#antiestablishment

EU populists thumping establishment

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EU election results so far are a disaster for the eurocrats. This was predictable. As CM has long argued, Brussels has continually ignored the issues of member states. Since 2007, poverty levels have grown from 78mn to 118mn of the EU population. UK won’t be the last to leave the EU, unless the bureaucracy in Brussels makes considerable reforms. CM bets it won’t.

UK: Brexit Party – 31.8% (populist), Tories – 7.6% (incumbent). Tories fallen from 20%. Of interest, Brexit took 38% of the West Midlands which is a slap in the face for Corbyn’s Labour Party. Even Islington, Corbyn’s home constituency, saw Labour fall behind the Lib Dems.

Greece: New Democracy 33.3% (populist), Syriza 23.9% (incumbent/socialist) – snap elections to be held

France: RN – 23.5% (nationalist), LREM 22.5% (incumbent) – Le Pen has called for snap elections.

Germany: CDU – 28.8% (incumbent), AfD – 10.8% (nationalist)

Austria: OVP – 34.9% (incumbent/nationalist), FPO – 17.2% (incumbent/nationalist)

Poland: PiS – 42.4% (incumbent/nationalist)

Italy: Liga -33.6% (populist/incumbent) + M5S – 16.7% (populist/incumbent)

Bulgaria: GERB – 30.1% (incumbent/populist)

Hungary: Fidesz – 52.1% (nationalist/incumbent)

Latvia: JV – 26% (populist/incumbent)

Sweden: Socialist Democrats – 23.6% (incumbent), Sweden Democrats – 15.4% (populist)

Czech: ANO – 21.2% (populist/incumbent)

Romania: PNL – 25.6% (populist), PSD – 21.7% (incumbent)

While results are Still coming in, it seems that the populist swell has only gathered momentum.

Voter turnout to EU elections is generally weak but this is the strongest showing since 1994. This is entirely self-inflicted. Europeans are growing increasingly frustrated at the EU’s authoritarian behaviour. The sooner this project fails the better.

While total seat numbers aren’t fully decided, the percentage terms are undoubtedly going to send shockwaves through the E.U. establishment.

Seattle Schitty Council

A Seattle citizen, Richard Schwartz, asks for the panel of Seattle City councilors to pay some mind to what he had to say. They couldn’t be less interested. Then people wonder why establishment politicians are being booted out.

The irony is looking at what these councilors purportedly have oversight – human rights, community safety, gender equality. The citizen made a point in his speech how the council allowed Seattle Democrat Rep. Pramila Jayapal to speak for as long as she wished the previous week while all others were given one minute. Some animals are more equal than others animals…

As he rightly points out, it was a damning indictment.

Trump mid term victory more probable than not

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Actions not words. Forget all of one’s personal opinions (hatred) of Trump and analyze the facts.  This is a picture of Obama trying to rally Democrats in Nevada this week. Despite the small audience, Obama mentioned himself 92 times in 38 minutes as opposed to talking up the candidate he was there to support. Sounded like a desperate attempt to save his own legacy. The following pictures are of Trump’s rally for Ted Cruz in Houston, Texas.

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Conventional wisdom tells us that the party in opposition tends to get the House in the mid terms. Politics is in such a funk, why would we for one second believe that consensus should be the default in November 2018? How did that work out on 2016?

Ahh yes, but the Democrats have learned from treating the prior election as a coronation for Hillary Clinton. They’ll be out in droves. No doubt they will but after the Kavanaugh debacle in the Senate and over 10,000 strong Honduran caravan surging to the US southern border (the Dems have been eerily quiet over this) it only plays to Trump’s domestic agenda. What many overlook is that ICE records indicate there are  474,000 illegal immigrants still in the queue for processing. Four hundred and seventy four thousand. Think of the costs to process that.

So to the polls? They were wildly inaccurate at the 2016 election. Largely because they are telephone polls to 1,000 people with landlines. Hardly an accurate assessment. Only old folk have landlines now don’t they?

A MSN (left leaning) online poll conducted last month showed 76% of 73,000 would lean Republican in the mid terms. How valuable are polls? Let’s be honest, a Fox poll leaning to conservatives and and a CNN poll swaying to liberals Shouldnt shock anyone. It is the anomaly that should cause us to question a mood as this MSN poll did. Are 73,000 people representative of the 250mn eligible to vote? More than 1,000 would be that is for sure.

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Once again, forget personal dislikes for Trump. If a p*ssy grabbing, racist, xenophobic, bigoted, nationalist silver back Nazi orange buffoon as he is often referred to as can get this many people to a gathering imagine if he had none of the baggage? Potentially less people because there is not as much shock value.

CM has said for ages that the mainstream media is his best ally. The constant one-eyed bias against him only gives more air time. He is a showman. The White House has become  a reality TV program. All the MSM does is feed his exposure. Sadly ratings reflect that he is winning. The media can only tell the public that Trump is the antithesis of the establishment so many times before it wears thin and people tune out.

Then again perhaps it is more telling that the average American doesn’t look to him as a spiritual leader. Or put that another way, the mid terms will be a measure of how successful he has been to date (even if blasted Russian bots meddling in the voting machines are behind it).

If he has genuinely helped put Americans on a better financial footing in their minds that is all that matters to them. Call Stormy ‘Horseface’, slag off Blasey-Ford for her amnesia and bash CNN at a rally for “fake news”. None of it matters. It appears Americans are less likely to be intimidated by thuggery (chasing Republicans out of restaurants or shooting them) of the left than to join their ranks as the #WalkAway campaign has demonstrated.

Trump is the most left field curve ball President in US history.  So unconventional in his diplomacy. He has shown that pushing back can get results. Whether smashing NATO members for failing to execute on  their own self imposed military spending targets, stopping Rocketman testing nukes or getting Juncker to sign an FTA a week after he stumbled blind drunk at a NATO summit there is some method to the madness.

In two weeks time we’ll get a result which will reflect the mood of America. The observation of CM is that the Dems are playing all the same party tricks as the 2016 election albeit at 11.

CM may be well off the reservation on this but those same vibes from Nov 2015 suggest Trump may well upset decades of history. Fake views? Allie Stuckey did a rather amusing parody of the Democrats here.

We’ll know soon enough.

Ultra High Net Worth Individuals (by country)

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In an ever growing world of haves vs have nots, Elliman has released an interesting update on the statues of global wealth and where it is likely to head over the next decade. It suggests North America has 73,100 UNHWIs at an average of $100mn each or $7.31 trillion. To put that in perspective 73,100 North Americans have as much wealth as Japan & France’s annual output combined. Over the next decade they expect 22,700 to join the ranks.

Europe has 49,650 UHNWI also at the magical $100mn mark (presumably the cut off for UHNWI or the equivalent of Japan.

Asia is growing like mad with $4.84 trillion split up by 46,000 or $105mn average. In a decade there are forecast to be 88,000 UHNWIs in Asia.

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I am not sure what the World Bank was smoking when coming up with the coming forecasts I’ve rthe next decade but the figures smel fishy.  Then it all comes down to this chart.

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1) Political uncertainty? Everywhere you look – Trump, Brexit, Catalonia, Australia, France, Germany, Austria, Czech Republic, The Netherlands, Hungary, Poland etc etc

2) Potential fall in asset values – looks a very high chance of that. Current asset bubbles are almost everywhere – bonds, equities, real estate etc

3) Rising taxes – maybe not the US or Canada (if you follow the scrutiny over Finance Minister Morneau), but elsewhere taxes and or costs of living for the masses are rising

4) Capital controls – China, India etc

5) Rising interest rates – well the US tax cuts should by rights send interest rates creeping higher. A recent report showed 57% of Aussies couldn’t afford an extra $100/month in mortgage – a given if banks are forced to raise lending rates due to higher funding costs (40% is wholesale finance – the mere fact the US is raising rates will only knock on to Aus and other markets).

Surely asset prices at record levels and all of the other risk factors seemingly bumping into one another…

So while UHNWIs probably weather almost any storm, perhaps it is worth reminding ourselves that the $100mn threshold might get lowered to $50m. It reminds me of a global mega cap PM who just before GFC had resplendent on his header “nothing under $50bn market cap”. Post GFC that became $25bn then eventually $14bn…at which point I suggested he change the header entirely.

I had an amusing discourse on LinkedIn about crypto currencies. The opposing view was that this is a new paradigm (just like before GFC) and it would continue to rise ( I assume he owns bit coins). He suggested it was like a promissory note in an electronic form so has a long history dating back millennia. I suggested that gold needs to be dug out of the ground – there is no other way. Crypto has huge risk factors because it is ultimately mined in cyber space. State actors or hackers can ruin a crypto overnight. There have already been hacking incidents that undermine the safety factor. It does’t take a conspiracy theory to conjure that up. To which he then argued if it all goes pear shaped, bitcoin was a more flexible currency. Even food would be better than gold. To which I suggested that a border guard who is offering passage is probably already being fed and given food is a perishable item that gold would probably buy a ticket to freedom more readily as human nature can adapt hunger far more easily in the fight for survival. I haven’t heard his response yet.

In closing isn’t it ironic that Bitcoin is now split into two. The oxymornically named Bitcoin Gold is set to be mined by more people with less powerful machines, therefore decentralizing the network further and opening it up to a wider user base. Presumably less powerful machines means fewer safeguards too although it will be sold as impervious to outsiders. Of course the idea is to widen the adoption rate to broaden appeal. Everyone I know who owns Bitcoin can never admit to its short comings. Whenever anything feels to be good to be true, it generally is. Crypto has all the hallmarks of a fiat currency if I am not mistaken? While central banks can print furiously, they will never compete with a hacker who can digitally create units out of thin air. Fool’s Gold perhaps? I’ll stick to the real stuff. I’ll take 5,000 years of history over 10 years any day of the week.

Tokyo Gov Koike shows powerful ad spurning the old guard

Tokyo Governor Yuriko Koike has released a powerful video which will likely capture the mood of what is going on in Japan’s political sphere. The cigarette chugging old men in the ad are screaming along the lines of “you wanna rise against us?”, “you wanna spurn our organizations?” and “if you change things it will be so problematic”. The model designed to look like Koike strides past ignoring them. With the stench in national politics (a long stream of scandals and corruption) her message is indeed powerful. It is still very early days and her success will rely on how ready some politicians are ready to defect. Koike is getting massive airtime and even if she chooses not to run it will be pitched as a Koike vs Abe campaign. Remember the hugely popular former PM Junichiro Koizumi was a backer of Koike. Let the games begin. This video will resonate.

Merkel presides over worst outcome since 1949

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Angela Merkel’s CDU/CSU looks to have sealed the largest support but it is her party’s worst showing since 1949. While much of the press is hailing her 4th term one can’t dismiss the rise of the Alternative for Deutschland (AfD) which looks to cement in the third spot with around 14% (c. 6 million votes). In the 2013 election AfD only managed 4.7% (c. 2mn votes) which was below the 5% threshold required to take seats in the Bundestag. Zero seats then, Now looking at 95+.

As CM wrote on Nov 21, 2016,

Think of the coming German elections in 2017 as more like Australia’s recent federal election where Liberal Party PM Malcolm Turnbull scraped home with the protest vote going to smaller parties such as Pauline Hanson’s ultra conservative One Nation Party…Merkel’s power will be greatly cut back as she is forced to pander to the reduced majority and harder line elements the results of recent state elections have borne out clearly.”

While we are already hearing the major parties refusing to form a coalition with it (much like those Dutch parties refusing to team up with Wilders’ Party for Freedom) the message is clear. More voters are sick of the political hand wringing that glosses over issues that concern them. It was the same for Le Pen. Yes, she lost to Macron but she doubled the share of the vote of her Front National party to a record – more than twice as many cared for her platform. Trump’s win. Brexit. The Italian 5 Star Movement. The Italian referendum. The Hungarian referendum. The Dutch election. All showing large shifts toward ‘national’ interests. Why?

It doesn’t matter how far-fetched some might feel the views of people who are voting for ‘nationalist’ platforms may be, the reality is that the counter arguments and actions taken by the current crop of the apologist political class isn’t cutting through. The only way many can express their frustration is at the ballot box. Hence we get Merkel’s worst showing. Yet when political parties say they ‘refuse’ to partner with it, how can they realistically alienate a party that represents 14% of the country? The mainstream media pillorying the supporters of right wing parties are part of the problem. They are made to feel ashamed for holding legitimate  concerns so all that happens is they get pushed underground and resurface at election time. This is why opinion polls have become largely meaningless.

In Merkel’s case what did she expect when she tried to gag the media and police in Cologne on New Year’s Day to cover her gross misguided altruism? To then support the Mayor of Cologne’s suggestion that German women dress more appropriately so they won’t be pestered spoke to many as such a limp wristed response to common decency. Germans are fair minded people but they cannot be expected to sacrifice hard earned freedoms for some who treat their generosity with utter contempt. Hearts and minds can’t be one by political correctness which seeks to segregate swimming pools and encourage citizens to keep an arms distance from certain groups to avoid unsolicited contact. No wonder the hard talking AfD has taken advantage of this weakness.

Before the trolls scream “racist, Nazi or bigot” we must ask ourselves why these large shifts? Put simply, more people are wanting action over problems they are not being addressed by the political class.

In Germany, political violence has been at record highs. The domestic intelligence agency, the Verfassungsschutz (BfV), reported  in Germany’s 2016 Report on the Protection of the Constitution, the number of left-wing extremists climbed last year, rising to 28,500 — the highest figure since 2012. It said the number of right-wing extremists was 22,471, about one-quarter of whom were neo-Nazis.

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Surely such demonstrations pointed squarely at politicians failing to be open and frank about issues. Talking about truck drivers ramming Christmas markets or shooting up Munich shopping malls as isolated events doesn’t fool anyone. Perhaps the most disgraceful cover up was the camera footage of three Bulgarian migrant thugs who kicked an innocent German female down some subway stairs where she broke limbs. The man who released the video as evidence of the lack of action taken by authorities was arrested for breaching privacy laws. It is like charging a home owner for knocking out a thief trying to break and enter.

Chalk this up as another loss for the political establishment.

 

 

Macron has boarded a modern day Titanic but Le Pen has stolen over a third of the life boats

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The Titanic was most infamous for being an unsinkable ship. We all know the tragedy of its maiden voyage. Folklore tells us that to calm the passengers, the band played as the ship went down. The cautionary tale is one that fits the EU almost too perfectly. Macron’s win is akin to the EU playing the band (well Macron did play the EU anthem for his victory speech rather than La Marseillaise) all the while the Hard Brexit iceberg has ripped a huge hole below the waterline of SS Titanic II. The problem is the EU continues to behave as if the SS Titanic II is indeed unsinkable. Le Pen’s loss is much like believing the water tight compartments will keep the ship afloat. They couldn’t be more wrong as chief designer Thomas Andrews told White Star Line boss J. Bruce Ismay – who protested she was unsinkable- “She’s made of iron, sir! I assure you, she can… and she will. It is a mathematical certainty.”

The SS Titanic II’s crew treats its customers with varying levels of service. It entertains Lady Merkel and Lord Macron in proper first class fashion but for steerage passengers like the Greeks, Spanish and Portuguese they are kept locked below deck. The Greeks were willingly given passage on the SS Titanic II in full knowledge they possessed forged promissory notes as they boarded. The belief was that when they landed on the other side of the Atlantic they’d be able to work it off. Sadly the crew has finally realized it is futile and are now demanding they hand over whatever they have left before handing out life jackets. Moreover they must promise if they’re let out of steerage they must stay chained to the Master at Arms.

In all seriousness the treatment of the Greeks is despicable beyond words. 36% of Greeks live below the poverty line. 58% youth unemployment. That means many can’t access affordable healthcare because it is generally provided by corporates and when you lose a job you lose the healthcare. This means many are forced to use A&E of major hospitals which are now overcrowded and understaffed as more doctors are leaving to seek better fortune for their services elsewhere.

If that wasn’t enough, mothers who had given birth were being restricted from taking their new-borns home if they couldn’t pay the fees. While the government has banned this practice they have introduced new laws to allow the seizure of assets (e.g. homes) if debts are not settled.

Naturally the EU wishes to keep control over the way Greece handles its economic affairs but using the nation’s defiance of autocratic rule from Brussels as a weapon against it shows how little the federal state truly cares for its members. Deeds, not words. It promised to punish steerage countries, Spain and Portugal, for breaching debt covenants. This is the real EU. It is a supranational. A federation through the back door.

The Brexit vote is without a doubt the most damaging iceberg for the EU. The gaping hole it exposes is far more serious than any perceived phyrric victory through Macron’s win.

The issue here is that if Hard Brexit (May is likely to get the majority she needs on June 8th to push for it) is shown to work for the UK (likely) and the idea of extortionate exit penalties are legally unenforceable (confirmed last week) then the risks of jumping ship are sharply lowered. The problem for the EU is that there won’t be enough life boats to save all the crewreaucrats when more member states realize self preservation is the only viable option.

Le Pen’s 1/3rd of the vote, Hofer’s 46% in Austria, Wilders’ 25% increase in seats in The Netherlands, the Sweden Democrats jump to the top of the polls, Italy’s ousting of Renzi, Brexit, the Swiss handing back a 30yr standing free ticket to join…these don’t look like promising trends for an EU which is already badly listing. Despite ample warnings the EU refused (and still refuses) to change its course or exercise due care.

Will Captain Juncker go down with his unsinkable ship or follow Seamen Martin Schulz off before it is too late?

Le Pen vs Macron – Post election followers

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Several days ago I noted that the Twitter following of Emmanuel Macron had experienced the strongest follower growth with Marine Le Pen in second. That was the result. On Facebook the growth differential had Macron in 3rd. Looking at the outcome of the day before the election and the day after the result we see that Macron grew 30,251 followers vs Le Pen’s 20,644. On Facebook we see that Le Pen has grown 41,279 and Macron 30,996 although as a percentage, Macron has grown 12% vs 3% for Le Pen.

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In any event, Twitter was more accurate and Macron would seem to carry the advantage. One thing we can say is that the establishment has been thumped again. Surely Eurocrats will breathe a sigh of relief but it is somewhat irrelevant. The outcome of May 7 will have no bearing on the ultimate demise of the EU. If the EU is constantly having to fight fires to justify its legitimacy it is clearly not deserved to rule the continent. Will keep tabs on the lead up to May 7. At this stage advantage Macron if we assume Twitter is more accurate.

“You stink!” How the EU could learn from the same denial as musicians and journalists.

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“We miss you already.” Those words spoken by President of the European Council Donald Tusk ring deeper than mere sentiment. As much as the almost year long debate of preventing the triggering of Article 50, PM Theresa May has respected democracy. Whether the musings of Sir Bob Geldof, the legal challenges led by Gina Miller or paying attention to polls that showed some wanted to change their original Brexit decision, the UK is doing the right thing. If it is any consolation one can only hope that the EU understands that it is the problem. Was the EU such a no brainer club to be a part of the UK would happily stayed by the campfire singing kumbaya. Did the EU forget the Swiss recently handed back their decades long free pass to enter the EU?

I’ve worked in several organizations where management was in denial. I’m sure many of you have too. When faced with crisis, some managers choose to point to external factors rather than a lousy product offering that no longer matches the needs of the firm’s clients. It is no different in the world of music or journalism.

Musicians used to make a killing on selling albums but Napster opened people up to the idea that you could buy the one song you liked rather than splurge on a whole album which you didn’t. Customers were offered a service which enabled them to choose and they fell in love with the concept. Yet many artists howled at the injustice of no longer being able to live the life of self entitlement. Look at music today and how many artists end up doing stupid stunts to hog the limelight. As the CEO of Avex in Japan said, “Music has changed. Pikotaro’s Pineapple-Apple-Pen has been viewed 100s of millions of times. Ask yourself why?” It is hardly a reflection of musical talent of the likes of Mozart or The Beatles

Journalism is also guilty of denial. The internet has allowed readers to discriminate what they read. Is it any wonder that NYTimes “60% off limited time offer” continues on and that The Guardian has passed around the Guide Dog collection box to keep its product alive, ignoring the fact that it is the ‘poor content’ which attracts users unwilling to pay. Yes, The Guardian is now a charity. To turn the argument on its head, for all of the hatred hurled at Fox News, more people pay for it’s content than CNN and MSNBC combined. Put simply, if people value content they will pay for it.

So to the EU, it is time to realize your product stinks. You can’t forever snub your member states with the same old mentality and expect to thrive. Europe has had a checkered history, Cross a border and the language, culture, cuisine and way of life are vastly different, To try to tell these same people they are “one” is utter insanity. To preach ‘diversity’ is irrelevant. Diversity is about respecting difference yet the ideology essentially preaches there Should be none. Yet the EU is the very antithesis of equality. The EU is happy to sit by and bury Greece’s chance of recovery by imposing hardships until they cede their democracy to Brussels and accept a protectorate status, The founder of ‘democracy’ is forced at gunpoint to hand it over when it was indeed the EU that used Goldman Sachs to fiddle its finances to create cooked books that would allow entry. To threaten Austria that if it democratically elected a right wing President that the EU would remove voting rights. That Italians voted on a referendum as a way to oust a pro-EU prime minister rather than the actual question on the ballot paper. That for all the celebrations and clinking of crystal champagne flutes from the German Foreign Ministry at the Dutch election result failed to realize conservative parties trounced the left. The idea that Wilders was going to PM was never going to happen. Yet he won more seats. Rutte only managed to stem his losses by adopting Wilders-lite.

The reality of Brexit is now formal. It finally seals a promise. It is a message from Brits who have saved Europe countless times that they cannot be part of a group that won’t listen. That individual mistakes like Merkel’s open borders should be a German problem. Why should Hungarians, Brits or French be forced to take a share of the burden of a mistake made by one individual member state? If the EU had voted to do it in a democratic fashion one might have had some sympathy but this was a mistake and it is unfathomable that the EU seeks to appease Merkel for imposing misguided altruism on countries that don’t share her view. It is this type of action that seals the EU’s fate. The idea of one Europe is fantastic. The practical realities are anything but. President Tusk perhaps said more about the introspection that is well overdue in the hallways of Brussels.

Let’s be clear President Tusk, the British do not miss you.

You have to hand it to the EU. Helping to frame Le Pen actually accelerates their demise

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I’ve always held that the EU is out of touch. Now that Brexit has awoken them from their deep slumber, they seem hell bent on stopping anything that risks the end of their supranational powers. How stupid do they take the citizens of the members states for? That she NOW risks being prosecuted for posting pictures of ISIS beheadings in 2015, something that provides proof as to why she pushes the platform she does. If it was such a terrible crime why did they choose to do nothing at the time (i.e. 2015) ? Could it be they finally see her taking the French presidency and with that her anti-EU stance.

Responding to a request from the French judiciary, the EU MEPs in the legal affairs committee voted to lift her immunity, EU officials said. The committee’s decision will have to be backed by EU parliament in a second vote, possibly Friday. There is no need for the EU to meddle in the affairs of the French election.

Ms Le Pen’s immunity shields her from prosecution and lifting it would permit legal action against her. The offence being considered is “publishing violent images,” which can carry a maximum penalty of three years in prison and a fine of €75,000.

Whether one likes her brand of politics or not, there is no way that this can be viewed by Europeans as the EU abiding and abetting a stitch up. To me that shows their true colours once again.

The other day Dutch PVV head Geert Wilders suspended all appearances on his election campaign amid a scandal over alleged security leaks to a Dutch-Moroccan gang that could compromise his safety. Was this a mere ‘security’ oversight by the DBB?

Such actions are only accelerating the demise of the EU. The citizens of increasingly impoverished states are sick of the status quo and being told how they have to behave. Voices like Le Pen should sound as a warning to the EU of its own failing incompetence, not criticize the French for making her #1 in the polls. For indeed if the EU functioned as a mere trade bloc as opposed to a federalist government then perhaps Le Pen would not be so far up the ticket.

Then again desperate acts like this now show even more so the state of panic in the hallways and corridors of the EU bureaucracy. After all Juncker said this week on the future of the EU parliament, “S**t. What do you want us to do?”

It is easy to see why – look at how Le Pen tore strips off Stephen Sackur’s weak arguments on Hard Talk.