#Obama

If Trump is so stupid how come the media keep getting fooled? Now they demand an insurance payout

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I used to read Der Spiegel. I even paid for a subscription but eventually the journalism lost its edge. This week’s article calling for Trump’s removal makes my decision sound. Read the following section several times and honestly ask yourself is this journalism? Put aside personal views of the President and objectively look at what the article ‘Donald Trump is a menace to the world’ written by Klaus Brinkbäumer is suggesting, if not demanding.

“He is a man free of morals. As has been demonstrated hundreds of times, he is a liar, a racist and a cheat. I feel ashamed to use these words, as sharp and loud as they are. But if they apply to anyone, they apply to Trump. And one of the media’s tasks is to continue telling things as they are: Trump has to be removed from the White House. Quickly. He is a danger to the world.”

So how would you suggest we do it? No, that is not an option. Should we ignore the democratic process by which he was elected?  Should we ignore the fact that even if he was a ‘liar, a racist and a cheat’ people voted in full knowledge of all of his ‘pussy grabbing antics’? The problem with this type of article is that it ignores reality on so many fronts. As I’ve written many times, if you are not a citizen of a country your input on their citizens’ voting intentions is irrelevant. Essentially what you are pleading for is the same as making a willingly high risk investment in a stock which goes bust then complaining to your broker you were misled and ask for your money back.

Elections are much like stock markets. Your voting intention is akin to investing in your country. In the case of America you had two stocks to choose form. One was the hedge of the other. If you wanted to reinvest in the diminishing returns of the last 40 years you bought Clinton Inc. If you wanted to bet on higher risk with potentially higher high return with a start up you voted for Trump Corp.  The media were slimeball stockbrokers trying to persuade investors (voters) to buy into the safety of Clinton Inc because they knew that the commission pay-off would be larger for them. However investors had enough of struggling through decades of exceptional losses, downgrades, dividend cuts and incompetent CEOs. Even worse they got sick and tired of the shareholder meetings where CEO Obama would talk about how successful his stewardship had been when an increasingly dissatisfied shareholder base kept on checking their statements and questioning the dud investment let alone disapproving of his suggested successor.

Mr Brinkbaumer, your article is exactly the problem with the media. You claim the media’s task is to ‘continue telling things as they are’ but you’ve failed on so many levels so many times that your trust rating is even lower than President Trump which stands in the early 40% range. The problem is that the only insurance you can buy in politics is the opposition. None other exists because the premiums would be too high and the payouts too low.

What your article painfully overlooks is that had the previous mob, who no doubt you think is the solution, was actually the problem. That 40 years of painful neglect led to record numbers on welfare, food stamps and income inequality. The investors knew that backing Clinton Inc, whose entire manifesto spoke to helping the needy that had been neglected by her own party (by deduction including the man she intended to replace), was such a palpable untruth that had the Democrats so brazenly lied in a stock prospectus she would really have been jailed.

After Comey’s decision to testify, my social media feeds lit up like a Christmas tree. I deliberately held back from making any call at the time because there was no evidence other than speculation. Yet social media had already made up its mind – “impeachment! – the orange buffoon is going down!” “The smoking gun!” Of course it turns out that the knee-jerk reaction was proved a falsehood. The media once again let its subjectivity rule the day. Like Rachel Maddow’s scoop on his taxes. She sold it as grounds to get him on tax evasion like Al Capone in The Untouchables. She essentially said “we’ve got the book keeper.” Yet she was gunned down in the elevator by her own leftist journos. You know when the media attacks its own that even it from time to time has flashes of objectivity, albeit too brief because lessons are never learned.

Sadly for the rest of the world, as much as we may despise Trump (he has flaws) and protest at his actions we have absolutely no rights to lynch a democratically elected President much less encourage his downfall. This type of reckless behavior is indeed more disturbing. It essentially says you don’t respect the democratic rights of Americans. What is worse is it the same downright condescending attitude people had during the elections that completely ignored the plight of those that voted for him remains. I remember reading one article suggesting that there be an intelligence test required to have voting rights.  That is totalitarian behaviour if there ever was!

The leftist media continues to forget that the one sure way to help him do another 4 years is to keep up the same broken record dialogue. Indeed in the next 3+ years the Americans will have the opportunity to sack him if indeed they see a better alternative. Trump was always the start-up IPO bet. American voters knew full well he was a risk and they took it. His volatile stock performance is not a big surprise.

Klaus, you conveniently forget that Trump is a by-product of decades of neglect. Had the past four decades of the incumbent political class done a sound enough job he never would have seen the light of day. Instead of putting blame on the causes you simply place it all on him. Instead of some introspection on asking why he is where he is you can’t remove yourself from the group think of attack dogs. That anything he may achieve will be discredited and anything he does wrong will be given full thermonuclear uranium tipped coverage. That my dear friend is shame on you.

It would be nice to see some balance in coverage because if you don’t social media will drag up example after example for you further discrediting your supposed ‘telling things as they are’. We must all remember that digital media has a half-life of infinity. Is it any wonder 25% of the workforce in media has been culled in recent years. It isn’t that advertising revenues are falling it is because you don’t provide enough value for advertisers to warrant posting ads in your publication. Guaranteed if the journalism attracted readers the ad revenue would climb with it.

So once again, the bigger danger to the world is you not him. We should never encourage the overthrow of democratically elected governments because we dislike the outcome. Don’t forget that Clinton had 99% of the mainstream media on her side, leaked debate questions to give her an advantage, a pussy-grabbing video against her opposition and more but still lost. Why? The attitude of expecting a coronation and frankly Hillary Clinton didn’t put in the work.

Suppose no dirt is found on Trump? That constant media mud slinging fails to stick. Evidence surely that maybe he is just a brash, uncouth, narcisstic bully rather than someone that must be removed as a danger to the world. Sure, he doesn’t exactly act in a manner very befitting of the most powerful office in the world but he got there legitimately.  Indeed if he is as unhinged as you imagine surely Pyongyang would be under a mushroom cloud and Assad would be a victim of SEAL Team 6. In fact you might point out that the incredible weakness of his predecessor on foreign policy makes Trump’s more assertive stance a welcoming relief rather than a terrifying prelude to WW3.

Your article is so typical of the snowflake culture. The type of attitude that seeks to ban people from making addresses at universities, once the cradle of free speech. You ignore what you don’t want to hear and pass judgement on those who fail to hear you. Once you learn to listen to others you may find that you come to understand why even people like Van Jones can eventually see why Trump won’t be outed so easily. For indeed if he is as big a fool as everyone makes out the media won’t be needed to point it out. It will be painfully clear and in 2018 Americans will get a trial IPO and 2020 the opportunity to buy or sell stock in Trump Corp.

I should thank you for this article for helping confirm why I didn’t bother renewing my subscription.

Comey testimony proves media can’t stop playing the man rather than the ball

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Comey admitted in his testimony that he was never pressured by Trump to end any investigations. Damn and blast. The media has done another collective Rachel Maddow “we’ve got his tax returns” backfire. So insistent on trying to seek revenge they forgot the old Chinese proverb, “before setting out on revenge, first dig two graves.” So eager are they to play the man they overlook basic check sheets to find balance. Trump may well be a loose cannon at times but the media is the pot still calling the kettle black.

While I long argued Trump would win the election I’ve been an advocate of trying to seek balance to the one sided argument against him. It doesn’t mean I think he is ideal.  I disagree with many (not all) things he has done and petty things (like his attitude to Merkel) are certainly not fitting the most powerful office in the world. Trump derangement syndrome is none-the-less real. The media attack dogs never seek to do moral equivalence with their beloved Obama over the same supposed crimes of leaking sensitive info or whatever. I do think Trump is Turnbull-esque in lacking judgement as well as constant cabinet reshuffles but the most twisted irony is that financial markets would seem to want him there using any wobble on the back of an impeachment scenario as an excuse rather than admit the hyper asset bubble blown for 8 years.

The mainstream media now preys on clickbait. Thinking the number of clicks, likes and shares are endorsements and can replace quality content (as much as they self appraise it’s high value added factual). In fact the revenue numbers of media outlets who continually rant  is telling. Fairfax in Australia has had two rounds of layoffs in the space of 12 months and The Guardian is openly begging for donations.

The media is surely going to keep launching salvo after salvo to try get him out of office. As stupid as they keep suggesting the ‘orange baffoon” is he keeps getting their measure. I issue a caution though. The deplorables that voted him in want him to get on with the job. With all these distractions the quest that they hope will get them under the “have not” hole is pushed further into the future. Getting an impeachment to stick and force a resignation is not high on a have not’s priority list. They need help as I argued at the time of the election. Whether Trump can provide it is a moot point but they voted for change and the “haves” ought to be careful how they indirectly impact the “have nots”

The screaming, carrying on and promoting blood sport may end up creating proper civil unrest. It’s simmering but the media as usual is oblivious to it all. In any event the last thing the world needs is instability in the world’s largest economy at this point in a peaking cycle.

Max Headroom – “Hard Brexit vote is between Coke Classic May, Diet Coke Farron & Coke Zero Corbyn”

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Be honest with yourself. If you were after the best taste (casting diet aside) would you have real Coke over Diet-Coke or Coke Zero? Full fat milk in your latte or soy milk? 34% fat King Island Brie cheese or a block of no-brand low fat supermarket cheddar? Wine from a bottle or a cask? The answers are obvious. The real thing always tastes better. Even in the adverts, Coke used to put girls eating fatty foods, seemingly balancing out their decadent junk food cravings with Diet Coke because it was “just one calorie” conveniently forgetting all the other unhealthy chemicals that went into the can to make it so. We know better and is it any wonder? Who could forget in the 1980s when Coke decided to change the formula of real Coke causing massive hoarding of the original, with a whole secondary market treating the scarce commodity like precious metals. Such was the backlash, Coke had to restore the old faithful. In their hearts people want the real thing. Same for Brexit.

The UK Labour Party has been espousing Coke Zero under Corbyn when constituents are clearly calling out for the real thing. The recent local elections saw a total drubbing. While local elections aren’t always a read across for national elections, the results are so telling that Theresa May, as much as she is inconveniencing the voters for the third time in such a short period, has clearly got the mood of the Brits for hard Brexit. I listened to London Mayor Saddiq Khan rabbit on about why Corbyn is the better option for the UK in the face of being so trashed in the local elections. He went so far as to say how evil Theresa May was to call an election to further her majority. Err, Mayor Khan, perhaps if the opposition were a viable alternative she would never have done so. Even The Guardian is arguing that the Lib Dems are the only hope for a soft Brexit. Tim Farron has no chance. Here are the results of the local elections.

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Labour lost its status as the largest party in Cumbria and its heartlands Blaenau Gwent, Bridgend and Merthyr Tydfil – good blue collar coal mining areas. Labour also lost Glasgow, the first time since 1980.

Here is how England looked:

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Here is how Scotland fared (mostly voted Remain):

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Here is how the Welsh voted (mostly voted for Brexit):

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Despite all of the pre & post-Brexit scaremongering of how the UK would slide into the abyss, the economy has done anything but reflect that. Juncker is now so unleashed in his bullying over Brexit negotiations that Merkel and Tusk have had to rein him in. The plucky Brit is probably the last person to cave into oppression. They love the idea of doing the opposite of what people dictate. We have cautionary tales. Who could forget when Obama told them that Brexit was a bad idea? Now we have Juncker and Verhofstadt hiking the Brexit bill like gangsters demanding a ransom.

The Brits are speaking – “Give us Hard Brexit. We don’t want soft compromises. We voted out so let’s make sure we fight for the best deal.”

Or perhaps as Max Headroom, the man of the moment of the New Coke once said, “Say, would someone mind checking the ratings? I seem to have an audience of two.”

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No, it was because you thought it was a coronation not an election

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Reading through Hillary Clinton’s comments about ‘why’ she lost in November missed one huge point. She thought it was a coronation, not an election. It was supposed to be an ordained affair. Blaming Comey or Putin misses the point entirely. She conveniently forgets she had the entire mainstream media on her side coming in with poll after poll showing it was a forgone conclusion. Even betting agency Paddy Power paid out on a Clinton victory one month before the election. The DNC backed off the gas. To lose to a pussy-grabbing opponent who looked straight down the camera lens at 10s of millions saying “no one respects women more than I do! None!” after the scandal broke says more than most. She wasn’t a good enough candidate period.

Why did she make Debbie Wasserman-Schulz the head of her campaign strategy when she was forced to resign from the DNC chair for deliberately shafting Bernie Sanders? Accepting leaked questions before the CNN debate thanks to Donna Brazile. With all the dirty tricks leading into the campaign she still lost. Her emails were a matter of poor judgement. She had Obama out at every turn talking about how great his legacy was when an ever growing mass of people weren’t experiencing such happiness in their day to day lives. In fact the opposite was happening as poverty, welfare recipients and those working more than one job kept hitting new highs.

People who read this blog would know I’d been saying that Trump would win since the GOP primaries because he was connecting with the strugglers. No matter how big a BS-artist he maybe, he was visiting the manufacturing wastelands and recognizing their plight. Hillary was too busy entertaining her inner-city mates, ignoring the deplorables. I pointed out that he was growing his Twitter following at twice the rate of Clinton. So no matter how horrid you might think Trump was, is, will be, he still won an election by the rules. Perhaps if the establishment had done a better job over so many decades indeed Mrs Clinton would have been crowned first female POTUS. Then again perhaps identity politics was another reason why Americans were fed up her campaign.

On a slightly different topic, note that Macron has grown his Twitter base around 100,000 since he won the first round. Le Pen is around 60,000 net adds. Twitter growth has been a good predictor of election victories as it captures underlying moods that 1,000 people called at random in a poll can’t help to match.

In any event election success boils down to one line to voters – “it is the economy stupid!”

Are you telling me you wouldn’t accept $400,000/hr?

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It is not often I write about Obama in positive terms but this time I must. $400,000 for a one hour speech to Wall Street is the price they’re willing to pay. If you’re reading this, throw away your prejudices and political affiliation and ask yourself point blank “if I was offered $400k as a speaking fee, would I take it?” I’m guessing most of you would. You can call Obama a sell out or whatever for speaking to those he despised but he is not dissimilar to any other world leader cashing in on the speaker’s circuit. Bill Clinton must be beside himself at being 50% off Obama’s rates or is that there is a bubble in public speaking?

Democrat Senator Elizabeth Warren was outraged at how Obama could be so out of touch with battlers. What a shame the Democrats didn’t figure out the mass increase in poverty, welfare and wealth divide over his 8 years, not to mention previous administrations.  The signs have been there for ages.

The sad fact is that being POTUS gives a huge wealth of opportunities, whether it be wakebording behind Sir Richard Branson’s mega yacht in the Bahamas or generous pay packets after dinner speeches after office.

Why would an investment bank pay $400,000 for Obama? Simple. The bank gets to invite all the top drawer C-level management clients which hopefully leads to multi million dollar transactions.

We can bitch and moan at the levels of hypocrisy or acccept that centuries if not millennia of business practice has been done this way. Influence is everything. Relationships are everything. It’s not what you know but who you know.  Surely kings in ancient times were showered with presents and favours by local lords pressing for greater influence to dominate other lords. In some cultures marrying one’s offspring off to more influential circles was deliberate attempt to gain favour. The Clinton Foundation made an industry out of pay-for-play. Why are we surprised?

I’ll be the first to argue that the gap between the haves and have nots has reached unsustainable levels but do not expect that Obama will worry about that. What worries me is we have a system where too many ‘have nots’ are living like ‘haves’ (e.g. Australia’s housing boom where mortgage debt:GDP is 180%) in this low interest rate world meaning risk is priced at next to nothing when in reality  it should come with a high visibility vest and flashing LEDs warning of its toxicity, flammability and volatility.

How is the imbalance redressed? That is not an overnight affair. With poverty levels around the world at all time highs, debt at record levels, deficits at unsustainable levels and public service jobs growing to hide the fact the establishment has lost control of a supertanker which is ablaze the reset will actually put a growing number of people into this harsh reality. From that we’ll have our hand forced. It will be ugly.

So I ask the question again. If you were offered $400,000 to speak for the sake of protecting your family would you do it? Of course you would but then the most common line I use for people looking for investment  returns is simple – “stop worrying about the return ON your money but the return OF it.”

Trump’s tax cuts – how much does corporate America pay? You’ll be surprised by the necessary evil

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How can Trump cut taxes to 15%? For those greedy corporates! Interestingly when one deep dives into the data two things emerge. One is that in 2016 net corporate tax receipts fell to around $444bn. Second US corporate taxes have slumped from 6% of GDP in the 1960s to around 2.4% of GDP today. Income tax and payroll taxes make up around 65% of the tax that fills the Treasury Department’s coffers. Of the $2.2 trillion that the government gets through squeezing us, they splurge around $3.6 trillion (see below).  Since the tech bubble collapse, the budget deficit has becoming a gaping chasm. It is a massive hole to fill.

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Naturally people scream that giving corporates massive tax breaks is obscene. What they tend to forget is that US corporations hide an obscene amount of taxable revenue (some estimate around $500bn p.a.) overseas. Apple’s €13bn tax bill fight in the EU should spring to mind. In any event we should look at corporate tax in the US that brings in around $444bn p.a. Slashing tax rates does not automatically imply that the $444bn will fall to $200bn. Looking at corporate profitability before tax one wonders are businesses really struggling? Pre-tax profits are hovering at around $2.2 trillion.

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There is a whiff of Poland about Trump’s plan. Poland faced similar corporate tax avoidance issues but in 2004 introduced sensible taxation reform which cured the problem. To lure tax avoiders/evaders from their lairs, Polish athorities introduced a flat business tax (19%) and its impacts were so favourable that the government saw a 50% increase in income reported by those corporates in higher tax brackets before the change and a 50% increase in reported income from individuals that fell into upper income tax brackets. In 2009 income tax rates at the top were slashed from 40% to 32% Despite this income tax receipts jumped 17%. Since 2004 tax receipts soared 56.4%. It clearly proved that lowering taxes created much higher tax compliance. There was a psychological factor at play – the cut ‘encouraged’ honesty.

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When breaking down the tax take by the Polish government we see that all levels of tax collection rose. Consumption, corporate, personal income and other tax categories jumped  45% or more.

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So there is method to the madness. Talks of a $2 trillion deficit that will need to be funded if it goes ahead is not based on reasoned economics if the Polish example is anything to go by. Besides we live in such a debt-fueled world now that central banks will just print the gap if others won’t step in and buy it. So this is a risk Trump sees worth taking. Lower taxes, encourage US corporates to repatriate income abroad, create jobs and get small business (50% of employment in America) to expand and create a virtuous circle. Whether he can pass these taxes through remains to be seen. What we can say is that corporate taxes are a measly % of GDP and total tax take compared to income and payroll taxes. However if US corporates aren’t encouraged to build at home then it is harder to squeeze the workforce for the bulk of the revenue pie. Pretty simple really and there is actually very little to lose. So quit the angry ‘evil corporates’ tag line and change it to ‘necessary evil.’

What did people expect? Understanding Middle Eastern politics

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One would have to be as isolated as a Japanese Imperial Army soldier discovered 40 years after the war ended to be surprised at Trump’s strike on Syria after a gassing. Do people honestly think drawing criticism from Iran or Russia is some mysterious happening? This is sadly the result of 8 years of impotent foreign policy which made America a laughing stock to despots. From Michelle Obama hashtagging Boko Haram on Twitter to release kidnapped school girls to allowing China to build man made islands in disputed territories.

Blowing up infrastructure in another sovereign nation is always going to create its own set of problems and questions. However the response from bully nations who have been used to running the school yard in recent times are naturally going to feel precious when given a taste of their own medicine.

As mentioned in the previous dispatch, geopolitical jigsaws aren’t first derivative. They’re usually 2nd,3rd and 4th interconnections.

Iran has long used Syria as a ‘highway’ into Lebanon to maintain influence in the region. Russia has only been too glad to be its arms supplier of choice. The Iranian Revolutionary Guard has been present in Syria for decades and ever since the Arab Spring has been making sure Assad keeps the highway open to Lebanon. Does it surprise you that Iran has been active in Yemen with the Houthi tribe to overthrow the Saudi loyal government in Sana’a and create instability in Riyadh?

When the US pulled out of Iraq in 2011 they left a huge power vacuum which was filled with pro-Iranian elements. Then Shi’ite Iraqi Prime Minister Nouri Al-Maliki had worked with the US to clean out pro-Sunni Saddam- loyalists and when Obama withdrew al-Maliki sold them out. He then accused the US of backing ISIS to reestablish a military presence in Iraq in 2014.

For Russia, Syria gives it a naval port and access to geopolitical weapons to exploit against the West. If the US puts missile defenses in Poland or the Czech Republic, Putin can flare up a crisis in the Middle East.

Saudi Arabia values Israel. Not on any religious grounds but as a buffer against Iran.  Far better to have a strong power act on their behalf than risk direct confrontation. It makes sense. Iran use Syria and Hizbollah to supply Palestine with rockets to nip at the heels of Israel and make them look like oppressors. That brings worldwide condemnation and led the likes of Obama to abstain from a vote to undermine a loyal ally.

So people need to separate fact from fiction. Trump is keen on reestablishing American dominance on the world stage. Foreign policy is never a pleasant or easy business when dealing with nations who have long histories and longer memories. The missile strikes in Syria were multi faceted. On one hand to counter chemical attacks. On the other to put Russia back in its box showing a new kid is on the block and Putin will gain far more being inside the tent pissing out than on the outside pissing in.

Of course the foreign ministries are sending strong messages of anger, condemnation and a halt to cooperation. That is page 1 section 1 of the manual. Cooler heads prevail and countries move to working out how to turn an ugly situation that allows Russia to keep skin in the game, the US to look tough again and the overthrow of Assad (he can live in Zimbabwe) without leaving a huge vacuum. In case you were wondering most of the pro-Iranian Syrian  Army top brass are Sunni. To them the luxuries they are afforded as elites outweighs their religious preference.

Markets will react. The mainstream media will dig up conspiracy theories and predict we’re on the brink of war but this is Trumps’s first message to the world – That guy you had for the last 8 years is no longer around. Things are different under new management.

Trump is unpredictable and whether we like it or not that actually makes the best leader to tackle such crises. One always has to second guess the real intentions of someone who can change on a whim.

Don’t believe the hype.