European Union

In a somewhat depressing show of the farce that is Europe's immigration policy, local media reports "apocalyptic scenes" on the northern Greek border where "economic migrants" who are not entitled to leave Greece's provisional camps are fighting with 'refugees' who are entitled to leave, and head into other European nations. Petrol bombs and stones flew through the air, fists, kicks and wrestling on the ground as migrants hindered refugees from entering Macedonia (FYROM). People have injured, trampled and faint, among them many babies as some migrants tried to pass together with the refugees and were apparently hindered with stun grenades fired by the FYROM police.

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She warned against a EU superstate by saying famously: "We have not successfully rolled back the frontiers of the state in Britain, only to see them reimposed at a European level, with a European superstate exercising a new dominance from Brussels."

Update: PSPP extended to March 2017 "or beyond", regional debt added to QE-eligible asset pool

Having just let everyone down with a less-than-spectacular 10 bps depo rate cut, Mario Draghi will now try to appease a spoiled market by announcing an expansion and/or an extension of PSPP. 

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"Where in such cases the overall functioning of the area without internal border control is put at risk, and insofar as the exceptional circumstances constitute a serious threat to public policy or internal security within the area without internal border control or within parts thereof, the period for the reintroduction of internal border control may be extended up to a total maximum of two years."

Turkey is the next key region in this conflict, since the only alternative gas pipeline that supplies Russia, and comes from Asia (Nabucco), passes through Turkey. Future conflicts between Turkey and Russia will be part of the Russian strategy within the region. 

The EU’s political leaders and other elites are committed to holding the European Union together. To them, united Europe is an article of faith. They hold the idea with as much ferocity and fervor as any religious belief. But while the European Union is a wonderful political idea, it’s economically terrible. And the EU nations will have to face up to bearing enormous costs to save the Europe we wished for.

The EU is warning Greece it faces suspension from the Schengen passport-free travel zone unless it overhauls its response to the migration crisis by mid-December, as frustration mounts over Athens’ reluctance to accept outside support. Meanwhile non-EU member Turkey gloats as it gets a soon to be embezzled wire transfer of €3.0 billion for its "proactive" refugee response.

While Americans are used to tears (and jeers) in The Capitol as politicians go about their 'business', none of that compares to the behavior of lawmakers in Kosovo this morning.

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Over half of all the illegal migrants slated for deportation in Sweden have mysteriously disappeared.  The National Border Police Section reports that of the 21,748 individuals due to be sent home after their asylum applications were turned down, a whopping 14,140 have simply vanished off the police radar.  "We simply do not know where they are”, said a spokesman for the local police.

The recent attacks in Paris evoke strong emotions for many people, but investors need to look through those feelings to the short, medium, and long-term implications. We believe Paris may mark an important turning point for Europe and the global business cycle... but for different reasons than you may think. There is a chance that the slow disintegration of Europe will drive more capital onto US shores, boosting valuations and fueling a blow-off top in the US equity market; but beware global shocks and take any rally as a chance to get defensive.

As previewed earlier today, moments ago the EU and Turkey reached a deal in which Europe would give Erdogan another €3 billion to be embezzled accordingly (perhaps to buy more tankers for Erdogan's son with which to ferry ISIS oil, or to build a new annex for his palace, or just to recycle the money and purchase even more F-16s from the US), in exchange for which Turkey would promise to close its borders to millions of outpouring Syrian refugees and agree to accept deported refugees already located in Europe.

The number of newly diagnosed HIV cases in Europe has hit an all-time high of 142,000, according to The World Health Organization. "Despite all the efforts to fight the disease," WHO officials note that the rise of the epidemic is primarily attributed to Eastern Europe, where new diagnoses have more than doubled. But it is comments from European Centre for Disease Prevention Control acting director Andrea Ammon that raised a number of witch-huntery eye-brows when she explained migrants and refugees were at a high risk of infection after they arrived in Europe, because social exclusion made them more likely to engage in risky behavior.