What could the ruler of Egypt’s turmoils possible have to do with the
need to takeover even more banks in western Europe and the potential
default of several members of the PIIGS group? Read on, my dear friend…
I received an impressive response from my earlier description of the
potential for contagion as a result of the Egyptian uprising. It is very
engaging to simply fathom the practical melding of the minds of
financial analysts, political analysts and global macro-economists.
Unfortunately, this is not common practice. As a matter of fact, it is
apparently never done in the analysis & research commonly proffered
by the brokerage houses and the mainstream media. The practical
applications of such has demonstrably superior predictive power over the
application of any of the single approaches. For those who have not
followed me over the years or somehow feel that an individual or small
group cannot outperform the glorious houses for brokerage of “The
Street”, I urge you to look into who I am and to compare my performance to that of the street’s best and brightest
over the last few years . I attempted to demonstrate the predictive
powers and effectiveness of looking for deeper understanding outside of
one’s core discipline by illustrating to my readers how our Sovereign
Contagion Model predicted a roughly 40% chance of eruption in the Middle
East, reference Egypt’s Social Unrest As A Pan-European Economic and Financial Contagion? It Can Happen!!!:
Closest thing you can get to a
crystal ball? No, just an objective, empirical approach from a realistic
perspective. None of that bull or bear crap, not being pessimistic nor
optimistic – just realistic.
Now that it is apparent to all that social unrest is most definitely
here (or not quite here yet, but definitely there), it is time to walk
both readers and subscribers alike through the thought processes that
went into the model and attempt to trace a distinct path of where this
may lead.
Instability stems from a government that loses control of its people
Summary of the Contagion Model Methodology
We have followed a bottom-up approach wherein we have first
identified the countries/regions with high financial risk either owing
to rising sovereign risk (ballooning government debt and fiscal deficit)
or structural issues including remnants from the asset bubble collapse,
declining GDP, rising unemployment, current account deficits, etc. For
the purpose of our analysis, we have selected PIIGS, CEE, Middle East
(UAE and Kuwait), China and closely related countries (Korea and
Malaysia), the US and UK as the trigger points of the financial risk
dissemination across the analysed developed countries.
In order to quantify the financial risk emanating in the selected
regions (trigger points), we looked into the probability of the risk
event happening due to three factors – a) government default b) private
sector default c) social unrest. The probabilities for each factor were
arrived on the basis of a number of variables determining the relative
weakness of the country. The aggregate risk event probability for each
country (trigger point) is the average of the risk event probability due
to the three factors.
Foreign claims of the developed countries against the trigger point countries were taken as the relevant exposure.
The exposures of each developed country were expressed as % of its
respective GDP in order to build a relative scale for inter-country
comparison.
The risk event probability of the trigger point countries was
multiplied by the respective exposure of the developed countries to
arrive at the total risk weighted exposure of each developed country.
Subscribers can download the current production models here:
Henry Kissenger commissioned the CIA to create a model that attempted
to predict the potential for disruption and the liklihood of a
government and/or regime being toppled. The request originated from his
alleged tiring of being behind the curve of such events and felt the US
was best served if it was at the forefront of regime change. In more
direct, and less politically correct words, in order for the US to more
efficiently maintain control of other countries it had to know what was
going on before the fact. I have incorporated many aspects of this model
into my own financial analysis for very much the same reasons.
At this point I ask one and all to put their political leanings on
the back burner for a minute as I delve into who the man was that
commissioned the model from which I constructed a good portion of the
socio–political aspect of my financial contagion model. I would like to
make note that Kissinger’s adherence to Realpolitik is as my dedication
to finansense – see . As per Wikipedia:
A proponent of Realpolitik, Kissinger played a dominant role in United States foreign policy between 1969 and 1977. During this period, he pioneered the policy of détente with the Soviet Union, orchestrated the opening of relations with the People’s Republic of China, and negotiated the Paris Peace Accords, ending American involvement in the Vietnam War. His role in the bombing of Cambodia
during this period remains controversial, as well as other
interventions abroad such as the Nixon administration’s tacit support of
the Pakistani Army in East Pakistan during the Indo-Pakistani War of 1971, with documents showing that US officials working in diplomatic institutions within Bangladesh using the terms selective genocide
in reference to the Pakistani Army’s atrocities, actions which prompted
widespread criticism and condemnation both by Congress and the
international press.[3][4][5][6][7][8]
… During the American advance into Germany, Kissinger was assigned to de-Nazify the city of Krefeld, owing to a lack of German speakers on the division’s intelligence staff. Kissinger
relied on his knowledge of German society to remove the obvious Nazis
and restore a working civilian administration, a task he accomplished
in 8 days.[18] Kissinger was then reassigned to the Counter Intelligence Corps, with the rank of Sergeant. He was given charge of a team in Hanover assigned to tracking down Gestapo officers and other saboteurs, for which he was awarded the Bronze Star.[19] In June 1945, Kissinger was made commandant of a CIC detachment in the Bergstraße district of Hesse, with responsibility for de-Nazification of the district.
For those not familiar with the concept of Realpolitik, it
basically the political science version of the highly realistic version
of finance portrayed throughout BoomBustblog. Reference Wikipedia:
Realpolitik (see also Political realism; from German: real “realistic”, “practical” or “actual”; and Politik “politics”, German pronunciation: [?e?a?lpoli?ti?k])
refers to politics or diplomacy based primarily on power and on
practical and material factors and considerations, rather than
ideological notions or moralistic or ethical premises. In this respect,
it shares aspects of its philosophical approach with those of realism and pragmatism. The term realpolitik is sometimes used pejoratively to imply politics that are coercive, amoral, or Machiavellian.
Realpolitik is a theory of politics that focuses on considerations of
power, not ideals, morals, or principles. The term was coined by Ludwig von Rochau, a German writer and politician in the 19th century, following Klemens von Metternich’s lead in finding ways to balance the power of European empires. Balancing power to keep the European pentarchy was the means for keeping the peace, and careful Realpolitik practitioners tried to avoid arms races.
For my financial version of Realpolitik, let’s refer to it as Finansense,
reference Amsterdam’s VPRO Backlight and Reggie Middleton on brutal
honesty, destructive derivatives and the “overbanked” status of many
European sovereign nations. Start at 7:35 in the video. The essence of
Realpolitik is espoused at 11:00 in the video. Basically, “If you’re
pessimistic or optimistic, you’ll probably end up being broke very
soon!”.
I will dig into the British aspect of this with subscribers soon…
Now, after that historical introduction and background, let’s peruse
today’s headlines then delve into the roadmap that I have drawn out for
BoomBustBlog subscribers illustrating today’s events nearly a year ago.
Opposition groups urged more Egyptians onto the streets to help unseat Hosni Mubarak, as the president sought to quell unrest by putting police back on duty in Cairo.
The anti-Mubarak movement, backed by
former United Nations nuclear official Mohamed ElBaradei and the Muslim
Brotherhood, aims to hold a 1 million-person march in the capital
tomorrow to demand the resignation of the 82-year-old ruler, said
Mahmoud El-Said, one of the organizers. That would be the biggest
demonstration in a week-long uprising that has left as many as 150 dead
and sent markets tumbling worldwide.
The opposition has set up a committee,
including Elbaradei and the Brotherhood, that will convey the movement’s
demands to the government, said Ayman Nour, who was a distant second to
Mubarak in Egypt’s
first multi-candidate election in 2005. Elbaradei, 68, told CNN
television that he’s willing to “serve as a bridge from an authoritarian
system into a democracy,” and said Mubarak must leave the country in
the next few days.
Mubarak’s response to the uprising — sacking his Cabinet and appointing intelligence chief Omar Suleiman as vice president — didn’t halt the protests. Tanks are deployed in Cairo and fighter jets flew over the crowd late yesterday.
… As the unprecedented unrest in the Arab world’s most populous nation
entered a seventh day, thousands of protesters poured into Cairo’s
Tahrir Square chanting “Get out … We want you out” and singing Egypt’s
national anthem.Soldiers looked on without taking action,
which would have been inconceivable just a week ago. World leaders
struggled to respond to a crisis that threatens to tear up the Middle
East political map. And in global markets, share prices fell across Asiaon Monday and Brent oil hit a 28-month high.
A significant aspect of both Kissinger’s early model and the
BoomBustBlog contagion model is that governments who display weakness
to the extent that factions or constituencies actually calculate a
material chance of success in an uprising effectively broadcasts an
endemic weakness, and as a result the perception of a government that
may or will lose control. In many of these instances, perception is
reality and it becomes a self-reinforcing loop – potentially creating
fact out of fiction. These issues are rarely if ever captured in
financial models.
Oil remains the biggest trade — and
perhaps the biggest risk for traders — as unrest in Egypt persists. U.S
oil prices climbed to over $90 a barrel in the electronic session Sunday
night, extending Friday’s 4% gain.
March NYMEX crude futures rallied over $1.50 to a high of $90.87 in
electronic trading. Brent crude nearly touched $100 a barrel, but rose
less than $.50 from the previous close. Oil prices have since pared
their gains and volume is expected to be light until floor trading
begins at the New York Mercantile Exchange at 9 a.m. ET Monday. The
volume of oil futures traded at the NYMEX exploded on Friday to an
all-time high, according to some early reports. However, the exaggerated
reaction to U.S. oil prices is surprising to some analysts.
Moody’s jumps into the fray, late as usual – but better late than
never (how much better is up for debate). Once it comes to things
financial, predictive is always better than reactive, no??? : Moody’s Cuts Egypt’s Rating, Warns on Spending. We also have the obligatory obvious statements, Business Leaders See Euro Zone Break-Up or Egypt Protests Negative for Growth:Risks
that the troubles in Egypt may spread have increased and the uprisings
have a negative effect on growth, as well as contributing to higher
prices, economist Nouriel Roubini said.
So, where does this leave us in terms of our proprietary contagion
model. Well, let’s expound upon the good doctor’s proclamation above by
walking through the logic of the model.
Now, lets reference the subscription “BoomBustBlog Sovereign Contagion Model“,
wherein we spent many analyst man/months to create a realistic model to
capture the potential for social unrest, financial and economic
contagion as they could skip across sovereign borders, continents, asset
classes and hemispheres. Most analysts, investors and financial pundits
look at the gross risk as cross claims between countries, very much in
this fashion, which to many would be considered high end analysis…
What we set out to do was to adjust the pathways of apparent pure financial contagion with several, real world factors.
On page 10 of the retail contagion report and page 16 of the
professional report, you will find this matrix which outlines the
various paths of contagion given X,Y,Z factors and occurences. By
tracing the path starting with the Middle East and following it to each
of the successive countries with the highest total exposure (all model
factors taken into consideration – a) government default b) private
sector default c) social unrest) you can attempt to predict who may be
next. The exposure is amazingly apparent and divergent from that of pure financial claims once
you approach it from an objective, analytical perspective. Needless to
say, there is a strong chance that some new names may be popping into
vogue, outside of the media whipping boys of the past year (ex. the
PIIGS group).
Middle Eastern unrest has strong and direct linkages to the most
powerful (and indebted) countries in western Europe. The most exposed
country is also heavily exposed to probably the most indebted country of
size in the sphere, whose banking system has NPAs as a very significant
and material percentage of the countries GDP and a vast amount of
foreign ownership of its debt. It is quite feasible to see further
unrest in the middle east causing material strain on the ECB, the
indebted PIIGS group and political stress on those EU member nations who
are considered stronger and will have to pony even more to prevent
defaults. This leads to the strengthening of the presumption that some
of the more profligate members of the EU may default or be asked to take
significant shorts.
Next in this series of posts, I will drill down further into
correlations than debunk the myth that the EU/ECB has put up enough
capital to truly backstop the banks and the countries of the block in
the case of another disruption. It is really about the simple math.
Arabs are mostly nomadic tribes people who haven't been properly controlled since the Pharaohs. Their leaders are corrupt potentates. better if Israel were to just get it over with.
wtf? have you read any history...that's like saying all the indigenious people in north america were nomadic because the Lakota were, yes some Arab cultures were nomadic but look at the last 1000 years of history...at one point, Arabic was the language that elite Europeans learned because it was the language of learning, books...there were many very sedentary, settled Arab states and empires and amony other things, the brought ancient learning back to Europe after Rome fell..
wtf? have you read any history...that's like saying all the indigenious people in north america were nomadic because the Lakota were, yes some Arab cultures were nomadic but look at the last 1000 years of history...at one point, Arabic was the language that elite Europeans learned because it was the language of learning, books...there were many very sedentary, settled Arab states and empires and amony other things, the brought ancient learning back to Europe after Rome fell..
I'm underwhelmed. Anyone with any knowledge of the region has understood that the position of these governments was 100%untenable.
The problem was, as always, the event horizon.
No statistical model in the world could effectively predict a Mohamed Bouazizi.
And to imagine the death of a street vendor could bring down one secular regime and rock another one, far larger and non-contiguous, to its very core, is what makes this all so amazing and beyond modelling and the claims of the modellers.
there are always sparks, but not always fuel to turn them into a wildfire...when there are multi-years droughts in California there are inevitably some big forest fires as a result. Yes, these fires a caused by a careless kid, arson, a piece of equipment sparking etc...but that's not a problem if no dought previously.
The exact moment of the spark is unpredictable, just as the exact moment of Lehman collapse/GFC was unpredictable, but it was coming no doubt.
For a hundred years after chattel slavery ended in US there was legal apartheid, lynchings etc in the South...in those hundred years there were many mighty freedom fighters fighting for, demanding civil rights for black people. The civil rights movement was sparked by the likes of Rosa Parks (who actually was arranged to make a statement that a younger less "well-respected" young woman (she was pregnant) had already done by not giving up her seat on that city's bus).
If you look at what happen politically, historically in the 100 years up to the civil rights movement and when the civil rights movement happened, you can see why it happened when it did. Not that you could have peg the day 1955 when it would really take off but the conditions were in place. In the case of the civil rights movement, it may have even been the wealth of the nation, the jobs up north etc, as opposed to poverty/high food costs now part of issue in Egypt , that contributed to its contagion.
In every time there are those that work tirelessly, endlessly, valiantly to fight against injustices...only in sometimes are enough people inclined to join them in the struggle, enough to make change so that the heros of the time are remembered.
Five years ago, he could have burned himself and while everyone would have felt bad, made him a cause, nothing more may have happened.
Brother, that was some inspired writing. I'm just not sure what the point of it all was. Moreover, I'm going to assume that all this talk of sparks and fires is just an unintentional pun with regard to Bouazizi.
That said, a bit of free advice: when you try to make a metaphor, you need to understand both the subject itself and the thing you are comparing it to.
The Santa Ana winds come every year. So why do some years have worse fires than others? The answer is counterintuitive. The worst fires in California (and a lot of other places) generally happen after a wet winter. Why? Something called Green-up. More rain = more fine fuels (like grass) which greatly enhance what firefighers call the Rate of Spread.
Regarding Civil Rights: Actually, the amazing thing about the the South from 1865 - 1955 was how few incidents of resistance there actually were. This isn't politically correct to point out, but it is historically accurate. As far as Rosa Parks is concerned, she wasn't the spark in the manner of Bouazizi. She was the spark that got fanned. Google "Claudette Colvin." Ms Colvin refused to give her seat up on a bus almost a year before Rosa Parks. But she was deemed too dark, too pregnant and too unwed to become the Mother of the Civil Rights Movement. You can, as they say, look it up.
If you really want a "spark" for the legal dismantlement of segregation, consider Lee Harvey Oswald. Again, it's counterintuitive. JFK was Go Slow on Civil Rights. By murdering JFK, Oswald (or whatever lone gunmen did the shooting) put a master legislator in the White House who understood the need to act, understood how to move the law, who could twist the arms of a lot of otherwise intransigent lawmakers, and who could wrap the bill around the casket of the dead President.
What do either of these things have to do with wise investing and geopolitics?
Nothing.
My point is a simple one: as far as wise investing is concerned, hedging is one thing, but we have to be wary of trying to predict or time singluar events. We have to be even more wary of ex post facto claims of wisdom regarding these events.
surprising how little resistance there was?! One could say it was surprising how littel resistance to the holocaust there was by the Jewish people...would that be fair, a correct criticism?
Reggie was polite...and you skip over huge things like Garvey movement etc. but obviously your schtick is to always be the one the smarter than everyone else rather than actually trying to suss out real actionable truths and analyses, so I guess this is discussion pointless.
One could say it was surprising how littel resistance to the holocaust there was by the Jewish people...would that be fair, a correct criticism?
1. Yes, one could. And while it might not be a "fair criticism" I ask you: would it be an accurate observation? By which criteria would you prefer to make economic decisions? I chose accuracy over sentiment.
2. This is not about what you want to believe. It's about whether your comparisons have anything to do with financial models and geopolitics.
3. Since we're now under the jurisdiction of Godwin's law, I'm going to have to bring this to a close. But not before
Regarding Civil Rights: Actually, the amazing thing about the the South from 1865 - 1955 was how few incidents of resistance there actually were.
You write as if you do not have black relatives from the South who could have told you how much resistance was given - or not. There was considerable resistance, particularly given the low socio-economic position of those who were resisting. Simply because it did not make it into the history books or was not broadcast in the radio or TV doesn't mean that Charlie Manigault, etc. was not beaten until an inch of his life for trying to stand up for his rigths or family. Be cautious judging history by what you read in history books. History tends to be written by the victor, remember that.
As for predicting events, many watershed events can be predicted because as MoneyMutt said, the actual cause of the event is more obvious than many are led to beleive. It is the impetus, the spark, which is difficutl to narrow down.
I try my best to remain objective and detached, and as a result I was able to see (and time with relative accuracy) the housing crash, the financial and market crash and the european debacle of the last few years. Of course, I am not perfect, hence I thoroughly underestimated the depth and the breadth of the '09 bull run - primarily becuase it was not supported by fundamentals - practically at all.
The contagion illustrated above, is not so much prediction but followng the math and the logic. While the impetus is hard to pin down hence I may have a problem pinpointing exact countries, the poweder keg that is the excessive debt sitting on top of extreme socioecocnomic stratification and real time global macro experiments by the powers that be make it rather obvious that explosions are due to occur. The key is to measure the amount of gunpowder accurately in each keg (as well as otehr explosives and inflammatory substances) and then map the locations - whcih is what I have done above.
Merkel is a walking disease factory herself. She.needs no help from egypt to start a contagion. I hope those secret talks are about.future rescue mechanisms after2012. She promised us current bonds are fully guaranteed. I suppose that was an empty.promise.
Love your work, Reggie, But I think I found an error.
The Actual, original definition of Realpolitik (as pioneered in the time of Bismark) is "LAND politics". As in, 'Real estate'. Which shows you that you can't rely on Wikipedia for linguistics, or any other non-pop subject.
All eyes are on Egypt and it's shadow. I spent a summer hiking around Crete. The locals think of Egypt as a big brother, who is wise, and should be followed. I think that is motivating Egypt, that they are embarrassed by being out done by back water Tunisia. The mid east is finally being led by a leader, Egypt. This is a very big development. It could go anywhere.
your hypothysis is totally wrong. the instability is caused by the taipan club, exerting covert market influence, after buying large blocks of exxon mobil. oil will hit $600 per barrel before inflation. glad we bought exxon also. the taipan club has deliberately and carefully started a jihad, where muslims will kill each other. the japanese royal family will be pissed when they find out.
I like Belgium's exposure in little old Ireland - WTF were they thinking - although a lot of that stuff could be in the IFSC building , who really knows.
Its becoming obvious that Dublin is at the centre of some of the worst crap in all of the Holy Roman Empire.
If the ECB does not expand its balance sheet by a extra tillion or so we are fucked.
Better yet - lets just incorporate the total euro M1 on their balance sheet - its well over 4 and a half trillion now , that should do the trick.
Many Belgians - especially from the minority French-speaking Wallonia - are descended from ancient Celtic tribes, fierce fighters whom Julius Caesar called the 'Belgae'. You can see the resemblance of some Belgians to some Irish people, reddish hair and facial features and so on, you might think they're Irish till you hear them speaking French.
Brussels has pubs named after Michael Collins and Éamon de Valera, too, with fine Irish whiskey, where locals can discover the John Powers and others.
As for the dodgy debt bonds ... well, Belgium has been very 'European' ...
Yes it could work , we don't own our drinks industry anyway - although paying us in super liquid currency has hints of the old opium trade - ah fuck it - we'll try anything once.
Excellent model Reggie - as always. My one suggestion would be to incorporate some of the modeling used in epidemiological research on how contagion spreads.
Sovereign Contagion Model – Pro & Institutional
Um ... Reggie, the oil prices went up first, then the rioting started.
When oil prices go up the food prices tend to go up too. Food is nothing more than oil in drag.
If oil was $20 a barrel we would not be having any crises and there would be no Zero Hedge, just more CNBC.
Arabs are mostly nomadic tribes people who haven't been properly controlled since the Pharaohs. Their leaders are corrupt potentates. better if Israel were to just get it over with.
wtf? have you read any history...that's like saying all the indigenious people in north america were nomadic because the Lakota were, yes some Arab cultures were nomadic but look at the last 1000 years of history...at one point, Arabic was the language that elite Europeans learned because it was the language of learning, books...there were many very sedentary, settled Arab states and empires and amony other things, the brought ancient learning back to Europe after Rome fell..
wtf? have you read any history...that's like saying all the indigenious people in north america were nomadic because the Lakota were, yes some Arab cultures were nomadic but look at the last 1000 years of history...at one point, Arabic was the language that elite Europeans learned because it was the language of learning, books...there were many very sedentary, settled Arab states and empires and amony other things, the brought ancient learning back to Europe after Rome fell..
I'm underwhelmed. Anyone with any knowledge of the region has understood that the position of these governments was 100%untenable.
The problem was, as always, the event horizon.
No statistical model in the world could effectively predict a Mohamed Bouazizi.
And to imagine the death of a street vendor could bring down one secular regime and rock another one, far larger and non-contiguous, to its very core, is what makes this all so amazing and beyond modelling and the claims of the modellers.
there are always sparks, but not always fuel to turn them into a wildfire...when there are multi-years droughts in California there are inevitably some big forest fires as a result. Yes, these fires a caused by a careless kid, arson, a piece of equipment sparking etc...but that's not a problem if no dought previously.
The exact moment of the spark is unpredictable, just as the exact moment of Lehman collapse/GFC was unpredictable, but it was coming no doubt.
For a hundred years after chattel slavery ended in US there was legal apartheid, lynchings etc in the South...in those hundred years there were many mighty freedom fighters fighting for, demanding civil rights for black people. The civil rights movement was sparked by the likes of Rosa Parks (who actually was arranged to make a statement that a younger less "well-respected" young woman (she was pregnant) had already done by not giving up her seat on that city's bus).
If you look at what happen politically, historically in the 100 years up to the civil rights movement and when the civil rights movement happened, you can see why it happened when it did. Not that you could have peg the day 1955 when it would really take off but the conditions were in place. In the case of the civil rights movement, it may have even been the wealth of the nation, the jobs up north etc, as opposed to poverty/high food costs now part of issue in Egypt , that contributed to its contagion.
In every time there are those that work tirelessly, endlessly, valiantly to fight against injustices...only in sometimes are enough people inclined to join them in the struggle, enough to make change so that the heros of the time are remembered.
Five years ago, he could have burned himself and while everyone would have felt bad, made him a cause, nothing more may have happened.
Brother, that was some inspired writing. I'm just not sure what the point of it all was. Moreover, I'm going to assume that all this talk of sparks and fires is just an unintentional pun with regard to Bouazizi.
That said, a bit of free advice: when you try to make a metaphor, you need to understand both the subject itself and the thing you are comparing it to.
The Santa Ana winds come every year. So why do some years have worse fires than others? The answer is counterintuitive. The worst fires in California (and a lot of other places) generally happen after a wet winter. Why? Something called Green-up. More rain = more fine fuels (like grass) which greatly enhance what firefighers call the Rate of Spread.
Regarding Civil Rights: Actually, the amazing thing about the the South from 1865 - 1955 was how few incidents of resistance there actually were. This isn't politically correct to point out, but it is historically accurate. As far as Rosa Parks is concerned, she wasn't the spark in the manner of Bouazizi. She was the spark that got fanned. Google "Claudette Colvin." Ms Colvin refused to give her seat up on a bus almost a year before Rosa Parks. But she was deemed too dark, too pregnant and too unwed to become the Mother of the Civil Rights Movement. You can, as they say, look it up.
If you really want a "spark" for the legal dismantlement of segregation, consider Lee Harvey Oswald. Again, it's counterintuitive. JFK was Go Slow on Civil Rights. By murdering JFK, Oswald (or whatever lone gunmen did the shooting) put a master legislator in the White House who understood the need to act, understood how to move the law, who could twist the arms of a lot of otherwise intransigent lawmakers, and who could wrap the bill around the casket of the dead President.
What do either of these things have to do with wise investing and geopolitics?
Nothing.
My point is a simple one: as far as wise investing is concerned, hedging is one thing, but we have to be wary of trying to predict or time singluar events. We have to be even more wary of ex post facto claims of wisdom regarding these events.
surprising how little resistance there was?! One could say it was surprising how littel resistance to the holocaust there was by the Jewish people...would that be fair, a correct criticism?
Reggie was polite...and you skip over huge things like Garvey movement etc. but obviously your schtick is to always be the one the smarter than everyone else rather than actually trying to suss out real actionable truths and analyses, so I guess this is discussion pointless.
One could say it was surprising how littel resistance to the holocaust there was by the Jewish people...would that be fair, a correct criticism?
1. Yes, one could. And while it might not be a "fair criticism" I ask you: would it be an accurate observation? By which criteria would you prefer to make economic decisions? I chose accuracy over sentiment.
2. This is not about what you want to believe. It's about whether your comparisons have anything to do with financial models and geopolitics.
3. Since we're now under the jurisdiction of Godwin's law, I'm going to have to bring this to a close. But not before
4. See #4 above, Middleton's Post.
You write as if you do not have black relatives from the South who could have told you how much resistance was given - or not. There was considerable resistance, particularly given the low socio-economic position of those who were resisting. Simply because it did not make it into the history books or was not broadcast in the radio or TV doesn't mean that Charlie Manigault, etc. was not beaten until an inch of his life for trying to stand up for his rigths or family. Be cautious judging history by what you read in history books. History tends to be written by the victor, remember that.
As for predicting events, many watershed events can be predicted because as MoneyMutt said, the actual cause of the event is more obvious than many are led to beleive. It is the impetus, the spark, which is difficutl to narrow down.
I try my best to remain objective and detached, and as a result I was able to see (and time with relative accuracy) the housing crash, the financial and market crash and the european debacle of the last few years. Of course, I am not perfect, hence I thoroughly underestimated the depth and the breadth of the '09 bull run - primarily becuase it was not supported by fundamentals - practically at all.
The contagion illustrated above, is not so much prediction but followng the math and the logic. While the impetus is hard to pin down hence I may have a problem pinpointing exact countries, the poweder keg that is the excessive debt sitting on top of extreme socioecocnomic stratification and real time global macro experiments by the powers that be make it rather obvious that explosions are due to occur. The key is to measure the amount of gunpowder accurately in each keg (as well as otehr explosives and inflammatory substances) and then map the locations - whcih is what I have done above.
1. My history was written by John Hope Franklin
2. No one has said you haven't made some great calls. What does that have to do with any of this?
3. People and their actions cannot be measured like gunpowder. That's why they are so interesting.
4. Spell-check is your friend.
"Control oil and you control nations; control food and you control the people." Henry Kissinger, circa 1970
you should get a mac
Merkel is a walking disease factory herself. She.needs no help from egypt to start a contagion. I hope those secret talks are about.future rescue mechanisms after2012. She promised us current bonds are fully guaranteed. I suppose that was an empty.promise.
Love your work, Reggie, But I think I found an error.
The Actual, original definition of Realpolitik (as pioneered in the time of Bismark) is "LAND politics". As in, 'Real estate'. Which shows you that you can't rely on Wikipedia for linguistics, or any other non-pop subject.
Great work, Reggie, You're the man.
All eyes are on Egypt and it's shadow. I spent a summer hiking around Crete. The locals think of Egypt as a big brother, who is wise, and should be followed. I think that is motivating Egypt, that they are embarrassed by being out done by back water Tunisia. The mid east is finally being led by a leader, Egypt. This is a very big development. It could go anywhere.
I hope/wish you are right that the people of Egypt are what is really leading this. Some reports are that it could be coming from elsewhere.
The elimination of food vouchers originated with the IMF.
http://www.engdahl.oilgeopolitics.net/
Don't worry, Greece found a cave filled with gold and is buying back it's debt.
Ireland printed enough to fund the construction of a base on Mars that could house 100 million people
And the euro is now at 1.37
your hypothysis is totally wrong. the instability is caused by the taipan club, exerting covert market influence, after buying large blocks of exxon mobil. oil will hit $600 per barrel before inflation. glad we bought exxon also. the taipan club has deliberately and carefully started a jihad, where muslims will kill each other. the japanese royal family will be pissed when they find out.
http://covert2.wordpress.com
Good work Reggie. Unique and insightful.
Whoops! Mistaken identity...
http://www.flickr.com/photos/43216883@N08/5404666133/
Walk like an Egyptian...
I like Belgium's exposure in little old Ireland - WTF were they thinking - although a lot of that stuff could be in the IFSC building , who really knows.
Its becoming obvious that Dublin is at the centre of some of the worst crap in all of the Holy Roman Empire.
If the ECB does not expand its balance sheet by a extra tillion or so we are fucked.
Better yet - lets just incorporate the total euro M1 on their balance sheet - its well over 4 and a half trillion now , that should do the trick.
Many Belgians - especially from the minority French-speaking Wallonia - are descended from ancient Celtic tribes, fierce fighters whom Julius Caesar called the 'Belgae'. You can see the resemblance of some Belgians to some Irish people, reddish hair and facial features and so on, you might think they're Irish till you hear them speaking French.
Brussels has pubs named after Michael Collins and Éamon de Valera, too, with fine Irish whiskey, where locals can discover the John Powers and others.
As for the dodgy debt bonds ... well, Belgium has been very 'European' ...
They like to drink beer, we like to brew it.
So when a drunk Irish dude ask you for a few billion and explains the return to you while drunk
YOU JUST DO IT! YOU GIVE HIM ALL THE MONEY AND DOUBLE IT!!
Yes it could work , we don't own our drinks industry anyway - although paying us in super liquid currency has hints of the old opium trade - ah fuck it - we'll try anything once.
Excellent model Reggie - as always. My one suggestion would be to incorporate some of the modeling used in epidemiological research on how contagion spreads.
Ashes, ashes, we all fall down.