Europe

Just as we were concluding our write up on the return of Europe's solvency crisis, facilitated by Donald Trump's NATO funding demands and the end of the ECB's unprecedented can kicking exercise, the FT reported that as many as eight of Italy’s troubled banks "risk failing" if prime minister Renzi loses next weekend's constitutional referendum and ensuing market turbulence deters investors from recapitalizing them, citing senior bankers.

Since Drahi's infamous "whatever it takes" warning in the summer of 2012, European bond yields have been a one way street lower, and until the recent Trumpflation rally, had tumbled to all time lows, in many cases well below 0%.  There are two catalysts, however, that may be ending Europe's QE-driven free ride, and according to a recent report by Barclays, their names are Donald Trump and Mario Draghi.

First, when looking at the impact of Trump, Barclays notes that his election as US president may have created an additional burden on European budgets: defence spending.

Market dislocations occur when financial markets, operating under stressful conditions, experience large widespread asset mispricing.

Welcome to this week's edition of “World Out Of Whack” where every Wednesday we take time out of our day to laugh, poke fun at and present to you absurdity in global financial markets in all its glorious insanity.

Update: Alain Juppe concedes making Francois Fillon Les Republicans' presidential candidate against Marine Le Pen in next year's presidential election.

#BREAKING Alain Juppe concedes defeat in French presidential primary

— AFP news agency (@AFP) November 27, 2016

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Following last weekend's latest latest "stunning" political outcome, in which French former PM Francois Fillon trounced pollsters' favorite Alain Juppe in the first round of the French conservative primary and which saw the latest political career termination for former president Nicolas Sarkozy, on Sunday the two former prime ministers are going head-to-head in a runoff vote for France's center-right presidential nomination, with the victor expected to face a showdown against a resurgent Marine Le Pen in the May 2017 presidential election.