Two Paths Forward with China – The Good and The Bad

Since a few things became clear to me last year, I’ve consistently forecasted a significant worsening in U.S.-China relations and remained adamant that all the happy talk of trade deals and breakthroughs is just a lot of hot air. What first appeared to be a unique quirk of Donald Trump has morphed into bipartisan consensus in Congress, and clear signs have emerged that the general public has likewise become alarmed at China’s growing global clout.

Due to this, as well as a litany of other factors outlined in prior posts, it’s highly unlikely the current trajectory will reverse course and result in a return to what had been business as usual. Instead, we’re probably headed toward a serious and historically meaningful escalation of tensions between the U.S. and China, with what we’ve seen thus far simply a prelude to the main drama. If I’m correct and the ship has already sailed, we should focus our attention on how we respond to what could quickly become a very dicey scenario filled with heightened emotions and nefarious agendas. There’s a good way to respond and a bad way.

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Stocks, Bonds, & The Dollar Dumped On Dismal-Data & Trade-Tensions

Stocks, Bonds, & The Dollar Dumped On Dismal-Data & Trade-Tensions

A quadruple-whammy of not-awesome trade-related comments today spoiled the party…

  • 0602ET *TRUMP TO RESTORE TARIFF ON STEEL SHIPPED FROM BRAZIL, ARGENTINA

  • 1035ET *TRUMP WILL INCREASE TARIFFS IF NO CHINA DEAL, ROSS TELLS FOX

  • 1200ET *TRUMP AIDE SAYS IT’S UP TO CHINA IF DEAL WILL BE MADE THIS YR

  • 1230ET *CHINA TO RELEASE ‘UNRELIABLE ENTITY LIST’: GLOBAL TIMES

And then US Macro data poured cold water on China and EU economic hope as construction spending plunged and manufacturing ISM disappointed significantly.

Source: Bloomberg

But that ‘surprising’ surge in a government-provided survey of manufacturers in China was offered up as evidence that (despite US weakness) everything will be ok and the trough is in…

Chinese stocks clung to very modest gains overnight (trade headlines hit after the China close)…

Source: Bloomberg

European stocks were hammered on trade turmoil (despite PMIs beating expectations)…

Source: Bloomberg

And European bonds were also down (in price) along with stocks (10Y Bunds +8bps)…

Source: Bloomberg

US equities suffered their biggest daily drop in 6 weeks…

Dow futures were down over 400 points from the overnight highs…

Momo was dumped at the open but the trend in value/momo reversed around the European close…

Source: Bloomberg

VIX spiked above 15 intraday but once again vol-sellers returned after Europe’s close…

Source: Bloomberg

Credit was smashed today (after last week’s insane surge)…

Source: Bloomberg

Treasury yields surged on the day, led by the long-end (2Y was marginally lower in yield)…

Source: Bloomberg

Most notably, the ultra-bond futures collapsed overnight (hitting a 3-point limit circuit breaker)…

Source: Bloomberg

And today saw a major steepening of the yield curve… (the yield curve move has the smell of rate-locks given the underlying macro data, but we will have to wait and see what the calendar looks like – high-grade dealers expect this week to bring $15b-$20b in supply. This is likely to be December’s busiest week, with just about $25b for the full-month in store, according to estimates — that’s $8b more than last year and in line with the $23b that priced in December 2017)

Source: Bloomberg

The dollar was dumped today (biggest daily drop in 6 weeks)…

Source: Bloomberg

…breaking down through its 50- and 100-day moving-averages…

Source: Bloomberg

Yuan also lost ground as trade-deal hope faded…

Source: Bloomberg

Cryptos extended losses over the weekend and pushed lower still today…

Source: Bloomberg

Bitcoin has been unable to get back above $7400…

Source: Bloomberg

Gold, Copper, and Silver ended the day lower (despite a tumbling dollar) but oil popped on Saudi calls for more production cuts/extensions at OPEC (as its Aramco IPO looms)…

Source: Bloomberg

But, with regard to oil, it is still a lot lower than before Friday’s plunge…

“This whole week is going to be based on OPEC speculations,” said James Williams, president of London, Arkansas-based WTRG Economics.

All the precious metals are green for 2019, but palladium is by far the biggest winner…

Source: Bloomberg

Finally, today was the worst day for a balanced portfolio of stocks and bonds since mid-August…

Source: Bloomberg

Additionally, as Bloomberg’s Garfield Reynolds notes, global equities are gliding serenely into the end of 2019, even in the face of a dire economic landscape. To justify an exuberance that looks anything but rational, global activity will need to turn around dramatically.

Source: Bloomberg

The 2019 FOMO rally’s resilience has taken it far enough in the face of a cloudy forecast. Any declines from here could get very steep indeed.

And then there’s this…

Source: Bloomberg

And the US is just as bad (if not worse)…

Source: Bloomberg

And this…

Source: Bloomberg


Tyler Durden

Mon, 12/02/2019 – 16:00

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Without the Soviet Union, NATO Seems Increasingly Irrelevant

President Trump’s trip to London for the NATO summit is a reminder of the political importance of an enemy.

The North Atlantic Treaty that came into force in 1949 does not mention the Soviet Union. But its preamble referring to “the principles of democracy, individual liberty and the rule of law” was what today we might recognize as a subtweet, unmistakably casting shade toward Moscow.

The treaty served many functions, but one crucial one was defining the enemy. Without one, following the defeat of the Axis powers of Japan and Nazi Germany in World War II, America might have felt purposeless or adrift.

Much of American politics since the defeat or collapse of the Soviet Union in 1991 can be explained as casting about in search of a new enemy. Sometimes, our enemies find us, as they did in the attacks of September 11, 2001 against the Pentagon and the World Trade Center. The day after, NATO invoked its collective responsibility against what it called “the scourge of international terrorism.”

And for a time it seemed that Al Qaeda—or a more broadly defined violent extremism, including the Islamic State—might fill the role that had been occupied during NATO’s glory days by the Soviet Union.

But then consensus broke down, in part over the definition of the enemy. Was it just Osama bin Laden’s Al Qaeda? Or did it include President George W. Bush’s “axis of evil” of Iran, Iraq, and North Korea? The congressional authorization for use of military force that passed immediately after the September 11 attacks gave the president permission to strike “those nations, organizations, or persons he determines planned, authorized, committed, or aided the terrorist attacks that occurred on September 11, 2001, or harbored such organizations or persons.”

As the September 11 attacks wane in American memory—some voters in 2020 will have been born after the twin towers fell—politicians have been searching for new villains.

Donald Trump ran for president in 2016 promising to build a wall to protect America from illegal immigrants from Mexico—immigrants he blamed for bringing crime and drugs. Various Republican foreign policy thinkers have floated other candidates for American enemies—Communist China, or the terror-sponsoring, nuclear-bomb-building regime in Tehran.

While these enemies all have their possible appeals, none has proved as durably unifying as the Soviet Union did. China is an inconvenient enemy because it’s also a big business partner. It makes a lot of our products, and we sell it a lot of things. Iran is terrible, but the Iraq War and the ongoing fight in Afghanistan have nearly exhausted American patience for ambitious projects to improve the Middle East.

The Democrats are in enemy-search mode, too. Listen carefully on the campaign trail or even in Congress, and the politicians test out possibilities. Tune in to the impeachment hearings, and it sounds like the enemy is President Trump, or Russia, or Ukraine. Watch a Democratic presidential debate, and the enemy to be fought is “millionaires and billionaires,” or perhaps “the insurance companies,” “Big Tech,” and “Big Pharma,” the fossil-fuel companies and their lobbyists. Perhaps an imaginative Democrat can channel American animosity toward something more abstract, such as racism or inequality.

Creative Republicans and centrists are testing similar ideas about making the enemy loneliness, addiction, or despair.

It’s almost enough to make one nostalgic for the glory days of NATO. The Soviet Union was unspeakably evil. I’m glad it’s gone. At least when it existed, though, pretty much everyone outside the Iron Curtain—America, Europe—understood that the communists were the foes. No number of NATO summits will re-energize an alliance against an enemy that went out of business nearly 30 years ago.

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Without the Soviet Union, NATO Seems Increasingly Irrelevant

President Trump’s trip to London for the NATO summit is a reminder of the political importance of an enemy.

The North Atlantic Treaty that came into force in 1949 does not mention the Soviet Union. But its preamble referring to “the principles of democracy, individual liberty and the rule of law” was what today we might recognize as a subtweet, unmistakably casting shade toward Moscow.

The treaty served many functions, but one crucial one was defining the enemy. Without one, following the defeat of the Axis powers of Japan and Nazi Germany in World War II, America might have felt purposeless or adrift.

Much of American politics since the defeat or collapse of the Soviet Union in 1991 can be explained as casting about in search of a new enemy. Sometimes, our enemies find us, as they did in the attacks of September 11, 2001 against the Pentagon and the World Trade Center. The day after, NATO invoked its collective responsibility against what it called “the scourge of international terrorism.”

And for a time it seemed that Al Qaeda—or a more broadly defined violent extremism, including the Islamic State—might fill the role that had been occupied during NATO’s glory days by the Soviet Union.

But then consensus broke down, in part over the definition of the enemy. Was it just Osama bin Laden’s Al Qaeda? Or did it include President George W. Bush’s “axis of evil” of Iran, Iraq, and North Korea? The congressional authorization for use of military force that passed immediately after the September 11 attacks gave the president permission to strike “those nations, organizations, or persons he determines planned, authorized, committed, or aided the terrorist attacks that occurred on September 11, 2001, or harbored such organizations or persons.”

As the September 11 attacks wane in American memory—some voters in 2020 will have been born after the twin towers fell—politicians have been searching for new villains.

Donald Trump ran for president in 2016 promising to build a wall to protect America from illegal immigrants from Mexico—immigrants he blamed for bringing crime and drugs. Various Republican foreign policy thinkers have floated other candidates for American enemies—Communist China, or the terror-sponsoring, nuclear-bomb-building regime in Tehran.

While these enemies all have their possible appeals, none has proved as durably unifying as the Soviet Union did. China is an inconvenient enemy because it’s also a big business partner. It makes a lot of our products, and we sell it a lot of things. Iran is terrible, but the Iraq War and the ongoing fight in Afghanistan have nearly exhausted American patience for ambitious projects to improve the Middle East.

The Democrats are in enemy-search mode, too. Listen carefully on the campaign trail or even in Congress, and the politicians test out possibilities. Tune in to the impeachment hearings, and it sounds like the enemy is President Trump, or Russia, or Ukraine. Watch a Democratic presidential debate, and the enemy to be fought is “millionaires and billionaires,” or perhaps “the insurance companies,” “Big Tech,” and “Big Pharma,” the fossil-fuel companies and their lobbyists. Perhaps an imaginative Democrat can channel American animosity toward something more abstract, such as racism or inequality.

Creative Republicans and centrists are testing similar ideas about making the enemy loneliness, addiction, or despair.

It’s almost enough to make one nostalgic for the glory days of NATO. The Soviet Union was unspeakably evil. I’m glad it’s gone. At least when it existed, though, pretty much everyone outside the Iron Curtain—America, Europe—understood that the communists were the foes. No number of NATO summits will re-energize an alliance against an enemy that went out of business nearly 30 years ago.

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Every Single Asset Tracked By Deutsche Bank Is Up For The Year

Every Single Asset Tracked By Deutsche Bank Is Up For The Year

What a difference a year makes.

It was last December, which incidentally was the worst December for US equities since the Great Depression, that we showed a remarkable chart: an astounding 93% of all assets tracked by Deutsche Bank were down for the year – worse than even the years of the Great Depression.

2018 would go on to close with a similarly deplorable record: of all assets, only cash posted a positive real return.

Fast forward 12 months when things couldn’t be more different, and with November now in the history books we have a performance mirror image on our hands: as Deutsche Bank’s Craig Nicol writes today, all 38 assets in its tracking universe have posted positive YTD returns in both local currency and dollar terms.

Equity markets still lead the way with notable mentions for the Greek Athex (+49.8%), FTSE MIB (+32.4%), MICEX (+32.3%) and NASDAQ (+31.9%). Credit markets are up anywhere from +5.2% to +16.5% with USD outperforming EUR. Meanwhile bond market returns continue to be led by BTPs (+10.9%) while Bunds (+4.4%) lag behind.

A big reason for this performance was the dramatic gains posted in November, a month which “proved to be another good one for risk assets as tentative signs of progress towards a “Phase 1” trade deal between the US and China fuelled sentiment.” That, and of course, it was the first full month of the Fed’s QE4.

Markets also took hope from the economic data and specifically the stabilization in the PMIs. As such of the 16 equity markets in DB’s sample, 13 closed with a positive total return in local currency terms. That of course included fresh new highs for the major US equity markets.

It was a slightly different story in fixed income markets however where higher bond yields acted as a bit of a headwind to returns. The majority of credit markets closed flat to slightly higher in total return terms however bond markets were broadly negative. As a result, when it was all said and done, out of the 38 assets in the bank’s sample 23 finished with a positive total return in local currency terms while 19 did so in dollar terms with the dollar appreciating versus the euro, yen and sterling.

That said, those assets which underperformed in November such as precious metals, BTPs, China stocks and sovereign bonds had benefited from an impressive return earlier in the year, so their YTD performance was still positive.

In terms of the details, the top of the leaderboard for equities was dominated by the US where the NASDAQ and S&P 500 returned +4.7% and +3.6% respectively. That means we’ve now seen positive total returns for both of these indices in 9 of the 11 months this year.

Meanwhile in Europe we saw the STOXX 600 return +2.9%, DAX +2.9%, FTSE MIB +2.7%, European Banks +2.6% and FTSE 100 +1.8%. Asia lagged with the Nikkei up +1.6% but the Shanghai Comp and Hang Seng down -1.9% and -2.0% respectively with the protests in Hong Kong clearly impeding the latter.

As for fixed income markets, Treasuries (-0.3%) and Bunds (-0.4%) finished with slightly negative total returns while Gilts (-0.9%), Spanish Bonds (-1.2%), EM bonds (-1.6%) and BTPs (-1.9%) suffered heavier losses. That acted as a headwind to IG credit with US IG non-fins retuning +0.3% and EUR IG non-fins -0.3%. High yield fared slightly better, returning +0.9% for EUR and +0.4% for US. Finally, commodity markets book-ended the leaderboard last month with Brent returning +3.7%, while Gold and Silver returned -4.6% and -6.0%. Copper finished +0.2%.

With “trade deal optimism” expected to continue well into 2020 and perhaps until the presidential election, alongside the Fed’s NOT QE, there are few indications that anything can change this trend as we close out the decade.


Tyler Durden

Mon, 12/02/2019 – 15:50

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Do The Democrats Have A Death Wish?

Do The Democrats Have A Death Wish?

Authored by James Howard Kunstler via Kunstler.com,

The early winter holidays are notorious for giving people the blues, but as the last Thanksgiving leftovers slide into the stockpot, the Democratic Party was put on suicide watch. Is the ghost of Jeffrey Epstein in charge? It’s a little late to call an exorcist.

The gun pointed at the Democrats’ head now is a stubby little low-caliber weapon in the person of Jerrold Nadler, chairman of the House Judiciary Committee, who has only grazed the party’s skull in two previous misfirings. The third time, the old saying goes, may be the charm.

When Mr. Nadler entertained Special Counsel Robert Mueller in July, he succeeded spectacularly in discrediting Mr. Mueller, and the inquisition he rode in on. It was the worst public demonstration of aphasia since William Jennings Bryan had a stroke at the Scopes Trial in 1925. Mr. Mueller’s pitiful performance put to rest the last sticky tendril of hope that his tortured report might avail to cast out the arch-demon in the White House. Even the Republicans on the dais seemed to feel sorry for him. True to his character as a schoolyard sap wearing a “kick me” sign on his back, Mr. Nadler just waddled away in a fog of bamboozlement, hitching his pants up to his sternum, to plot his next foolish move.

Which was to haul former Trump campaign manager Corey Lewandowski into the committee in September. Mr. Lewandowski’s performance was the equivalent of watching poor Mr. Nadler get hitched to the rear bumper of a Lincoln Navigator and dragged over several miles of broken Coke bottles. And yet, ever-sturdy, like one of those plastic punching dummies with all its weight on the bottom, Mr. Nadler just popped back up, adjusted his “kick me” sign, and moved on to his next folly: the current comedy of errors around impeachment.

Really, the only question now is what new way will Mr. Nadler find to humiliate himself and mortify his party? Opening testimony this week will be supplied by a panel of Woke constitutional law professors who will attempt to tease out some hermeneutic legal basis for an impeachment other than actual misdeeds. They’ll surely settle on thought-crime, since there is nothing else. Whose idea was it to hit the snooze button just as the curtain goes up on the show?

Next will come a mighty hassle over whether the minority can call witnesses of its own choosing. Ranking member Doug Collins (R-GA) has already asked for an appearance by Adam Schiff, chair of the House Intel Committee, whose procedural shenanigans last month embarrassed anyone with a vestigial memory of Anglo-American due process. Some folks think that Mr. Schiff has got some ‘splainin’ to do about the predicating circumstances of his star chamber spectacle. He is, in fact, a fact-witness to all that, on top of being the issuer today of his own committee’s report on all that, and therefore susceptible to public examination — especially in a train of proceedings as grave as impeachment. If Mr. Nadler enables Mr. Schiff to slither out of testifying, there will be hell to pay, and in the not-so-likely prospect of an actual impeachment trial in the senate, it would be paid there as an unleashed defense goes for Mr. Schiff with pithing needles and thumbscrews of genuine interrogation.

Then there is the “Whistleblower,” this would-be pimpernel of perfidy hiding behind Adam Schiff’s apron under the false assertion that he is entitled to everlasting anonymity. What an idea under our system of jurisprudence! In fact, contrary to Mr. Schiff’s public pronouncements, there is no law that states what he claims — one of several things Mr. Schiff can be called to account for. And that is even if you accept the dishonest proposition that the fugitive who started this fiasco even was a whistleblower, rather than a rogue CIA officer acting on explicitly illegal political motives to interfere in the 2020 election. The CIA, you must know, is forbidden by charter and statute from operating against American citizens, including the president of the United States. Under the circumstances, the so-called “Whistleblower” might fairly be accused of treason.

Has anyone failed to notice that one of the “Whistleblower’s” attorneys, Mark Zaid, tweeted notoriously on January 30, 2017 that “Coup has started. First of many steps. #rebellion. #impeachment will follow ultimately. #lawyers.” Mr. Zaid later explained, “I was referring to a completely lawful process.” Yeah, sure. I think he meant a completely Lawfare process. Of course, the engineered “Whistleblower” escapade was only the latest (perhaps the last) chapter in the annals of nefarious events and actions carried out far-and-wide by several government agencies for three years, and by many officials working within them, and not a few freelance rogues in their service. There is no more accurate way to describe all that except as a coup. The authorities looking into all that have not been heard from yet. The portentous silence is making a lot of people in Washington edgy.

If the various House committees have put the Democratic Party on suicide watch, then something even more deadly is lurking just offstage. Hillary Clinton is making noises about jumping into the 2020 election. She senses opportunity as Joe Biden goes pitifully through the motions of running for office to avoid prosecution for his international grifting operations as Veep. Think of Hillary as the cyanide capsule that the party might actually choose to bite down on as the year ominously turns.


Tyler Durden

Mon, 12/02/2019 – 15:35

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Planes, Trains, & Automobiles: Commuters Crushed As Huge Winter Storm Slams Northeast

Planes, Trains, & Automobiles: Commuters Crushed As Huge Winter Storm Slams Northeast

It’s been well over a week since we’ve been reporting on two significant weather disturbances that caused severe headaches for tens of millions of Americans from coast to coast. The latest batch of wild winter weather continues to torment millions in the Northeast. It could make commuting this evening for drivers in Philadelphia to New York City and Boston a living hell. 

Through the workday, rain and snow showers will switch to snow, could see 1-3 inches in NYC and 4 to 6 inches in Boston by the evening, meteorologist Bob Oravec of the National Weather Service’s Weather Prediction Center told Reuters.

The heaviest bands of snow will be seen this afternoon in Upstate New York, Pennsylvania, northwestern New Jersey, Connecticut, Massachusetts, southern Vermont, southern New Hampshire, and Maine, Oravec said. He added that some regions could receive more than one foot of snow. 

“When it’s all said and done, some areas will have over 2 feet of snow from this storm, especially over parts of the Poconos and Catskills,” Oravec said. 

Meanwhile, the Mid-Atlantic region has seen a mix of rain, snow, and ice. Mostly rain has been seen in the Baltimore–Washington metropolitan area. 

The worst conditions could be seen around the rush hour period for NYC to Boston when the storm is expected to ramp up the intensity. The snow is expected to last through the overnight. 

The winter storm is expected to dump nearly a foot on much of Maine in the overnight. The storm is expected to exit the Mid-Atlantic and Northeast regions by Tuesday. 

Reuters reports that 1,500 cancellations and delays were posted for airports across the country by late morning. The most affected airports were San Francisco, Albany, Boston, Chicago, and Newark.

As of the early afternoon, Flight Aware posted 753 delays and 56 cancellations across the country. A majority of the delays and or cancellations were seen at Mid-and Northeast airports. 

Both storms had huge impacts on the US and came at the worst time during one of the busiest shopping holidays of the year. We assume retailers, who saw foot traffic plunge this year across Black Friday, will blame the weather for their sales slump.

Ed Vallee, head meteorologist at Empire Weather, provides a storm update for the next 36 hours in the Northeast: 


Tyler Durden

Mon, 12/02/2019 – 15:20

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“A Breach of the EU Directive Against Egregious Cliché Embodiment”

Agence France-Press reports:

In a case that could have far-reaching consequences for restaurant critics, chef Marc Veyrat is claiming he was “dishonored” by the red guide when it stripped his flagship restaurant in the French Alps of its coveted third star in January.

Dubbed “Cheddargate” by wags, he claimed that an “incompetent” Michelin inspector mistakenly thought he had adulterated a soufflé with the much-maligned English cheese instead of using France’s Reblochon, Beaufort and Tomme varieties….

[Veyrat] said the Michelin review nearly broke him, sending him into an eight-month depression, and leaving his cooks in tears….

The larger-than-life figure, instantly recognizable for his wide-brimmed black Savoyard hat and dark glasses, told AFP that the case … is a matter of “honor” for him.

“That they said that my soufflé was full of cheddar … and that they took ‘my virtual scallops’ to be real coquilles Saint-Jacques when they were made from a base of burbot (fish) livers from Lake Geneva shows a lack of competence,” he said.

I sympathize with M. Veyrat, and even with his over-the-top reaction (though I can’t speak to the merits of the French lawsuit); nonetheless, it totally put me in mind of the quote that I’ve used as the title of the post. I highly recommend October Man, which is part of Aaronovitch’s charming Rivers of London fantasy-police-procedural series.

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“A Breach of the EU Directive Against Egregious Cliché Embodiment”

Agence France-Press reports:

In a case that could have far-reaching consequences for restaurant critics, chef Marc Veyrat is claiming he was “dishonored” by the red guide when it stripped his flagship restaurant in the French Alps of its coveted third star in January.

Dubbed “Cheddargate” by wags, he claimed that an “incompetent” Michelin inspector mistakenly thought he had adulterated a soufflé with the much-maligned English cheese instead of using France’s Reblochon, Beaufort and Tomme varieties….

[Veyrat] said the Michelin review nearly broke him, sending him into an eight-month depression, and leaving his cooks in tears….

The larger-than-life figure, instantly recognizable for his wide-brimmed black Savoyard hat and dark glasses, told AFP that the case … is a matter of “honor” for him.

“That they said that my soufflé was full of cheddar … and that they took ‘my virtual scallops’ to be real coquilles Saint-Jacques when they were made from a base of burbot (fish) livers from Lake Geneva shows a lack of competence,” he said.

I sympathize with M. Veyrat, and even with his over-the-top reaction (though I can’t speak to the merits of the French lawsuit); nonetheless, it totally put me in mind of the quote that I’ve used as the title of the post. I highly recommend October Man, which is part of Aaronovitch’s charming Rivers of London fantasy-police-procedural series.

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There’s Nothing Noirish in Hulu’s Grating, Hyper, Tiresomely Violent Reprisal

Reprisal. Available Friday, December 6, on Hulu.

The publicists for Hulu’s new revenge drama Reprisal‘s describe it as “hyper-noir.” Actually, it’s more an object lesson in how those two terms can’t be used together.

Film noir is darkly underlit, a creature of the shadows. Its dialogue is cynical but clever. Though its sexuality may be frenzied, it’s about seduction, not rape.

“Hyper” implies the opposite: Garish. Extreme. Grating. Which is actually a fairly good description of Reprisal. Throw in “charmless” and “crude” and you’ve pretty much painted the whole picture.

Reprisal stars Abigail Spencer in a role almost inconceivably opposite the one with which she made her mark, as the perkily cute historian in the time-travel action drama Timeless. Here she’s cast as a Dixie Mafia moll named Katherine who, when she finds herself on the other end of the gang’s violence, seeks grisly vengeance.

Her specific target is her brother Burt (Rory Cochrane, 24), who for reasons unclear (at least at the show’s beginning; the flashback-riddled Reprisal is allergic to linear story-telling) had her dragged behind a pickup truck and left for dead.

But anybody who gets in her way—or even annoys her—is fair game. Collateral damage is a way of life in Reprisal, which has a body count roughly the size of the one for the Korean War.

After a brief prologue with that truck-dragging scene, Reprisal jumps several years into the future. Katherine has changed her name to Doris and her hair to a blonde wig as she prepares to infiltrate Burt’s redneck empire of money-laundering bars and gun-running gangbangers.

Her advance guard is Ethan (Mena Massoud, Tom Clancy’s Jack Ryan), a street punk with a heart of gold but the impulse control of Godzilla. He’s managed to sign on as a member of the River Phoenixes, the band of enforcers who are even more mindlessly vicious than the rest of Burt’s hoodlum cadres. Another potential mole: Meredith (Madison Davenport, Sharp Objects), Doris/Katherine’s niece, a sulky stripper at one of the bars. What exactly they’re planning is hard to say, but it seems likely to trigger a shortage of Hollywood fake blood.

The potential of this scenario can be argued, but the execution cannot: It’s an awkward mishmash of styles that gives Reprisal a pervasive air of unreality.

Characters absorb vicious beatings (frequently, constantly, unceasingly), then pop back up as if nothing has happened. They’re tracked through crowds on gaudy one-shot takes that signify nothing except the self-proclaimed virtuosity of director Jonathan van Tulleken, a Brit who is deliriously out of touch with the blue-highway American culture he’s trying to depict. His idea of a cracker strip joint looks like something out of Moulin Rouge.

The series’ era is deliberately—and pointlessly—obscured; the landscape is dotted with diners and phone booths, but much of the costuming is glam-trash ’90s or beyond. The acting is largely over-the-top pulp. And it’s hard to say—verrrry hard—which is more cryptically opaque, the show’s writing or its editing.

Despite all these pretensions, the only thing cutting-edge about Reprisal is its knives. It’s more like a hyper-stylized version of Walking Tall or one of those other revenge-of-the-rednecks films that contributed so greatly to the unbearableness of the 1970s. (Note correct usage of “hyper.”) Its purported ideas are at least as out of date. Does an obsession with vengeance contort righteousness into villainy? I dunno; let’s watch Death Wish and find out. Do we need to smash the glass ceiling on female serial killers? Consult the feminist classic Hannie Caulder. But when it comes to Reprisal, heed Abigail Spencer’s warning: “I come from bad blood, bad blood and dark days.”

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