Archive for category Investment Primer

TRUST IS VERY IMPORTANT WITH DONALD TRUMP. SO, WHO DOES HE RELY ON FOR TRUSTED ADVICE?

It has often been suggested that Donald Tump has numerous emotional disorders; but, it appears to me that his neurotic behavior is a controlling one.  If you believe him, Donald is perfect and never makes mistakes, and it appears that he always seems to find others to blame for his problems.  Based on the fact that he seems to feel that everyone else is out to get him, he often relies on a very small group of confidents, in whom he can trust!

Just before his first overseas trip, when Donald addressed the graduates of the U. S. Coast Guard Academy, he told them:  “Look at the way I’ve been treated, especially by the media.”  He went on to say: ”No politician in history, and I say this with great surety, has been treated worse or more unfairly.”  Remember that Trump is a man, who has lived his entire life in privilege, and he complains because the media reports the obvious!

Now, since he has somehow stumbled into the highest office in the land, Donald is delusional about non-existed “accomplishments”.  After kowtowing to King Salman, of the Saudi Arabia, one of the two foremost financiers of Islamist Extremism, Trump stopped in Palestine, and then he travelled on to Europe.  There, during several summit conferences, he established himself as being boorish and ignorant. his signature move resulted in his pushing the President of Montenegro, so that he could be front-and-center for the “Class Picture”.

In the extreme delusion, which personifies Trump, he declared that his overseas trip was: “…a Home Run!”  German Chancellor Angela Merkel, on the other hand, suggested that she can no longer feel confident of a European-U. S. Partnership!  Then, upon returning to Washington, Donald announced that he is considering re-shuffling his Staff, in order to stop the leaks.  But, Trump appears to be asking the very leaders of the past disruption to provide the needed cooperation and security.

For a self-proclaimed businessman, Donald Trump seems to rely too much on Jared Kushner for virtually everything.  His 36 year-old son-in-law, Kushner has been involved in negotiation in Lain America and China, he is Trump’s Envoy to Palestine and the Middle East, and let’s not forget his discussions with Russian Ambassador Sergei Kislyak, allegedly about establishing a secret communications link.  Oh, and Donald has also tapped Jared to reform the government along business lines.

Might this be a combination of factors:  Donald Trump is too despised by anyone with valid high-level Foreign Affairs experience, to join his Regime; no one in his Inner Circle would dare suggest a highly regarded consulting firm to re-align government, as if that was actually a realistic idea; or Donald Trump really is that dumb?  Personally, I believe that it is a combination of all three. Trump is despised, narrow-minded, and dumb!

NOTE:  Welcome to my readers in Cyprus and Oman.

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DONALD! ON YOUR FIRST TRIP OVERSEAS—ESPECIALLY MEETING WITH ALLIES IN EUROPE—YOUR PERFORMANCE WAS TRULY DISGRACEFUL

Let me break it down for you:

1.  Remember that comment about Germany selling cars here?  Well, BMW, Mercedes and Volkswagen all have auto plants in the U. S., and they employee American workers.  As a self-proclaimed “Businessman”, you ought to realize that it is more cost-effective to manufacture the Supply, when it comes to heavy industry, near where the Demand is!

2.  There should absolutely not be any pushing and shoving—as you did to the President of Montenegro—in getting to your pre-assigned photo-op places.  I realize that you always like to be “In-Front”; but, in this case, everyone was also a Head of State.  So, be civil next time!

3.  Surely, a number of the NATO Allies have not adequately been funding their respective Defense Budgets, at two percent of GDP, as agreed upon!  But, you have to stop lying that they owe it to the American People.  Donald, with your various absurd health care proposals, you have already shown how much YOU care for the American People.  HA! When a Nation underfunds its own budget, regardless as to whether it was Defense or not—it would only be underfunding itself!  And thus, they would owe nothing to America, or its people!

4.  I wish that there was such as thing as “The European Union—for Idiots”; because, I would be happy to send you a copy!  When you meet a group—in this case, it was members of the European Union—it is just common sense to, at least, know something about them—and how they function.  By the way, it certainly was foolish on your part to attack Germany for its Trade Surplus; because, the E. U. negotiates trade policy as one unified bloc–even with the U. S!  (In fact, there has already been some discussion, within the E. U., about Germany’s trade surplus with its European neighbors.)

5.  Lastly, Donald, you showed no tact whatsoever, when you spoke at a NATO Memorial, for those who died in the 9/11 Attacks on the U. S., and you specifically harped on the underfunding of NATO Defense Budgets.  That, Donald, was neither the time, nor the place!

Frankly, Donald, I feel very embarrassed every time I see you on TV; but, it was certainly even more horrendous, watching you act like a boorish clod, while you were traveling overseas, this past week.

NOTE:  Welcome to my readers in Cote d’Ivoire and Kenya.

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AMERICA NEEDS TO MAINTAIN A LEADERSHIP ROLE IN SOUTHEAST ASIA—TRADE-WISE AND MILITARILY—TO KEEP THE SEA LANES OPEN AND FREE!

In my last post, I made several points, which I wish to clarify, and enhance. The U. S. should: shift its focus to the Indian and Western Pacific Oceans, rather than the Atlantic; remain in the Trans-Pacific Partnership; and avoid local, internecine military engagements.  Let me explain why each of those points are still appropriate.

Russia, with its economy in a shambles, will not be able to continue funding an aggressive military, while providing the domestic programs that its people need.  The Eurasian Economic Union, of former Soviet satellites, adds nothing whatsoever to its global strength.  Also, its primary external target, Europe, is integrated militarily, and geographically concentrated.

China, on the other hand, is on the ascent, both economically and militarily.  Although it’s economy is currently showing its growing pains, it is still projected to surpass that of the U. S., within the next decade or two.  Also, China’s economy further benefits from its location in the moist dynamic, fastest-growing Region on earth.  The growth of the Chinese Navy seems to be a major element of its military growth, since any engagements in Asia-Pacific would be mostly naval battles

While China’s Military Budget pales when compared to that of the U. S., it is more concentrated.  It is primarily focused, first, in Southeast Asia, and then second, in the the Asia-Pacific Region.  It doesn’t patrol all the oceans of the world, as the American Navy does, and therefore, it isn’t diluting itself by acting as the Traffic Cop to the World,  We need our allies to step-up, and share the load—financially and militarily.

Let’s narrow the focus, from the two-ocean WorldAtlas map, to one of the Southeast China Sea (Middleburg-SCS map).  The Strait of Malacca lies between Indonesia, Malaysia and Singapore (just left of word “INDONESIA”, north-left of Australia), and it is a major choke-point, through which 50% of all global sea commerce passes, as well as 85% of China’s crude oil.  Also, as might be imagined, control of that one location—11 miles across, at its narrowest point, near Singapore—is of strategic importance.

More and more, Energy Security is of primary concern for most nations.  And, as China’s military power increases, the nations of Southeast Asia are concerned for several reasons.  China has been building “islands” in the middle of the Southeast China Sea, while citing historical claims, which have no relationship to any coastal shelf, or any other geological proof.  These claims might be used to take possession of valuable oil and mineral rights, as well as vital fisheries.  Also, there is concern that China might use them for military purposes, or to block vital waterways—such as The Strait!

Several of the Southeast Asian nations invite U. S. ships to visit their major ports frequently, and they have even upgraded their ports to accommodate them.  Realistically, however, they realize that America is half a world away.  They should transform ASEAN (Association of Southeast Asian Nations) into a mutual defense pact, patterned after NATO, but with an Asian character.  They are all upgrading their military; but, properly coordinated, their might be strength in numbers—if they are integrated.

As China continues to grow its military—both in size and technological capacity—it might begin to become more offensive in asserting its alleged rights and, perhaps, even enforcing them militarily.  Even though the U. S. currently has a larger Defense Budget—and a larger Navy—we might still lose the advantage.  That’s because China’s somewhat smaller Military would have the geographic advantage.  This is why we need to remain engaged; not only in a military capacity, but in trade and diplomatic involvement, as well.  We also need all of our allies to meet their Defense Funding Obligations.

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LEAVING THE TPP IS DUMB! CHINA WOULD JOIN, ASSUME THE LEADERSHIP ROLE, AND EVENTUALLY CONTROL THE REGION’S SEA LANES.

Prior to the formation of the European Common Market, which grew into the current  28-member European Union, there were intra-continental wars—neighbor against neighbor—in Europe, every twenty years or so.  In the 70 years since World War II, after which the E. U. was formed; however, there haven’t been any wars on the Continent.  Familiarity and economic cooperation breeds peaceful coexistence!

The twelve-member Trans-Pacific Partnership would have included members from both sides of the ocean, and from four continents.  Due to the huge size of the U. S. Economy—and the exclusion of China—America would, most certainly, have held a leadership role. With the formation of this trade pact, it could evolve somewhat along the lines of the E. U., but with its own Asia-Pacific character.

Now, let’s consider TPP as a military strategy. China and Russia are the American Military’s two main adversaries.  Global powers require two characteristics:  a strong military; and a large, growing economy.  The importance of the economy, in projecting global power, is two-fold:  domestic needs must be met in order to prevent political turbulence, back at home; and a strong economy is necessary to finance a large, technologically-powerful military.

China’s economy is second only to that of the U. S., and it is growing, although it has recently shown the normal growing pains of a young economy.  It also has the additional advantage of being located in the most dynamic, fastest-growing region of the world! Although its defense budget lags that of the U. S. in total size, it has been continuing to
accelerate its spending to strengthen its military–both in size and technologically..

Russia, on the other hand, appears to be stymied.  It’s poorly diversified economy, was decimated by the economic sanctions of the Atlantic Alliance, and the 50% decline in global oil prices, which accounts for 70% of Russia’s hard currency.   Geopolitically, it has entangled itself in local wars, both in Eastern Ukraine and, more recently, in Syria.  Lastly, it seems to have been rebuffed in its plan to break-up the E. U., by decimating fake news and hacking the political polls in various European National Elections.

With three-quarters of the world covered by seas, and the global landmass already set, at least for the most part, President Obama’s idea of the Asian Pivot was an important one. In fact, he personally preferred the term: “Indio-Pacific Pivot.”  With Russia apparently in somewhat of a decline, the U. S. needs to change the focus from the Atlantic and Pacific Oceans, to the Indian and the Western Pacific.  In fact, three-quarters of the American Navy was deployed in that Region when he left office.

In my next post, I will add more detail as to why the shift in focus, from the Atlantic and Pacific, to the Indian and Western Pacific.  Just consider where the current global hot spots are: the Horn of Africa; the Arabian Peninsula; the Persian Plateau; the Subcontinent of India; the South China Sea; Taiwan  (Republic of China) and the Korean Peninsula.  This area also has the two choke-points through which global sea commerce passes: the Strait of Hormuz (40% of global crude oil), between Saudi Arabia and Iran, and the Strait of Malacca (50% of all global sea commerce, and 85% of China’s oil), between Indonesia, Malaysia and Singapore.

Parts of this region, mostly toward the South China Sea are very dynamic, both intellectually and economically, while others, more toward East Asia (left on the WorldAtlas Map), are not advancing either intellectually or economically.  Many analyst predict that the future will be one of the two Asian Giants—China and India—confronting each other in their quest for Oil Security.

NOTE:  Welcome to my readers from the Republic of China, A/K/A Taiwan!

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WILL DONALD TRUMP AND TREASURY SECRETARY STEVE MNUCHIN PROCLAIM THE NEW 21st CENTURY GLASS-STEAGALL ACT, BUT ONLY METAPHORICALLY?

The Banking Act of 1933, commonly referred to as the Glass-Steagall Act, ushered in various reforms, to assist the Nation’s Recovery from The Great Depression.  “Glass”, which was part of (new) President Franklin D. Roosevelt’s “New Deal”, broke-up the Banking Industry, and created Federal Deposit Insurance.  It was made permanent in 1945.

Prior to “Glass”, companies could engage in both commercial and investment banking, which meant that risky securities actions might jeopardize clients’ deposits, and there wasn’t any deposit insurance either.  In the mid-1980s, however, many of the banking restrictions were lifted, and mostly larger banks transformed themselves into Financial Services Supermarkets.  Also, making “banking” even more precarious: the number of products and financial institutions, has frown considerably since the 1930s.

In October of 2008, President George W. Bush bestowed many billions of dollars on the largest banks, in order to enhance liquidity within the banking system.  Unfortunately, that action was interpreted, by many, as conveying an explicit Federal Government Guarantee of what became to be called the “Too Big to Fail” banks.  That general assumption merely led to an even higher concentration of financial business, on the few, but same, largest—or Too Big to Fail Banks.  Thus, the solution worsened the problem!

Following The Great Recession (4Q07-to-1Q09), President Barack Obama signed the Dodd-Frank Act into Law, in July 2010.  Dodd-Frank reined-in the banks, required required high equity capital standards, and was intended to separate the investment risks from consumer deposits.  The GOP, however, has sought to repeal Dodd-Frank ever since!

Treasury Secretary Steven Mnuchin, who is Donald Trump’s lead-man on banking laws, has been suggesting that he might propose a “21st century version of Glass-Steagall”. Donald Trump has also been saying the same thing!  Today, Senator Elizabeth Warren called Secretary Mnuchin to task, at a Senate Finance Committee Hearing, as linked from CNBC-TV.  She noticed that he had been avoiding the question of whether, or not, the Trump Regime would break-up the banks.

Finally, Secretary Mnuchin realized that he had to answer the question, and his response was still quite convoluted: “it’s a complex issue”; “not a good thing”. and finally “NO!”   He stammered when she asked him how they could be considering a “21st century version of Glass-Steagall—a law which specifically broke-up the banks—with one that would not.” Mr. Mnuchin suggested that he would bring a team from the Treasury Department to brief the Senator’s Staff.

Secretary Mnuchin seemed to be avoiding answers from most of the Senators on the Committee—especially the Democrats—as he offered to provide briefings, similar to those offered Senator Warren, to a number of other Senators.  Surely, the Secretary of the Treasury should be expected to appear before the primary Senate Committee, which regulates his office—and be totally prepared! And it should be obvious to most Americans that, so soon after the 2008 Banking Crisis, that the status of the Banking Laws would be Question Number One, Two and Three!

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NOW MIGHT NOT BE THE TIME TO SELL, IN THE STOCK MARKET, UNLESS YOU KNOW SOMETHING THAT WALL STREET DOESN’T!

Today, the Dow Jones Industrial Average dropped by 1.79%; but, it’s still up 4.27% above the 2016 close.  Similarly, the S & P 500 closed down 1.82%, and is still up by 5.28% for the year. And NASDAQ, which lost the most, some 2.57% today, is still up by 11.57% on the year.

It’s important to remember that the financial markets never go straight up, or straight down.  There appears to have been talk around the markets lately, that some degree of “correction” (a sell-off) was necessary to calm the volatility.  So, perhaps the political angst  provided just the spark to settle the market!  If there is any volatility in the early  U. S. market trading on Thursday, it will probably be a combination of Sellers, who weren’t paying attention on Wednesday, and Buyers looking to pick-up a few potential bargains.

Jeremy Siegel, Economics Professor at the University of Pennsylvania, literally wrote the book about “Stocks for the Long Run”, is a perennial stock market Bull.  Today, he said, in an interview on CNBC-TV:  “If Donald Trump resigned tomorrow I think the Dow would go up 1,000 points,”   Professor Siegel’s stated rational is that the market has been rallying on the Republican Agenda, and not the Trump Agenda.

I wouldn’t try to project how the stock or bond market would adjust to such a situation, especially when we don’t know how ugly it might get.  Also, if Donald Trump were to be ousted, the degree to which the Trump Republican Party continues to remain comfortable with him at the helm, might reveal whether or not it will continue to maintain it majority—or even its relevance to the average American.

NOTE:  Welcome to my readers from Austria and the Netherlands.

 

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THE PRESIDENT HAS NO INTELLIGENCE!

Long before his Inauguration, Donald Trump has been dissing the Intelligence Community.  As a candidate, when asked about skipping even the “Lite” version of the President’s Daily Briefing, he said: ”I’ll get Intelligence when I need it!”  Typical Donald Trump, and with all of his ignorant narcissism a-blazing!

Then, right after his Inauguration, Donald went to the Central Intelligence Agency’s Headquarters, in Langley, Virginia, where he spoke in front of the “Wall of Honor.”  That is a memorial dedicated to agents who have died in the line-of-duty.  As it turned-out, the event was nothing but a photo-op, during which the so-called President Trump even made an obnoxious joke.  That disrespectful charade was surely received with horror by CIA personnel—worldwide.

Domestically, the Federal Bureau of Investigation, also provides intelligence, and it is also the main law enforcement arm of the U. S. Justice Department.  Just a week ago, Donald Trump fired FBI Director James Comey, apparently because the FBI investigation of Trump’s Transition Team, possibly having colluded with Russia was gaining momentum.  The Whits house “justified” the termination as being due to some error by Director Comey, last summer.

Today, Donald Trump acknowledged that he had shared intelligence information with Russian Foreign Minister Sergei Lavrov, and the Federation’;a Ambassador to the U. S., Sergei Kislyak, who is also an alleged spy master.  Trump claims that “I have the absolute right” to share information with Russia.  Ironically, there was only one journalist in the Oval Office when Trump shared the Intel with his guests—a Russian one.

More specifically, Trump Tweeted, early this morning, that: “I want Russia to greatly step up their fight against ISIS & terrorism”, which was reported in the NY Times,  as linked below:

As he basked in all of his splendid ignorance, claiming that he has the authority to de-classify any material, I wonder if Trump considered the following:

  • Can I be sure of who Russia might pass this information onto, or how they might use it, since I do not know what their real intentions are?
  • Am I putting the lives of CIA agents at risk, or those of friendly source nations?
  • Will news of this leak dry-up future Intel sharing with friendly nations?
  • Will I have access to vital intelligence from the CIA, FBI, NSA, etc, within our own Intel Community?

Shortly before Donald Trump’s Inauguration, CIA agents  had reportedly cautioned their counterparts at Mosad, the Israeli Intelligence Agency, about sharing Intel with the White House or the National Security Council.  They suggested, albeit during the Michael Flynn Era, that it might be shared with Russia, who could pass it on to Iran.  

Well, it has been reported that the source of the recent Intel, which Donald Trump had recently given to the Russians was, in fact, Israel.  And Israeli Prime Minister Benjamin Netanyahu seems comfortable with that!  I just don’t get it!

NOTE:  Welcome to all of my readers from India, Singapore, Slovenia and Turkey!

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