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Friday night the world has changed, again. The multiple attacks in Paris are a stark reminders of what happened in 2001, where several aircraft were directed at various American targets (World Trade Centre, Pentagone and White House).  These attacks are somewhat similar, except they targette the France's youth.  The region of Paris where the attacks occurred are known as the primary "fun spot" of Paris.  

It was horrible!

In Liars Poker, Michael Lewis talked about how his boss would use real (horrible) world events to theorize on how they would impact the world. economy in general and markets in particular. Therefore one question I got asked this weekend was what will be the economic impact of the attacks on the world economy; we have a strange confluence -- whereas last week everyone was "anti-Putin" this week, no so much.  My first guess is that conflict with Russia is now off the table;  The enemy of my enemy is my friends (or something akin to that). We seem to be on the same side (or sides that are close enough), the attacks (Monday morning) by the French air force seem to indicate that the country was "ready for trouble" and more news over the past few days seem to indicate that the French authorities had some information that attacks were expected. Over the next few weeks it will probably emerged that some very specific intelligence was available marking the targets; however, they were maybe dozens of similar target rumors.  With hindsight, the French will discover that they had specific intelligence together with a  number of false positive.

So the questions has to be:  Will the events of Friday change economic outlook?  The short answer is almost certainly, it may be a contributing factors to an already tepid global growth.  Europeans have a new reason not to go out and have fun, because although it was the French that were attacked no one believes that this will be an isolated incident.  The mass of Syrian refugees (apparently several of the terrorists arrived as refugees) makes detecting any "hidden" terrorist almost impossible.  The attacks could be the infamous "the one drop that made the water spill over"!  But other factors cannot could also be determinant: This morning Japan announced that it had, again, slipped into recession.  China's PPI came in below 52% indicating that growth was probably less the 7.2%.  Oil price this morning were briefly below $40.00/bbl.  Rumors abound that some of the big players in the US unconventional gas markets are very very close to default (technical -- convenants) or real payment issues.  

On the other hand military spending is spending, and it may not be seen as a positive thing, but it remains that a nation at war -- as France basically declared on Sunday will see increased spending.  The reaction to Friday's shooting is certain to increase the security threat in Europe (and elsewhere) that should/could lead to high GDP.  

So the short answer is; all the primers for a global recession are in place, maybe this was the "event" that made things go bad.  There is no doubt that a frighten population will spend conservatively.  That cannot be go for global GDP growth.


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