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Reflections on Terrorism
The events of 9/11/2001 were the deadliest terrorist attack in world history and the most devastating foreign attack on U.S. soil since Pearl Harbor. There was great fear at the time that additional attacks were almost certain; however, as time has passed, it appears that 9/11 was an outlier.
What’s Putin up to?
Over the past few months, Russian President Vladimir Putin has been unusually active on multiple fronts. He has expanded military operations in the Middle East in support of Syrian President Assad, boosted troop strength on the Ukrainian border and conducted a major purge and restructuring of the Russian government.
The Turkish Coup, Part III
Last week, we recounted the events of Turkey’s recent coup and some of our thoughts about why the coup failed and who was behind it. This week we will discuss the unfolding purge, including the role of Fethullah Gulen, and discuss the impact on regional geopolitics. In this week’s report, we will examine the market effects of the coup and its aftermath.
The Turkish Coup, Part II
Last week, we began a three-part series on the attempted Turkish coup that started on Friday, July 15. In Part I, we examined Turkey’s history to frame the historical conditions that affected the failed coup. As promised, this week’s report will discuss the actual coup. Next week we will conclude this series with a look at the post-coup purge, the likely path forward for Turkey and the impact of the coup on the Turkish economy and geopolitics.
The Turkish Coup, Part I
On July 15, reports out of Turkey suggested a coup was in progress. It became clear that elements of the Turkish security services were attempting to oust President Erdogan. As the hours wore on, a countercoup was launched by supporters of Erdogan and the tide turned. By the next day, the coup had failed. In light of the coup and the potential changes that may be occurring for a key U.S. ally in a volatile region, we believe a detailed examination of this event is in order and are publishing a three-part report on the coup. This week we examine the failed coup within the historical context of Turkey.
Meet Theresa May
On Monday, July 11, U.K. Energy Minister Andrea Leadsom withdrew from the race for prime minister. The Tories decided to end the leadership contest with Leadsom’s exit, giving the PM job to Theresa May. She officially took over the role on Wednesday, July 13. In this report, we will begin with a discussion of how she won.
Post-Brexit
On June 23rd, voters in the U.K. shocked global markets by voting to leave the EU. In this report, we will examine the various paths the country may take in the coming months with regard to this issue, discuss the political lessons learned and the impact Brexit will have on other European nations. As always, we will conclude with the potential impact on markets.
The 2016 Mid-Year Geopolitical Outlook
As is our custom, we update our geopolitical outlook for the remainder of the year as the first half comes to a close. This report is less a series of predictions as it is a list of potential geopolitical issues that we believe will dominate the international landscape for the rest of the year. It is not designed to be exhaustive; instead, it focuses on the "big picture" conditions that we believe will affect policy and markets going forward. They are listed in order of importance: the Rise of Populism, the U.S. Elections, the South China Sea, Lone Wolf Islamic Terrorism and the New Oil World.
The Real Risk of Brexit
Earlier this year, we presented an analysis of Brexit and discussed potential risks to the U.K. political system and economy from leaving the EU. However, there is also an under appreciated risk to the EU. The problem can be summed up in this question—what if the U.K. leaves the EU and prospers? This has the potential to be a major problem for the postwar European political environment. In this report, we discuss the role of the EU in shaping the European postwar geopolitical environment and the multiple threats Britain’s exit presents for the EU. We conclude with the impact on financial and commodity markets.
The Trade Facilitation and Trade Enforcement Act
Obama recently signed the Trade Facilitation and Trade Enforcement Act, a broad refresh of US trade laws. Title VII concerns exchange rate and economic policies. The earlier law from 1988 required the Treasury to determine if a nation was manipulating its exchange rate. In reality, being designated a manipulator didn’t trigger significant penalties. In this report, we discuss the history of exchange rate issues in trade, the new legislation and its potential impact on US trading partners. We review the reserve currency role and explain why this role almost precludes any effective trade policy designed to punish foreign trade practices, reflecting on the new law in light of the current political situation in the US.
Sykes-Picot: 100 Years Later
Last week marked the 100th anniversary of the Sykes-Picot Agreement, which divided the disintegrating Ottoman Empire territories in the Middle East into British- and French-controlled areas following WWI. One hundred years after the agreement, the effects of the borders continue to reverberate as the region remains unstable. The Middle East has a rich and complex history that could fill several volumes of books. Although we will give a condensed overview of the region’s long history, we focus on the WWI time period, specifically the circumstances that led to the Sykes-Picot Agreement.
The Geopolitics of Helicopter Money: Part 3
Two weeks ago, we described the process of “monetary funded fiscal spending” (MFFS), including a discussion of why it might be implemented, how it would work and the potential problems that could come with using it. Last week, we examined two historical examples where forms of MFFS were implemented, Japan in the 1930s and the U.S. during WWII. In the final segment of this series, we will make some observations based on the historical examples discussed last week. We will then discuss the likelihood of MFFS being deployed in today’s world, focusing on which nation is most inclined to use it.
The Geopolitics of Helicopter Money: Part 2
Last week, we described in some detail the process of “monetary funded fiscal spending” (MFFS). Part 1 of this series included a discussion of why MFFS might be implemented, how it would work and the potential problems that come with using it. In this week’s report, we will examine two historical examples where forms of MFFS were implemented, Japan in the 1930s and the U.S. during WWII. Next week, we will conclude the final report of the series with market ramifications.
The Geopolitics of Helicopter Money: Part 1
Since 2008, developed economy central banks have been implementing unconventional policy measures. Although they likely prevented deeper financial calamity, the central banks’ actions have not led to strong economic recovery. One remaining policy virtually guaranteed to lift inflation and would likely boost growth is to use monetary policy to directly fund fiscal spending, called “monetary funded fiscal spending” (MFFS) and often referred to as “helicopter money.” However, it’s a potentially dangerous policy appropriate only in the most extreme circumstances. In Part 1, we describe MFFS and barriers to its use.
The Impeachment Proceedings of Dilma Rousseff
Brazil’s lower house recently voted to impeach President Dilma Rousseff. The process now moves to the Senate, which is expected to vote in the next few weeks. For almost a year, Rousseff’s opposition has been trying to impeach her for allegedly manipulating the government budget in 2014. A Senate majority vote to impeach could remove her from power, installing her vice president, Michel Temer, as president. This week we look at the circumstances that have led to the Brazilian presidential impeachment proceedings, Brazil’s recent political history and its economic development.
Nagorno-Karabakh
In early April, fighting erupted in the region around Nagorno-Karabakh, a disputed area within Azerbaijan but controlled by Armenia. This region is considered one of the world’s “frozen conflicts,” experiencing periodic unrest. In this report, we discuss the history and geopolitics of the Caucasus region. We examine how the three nations in the area—Georgia, Azerbaijan and Armenia—have evolved, and how the three larger surrounding powers—Iran, Russia and Turkey—affect the region. Finally, we discuss why this conflict could become a concern for the world, especially the U.S.
Intergenerational Forgetfulness
Recent candidates have made foreign policy statements that signal significant change, displaying ignorance about why current policies are in place and what could occur if they are radically changed. We believe these calls are the result of “intergenerational forgetfulness.” When policymakers implement an initial policy, they tell their successors why such policies were deployed. Eventually, younger policymakers reverse course, only to discover later why the original policy was made. We examine the increasing disenchantment with current policy as an example of intergenerational forgetfulness.
The Archetypes of American Foreign Policy: A Reprise
In this report, we briefly describe and discuss the four archetypes of American foreign policy as detailed in Walter Russell Meade’s book, Special Providence. By using these archetypes of American foreign policy, one can more easily anticipate how a candidate might act if they were to occupy the Oval Office. With presidential elections less than eight months away, I hope this discussion will assist readers in examining the candidates and their potential foreign policy positions, using these archetypes as a guide. The report concludes with my characterization of the current leading candidates.
The Russian Withdrawal
On March 14, Russian President Vladimir Putin surprised the world with an announcement of the withdrawal of Russian troops from Syria. The move was unexpected and has raised questions as to whether Russia will really pull its forces out of Syria, and if so, why? In this report, we will examine Russia's initial decision to place forces in Syria and discuss if Putin really means to remove his troops from the country. We will examine what might have prompted the decision to announce the withdrawal and, as always, discuss the market implications of the decision.
The Apple Problem
In December, Syed Rizwan Farook and his wife attacked a San Bernardino county facility, killing 14 people and injuring 22 others. The FBI discovered an Apple iPhone that was used by Farook but owned by the county. The encryption built into the device prevented authorities from accessing its data. The government has sued Apple to circumvent its security, but Apple has refused. We discuss the attack, compare and contrast the legal positions of both parties, and frame the issue using the U.S. Constitution, examining the tensions between the Bill of Rights and the conflicts presented by wartime.
The Iranian Elections
On February 26, Iran held two elections, one for parliament and the other for the Council of Experts. The former is Iran’s legislative body, and the latter is the part of government that monitors the Supreme Leader and selects his replacement if he dies, becomes incapacitated or is removed. Since the 1979 revolution, Iran has not held these two elections simultaneously. The results favored moderate candidates and rejected the most hardline factions. In this report, we discuss the structure of the Iranian government, examine the results of the elections and analyze their impact.
Brexit
Despite the EU’s founding premise that members should seek an ever closer union, the U.K. is questioning the net benefits of its membership. Following a recent increase in public opinion asking to separate from the EU, U.K. Prime Minister David Cameron set a referendum on membership for June 23. Cameron supports remaining in the EU; however, several other highly visible members of the Conservative Party have stepped out in support of leaving the EU. In this week’s report, we will take a look at the main factors leading to the call for Brexit and their impact on the economy and the markets.
The 2016 Election: An Update
Two years ago we wrote a series on the 2016 election where we suggested rising discontent among the electorate could increase the odds of a president that turns the US away from the superpower role. Some of these trends have come to pass and the underlying cause of discord we identified appear to be the driving force in the current political turmoil.
Russia's Struggles
Over the past year, Russia has faced a growing number of challenges that have the potential to weaken President Putin’s hold on the reins of power. In this report, we will discuss recent trends in the country, including the economic problems caused by falling oil prices and the military operations occurring in Ukraine and Syria. We will examine the Putin government’s responses to these issues. As always, we will conclude with market ramifications.
Italy's Banking Crisis
On January 1, the EU implemented a new bank restructuring directive. The new and stricter rules are aimed at forcing private stock, bond and deposit holders to accept losses before public funds would be used in a bank restructuring. Although all EU countries are affected, Italy remains of particular concern due to the number of distressed loans in the country. This week, we look at the overall health of Italy’s banking system as well as its nonperforming loan problem.
The Saudi Executions
On January 2, Saudi Arabia executed 47 people accused of various crimes against the state; 46 were Sunni jihadist radicals and one was a Shiite cleric, whose execution set off protests in Iran and the Saudi embassy in Tehran was sacked. In response, the Saudis broke off diplomatic relations with Iran and several other Sunni nations have either followed suit in breaking off relations or recalled ambassadors in protest. These executions are the result of many important trends affecting Saudi Arabia and the Middle East. In this report, we discuss the executions and the signals they send.
The 2016 Geopolitical Outlook
As is our custom, we close out the current year with our outlook for the next one. This report is less a series of predictions as it is a list of potential geopolitical issues that we believe will dominate the international landscape in the upcoming year. It is not designed to be exhaustive; instead, it focuses on the “big picture” conditions that we believe will affect policy and markets going forward. They are listed in order of importance: the Election Transition, Western Populism, Small-Scale Islamic Terrorism, the Weakening of the European Union, and Trouble in the South China Sea.
The Evolution of IS
An IS affiliate downed a Russian flight in October. In November, IS-affiliated terrorists launched a series of attacks in Paris. These two events suggest a significant change in IS’s behavior. Prior to the Paris attacks, IS appeared focused on building a caliphate in Syria and Iraq. The shift to terrorist acts suggests a new strategy. In this report, we recap the strategies radical jihadists have employed against the West, highlighting the differences between al Qaeda and IS.
Putin and Flight 9268
On October 31, Russian Flight 9268 took off from Sharm el-Sheikh, Egypt, en route to St. Petersburg, Russia. Within 25 minutes, the aircraft had reached its cruising altitude and disappeared from radar over central Sinai. Shortly thereafter, airplane debris was reported over the area. All 224 passengers and crew were lost, making it the worst Russian civilian air disaster in history. In this report, we examine the potential causes of this event. Given that a terrorist group may be the culprit, we discuss the most likely perpetrator and analyze how Russian President Putin will likely react.
Political Turmoil in Portugal
Portugal held parliamentary elections in which the incumbent center-right Social Democratic Party received the most votes but fell short of an outright majority. The president tasked the party with forming a government. However, the center-left opposition party and some far-left parties have formed a coalition, together garnering a majority of votes and currently awaiting presidential approval to form a government and take control from the center-right party. This week, we look at Portugal’s current political environment, election results, change in coalition powers and path going forward.
The Obama Doctrine: Moneyball America
Over the past three years, we have witnessed what appears to be a steady erosion of American power. In this report, we will examine President Obama’s foreign policy, using the construct of Ian Bremmer’s recent book, Superpower. After discussing President Obama’s foreign policy and the potential effects, we will examine how the next president may shift from the current policy. As always, we will conclude with potential market ramifications.
The TPP
On October 6, trade negotiators announced a final agreement for the Trans-Pacific Partnership (TPP), a multilateral trade deal between 12 Pacific Rim nations in both the eastern and western hemispheres. In this report, we will begin by discussing the nations involved. We will examine some of the details of the treaty. An analysis of the geopolitics will follow along with a look at specific political factors surrounding the treaty. As always, we will conclude with potential market ramifications.
Catalonia, a New State within Europe?
“Catalonia, a new state within Europe” is the slogan of the pro-independence movement in the Spanish region of Catalonia. The federal government has made it clear that it will not hold secession negotiations and, in fact, even holding an independence referendum is considered unconstitutional. This week, we look at the separatist movement in Catalonia, starting with a brief overview of the region’s history and politics. We explore the probability of independence, the potential future relationship between the region and the central government, and the roles of the EU and the Eurozone.
Putin and Syria
Last month, Russia moved a significant amount of military hardware into areas of Syria controlled by the Assad regime. The action caught the Obama administration by surprise and raises questions about what Russian President Putin is trying to accomplish. In this report, we will examine Russia’s short-term geostrategic goals and the tactics Putin is using to achieve these aims. As always, we will conclude with potential market ramifications.
El Niño Update
Meteorologists have been calling for an El Niño event since last year. Current forecasts place the likelihood of an El Niño this winter at over 90%. Water temperatures in the Pacific, one of the first signs of a looming El Niño, have measured much higher than normal. In fact, water temperatures have been on par with the most severe El Niño event from the past 30 years. This report looks at how an El Niño develops and its possible climate, economic and geopolitical effects on the global economy. As always, we outline the potential investment implications of this event.
Meet Jeremy Corbyn
On September 12, Jeremy Corbyn, a longtime Member of Parliament, was elected as the new leader of the UK’s Labour Party. In this report, we begin with a short biography of Corbyn followed by a description of how he won his party’s leadership role. With this background, we explore Corbyn’s long held policy positions and their potential impact on UK policy. We offer our reflections on Corbyn’s win, including an examination within the context of other political developments in the West. As always, we conclude with potential market ramifications.
Bremmer’s Choices
Last week, we wrote our first formal book review as a Weekly Geopolitical Report. The book, Superpower: Three Choices for America’s Role in the World, is a recently published book by Ian Bremmer in which he discusses three models for American foreign policy. In our closing comments last week, we promised to take a deeper look at Bremmer’s foreign policy models to examine their costs and benefits. In this report, we analyze his three models of exercising the superpower role, Indispensable America, Independent America and Moneyball America, and discuss which model is the most likely choice.
Superpower
Our subject is a new book titled Superpower: Three Choices for America’s Role in the World, by Ian Bremmer, a political scientist who writes often on geopolitical issues. At some point, the US will need to select a workable foreign policy for the post-Cold War era and determine how to handle the superpower role. In this report, we review Bremmer’s book, starting with his premise that no president since the fall of the Berlin Wall has developed a coherent foreign policy.
Donald and Bernie
In this report, we recap the economic and political factors that led us to conclude in previous reports from last year that the next presidential cycle could be unusually significant. From there, we look at the unlikely rise of Donald Trump and Bernie Sanders and what their success thus far signals about the electorate and the next presidential election. Finally, we analyze their potential impact on the election, including the possibility that each might mount an extra-party candidacy. As always, we conclude with market ramifications.
Turkey’s Predicament
It is our view that over the next few decades Turkey is well positioned to return to its status as a dominant regional power; however, the situation is much less clear in the near term. Turkey has been trying to run a foreign policy of having “no problems” with its neighbors. This stance has become impossible to maintain. Unfortunately for President Erdogan, Turkey is encircled by instability and is struggling to develop a response.
Reflections on the Iran Deal
Last month, the P5+1 and Iran concluded negotiations on a nuclear deal. In this report, we will offer some reflections on the agreement, including why it occurred, and the major reason why the U.S. negotiated this agreement and the underlying issues. As always, we will conclude with market ramifications.
Laudato Sí
Last week, the Vatican held a meeting of the mayors of some of the world’s largest cities to discuss climate change. This meeting was part of Pope Francis’s efforts to add to the discussion of climate change, which was the subject of a recent encyclical, Laudato Sí. In this report, we will begin with our position on climate change, discuss the encyclical and try to measure its potential impact on the direction of climate change policy. As always, we will conclude with market ramifications.
Imperial Germany
Last week, we analyzed the Greek/Eurozone negotiations using game theory as an explanatory tool. In this report, we will review the basic geopolitics of Europe, the political response and the evolution of the Eurozone. Using this background, we will examine Germany’s actions in the most recent Greek crisis. As always, we will conclude with market ramifications.
Greek Games: An Update
We update our views on the Greek situation using game theory as a theoretical construct. We used a similar construct in an earlier report on Greece but, in light of the referendum and subsequent negotiations, we believe that further clarification is necessary. And so, we will review the “game of chicken,” which we believe best describes this situation. We will then discuss in detail the particular aspects of this game and why it leads to rash and aggressive behaviors in participants.
Results 101–150
of 272 found.
