By Christian Takushi MA UZH, 2 March 2016 – Switzerland.
Global Geopolitical Macro-Update following Super Tuesday – what consensus is missing ..
Some 60% of US voters expressed their anger about the current political-economic system by voting for Trump, Sanders, Cruz and Carson. Most businesses and investors are dismissing this as a temporary protest though – a mis-judgement that could be costly. While US politicians, businesses and journalists laughed at Mr. Trump for months, they launched a concerted and furious attack on him last week. In my view it is only galvanizing the revolt-voters, yielding him a major victory last night.
How about investors?
The majority are still dismissing this political revolt, because they’ve grown reliant on central banks to protect them. Sitting in Europe gives me two advantages: First, the distance allows for some objectivity. Second, in Europe we have some experience with conservative leaders that care about social issues and the “working class”.
(Note: we are analyzing the US elections 2016 from a Global Geopolitical-Macroeconomic perspective. We see this phenomenon as part of a global convergence process)
When the American people take back their parties ..
.. the party elites panic: Voter turnouts at Republican primaries that are roughly 80% bigger than in past elections, while turnout at Democratic primaries is a shocking 40% lower – this is sending alarm signals to the political, business and media establishments. Tremendous turnouts at open Republican primaries is showing that many Democrats, independents and long-time-inactive Republicans are showing up to support an outsider (Trump) and an anti-establishment candidate (Cruz). But the Democratic Party is also detached from key segments of its base. Despite keeping the Hispanic and African-American support, the Democrats are not able to reach the young and women in particular. A self-declared socialist, Mr. Sanders, wins big among them.
Even with the refreshing Sanders phenomenon the Democrats’ voter mobilization is underwhelming as a whole. I personally think Mr. Sanders is not finished yet, but even if he is defeated by Mrs. Clinton, what he has started among young Americans and women will not end this Summer, it will go on. It is part of a nascent movement across the globe. The young generation has been “left behind” across G7 economies in many ways.
Analyzing the US political process from a Global Perspective allows for slightly different conclusions than those reached by insiders and US analysts: Allow me to share some of my first projections for these primaries.
1st projection: One thing we should expect is for Mr. Cruz to do well in closed Republican primaries in very conservative states (where only registered Republicans can vote and ultra-conservatives are well organized), while Mr. Trump should more than compensate this in the open primaries and the rest of the nation where support across evangelicals, moderates, Republicans, Independents and Democrats is strong.
2nd projection: The more the political and business establishment attacks Mr. Trump or Mr. Cruz, the more powerful the growing voter revolt. Should the GOP try to trick away the nomination from Mr. Trump or Mr. Cruz in Cleveland, a civil uprising could be unleashed (see conclusion 5). Many voters are already upset about the super-delegates of the Democratic Party – which makes it almost impossible for Mr. Sanders to win the nomination. To them the Democratic primaries are to some extent a farce.
A dangerous mix for financial markets during a most vulnerable transition period 2015-2018
After 7 years of not having to “price in” the growing geopolitical-political risks thanks to a quasi guaranteed FED-support, markets are now dismissing rising US political risks. A Bloomberg commentator said today something along “why bother now, we can worry about it in November”. I think that encapsulates how many busy investors are reacting. After having lost so much money over the past 15 years by external geopolitical shocks, they failed to anticipate, the majority of investors are still not embracing the changed realities of an uncertain post Cold-War World. They dread the growing influence of geopolitical and political forces on the economy and markets. They look away first, when the shock hits, they focus too much on one risk-source and overreact.
When outsiders and those opposed to the current establishment get way over 50% of the vote across parties, we should take a deep breath. I saw that in the long early hours of Wednesday as I was watching the results on TV and checking demographics & income data on my computer. Across different demographics and incomes discontent manifested itself – we are dealing with a socio-political phenomenon that is increasingly taking on the shape of a movement.
After analyzing Super-Tuesday results in the early hours of today, checking with sources, watching Asian, European and US markets react, I’d like to share with you my preliminary thoughts and 7 tentative conclusions ..
1st Conclusion: It is not so much about Trump, Cruz or Sanders, but what a loose coalition of such disparate segments of society are trying to express by supporting one of them. As Mr. Trump put it “I’m just the messenger” or spokesperson of the people.
Is this just political noise? No. There could be something flawed with our system when devout Christians, educated well-off professionals, military veterans and even government employees join forces with working class Americans and young women of all races to support outsiders like Mr. Trump and Mr. Sanders. We should react with some humility and ask “is there something wrong with our exceedingly politically correct society and liberal economic order of the past two decades?”
Trump and Sanders are quite different, but they got something in common: they are both angry at the establishment. Please, consider this: in the state of South Carolina Mr. Trump swept all 50 delegates thanks to a victory in each of the 46 counties – and they are very diverse; some rich, some working class, some conservative etc.
All over the world most efforts are made to stop Trump, rather than to listen to his supporters
Before being angry at Mr. Trump, politicians and business people should ask themselves “do I really understand why all these different groups are so frustrated or furious?” Let us try to avoid the typical “they just need to vent, it will die down” or “he is just a populist” dismissive reactions; we are talking about a significant number of Americans. I’m surprised at the reaction in Europe: people focus on ridiculing Mr. Trump instead of taking his followers seriously or analyzing what is wrong with the system. Much is at stake. As the biggest economy, greatest military power and issuer of the global currency, US election results will reverberate across the globe.
Unless we take corrective measures now, there might not be any Free Market Economy nor Free Trade by 2030
I am one of a growing number of macroeconomists and political analysts that believe the political & business establishments in the West are dangerously detached from normal citizens. Even democracy might be at risk. Democracies are already highly dysfunctional, highly polarized and held hostage by big businesses. We may have passed the point of no return already.
Although financial markets are in the tight grip of policy makers, it is wise to gauge the market reaction to Super Tuesday
The reaction overall has been muted. This tense stability of markets can be explained by two factors. First. we have had a confluence of events over the past 6 days that called for policy support. 2nd, absorbed by currents pressures, investors have not been able to focus on US politics. But worryingly, some are simply disregarding it, others want to take it seriously in November. Indeed investors were busy ..
- The G20 meeting ended up in semi-fiasco – world leaders couldn’t agree about anything solid. Only about no more currency devaluations, which China relativized two days later
- EU Inflation data dipping into negative territory made many investors nervous and some called for desperate action by the ECB (helicopter-style etc)
- Switzerland voted on 4 referendums: common sense prevailed and it will help reduce tensions with Brussels. At the margin easing some of the pressure on the SNB
- US inflation, consumer and auto sales data came out rather stronger than expected – I warn that 2nd 2016 may see a surge in US wage and consumer price inflation.
- Rising US inflation and sudden negative inflation in the EU triggered a rise in the USD vs EUR. It might be short-lived since the USD is under big political uncertainty until Spring
- Super Tuesday in the USA ran into the early hours of today yielding sweeping victories for both Mr. Trump and Mrs Clinton. The Washington elite is in shock or disbelief
Even looking at intra-day moves, markets delivered no meaningful signals. I think it there might be a rude awakening for investors later this year.
2nd conclusion: What do these voters behind this uprising want? Many of those supporting Sanders, Trump, Cruz and Carson want
a non-politician (outsider) in the White House,
a strong leader (someone who has no fear of man) that can defy powerful lobbies and Washington’s circles of power,
an end to excessive political correctness (if you can’t name it, you can’t fix it),
an end to excessive political ideology (partisanship) – as a result: very elaborated policy “details” are received with suspicion
Roughly 40% of them want the working class to get more of the Economic Rent, which they see as “seized” by big business. Hence the tough stance against illegal immigration (read cheap labor) and liberal Trade Agreements with unfair competition. Last but not least, in some US states the biggest problem is not terrorism nor underemployment; rather the huge supply of drugs. After three decades of failed policies to fix this, citizens want a “wall”.
“First they ignore you, then they laugh at you, then they fight you, then you win”
For those supporting Trump and Cruz it must feel just as the late Mahatma Gandhi once put it. The establishments in media, politics and business first laughed at Trump, then got upset and fought him with a formidable machinery of politicians, business leaders, journalists, TV ads and even artists. But last night “Super Tuesday” came as a shock to them. Everything they have learnt and built their careers upon was upside down: Outsiders Trump and Cruz swept the table. Nevertheless the reactions of the political and business establishments are not identical.
Third conclusion: While the US political establishment is coming to terms with an uphill battle and accepting Trump’s victory, financial markets for the most part are still amused or in denial.
This doesn’t mean the political establishment has given up the fight. They are regrouping, and some party leaders want to resort to broker-tactics to deny the front-runner the nomination. And not all business is upset; the big US multinationals that used their powerful lobbies and money donations to get the US Congress pass the laws they wanted are in shock and are funding campaigns against Trump. But domestic oriented enterprises along small and mid-sized businesses are more optimistic: a return of US jobs, an end to the 3-decades-long decline in real incomes and upward wage pressure (in part due to less illegal immigration) points to rising incomes supporting private domestic consumption. A rising Aggregate Domestic Demand could be compatible with a more balanced economy and a reduced income gap. Yes, global trade may see a correction first, but after a few years I predict global trade will continue its upward trend – this time on a more socially-politically sustainable path. I am saying that as a macroeconomist I can see positive policy ideas coming from the revolt-leaders Trump, Sanders and Cruz. Ideas that long term would benefit the US and the Global Economy. Take Cruz’ “flat tax”, a brilliant idea.
We are gathering that angry citizens in the USA and in Europe are seeing the concerted massive attacks on Mr. Trump as a confirmation that those at the top of the establishments of society (system elites) see him as a threat. But a more acceptable VP running mate or enlarged team with trusted leaders could address this. I personally thought Mr. Marco Rubio would be a unifying character, personifying the future of the Republican Party, that could help Mr. Trump connect with the GOP. The desire for an outsider and the support of the establishment scared millions of voters away from him; but Mr. Rubio is not done yet, he could help bring the GOP together around Mr. Trump. But if wounds are too fresh and emotions could not be bridged, Mr. Kasich could do this too. For this effort to succeed. The GOP has to listen to the voice of the people and take them seriously. I have not seen any clear effort to listen to the popular movement, take the revolt leaders seriously and try to channel or flank the movement forward.
In my opinion, Mr. Marco Rubio may become – in a not too distant future – a very influential leader and possibly the President of the United States. He has excellent attributes and can work with diverse political groups, while appealing to big electorate groups as well. His personal story is the modern American Dream, but probably too positive and moderate a story in a time when so many people are hurting and angry.
I’d like to attempt to think ahead.. How a Trump victory could affect first the political process and the economy. This could be helpful, because markets are underestimating this risk for now.
The most powerful political system in the world is in stress now, but it might even glide into distress if it fights the voice of the American people: Yesterday the US media, political & business elite threw everything they had at Mr. Trump to destroy him even as voters were casting their votes. Fake “robocalls” were made and efforts launched to link him with the KKK. TV stations aired parodies to ridicule him. But the more they piled on the candidate the bigger the record turnout of people that haven’t voted in years in favor of the “politically incorrect” billionaire. It didn’t work! Mr. Trump has the clear lead in delegates. But there is something more important than the delegates, the masses that Trump, Cruz and Sanders have mobilized are huge and they could even join forces. They are the biggest asset Mr. Trump has as he looks forward to the Party Convention in Cleveland. The party bosses want to use “broker-tactics” in Cleveland to deny him the nomination. Denying him the ticket could unleash a GOP break-up or even a civil insurrection by millions of disenfranchised voters that supported him; thus it could be more dangerous than a Trump presidency itself.
Fourth conclusion: Despite most polls and experts that say Clinton would easily beat Trump in a general election, I conclude that he can be a formidable rival and even beat Mrs. Clinton. In Europe we saw the rise of Conservative leaders that had social empathy and won millions of voters from the traditional Socialist parties. Some called them populists, but I try to avoid that term: it takes away seriousness from the leader and worse, it belittles the cause of their followers.
Having taken both Mr. Sanders and Mr. Trump seriously since early October 2015, I conclude that the likelihood of a TRUMP SHOCK to the system is now closer to 50%. I define the TRUMP SHOCK not merely as Trump securing the nomination or the presidency, but the shock that Mr. Trump and the movement he is leading could give to the political and economic system as we know it. It is likely that many angry voters supporting Sanders, Carson and Cruz will join Trump to express their repudiation at the way their country has developed. Thus, if Clinton takes the nomination, young Democrats and working class Democrats whose incomes have stagnated over the past 3 decades may also join Mr. Trump – they are currently supporting Sanders. The TRUMP SHOCK is not so much about Mr. Trump himself, but the massive wave of discontent & anger coming from multiple sections of society being channelled through the one revolt-leader that can survive the campaign the longest. Having said that, we may see some Republicans voting for Clinton. An amazing year!
Take an example of the shake up: Russia, Iran and Israel
If Trump wins in November, there would be a shock to the global geopolitical landscape, along jolts on Wall Street of course. He could quickly normalize relations with Russia and undo the US-Iran deal. He would get in a fight with the State Department, though, which is supporting Turkey and Iran and even meddling in the internal US Treasury‘s operations to block, water down and delay any US sanctions against those nations. Therefore Mr. Trump will need a tough Secretary of State to take on the State Dept. No one could fit that role better than Governor Chris Christie. Thus, I disagree with consensus that Mr. Christie will be the final VP ticket. That might be Mr. Rubio or Kasich. With Mr. Rubio the GOP could win Hispanics and immigrants (Clinton’s key support groups) in November. The GOP could have a well-liked and well-spoken young leader representing the future of America to the world. An area where Mr. Rubio is particularly skilled and gifted.
Mr. Christie could be both Vice President or Secretary of State – there he could reign into the State Department. The opposition against Trump in Washington will not be small. After removing all top generals and other security complex leaders that opposed his views, President Obama placed rather liberal leaders in most security and foreign policy related posts. Interestingly, media was silent about this widespread “cleansing” by President Obama. Thus, while Obama may be gone in Q1 2017, his people will not.
If you go to the Far East, Trump would demand that Japan and South Korea pay more for their protection. Trump could also contain or face China in a way no one has dared to do since 1990. Last but not least, the reverse of Obama’s trade and foreign policies, specially the “reshuffle of the Middle East” to facilitate the birth of a more powerful Islamic World, could have far-reaching implications. This would impact currencies and Treasury yields (interest rates). Israel (in regard to its security) would be one of the first winners from a Trump or Cruz victory.
If Mr. Trump or Mr. Cruz win, all the policies Mr. Obama enforced over the past 7 years will be reversed or at least put under a “big” Question Mark. These include the Iran-US deal, ObamaCare, Obama’s Middle East reshuffle, TPP trade pact, tax exemptions for big US firms, downgrading of Israel .. etc.
Many of President Obama’s liberal policies were enacted via Executive Orders. He rarely engaged directly with Congress to negotiate a deal or compromise, he preferred to rule with executive decrees. Mr. Trump wants both parties to strike pragmatic deals – he doesn’t care much about party lines nor party ideology. This is of course a horror scenario for the Washington political apparatus with its thousands of business lobbies. One of the reasons why millions of Americans – even evangelicals – are willing to forgive Mr. Trump his temperament or rough edges – Americans have seen enough of party ideology. Barely anything was getting done effectively in Capital Hill over the past 16 years.
This Super Tuesday has not decided the outcome, but it has sealed the direction of the US elections 2016. It was the last chance for the political and business establishment in the USA to stop Mr. Trump “conventionally” from de-facto seizing the Republican Front-Runner status for the nomination. It was the last chance of Mr. Sanders to reign into Mrs Clinton’s lead in the South. And he failed.
Watching the unprecedented mobilizations
The Republicans – thanks to Trump and Cruz – are mobilizing voters in 2016 much more than the Democrats. Republicans and independents that haven’t voted in years are turning out to vote. But we will also monitor the mobilization of Hispanics by Univision (NY) to register them as regular voters for the general elections against Mr. Trump. Thus, the Trump effect could also help mobilize opposing Democrats. Hence the phenomenon that could reverberate throughout the US political and economic system way beyond US elections 2016, whatever the results. The level of anger is so high, it would be naive to try to explain it only with Mr. Trump. I personally believe this discontent will lead to unprecedented changes to the current system – even if change might be positive. The uncertainty will jolt markets, currencies and even interest rates.
In my opinion the establishment has lost. They can no longer stop him – at least not with conventional, legal or common sense means.
Currently I’m reviewing and computing the data to update our Global Geopolitical Risk Monitor. The update will appear in my quarterly outlook.
An assault on two decades of Free Trade, Globalization and Mass Immigration (cheap labor) is taking place. Millions of Americans believe that the liberal trade agreements of the past three decades have mainly benefitted big business and foreign trading partners. They see themselves as the victims. Many in the financial industry may not fully understand this widespread fury. They point to the cheap products available to Americans thanks to Free Trade, closing an eye on the big barriers for many Western firms to export to China and other economies. To be able to buy cheap made-in-China products is no real comfort for an average US family, where both parents have to work two or three jobs just to make ends meet and when household income is trending down for decades. With both parents working and in stress to pay the bills, children are not getting parental attention, they are getting chronically ill. As a result, social problems and family breakdowns are rampant.
Let’s look at the flip side of the coin: Corporate accounting profits are record high, but the economic and social costs are gigantic.
The “impoverishment” felt by the lower and middle classes is received with “head shaking” by many big businesses, investors and economists. We celebrate the same phenomenon as improved “Cost Competitiveness“. A nice name to a painful and risky experiment. Just like QE for massive printing of paper money out of thin air.
How a Trump Shock could affect the Economy? There are many risks to his policy proposals, some of which have been aired already. While many attack him for the lack of details, I see that as a “plus”. Any extreme policy proposal in a democratic nation only compounds its risk if it is already very detailed. It has to go through the fabulous US congressional process before it is born. Despite Trump’s oral aggressiveness, he and Kasich are the most able candidates to work with both parties in the Congress. As much as I admire Mr. Cruz, his extreme ideological positions – albeit excellent – makes it almost impossible for him to work even with fellow Republicans. Striking a water-downed compromise is a defeat to a detailed policy manifesto. My point is, Mr. Trump’s policy proposals would be enacted by Congress faster than any legislation in recent years – and yes, we shall see big compromises. Few of the revolt-voters will mind as long as Washington can get some work done and the nation is moving in the right direction.
I am impressed with the excellent detail and vision of Mr. Cruz’s policies, but they are so detailed, any compromise would be a loss of face. That is one of the reasons, why for 15 years barely anything can be agreed upon in Washington. Too much policy detail too early.
But despite the positive aspects of a TRUMP SHOCK, there is no doubt that initially uncertainty could hit Wall Street and world markets very hard. Uncertainty about change in trade and taxes could affect US long term investment plans (not that they were high these days) and analysts’ estimates of corporate earnings. Nevertheless, I personally believe that a coherent implementation of some of Trump’s and Cruz’s policies could help bring about a much-needed system rebalancing. The Flat Tax of Cruz being the most powerful one. It would put an end to over 50% of lobbying without having to ban it. An implementation of some of the constructive Trump-Cruz policy ideas would shift the Economic Rent from the Big Corporations to the working class and domestic small-to-mid-sized enterprises. The degree could be managed – allowing for big firms to still earn decent margins. Long term the increased private income would boost private consumption and corporate earnings of smaller & mid-sized enterprises. While domestic businesses could win, many big US multinationals would have to adjust. S&M Caps catering to the working class and the middle class would benefit the most. It would not be a disaster for large multinationals, rather a return to a more sustainable & balanced growth model, where all major stakeholders – workers, businesses and society – could benefit to some extent. If the US government doesn’t bring moderation to the current economic system (one that has less and less popular support), then a Sunders-like revolt could sweep one day the USA into Socialism.
Fifth conclusion: last year I warned that thanks to the “Fed put” Equities in developed markets have not had to “price in” global geopolitical risks since 2008. The growing US political risk in 2016 comes on top of that and could lead to a powerful EPS compression of at least 20% as a result. Stock markets have a lot of geopolitical and political risk to price in during 2016. And a Day of Reckoning for investors is coming: Looking at the global socio-political tendencies and our demographics & income analysis of US primaries we predict that even if the revolt-leaders Sanders, Trump, Cruz and Carson cannot make it into the White House as President or Vice-President, no new US administration will be able to overlook the demands of such broad segments of society.
Should the super-delegates take away the nomination from Mr. Sanders or should the GOP elites try to take away the nomination from Trump and Cruz, .. the establishment would have sown the seeds for future massive riots in US cities and the rise of a third party. The party leaders will not be able to say “these are our party rules, we own the game”. America has evolved and the party elites would be well advised to show utmost respect to the voice of the people rather than sticking to their old play book. Seeing the condescending attitude displayed by many Democratic and Republican party leaders vs their dissatisfied voters though, I personally conclude massive riots and the rise of a 3rd party nationwide are simply a matter of time in the USA. Both events would send risk assets across the world into significant corrections.
As I have said in the past, investors already utterly underestimate the risk of natural disasters in North America. Those risks might be unpredictable, but not negligible. Unfortunately some of the above-mentioned risks might converge over the USA, just as many global trends are converging in this decade.
Currently I’m reviewing and computing the data to update our LEV-AL Global Alertness Level for Investors.
C) FINANCIAL MARKETS
Aware of the risk of the Super Tuesday in the USA policy makers were alert and supportive. The effort paid off today. Markets shrugged off the strong results of Mr. Trump in the USA.
After 15 years of being surprised by repeated external shocks and heavy losses, the majority of investors have come to dread anything related to politics and geopolitics – to their own detriment. Enjoying a policy-driven bull market from 2008 to 2014 hasn’t changed that. A minority of smarter investors are embracing the new realities though, and trying to figure out the possible geopolitical or political risks.
Our cautious suggestions to our followers last July 2015 to shift from Equities to Cash and Gold by 31 July 2015 has worked well. As we expected, risk assets like global stocks were vulnerable, and they are down 12% since July 2015. Gold instead is up 12%. The gap between Gold and Stocks is 24%. Investors with big gains should taking partial profits gradually and look for value. (Please, read disclaimer at the bottom of this report)
Sixth conclusion: Our geopolitical macro research would suggest to keep the stance from 31 July 2015 of elevated positions in Cash and Gold. The USD could be particularly vulnerable during March-November. Risk assets remain vulnerable in 2016. This of course within every investor’s specific boundaries and tolerances.
We remind you that we are not in the business of managing money nor giving investment recommendations, but just as means to give an indication of how the geopolitical factors we monitor could affect financial markets, I issued some macro-financial forecasts last year. These predicted levels are as of November 2015, and I don’t see any reason to revise the targets so far in 2016:
My target for Gold in 2016-2017 is USD 1’550
- My target for the DOW in 2016-2017 is 14’000
Caution: these forecasts are based solely on the perspective of geopolitical & macroeconomic factors. Investors should make their own assessment of corporate earnings and weigh the opportunities and risks. Company visits and bottom-up valuation models may for instance point to more robust markets. We recommend for investors to consider our independent perspective as an additional layer to their time-tested investment process. What we provide should in no way replace a conventional investment process. Our perspective focuses on geopolitical trends and the interaction of geopolitics with macroeconomic forces. The political process is at the core of our geopolitical analysis. Thus, Geopolitics includes Politics.
A TRUMP SHOCK if accompanied by a tantrum by the losers could quickly compound the current convergence of Global Geopolitical Risks, making stocks go even lower than 14’000, or Gold even higher than 1’550. But unlike other economists, I think that a pragmatic mix of the outsiders’ policies (Trump, Cruz ..) would allow the US economy to enter a more sustainable economic path longer term. It would affect Europe and Asia for years to come. It could make the Growth Model of many nations obsolete over night.
We have to prepare for some strong swings on the Currency Front in the remainder of 2016.
D) FINAL THOUGHTS
The unprecedented rise of a “strong man” like Mr. Trump that wants to put an end to “politics as usual” and his ability to mobilize the masses across most sections of society couldn’t contrast more with President Obama. The probably best orator and most “political correctness” minded among the US presidents of recent decades. But Trump’s rise has benefitted mainly Mr. Cruz’ unyielding evangelical-constitutional-conservative movement. The GOP elite, that once hated and shun Cruz, is increasingly seeing in him their last chance to stop Trump. I assume Trump or Cruz could take Marco Rubio as Vice President ticket to allow for a compromise with the party elite. Trump-Rubio could mobilize almost every single voter segment and I think it is important to prepare for the scenario of Trump winning the nomination and even the “risk” of taking the White House. Even if someone stops him, what has started is a civil movement of unprecedented proportions. It may die down, it may grow.. We’ll monitor it. America has probably never seen anything like this. It is to some extent a mix of Reagan coalition and Martin Luther King. A mix of an outsider-takes-the-GOP with a civil revolt against the establishment. Washington calls it the phenomenon, for lack of a better word.
Whether Trump wins or not, one beneficiary stands clear: Mr. Cruz. He himself could be a nominee, but can he win beyond the conservative South and Mid West in general elections? I think they both need the help of Mr. Rubio, Mr. Carson and possibly Mr. Kasich.
Seventh conclusion: The current lack of US leadership and the fear of Europeans to stand up to challengers or aggressors .. is leaving the world very vulnerable until November this year. And we need to add to this the following Risk: what will Turkey and Iran – two aggressive expansionary states highly protected by President Obama – do in the last 11 months of Mr. Obama’s reign? Time is running out for them to achieve their strategic goals. Much of what is happening in the world is exposing Europe to increased risks. We reiterate our view that the Nuclear Security over Europe is fading away.
by Christian R. Takushi MA UZH, Macroeconomist & Strategist, 2 March 2016 – Switzerland
(the original report was written and shared with clients on March 2nd 2016, but released here a week later after adaptation. We apologize for the typos and other small imperfections. We put highest priority on the analysis and speed, thus layout and beauty come second or later)
General Disclaimer: Global Macro and Geopolitical Analysis are highly complex and subject to sudden changes. No analytical method is without certain disadvantages. We may change our 3-pronged outlook within less than 3-6 hours following an event or data release. Global macro analysis can be extremely time-sensitive and the first 24 hours after an event are critical for the response of a corporation or pension. Only qualified investors should make use of macro reports and any investment conclusions, and treat them as an additional independent perspective. Every investor should weigh different perspectives as well as “opportunities & risks” before making any investment decision. Not all our reports, research and intelligence is published here. Only our clients have full and instant access to it. What we release here is delayed and adapted. Thus, we don’t recommend any professional investor to take investment decisions solely based on what she or he can read here. If you are not a qualified or professional investor, you should get professional advice before taking any investment decisions.