Dominicans Cracking Down on Haitians Again

Guardian: US warns its ‘darker-skinned’ citizens of Dominican Republic’s migrant crackdown

US officials in the Dominican Republic are warning “darker-skinned” Americans they are at risk of being swept up in the country’s crackdown on Haitian migrants.

The advice from the US embassy in Santo Domingo suggests that authorities there are using a person’s appearance as a criteria for detention of those suspected of being in the country illegally.

The Dominican Republic says it has deported 43,900 migrants, mostly Haitians, between July and October in an operation it insists is necessary for national security amid growing unrest, gang crime and a fuel blockade inside its only neighbour on the island of Hispaniola.

This will eventually come to Europe. Probably not the United States because it isn't an ethnostate. The odds are near zero in the U.S., but they rise with the degree of collapse that unfolds. It is possible that all illegal immigrants are eventually deported if there's no amnesty.

Jiang Zemin Dead at 96

The Western press has more detailed obituaries for Jiang, who led China during the most important phase of its rise in the 1990s. Making the leap from a rising power to a potential global hegemon during a period when the United States was at the apex of its power, Jiang integrated China into the American system while simultaneously laying the foundation to displace it as the premier economic power. He came to power with China an outcast following the Tiananmen crackdown and left with China in the WTO, rapidly gutting what was left of the West's industrial advantage.

AP has a long biography: Former President Jiang Zemin, who guided China’s rise, dies

Chinese coverage is remarkably terse.

China Daily: Jiang Zemin passes away

The letter says that Comrade Jiang Zemin was an outstanding leader enjoying high prestige acknowledged by the whole Party, the entire military and the Chinese people of all ethnic groups, a great Marxist, a great proletarian revolutionary, statesman, military strategist and diplomat, a long-tested communist fighter, and an outstanding leader of the great cause of socialism with Chinese characteristics. He was the core of the CPC's third generation of central collective leadership and the principal founder of the Theory of Three Represents.

My take: this is probably a non-event for China because Jiang wasn't heavily involved in current politics. He also isn't a beloved figure among the people. The June 1989 protests were sparked by the death of Hu Yaobang in April because he was a popular figure for people who wanted China to open up politically. Given the current state of affairs, disgruntled citizens or CCP insiders could his death as a vehicle for criticizing the state.

I still don't think these protests have legs. I'm not basing that on superior on the ground knowledge, but the fact that I've seen this show play out before and it always ends the same way. Jiang's death adds a new variable that could fuel something larger, but that something hasn't happened yet.

Apple Ratios

A trip to the lower support on AAPL/QQQ corrolates to a $130 price at the current level of QQQ> A conservative target is a touch of that support. Adjust for move in QQQ.

Island Reversal on Utilities

Below on the utilities that look the most intriguing as short candidates. NEE has the most liquid options.

Greater Idaho

Unlike some moves such as Western New York breaking away, this move will not affect the evenly divided U.S. Senate. 'Greater Idaho' Moves Closer To Bi-State Referendum As Two More Oregon Counties Vote To Leave

“We’re about matching government to people and their values. You get rid of polarization and tension by matching people to the government they want,” McCaw told The Epoch Times.

Palladium Again

A breakdow is bearish for the Nasdaq. If it falls into year-end, the yearly candle will be a gravestone.

Chinese Have Had it With Lockdowns

Be skeptical of Western reports of protests. The Chinese have a different conception of government and their relationship with it. Some areas have had it with strict lockdowns, but notice most people are wearing masks. They aren't wearing masks to thwart the surveillance state. The main takeaway is the negative mood is boiling over with new rounds of lockdowns. Everyone in and out of China can see another long winter of lockdowns coming as long as zero-covid is the policy.

Perhaps the protests escalate, but there's no evidence of that yet.

Will There Really Be a Diesel Shortage?

I'm skeptical about the diesel shortage. There is chart evidence both for and against. The two important charts are below. If you'd like some more discussion, see it here: Clearing the Smoke: Diesel Edition

Bearishness Intensifies: China Cuts RRR Again

Update: For more discussion, see the post over at Substack: The Based Take on China's RRR Cut

ZH: China Cuts Reserve Requirement Ratio By 25bps, Boosts Economy With $70BN In Fresh Liquidity

Below I've reproduced my post from December 6, 2021: China RRR Cut is Bearish

ZH: China Cuts RRR By 50bps; More Easing Expected

Specifically, the PBOC cut the RRR by 50bps effective 15th Dec. The move will release CNY 1.2 trillion in liquidity - some of this new money will be used by banks to repay maturing loans from the PBOC’s medium-term lending facility and some of it will be used to replenish financial institutions’ long-term capital, the central bank said. There are almost 1 trillion yuan worth of the 1-year loans maturing on Dec. 15, the day the cut takes effect.

It releases zero trillion in new lending. It eases financial pressure on banks who are probably running into some trouble because of the strong dollar. Look at the chart posted with the article. The RRR cuts come during the taper. They occur before yuan depreciation in August 2015 and before a broad global sell-off in risk assets in autumn 2018.

I am thinking about the time and place of the next panic.

New Covid Lockdowns Spurring Rumors

163.com: The closure of Beijing Railway Station is a rumor

On the evening of November 23, it was reported on the Internet that "Beijing Railway Station was closed for the first time in 63 years, and it will be recorded in the history of the station." The reporter learned from Beijing Railway Station that this news was a rumor.

Meanwhile in Henan, the newly hired Foxconn workers are being paid 10,000 yuan to go home.

New Losers

Three of the largest (by market capitaliztion) losers on high volume on Friday. I have puts on MSCI. No positions on the other three. WSM is a bonus, chart looks good for bears.

I'm Shorting the Gap

That's quite the gap that's opened up between XLE and CL. There's a roughly 20 percent peformance gap open. It can go wider, 30 percent wouldn't be impossible, but this type of directional gap where one rises and the other falls is rare. This isn't necessarily going to close then, but the inverse correlation should end. Since XLE looks like a double-top here, I see XLE as offering similar downside potential as CL or USO, but without outperformance potential (for short positions) should the gap close.

Here's how performance went in 2014 and 2018. The latter looks more relevant to me given rising rates and falling stocks as part of the backdrop.

Cadence

Are We Done Here?

The elevator doors are open and there is no elevator. Will the market step in today?

One Last Bear Rampage to End 2022: Stapled Consumers

One Last Bear Rampage in 2022: Communication Services

One Last Bear Rampage for 2022: Semiconductors

Looking at the ascent on some of these, I think I might go 10 percent or more OTM on options. My expepctation is they will descend faster than they ascended. KLAC gained 57 percent from low to high in barely more than one month. My expectation is it will trade at a new low, which would require a minimum loss of 365 percent. TSM doesn't have the greatest chart, but it gained 40 percent in two weeks. Likely to lose it all as fast, if not faster.