickly claimed as a win for Donald Trump’s protectionist agenda
  • U.K. Prime Minister Theresa May faces yet another grueling battle this week as members of Parliament sink their teeth into her Brexit deal ahead of a crucial vote. On Monday, politicians on all sides will ratchet up the pressure on May to justify the terms she’s agreed to with the European Union by demanding she publish the government’s internal legal advice underpinning the accord
  • France’s “Yellow Vest” anti-government demonstrations intensified Saturday. More than 400 people were arrested and at least 133 injured after rioters in Paris burned cars, looted stores and restaurants, and sprayed graffiti on the Arc de Triomphe. Emmanuel Macron convened an emergency cabinet meeting amid demands to alter his environmental and budget policies
  • As the Brexit deadline approaches, about 50 banks and other financial institutions are having or have had talks with the Dutch central bank about setting up shop in the Netherlands
  • The compromise to safeguard the euro is set to underwhelm supporters of the sweeping vision of an integrated and assertive Europe set out by French President Emmanuel Macron last year as the banking union, bailout plans and euro budget are all bogged down

Asian equity markets were higher across the board with global risk appetite boosted following the US-China trade truce at the G20. News of the tariff ceasefire spurred a rally in US equity futures in which the Emini S&P and DJIA futures reclaimed the 2800 and 26000 levels respectively, with the blue-chip index up nearly 500 points. ASX 200 (+1.8%) and Nikkei 225 (+1.1%) advanced with Australia led by commodity-related sectors as energy benefitted from the positive trade developments and Russia-Saudi agreement to extend the OPEC+ accord, while the JPY-risk dynamic was very much in play for Tokyo trade. Elsewhere, Hang Seng (+2.4%) and Shanghai Comp. (+2.6%) outperformed on the easing of trade tensions, with sentiment also supported by better than expected Chinese Caixin Manufacturing PMI and after the CFFEX relaxed domestic stock index futures trading conditions. Finally, 10yr JGBs initially saw a bout of weakness at the open amid the heightened risk appetite, although prices later recovered amid the BoJ’s presence in the market for JPY 800bln of JGBs with maturities of up to 5yrs.

Top Asian News

  • Trump’s Auto Tariff Tweet Boosts Stocks, Leaves Beijing Silent
  • Goldman Sachs-Funded Group Bids A$2.4 Billion for GrainCorp
  • Macau Casinos Rise as J.P. Morgan Calls November Beat Impressive
  • Saudi Prince Finds Both Friends and Disapproval at G-20 Summit
  • India Is Said to Seek Seizure of IL&FS Officials’ Properties

European equities (Eurostoxx 50 +1.8%) trade with firm gains as markets react to the fallout of the G20 summit which saw US President Trump and Chinese President Xi Jinping agree to delay hiking tariffs on USD 200bln of Chinese goods to 25% for 90 days  to allow for trade discussions between the two nations. In terms of sector specifics, mining names have been the main beneficiary  from the trade optimism thus far with price action in metals markets giving a lift to Antofagasta (+8.0%), Arcelormittal (+6.6%),  Anglo American (+6.3%), Glenore (+6.5%) and many more. Elsewhere, luxury names are also seeing some reprieve from the US-China developments with the sector previously hampered by tensions between the two nations; as such, Swatch (+6.1%), Kering (+5.5%), LVMH (+4.3%) and Burberry (+3.3%) all trade with firm gains. Auto names are also seen higher amid the spillover from US President Trump tweeting that China has agreed to reduce and remove tariffs on cars coming into China from the US which are currently at 40%; BMW (+6.1%), Daimler (+6.2%), Volkswagen (+3.9%). Finally, tech names have also been supported by the weekend’s developments with tech a key focus for negotiations, subsequently, STMicroelectronics (+7.3%), Infineon (+5.8%) and Wirecard (+4.4%) are also near the top of the Stoxx 600 leaderboard.

Top European News

  • U.K. Manufacturing Growth Recovers From 27-Month Low in November
  • Spanish Establishment Suffers Another Fracture in Andalusia
  • Sewing’s Options Dwindle as Fresh Scandals Hit Deutsche Bank
  • Albert Frere, Belgian Billionaire Investor, Dies at 92
  • $80 Billion Locked in a ‘Golden Cage’ in Austria May Be Set Free

FX: DXY, CNY, JPY – An optimistic end to the G20 summit with Trump and Xi agreeing on a 90-day tariffs ceasefire until a trade deal can be negotiated (with sticking points such as IP remaining). As such DXY fell to lows of 96.710 vs. last week’s low of 96.622, though the index is nursing losses in an attempt to take another jab at 97.000. USD/CNY fell below the key 6.90 level despite a higher USD/CNY fix by the PBOC overnight, while JPY unwound some risk premium with USD/JPY stopping just shy of 114.00, but the headline pair supported just ahead of a downside tech-level (Tenken at 113.34).

  • AUD, NZD, CAD – Major high-beta beneficiaries in the aftermath of the G20, with AUD/USD within striking distance of 0.7400 (where 1.365bln in option expiries lie) ahead of its 200DMA at 0.7418, while the Kiwi holds above 0.6900, marginally hampered by weaker than expected Q3 terms of trade and softer export volumes. Meanwhile, CAD also takes advantage of the rising oil prices after Russia and KSA extended their OPEC+ pact, on top of the tactical 325k BPD production cut at Canada’s Alberta refinery. USD/CAD currently sub-1.3200 but off post-G20 lows of 1.3160.
  • GBP, EUR – Little reaction in the pound and the single currency following mixed manufacturing PMIs with Cable back down below 1.2750 (after having breached its 10DMA at 1.2800 where stops were reportedly tripped) and through the Raab-low at 1.2724 to test bids ahead of 1.2700, while EUR/USD couldn’t sustain gains to 1.1400 before retreating through 1.1350 and towards 1.1300. Note, the single currency was supported earlier on Italian press reports that PM Conte is said to be preparing for a deficit/GDP target in the range of 1.9%-2.0%, with the Deputy PMs apparently ready to accept the new target but has eased back in wake of the ECB’s announcement of Capital Key changes, including a perhaps surprisingly lower Italian ratio. In terms of option expiries, EUR/USD sees 1.32bln around 1.1380-90 ahead of reported offers at 1.1400.
  • EM – TRY back in focus with softer than expected Turkish CPI helping the Lira retest recent highs around 5.1500 vs. the buck at one stage, but unable to breach resistance as the USD stage a broad comeback.

In commodities, WTI (+4.1%) and Brent (+3.9%) are both stronger following the positive US-China trade news and reports that Russia and Saudi Arabia are agreeing to extend the OPEC+ agreement; although no production cut figure has been announced so far. Additionally, Qatar, which produces approximately 600,000 BPD of oil, has announced that they are withdrawing from OPEC as of January with this being in-line with their long-term plan. Separately, Canada’s Alberta province is to reportedly mandate a 9% oil output reduction, which amounts to 325,000 BPD, in order to ease a supply glut with this to come into effect from January. Gold (+0.7%) is firmer, albeit off of a 3-week high of USD 1232.30/oz reached earlier in the session; after gaining support from the dollar being weighed on by positive US-China trade news from the G20 summit. Steel and copper prices have also benefited from the positive trade news, with Chinese rebar steel increasing by its 7% exchange-set trading; with copper’s London benchmark prices nearing a two-month high.

US Event Calendar

  • 6:30am: Fed Vice Chairman Clarida Interviewed on Bloomberg TV & Radio
  • 8am: Fed’s Quarles speaks at Council on Foreign Relations in NYC
  • 9:15am: Williams Speaks at a NY Fed Conference on Treasury Market
  • 9:45am: Markit US Manufacturing PMI, est. 55.4, prior 55.4
  • 10am: Construction Spending MoM, est. 0.35%, prior 0.0%
  • 10am: ISM Manufacturing, est. 57.5, prior 57.7
  • 10:30am: Brainard Gives Keynote at NY Fed’s Treasury Market Conference
  • 1pm: Fed’s Kaplan Speaks at Community Forum in Laredo, Texas
  • Wards Total Vehicle Sales, est. 17.2m, prior 17.5m

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Italy Backs Down: Yields Slide As Populists Cave On Deficit Target

It’s only Dec. 3, but international investors already have a lot to be grateful for this holiday season. In what was perhaps the most important development for global markets this weekend, President Trump and his Chinese counterpart, Xi Jinping, helped soothe investors’ trade war fears by agreeing over the weekend to a truce – essentially a three-month detente in the US-China trade war that will put the next round of tariffs on hold while the two countries try to forge an agreement on some of the US’s more contentious demands (like putting an end to IP theft by Chinese companies).

Conte

The deal inspired shouts of jubilation from Wall Street. But while sell side analysts were busy cranking out bullish sell-side notes with almost unbelievably corny titles (as was to be expected, regardless of which way the Trump-Xi dinner broke)…

…Italy has taken some serious strides toward calming fears about the “beginning of the end” of Europe by reportedly agreeing to work with the EU to lower its budget deficit target.

According to Bloomberg, Italian with a duration longer than 5 years climbed, sending yields to a two-month low, after the coalition government said it is ready to accept new budget deficit targets, according to Messaggero. Meanwhile, German bunds have pared losses which followed a trade truce between Presidents Donald Trump and Xi Jinping.

It was only weeks ago that Italian Deputy Prime Ministers Luigi Di Maio and Matteo Salvini, as well as the country’s ‘moderate’ economy minister, Giovanni Tria, had claimed that capitulating to the EU would be tantamount to “suicide” for the Italian people. However, that position softened a couple weeks later when Salvini, followed by the rest of the Italian populist establishment, told reporters that Italy would consider a lower deficit target, so long as the populists could still pay for all of the generous social programs promised in their platform. After consulting with Prime Minister Giuseppe Conte, the populists said they were ready “to accept new targets”, with Tria predicting that the EU will suggest a deficit of 2% rather than 2.4%. Such a number seems like a happy medium, that would allow the populists to save face (and preserve their popular mandate) while allowing the EU to crow about preserving fiscal discipline. Conte, who has emerged as the most moderate voice in the Italian government (even surpassing Tria in recent weeks), will lead negotiations with the EU, instead of Tria.

Though the yield on the Italian 10-year has climbed off its lows, it remains down 4.5 basis points on the day.

Italian

Last week, Italy’s European peers took the first step toward punishing it as representatives from the EU governments agreed to back the European Commissions call for an “Excessive Debt Proceeding” against Italy. While any sanctions likely wouldn’t materialize until the spring, the anxiety-inducing climb in Italian bond yields, and the ever-present threats of a downgrade from the world’s ratings agencies, has apparently convinced the populists that it would be better for the country – if not politically advantageous – to try and avert a banking crisis.

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In Historic Decision, Qatar Unexpectedly Says Will Leave OPEC Jan. 1

Just days before the cartel (along with its outside accomplices) is due to meet in Vienna for what could be another historic meeting, OPEC is dissolving right before our very eyes, as the perceived “US influence” over Saudi Arabia has strained ties within the bloc. As we pointed out on Friday, the increasingly “problematic” perception that Saudi Arabia is accelerating production to appease President Trump – and subsequently that the entire bloc’s policy is now subject to undue US influence – has reportedly brought several OPEC members to the verge of mutiny.

And on Monday, just hours after the conclusion of the G-20 summit in Buenos Aires, Qatar announced that, after more than 55 years of membership, it would be leaving the bloc effective Jan. 1. While countries have left OPEC before, Qatar’s departure is more significant than its declining oil production might suggest: Since forming in 1960, no other Persian Gulf Countries have left (though Ecuador and Gabon once left, only to return, and Indonesia has suspended its membership).

OPEC

Saad Sherida al-Kaabi

According to Al Jazeera, the Qatari television network, Qatari Energy Minister Saad Sherida al-Kaabi broke the news overnight. It was later confirmed by Qatar’s state energy company, which clarified that Qatar would be leaving OPEC effective Jan. 1.

Qatar, of course, has every reason to be angry with the Saudis. A blockade against Qatari exports remains intact following the GCC crisis of summer 2017. And just like then, when we pointed out that the “real reason for the Qatar crisis was natural gas”, so the Qataris have teased that they are leaving OPEC to “focus on LNG”.

Speaking at a news conference in Doha, al-Kaabi said: “The withdrawal decision reflects Qatar’s desire to focus its efforts on plans to develop and increase its natural gas production from 77 million tonnes per year to 110 million tonnes in the coming years.”

The country’s reason for leaving is evident in the numbers: Since 2013, the amount of oil it is pumping has declined by more than 725,000 barrels a day even as global oil production has soared.

Al Jazeera’s correspondent Charlotte Bellis said that Qatar made the decision just days ahead of a December 6 OPEC meeting.

“They say it has nothing to do with the blockade on Qatar and that they have been thinking about it for several months now,” Bellis said, referring to a diplomatic blockade on Qatar by Saudi Arabia, the United Arab Emirates (UAE), Egypt and Bahrain.

“They also said that if you want to withdraw from OPEC it had to be done before the end of the year,” she added.

“They said they wanted to do this now and be transparent ahead of a December 6 OPEC meeting.”

Since 2013, the amount of oil Qatar produced has steadily declined from about 728,000 barrels per day in 2013 to about 607,000 barrels per day in 2017, or just under 2 percent of OPEC’s total output.

Meanwhile, total production during the same period increased from 30.7 million barrels per day to 32.4 million barrels per day.

Despite Putin’s claim that he and Saudi Crown Prince Mohammad bin Salman had agreed to extend the current OPEC+ production cuts, Wall Street analysts – not to mention investors – are still pricing in further cuts for the bloc. Goldman expects production to be reduced by 1.3 million b/d, nearly double the 700k b/d priced in by the Brent futures curve.

Ultimately, Qatar’s departure won’t have much of an immediate impact on OPEC. As its oil production has declined, Qatar has become the world’s biggest supplier of LNG; it produces almost 30% of the world total. Development of its North Field, which is shares with Iran, is the country’s top priority, as it should be. Following the news, Brent crude futures have traded higher all morning.

Even if OPEC doesn’t cut production later this week, Canadian producers in Alberta, the country’s production hub, announced an “unprecedented” production cut over the weekend.

OPEC

 

But given the recent reports about the discontent with Saudi Arabia’s borderline dictatorial rule over the bloc, the political ramifications of a Gulf producer – particularly Qatar – are difficult to ignore. But in terms of how it might impact the overall production capacity of OPEC, the answer could very well be “minimal”. Because according to media reports, Colombia is reportedly in talks to join the bloc.

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Bill Black: Deutsche Bank Crimes Could Trigger Next Global Crisis

Via Greg Hunter’s USAWatchdog.com,

The International Monetary Fund (IMF) previously deemed Deutsche Bank as the most systemically dangerous bank in the world.

Professor of Economics and Law, William Black, knows why and contends:

“Deutsche Bank (DB) poses as what is called a ‘National Champion’ bank and the largest bank by far in Germany, but it’s actually the largest criminal enterprise in Germany. This is quite a statement because VW is such a massive fraud…

It is insane that we allow Deutsche Bank to go from fraud to fraud to fraud…

They cheat on everything else you can possibly imagine and, typically, they are getting caught, which is also not a very good sign in terms of their competence even as thieves. Even in the United States, there has been reluctance to crack down on Deutsche Bank…

When the New York Commissioner tried to crack down, the Office of the Comptroller of the Currency, the premier banking regulator, actually sought to impede that. He disparaged the New York folks and said there really wasn’t that big of problems and such, and all of that proved to be lies.”

Deutsche Bank was raided by German regulators last week on more allegations of fraud and money laundering.

DB is the epitome of “Too Big To Fail.”

So, it will never be allowed to fail, and regulators will not be allowed to regulate them properly. Professor Black says,Why you should care is Deutsche Bank impedes effective regulation everywhere and because God only knows the next thing they are going to do…”

“This is going to continue until something dramatic changes. Eventually, they can cause the next crisis…

There will be a bailout in these circumstances, but that could help trigger another economic crisis. When the largest bank in the third largest economy in the world is completely dysfunctional, then the German economy is more likely to go into recession as well. That is one of the potential sources of the next recession, and you can see lots of people warning that there are signs that a serious recession is pretty likely relatively soon. Relatively could be two years.”

Professor Black, who was a top regulator in the S&L crisis, says,

“The whole system weakens itself because it gets caught in this big lie that says we have to pretend that Deutsche Bank is a bank instead of a criminal enterprise.”

In closing, Professor Black says,

I am going to give you the advice you get after the recession before the recession. Pay off your debt, all that you can. Do not keep borrowing except in certain circumstances like you are going to buy a home, and it is prudent purchase. Buy a car when you can buy it with cash whenever possible…and always try to be a net saver.”

Join Greg Hunter as he goes One-on-One with Dr. William Black, Professor of Economics and Law at University of Missouri Kansas City.

(Correction: Deutsche Bank has a market cap of $19.5 billion and not $1.5 billion as I mistakenly said at the beginning of the interview. Also, Germany’s GDP fell .2% recently and not 2% as I stated later in the interview.)

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Explaining France’s Grassroots “Yellow Vest” Movement – And Why It’s Spreading Across Europe

For three weeks, tens-of-thousands of French protesters have donned yellow vests and marched throughout Paris. While the “yellow vest” movement began on November 17 as a grassroots protest against president Emmanuel Macron’s gas tax – levied in the name of climate change, it has morphed into a general rage against the French government in general at a time when Macron’s approval rating is at an all time low. 

What’s more, the movement is spreading – with yellow vest demonstrations seen in Belgium, Italy and the Netherlands by those expressing frustration over similar issues. The protests have turned violent, as disaffected rioters have been setting cars on fire, causing structural damage, and assaulting the police.

Riot cops in Brussels, for example, were pelted with billiard balls, cobblestones and other hard objects last week, while the yellow vest movement is now working to form a Belgian political party under the name Mouvement citoyen belge 

What’s behind the movement?

French authorities have predictably blamed the right-wing for the protests – with interior minister Christophe Castaner denouncing National Rally (*formerly National Front) leader Marine Le Pen of encouraging the violence. 

“Marine Le Pen urged people to come to the Champs Elysees, and there are members of the ultra-right putting up barriers,” said Castaner, adding “They have responded to Marine Le Pen’s call and want to take the institutions of state. We want people to be responsible.”

The real cause, however, may be quite a bit more nuanced and a long time coming. As political commentator Kark Sharro suggests in a seven-part tweetstorm, the Yellow Vest movement is “about marginalsation and the impotence felt by ordinary people.” 

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The Hypocrisy Of The G20, And The World Leaders Who Participated

Authored by Richard Galustian via TheDuran.com,

The G20 in Argentina was nothing short of a circus; a distasteful display of imperialism, greed, corruption and elitism. These leaders do not speak for the poor or downtrodden or oppressed…

As for America, Trump continues his theatrics by saying he would not meet Putin; whether he did or didn’t, us ordinary folk will never know. These are games. Though President Trump canceled his meeting with Putin, Trump met with China’s President Xi, let us not fool ourselves about prospects for any real breakthrough over their two countries’ trade disagreements from a so-called ‘truce’.

China emerges as ‘the grown up’ of all world nations; the 21st Century will eventually, one can predict, belong to them.

However one must admire the charm, intellect and humour of the exceptional Russian Foreign Minister Lavrov, who on the subject of a cancelled meeting between Trump and Putin, he brilliantly described the dance between the two nations by saying he was saddened by President Trump’s decision, adding “love can’t be forced.”

Do we have any person in the West that comes close to the class of Lavrov?

One cannot fail to mention though no more revolting images imaginable were the mostly warm welcome by many leaders given to the psychopath Crown Prince of Saudi Arabia, Mohamad bin Salman (MBS).

However the one that disappoints the most is the sight of President Putin with MBS, laughing and joking.

The main reason is that for the last few years, Russia and Putin and his exceptionally capable Foreign Minister Sergei Lavrov have maintained a very high moral ground on most of the world’s issues and outrageous actions, in the main, made by America. This has been Russia’s success these recent years, especially their brilliant handling of the World Cup.

But to see President Putin’s animated display of friendship towards MBS was nothing short of disgusting.

Putin’s advisors should never have allowed their President to make such a disillusioning mistake for all of us to see.

MBS and the Saudi regime are the most distasteful murderous regime on the planet. Putting the heinous murder by the Saudi’s of Jamal Khashoggi to one side, what Saudi is doing in Yemen is without doubt a war crime of huge proportions. They also are the real exporters of terrorism not Iran. Remember who were the alleged hijackers on 9/11. Saudis or Iranians? Only Israel match being as murderous a regime as Saudi, evidenced by what they have done and continue to do in the ‘open prison’ that is Gaza.

When did we all lose our moral compass?

You think these second rate leaders can solve the most important planet’s problems of over population, the environment and nuclear proliferation? Dream on.

For some of us there was hope that Russia could counter the imperialistic ambitions of America and it’s penchant for regime change. Now that hope seems to have been a false.

All these spineless amoral leaders attending the G20 meeting should be in many cases simply arrested or put up against a wall. Where is the anger, the indignation from the world’s populace against their leaders? Where is the media? Why is Assange not spoken of, etc.

In a nutshell, the G20 only reinforces a fact most of us know which is that corrupt leaders control our planet.

We need, though it will never happen, a ground swell of revolution by the people, by citizens, to change the system, of most countries, even if it be violent, which seems the only way anything will change.

The G20 meeting was of corrupt people on a scale akin to a mafia get together.

Corruption is the World’s greatest enemy and in Buenos Aires we saw ‘the Dons’ get together and, be sure of one thing above all else, there will be no real result except the leaders attending will increase their personal self interests and wealth.

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As Deutsche Bank Takeover Speculation Intensifies, Here’s A Look At The Troubled Bank’s Options

Since taking over troubled German lender Deutsche Bank back in April, Christian Sewing has watched the recidivist lender’s troubles go from bad to worse.

On Friday, the bank’s shares reached an all-time low; they’re now down 50% YTD, making Deutsche the worst performer in a poorly performing index of the world’s largest global banks. The latest selloff was inspired by the Frankfurt prosecutor’s office deciding to raid six Deutsche buildings, including the bank’s headquarters The raid, which continued for two days, doubled as the first public revelation about the latest criminal scandal involving Europe’s biggest bank by assets, which has already paid $18 billion in legal penalties since the financial crisis. Prosecutors revealed that they were investigating at least two employees in the bank’s wealth management unit (part of the division overseen by Sewing before he took the CEO job) for allegedly helping customers set up accounts in offshore tax shelters and helping criminals launder their ill-gotten gains – allegations that prosecutors said were inspired by the infamous ‘Panama Papers’ leak. During their raid, prosecutors searched the offices of five senior Deutsche executives, including the bank’s chief compliance officer, who was rumored to be leaving the bank in a report published just days before nearly 200 police officers, tax inspectors and prosecutors showed up outside Deutsche’s international headquarters and demanded that everybody step away from their computers.

Sewing

Given the abysmal week the bank just had, it’s hardly surprising that the financial media has published a barrage of negative stories featuring anonymously sourced quotes from Deutsche “investors” effectively demanding that, if Sewing can’t get his shit together in the next quarter or two, he will need to abandon the “strategic alternatives” (cost-cutting, shifting the bank’s investment strategy to emphasize growth in wealth management) that he championed as a road toward salvation (alongside cost-cutting, of course) and seriously consider a sale.

Here’s Bloomberg:

While many of Deutsche Bank’s largest investors, contacted before the raids, said they still back him, they argued he only has another quarter or two to prove his approach can work. At the same time, strategic alternatives are getting ever more painful for shareholders because of the low stock price.

The bank just finished slashing 10,000 jobs across its global operations. But after posting a Q3 decline in net income that was the largest in eight years, many investors (possibly even the activist investor who disclosed a 3% stake in the bank back in November, arguing that he was going “all in” on Sewing) will push for another wave of layoffs. And even cutting its global workforce to the bone may not be enough to bring the bank back toward profitability (particularly if it is slapped with another mutli-billion dollar fine).

Other investors are bailing out of their Deutsche Bank stakes: Chinese conglomerate HNA is reportedly still in the process of offloading its stake in the lender, held through a complex array of derivatives. And out of the top ten largest positions in DB, two are net short.

Holdings

Meanwhile, Cerberus Capital, which owns stakes in Deutsche and rival German lender Commerzbank, is reportedly pushing for a merger between the two, something it believes will allow for the elimination of “redundancies” (i.e. tens of thousands of jobs) that would improve the overall profit profile of the combined lender.

DB

But Sewing isn’t ready to give up just yet: And given the bank’s historically weak share price, a merger would almost inevitably result in DB becoming the junior partner in whatever conjoined entity would emerge. Which is probably why Sewing spent the weekend rebuffing rumors of an imminent takeover, as Reuters reported.

Speculation about a possible merger has continued despite the bank’s dismissal in September of reports that it could consider tie-ups with Switzerland’s UBS (UBSG.S) or German peer Commerzbank.

“I don’t have any indication of that,” Christian Sewing told Bild am Sonntag. “We are on track to make our first profit for three years. It is only a matter of time before this progress is reflected in the share price.”

To be sure, rumors about a possible merger, takeover or even a breakup of Deutsche have been circulating for years. But if the bank’s shares continue to flounder, its CEO may not have a choice. Several consecutive CEOs have now failed to realize their grand visions for a turnaround, and shareholders are growing impatient. With this in mind, we feel like now would be as good a time as any to take a moment to review the bank’s (limited) options for survival.  To that end, we’d like to share some insights from a quick rundown provided by Bloomberg, which are quoted in full below (emphasis ours):

More Cuts

Sewing took over in April with a mandate to accelerate cost cuts, but he has recently emphasized efforts to invest again in growth after years of falling revenue. Still, additional savings aren’t entirely off the table. The CEO said privately that he’ll review his strategy if it’s becoming clear that it’s not working, a person familiar with his thinking has said. His current plan has set only vague targets beyond 2019 and investors will likely soon demand more detail.

Further reductions to the U.S. operations would be welcome, two large investors said asking not to be identified discussing individual investments. Wherever the bank will shrink, it won’t be at the expense of revenue, Chief Financial Officer James von Moltke has said.

A German Merger

This is the option that’s been most hotly debated in the past year. Cerberus Capital Management, the biggest private investor in rival Commerzbank AG, a year ago revealed owning a large stake in Deutsche Bank, too. A deal would enable the newly formed bank to cut possibly tens of thousands of jobs, hundreds of branches and an uncounted number of IT systems, positioning it for higher profit in the overbanked German market.

Many top executives agree it could make sense for the two to join at some point, according to people briefed on their thinking. But they also say a tie-up would be difficult as long as both banks are locked in multi-year turnaround programs. The long, painful decline in the share price of Deutsche Bank, the larger of the two, is another obstacle, though it may make a deal more palatable to Commerzbank.

A European Deal

Many people inside Deutsche Bank prefer a merger with a bank outside Germany that would complement the German lender rather than making big parts of it redundant. The bank’s top executives and its supervisory board went through several scenarios at their annual strategy meeting in September, though in the end decided that the time isn’t right.

FB

The biggest obstacle to such a scenario, again, is Deutsche Bank’s low share price. Any deal at the current valuation means Deutsche Bank may end up as the junior partner. UBS’s market capitalization, for example, is more than twice as high. A higher share price would open more strategic options for Deutsche Bank, a key reason why top management is opposed to making a decision too soon, according to one of the people.

Teaming Up

A less disruptive approach to grow some revenue would be a joint venture. Sewing has repeatedly touted the idea over the past few months as an alternative to bank consolidation and a way for European banks to bulk up retail platforms against a potential threat posed by large Internet firms such as Google, Amazon and Facebook.

Deutsche Bank has already teamed up with other firms to create online product offerings such as the digital identity management app Verimi. But that is a very small start. If Sewing really sees joint ventures as an alternative to mergers, he must have bigger things in mind.

Splitting Up

While Sewing is trying to win over shareholders by showing his current plan is starting to bear fruit, he’s been discussing changes that would make a deal simpler to execute. The lender has been weighing a move to split its core businesses under a holding company, a measure that would make it easier to break up in a crisis and more agile in potential mergers, people with knowledge of the discussions told Bloomberg in September. Implementation would face many regulatory and operational hurdles, however, and CFO von Moltke said the discussions were “not strategic.”

A holding structure would also make it easier to split up the bank into a retail lender and an investment bank. A proposal to do so was tabled at the last annual general meeting in May. Although Deutsche Bank’s management board recommended voting against the proposal, arguing that splitting the bank would damage the business, it still received more than 5 percent of the vote.

Trudging On

There’s still a chance that no change in plan will be needed. Some regulators and several investors agree that it will be hard for the bank at the current juncture to pull off a deal that radiates strategic vision rather than desperation, the people said. If Sewing manages to stabilize earnings – despite the fresh headwinds – investors may regain confidence.

While this latest investigation into Deutsche is the most prominent facing the bank right now, it is by no means the only one. The bank still has a massive derivatives exposure of roughly 48 trillion euros – equivalent to more than 3x the GDP of the European Union.

Derivative

More than two years ago, Deutsche Bank Chief Risk Officer Stuart Lewis assured investors during a widely circulated interview not to worry about the bank’s derivatives exposure (which was cited as one reason why the IMF had, at the time, just labeled it the most systemically risky bank in the world). “We are not dangerous”, he said. 

Clearly, the market disagrees.

FB

Just remember, DB is not LEH…

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France’s Meltdown, Macron’s Disdain

Authored by Guy Milliere via The Gatestone Institute,

On November 11th, French President Emmanuel Macron commemorated the 100th anniversary of the end of World War I by inviting seventy heads of state to organize a costly, useless, grandiloquent “Forum of Peace” that did not lead to anything. He also invited US President Donald Trump, and then chose to insult him. In a pompous speech, Macron — knowing that a few days earlier, Donald Trump had defined himself as a nationalist committed to defending America — invoked “patriotism”; then defined it, strangely, as “the exact opposite of nationalism”; then called it “treason”.

In addition, shortly before the meeting, Macron had not only spoken of the “urgency” of building a European army; he also placed the United States among the “enemies” of Europe. This was not the first time Macron placed Europe above the interests of his own country. It was, however, the first time he had placed the United States on the list of enemies of Europe.

President Trump apparently understood immediately that Macron’s attitude was a way to maintain his delusions of grandeur,as well as to try to derive a domestic political advantage. Trump also apparently understood that he could not just sit there and accept insults. In a series of tweets, Trump reminded the world that France had needed the help of the USA to regain freedom during World Wars, that NATO was still protecting a virtually defenseless Europe and that many European countries were still not paying the amount promised for their own defense. Trump added that Macron had an extremely low approval rating (26%), was facing an extremely high level of unemployment, and was probably trying to divert attention from that.

Trump was right. For months, the popularity of Macron has been in free fall: he is now the most unpopular French President in modern history at this stage of his mandate. The French population has turned away from him in droves.

Unemployment in France is not only at an alarmingly high level (9.1%); it has been been alarmingly high for years. The number of people in poverty is also high (8.8 million people, 14.2% of the population). Economic growth is effectively non-existent (0.4% in the third quarter of 2018, up from 0.2% the previous three months). The median income (20,520 euros, or $23,000, a year,) is unsustainably low. It indicates that half the French live on less than 1710 euros ($1946) a month. Five million people are surviving on less than 855 euros ($ 973) a month.

When Macron was elected in May 2017, he promised to liberate the economy; however no significant measures, were taken. In spite of some cosmetic reforms– such as limits on allowances for unfair dismissal or the slightly increased possibility that small businesses could negotiate short work contracts — the French labor code, still one of the most rigid in the developed world, expertly blocks job creation. The tax burden (more than 45% of GDP) is the highest in the developed world. Even if some taxes were abolished since Macron became President, many new taxes were created. Public expenditure still accounts for about 57% of GDP (16% above the OECD countries average) and shows no signs of waning.

Macron also promised, when he was elected, to restore security. Lack of security, however, has been exploding; the number of violent assaults and rapes has been steadily on the rise. No-go zones are as widespread as a year ago and fiercely out of control. The influx of unvetted illegal immigrants into the country has sadly turned entire neighborhoods into slums.

In May, Macron warned that in many suburbs, France has “lost the fight against drug trafficking”.

When Minister of the Interior Gérard Collomb resigned in on October 3, he spokeof a “very degraded situation” and added that in many areas “the law of the strongest — drug-traffickers and radical Islamists — has taken the place of the Republic.” He was simply confirming the chilling assessments of “out of favor” commentators such as Éric Zemmour, author of Le Suicide Français, and Georges Bensoussan, author of Une France Soumise (A Submissive France).

Riots are frequent; they indicate the growing inability of the government to maintain order. Public transport strikes, which took placeduring the entire spring of 2018, were accompanied by demonstrations and an enthusiastic looting of banks and shops. France’s victory at the soccer World Cup in July was followed by jubilation, which quickly gave way to violence by groups who broke store windows and attacked the police.

Since entering political life, Macron’s remarks have not only revealed a contempt for the French population, but also have multiplied. That has not helped. As early as 2014, when Macron was Minister of the Economy, he said that the women employees of a bankrupt company were “illiterates“; in June 2017, just after becoming president, he distinguished between “those who succeed and those who are nothing”. More recently, he told a young man who spoke of his distress at trying to find a job, that he only had to move and “cross the street”. During a visit to Denmark, he announced that the French were “Gauls resistant to change”.

One of the few issues Macron did seem eager to work on was Islam. He stressed several times his determination to establish an “Islam of France“. What he failed to take into account werethe concerns ofthe rest of the population about the rapid Islamization the country. In June 20, 2017, he said (not quite accurately, for example hereherehereherehere and here), “No one can make believe that (Muslim) faith is not compatible with the Republic”. He also seems to have failed to take into account the risks of Islamic terrorism, which he hardly ever calls by its name. He seems to prefer using the word “terrorism“, without an adjective, and simply acknowledges that “there is a radical reading of Islam, whose principles do not respect religious slogans”).

The current Minister of the Interior, Christophe Castaner, whom Macron appointed to replace Collomb, dismissed the concerns raised by his predecessor, and described Islam as “a religion of happiness and love, like the Catholic religion”.

Another area in which Macron has acted relentlessly is the “fight about climate change”, in which his targeted enemy are cars. On vehicles over four years old, mandatory technical controls were made more costly and failure to comply with them more punitive, evidently in the hope that an increasing number of older cars could be eliminated. Speed ​​limits on most roads were lowered to 80 km/h (50 mph), speed control radars multipled, and tens of thousands of drivers’ licenses were suspended. Gas taxes rose sharply (30 cents a gallon in one year). A gallon of unleaded gas in France now costs more than $7.

The small minority of French people who still support Macron are not affected by these measures. Surveys show that they belong to the wealthy layers of society, that they live in affluent neighborhoods, and almost never use personal vehicles.

The situation is painfully different for most other individuals, especially the forgotten middle class.

A recent decision to increase gas taxes was the final straw. It sparked instant anger. A petition demanding that the government roll back the tax increase received almost a million signatures in two days. On social networks, people discussed ​​organizing demonstrations throughout the country and suggested that the demonstrators wear the yellow safety jackets that drivers are obliged to store in their cars in case of roadside breakdowns. So, on November 17, hundreds of thousands of protesters blocked large parts of the country.

The government ignored the protesters’ demands. Instead, officials repeated the many unproven imperatives of “climate change” and the need to eliminate the use of “fossil fuels” – but refused to change course.

After that, another national protest day was selected. On November 24, the demonstrators organized a march on Paris. Many, it seems, decided, despite a government ban, to head for the Champs Elysées and continue toward the presidential Elysée Palace.

Clashes took place, barricades were erected and vehicles were torched. The police responded harshly. They attacked non-violent protesters and used thousands of tear gas grenades and water cannons, which they had never done in the past. Although many of the protestors were holding red flags, indicating they were from the political left, the newly appointed Minister of the Interior Castaner said that the violence had come from a fractious and seditious “far right”. One member of the government fueled the fire by equating the French “yellow vests” with the German “brown shirts” of the 1930s. Macron declared that those who try to “intimidate officials” should be “ashamed“.

Finally, on November 25, Macron ended up recognizing, with visible reluctance, the suffering of the “working classes”. Two days later, Macron delivered a solemn speech, announcing that he would create a “high council for the climate”, composed of ecologists and professional politicians, and that his aim was to savethe planet and avoid “the end of the world”. He still did not utter a single word about the economic grievances that had poured forth during the previous ten days.

The spokesman for the center-right party, The Republicans, Laurence Saillet, remarked, “The French say, ‘Mr. President, we cannot make ends meet,’ and the President replies, ‘we shall create a High Council [for the climate]’ Can you imagine the disconnect?”.

Marine Le Pen, president of the right-of-center National Rally (the former National Front party, and today the main opposition party in France), said, “There is a tiny caste that works for itself and there is the vast majority of French people who are abandoned by the government, and feel downgraded, dispossessed “.

The “yellow jackets” now have the support of 84% of the French population. They are demanding Macron’s resignation and an immediate change of government. Those who speak on radio and television say that Macron and the government are hopelessly blind and deaf.

 The revolt in the country is intensifying and shows no sign of slowing down.

The political scientist Jean-Yves Camus said that the “yellow jackets” movement is now a revolt of millions of people who feel asphyxiated by “confiscatory” taxation and who do not want to “pay indefinitely” for a government that seems “unable to limit spending”.

He added, ” Some do not measure the extent of the rejection that the demonstrators express”.

Dominique Reynié, professor at the Paris Institute of Political Studies, said that “Macron and the government had not expected that their tax policy would lead to this”.

European elections are to be held this May, 2019. Polls show that Le Pen’s National Rally party will be in the lead, far ahead of the party created by Macron, La République En Marche! [The Republic on the Move!].

In a little more than a year, Macron, elected in May 2017, has lost almost all credit and legitimacy. He is also one of the last European leaders in power who supportsthe European Union as it is.

Macron, who claimed that he would defeat the “populist” wave rising throughout the continent, has also claimed that leaders who listened to people eager to defend their way of life were “leprosy” and “bad winds“.

The “populist” wave is now hitting France; it could well mean the end of Macron’s term as president.

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