Defence

Is Tommy Robinson in the minority with a #2 rank book on Amazon?

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There is no moral equivalence to be drawn here with this latest attack outside Finsbury mosque in London. Innocent people were mown down by a van driven by someone filled with rage and hate. Social media is already screaming “bigot, racist, terrorist, anti-Muslim, radical” but there is a much bigger point not being addressed. The social boiling point is being reached much more rapidly than the media will admit.  Tommy Robinson was accused across social media for inspiring anti-Muslim rhetoric and fueling this person to commit the crime. His tweets matched his long standing convictions and predictions. Perhaps everyone who has bought Tommy’s book “Enemy of the State”  (ranked #2 book on Amazon UK, #131 in Canada and #2375 in America & now $350 on paperback) could be a risk of commiting such acts if that is the generalization. Of course it is nonsense. By the measure of the sales success perhaps his views maybe more mainstream than the negative ‘extreme’ moniker that is often hurled at him.

Could it be argued that a growing number of people are growing sick and tired of random jihadi attacks and see this book as a guide on how the government isn’t  handling the problem? That was not a intended to be a fact checking laced comment rather pointing out that many people potentially share his supposed ‘patriotic’ view as demonstrated by the commerciality of his writing. This is no longer a pure jihadi problem but one that is now likely to become tit-for-tat terrorism which carries far more negative connotations.

Think beyond the all too common propensity to push prejudices by lashing out on social media with little thought to trying to understand the full arguments of alternative views. Do we take a book review from apologists as fact when most of those have probably never read his book cover to cover? I am reading it because I want to form my own judgement rather than rely on others’ bias. He has strong views but no better way than self vetting. I’ve read Mein Kampf in what must be the most appalling book ever written – grammatically and content-wise. For one whose family escaped the deaths camps of Poland, trying to understand the ravings of Hitler brought added perspective to the horror although some might conclude reading it is an endorsement. It is not.

Innocents are dead or injured in this attack on Fisnbury Park Mosque. If indeed Tommy has a minority view, most people wouldn’t buy his book. Are all the people that buy it racist? Even if one thinks they are then even more reason to say that the government’s current pandering to political correctness won’t solve these hate fueled events whether radical jihadis or right (left?) wing nutters. Do violent video games incite massacres? Are all ‘Brexiters’ a carbon copy of the man who murdered Labour politician Jo Cox days before the referendum?  Do we need to bring in Islamophobic legislation like Canada (Bill M-103) to shut down people expressing concern? No, No and No. Current policy approaches are having the opposite effect as this attack proves.

At the time of the Manchester bombing I warned that vigilantism would be an ugly side effect of endless political correctness. Coincidentally Robinson suggested similar views about the rise of vigilantes after that post in a vlog. Wasting a lot of time on what  motivated the driver to commit such a terrible crime is not necessary. It is obvious. It is a revenge attack. This is highly likely to be a person screaming out for something to be done about a problem he obviously doesn’t think is being handled properly by elected officials. He probably viewed himself as a vigilante even if that title might be an overreach in this instance.  This in no way defends his despicable actions. One man’s terrorist is another man’s freedom fighter was often used by IRA sympathisers. Still it doesn’t in anyway condone killing or maiming innocents, no matter what ideology, faith, race or background they come from. It is plain awful. The majority of people would agree with that view.

Revenge attacks and reprisals only exacerbate a rapidly deteriorating relationship. However trying to say the perpetrator proves that not all such attacks are driven by radical Islam doesn’t address the core of the problem. The majority of good people (note a deliberate statement not to go down the identity politics line) want an end to innocent deaths at the hands of extremists but if free speech and the ability to tackle radicalism (wherever it lies) aren’t openly addressed these events will sadly continue. It should be totally in the interests of the majority of ‘good’ Muslims (I detest that phraseology) to want to stop radicals from collectivising their faith with what they perceive is the wrong interpretation. Common sense would say they are the most important link in the chain to weed out those who want to kill in the name of Allah. They need to be front and centre of the debate.

What the UK government (and other governments) have created is a monster of their own making. Candles, flowers, lit monuments, avatars, expressions of sympathy and ‘love conquers hate’ posts dodge the need to have a serious debate on the problem. Now we have seen first hand a real openly targeted revenge attack in the UK, people need less sanctimonious posturing on social media and focus their energies on truly understanding what is at stake. That is to ditch the liberal hand-wringing and have an open debate on the problem. Robinson’s book isn’t selling in the volumes it is by chance. Politicians should pay attention to this trend. It is not about arguing about whether he is right or wrong but noting the simmering underbelly of a growing number of people fed up with inaction. This is the end of the beginning not the beginning of the end.

Mulligan democracy?

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One disturbing development in politics is the promotion of mulligans. The idea of ‘that is the shot I would have played if I had another chance’. Sadly some people think that is fair game and even worse, democratic. The lead up to the Brexit referendum almost a year ago saw “leave” and “remain” go at it. Months of campaigning, panel discussions and other forums were largely irrelevant. Both sides accused each other of lying and spreading falsehoods but ask yourself in the history of politics – if you believed everything that came out of a politician’s mouth you’d be lying to yourself. To host a second referendum would basically say ignore democracy until you get the result you want. Maybe like a modern day prep school sports event – everyone is a winner at St. Barnabus’.

People were well aware of the issues of Brexit going in. The idea of people being too gullible is frankly condescending in the extreme. Many long standing Labour voters went for “Leave”. They weren’t voting Tory by stealth. They took a view. It wasn’t just about immigration. They were feeling pain in real time, the valid threat of their future economic security. The higher unemployment rates and withering opportunities aren’t scare stories from politicians but here and now. For example the people of the Midlands didn’t need stats, Farage or Boris to sway them. Just like those that voted Trump – they were feeling the pressure of harsh economic realities that weren’t reflected in rosy government stats that were waved in their face as a testament to their superior leadership skills.

While Remainers can whine about ‘fake’ figures of how much the EU takes every week from the UK, immigration or the number of regulations that affected Brits, financial markets proved over the 12 months since the vote that the ‘Leave’ outcome didn’t crash the economy or skewer asset prices. In fact the idea of a potential Corbyn Prime Ministership sent the pound and markets into panic. If he was to get in then Macron will get his wish of a financial center in Paris. Investment money would vanish out of the UK. It isn’t an idle threat but a reality. Capital is global.

Some argue that had the people who thought ‘remain’ would be a foregone conclusion bothered to vote then the UK would have stayed in the EU. Maybe. They were given a democratic opportunity to exercise a choice and they didn’t. Many of the 1,000,000 new voters who signed up since Theresa May called the snap election who didn’t do so before the referendum had a choice a year ago. Do we give them a free hit? How do we truly instill the realities of a true democracy if we have to attach L-plates to beginners? It doesn’t matter one jot if there were enough dormant or eligible voters to defeat the referendum if they don’t show up on game day. Is the Premier League football FA Cup given to the team that won the most games til the final but doesn’t show up because of their for and against stats?

It is an important question because the lesson should always be that people must take their vote seriously every time. Even John Cleese is understanding this. If they can’t be bothered when they have a chance to vote then  that is self inflicted and we should have no sympathy.

Theresa May gave voters a democratic chance to give her a mandate and she got thumped. There were two parts to this. Some young voters were surely lured by the offer of free education and a chance to reject Brexit by the back door. Theresa May was too arrogant to think the population would roll over and give her carte blanche to carry out her plans along with a biting austerity budget for good measure. A refusal to do a debate vs Corbyn, a slapdash manifesto and dreadful performances when she appeared sealed her fate. Corbyn came across as the warmer candidate and simply campaigned better. Still an election and a referendum are two different beasts. Just because more voted for Labour than expected doesn’t mean they want an end to Brexit. They did it to send a message to May.

Still the idea we propose a second referendum is a bad idea for democracy. Unlike elections, referendums are yes or no.

Don’t buy the argument that people were sold a pup. That the elderly are bigots, racists and have no concern for their kids or the youth. That the youth should have twice the vote of the elderly because they’re on the planet for longer or the elderly should have their voting rights cut. Saying people are stupid is not a valid answer. Why not have an IQ test for voters to determine voting rights??  If lessons aren’t learnt through bitter experience then why bother holding elections or referendums at all. If anything this election showed through the higher turnout (68.7%) that the lesson is being learnt and the electorate has told politicians they won’t be taken for mugs.

The referendum was held, Article 50 was passed as an Act of Parliament and our Dear John letter was handed to President Tusk. The UK would be a total laughing stock to divorce and then ask to remarry again. Corbyn will undoubtedly have a much stronger say in negotiations and has a vested interest to ruin what little legitimacy May has left. She is left with a divided party created by her unwillingness to listen. The Tories are toast with her at the helm and the DUP alliance smacks of desperation. A Diet Coke Brexit is pointless. We’re in or we’re out.

The Conservatives won the popular vote despite the shambolic display although Labour took 60% of the votes from UKIP. What we can say is that politics is not like it used to be. The electorate is fickle. Loyalty is no longer a given and abandoning core party principles will see politicians punished at the polls. May must step down for the sake of the Tories. as the HMS Tory takes on water under Captain May, more will seek to abandon ship until she walks the plank.

This miscalculation by May will go down as one of history’s biggest political failures. Do not be surprised if we do get a second referendum but be very worried about the precedent it sets for the future. Democracy is at stake and even arguing that it is in the interest of the people to take a mulligan on this issue is effectively saying their votes don’t matter. That referendums have no meaning. Of course the Remainers will cite opinion polls that give them the answer they want to hear but as we all know polls are useless these days. May had the biggest lead and highest popularity in living memory yet got this result.

Her Majesty knows best Mayor Khan

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Isn’t it funny how the Mayor of London Sadiq Khan has been gazumped by the Queen. Her Majesty has served her country for over 65 years and ruled over 14 Prime Ministers. Let’s just say her understanding of politics, geopolitics, terrorism and the importance of long term relationships has never got in the way of short term pettiness. The Queen values the American relationship knowing it was their partnership that helped Great Britain defeat the Axis powers in WW2. She never forgets the important times when the relationship has truly mattered. Her extension of an invite to President Trump to Buckingham Palace is all about preserving shared values. Khan wants to cancel Trump’s visit because he is offended by his tweets with regards to his softness on terrorism in his city. Is Trump wrong?

Instead of the Mayor facing Trump tete-a-tete and justifying his stance he seeks to do what many leaders in the West do – sulk and seek to alienate the relationship because of their weakness. What Trump has said about Khan has validity. The President isn’t conventional and he doesn’t necessarily deliver in the most courteous manner but where is the counter argument? Piers Morgan was spot on. Instead of Khan blaming Theresa May for Met Police funding cuts, he humiliated the Mayor querying isn’t his biggest responsibility to ensure the safety of Londoners by monitoring the 400 suspects living in his constituency?

Let’s be clear, if the UK was at war for whatever reason you can be guaranteed the majority of the British want America on their side. The Queen knows this and I’m sure Her Majesty can bring Trump to mutually beneficial discussions rather than exchange pleasantries over tea. All this nonsense about banning Trump and distancing the UK from the US shows the typical “conditional” attitudes our society seems increasingly willing to tolerate. Khan is in that camp.

Let’s be clear. Trump’s America first isn’t all about pure isolationism. A large part is about making sure other nations don’t ride their overwhelming generosity on things like NATO, UN or the Paris Climate Accord. Many presidents to date have happily allowed the country to be gouged on the international stage but now the budget and deficits don’t support endless freebies for other nation states.

Perhaps Mayor Khan should learn from the current monarch about true values rather than  grizzle about his hurt pride. She maybe in her 90s but she is still sharp as a tack.

NATO Facts and why Macron’s arrogance is no better than Trump’s

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While social media splashes around a US contribution to total NATO spend of 73% it in reality is a third of that. Only the USA and UK spend over and above NATO commitments as outlined in the chart above. Even the Greeks meet half the requirement! Germany is below not only NATO guidelines but the media would never tell you that. Trump has a point. In fact the reason much of the military spending numbers below the requirement stems more from inefficiency than anything else.

What many fail to understand is that salaries and benefits (housing, education and healthcare) for military staff tend to consume 3/4s of the budget. Procurement is a dog’s breakfast and influenced by age of fleets, battalions, interoperability and so forth. While NATO isn’t exactly group buy the us wins by default of having access to the best cost/performance equipment allowing better bang for the buck. Little Estonia can’t get the same economies of scale.

The “contribution” (click here) question is clouded by two things. Under Obama, the US has cut its NATO contribution from 5.29% of GDP when he took office to 3.6%. NATO Europe had met the minimum expected contribution of 2% but this has slumped from the tech bubble collapse of 2000 to 1.47% today which has meant the only thing keeping NATO’s overall budget above target has been Uncle Sam!

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So once again social media muddles a message. It takes 10 seconds to go on NATO’s website and fact check.

Instead the media is more focused on pointless clickbait on whether Trump can hold Melania’s hand without being swatted away or who won the vigorous handshake contest – he or Macron. In fact Macron’s deliberate snub Of Trump when he met all the leaders spoke volumes. He made no conscious effort to shake his hand first. He made a point of sucking up to his EU cronies first and spent needless time making worthless chitchat before even acknowledging the leader of the strongest nation on earth. We shouldn’t be surprised. Best have Trump inside the tent p1ssing out than outside p1ssing in.

Even if they want to delegitimize Trump they play a silly game. Much like business leaders being bullied on social media to leave Trump’s business council (Uber chickened out), the EU plays a dangerous game of isolating Trump. If they want to prevent him from being the “unhinged” orange buffoon they think he is they’d do much better to be welcoming, accommodating and flattering his eminence. That way they can bring balance and find common ground. They show no signs of even beginning to try. By snubbing him they shouldn’t be surprised if he acts independently. Yet Macron acts no better than Trump and the media lavishes praise on the exact same antics they crucify The Donald over. Typical double standards.

Be careful what you wish for! The world needs a healthy US and stunts like this only fray the lines of trust and partnership further. Sure, the America First policy stance is affronting but if the EU want to expedite the process then keep up the Trump bashing. It doesn’t mean Trump bumping (hey Trudeau did it in Canada to a female member of parliament) other dignitaries shows good character but he knows he’s being ridiculed and the media sees it as their only form of attack. The problem is they forget 75% of Republicans STILL approve of his job performance.  He may only be doing a C+ on performance in office but he isn’t anywhere near the F- portrayed by the media.

Follow the market on North Korea

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Follow the market. Financial markets are the ultimate arbiter of risk. What we have here is the 5yr Republic of Korea CDS which gives a rough guideline of how risk is being priced over time. Clearly unchartered waters at the time of GFC saw Korean risk leap to 700bps. The death of Dear Leader Kim Jong-Il saw around 240bps on the clock and Kim Jong-Un’s first nuclear weapons test saw a slight nudge over 100bps before sliding back to a standard 50bps range. Since Trump sent a carrier battle group and China issued an ultimatum (the ‘bottom line’) the rate has popped to 58.7 from 50-odd earlier in the week. It will be no surprise to see the fear factor rise in coming days but the odds are now on for China to take charge and work to install a pro-Beijing puppet which can be sold as a way to dismantle the nuclear threat and remain China’s protectorate. Kim Jong-Un may be offered a Rimowa of cash and an Idi Amin style exile in Saudi Arabia as a way to saving his hide because he has no alternatives and backing down in the face of the current situation will bring his power into question. China wants North Korea to survive for its political aims. For now markets are not panicking. Gold drifting higher and Korean won softening but it is hardly showing fear at this stage.

China send ultimatum to Kim Jong-Un

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As written yesterday in North Korean Roulette, “China has no choice but to step up to prevent the US giving it a bigger headache than it already has. Trump has clearly shown he is willing to pull the trigger when nations get out of line…Somehow China will be summoning Sun Tzu before it escalates out of its control.” So it appears China have overnight sent a ‘bottom line‘ threat to North Korea saying it’ll bomb their nuclear sites if crossed. According to the military-focused Global Times (owned and operated by the Communist Party’s People’s Daily newspaper), said that if the North impacts China with its illicit nuclear tests through either “nuclear leakage or pollution”, then China will strike hard. Taking out North Korea’s nuke arsenal would also win China credibility in neutralizing a global threat. Without nukes North Korea is a toothless tiger and Trump could end up with the result he needs by forcing Xi to act. That may well be to remove Kim and install a puppet. Korean CDS have edged slightly higher to 57.8bps but hardly showing fear. China is Kim Jong-Un’s biggest client. Best heed the warning.

North Korean Roulette

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In years gone past, North Korea used to up the ante on its belligerence when it needed a cash injection. Its neighbours tended to see that as the easiest way to put the Hermit Kingdom back in its place. Sure enough the North Koreans went away until the next ‘hit’ was required. China bought coal from North Korea to give it hard currency and prevent 20 million starving refugees trying to cross its border. It is no surprise that China has mobilized 150,000 troops to watch it. China has recently banned coal imports from North Korea to send a message that KJ-U’s antics can’t be tolerated. It may well be that the Trump/Xi dinner at Mar-a-Lago wasn’t clinking champagne but scoffing Red Bull over a chess board.

The chart above shows the extent of Kim Jong-Un’s thirst for missile testing. For a man willing to knock off his own brother, a man who looked as if he had no eyes on usurping Dear Leader, Kim Jong-Un will be an all or nothing trade. Cutting the head off this snake would plunge North Korea into deep crisis. It is highly likely that the many of the adoring generals all hate each other. Although China is likely to have a puppet in waiting.

The other problem is that all the while no action is taken, PyongYang’s arsenal grows more sophisticated. Eventually it will be sufficiently credible. In 1994 then President Bill Clinton came closest to taking action against its nuclear capability but in the end chose diplomacy.

On April 10, China’s special envoy on the North Korean nuclear programme, Wu Dawei, visited Seoul with the idea of pushing a harder UN resolution in case of another nuclear test. In the short term China is hoping a short term halt to coal imports will bring Kim Jong-Un to heel they have not ruled out removing him.entirely. It is the least preferred option but now Trump has dispatched a carrier battle group nearby China is being forced to up the ante.

Let us not forget the strategic benefits of North Korea to China. It provides a buffer to the US friendly South Korea and keeps China the dominant player geopolitically in the peninsula. However China must be thinking Kim Jong-Un is becoming more of a liability than an asset. How does it keep the strategic importance of North Korea in a palatable package that even Trump can tolerate?

North Korea has 3 main nuclear missile launch sites (Musudan-Ri,  Punggye-Ri and Tongchang-Ri) among the fourteen nuclear facilities ranging from R&D, power generation,  mining and refined fissile material production. A surgical strike would be difficult to achieve without North Korea getting away a few missiles itself. Naturally Japan would be a soft target for reprisal given its pacifist nature.

China has no choice but to step up to prevent the US giving it a bigger headache than it already has. Trump has clearly shown he is willing to pull the trigger when nations get out of line. Should he shoot one of Kim Jong-Un’s missile tests down to show he isn’t joking Kim will need to weigh up being a laughing stock by backing down or go down in a blaze of glory. Somehow China will be summoning Sun Tzu before it escalates out of its control.

One interesting take is the reaction on financial markets. South Korean CDS have jumped from 50bps to 57bps in recent days.  When Kim Jong-Il died these rates surged to 240bps from around 100bps. GFC by way of comparison was 700bps. The Korean Won has slid for 6 days running but it hardly looks like a collapse.