The Peanut Gallery

Statements, comments and forecasts that have no substance, but just might turn out to be relevant.

1."The yuan will keep depreciating as time goes by, so we should swap the money we have in hand into tangible assets," Li Xiaodong, chairman of Canaan Capital, tells his audience, while exhorting them to pull their money out of China while the going is still good and pour it into property in Spain and Portugal. Canaan Capital is one of a swarm of asset management firms leaping to profit from Beijing's latest policy headache: the swelling crowd of Chinese individuals and firms trying to get their money out of the world's second biggest economy as its growth slows to a quarter-century low. COMMENT: Another side effect of a slowing Chinese economy....the money is running. Follow the money.

2.Reuters: Apple Inc (AAPL.O) is expected to report a 1.3 percent increase in iPhone sales in the holiday quarter, its slowest ever and a far cry from the double-digit growth investors have come to expect. COMMENT: The competition is catching up with Apple. They will either have to lower prices or possibly introduce monthly payment plans in conjunction with the larger telephone co's.

3.Stratfor: India is the world's largest defense importer, accounting for 15 percent of all global imports over the past five years. However, the primary source of these weapons may soon change. Russia has long had privileged access to the Indian market, providing some 70 percent of India's weapons in volume over the last half decade. However, even as India invests heavily in upgrading and modernizing its armed forces, several pending deals between Moscow and New Delhi have stalled. COMMENT: As if Russia does not have enough problems.

4. Bloomberg: After years of lambasting other countries for helping rich Americans hide their money offshore, the U.S. is emerging as a leading tax and secrecy haven for rich foreigners. By resisting new global disclosure standards, the U.S. is creating a hot new market, becoming the go-to place to stash foreign wealth. Everyone from London lawyers to Swiss trust companies is getting in on the act, helping the world’s rich move accounts from places like the Bahamas and the British Virgin Islands to Nevada, Wyoming, and South Dakota. COMMENT: Clearly when you are king of the jungle, nobody argues with you. At the moment North America is the safest geopolitical continent to keep ones fortune safe...tax free!

5.According to an unnamed official, Sweden plans to expel up to 80,000 immigrants seeking asylum, AFP reported Jan. 27. Details are still emerging about the timing of the potential move, which was leaked to the public just a day after a Swedish aid worker was stabbed to death by a fifteen-year-old boy at the center for young refugees where she worked. Sweden's plan would fall in line with the actions of many European countries that have recently taken steps to limit or stop the flow of migrants across their borders. COMMENT: Looks like liberal Sweden are starting to feel the heat in the real world. Maybe they should ask Trudeau to take them.

6.Exactly five years ago the western liberal media and their messiah, Barack Obama, announced to the world that the great liberal revolutions of the Middle East had at long last begun. They labelled it with a romantic Hollywood title "The Arab Spring". That was then and this is now five years later. According to the UN, over 250,000 people have died in the Syrian civil war. Iraq has become a sectarian battleground on the verge of splitting into three parts. Yemen and Libya are failed states. The Islamic State has evolved from a terrorist group to a budding totalitarian religious state that controls wide swaths of territory and has thus far withstood all the hot air and airstrikes that the West and Russia have thrown at it. Millions of refugees of the conflicts are pouring into Europe and wherever else they can find safe harbour. COMMENT: Now thats one for the Obama legacy.

7.Shares of Italian banks continued to fall Jan. 28, a day after Italy reached a deal on debt with the European Commission, ANSA reported. By midday, the FTSE Italia All-Share Banks index had declined 5.3 percent. Trading of shares at a number of banks, including Banca Popolare di Miliano, UniCredit, Monte Paschi and Banca Popolare dell'Emilia Romagna, was halted after declining 5 percent or more. COMMENT: Watch for more fallout in this crisis. Italy is much larger than Greece.

8.Dark clouds on the horizon. Informed (or possibly uninformed) sources are indicating that a Turkish - US initiative to invade Northern Syria is in the offing. The Turks would supply the ground forces while the US would provide air cover. The Turks would then join local militia and create a buffer against ISIS and against Kurdish forces also battling ISIS. The potential flashpoint is a possible Russian alliance with the Kurds and a confrontation with Turkish-US forces (BTW both sides battling ISIS). Comment: Quite the salad on this menu.

Politics is not a game for naive thinkers. You may go in as an idealist, but you certainly won't come out as one - Honeysuckle Weeks

The herd instinct among forecasters makes sheep look like independent thinkers -Edgar Fiedler

Beware when the Great God lets loose a thinker on this planet - Ralph Waldo Emerson

Preposterous Predictions 2016

If we get 7 out of 10 predictions correct that would be pretty good.      

Lets follow the money and the refugees

1.Stock markets and investors have become accustomed to markets continually recovering as a result of central bank manipulations. This will end in 2016 as markets come to terms with reality. The international credit bubble created as a result of the 2008 crisis will slowly disintegrate, punctured by collapsing raw materials demand and the demise of the oil market. The economic downturn will have a profound effect on our world and we predict a primary bear market in stocks and the continuation of the primary bull market in the US Dollar.

2.The slowdown in China will continue at an increased pace. Potentially China can go one of two ways. Either it breaks down into separately governed regions (Coastal vs Inland) or a ruthless dictatorship will attempt to control economic dissatisfaction within the Chinese population. The Chinese currency (the Yuan) will continue to be devalued in an attempt to jumpstart fading Chinese exports.

3.Historically the movement of refugees has created new geopolitical realities. The mass movement of refugees from unstable regions into the European Union is a geopolitical weapon of change that will create political, economic and violent chaos. Anti-immigration and anti-EU parties will strengthen and the movement towards fragmentation will be reflected in the value of the European symbol of unity, the Euro.

4.The Italian banking system will come under serious pressure this year accompanied by friction between old enemies France and Germany.  All it takes are a few terrorist attacks to understand that the so-called liberal European multi-culturism is just a cover for a deeper and darker psyche lurking in the shadows.

5.Russia will weather an economic meltdown (the Russian people are made of sterner stuff than most) as its ruble crumbles, but not without chaotic conditions amongst neighbouring countries who rely on Russian support (and energy) for their economic wellbeing. Russia will also have to overcome an AIDS epidemic of major proportions.

6. Apple will lose its shine as competing companies close the technological gap. They might even have to consider lowering their prices.

7.Regardless of who the candidates might be, the Republicans will take the White House this year. President Obama's naive foreign policy of shaking hands with a crocodile, his alienation of US allies, his creation of a massive debt bubble and his inability to unite the American people will signal the demise of big government for the near and distant future. As for his legacy....need I say more?

8.Climate change will have positive (yes, positive) and negative results as the trend continues. Countries like Canada and parts of the US and Europe will definitely have the advantage, whereas parts of the Middle East and Africa (Yemen, Syria, Iraq, Libya, Algeria, Sudan and others) will continue to pay the price.

9. Islam will continue to implode leading to a Sunni-Shiite face off. The violence being the product of dictatorships, religious fanaticism and the inability by over a billion people to compete economically. The stream of refugees will turn into a flood creating change wherever they flow.

10.North and South America will be the least affected by the refugee fallout, being continents geographically insulated from the deluge. Unless of course some politician decides to play saviour and opens the door.

11.Last year I wrote about Israel..."Israel is always at number 11 and outside the ten forecasts. Why you may ask? Israel from year to year remains a shining light to the world, regardless of the tinted sunglasses with which some may view this." This year all that is needed is to "copy and paste"

Humanity has survived worse - Anonymous

Yesterday's answer has nothing to do with todays problem - Bill Gates