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"One should either write ruthlessly what one believes to be the truth, or else shut up."

Arthur Koestler 

Sunday
Jan072018

Why No Peace in Ukraine? 

I have heard a few talking heads say that the reason there is no peace in Ukraine is "Russia, Russia, Russia." If you want to know why there is no peace in Ukraine, watch this short video. 

This next clip is Russian news, and needs to have the same skepticism that you would direct toward any news, even US news. Since the news is reporting that what Ukraine President Poroshenko promised in the first clip is happening, I think this is accurate. These are the people to whom Trump is sending lethal arms and is training. 

BTW, today is the Russian Christmas, and civilians in Eastern Ukraine are huddling in basements in fear. 

Thursday
Jan042018

Trump Verses Putin

I thought a comparison between Trump's New Year's message and Putin's might tell us a lot about their character. 

Here is Trump's:

 Here is Putin's: 

To be fair, New Years is a much bigger deal in Russia than it is in America. Both messages are heavily produced, but only the Trump message is about Trump, and nothing else. I found it embarrassing. Be sure to listen to the music at the end of Putin's message, the music is very traditional Russian. 

Monday
Jan012018

2018 Predictions

Here are my predictions for 2018. 

1. The stock market will increase 10%.

2. The stock Market will crash 30%.

3. The stock market will decrease 10%.

4. The stock market will rise 30%. 

Confused? You are not alone. There are several reason why I am making contradictory predictions. First, this is the way the prophecy game works. You make contradictory predictions and only point out the ones that ended up correct. There is even a Twilight Zone episode about this.  

But I am following my usual practice of having my even number predictions not being serious. So I do not expect a large increase or decrease in the markets. But either of these options is possible. With the expected repatriation of overseas money legally, but immorally, placed/left overseas, there will be a lot of investments and stock buybacks. The reduction in the corporate tax rates will also increase corporate profits. This seems an unlikely outcome as the rate of corporate profits is the highest in modern history. But nevertheless it is what will probably happen. This could mean another 30% increase for this year like last year. 

Since the stock market is actually higher in relative terms than it was in 1929 before the great depression, one would think that the market will crash. One would be wrong. I still can't believe I am saying this. There will not be a crash for several years. Since the longest period without a recession is 118 months and we are in month 114, this prediction seems unlikely. But looking at the madness that is Japan, the US has a long way to go before the fiscal madness gets out of control. (It is already out of control, but the bubble still has a long way to go.) I think that the stock market will go up slightly next year, prediction 1. 

5. The 1.5 trillion estimated deficit increase that will be the consequence of the Trump tax cut will not even cause a hiccup in the markets. No one will care. 

6. Krugman, since there is a Republican in office will continue to prediction dire consequences, and he will continue to be wrong, as he was when he predicted that the internet would not have a significant impact on business and his prediction that the Trump stock market would be bad. The prediction biz is tough. 

7. The real estate market in Southern California is nuts. If my family had kept any of our family homes from the 60's and 70's, I could sell it and retire to Costa Rica and live the live of leisure. One would think this would mean I am predicting a crash. I am not. Everyone seems to be buying houses and then renting them out. Many rentals on the market are in this category. As long as interest rates are low, this will continue. I do wonder how many of these new landlords are committing loan fraud by claiming they will live in the unit. 

8. Bitcoin will rise to $50,000.

9. There will be no evidence that Trump colluded with anyone, but there will be a lot of noise about it. There will be charges, but the charges will have nothing to do with Russia. I do not think one can be in business and not violate some law somewhere. For example, if a business charges less than the competition, they are trying to monopolize and drive the competition out of business; if you are charging the same amount, then you are colluding; if you charge more, then you are using your market position to cheat the consumer. You can't win. To channel Jan Brady from the Brady Bunch, instead of "Marcia, Marcia, Marcia." It will be "Russia, Russia, Russia."

10. No one will care that no evidence will be found and Trump will still be declared guilty in the court of public opinion. I advise that everyone who can should get out of debt. I am trying to do that. But it is tempting to just go out and buy the tulips. I will be smart enough to know when to sell. Right? 

 


Sunday
Dec312017

Recap of My 2017 Predictions

My predictions for 2017 were not that good. 

1 I predicted that China would tighten up on its cash outflows. They are doing so. 

3. I thought that the market would basically go sideways this year, with a 10% decline the most likely outcome. Boy, was I wrong. The market went up substantially. This makes no sense, but it is what happened. 

5. Obamacare was not abolished as I thought. There is now no reason for a young person to buy Obama care as there is no longer a penalty for not doing so. Hopefully a high deductible policy will become available. Such a policy did not follow the Obamacare guidelines so no one offered one. I hope this will change. 

7. There was no settlement in Ukraine. I don't think the US wants one. Since the US is supplying the Ukrainian army now, a settlement looks unlikely. 

9. Inflation continues to be low, as I predicted. The infrastructure program was more than modest, it was never passed. The tax cut was bigger than I thought, but it has not taken effect yet. 

So 2017 was not a good year for my predictions. While 3/5 is not too bad, the big miss on the stock market overshadows everything else. 

Saturday
Jul152017

Rinat Akhmetshin: Not a Russian or a Spy

First a little background: there was a meeting June 2016 where a Russian "government" lawyer Natalia Veselnitskaya met with Donald Trump, Jr. to provide information about a supposed Clinton scandal. There was no information. Instead it was an attempt to influence Trump, Jr., and hopefully his father, on behalf on a Russian Oligarch against the Magnitsky Act which put up sanctions against her client. The meeting was a total bust. The reason I used quotation marks around government is that this is technically true, but misleading. Yes, she worked for the prosecutors office in Moscow, just as a promising attorney in the US might work for the Office of the New York prosecutors office. Would you describe this person as a government lawyer years after she went into private practice? You would not. I leave it to your imagination why the words "government lawyer" are being used on the various networks. If you think they would have the decency to use the word "former," you would be wrong. Veselnitskaya was not representing Russia, she was representing her client. 

But the talking heads and the politico class have a problem, there is no there there. So they had to expand their blathering. Besides the translator, there was a fifth person present, Rinat Akhmetshin. Here is how the New York Times talks about him:

While not, he insisted, an expert in the technical aspects of hacking nor, a spy, Mr. Akhmetshin talked openly about how he had worked with a counterintelligence unit while serving with the Red Army after its 1979 invasion of Afghanistan and how easy it was to find tech-savvy professionals ready and able to plunder just about any email account.

I quoted this because it can show how to lie through your teeth but saying nothing false. Rinat Akhmetshin, like every other Soviet young man, was drafted into the army for his two year hitch. So at about age 18 to 20 he served in the army from 1988 to 1990. Imagine the jobs he would have been given. Assuming he is telling the truth about where he was assigned, he would have been emptying the trash, and cleaning the toilets. Assuming that he is telling the truth about his departure rank of sergeant, he would not have had a job that might be described as an "intelligence" job; that would be quite a stretch. (There is no reason to conclude that Rinat is lying.) 

Note also the phrase, "the Red Army after its 1979 invasion of Afghanistan." Every Soviet young man would have served in the Red Army after 1979, if they were drafted after 1979! Why try to connect Akhmetshin with the Afghanistan invasion? 

I think that for years Akhmetshin might have said things that are technically true but misleading in order to benefit his consulting business. Or maybe he allowed others to draw conclusions and did not correct them. He is not a former spy or even a former intelligence officer. He was a GI Ivan who was drafted. 

What do I mean when I say that Rinat Akhmetshin is not Russian? He is not ethnically Russian. His first name tells us that. It is not clear exactly what his ethnic background is. Russian minorities tend to be concentrated in their traditional homelands. Rinat is either a Kazakh, a Kazakh Tartar, a Tartar born just north of Kazakhstan, or interesting enough in a Tatar born in Crimea. 

You might think, as an American, that such ethnic issues do not matter. You are being naive, even about America. In Russia it matters, it matters a lot. 

Here is what government sponsored Radio Free Europe said about him:

Barely registering in U.S. lobbying records, the 48-year-old Akhmetshin has been tied to efforts to bolster opponents of Kazakhstan's ruling regime, discredit a fugitive former member of Russia's parliament, and undermine a Russian-owned mining firm involved in a billion-dollar lawsuit with company information allegedly stolen by hackers.

Rather than being pro-Russian, his career seems to be centered on anti-Russian activities and lobbying as "Kazakhstan's ruling regime" is pro-Putin

Rinat Akhmetshin does not represent the Russian government, nor is he a former intelligence officer. When you hear otherwise, you are being played.