Consider this:

VW's profits dropped by 64%. Audi's profits dropped by 91%. BMW's profits dropped by 84%. And Mercedes-Benz's profits dropped by 54%.

German carmakers are in trouble. Their business model was based on two things: cheap Russian energy powering the German engineering coupled with sales in China subsidizing antiquated, overblown unions protecting their cost structure at home. The first pillar collapsed and the second is now under severe pressure.

China now builds its own decent cars. There's no need for the Chinese to buy anything other than Chinese cars.

Now, let me show you something else. The flow of trade, of course, is seen in the currency markets.

What you're looking at above isn't so much the dollar gaining as much as it is the euro losing. Capital is fleeing Euroland — exactly as we've been promising you it would.

Wanna see something else cool?

Now, you may look at this and think, "Aha, Chris… look, it's the cheapest it's been in over 30 years."

But I think Europe is a value trap. Unfortunately, this is not purely business cycle cyclical. This is terminal. I loved Europe. I lived there for years and traveled around it extensively, so believe me I find no pleasure in my diagnosis, but Europe is completely and totally au-pha-cdup, and I don't see it getting much better anytime soon.

The other component of this is the US markets, because western capital has always played largely between Europe and North America. So if it's not Europe, well…

And it's fueling this.