Barbarians are inside the gates – and that’s a huge challenge as you know. It impacts society in many ways; and that includes markets. It’s also challenges a somewhat already conflicted European Union; especially the Shenzhen area of ‘free travel’ in Europe. In my view that is effectively suspended without any overall agreement, simply by virtue of France closing its borders. 

As you know it’s necessary to cross French borders to travel between the core nations of the EU; Spain to Germany; Holland and Belgium to Spain, even Italy unless traversing mountain roads in Switzerland. As I drove from near Spain (Jean San Sebastian, a beautiful seaside town) back to a family chateau near Bordeaux in August (on E-5, the Spanish/Franco version of I-95); I noticed license plates from virtually every country in Europe, including the Balkans, the Baltic states; even Russia. Border checks there and comparable roads North and East of Paris, effectively ends free ‘core Europe’ no-border-check travel.

I believe the open (compassionate but less smart) arms policies championed by Germany (now quickly backing-off) are well-intended humanitarianism, but really opened the door to ‘Trojan Horse’ attacks; of which I’m sadly convinced Paris on Friday night was just one (that’s clear given the cache of weapons seized in Paris and Brussels in police raids Monday, including even an RPG). The fact that the perpetrators mostly came through Belgium, as did the Thalys terrorist from the same ‘network’ shows the mess Brussels has allowed for the arms trade as well as a safe haven for terrorists. Home of NATO; pressure to clear-out a lot of the spurious types is going to be hard to resist.   

Border controls and mobilization will cost money; probably stimulate Draghi’s call for more funding, and perhaps that is part of what the market liked Mondaytoo. It’s sad for ‘legitimate’ refugees, but most cannot be adequately vetted, so officials claiming to do just speak politically-based nonsense wishful thinking, in-absence of any ‘security databas’e to check for people who never traveled much before and so are unknown to databases, even in their home countries sometimes. It’s a risk many US Governors made clear today as well.