Europe

In the weeks since Donad Trump was elected president, US financial stocks (and energy companies) have soared with all eyes on Dow 20k. However, across the world's capital markets, investors have lost a combined $1.2 trillion in debt and equity values, as the bond losses have outweighed stock gains dramatically (especially post-Fed). The question is - what happens next?

The drop in global debt and equity values in Q4 2016 is very reminiscent of the drop into 2015's Fed rate hike... which did not end well...

The danger signs are building up for the Chinese bond market.

First, last Thursday, Chinese bond futures crashed by the most on record forcing China's regulator to briefly halt trading in the security until the panic fades.

Then, on Friday, a Chinese bill auction technically "failed" when it was unable to find enough buyers for the total amount offered for sale.

Following yesterday's deadly terrorist attack, in which a truck driver rammed into a crowded Christmas market, killing 12 and injuring 48, the German mood has been dour, deteriorating further this morning when the interior minister of the German state of Saarland said on Tuesday that Germany is in a state of war. "We must say that we are in a state of war, although some people, who always only want to see good, do not want to see this," the minister, Klaus Bouillon, told German broadcaster SR.

Authored by Steve H. Hanke of the Johns Hopkins University. Follow him on Twitter @Steve_Hanke.

Donald Trump has tabbed Andy Puzder to lead the Department of Labor. Puzder is the CEO of CKE, the restaurant outfit (read: Hardee’s and Carl’s Jr.). CKE, thanks to Puzder saving it from the bankruptcy hammer, employs 75,000 workers (read: jobs). Puzder knows that “high” minimum wages, such as the $15 per hour one thrown around by progressives, is a job killer for those with poor job skills.

For evidence that the market bears are all but extinct look no further than the latest letter from erstwhile bear Bob Janjuah, in which the Nomura strategist throws in the towel in a near-term correction and predicts that "the trends over H1 2017 should be higher (especially US) equities and yields, steeper curves, a stronger USD, and mixed performance in credit (especially in the IG sphere) and EM.