Europe

In retrospect it appears Tom DeMark was spot on with his Wednesday prediction, made just as the Dow Jones was down some 500 points that that very day was "an interim low" to be followed by a 5-8% rebound (at which point the selling would resume). In fact, those trading Japanese stocks saw virtually the entire predicted rebound take place in just one day as the Nikkei soared by almost 6% overnight, or nearly 1000 points, the biggest jump in 4 months, while risk everywhere else around the globe has likewise exploded higher, as crude has stormed back over $31/barrel.

The lights are burning late in Davos tonight.

At the World Economic Forum, keynoter Joe Biden warned global elites that the unraveling of the middle class in America and Europe has provided “fertile terrain for reactionary politicians, demagogues peddling xenophobia, anti-immigration, nationalist, isolationist views.”

Evidence of a nationalist backlash, said Biden, may be seen in the third parties arising across Europe, and in the U.S. primaries. But set aside Joe’s slurs—demagogues, xenophobia.

• Global Stocks Face Fresh Losses (WSJ)
• European stocks lick wounds after mauling, oil steady (Reuters)
• Hang Seng Index Sinks Below Net Assets for First Time Since 1998 (BBG)
• U.S. Hedge Funds Boast Lower Losses as Markets Tumble Further (NYT)
• Deutsche Bank Drops as Investment Bank Revenue Concerns Mount (BBG)
• Islamic State Uses Syria’s Biggest Dam as Refuge and Potential Weapon (WSJ)
• Goldman-run funds most popular with Republican candidates, disclosures show (Reuters)

Via The New York Review of Books,

The following is a revised version of an interview between George Soros and Gregor Peter Schmitz of the German magazine WirtschaftsWoche.

Gregor Peter Schmitz: When Time put German Chancellor Angela Merkel on its cover, it called her the “Chancellor of the Free World.” Do you think that is justified?

It all started early last night when the front month oil contract dipped below $28 giving a taste of what was to come. It was all downhill from there.

First Chinese stocks ended the recent ramp higher, with the Shanghai Composite closing down 1% back under 3000, then Japan's rout accelerated with both the Nikkei (-3.7%) and the Topix Index sinking into bear markets, both falling more than 20% from their 2015 highs.