Setting Back The Clock In Europe

Europe appears to have set back the clocks in more than one way over the weekend. In Portugal the leftist anti-austerity party won the election by a landslide but has effectively been banned from taking power by the incumbent Prime Minister Pedro Passos Coelho, stating that he couldn’t yield power to parties which oppose Portugal’s membership of the shared euro currency. He then invited the right coalition to form a government. So much for democracy in Europe – it appears we are back to good ole’ fascism. Given the ongoing economic situation in combination with the unfolding ‘migration crisis’ I may be sitting on a veritable powder keg over here in Spain.

I’m not sure what those Eurocrats in Bubbles are thinking but ignoring the will of the people is not going to end well, no matter how well justified. They did it in Greece, they did it in Cypress, they are doing it in Catalunia, and now it’s happening in Portugal. The pendulum is swinging to the extremes across the entire Eurosphere. In the North people are starting to flock to the right mostly due to a sudden open border policy across the Schengen area and the ensuing incursion of millions of refugees all summer until now. In the Mediterranean, with continued youth unemployment figures ranging between 30% – 50% we are seeing a drastic shift toward the extreme left as well as outright communism. I’m not taking sides here as the underlying causes are systemic and not political. But what I do know for a fact is that you can push people only so far for so long until they either seek out new leadership or, should those fail them as well, take measures into their own hands.

Suffice to say that my personal policy of keeping a low profile/footprint seems to be paying off in spates now as I am literally ready to board a plane and be gone in 30 seconds flat if the proverbial excrement is heading toward the scramjet.

Equities seem to be holding the line thus far and I am doing exactly nothing here – my stop near ES 2055 seems well placed.

Similar story on the AUD/CHF – here I’m moving my stop a little higher slightly below the 25-hour SMA. Will trail it higher as things unfold – the daily panel is looking supportive of a continued run higher.

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Cheers,