Throughout most of my career geopolitical noise was something that only temporarily affected markets unless there was an actual threat of war. I think unfortunately (I hope that I am wrong) we are very close to things going hot in the Ukraine. I believe that the Washington power brokers have left Putin no choice but to enter the Ukraine and annex it.
Let me explain. To all but the dimwitted, the coup in Ukraine was a joint Nato/CIA backed operation to isolate Russia and enrich the West. Putin has held back because he has been trying to build a case with the EU that it is in their best interests to resist the overtures of the West. He is openly telling anyone who will listen to move away from the dollar and the associated issues that come with it. With the downing of flight MH17 the demonization process of Putin has begun. I don’t really care who shot down the plane, the point is it has happened and the Western media has decided to try and convict Putin in the court of public opinion. The idea is to convince the EU members to go along with our sanctions and turn up the heat. Sanctions from the EU would hurt the already ailing Russian economy very badly. Washington thinks they now have the upper hand against Putin. However, Putin knows that Obama has very low approval in the US and abroad. He also knows that we have been downsizing our military and we have extended ourselves all over the world. The comments today from Obama were timid and weak. Putin knows that the US people have no stomach for more war. I think he makes his move soon and it will catch the US and the world by surprise. The best defense is a good offense.
Obviously if this happens I think the markets tank but let the market be your guide. It will likely sniff this out and break down in anticipation of Putin’s move. If we start melting up then I am wrong. Again I hope that I am wrong. War is awful and I don’t want to see it happen.
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This analysis makes perfect sense. Follow the money. Short stocks, long Precious Metals will be the way to go very soon.
What absolute inane drivel.
I absolutely agree with your analysis of the situation ..
Interesting times ..
I think the invasion of Ukraine will be more a function of the sanctions killing the Russian commoner. Putin will use his approval rating and the problems and create a bogey man for the invasion, thus taking the misery off the minds of the Russian people.
This is one of the very few attempted analysis of the Ukriane where someone actually shows no bias and tries to connect the dots and come up with a logical analysis of what’s really going on here. IMHO Ukraine joining NATO is the deal breaker. I just hope your end game is wrong. Good job.
Long the pms of course but I think shorting us equities should be by proxy via some sorts of derivative products because it just seems like the algos squeeze every short following downturns.
Also silver is the most conductive metal so barring a complete industrial collapse it will have continually increased demand.
The EU is unlikely to impose any further sanctions on Russia for this reason:
% of gas supplied by Russia:
EU: 30% Germany: 40% France: 18% Italy: 20% via @cnni h/t: @sobata416
https://pbs.twimg.com/media/BtKK24sCIAEtdb5.jpg:large
Wow – this reads like a hollywood movie.
So Americancentric. Why would the EU give two shits about what the U.S wants. Germany (EU biggest economy) just booted out a top CIA operative. The Germans run the bank – they run the EU. There is massive trade both ways between Russia and EU. Good luck with your movie script writing!
Clawhandle,
The EU’s military protection comes from us. They listen to us but not as much as they used to. The US underestimated the EU’s lack of willingness to go along with sanctions due to economic ties. This plane incident came along “coincidentally” to help gin up support for the sanctions. It remains to be seen if that actually works.
Yes, the EU does rely on the military might of the U.S as do many of U.S allies. However, an armed military conflict between Russia and the EU/U.S will never happen. Putin is a two bit gangsta not a lunatic like Kim Jon Un. I don’t think he would be silly enough to escalate into outright military conflict with EU/U.S
Remember the Russians are the best chess players in the world.
rotfl @ russia annexing ukraine after the incident. seriously .
Clawhandle,
I agree Russians are great chess players. However, I think as we continue our insane policy we are backing the russians into a corner. Also do you find it interesting that the Fed decided to leak the news about DB being a mess yesterday. The wording was very harsh and disturbing. I am hearing the Germans want no part of this nonsense. Is this a subtle threat or am I just reaching? The timing was just uncanny.
blue:
i was making that same point yesterday. does anyone really think any of the euro banks are in good shape. is it coincidence these latest fines have been largely on euro banks? they want nothing to do w/ further sanctions against russia per my post/pic yesterday. we are trying to force their hand.
furthermore, check out the performance of Euro Banks this year:
h/t: @mktoutperform
https://pbs.twimg.com/media/BtEvO-UCEAAp45n.png:large
bc21
The euro banks are all insolvent. It is clear to me the markets are not longer free but are part of a complex global game of chess. The question is will market forces reassert themselves. Since 2009 this is not the market I grew up in. I hate to say this but the US needs proxy wars to keep the ponzi scheme going. However, lets figure out how to make money. Very tough market.
This is all just noise albeit an interesting sideshow. Sooner or later Russian oligarchs who are probably bleeding hard about now will force Putin to reign it in a bit. Euro banks are in terrible shape but they will always be backstopped by the ECB. Make money by riding the bull gravy train. The same train that’s been chugging for the past five years. Markets will normalize/correct when rates go up. No point trying to anticipate this now.
Clawhandle,
I was a bull until January.
“Markets will normalize/correct when rates go up.”
this view/theory is simply flawed. you really believe that is what everyone is sitting around waiting for?
and the no-recession w/o an inverted yield curve mantra has been more than disproved here:
http://www.zerohedge.com/news/2014-07-09/destroying-recessions-cant-happen-without-yield-curve-inversion-myth
and here:
http://www.acting-man.com/?p=31732
blue:
things heating up in EUR? any wonder why Germany/France undecided? lol
http://www.zerohedge.com/news/2014-07-24/european-leaders-tentatively-unveil-potential-russian-sanctions
Are you Tyler Durden in disguise? Please go back to ZH and stop posting this irrelevant conspiracy theory nonsense that has no basis in fact. Do you base your investments on this type of analysis?
BC21 – Look at your history books and use some common sense (if you have any). If rates (yields) rise to say 8% why would I allocate all of my money into risk assets such as the stock market, when I can receive a risk free return of 8%. Something else you have probably never witnessed is that yields can rise very quickly thus the stock market rug pull catches chumps like you.
claw:
not sure that even warrants a response. i’ll just say i’m very well versed on any topic i’ve posted.. but give a quick check on the chart posted as to where rates were in 37. and also, when it’s obvious to everyone, it’s obviously wrong.
Tangent: At 16% during Carter no one wanted to buy debt. At 3% no one wants debt. With rates set to move higher, no one wants to be stuck with debt. There’s no market for Russian debt, and Russia’s got commodities, including gold – so how does Russia run its finances for the foreseeable future? Where is the Russia/Ukraine/Europe inflationary pressure? Looks like we’re looking at Irish bonds as safe, Portugese and Greek bonds as the medium term parking spot to watch, and German business to pull back from US markets – a prime demonstration of the law of unintended consequences in action. So, on a relative basis, it’s all eyes on Asia, with a glance at Africa.