The Duran’s Alex Christoforou and Editor-in-Chief Alexander Mercouris take a quick look at French President Macron’s pathetic display of leadership as he offers protestors little in the way of concessions while at the same time promising to crack down hard on any and all citizens who resort to violence.

Meanwhile France’s economy is set for a deep recession as French output and production grinds to a halt.

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Europe Has A New Problem: Macron’s “Populism” To Blow Out French Budget Deficit Far Beyond Italy’s

Via Zerohedge…

As if Brussels didn’t have its hands full already with Italy and the UK, the European Union will soon be forced to rationalize why one of its favorite core members is allowed to pursue populist measures to blow out its budget deficit to ease domestic unrest while another is threatened with fines potentially amounting to billions of euros.

When blaming Russia failed to quell the widespread anger elicited by his policies, French President Emmanuel Macron tried to appease the increasingly violent “yellow vests” protesters who have sacked his capital city by offering massive tax cuts that could blow the French budget out beyond the 3% budget threshold outlined in the bloc’s fiscal rules.

Given the concessions recently offered by Italy’s populists, Macron’s couldn’t have picked a worse time to challenge the bloc’s fiscal conventions. As Bloomberg pointed out, these rules will almost certainly set the Continent’s second largest economy on a collision course with Brussels. To be clear, Macron’s offered cuts come with a price tag of about €11 billion according to Les Echos, and will leave the country with a budget gap of 3.5% of GDP in 2019, with one government official said the deficit may be higher than 3.6%.

By comparison, Italy’s initial projections put its deficit target at 2.4%, a number which Europe has repeatedly refused to consider.

Macron’s promises of fiscal stimulus – which come on top of his government’s decision to delay the planned gas-tax hikes that helped inspire the protests – were part of a broader ‘mea culpa’ offered by Macron in a speech Monday night, where he also planned to hike France’s minimum wage.

Of course, when Brussels inevitably objects, perhaps Macron could just show them this video of French police tossing a wheelchair-bound protester to the ground.

Already, the Italians are complaining.  Speaking on Tuesday, Italian cabinet undersecretary Giancarlo Giorgetti said Italy hasn’t breached the EU deficit limit. “I repeat that from the Italian government there is a reasonable approach, if there is one also from the EU a solution will be found.”

“France has several times breached the 3% deficit. Italy hasn’t done it. They are different situations. There are many indicators to assess.”

Still, as one Guardian columnist pointed out in an op-ed published Tuesday morning, the fact that the gilets jaunes (yellow vest) organizers managed to pressure Macron to cave and grant concessions after just 4 weeks of protests will only embolden them to push for even more radical demands: The collapse of the government of the supremely unpopular Macron.

Then again, with Brussels now facing certain accusations of hypocrisy, the fact that Macron was pressured into the exact same populist measures for which Italy has been slammed, the French fiasco raises the odds that Rome can pass any deficit measure it wants with the EU now forced to quietly look away even as it jawbones all the way from the bank (i.e., the German taxpayers).

“Macron’s spending will encourage Salvini and Di Maio,” said Giovanni Orsina, head of the School of Government at Rome’s Luiss-Guido Carli University. “Macron was supposed to be the spearhead of pro-European forces, if he himself is forced to challenge EU rules, Salvini and Di Maio will jump on that to push their contention that those rules are wrong.”

While we look forward to how Brussels will square this circle, markets are less excited.

Exhausted from lurching from one extreme to another following conflicting headlines, traders are already asking if “France is the new Italy.” The reason: the French OAT curve has bear steepened this morning with 10Y yields rising as much as ~6bp, with the Bund/OAT spread reaching the widest since May 2017 and the French presidential election. Though well below the peaks of last year, further widening would push the gap into levels reserved for heightened political risk.

As Bloomberg macro analyst Michael Read notes this morning, it’s hard to see a specific near-term trigger blowing out the Bund/OAT spread but the trend looks likely to slowly drift higher.

While Macron has to fight on both domestic and European fronts, he’ll need to keep peace at home to stay on top. Remember that we saw the 10Y spread widen to ~80bps around the May ’17 elections as concerns of a move toward the political fringe played out in the markets, and the French President’s popularity ratings already look far from rosy.

And just like that France may have solved the Italian crisis.

The Duran’s Alex Christoforou and Editor-in-Chief Alexander Mercouris take a quick look at the tragedy that has fallen up May’s disastrous Brexit deal. The UK Prime Minister has now delayed a critical Brexit vote well past the new year, as she runs to Brussels to seek “assurances” from EU oligarchs.

Meanwhile in a stunning decision that is sure to be leveraged by multiple EU member states, the European Court of Justice has ruled that Britain is free to revoke Brexit unilaterally.

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As Zerohedge reports, ‘Meanwhile In Brexit… Total Chaos’:

It has been a furiously chaotic day for Brexit developments, which considering the “organized” nature of the process to date, is saying something.

Just a few hours after the embattled U.K. prime minister announced to the House of Commons she would “unexpectedly” delay the critical Brexit vote – facing certain and humiliating defeat – and return to Brussels to seek “assurances” from European Union leaders, the fate of any upcoming votes to ratify the deal is now in limbo.

As ITV’s Richard Peston reported, “it appears that UK PM May could keep the current talks with EU going well past January 21st “perhaps right up to Brexit day 29 March, and avoid any parliamentary Brexit vote,” effectively eliminating a popular vote of disapproval for her process.

I may have got this wrong. Looking at European Union Withdrawal Act it seems that @theresa_may could keep the current talks with EU going well passed 21 Jan, perhaps right up to Brexit day 29 March, and avoid any parliamentary Brexit vote. @YvetteCooperMP understandably concerned https://t.co/1kgnGmXBxJ

— Robert Peston (@Peston) December 10, 2018

That, as Bloomberg notes, raises the prospect that May will be back in Parliament in January with virtually the same deal, relying on tanking markets, a crashing pound and frightening no-deal preparations – including even more doomsday rhetoric from the Bank of England – to convince lawmakers to back her. Sadly for May, the parliamentary arithmetic won’t have changed, as only an election can do that. And an election is out of the question as May will almost certainly lose her job, potentially resetting the Brexit process back to square one (or perhaps minus one).

Meanwhile, with the Brexit vote in parliament indefinitely postponed, the UK Parliament will debate the vote delay for three hours on Tuesday according to House of Commons Speaker John Bercow, assuring even more drama and chaos.

The debate was demanded by opposition Labour Party leader Jeremy Corbyn, who said May has shown “disregard for Parliament and the rights of this house” by making a “unilateral” decision to delay vote on her Brexit deal. While the debate won’t be binding on May’s government, contributions “will reflect anger” at May avoiding what was predicted to be a heavy defeat of her deal in House of Commons, according to Bloomberg.

Even so, Corbyn won’t table a “no confidence” motion against Theresa May’s government until there’s been a formal vote on the withdrawal agreement, effectively trapping May in a no way out situation.

And while the domestic chaos hit previously unseen levels, in Brussels European Council President Donald Tusk called a leaders’ meeting on Brexit for Thursday, but made it clear that the EU “will not renegotiate the deal” even as he tweeted that “we are ready to discuss how to facilitate ratification.”

Amusingly, it’s not just Europe that refuses to renegotiate the deal: Irish PM Leo Varadkar was also on the tape re-iterating that the deal cannot be renegotiated.

All this is happening as May’s critics hate the agreement she negotiated because, as BBG notes, they think she’s allowing the U.K. to be trapped in the EU’s orbit indefinitely – a situation they consider even worse than current membership.

To that end, the Daily Mail’s tweeted that Brexiteers claim to have heard of “a couple more” letters of no confidence in Theresa May going in tonight, which means that should the total surpass 48, May’s cabinet may fall even before a vote in Parliament is held… if one is held to begin with.

If that wasn’t enough, juggling a seemingly infinite number of variables, May said the government will step up preparations in case Britain does crash out of the bloc on March 29, which is less than 4 months from now. She once again brought up the threat of no-deal – the worse-case scenario for business – as a weapon to try and bring rebellious Conservatives on both sides of the Brexit debate into line.

To be sure, as the Brexit chaos hits previously unimaginable levels, traders no longer are able to follow every twist and turn in this melodramatic tragicomedy, and appears to be resigned to just sell the pound as it now appears that the only thing that can get the pound to surge – i.e., get a Brexit deal – is if the pound first crash. It did so today, with sterling hit the lowest since April as the market either judged that the risk of no-deal Brexit has increased, or realized that the only way to get a deal is to scare parliament into voting for May’s deal.

So what happens next? Nobody knows.

As Bloomberg reports when pressed by members of Parliament to tell them when she would bring the deal back, May refused to answer, saying only that Jan. 21 served as a deadline because it’s the date in the law when the government has to report back to Parliament on what it’s doing if there’s no deal.

“The worst case is no vote until January 21,” according to Societe Generale SA strategist Kenneth Broux, adding that the longer it takes, the lower the pound is likely to fall.

The Duran’s Alex Christoforou and Editor-in-Chief Alexander Mercouris take a quick look at how Michael Cohen’s botched Moscow Hotel deal fully exonerates the Trump campaign of any possibility to have colluded with the Russian government in the run up to the US Presidential election.

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Via The Gateway Pundit…

Federal prosecutors in New York filed their sentencing memo for President Trump’s former-lawyer-turned-rat Michael Cohen on Friday.

Special Counsel Robert Mueller did not take a position on Cohen’s sentencing even though the charges stemmed from Mueller.

Last week Michael Cohen, 52, pleaded guilty to lying to Congress about his role in building a Trump Tower in Moscow – a tower that was never even built.

Michael Cohen’s lawyers asked for no prison time; Cohen reportedly thought Trump was going to pardon him.

But the liberal prosecutors suggested 51 to 63 months in prison when referring to the sentence.

Cohen reportedly cooperated with special counsel Robert Mueller’s Russia witch hunt and provided information that “was ultimately credible and useful to its ongoing investigation.”

For this he will serve up to five years in prison.

President Trump tweeted about Cohen’s sentencing and the court’s findings.

It looks like Cohen may be on his own here.

Totally clears the President. Thank you!

— Donald J. Trump (@realDonaldTrump) December 7, 2018

CNBC reported on the filing:

• The Southern District of New York cited sentencing guidelines of 51 to 63 months in prison when referring to the sentence.
• Prosecutors asked for a “substantial term of imprisonment” for Cohen, whom they slammed for committing crimes intended to affect the 2016 presidential election: “Cohen sought to influence the election from the shadows … [he] clouded a process that Congress has painstakingly sought to keep transparent. The sentence imposed should reflect the seriousness of Cohen’s brazen violations of the election laws and attempt to counter the public cynicism that may arise when individuals like Cohen act as if the political process belongs to the rich and powerful.”
• But they noted in the memo that their recommendation be modestly lower than the suggested range of prison time suggested in federal guidelines.
• Prosecutors also wrote: “While Cohen – as his own submission makes clear – already enjoyed a privileged life, his desire for even greater wealth and influence precipitated an extensive course of criminal conduct.”
• The U.S. attorney’s office noted that Cohen’s cooperation with special counsel Robert Mueller’s Russia probe provided information that “was ultimately credible and useful to its ongoing investigation.”
• But, the prosecutors added that “Cohen repeatedly declined to provide full information about the scope of any additional criminal conduct in which he may have engaged or had knowledge.”
• The prosecutors also pushed back on the characterization of Cohen from his lawyers, who presented Cohen’s cooperation as an act of principle: “While Cohen’s provision of information to the [special counsel] merits credit, his description of his actions as arising solely from some ‘personal resolve’ … ignores that Cohen first reached out to meet with the [special counsel] at a time when he knew he was under imminent threat of indictment in this District. As such, any suggestion by Cohen that his meetings with law enforcement reflect a selfless and unprompted about-face are overstated.”

According to The Gateway Pundit, Cohen’s previous plea deal with federal prosecutors in the SDNY focused on finance felonies; he pleaded guilty to six felonies related to his personal business in August.

Then Mueller interrogated Michael Cohen for 70 hours about the Trump campaign’s so-called contacts with Russians, Trump’s business ties to Russia, obstruction of justice and talk of possible pardons, according to ABC News.

It isn’t new news that Michael Cohen was discussing plans to develop a Trump Tower in Moscow, but the Deep State and fake news media need their ‘Trump-Russia’ headlines, so here we are.