Trump, Italian Style

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“Donald J. Trump announced his candidacy for President in June 2015, to criticism, mockery, and doubt by the media and political class. Trump’s candidacy and campaign have been called a joke by many since Trump’s announcement.  Beware of clueless media elites who spend more time talking to each other at Manhattan cocktail parties than listening to the American people.  Trump has come this far against all odds, so is winning the general election really that farfetched?  No, it’s not. Trump can win, here’s how and the best trades to prepare for the unexpected.”

Bear Traps Report Election Playbook, July 2016

Breaking: *RENZI SAYS HE WILL OFFER HIS RESIGNATION TO PRESIDENT

And then there Were Two

leaders

A global populism tsunami: Hillary Clinton’s November loss was a rejection of President Obama’s policy direction.  Cameron stepped a side post Brexit’s defeat.  Holland in France has announced he will not run next year.  Renzi to offer is resignation, after Referendum defeat.  The dominos keep falling.

What do Marie Antoinette in 1788 and the U.S. political establishment of 2016 have in common? Everything.  Ten years from now the establishment media and global political class will look back and say, “how did we miss that.”  When too many people have a vested interest in a certain political outcome, they live in a strange state of confusion.

As Mark Twain once said, “denial ain’t just a river in Egypt.”  As we learned with Lehman Brothers, after a long state of hubris, the unthinkable can happen.  The global media intelligencia, as well as the entire political (globalization) establishment have spent the last 15 months trying to mislead investors as to the true lay of the political land.

After Italy, France could possibly be the NEXT Domino to Fall this coming April-May 2017, stay tuned.

Breaking: Monte Paschi, Advisers to Meet Soon as Monday on Rescue Plan.  Renzi’s loss in Italy put the plan at risk, please see our report.

After Trump’s surge in the U.S., follow on populism in Europe is yet another blow to China.  The anti-globalization trade is in its middle innings.  China has been eating Italy’s lunch for more than ten years, those days are coming to an end.  Middle class working families have made a stand in the UK, USA and now Italy.

*ITALY REFERENDUM: ‘NO’ AT 56%-60% IN RAI WEIGHTED EXIT POLL

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Italian Banks Have Been Saying “No” is Coming for Weeks

italian-stocks-v-unicredit

Italian banks will wear the brunt of tonight’s ‘No’ victory during the trading day tomorrow.  The downside in the euro will be limited as much has already been priced in. In the short run, an Italian bond sell-off will be contained given how much has already been priced in and a potential backstop from the ECB.

Globalism is Under Siege

Establishment media has had its head in the sand for 15 months as a tsunami of populism sweeps across the world.

Prime Minister Matteo Renzi has lost a referendum on constitutional reform by a wide margin, exit polls show, throwing his future into doubt and opening the door to renewed political instability in Italy.

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The Road to Populism

1. Trump defeats Jeb Bush and 15 others in the GOP Primary
2. Brexit vote stuns the UK establishment
3. AfD’s Rise in Germany, embarrassing Merkel in her home district elections
4. Trump wins 30 of 50 States in the U.S. Presidential election, 309 Electoral Votes, most for a Republican since 1988
5. Italy: Renzi’s “Line in the Sand” Referendum, points to “No”
6. Le Pen’s surge in France, the most significant far right threat in decades, April-May 2017 Elections

Three exit polls showing ‘No’ vote ahead in Italy referendum spurs decline in EUR/USD, drives up yen on haven flows.

Euro: Right on its Lowest Level Since 2003

no-vote

Italians have voted 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.  An exit poll by the Piepoli Institute/IPR for state television station RAI, estimated the ‘No’ vote at 54-58 per cent against 42-46 per cent for ‘Yes’. Two other polls gave ‘No’ a similar lead of at least 10 points.

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What it Means?

– No vote is yet another anti-establishment “get lost” to Renzi.
– He has stated he would resign in defeat, a major center left establishment loss.
– New elections are possible, with Euro skeptic party “5Star” possibly coming to power, a Euro exit is more real than ever now for Italy.
– After Trump’s surge in the U.S., follow on populism in Europe is yet another blow to China.  The anti-globalization trade is in its middle innings.  China has been eating Italy’s lunch for more than ten years, those days are coming to an end.  Middle class working families have made a stand in the UK, USA and now Italy.
The margin of victory is the most important thing to watch.  A 60-40 “No” vote speaks to a ItalExit from the Euro.

Matteo Renzi, the prime minister, 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 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.

European partners were closely monitoring the vote. A headline in the Frankfurter Allgemeine Zeitung said Renzi’s “arrogance is his shortcoming,” noting that “Europe is at stake” in the vote.

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