I am pleased to announce that I will name Robert C. O’Brien, currently serving as the very successful Special Presidential Envoy for Hostage Affairs at the State Department, as our new National Security Advisor. I have worked long & hard with Robert. He will do a great job!

— Donald J. Trump (@realDonaldTrump) September 18, 2019

According to the State Department's website, O'Brien has served in multiple administrations, and even once worked closely with John Bolton after being named the US representative to the 60th session of the UN General Assembly by George W Bush.

Robert C. O'Brien

* * *

Read his full biography below:

Ambassador Robert C. O’Brien serves as the Special Presidential Envoy for Hostage Affairs at the U.S. Department of State. Working for Secretary Pompeo, O’Brien leads the U.S. Government’s diplomatic efforts on overseas hostage-related matters. He works closely with the families of American hostages and advises the senior leadership of the U.S. Government on hostage issues. O’Brien also coordinates with the interagency Hostage Recovery Fusion Cell on the development and implementation of U.S. hostage recovery policy and strategy.

O’Brien previously served as Co-Chairman of the U.S. Department of State Public-Private Partnership for Justice Reform in Afghanistan under both Secretaries Rice and Clinton. The PPJRA promoted the rule of law by training Afghan judges, prosecutors and defense lawyers and provided scholarships for young Afghan lawyers to study in the U.S. From 2008 through 2011, O’Brien was a presidentially-appointed member of the U.S. Cultural Property Advisory Committee, which advises the federal government on issues relating to the trafficking of antiquities and other cultural items. In 2005, Mr. O’Brien was nominated by President George W. Bush and confirmed by the U.S. Senate to serve as a U.S. Representative to the 60th session of the United Nations General Assembly where he worked with Ambassador John Bolton. Earlier in his career, O’Brien served as a Senior Legal Officer for the UN Security Council commission that decided claims against Iraq arising out of the first Gulf War. O’Brien was a Major in the U.S. Army Reserve.

O’Brien is the co-founding partner of Larson O’Brien LLP in Los Angeles, a nationally recognized litigation firm. His law practice focuses on complex litigation and international arbitration. In addition to his client work, O’Brien has served as an arbitrator in over 20 international proceedings and he has been appointed by the federal courts to serve as a special master in numerous complex cases.

O’Brien is a graduate of the Boalt Hall School of Law at U.C. Berkeley. He received his B.A. degree in political science, cum laude, from UCLA. He is a member of the Pacific Council on International Policy.

* * *

Like Mitt Romney, whose campaign he worked on as an advisor, O'Brien is a mormon. And after he is confirmed, will be the highest ranking Mormon in the Trump Administration.

As many federal jobs remain unfilled, Trump didn't take long to nominate O'Brien, which suggests the administration already had him in mind, and that they only needed to vet him.

O'Brien has been involved in many high-profile incidents during the Trump years, including, most recently, the negotiations with Sweden over the fate of rapper A$AP Rocky.

This makes O’Brien the highest ranking Morman in the U.S. government https://t.co/ZN3QOsDHxL

— John Hudson (@John_Hudson) September 18, 2019

Back in 2017, O'Brien was reportedly considered to be Secretary of the Navy, but was instead nominated to his current position, and given the rank of ambassador one year later.

As reported by Reuters, on Sept. 17, German Vice Chancellor and Finance Minister Olaf Scholz said during a panel discussion in Berlin that Facebook’s planned crypto coin Libra will be clearly rejected. He said:

“We cannot accept a parallel currency. [...] You have to reject that clearly.” 

According to a document seen by Reuters, German regulators are working closely with their European and international allies to make sure stablecoins will not become alternatives to traditional currencies. The document reportedly read:

“The Federal Government will work at European and international level to ensure that stablecoins will not become an alternative to official currencies”

The German government has spoken out against Facebook’s Libra project before. On Sept. 13, German parliamentarian Thomas Heilmann stated that the government will block projects like Libra, claiming that the authorities are not planning to allow any market-relevant private stablecoins, following in France’s footsteps.

Meanwhile, David Marcus, head of Calibra, was attempting to defuse Libra’s perceived threat to the global financial system yesterday.

Marcus pointed out during a meeting between Libra founders and 26 global central banks in Basel that Libra’s cryptocurrency project does not intend to form a new currency but rather build a “better payment network and system running on top of existing currencies” to deliver meaningful value to users over the globe. He emphasized that there is no new money creation, which will “strictly remain the province of sovereign Nations.”

Saudi Energy Minister Prince Abdulaziz bin Salman on Tuesday sought to reassure markets, saying the kingdom would restore its lost oil production by month-end having recovered supplies to customers to the levels they were prior to weekend attacks. "I would think a spike in oil prices will likely prove to be short-term given that the global economy isn’t doing too well," said Akira Takei, bond fund manager at Asset Management One.

Still, heightened geopolitical tensions underpinned oil as well as some safe-haven assets such as U.S. bonds. A U.S. official told Reuters on Tuesday the United States believes the attacks originated in southwestern Iran, an assessment that could further increase the rivalry between Tehran and Riyadh. Adding to uncertainties in the Middle East were exit polls from Israel’s election, which showed the race too close to call suggesting Prime Minister Benjamin Netanyahu’s fight for political survival could drag on.

At the same time, now that the record barrage of investment grade issuance is finally over, as are hedging rate locks, bonds rallied globally while stocks struggled for traction ahead of Wednesday's Fed decision, as the dollar rose.

In equities, European stocks traded without direction, with the Stocks 600 index swinging from a loss to a modest gain, led by utilities and oil companies.

A similar drift was observed earlier, when Asian stocks traded little changed as investors awaited the Fed's decision. Shares rose in China, but declined in Japan and Australia. The Topix dropped for the first time in nine days, ending its longest winning streak in almost two years. Electric appliance makers slid, with Sony Corp. being the biggest drag on the benchmark. Elsewhere, China’s Shanghai Composite Index gained as much as 0.6%, boosted by consumer stocks including Kweichow Moutai Co Ltd. and Foshan Haitian Flavouring & Food Company Ltd. India’s Sensex gained as much as 0.6% as market fears of higher oil prices were assuaged on signs Saudi Arabia is restoring production. The U.S. central bank is broadly expected to cut rates by 25 basis points Wednesday.

S&P 500 Index nudged lower, once again hugging the 3,000 line as Fedex shares plunged in pre-market trading after the company slashed its profit outlook, blaming a global economy weakened by trade tensions.

Looking at today's main event, in which Fed officials are widely expected to cut their benchmark rate by a quarter-point, some investors such as DoubleLine Capital’s Jeffrey Gundlach are saying the central bank may also boost its balance sheet launching what we dubbed "QE Lite" to stabilize the volatile repo market. Traders also are keeping an eye on whether a potential oil shortage weighs on the global economy, and on preparations by the U.S. and China for top officials to meet on trade in October.

“Markets are currently almost pricing in three more rate cuts by the end of next year, including one by the end of this year, but the chances are that the Fed’s stance will be more hawkish than markets and we could see a rise in bond yields in the near term,” said Masahiko Loo, portfolio manager at Alliance Bernstein.

“Markets want to hear that the Fed is there if needed, the Fed is a backstop,” Alec Young, managing director for global markets research at FTSE Russell, told Bloomberg TV. “There is concern, obviously, from trade, manufacturing, and we’re seeing that bleed into some job-growth weakness, and these are all the big questions that Chairman Powell is going to be getting.”

Further complicating the Fed's discussions, short-term U.S. interest rates shot up this week, with overnight repo rates rising to 7%, due largely to seasonal factors such as huge payments for taxes and bond supply. That prompted the New York Fed to conduct its first repo operation in more than a decade to inject funds to stressed money markets.

The New York Federal Reserve said late Tuesday it would conduct a repurchase agreement operation early on Wednesday “in order to help maintain the federal funds rate within the target range of” 2.00% to 2.25%. Jeffrey Gundlach, chief executive of DoubleLine Capital, said on Tuesday that the repo market squeeze makes it more likely that the Federal Reserve will resume expansion of its balance sheet “pretty soon.”

In FX, the dollar gained against all peers, paring most of Tuesday's losses, as money markets remained on edge and traders awaited Wednesday’s Federal Reserve policy decision. The pound retreated from the almost two- month high reached Tuesday; the currency was hit by inflation data and increasing pessimism of the Brexit deal being reached before the Oct. 31 deadline. The Norwegian krone was at the center of attention in the G-10, given that it risks volatility around its central bank decision on Thursday. Sterling traded at $1.2483, down 0.1% so far on the day, having hit a two-month high of $1.2528 as investors reversed their bets against the currency on fear of a no-deal Brexit at the end of next month.

Gold was mostly flat at $1,502.10, while the 10-year U.S. Treasuries yield fell to 1.799%, compared with Friday’s 1-1/2-month high of 1.908% ahead of the Fed’s policy announcement on Wednesday.

Expected data include mortgage applications and housing starts. General Mills will report earnings.

Market Snapshot

• S&P 500 futures down 0.1% to 3,003.25


• STOXX Europe 600 up 0.08% to 389.66


• MXAP down 0.1% to 158.87


• MXAPJ up 0.06% to 511.04


• Nikkei down 0.2% to 21,960.71


• Topix down 0.5% to 1,606.62


• Hang Seng Index down 0.1% to 26,754.12


• Shanghai Composite up 0.3% to 2,985.66


• Sensex up 0.3% to 36,576.19


• Australia S&P/ASX 200 down 0.2% to 6,681.59


• Kospi up 0.4% to 2,070.73


• German 10Y yield fell 2.2 bps to -0.496%


• Euro down 0.2% to $1.1053


• Italian 10Y yield rose 7.7 bps to 0.581%


• Spanish 10Y yield fell 1.9 bps to 0.267%


• Brent futures down 1% to $63.91/bbl


• Gold spot little changed at $1,501.66


• U.S. Dollar Index up 0.2% to 98.41

Top Overnight Headlines from Bloomberg

• The Fed bought $53.2 billion of U.S. securities on Tuesday to quell a liquidity squeeze, and said it would conduct another overnight repo operation of up to $75 billion Wednesday morning; the moves had markets reeling and underscored just how deep the structural problems in U.S. money markets have become


• Under pressure from Wall Street and President Donald Trump, the Fed is widely expected to reduce interest rates, but its sharply divided policy panel may be reluctant to forecast further cuts


• Saudi Arabia reassured anxious customers that crude exports will keep flowing as normal and its industry can recover quickly from the worst attack in its history; the kingdom restored about half of pre-attack capacity at the crucial Abqaiq facility


• European Commission President Jean-Claude Juncker said the risk of a no-deal Brexit on Oct. 31 is now “palpable,” sparking a drop in the pound; he said the main sticking point continued to be the so-called backstop to avoid a hard Irish border and demanded that the U.K. provide its proposals for an alternative in written form as soon as possible


• Benjamin Netanyahu’s gamble to hold elections for a second time this year backfired after a stunning deadlock left Israel rudderless and convulsed by a new wave of political turmoil

Asian equity markets traded tentatively following the cautious gains on Wall St amid positioning heading into a flurry of central bank activity including the FOMC decision where the Fed are expected to deliver a consecutive 25bps cut. ASX 200 (-0.2%) and Nikkei 225 (-0.2%) were indecisive ahead of the looming risk events and with Australia subdued by losses in the energy sector after an aggressive pullback in oil prices due to reports Saudi oil output will return to normal levels quicker than initially anticipated, while the Japanese benchmark remained at the whim of a choppy currency amid somewhat inconclusive data which showed Exports contracted for a 9th consecutive month albeit at a narrower than expected decline. Hang Seng (-0.1%) and Shanghai Comp. (+0.3%) conformed to the holding pattern seen across regional and global counterparts after the PBoC opted for a net neutral position in its liquidity operations and after President Trump reverted back to a blasé approach on US-China trade in which he suggested a deal could come soon, possibly before the 2020 election or after. Finally, 10yr JGBs initially continued to oscillate around the 154.00 level as the BoJ kick-started its 2-day policy meeting, although prices eventually gained traction after tripping stops through this week’s resistance levels and largely ignored the mostly weaker 20yr JGB auction results.

Top Asian News

• An Army of Japanese Salarymen Is Rocking Global Currency Markets


• Vietnam Becomes a Victim of Its Own Success in Trade War


• Profiting From Trade War, China Fund Jumps 54% in First Year


• London Trading More Rupee Than India Shows What Modi Needs to Do


• Thai Court Rejects Petition Seeking to Disqualify Prime Minister

Major European bourses are flat (Euro Stoxx 50 +0.1%), following on from a tentative AsiaPac session, amid cautious trade ahead of this evening’s FOMC meeting. IBEX 35 (+0.2%) was mildly softer after the open, although has since turned around, amid more political uncertainty, after the King stated there was no candidate for a parliament investiture vote; meaning Spaniards will return to the polls in November for the fourth time in four years. In terms of sector performance; Energy (+0.4%) has managed to shrug off yesterday’s fall in oil prices, while Telecoms (u/c), Consumer Discretionary (-0.4%), Consumer Staples (-0.2%) and Industrials (-0.1%) are the laggards. Luxury names, including Richemont (-4.1%) and Swatch Group (-2.6%), are under pressure after UBS downgraded the sector, with downside in Moncler (-4.5%) exacerbated by cautious comments from the co.’s CEO, who expressed concern about the situation in Hong Kong. In the lead are utilities (+0.4%), with gains in EDF (+3.7%) helping to prop up the sector (the Co. reported weld issues in six reactor units relating to 16 steam generators but does not believe they pose a significant adverse effect now), while materials (+0.2%) and Tech (+0.4%) are also higher. In terms of other notable individual movers; Kingfisher (-2.4%) is lower after sales disappointed (GBP 6.0bln vs. Exp. GBP 6.02bln and like-for-like sales down 1.8%). Elsewhere, Wirecard (+3.1%) took a leg higher on the news that the co. has signed a strategic co-operation agreement with Japan’s Softbank. Finally, Beiersdorf (-1.0%) is under pressure after being downgraded at Goldman Sachs.

Top European News

• U.K. Inflation Rate Falls to Lowest Since 2016 on Games, Clothes


• Comcast’s Sky Moves Beyond BT’s Network in U.K. with Fiber Deal


• Cobham’s $5 Billion Sale to Advent Sparks U.K. Security Probe


• EDF Rises on Belief That Reactor Weld Issues Don’t Need Fixing

In FX, the DXY seems to have established a firm base above 98.000 and Fib support just above the big figure, partly due to weakness in the Greenback’s G10 counterparts, but also on the back of recent firmer than forecast US data/surveys, increased demand for short term Usd funds and a marked change in Fed rate expectations going into September’s policy meeting (odds between another 25bp hike and no change much closer to even from around 90% for +1/4 point only a few days ago). The index is currently just shy of 98.500 and considerably closer to nearest resistance (98.744 yesterday) than the aforementioned downside chart retracement level (98.034).

• GBP/NZD/AUD - The major underperformers, with Cable already retreating after another 1.2500+ sortie and failure to sustain gains above the 100 DMA (1.2501) amidst relatively negative Brexit remarks from EU’s Barnier and Juncker, but then extending its pull-back through 1.2450 at one stage in wake of significantly softer than expected UK CPI on the eve of retail sales and the BoE rate convene. Meanwhile, the Kiwi is back under pressure alongside the Aussie after overnight releases showing a decline in Westpac’s LEI and mixed NZ Q2 current account metrics, with Nzd/Usd under 0.6350 again and Aud/Usd sub-0.6850. Note, Aud/Nzd is still pivoting 1.0800 following this week’s dovish RBA minutes and eyeing NZ Q2 GDP later today, while Aud/Usd appears capped by decent upside option expiry interest at 0.6860-65 (1 bn) and 0.6895-0.6900 (2.6 bn).


• JPY/CAD/CHF/EUR - Also weaker against their US peer, albeit on a sliding scale as the Yen contains losses over the 108.00 mark with the aid of a narrower than anticipated Japanese trade gap and with expiries also in close proximity (1.1 bn at 108.25-40 and then 1 bn at 108.75 if Tuesday’s multi-week peak and 108.50 are breached) ahead of the FOMC and BoJ tomorrow. Meanwhile, the Loonie has regained some poise and traction having held just above 1.3300 yesterday to meander around 1.3250 awaiting some independent impetus from Canadian CPI in advance of the Fed. Elsewhere, the Franc remains anchored near 0.9950, but has weakened vs the Euro to 1.1000 into the SNB on Thursday even though the single currency has lost momentum against the Buck following another approach towards 1.1100. Indeed, Eur/Usd has pulled back below 1.1050 amidst downbeat commentary from ECB’s de Guindos and the headline pair may gravitate further given more downside option expiry interest compared to upside (1.6 bn at the 1.1000 strike and 1 bn between 1.1020-30 vs 1.7 bn from 1.1100 to 1.1115).


• EM - The Rand is also awaiting the Fed before turning attention to tomorrow’s SARB meet, and Usd/Zar has largely taken in stride slightly firmer than forecast SA CPI ahead of retail sales within a 14.7080-6325 band, though mostly trading near the base.

In commodities, the crude complex is largely in consolidation mode ahead of key risk events (FOMC) amid a lack of fresh catalysts and following yesterday’s declines, triggered by news that Saudi oil output will return to normal levels faster than originally assumed; Energy Minister Abdulaziz said oil supply is fully back online and resumed as before after more than half the oil output was resumed in the past few days and that it will keep full oil supply to its customers this month. Losses were later exacerbated by a surprise build in API inventories. Brent Nov’19 futures sit just above the USD 64/bbl handle, just above yesterday’s USD 63.50/bbl lows, with WTI similarly lacklustre just above the USD 59.0/bbl mark. In terms of geopolitical developments, the pace appears to have slowed somewhat; the Trump administration is reportedly considering a range of options to retaliate against Iran including cyberattack or physical strike on Iran's oil facilities or Revolutionary Guards assets, meanwhile, the Saudis continue to point the finger at Iran, who have doubled down in denial. Looking ahead, IEA Birol will conduct a press conference today at 14.00BST alongside a press conference from the Saudis who are expected to show evidence of Iran’s involvement and that Iranian weapons were used in Aramco attacks. Separately, lacklustre trade in the metals complex reflects cautious sentiment, with gold holding on to the USD 1500/oz level for now and copper a touch lower.

US Event Calendar

• 7am: MBA Mortgage Applications, prior 2.0%


• 8:30am: Housing Starts, est. 1.25m, prior 1.19m; Housing Starts MoM, est. 4.95%, prior -4.0%


• 8:30am: Building Permits, est. 1.3m, prior 1.34m; Building Permits MoM, est. -1.29%, prior 8.4%

DB's Jim Reid concludes the overnight wrap

I write this from Paris this morning but there’s only one place to start and that’s in Washington ahead of the Fed meeting this evening. Not long ago this FOMC was perhaps gearing up to be closer to a 50/50 call between a 25bp or 50bp cut however the latter looks a lot less likely now with markets only pricing in about a 15% chance of that happening. That fits with the view of our US economists who also expect a 25bp cut which mirrors the consensus.

The bigger focus will be on what the Fed signals about the expected policy trajectory in the coming months. Our US economists note that a continued dovish bias should be evident in the statement language, Summary of Economic Projections and Chair Powell’s press conference. The latter in particular should echo the narrative that, while the baseline outlook for the economy remains favorable, officials are attuned to significant risks emanating from softer global growth and elevated trade uncertainty. As in July, Powell should stop short of detailing the likelihood and timing of any future actions, but the signal should be that the bar is set relatively low for further rate reductions with the Committee intent to “act as appropriate to sustain the expansion”.

Our colleagues do not expect the September rate cut to be the last of this cycle though. With accumulating evidence that the economy is slowing amid greater sensitivity to the trade turmoil, they recently adjusted their call to reflect a further cumulative 75bps of rate cuts after this meeting, specifically at the October, December and January get togethers. All eyes on 7pm BST/2pm EST.

In an ideal world the Fed was probably hoping that markets would go into today in a relative state of calm however the mini sell-off across bond markets over the last couple of weeks and the biggest daily climb for oil in over a decade put an end to that. You can also add panic in the US funding market to that list after the overnight repo rate touched as high as 10% intraday yesterday and one of the highest levels on record. Notwithstanding a technical delay, the NY Fed did move to calm the market by conducting an overnight repo operation – the first in a decade – for $53bn which helped to push the rate back down however another operation is planned for today for up to $75bn.

There appeared to be various schools of thought on what caused the explosion in overnight funding rates with bulging treasury supply, a mismatch of cash liquidity tax payments, regulatory constraints, bloated dealer sheets, banking seasonals and investors selling bonds back to dealers all cited as possible reasons. We remained confused about the real cause!! Whatever created the tensions it’s not gone unnoticed that we’ve had two huge moves in different asset classes this week, in addition to the rates’ selloff of the prior two weeks.

Just on oil, WTI and Brent both sold-off around 6% yesterday – and thus gave up about half of Monday’s gains - after Reuters reported that Saudi Arabia is supposedly close to restarting 70% of the lost oil production following the weekend attack. The same story also suggested that output would be fully back online in the next couple of weeks, citing a “top Saudi source”. The Kingdom later confirmed that they will ensure this month’s supply by drawing on reserves. Aramco’s CEO also confirmed that the Abaqiq facility should be back to pre-attack levels of output by the end of September. Gasoline (-7.73%) and Heating Oil (-9.42%) also fell in tow however the end result for equities was fairly muted. Indeed the S&P 500 ended +0.26% while the DOW and NASDAQ ended +0.13% and +0.40% respectively. This was after the STOXX 600 had closed -0.05%. After the US bell, trade bellwether FedEx cut its 2020 profit outlook on a weaker global economy and trade tensions. The shares were down as much as 10% in after-hours trading potentially wiping out gains for the year.

Meanwhile US HY credit spreads finished little changed with energy spreads 4bps wider. As for bonds, 10y Treasuries finished -4.5bps lower with the 2s10s curve flattening 1bp to +7.2bps, while Bunds finished little changed. It was BTPs (+7.9bps) which stood out the most in Europe though following (an albeit expected) confirmation of the news we discussed yesterday morning that former PM Renzi was leaving the PD to form his own party, further complicating the political stability picture in Italy.

This morning in Asia, with the exception of Japan where the Nikkei (-0.13%) is a touch lower, most bourses are flat to slightly higher ahead of the Fed. That’s the case for the Hang Seng (+0.03%), Shanghai Comp (+0.39%) and Kospi (+0.44%). The yen is slightly weaker, following weak trade export data in Japan this morning (albeit not as weak as expected), and the news yesterday that South Korea had removed Japan from its list of most trusted trading partners.

In terms of the data yesterday, in the US the August industrial production print surprised to the upside at +0.6% mom (vs. +0.2% expected), as did manufacturing production (+0.5% mom vs. +0.2% expected). Given that Powell has previously flagged concerns about the manufacturing sector, this was a modest positive. The only other data release in the US was the September NAHB housing market index which rose 1pt to 68.

In Europe the only data worth noting was the September ZEW survey in Germany where the expectations component improved over 21pts to -22.5 (vs. -37.8 expected). That being said the current situation component did weaken over 6pts to -19.9 (vs. -15.0 expected). So a mixed survey.

In other news, it is worth flagging the unveiling of plans for a Dutch national investment fund for the economy. Finance Minister Hoekstra said in the budget that “we are going to investigate the possibilities for further investment in areas such as innovation, knowledge development and infrastructure” with details expected to be presented to parliament in early 2020. Various media reports in Holland suggested that the fund could be as much as €50bn (about 6% of GDP). As Mark Wall noted yesterday, this isn’t just a sign of follow through on Draghi’s plea for fiscal easing by those member states that can most afford it. With a public debt ratio close to 50% of GDP and a current account surplus of nearly 10%, the Netherlands would fit the bill. What’s more striking is that the Netherlands is one of the most fiscally conservative members of the Eurozone. So this could well put more pressure on Germany. Certainly one to watch.

Speaking of which, yesterday our economists in Germany published a report titled “A new ‘fiscal deal’ in Germany”. They note that there is talk that the climate package announced this Friday might amount to €40bn (until 2023 cumulatively). Technically, this might not be all additional spending but could also include higher climate related taxes and levies (possibly, it also includes expenditure items already earmarked elsewhere). Finally, implementation lags and bottlenecks lead the team to expect that expenditures will rise over time resulting in an amount likely below €10bn (at best 1/4 pp of GDP) for 2020. See their report here .

Looking at the day ahead, needless to say that all the focus will be on the Fed this evening. As for data, this morning the data includes August new car registrations for the Euro Area and final August CPI revisions for the UK and Euro Area. In the US the focus will be on the latest housing market data with August building permits and housing starts due. Away from that French President Macron is due to meet Italy’s Conte.

Mean reversion is an extremely important financial concept and it is the “reversion” part that is so powerful.  The simple logic behind mean reversion is that market returns over long periods will fluctuate around their historical average. If you accept that a security or market tends to revolve around its mean or a trend line over time, then periods of above normal returns must be met with periods of below normal returns.

If the professionals on CNBC understood the power of mean reversion, they would likely be more enthusiastic about locking in a 2% bond yield for the next decade.

Expected return analysis is easy to calculate for bonds if one assumes a bond stays outstanding till its maturity (in other words it has no early redemption features such as a call option) and that the issuer can pay off the bond at maturity.

Let’s walk thought a simple example. Investor A and B each buy a two-year bond today priced at par with a 3% coupon and a yield to maturity of 3%. Investor A intends to hold the bond to maturity and is therefore guaranteed a 3% return. Investor B holds the bond for one year and decides to sell it because the bond’s yield fell and thus the bond’s price rose. In this case, investor B sold the bond to investor C at a price of 101. In doing so he earned a one year total return of 4%, consisting of a 3% coupon and 1% price return. Investor B’s outperformance versus the yield to maturity must be offset with investor C’s underperformance versus the yield to maturity of an equal amount. This is because investor C paid a 1% premium for the bond which must be deducted from his or her total return. In total, the aggregate performance of B and C must equal the original yield to maturity that investor A earned.

This example shows that periodic returns can exceed or fall short of the yield to maturity expected based on the price paid by each investor, but in sum all of the periodic returns will match the original yield to maturity to the penny. Replace the term yield to maturity with expected returns and you have a better understanding of mean reversion.   

Stocks, unlike bonds, do not feature a set of contractual cash flows, defined maturity, or a perfect method of calculating expected returns. However, the same logic that dictates varying periodic returns versus forecasted returns described above for bonds influences the return profile for equities as well.

The price of a stock is, in theory, based on a series of expected cash flows. These cash flows do not accrue directly to the shareholder, with the sole exception of dividends. Regardless, valuations for equities are based on determining the appropriate premium or discount that investors are willing to pay for a company’s theoretical future cash flows, which ultimately hinge on net earnings growth.

The earnings trend growth rate for U.S. equities has been remarkably consistent over time and well correlated to GDP growth. Because the basis for pricing stocks, earnings, is a relatively fixed constant, we can use trend analysis to understand when market returns have been over and under the long-term expected return rate.

The graph below does this for the S&P 500. The orange line is the real price (inflation adjusted) of the S&P 500, the dotted line is the polynomial trend line for the index, and the green and red bars show the difference between the index and the trend.

Data Courtesy Shiller/Bloomberg

The green and red bars point to a definitive pattern of over and under performance. Periods of outperformance in green are met with periods of underperformance in red in a highly cyclical pattern. Further, the red and green periods tend to mirror each other in terms of duration and performance. We use black arrows to compare how the duration of such periods and the amount of over/under performance are similar.  

If the current period of outperformance is once again offset with a period of underperformance, as we have seen over the last 80 years, than we should expect a ten year period of underperformance. If this mean reversion were to begin shortly, then expect the inflation adjusted S&P 500 to fall 600-700 points below the trend over the next ten years, meaning the real price of the S&P index could be anywhere from 1500-2300 depending on when the reversion occurs. 

We now do similar mean reversion analysis based on valuations. The graph below compares monthly periods of Cyclically Adjusted Price to Earnings (CAPE) versus the following ten-year real returns. The yellow bar represents where valuations have been over the last year.

Data Courtesy Shiller/Bloomberg

Currently CAPE is near 30, or close to double the average of the last 100 years. If returns over the next ten years revert back to historic norms, than based on the green dotted regression trend line, we should expect annual returns of -2% for each of the next ten years. In other words, the analysis suggests the S&P 500 could be around 2300 in 2029. We caution however, valuations can slip well below historical means, thus producing further losses.

John Hussman, of Hussman Funds, takes a similar but more analytically rigorous approach. Instead of using a scatter plot as we did above, he plots his profit margin adjusted CAPE alongside the following twelve-year returns. In the chart below, note how closely forward twelve-year returns track his adjusted CAPE. The red circle highlights Hussman’s expected twelve-year annualized return.

If we expect this strong correlation to continue, his analysis suggests that annual returns of about negative 2% should be expected for the next twelve years. Again, if you discount the index by 2% a year for twelve years, you produce an estimate similar to the prior two estimates formed by our own analysis.  

None of these methods are perfect, but the story they tell is eerily similar. If mean reversion occurs in price and valuations, our expectations should be for losses over the coming ten years.

As the saying goes, you can’t predict the future, but you can prepare for it. As investors, we can form expectations based on a number of factors and adjust our risk and investment thesis as we learn more.

Mean reversion promises a period of below average returns. Whether such an adjustment happens over a few months as occurred in 1987 or takes years, is debatable. It is also uncertain when that adjustment process will occur. What is not debatable is that those aware of this inevitability can be on the lookout for signs mean reversion is upon us and take appropriate action. The analysis above offers some substantial clues, as does the recent equity market return profile. In the 20 months from May 2016 to January 2018, the S&P 500 delivered annualized total returns of 21.9%. In the 20 months since January 2018, it has delivered annualized total returns of 5.5% with significantly higher volatility. That certainly does not inspire confidence in the outlook for equity market returns.

We remind you that a bond yielding 2% for the next ten years will produce a 40%+ outperformance versus a stock losing 2% for the next ten years. Low yields may be off-putting, but our expectations for returns should be greatly tempered given the outperformance of both bonds and stocks over the years past. Said differently, expect some lean years ahead.

The ban will initially stand for 90 days, but it can be renewed or extended.

Andrew Cuomo

The only two flavors that people will be able to buy are tobacco and menthol.

State Health Commissioner Dr. Howard Zucker said during the emergency meeting that officials would take a closer look at menthol to determine whether that should be banned as well.

Banning flavored products is aimed at reducing the number of teenagers and children who vape.

Zucker presented data to the state's Public Health and Health Planning Council showing that New York state high school students' use of tobacco products increased 160% from 2014 to 2018.

Meanwhile, across New York State, there have been 74 confirmed cases of people with fast-developing pneumonia, who developed symptoms after using black-market vaping products.

Of course, the vote at the planning council was hotly debated, with vape shop owners arguing that flavored products accounted for most of their sales, and that the ban would be devastating for their businesses. Others testified that the flavored products helped them quit smoking.

The state is also planning to slap a 20% tax on vaping products, Zucker said.

Meanwhile, India has become the latest country to ban e-cigarettes, banning the production and sale entirely, according to Bloomberg.

Cuomo's ban follows the Trump administration's new enforcement policy, which will require vaping companies to take all of their flavored products off the market.

The country's defense ministry will hold a news conference later in the day laying out new evidence. This follows reports from the US claiming that the roughly 20 missiles and drones used in the attack had been traced back to a 'launch site' in southern Iran.

Tehran has denied involvement in the Sept. 14 attacks, while the Houthi rebels in nearby Yemen have claimed credit. But Washington and Riyadh have adamantly blamed Iran, whom they have blamed for several 'attacks' in the region since the start of the year. 

Of course, this attack would represent a serious escalation from the tanker bombings and the downing of an American drone. Some have speculated that Tehran has nothing to gain from attacks like this, which only serves to provoke the West and Saudi Arabia. The Houthis have carried out several attacks within Saudi Arabia, including the bombing of an airport earlier this year, but experts say the precision of the attack on Aramco's Abqaiq plant was far more sophisticated than anything the armed movement has ever pulled off. Experts said cruise missiles were likely used to target critical components of the oil complex.

Secretary of State Mike Pompeo and several senior US officials are heading to Saudi Arabia on Wednesday, as are several UN experts responsible for monitoring sanctions on Iran and Yemen, and another team of investigators that will report to the Security Council, according to Reuters.

The Defense Ministry's news conference will begin Wednesday at 10:30 am ET.

The Saudi Defense Ministry said it will hold a news conference on Wednesday at 1430 GMT to present "material evidence and Iranian weapons proving the Iranian regime’s involvement in the terrorist attack." Riyadh has already said preliminary results showed the attack did not come from Yemen.

The Iranian leadership infamously threatened that if they couldn't export crude oil, "no one would" shortly after Washington ended waivers for countries reliant on Iranian oil. The Iranian leadership has ruled out meeting with President Trump, arguing that this would only validate the administration's strategy of maximum pressure.

Other countries, including Japan, have said they haven't seen any intelligence linking the attacks to Iran. But that hasn't deterred one senior US official from asking the UN Security Council to respond.

Several senior officials in the Trump Administration assured Reuters that the Saudi investigation would yield "compelling forensic evidence" showing the location of the attack's origins.

Trump said Monday that there was "no rush" to retaliate, and that the US was working closely with Gulf states and its European allies. But the US and Saudi Arabia are pushing Iran to stop providing financial assistance to groups like the Houthis, who retain control of most of the territory in Yemen, despite years of fighting with supporters of the ousted government, which has Saudi Arabia's backing.

"It is necessary to prevent the formation of a terrorist corridor,” the Turkish president said after talks with Russian President Vladimir Putin and Iranian President Hassan Rouhani in Ankara on Monday.

The Turkish capital Ankara on Monday hosted the tripartite summit of the guarantors of the Astana process (Russia, Turkey and Iran) on the Syrian settlement.

During the meeting on Monday, the three presidents agreed to establish a constitutional committee to resolve future political disputes.

With refugees from Syria used in a negotiating tug-of-war between Turkey and the EU, the Balkan region might have to carry the brunt of any large numbers of people on the move trying to reach safety in Western Europe:https://t.co/CjGRSiyIEv

— Balkan Insight (@BalkanInsight) September 17, 2019

Furthermore, the three presidents discussed the future of the Idlib Governorate, but no official agreement was made to resolve their differences.

* * *

Erdogan's "refugee city" idea comes after earlier this month he issued a 'with us or against us' ultimatum to the world, promising that if he couldn't have his Syria 'safe zone' (read: land grab to ethnically cleanse Syrian Kurds), he would flood Europe with one million refugees in response: 

“You either support us to have a safe zone in Syria, or we will have to open the gates. Either you support us or no one should feel sorry. We would like to host 1 million refugees in the safe zone,” he said at the time. 

It remains unclear, however, whether the so-called refugee city would be on Turkish soil or "newly acquired" Syrian territory occupied by the Turkish Army. Mostly likely in Erdogan's mind it would be the former. 

As Statista's Martin Armstrong explains, the quickest, but let's face it, most unlikely outcome, would be a new deal which gets approved by parliament, leading to the UK leaving the EU on the current Article 50 deadline of 31 October.

Going further down the Brexit rabbit hole, we could also see Boris Johnson refusing to request an extension and resigning, the Queen appointing Jeremy Corbyn to sort the mess out, only for a vote of no confidence motion to pass, placing the Father of the House, Ken Clarke, in temporary charge, leading to an Article 50 extension, a general election, and a possible second referendum in 2020.

Take a deep breath...

You will find more infographics at Statista

Zircon is a winged hypersonic cruise missile that can travel at Mach 8 to Mach 9 (6,090 to 6,851 mph). The missile's range is estimated at 620 miles, can already be launched from aircraft, ships, ground-based launch systems, and soon to be submarines. 

Forbes said the Russian Navy is going through an unprecedented transformation, ever since it started launching cruise missiles from submarines into Syria. Before that, Russia developed its cruise missiles, fired from submarines, for anti-ship operations. 

"For much of the Cold War, the missiles carried by Russian submarines were focused on hitting ships at sea, particularly the US Navy's formidable aircraft carriers. It was not until the conflict in Syria that Russia began using submarine launched cruise missiles in a similar way to the US Navy's Tomahawk missile; as a long-range surgical strike weapon." 

The Tomahawk Land Attack Missile is primarily launched from submarines and ships by the US Navy and Royal Navy. It flies at Mach 0.75 (575 mph) with a range 1,550 miles. 

Russia's new missile is so advanced that upon it being deployed by submarines, it would create a significant power shift away from the US Navy. The shift in power would add a new layer of deterrence for Russia that would have the US Navy very concerned, that is because the US Navy doesn't have any countermeasures against hypersonic weapons. 

A submarine-launched missile test of the Zircon could pave the way for deployment in the near term. 

Forbes said by 2030 Russia could have at least eight submarines armed with Zircon missiles, and 17 by 2040. 

And in a bizarre report earlier this month, President Vladimir Putin revealed he was ready to sell the US some of Russia's hypersonic missiles, if President Trump was willing to return to serious strategic arms talks after the US-backed out of the Intermediate-Range Nuclear Forces Treaty (INF). 

Last year Russia's defense ministry touted a range of experimental weapons it said could counter and evade any US anti-aircraft defense measures, including a nuclear-powered missile that could traverse the globe endlessly. 

For a glimpse of a land-based launch of a Russian hypersonic missile, Russia-24 published a video from the Ministry of Defence of the Russian Federation that shows a successful launch of a new hypersonic interceptor missile.

На полигоне Сары-Шаган (Республики Казахстан) боевым расчетом войск противовоздушной и противоракетной обороны ВКС успешно проведен очередной испытательный пуск новой ракеты российской системы противоракетной обороны (ПРО)#Минобороны #ВКС #ПРО #Казахстан #СарыШаган pic.twitter.com/mhtveLcJ3N

— Минобороны России (@mod_russia) June 4, 2019

So the question we ask: Is Russia winning the hypersonic development race?

This despite the fact that the shooter himself said in his own manifesto that provoking mass gunfiscation was one of his intended goals. Mission accomplished.

Since the buyback scheme began, 19,000 firearms have been handed in. Most of the guns seen being handed in looked like ordinary rifles, not AR-15s.

Pay Attention America!


Six months after Christchurch massacre, a farewell to firearms in New Zealand


If New Zealanders fail to turn in their banned weapons by Dec. 20, they could face 5yrs in prison.


This is gun confiscation and confiscation is what Democrats want in America! pic.twitter.com/CnYUonxMB5

— Amy Mek (@AmyMek) September 17, 2019

Inspector Terry Van Dillen said he “accepted” that some people would be emotional giving up their guns due to them having been handed down by families for generations.

I’m sure any potential future mass shooters are gleefully handing in their firearms to police as I write this.

New Zealand’s gang members even publicly announced they would refuse to hand in any of the “banned” firearms.

Disarming responsible people and making them easier targets for actual criminals.

Genius idea.

*  *  *

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The photos sparked a firestorm of conversation on social media platforms, partly due to an unassembled supersonic DR-8 reconnaissance drone was spotted on the back of a military truck. The drone has never been seen before in public.

The South China Morning Post said the DR-8 would play a vital role if a shooting war breaks out with the US in the South China Sea or Western Pacific.

Rick Joe, a Chinese military analyst and author at The Diplomat, tweeted that the DR-8 has similar characteristics to a Lockheed D-21 supersonic drone that retired in the early 1970s. 

The new high speed UAV seems similar to D-21 in some respects, but differences exist:


- big delta wing with ?winglets vs D-21 wing and fin config

- likely chin intake vs nose intake on D-21

- landing gear ?present, i.e. likely reusable rather than expendable like D-21 pic.twitter.com/Eo6sX7F3Zp

— Rick Joe (@RickJoe_PLART) September 15, 2019

The DR-8 reconnaissance drone will allow China to coordinate strikes on US vessels with DF-21D anti-ship ballistic missiles, and the DF-26 ballistic missiles.

Zhou Chenming, a Beijing-based military commentator, was cited by the Post as saying the DR-8 has a maximum speed of Mach 3.35 (2,570 mph).

Shanghai-based military commentator Shi Lao told the Post that the People's Liberation Army (PLA) has been testing the drone extensively, says it can easily reach Guam where a major US military installation resides.

"In fact, this UAV [the DR-8] entered into service a while ago," Shi said.

Another military observer on social media said the drone was "the biggest surprise so far."

The biggest surprise so far, hypersonic UAV. pic.twitter.com/JHxIJdhKFf

— dafeng cao (@dafengcao) September 14, 2019

Also spotted in the rehearsal was China's hypersonic DF-17 missile, which can penetrate American missile defense networks through evasive maneuvering while traveling between Mach 5 (3,836 mph) and Mach 10 (7,672 mph).

Zhijun Cai, deputy director of the military parade leading group office, told local media that the weapons in the parade are all active and deployed with the PLA.

A previously undisclosed main battle tank of the PLA that entered service last year was also spotted.

"There will be some exciting new weaponry on show at the parade this year," Zhou said.

Hundreds of thousands of people are expected to attend the celebrations in Tiananmen Square on October 1, which will showcase how China, the rising power of the world, is ready for a fight with the US.

However the European Court of Human Rights has found, in judging a case brought against Russia by the Magnitskiy family, that the very essence of this story is untrue.

They find that there was credible evidence that Magnitskiy was indeed engaged in tax fraud, in conspiracy with Browder, and he was rightfully charged. The ECHR also found there was credible evidence that Magnitskiy was indeed a flight risk so he was rightfully detained. And most crucially of all, they find that there was credible evidence of tax fraud by Magnitskiy and action by the authorities “years” before he started to make counter-accusations of corruption against officials investigating his case.

This judgement utterly explodes the accepted narrative, and does it very succinctly:

The applicants argued that Mr Magnitskiy’s arrest had not been based on a reasonable suspicion of a

crime and that the authorities had lacked impartiality as they had actually wanted to force him to

retract his allegations of corruption by State officials. The Government argued that there had been

ample evidence of tax evasion and that Mr Magnitskiy had been a flight risk.

The Court reiterated the general principles on arbitrary detention, which could arise if the

authorities had complied with the letter of the law but had acted with bad faith or deception. It

found no such elements in this case: the enquiry into alleged tax evasion which had led to

Mr Magnitskiy’s arrest had begun long before he had complained of fraud by officials. The decision

to arrest him had only been made after investigators had learned that he had previously applied for

a UK visa, had booked tickets to Kyiv, and had not been residing at his registered address.

Furthermore, the evidence against him, including witness testimony, had been enough to satisfy an

objective observer that he might have committed the offence in question. The list of reasons given

by the domestic court to justify his subsequent detention had been specific and sufficiently detailed.

The Court thus rejected the applicants’ complaint about Mr Magnitskiy’s arrest and subsequent

detention as being manifestly ill-founded.

“Manifestly ill founded”.

The mainstream media ran reams of reporting about the Magnitskiy case at the time of the passing of the Magnitskiy Act. I am offering a bottle of Lagavulin to anybody who can find me an honest and fair MSM report of this judgement reflecting that the whole story was built on lies.

Magnitskiy did not uncover corruption then get arrested on false charges of tax evasion. He was arrested on credible charges of tax evasion, and subsequently started alleging corruption. That does not mean his accusations were unfounded. It does however cast his arrest in a very different light.

Where the Court did find in favour of Magnitskiy’s family is that he had been deprived of sufficient medical attention and subject to brutality while in jail. I have no doubt this is true. Conditions in Russian jails are a disgrace, as is the entire Russian criminal justice system. There are few fair trials and conviction rates remain well over 90% – the judges assume that if you are being prosecuted, the state wants you locked up, and they comply. This is one of many areas where the Putin era will be seen in retrospect as lacking in meaningful and needed domestic reform. Sadly what happened to Magnitskiy on remand was not special mistreatment. It is what happens in Russian prisons. The Court also found subsequent Magnitskiy’s conviction for tax evasion was unsafe, but only on the (excellent) grounds that it was wrong to convict him posthumously.

The first use of the Magnitsky Act was to sanction those subject to Browder’s vendetta in his attempts to regain control of vast fortunes in Russian assets. But you may be surprised to hear I do not object to the legislation, which in principle is a good thing – although the chances of Western governments bringing sanctions to bear on the worst human rights abusers are of course minimal. Do not expect it to be used against Saudi Arabia, Bahrain or Israel any time soon.

*  *  *

Unlike his adversaries including the Integrity Initiative, the 77th Brigade, Bellingcat, the Atlantic Council and hundreds of other warmongering propaganda operations, Craig's blog has no source of state, corporate or institutional finance whatsoever. It runs entirely on voluntary subscriptions from its readers – many of whom do not necessarily agree with the every article, but welcome the alternative voice, insider information and debate. Subscriptions to keep Craig's blog going are gratefully received.

To begin to appreciate this fight, it is useful to conduct a short survey of the 3 weeks of fanatical neocon maneuvers led by Bolton, Defense Secretary Esper, Sen. Marco Rubio, and VP Pence. These maneuvers were instigated by two “unforgivable sins” conducted by Trump when the latter: 1) stated his wish that Russia be re-introduced to the G7 on August 21 stating “I think it would be better to have Russia inside the tent than outside the tent”, and 2) his defense of President Xi Jinping as “a great leader” who must resolve the Hong Kong chaos without American interference. These initiatives had to come undone at all costs.

First, neocon war hawk Marco Rubio ranted at length in the Washington Post calling for the US government to intervene into the Hong Kong mess which itself has been stirred up by American intelligence outfits like the CIA-affiliated National Endowment for Democracy.

In his September 3 editorial, Rubio stated “the administration should make clear that the United States can respond flexibly and robustly in Hong Kong” and called for the Congress to pass the Hong Kong Human Rights and Democracy Act co-sponsored by Rubio, Ben Cartin (Democrat), James Risch (Republican), and Robert Menendez (Democrat). The act, if passed would force the US government to fully support the Hong Kong color revolutionaries while sanctioning all

Chinese officials who “have undermined the city’s autonomy”.

Just before Rubio’s belligerent words went public, US Defense Secretary Mark Esper had already exclaimed publically that America had to confront China directly in support of US allies in the Asia-Pacific over territorial issues and containment of China’s growth. Esper shocked many Asian and western statesmen alike when he stated that there is a “coming shift” from “low intensity conflict… to high intensity conflicts against competitors such as Russia and China”.

In this surreal relay race to Armageddon, Vice-President Mike Pence next took the baton during his September 2 speech in Warsaw, Poland alongside Polish President Andrzej Duda. It was here that Pence here took the opportunity to demonize Russia when he said “with its efforts to meddle in elections across Europe and around the world, now is the time for us to remain vigilant about the intentions and the actions taken by Russia.” Pence went further to state without any evidence that “Russian forces still illegally occupy large parts of Georgia and Ukraine.”

Pence was joined in Poland by ex-US National Security Advisor John Bolton, who ended his tour of four former Soviet nations begun a week earlier (Ukraine, Moldova, Belarus and Poland). Beginning his tour on August 26 in Kiev, Bolton took the opportunity to attack Ukraine’s growing relationship with China which is on the verge of finalizing a deal to purchase the beleaguered Ukrainian aerospace giant Motor Sich. Ever since the Russian sanctions began, the Ukrainian company has lost over 40% of its markets with the Chinese providing the only chance for its salvation. Exhibiting his usual flare for hypocrisy, Bolton attacked China saying: “The Chinese are not afraid to use corruption – or to put it bluntly, bribes – to get the decisions they want”, calling for Ukraine to reject the deal.

It is important to note that Ukraine signed an action plan to join the Chinese-led Silk Road Economic Belt and 21st century maritime Silk Road already 18 months ago with recent plans to accelerate that cooperation. Ever since the BRI and Russian-led Eurasian Economic Union increasingly began merging into a unified program, western NATO-philes have realized that their years of hard work to de-rail a pro-Eurasian alliance in Ukraine could easily come undone.

Having made a mess of Ukraine, Bolton then headed to Belarus, and Moldova pushing an anti-Russian line, ending his trip in Poland where he solidified the location for the additional American 1000 troops to be added to the 4500 US troops already operating in the nation- many of whom operate America’s anti-Russian ABM system.

The ABM system which has been built up around Russia’s southern perimeter and which Poland plays a key role, is part of a larger agenda identified by the Russian government as “Full Spectrum Dominance” and seeks a unipolar nuclear first strike monopoly. Poland’s only hope to avoid being caught in the middle of a nuclear exchange between NATO and Russia is to break free of this program and accept China’s offers to join the BRI which experts have recently stated would make Poland “The Buckle of the Belt and Road”.

It was not lost on Bolton and Pence that Poland is also a key member of the 17+1 Central and Eastern European nations + China group which has deeply tied itself to the BRI while Belarus is a member of the Eurasian Economic Union- making their allegiance to the western technocracy more fragile than some would like to admit.

When objectively assessing the psychological state of the western oligarchy at this particular moment in history, it must be concluded that certain forces operating on behalf of the City of London and Wall Street would go to any length– not excluding nuclear war- in defense of their failing system. There is thus no solution to this dark chapter of the human experience unless:

The bankruptcy of the financial system now sitting atop a $800 trillion derivatives bubble is fully acknowledged such that a serious discussion centered on bankruptcy re-organization can finally occur.

That the neocons and other deep state operatives be flushed from power- following Bolton into the trash bin of history.

That the need for a new system premised upon cooperation and long term development is adopted post-haste. This new system would have to contain certain non-negotiable features such as nationally-guided capital controls to prevent speculative fluctuations of currencies and other vital resources, the separation of investment banking from normal commercial banking functions as was done under the 1933 Glass-Steagall Act (repealed in 1999 in the USA), and long term credit generation for major infrastructure projects.

Russia, China and India are increasingly becoming the foundation for a new multipolar world order founded upon the respect for sovereign nations and improvement of conditions of life of the people driven by Putin’s Far East/Arctic vision and China’s New Silk Road which are winning over dozens of nations to a new paradigm of political economy.

For all of his problems, Donald Trump has maintained a generally consistent (albeit flawed) intention to re-build American industry and infrastructure after decades of post-industrial decay and combat the Deep State which has worked on overtime to overthrow his presidency. On top of this, he has seriously worked to keep the nation out of foreign entanglements while avoiding any new wars (a first for any president in over 50 years). Most importantly, he has attempted repeatedly to create positive relations with Russia and China.

Whether the neo-cons infesting the US administration successfully subvert this potential for a new paradigm which would be unstoppable under a Russia-China-India-USA alliance, or not remains an open question, but Trump’s firing of Bolton will hopefully represent a new purge of war mongering sociopaths while opening the door to a new foreign policy doctrine.