For the night of 7 December 2011
Turkey-Syria: For the record. Turkey will not allow armed groups to use its territory for launching attacks on other countries, an unnamed Turkish diplomat said in response to reports from Syrian news that border guards prevented "armed terrorist groups" from crossing the Turkish border into Syria. The diplomat denied that Turkish residents observed military activity on the Syrian side of the border.
Syria-Turkey: Syrian troops opened fire on the Turkish border, Turkish villagers said and Reuters reported. One villager said they heard gunfire in Guvecci from the Syrian side of the border "until early dawn." Another villager said Syrians fired from sniper posts on the hills.
Comment: Turkey can beat Syria easily in a conventional conflict, according to a Brilliant and well-informed Reader. However, Turkey has no legal, ethnic nor moral justification for supporting an insurgency in a neighboring country. It is a bad precedent.
Egypt: The Muslim Brotherhood and Salafist candidates won 42 of the 52 individual seats contested in runoffs for the first stage of Egypt's multiphase parliamentary elections, according to Egyptian state media. The final results of the second round of voting will be announced on 8 December.
Just days after celebrating the beginning of the first parliamentary elections since the ouster of Hosni Mubarak, Egypt's interim military rulers reasserted their own power, declaring that despite the elections they would still manage the writing of a new constitution in order to insure against an Islamist takeover.
General Mokhtar al-Molla of the ruling military council said it would intercede to make sure that no such organized minority could put its own stamp on the future constitution.
Comment: The Egyptian military leadership is gambling that it can prevail over the will of the electorate. That is a bad bet because armies always are drawn from the populace and reflect the attitudes of the parents of the soldiers. Generals always lose against the voters.
If the voters - the parents of the soldiers - vote against the army leadership, the army leadership must fail and fall, eventually. The leaders of military coups in Pakistan during the past half century are the text book examples of generals who overstayed their welcome and were turned out by the people who welcomed them. The Egyptian generals are about to join their ranks.
China-Europe: Chinese trade data due to be released on Saturday will show a sharp slowdown in export growth in November, official sources told the press. Sales to Europe and the US, which comprise about 40% of total exports, were not expected to recover next year.
Exports to the European Union fell 9% in October versus a year ago, and exports to the US fell 5%.
The country's total exports, however, were still up 15.9%, thanks in part to booming demand from Latin America.
"Next year, I think that we will face severe challenges in our exports and imports," said Foreign Trade Director Wang Shouwen. "There won't be fundamental improvement in Europe or the United States, and costs at home will stay as high as this year, so the foreign trade situation will be severe next year."
"However, some developing and emerging economies are enjoying sound economic performances, so we will attach more importance to exports to these countries."
UK: Citibank announced it will dismiss hundreds of investment bankers in London owing to the European economic slowdown.
Comment: The two anecdotes above are indicators that a large financial crisis is evolving in Europe, several years behind the US crisis, but with no signs of improvement. A major challenge for investors and investment managers is to bridge the gap between human behavioral indicators of financial crisis and daily trading data. The foregoing reports are leading behavioral indicators of financial crisis in Europe.
The Chinese announcement is the clearest statement to date by any national leadership that it has made basic investment decisions based on expectations of a financial crisis in Europe lasting through the next year at least. Europe can't pay for cheap Chinese imports. That is ominous.
End of NightWatch for 7 December.
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