Skip to main content

The Middle East an observation!

Trump's first Tour was a catalyst for many of those he met during his little jaunt in the Middle East and Europe.  The Europeans came out convinced that the American President understood absolutely nothing of the NATO alliance and was basically a Mercantile who viewed the world through 19th century trading rules (we export everything and you import nothing), so that we create jobs at home -- "beggar thy neighbour" policies.  The fact that Trump would not re-iterate NATO's article 5 is further evidence of his stubbornness and his lack of education (he did reiterate in speech at the White House -- but the damage was done).

In the Middle East he signed a $ 100 billion arms deal with Saudi Arabia -- that was no such deal!  It was a bunch of MOU some dating back to 2015 -- signed by Trumps' greatest enemy:  Obama!  When Saudi Arabia felt they could browbeat Qatar in towing the line, they embargoed the tiny state (for the second time in a decade) and Trump took credit. Since then, a $100 million arms deal to Saudi Arabia was blocked by Republican Congress... A $ 10 million arms sales to Qatar was authorized by the Secretary of Defence.  What is going on?

America has caused havoc in two blocks:  the EU and GCC in the space of a few weeks.  Out of this America has gained nothing, in fact the Saudi must be furious, the enemy (Qatar) got its gone while the Saudi themselves got nothing...Europe though that Trump was crazy stupid man child...and then he proved it.

Europe will downgrade the role and relevance of the Americans in their defence pact, expect the influence of America to dwindle.  First act must be to reduce the presence of American military personel in europe, a fist step is to ask America to downgrade (and eventually remove themselves) from their bases in the UK, Spain, Portugal, Italy and Germany.

America has become a destabilizing agent, it should be cordoned off to limit the damage.





Comments

Popular posts from this blog

Trucker shortage? No a plan to allow driverless rigs

There are still articles on how America is running out of truckers -- and that its a huge problem, except its not a problem, if it was a problem salaries would rise to so that demand would clear. Trucking is one of those industry where the vast majority of participants are owner/operators and therefore free agents.

Salaries and cost are extremely well know, "industry" complains that there are not enough truckers, yet wages continue to fall... Therefore there are still too many truckers around, for if there was a shortage of supply prices would rise, and they don't.

What there is though is something different; there is a push to allow automatic rigs to "operate across the US", so to encourage the various authorities to allow self driving rigs you talk shortage and hope that politicians decided that "Well if people don't want to work, lets get robots to do the work" or words to that effect.

This has nothing to do with shortage of drivers, but every…

Every punter says oil prices are on the rise: Oil hits $48/bbl -- lowest since September 2016

What the hell?

How could this be, punters, advisors, investment bankers all agreed commodity prices  in general and oil prices in particular are on the rise...its a brave new era for producers and exporters -- finally the world is back and demand is going through the roof, except not so much!

What happened?  Well energy is complicated, the world operates in a balance -- 30 days of physical reserves is about all we've got (seriously) this is a just in time business.  So the long term trend always gets hit by short term variations.

Global production over the past 12 months has risen by somewhat less than 1.5% per annum.  As the world market changes production becomes less energy intensive (maybe), but the reality is that the world is growing more slowly -- America Q4 GDP growth was around 1.9% (annualized) Europe is going nowhere fast (the GDP growth in Germany is overshadowed by the lack of growth in France, Italy, Spain (lets say 27 Euro members generated a total GDP growth of 1.2…

Paying for research

This morning I was reading that CLSA -- since 2013 proudly owned by CITIC -- was shutting down its American equity research department -- 90 people will be affected!

Now the value of a lot of research is limited, that is not to say that all research is bad. In fact, I remember that GS's Asia Aerospace research was considered the bible for the sector.  Granted, there was little you could do with the research since the "buy" was for Chinese airlines...that were state owned.  Still it was a vey valuable tool in understanding the local dynamics.  It seems that the US has introduced new legislation that forces brokers to "sell" their research services!  Figures of $10,000 an hour have been mentioned...

Now, research can be sold many times; if GS has 5000/6000 clients they may sell the same research 300x or 400x (I exaggerate) but this is the key -- Those who buy the research are, I presume, prohibited from giving it away or selling it, at the same time the same rese…