Since the fall of the Berlin wall, NATO and the United States has been undermine Russia. The United States has not missed an occasion to humiliate Russian from negotiating a troop withdraw from Eastern Europe and former republics, refusing to bail the rubble out, privatization to the Russian mob,making Yeltsin swallow losing Sevastopol, NATO’s bombing of Serbia and all those movies about with actors with tick russian accents drinking vodka and trying to sell nuclear weapons.

What people don’t understand is that this the same type of idiot behavior that lead to the Third Reich. France and to some degree the United Kingdom treatment of post WWI Germany lead to resentment and then nationalism and eventually Hitlers rise. I am not saying that President Putin is Hitler but the situation has lead to a resurgence of Russia very much like in Germany in the 30’s. Using corruption, crime and NATO’s perceived aggression as the banners to rally the people under one man. It has modernized its military, learned from its lessons in Chechnya and Georgia.

On February 9 1990, Secretary of State James Baker made a deal to with Russia not to expand into eastern Europe in exchange for Gorbachev’s backing of the reunification of Germany.  The idea that NATO would add East Germany and stop there. It didn’t.  Poland, the Baltic states, Bulgaria, Romania, Check Republic, Slovakia, Slovenia, Albania, and Croatia. 11 countries later it found itself at the doorstep of Russia with Ukraine.

Ukraine’s historical, economic, and military importance to Russia was the last straw.  After the 2008 Georgia fiasco, the Russians were in no mood to play games with the United States and a clear signal had to be sent.   All signs pointed to a high probability of direct involvement in Ukraine.  The night that Viktor Yanukovych fled his opulent presidential palace, I said to my wife watch President Putin take Crimea within weeks or months and eastern Ukraine within a year.  Crimea would be taken because Russia could not trust Ukraine or NATO to abide by the 99 year lease that Clinton made Yeltsin accept (he threatened walking out of negotiations several times over Crimea). Crimea is not just an important Naval base but a symbol of Russia.  It has major historical significance from the defeat of the Ottoman Empire and the Tatars, the Crimean War all the way to its heroic resistance to the Nazis. Crimea and Sevastopol is Russia. To lose it would mean losing Pearl Harbor for the United States. Russia would of wiped out the Ukrainian Army and gladly accepted sanctions if it was necessary. Luckily, Putin acted fast while Kiev was in disorder which resulted in no loses on either side.  An impressive feat to say the least.  President Putin had 4 objectives:

1.Take Crimea to safeguard the black sea fleet and any future the Navy would have in the Mediterranean

2. Make sure that Ukraine never joins NATO since the later would not accept a country which has a territorial dispute with Russia

3. Warn Ukraine that it could break with Russia but Russia would never break with Ukraine

4. Send a clear signal to NATO that it’s march east is over

With the Crimean situation under control, Putin could now turn to undermining the Kiev government with impunity. Seeing that NATO, the US, the UN and Ukraine was powerless to intervene it could now set about making sure the new government would be stuck in perpetual crisis and potentially collapse. In order to do that it needed to undermine the authority of the state and nothing is better for that than secession. The FSB pushed and bombarded Russian speaking Eastern Ukraine with propaganda to entice a move toward secession. Taking over a few towns was just enough to get a reaction from Kiev. Instead of calling for calm and reassuring the Russian speaking east, Kiev opted to send its underfunded,  untrained, and clueless Army to the Donetsk region to crack down. The result  was a disaster still unfolding. The current government of President Petro Poroshenko is in shambles and near collapse (corruption, economy in ruins, and Donetsk firmly under Russian control)  leaving Russia in a better position to pull the strings with the next government that will take over (a very good chance that the government collapses and new elections are called within a year).

After successes in Ukraine and hesitations from the UK and the United States to not bomb Syria after the staged WMD attack, Russia saw an opening there. The idea that the Russians were going in for a little unused naval base was embarrassing reason when brought up by some pundits and experts in the media. The Russians saw Syria as vital to protect its natural gas market, eliminate Chechen mercenaries, and use the conflict as a bargaining chip with the US and Europe for lifting sanctions.  Using ISIS as cover, Russia set about to change the situation on the ground to gain a negotiating advantage. It offer repeated proposals and offers of cease fires to get all parties at the table. The US, Saudi Arabia, Qatar and Turkey repeatedly refused. Now with the Syrian regime in a offensive posture it has decided that Aleppo will fall and the so called FSA and Al-Nusra will be  defeated there and sent back to the country side. It waited until after the election to commence its offensive which they hope the city can be taken before President Elect Trump takes over. This will change the  facts on the ground and more than likely tie the hands of the next administration to cooperate with Russia and Syria.

Russia is in a good position and would welcome lifting of sanctions but is ready for the long game.  President Elect Trump will have a difficult task of reigning in the CIA, the Republican establishment and allies to accept that Russia will be able to negotiate on its term a final peace in Syria and in Ukraine. I truly believe that US-Russian ties will defrost but slowly and with much resistance from regional allies. The fact is that without arming Al-Nusra more directly and with more sophisticated weapons (MANPADS, 3rd generations ATGM) the facts on the ground look grim.  I hope that some in the new administration will be reminded that the last time we went to bed with AL-Queda it did not turn out so well.  So lets just suck it up, swallow our pride and look at our long term interests. We can negotiate with President Putin but not with Al-Queda.


In the late 90’s in my finance and accounting classes I was the odd person out that kept arguing with my peers and professors that the valuation of stocks was off and that new accounting rules and banking deregulation were going to lead to problems. I was right, but then 10 years on in 2008, I was shocked about what was happening.  I did not foresee the size and impact of the crash even thought saw that the real estate market was one big bubble and that mortgage interest loans were a bad idea. But because I didn’t want to miss out on the real estate bubble like I missed out on the tech bubble. I let myself drink the kool-aid  and jump on the band wagon.

After 2008, I was mad, angry and disappointed in myself for just accepting what analysts, the experts  and the press was saying without questioning it. I have always had a long history of questioning everything. From questioning the tech bubble to the evidence for the case for war in Iraq, I questioned the prevailing mainstream view.  But in 2008 I was caught off guard. Maybe it was because I was invested in the stock market and was a home owner. My personal interests blinded me to the fact that the data and the information were all pointing to a crash. The markets, the press, the politicians were all pushing the same story.Personal interest and very little to no descent let me sink in the BS and conform. It’s not always fun to be the odd person out. It is not always fun defending your views against the masses especially if you are going against the entire establishment. But group think is dangerous. Unfortunately we are seeing more and more group think. Schools are pumping out a bunch of clones that regurgitate the same theories and ideas. The press all spews the same propaganda either on the right or on the left. Look at the their view points on Russia. The pollsters and analysts have gotten Brexit, the Colombian Referendum, and the US election wrong.  What is the data? no it was group think and bias that made them blind to the statistics that showed that all of them were within the margin of error.

So ever since 2008, I have made it a point to question and dissect the rhetoric and the evidence. Because of that I have had a pretty good record and have predicted:

  • Trump’s victory
  • Brexit
  • Russia’s intervention in Syria
  • Saudi Arabia’s intervention in Yemen
  • Russia’s take over Crimea and the separatist movements in Eastern Ukraine
  • The move of Qatar, Saudi Arabia, and Turkey to finance groups in Syria
  • The total failure of the state of Libya after Gaddafi’s death
  • Toppling of President Ben Ali in Tunisia and Hosni Mubarrak in Egypt and then the ouster of Muslim brotherhood
  • Obama’s victory in 2008 and 2012

I have been much better at seeing political events coming since starting to re-question the data and never blindly accepting anything proposed especially if everyone is on board. I have been more aware of my own biases and have worked to suppress them in order to objectivity observe and breakdown the information being sold by politicians, the press, the experts and pundits.  All the signs and information is out there. All you have to do is check and question the evidence.  All the polls in battleground states before the 2016 election were within the margin of error. The enthusiasm for Trump was evident in his rallies, the Wikileaks emails were eroding Clinton’s perception, the FBI letter made a dent, Republican turn out was up, minority registration down. the polls showed that over 70% of Americans wanted change but everyone jumped on the band wagon.

 


Protesters have been flooding the streets of major US cities for a week now and they are clueless. They call Trump a fascist but know the definition of the word. Did Trump say at any time that he was suspended the bill of rights or any specific amendment? No. Under president Bush and Obama we have seen the NSA step on our freedom of privacy with blanket spying on all Americans, extra judicial killings of Americans overseas, and the use of torture.  All of them are in my mind examples of the suspension of the bill of rights but where were the protesters then?

They say he is racist because he said he is going to deport illegals.  He will deport some illegals. He can’t deport them all because of the cost of deporting them and the cost and the disruption it will cause to the economy. He might deport a few million like President Obama did (over 2.8 million over 8 years more than any previous administrations).  I believe that immigration is an issue that needs to be addressed and the current political establishment has refused to address because it suits them. The Republicans like to keep wages down and the Democrats like to get votes and therefore our border is not secure and drugs and yes some criminals are crossing our borders. The current situation is not sustainable and lets be frank it suppresses wage growth, promotes slave labor and traps thousands of women in children to the sex trade. Liberals needs to accept that immigration reform is needed and not just a blanket amnesty that would just send a green light for more illegal immigration. Conservatives need to understand that immigration is healthy and helps makes the economy run smoothly. So by enforcing the laws of the nation is President Elect Trump a racist? No but has his rhetoric sounded racist? Yes. Time will tell if his actions prove to be racist. I still believe that our Republic is based on checks and balances and that it will work to overrule any overtly racist policies he may or may not try to impose.

They say he is not their president because he didn’t win the popular vote but I guess they don’t understand our Republic and how the Electoral College works.  He did not win more votes than Secretary Clinton but also more people did not vote for either of them. 43% of Americans did not cast a ballot for President. Some cast their votes for local, state, congressional and senate seats and not for President and other just stayed home. More people taught that both candidates were so bad that they decided not to vote. It is telling that over 100 million Americans did not vote for Trump or Clinton.  Technically 2.7 times more Americans did not cast a vote for Secretary Clinton than voted for her. Instead of taking the popular vote with a grain of salt, some protesters are choosing to ignore that fact. more Americans did not like and did not want to vote for their candidate than people vote for her.

So to all the protesters out there how about you save your energy for a real fight and based it on some concrete action/policy that might or might not come out of the Trump administration.


Wasn’t President Elect Trump supposed to be a disaster for the United States, the economy and global trade? Well Wall Street believes that he will be great for business and a Republican controlled Congress and Senate will be able to water down if not call all the shots. In this respect I believe that they are right.

The good stuff like lower regulation, a tax free corporate repatriation of profits to the US will both be a big gain to fortunate 500 companies will be passed quickly and ultimately will inflate Wall Street. Imagine over $2 trillion coming back into the US and a 15% corporate tax rate and most of it going into buying back corporate stocks,mergers and acquisitions and going to stock holders. Can you say the Dow at over 20,000 points? I can. and that is exactly what is going to happen.

As for free trade? The Republicans will indefinitely shelf TPP to make Trump more popular and do a few things here and there to make him look like the new champion of the American worker but don’t get your hopes up on killing NAFTA. He might just get an infrastructure bill signed that overall will be good for the economy, jobs, Caterpillar and construction companies. Overall he will be controlled by the Republican party which if they are smart will take the opportunity to prove the middle class that they can think about them (a little). So the best option is to let be Trump be Trump and water down any of the big stuff (trade wars, currency wars, scrapping trade).

Another reason for a positive Wall Street outcome will be that nationalist and conservative parties all over Europe will be on a rampage (watch Austria in a few months and France next year) that will drive money out of Europe and in the US stock market. So this Wall Street bubble will continue to grow. I am back in big but not in gun maker stocks. Sales of guns will go down. What has propped up gun sales in the last 8 years were constant false rumors by conservatives and the gun industry that the Democrats were going to curb the 2nd amendment driving fear and therefore sales. So short gun makers they lost their best marketing trick.


Why Brexit happened? Why Trump  won? Why anti immigration parties are winning in Europe? 2008 it is clear and simple. Western countries have been shocked by the 2008 crash and many politicians and elites have still not understood the ramification and magnitude of that event.

Country after country, many have started to put in question the entire principle of globalization, free trade, wall street, the banks, the system that the establishment  (in all Western countries) has been pushing for for the 30 years.  Pre-2008, the citizens of Western countries at least believed their politicians that global trade was working because they went to Wall-mart and bought cheap  goods while at the same time they saw their jobs either going to China or paying less. In 2008, the system was near total collapse and people lost their jobs and lost their homes and lost frankly that illusion that the so called Wall Street experts are geniuses. The idea that the people on top are not that smarter, more hard working and are not infallible is the first bubble that popped.

The second bubble is the most important.  Elected official and the system that are supposed to represent the will and interest of the people did everything possible to bail out the banks, large companies, the wealthy, and the connected. They did that by making the people that they supposedly represent pay for it. They cut services, raised taxes, cut interest rates to make your saving worth nothing, imposed more regulation on small businesses while letting big companies continue as usual. In the US, Obamacare in my view a cover  that shifted attention from the 2008 depression and created nothing more than a subsidy for insurance companies. Personally I have always believed in single payer system because it makes sense when looking at the math. statistics and probability. But that is for another blog post. Obamacare took the attention off the banks, the big companies.

People that elected President Obama did not vote for him for health care. They voted for him and put Democrats in charge of both the House of Representatives and the Senate for change, real concrete change and a little bit of justice. What happened? No one of any significance went to jail. None of the big banks were made to pay. They did the opposite. They let the banks make changes to Dodd-Frank, get access to cheap money that created the Wall Street Bubble.  Between TARP and Quantitative Easing. banks got trillions to pad their bottom line and invest in the stock market while squeezing mortgage owners, paying less in saving interest, charging more to consumers, and not lending. Obamacare was the great slight of hand in American politics

So the lesson that many learned was that the politicians and the politicians don’t work for them. They are detached from the people and clearly do not have the same view points and interests.  They work for a growing group of people that are rich and growing richer and hold immense influence and power of the system in all Western countries. These elites are not nationalists, they are ultra nationalist that believe that they are world citizens that have more in common with their counterparts in other countries than their fellow citizens (most have multiple passports anyway and own assets around the world). They believe in the free movement of money and assets while driving down labor costs everywhere. I call it the race to the bottom. Just like Uber and the sharing economy. People think is it great but when later on they realize that it benefits few and is driving labor prices down they will revolt.  Con men always fool people at first but sooner or later people will learn their lesson (most of the time after they got conned)

 


Trump won and won big with not only swing states like Florida, Ohio, North Carolina but in the rust belt as well.  Why? The economy stupid. The entire election was based on how people feel about the economy and their future. The result was bigger than I expected. I taught he would pick up Ohio, North Carolina, Arizona, and Michigan based on how well Sanders did there. Wisconsin was a surprise and Pennsylvania was a bigger win then I expected. So what should we learn from this?

Pollster can get it wrong just like Brexit. They give too much importance to incumbents and to establishment big players.  They tend to drink their own cool aid like the press. I have been saying for months,  Trump can win it because the same ailments that fell upon Brits after 2008 can be seen in America.  People gave President Obama 2 mandates and I was always mad that he squandered it on health care that honestly was a big issue in this campaign even if the press never covered it. He said we would disengage from the Middle East and that never happened (Libya. Yemen and Syria are in ruin, Al Qaeda is stronger then ever, Iran is a big player, and we still losing lives in Afghanistan). He talk a lot of about Wall Street but his entire administration was jam packed with Clinton’s Citi Group surrogates. No one was blamed or held accountable for the 2008 and we are basically back where we started with too big to fail banks, derivatives, over emphasis on Wall Street versus main street.  I vote for Obama but like many feel disappointed with his lack of achievements.  Yeah yeah the Republicans obstructionism didn’t help but the first 2 years he had no excuse to jam a real and effective economic plan. Instead he filled the pockets of hedge fund managers with free Fed money.

Trump spoke to the grievance of the middle class just like Nigel Farage in the UK for Brexit and Obama in 2008. But now people don’t want just talk they want real change that will benefit them.  Trump has, with this election, a clear and unparalleled mandate not seen since Nixon in 1972. The Republicans owe him for  taking the Senate and the House without giving him any support (More like stabbing him at every turn) and the Democrats in disarray and demoralized. It is up to him to use it or squander it. I expect that he will be more of a doer (tax cuts, big infrastructure bill, repeal of Obamacare) but don’t expect him to be perfect. He is still Donald Trump so expect some WTF did he just say?

So the lesson is?  The economy stupid always was always will.

The good news is that in this election big money didn’t win. Clinton and surrogates raised over $1.3 billion while Trump did it on the cheap a little over $700 million and really only $250 million because the rest really wasn’t spent on him but more on Senate/House Elections.

 


Before the FBI reopening the investigation the polls were tightening already. Most pollsters, who already have been facing major headaches in accuracy lately, are scratching their heads trying to figure out the impact of the investigation on the election. What is not being factored in is the impact of wikileaks emails dumps on daily basis. I would think that the daily trickle of revelations. must be exhausting the pollsters who have just decided to ignore it. 

They shouldn’t since this is the equivalent of 1000 cuts that is slowly bleeding the morale of Clinton supporters and independents leaning democrat. On a daily basis, they are bombarded with negative news and reminders of the bad judgements of Hillary Clinton.After a while, like or not, humans tend to link things together and form a pattern. The human brain is wired to recognize patterns and shapes. Plenty of studies in psychology and marketing have studied pattern recognition and the use of repetition. Ignoring it doesn’t make it go away. The email revelations are a huge morale sucker and have been sucking the enthusiasm for the Clinton campaign for weeks now. 

The FBI reopening the case is a vindication of what has come out from Wikileaks. For weeks we had smoke from Wikileaks and the fire was supplied by the FBI.So even if people have been ignoring the email leaks the FBI bombshell will make then reevaluate them or at least recognize their existence.Impact:

  1. Young vote will as usual be insignificant because of disillusionment
  2. Voters on the fence for Trump will vote Trump
  3. Voters on the fence for Clinton will not vote and a few for Trump
  4. Republican enthusiasm is growing and lead to larger turn out
  5. Democrats morale is dropping and lead to lower turn out

outcome will be  Trump win. This is the Brexit all over again with pollsters not taking into account disillusionment and a will to stick it to the system. This election thanks to Wikileaks is really about the system, and Clinton  is the system.


No. The FBI acted within its jurisdiction and the FBI director had not only the right but the obligation to disclose the information.

The Clinton campaign said that the FBI should of kept the information secret in order not to affect the election. This logic is one sided since nor releasing the fact that the investigation was being reopened would also have affect the election. So damn if you do damn if you don’t. Clinton has claimed that the action of the FBI are “unprecedented”.  Another false claim since in the 1992 election, a special prosecutor pressed charges against Bush in the Iran-Contra scandal that accused the sitting President of having knowledge of illegal scheme to trade weapons for hostages. Then governor Clinton did not hesitate to pounce on the allegations and claiming “culture of corruption.” This hit the weekend before the election giving President Bush no time to do damage control. The claim was thrown out by a Federal Judge after the election too late for President Bush.

John Podesta from the Clinton campaign said on CNN’s State of the Union that “There is no evidence of wrongdoing, no charge of wrongdoing, no indication that this is even about Hillary,”  but the FBI director Comey told Congress that his investigation was complete and no other emails and all devices were handed over by the Clinton team. So if all devices were destroy why did they find one in Anthony Weiner’s house? Is this a device that was not declared to the FBI or not handed over? Either way the existence of the emails on this device would be grounds for a new investigation and the potential new charges of obstruction of justice.

So Hillary Clinton should stop her whining and accept the FBI investigation. She should have cooperated more back when everyone from the White House, the FBI and the DOJ were covering her.


Bombshell just hit the news. FBI director James Comey, has just reopened the investigation on the Clinton server and emails. Now the information is very thin but just the fact the director reopened the investigation must mean that the new information and emails discovered by the FBI must be significant.

He must of known prior to taking the decision that this will go down as the biggest political scandal and event in American election history.  His tenure and how he will be remembered in history will be based on this one moment and action and he knew it. He must of spent days thinking of this and cursing left and right trying to figure out what to do.

We don’t have any details but logically  we must assume the information must be damning and must be of a criminal nature. I don’t want to guess but it the information must be either a clear case of:

  1. Pay for play
  2. Transfer of classified information to a agent(s) of a foreign government
  3. a direct order to delete emails, cover up and up struct the FBI investigation

This is huge and will upend the election only 11 days out. Maybe her campaign can call FBI director Comey a friend of Putin and his surrogate. We might just have to start practicing saying “President Trump”.


To answer the question lets look at the Brexit vote.  Many have claimed that the UK’s referendum voted Brexit because of immigration. I would claim that this reason is minor and did not significantly impact the result.  Brexit in my mind was due to 2 reasons:

  1. People have come to the realization that globalization and open trade is not all that great for them. Italo Colantone and Piero Stanig, 2 economists, who analyzed the results of the referendum claim that area that voted leave are the same areas hardest hit by globalization. Where globalization took jobs people voted for leave.
  2. The vote was also a vote of rejection. Not just the EU but about everything, no wage growth for years, lower levels and quality of public services, no job growth, a political system not working them, the rich getting richer and on top of that austerity. The Brits wanted to make a statement and a statement they did.  The vote was more about anger and frustration about the past and the present than the future. It was the ultimate f*** you vote.

How does this compare to the US election? Surprisingly everything.

Poll after poll has shown that Americans view the economic system as being rigged. A poll from Marketplace and Edison Research (link to poll) found that 71% of Americans believe the economic system is rigged in favor of certain groups. Americans are more and more angry at the system that they believe is no longer working for them but for the rich and the powerful.  Look at the Princeton study on how the US is an Oligarchy  and frankly ask around and that view that the system is not made for the little guy is quite clear. This is not just a white issue but a minority issue as well. From the lowest incomes to the upper middle class. Everyone is starting to believe that the system is not fair and concentrates power in the hands of a few. 2008 was a big wake up call and the last 8 years of public policy a confirmation that the system favors the few.

If people think that the economy is rigged they are also are starting to believe that the political system and the press is rigged.  Trump supporters are frustrated and angry toward the press for their negative coverage of Donald Trump and they are honestly completely right.  Just look at the stories coming out of CNN and almost everyone else not called FOX News. It’s all day and nothing but women harassed by Trump and lewd comments in a bus non stop. Absolutely radio silence about Clinton and  Wikileaks.  Bernie Sanders supporters are not too happy as well with the coverage and revelations about how their candidate was treated by the DNC and the Clinton campaign.

Trump has for 3 debates and for months pushed that Clinton is the establishment and is pro free trade. Thanks to Wikileaks that has been confirmed.  He has been surprisingly on message these last few weeks hammering the previous points and using the Wikileaks emails as much as he can. In the next few weeks almost anything can happen surprise wise and I do believe that Wikileaks is not done yet and possibly preparing the biggest scandals for the last week.

So take disillusion with the economy, the political system and the press and sprinkle some of the lowest approval and likability rating on record for candidates, a dash of higher then expected polling numbers for independents and add low voter turn outs and a whole lot of f*** you votes and we got another Brexit.

After the news that premiums are going to go up by 25% for the Affordable Care Act next year how many of you would like to send a big f*** you message?

 

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