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Davos elites struggle for answers as Trump era dawns


By Noah Barkin

DAVOS, Switzerland – The global economy is in better shape than it’s been in years. Stock markets are booming, oil prices are on the rise again and the risks of a rapid economic slowdown in China, a major source of concern a year ago, have eased.

And yet, as political leaders, CEOs and top bankers make their annual trek up the Swiss Alps to the World Economic Forum in Davos, the mood is anything but celebratory.

Beneath the veneer of optimism over the economic outlook lurks acute anxiety about an increasingly toxic political climate and a deep sense of uncertainty surrounding the U.S. presidency of Donald Trump, who will be inaugurated on the final day of the forum.

Last year, the consensus here was that Trump had no chance of being elected. His victory, less than half a year after Britain voted to leave the European Union, was a slap at the principles that elites in Davos have long held dear, from globalization and free trade to multilateralism.

Trump is the poster child for a new strain of populism that is spreading across the developed world and threatening the post-war liberal democratic order. With elections looming in the Netherlands, France, Germany, and possibly Italy, this year, the nervousness among Davos attendees is palpable.

“Regardless of how you view Trump and his positions, his election has led to a deep, deep sense of uncertainty and that will cast a long shadow over Davos,” said Jean-Marie Guehenno, CEO of International Crisis Group, a conflict resolution think-tank.

Moises Naim of the Carnegie Endowment for International Peace was even more blunt: “There is a consensus that something huge is going on, global and in many respects unprecedented. But we don’t know what the causes are, nor how to deal with it.”

The titles of the discussion panels at the WEF, which runs from Jan. 17-20, evoke the unsettling new landscape. Among them are “Squeezed and Angry: How to Fix the Middle Class Crisis”, “Politics of Fear or Rebellion of the Forgotten?”, “Tolerance at the Tipping Point?” and “The Post-EU Era”.

The list of leaders attending this year is also telling. The star attraction will be Xi Jinping, the first Chinese president ever to attend Davos. His presence is being seen as a sign of Beijing’s growing weight in the world at a time when Trump is promising a more insular, “America first” approach and Europe is pre-occupied with its own troubles, from Brexit to terrorism.

British Prime Minister Theresa May, who has the thorny task of taking her country out of the EU, will also be there. But Germany’s Angela Merkel, a Davos regular whose reputation for steady, principled leadership would have fit well with the WEF’s main theme of “Responsive and Responsible Leadership”, will not.

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the Revolution Continues :Italian PM Matteo Renzi to resign in wake of referendum defeat

Premier Matteo Renzi

Matteo Renzi, who staked his future on winning the vote, says he takes full responsibility for the “extraordinarily clear” defeat.

Italian PM Matteo Renzi has said he will resign after losing a key referendum on constitutional reform.

Mr Renzi had staked his future on a “Yes” vote, vowing to quit if voters rejected his plans to reduce the role of the country’s Senate and take back powers from regional authorities.

The result plunges the country into political turmoil, with the effects likely to be felt on the markets and across the rest of Europe.

“The experience of my government ends here,” Mr Renzi said in a televised address to the nation after early results suggested he may have lost by as much as 20 points.

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Premier Matteo Renzi


MILAN (AP) — Italians vote Sunday in a referendum on constitutional reforms that is being closely watched abroad to see if Italy becomes the next country to reject the political status quo.

Premier Matteo Renzi has said he will resign if the reforms are rejected, and opposition politicians have vowed to press for a new government if voters reject the proposed constitutional changes.

The premier made no comment as he voted in Pontassieve, a Tuscan town east of Florence, along with his wife, Agnese Landini. He is expected to return to Rome later this afternoon to watch the outcome of the vote.

The risk of political instability in Italy, Europe’s fourth largest economy, has triggered market reaction before the vote, with bank stocks sinking and the borrowing costs on sovereign debt rising.

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Le Pen victory would be ‘body blow’ to Europe: ex-British PM

France's Marine Le Pen

AFPDecember 3, 2016

New Delhi (AFP) – Britain’s former premier said Saturday the election of France’s Marine Le Pen would be a “big body blow” for Europe, saying he hoped for the victory of a mainstream party.

David Cameron said the recent rise of “anti-system, populist” and “quite extreme political parties” in western Europe did not mark the end of globalisation, but warned of the immediate need to make a “major course correction” to address related economic and cultural challenges.

“If France were to elect Marine Le Pen, that would be obviously a very big body blow for the European project,” he said at a Hindustan Times organised conference in New Delhi, hoping for a victory of “a mainstream party that can unite people behind their candidacy”.

He said the demand for and benefit of free trade, travel, specialisation, technology, innovation were not going away.

“But we do need to understand very profoundly the things that have happened, that have caused the events you have seen in Europe and the wider world in the last one year,” he added.

Cameron resigned as prime minister in June after he — a supporter and campaigner for Britain to remain in the European Union — lost a high-stakes national referendum on the very issue.

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Italy referendum result could send shockwaves through markets and DESTROY Europe

Marcello Mastroianni

THE EU’s days might be numbered with Italy about to vote on a referendum which could send shockwaves across the continent.

PUBLISHED: 10:10, Sat, Nov 12, 2016 | UPDATED: 11:32, Sat, Nov 12, 2016

Analysts believe the outcome of the ballot on constitutional reform could have massive global implications.

With many European leaders already coming under severe pressure from anti-EU parties ahead of elections next year the significance of the Italian result is huge.

Defeat for Italian Prime Minister Matteo Renzi could lead to even deeper social turmoil in countries already struggling with austerity, immigration problems and a growing contempt for Brussels.

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Hungary Referendum: EU Humiliated as 95 Percent Say NO to Migrant Quotas

Hungarian Prime minister Viktor Orban


Hungarian Prime minister Viktor Orban has delivered a huge blow to the European Union after 95 per cent of the Hungarian public soundly rejected EU migrant redistribution plans.

The Hungarian referendum on the redistribution of migrants and asylum seekers by the European Union has faced an almost unanimous result among Hungarian voters. An overwhelming majority of those who cast their ballot agree with Hungarian Prime Minister Viktor Orban that Hungary should not be forced by the European Union to accept migrants via redistribution.

The victory could set in motion the Orban government’s plans to create laws that may be even more stringent toward asylum seekers who enter the country and possibly those who are residing there today. Spokesman for Orban, Zoltan Kovacs, told press in Brussels last month that he expected the result to affirm the position of the government and be used as a stepping stone to create more laws.

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Global elites must heed the warning of populist rage


Real income stagnation over a longer period than any since the war is a fundamental political fact

by: Martin Wolf

For every complex problem, there is an answer that is clear, simple and wrong.” HL Mencken could have been thinking of today’s politics. The western world undoubtedly confronts complex problems, notably, the dissatisfaction of so many citizens. Equally, aspirants to power, such as Donald Trump in the US and Marine Le Pen in France, offer clear, simple and wrong solutions — notably, nationalism, nativism and protectionism.

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How to embrace nationalism responsibly

brexit Churchhill

By Lawrence Summers July 10

The writer is a professor at and past president of Harvard University. He was treasury secretary from 1999 to 2001 and an economic adviser to President Obama from 2009 through 2010.

It is clear after the Brexit vote and Donald Trump’s victory in the Republican presidential primaries that electorates are revolting against the relatively open economic policies that have been the norm in the United States and Britain since World War II. If further evidence is needed, one need only look to the inability of Congress to pass legislation on immigration reform and the observation that the last four candidates left standing in the U.S. presidential contest all oppose the Trans-Pacific Partnership.

Populist opposition to international integration is also on the rise in much of continental Europe and has always been the norm in much of Latin America.

The question now is: What should be the guiding principles of international economic policy? How should the case be made by those of us who believe that the vastly better performance of the global system after World War II than between World War I and World War II was largely due to more enlightened economic policies?

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Don’t Let Overreaction To Brexit Drive You Into Panicky Investment Decisions

brexit Churchhill

July 10,2016
the staff of the Ridgewood blog

Ridgewood NJ, The British vote to leave the European Union – commonly referred to as the Brexit – seemed to catch much of the world by surprise, at least temporarily shook up the markets and left many people wondering whether they should act quickly to protect their investments.

But puzzled American investors should wait to see how this unfolds over time, rather than taking drastic measures they may later regret, says Joseph Mallen, Chief Investment Officer for Sawtooth Solutions (, a technology-focused company that concentrates on wealth-management platforms.

“I believe this is much ado about nothing until further clarity on the result of the vote is determined,” Mallen says. “This may take years to sort out. The Brexit may not happen at all.”

While there was market reaction – really, overreaction, Mallen says – right after the vote, it was based more on perceptions than on anything of substance.

Ultimately, what could the Brexit mean for the future of the American economy? Mallen says no one has a crystal ball, but he offers these observations:

• Overall impact on U.S. markets may be negligible.After instant, but temporary, turmoil the markets in the U.S. recouped their early losses. “This is telling and in line with my expectations that the Brexit should have little to no impact directly on U.S. equity markets,” Mallen says. “We have seen U.S. treasuries gain on what I believe is a flight to quality, pushing the 10-year yield below 1.4 percent.”
• The long-term investment outlook. If other European countries elect to follow suit with their own exits, there could be disruption in Europe-based equities. But Mallen says he doesn’t believe the Brexit, in isolation, will be negative either for the U.S. or for the United Kingdom. “I believe it’s a positive move for the UK, giving it more freedom to act independent of EU governance,” Mallen says. “The UK has more to offer the EU than the EU has to offer the UK.” Ultimately, Mallen says he believes the UK will become a pseudo-member of the EU, similar to the relationships Norway and Switzerland have with the EU.
• Interest rates. The Brexit likely will be a further catalyst for U.S. interest rates to remain low for the next couple of years. “I don’t see the Federal Reserve raising rates, as that would be highly unpopular given the prevailing market sentiment,” Mallen says. “Also, I believe U.S. treasuries will continue to be a safe-haven asset for nervous international investors.”

The initial Brexit vote resulted in a wave of media attention, but it was perhaps more attention than will prove to be warranted as time passes, Mallen says.

In terms of impact on the market, the attention actually should be on the presidential election, he says.
“As much as Brexit was a welcome reprieve from the election, I believe that within weeks the U.S. elections will become the primary global-market media focus and that will continue through November,” Mallen says. “It promises to be a volatile campaign that, I believe, will impact global markets directly.”

About Joseph Mallen

Joseph Mallen is Chief Investment Officer for Sawtooth Solutions ( in Minneapolis, MN, a technology-focused company that concentrates on wealth-management platforms. He has more than a decade of experience as a financial professional and holds a bachelor’s degree in finance from the University of Minnesota and a master’s degree in finance with a concentration in quantitative finance from the London Business School.

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Dow, S&P 500 shake off Brexit, log best week of 2016

brexit Churchhill

Published: July 1, 2016 4:42 p.m. ET

U.S. stocks booked a fourth straight daily gain Friday, and the Dow and S&P 500 marked their best week this year as stocks clawed back some of the losses scored in the wake of the tumult that followed the U.K.’s decision last week to sever ties with the European Union.

Better-than-expected manufacturing data combined with fading worries about the Brexit, or British exit from the EU, stoked appetite for equities.

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Theresa May launches Tory leadership bid with pledge to unite country

Theresa May Brexit

Home secretary vows to make sure Britain leaves EU, saying there must be no attempts to ‘remain through the back door’

Theresa May has launched her bid for the Conservative leadership, pledging that “Brexit means Brexit” and that there would be no general election before 2020.

The home secretary, who campaigned to remain in the EU, positioned herself as the candidate of stability and experience.

Asked for her pitch, she said: “I’m Theresa May and I’m the best person to be prime minister.”

The event was electrified by Michael Gove’s surprise announcement just minutes before she stood up that he would run for the leadership because, he said, Boris Johnson was not a suitable candidate.

Bookmakers were making May the favourite, followed by Gove, even before Johnson dramatically announced later in the morning, after she had made her speech, that he was not going to stand.

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European SUPERSTATE to be unveiled: EU nations ‘to be morphed into one’ post-Brexit


EUROPEAN political chiefs are to take advantage of Brexit by unveiling their long-held plan to morph the continent’s countries into one GIANT SUPERSTATE, it has emerged yesterday.

PUBLISHED: 02:01, Tue, Jun 28, 2016 | UPDATED: 12:28, Tue, Jun 28, 2016

The foreign ministers of France and Germany are due to reveal a blueprint to effectively do away with individual member states in what is being described as an “ultimatum”.

Under the radical proposals EU countries will lose the right to have their own army, criminal law, taxation system or central bank, with all those powers being transferred to Brussels.

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Why the U.S. is freaked out about Brexit

brexit Churchhill

By Nicole Gaouette and Stephen Collinson, CNN

Washington (CNN)Britain’s vote to leave the European Union Friday left the United States confronting a threat to the strength and cohesion of both its closest historical ally and a 70-year transatlantic partnership that has been the bedrock of Western peace and prosperity.

The outcome of Britain’s referendum instantly pitched an already weakened Europe into a new crisis, opening the possibility that other member states could choose to leave the E.U. and create new headaches for Washington.

American leaders on all sides of the political aisle Friday expressed respect for the decision of British voters and vowed to stand with America’s “special relationship” ally Britain and the diminished European Union once both partners have finalized their divorce — a period that could take years.

But there was no hiding the concern behind the scenes as the shockwaves rippled through the EU, a body that has been vital to American foreign policy initiatives in recent times, including the drive to a nuclear deal with Iran and attempts to punish Russia for its incursion in Ukraine.

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Nigel Farage: Britons voted for Brexit because Obama told them not to

Nigel Farage

By Mark Hensch

A leading figure in the British push to exit the European Union says President Obama accidentally helped the Brexit cause.

Nigel Farage on Friday said Obama’s calls for the United Kingdom to stay in the EU caused people to vote to leave.

“Threatening people too much insults their intelligence,” the United Kingdom Independence Party head said.

“A lot of people in Britain said, ‘How dare the American president come here and tell us what to do?’ ” Farage continued on Sirius XM’s “Breitbart News Daily,” citing Obama’s U.K. trip in April.

“It backfired. We got an Obama-Brexit bounce, because people do not want foreign leaders telling them how to think and vote.”

Britain on Thursday voted to leave the EU in a move experts predict will lead to worldwide financial uncertainty.

British Prime Minister David Cameron promptlyresigned Friday morning.

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Britain Rattles Postwar Order and Its Place as Pillar of Stability

Nigel Farage


LONDON — Britain’s historic vote to leave the European Union is already threatening to unravel a democratic bloc of nations that has coexisted peacefully together for decades. But it is also generating uncertainty about an even bigger issue: Is the post-1945 order imposed on the world by the United States and its allies unraveling, too?

Britain’s choice to retreat into what some critics of the vote suggest is a “Little England” status is just one among many loosely linked developments suggesting the potential for a reordering of power, economic relationships, borders and ideologies around the globe.