Why Iran might loose every battle and still win the war

 I am old.  I am old enough to remember the Iranian revolution, and the US embassy being taken over and 55 Americans held for 444 days.  While I know this might sound crazy, the Iranians really put their thumb on the scale of the US elections---had they released the hostages in October or had the mission to use the military to free them work Carter might very well have won reelection and we never would have had a Reagan presidency.  How different would the US have been with no Reagan presidency, who knows but I am sure the answer is VERY.  Instead the mission failed, and the hostages were released the day Reagan was sworn in.  A middle power middle east country swayed the US presidential elections--that is some serious power.

Fast forward to today and our military has crushed the Iranian military and yet Iran might have even more power to influence American than in 1979.  Since the start of the war the price of oil has gone up about 30%.  Predictions of a global recession or even depression are commonplace.  Expectations of future interest rates have gone from cuts to hikes as higher energy prices feeds through into broad inflation expectations.  But here is the difference no one is talking about.  In 1979 US total debt to GDP ratio was 31.6% while today it is 122.6% (i.e. almost 390% higher).  The dog that hasn't barked is America's ability to fund our borrowing--but if that is ever going to be an issue it might be when American pursues a war of choice not necessity while also beating up our allies with tariffs and threats to NATO while China takes a hard look at taking over Taiwan.  If ever there was a time for foreign individuals and governments and asset managers to go on a buyers strike this is it.  And while the DOD (or is it the Department of War) asks for an additional $200 billion to fund the war in Iran the question that no one is asking is who will loan us that money.  And at what price.  

While Iran helped swing the 1980 elections to Reagan in 2026 Iran might create a blue tidal wave.  The big difference is this is of Trump's making while Carter born no responsibility for the Iranian revolution.  Also Trump has taken the world to the brink of WW3.  If you are not worried about China being concerned about American controlling the Strait of Hormuz you should read a bit of history about Japan's motivation in 1940.  See below.

Oil was the primary catalyst for Japan starting World War II in the Pacific. Facing a 90% dependence on foreign oil imports and a total U.S. embargo in 1941, Japan launched a "southern strategy" to seize oil fields in the Dutch East Indies. This move meant seizing territory and attacking the U.S. to ensure, rather than run out of, fuel for their war machine

Iran --some thoughts

 First things first, I really hope that our attack on Iran leads to a stable, healthy, democratic, region where all people are treated with respect.  Of course our partner Israel (maybe even our leader if Rubio is to be believed) in this war does not pursue such an with Palestinians, but that is a story for another time.  Also I am old and remember the Arab Spring and our previous attempts at bombing our way to democracy and its failures.

Things to think about:

1.  I believe the most likely outcome of our war is a failed state in Iran.  Historically which has been more dangerous, a failed state or a state sponsor of terrorism?  Answer--a failed state.  The 9/11 attacks came out of a failed state and is the only time in the last 75 years there has been a mass causality event on American soil from a foreign actor.  Also how much trouble could a failed state located on the strait of Hormuz cause?  A lot.  Bottom line, a bad acting state is bad, anarchy in a geographic important location with lots of arms and oil and hate towards America might be a heck of a lot worse.

2.  Who is winning right now?  China.  A classic blunder is trying to fight two wars at the same time, and China is watching us burn through munitions to destabilize the Middle East.  We are told that we needed to attack Iran because they were weak and we had actionable intelligence that their leadership was gathering.  I wonder if China is taking a hard look at Iran and our force readiness and thinking, China is  never going to have a better time to take Taiwan.  If I was in Taiwanese leadership I would be hiding under ground and have the country at Defcon 2.

3.  You know what Trump and the GOP never talk about any more---the US debt.  First came Trump's BBB which is projected to add $4 TRILLION to our debt over 10 years ---while cutting Medicaid and crushing rural hospitals resulting in 10-50% increases in the cost of health insurance.  Then Trump decided to bomb 7 countries and who knows how many boats in the Caribbean.  He also decided to deploy the National Guard in American states and the Capitol in a show of force to intimidate Democrats.  All of these things cost money.  We will be lucky to see our debt grow by only an additional $4 trillion over the next 10 years.  Of course with a President whose businesses have declared bankruptcy 6 times, worrying about how the bills get paid is not on his to do list.  For the rest of us who will pay the bills it should be.  With  America  burning through goodwill as fast as we are burning through Patriot missiles, is it possible that the OPEC countries decide to buy fewer US bonds in the future.  Hell yea.  While I don't foresee all foreign countries deciding to sell all their US government bond holdings is it possible or even likely that they decide to cut way back on future purchases which will correspond with our ever rising borrowing needs.  Yes, indeed.

Finally a bit of education for all those arm chair middle east experts in the GOP (I've lost track of the number of GOP members of Congress who don't know this) Ali Khamenei was killed this week.  He lead Iran from 1989. Ruhollah Khomeini lead Iran from 1979-1989 and was responsible for the fall of the Shah, the take over of the US embassy and the 1983 bombing in Beirut.  Every time I hear a GOP senator telling me that Khamenei has been in charge since 1979 I want to scream that maybe just maybe before risking American lives, the global economy and our military readiness you should read the cliff notes on the Middle East (PS Iran is mostly Shia Persian and the states surrounding them are Arab Sunni and they don't like each other.  As a matter of fact they have been at each other's throats off and on for about.....1400 years.  So don't be so surprised when Iran decides part of their plan to share the pain includes attacking their Arab neighbors.)  

About team USA gold medal in hockey---follow the dam rules

 Team USA hockey beat Canada in a great exciting game.

And then Kash Patel and DJT and the team itself kinda screwed it all up.

I do know a thing or two about hockey---let me share some knowledge with you.  Team USA at the Olympics is bound by IIHF rules on the ice, and off the ice they are bound by Team USA rules.  Those rules include NO PHONES in the locker room and access to the locker room is limited to team members and staff (with safe sport certification).  Clearly these rules were not followed and the coaches should be fined and reprimanded.  More importantly is the example set by the top level Team USA team.  If they don't follow the rules regarding access to the locker room and cell phones why should Bantams or Team USA JRs?  

We have seen what happened with women's gymnastics when the governing body didn't follow rules re safesport.  Why the hell was Kash Patel allowed in the locker room.  Is he safe sport certified?  My daughter had to get safe sport certification just to play when she turned 16.  Can we please see Mr. Patel's current safe sport certification?  My son has to re up his safe sport certification every year to play at college (and coach in the summer).

Maybe with a little bit of time and distance the team could have enjoyed themselves in the locker room, and then thought about being used as a political tool at the State of the Union Speech.  Bottom line Team USA after their great win has done nothing but hurt hockey.  A private meeting with the president, fine.  Allowing themselves to be trotted out so that Trump could share in their glory at the SOTU not fine at all.  And chugging beers with Kash Patel and locker room banter with the president.  Really bad optics.  Guys your better than this. 

"the dow is above 50,000" Pam Bondi

 Ok, thanks Pam.  I am pretty sure that actually isn't relevant to the DOJ's activities or related to the question you were asked, BUT in the spirit of the Olympics lets take a look and see if DJT would be on the podium for equity returns over the past year.

Gold   medal           Korea KOSPI      127%

Silver  medal          Japan Nikkei        50%

Bronze medal         MSCI Emerging markets index 49%

                       Canada TSX        34%

                        MSCI world index ex us     33%

                       UK    FTSE                        23%

                      MSCI World                        19%

                       Hong Kong Hang Seng    15%

                        S&P 500                            15%

                        Dow Jones index                13%

Our president can post a video of him winning the gold medal against Canada but he sure can't claim that his economic policies are medal winning.  Canada TSX is doing 260% better than the Dow over the past year.  Emerging market are doing 372% better than our poor Dow.  The entire world stock market is doing 220% better than the S&P 500.  So when Trump claims tonight at the State of the Union that we should be thrilled with how good our 401ks are doing, you should realize that if your sold all your stocks when DJT was elected and bought the MSCI index ex US you would have done 220% better.  Let that sink in.

To add insult to injury (or at least poor performance) if you had invested overseas you also would have not lost 8% (DXY) as your currency our dollar depreciated.

Would Mr. Market give DJT a medal for our stock market performance.  Nope.  But one thing this administration doesn't do is let facts get in the way of a good story.  So Pam you go right ahead and shut up those evil socialist libtard dems with that devesating clap back that we should all be thankful for our crappy equity performance under DJT.

why I dislike Trump in $$$s

 The election of DJT has been very expensive for me and my wife.  How expensive?

increase health care costs                                    $26k

loss of solar tax credit                                             $30k

loss of business sales to Canada and Europe          $50k

on the plus side

extension of tax cuts                                                 $15k

total                                                                        -$91k

So the president who folks claim is good for business owners sure isn't good for this business owner.  Increasing tariffs by about 30% on my sales into Europe and Canada has.....hurt sales.  While Canada is not a main market for us, its not nothing.  

Health care is something I think many of the talking heads don't understand in a direct way, and for sure our elected leaders have no clue.  If you are employed by a large business you might find health insurance for a couple aged 50-64 costs you about $12k a year in premiums and has a 5k per person deductible.  You don't realize your employer is probably paying $10-15k a year for that plan nor the advantage of being in a more healthy insurance pool helping to keep costs down.  In 2026 thanks to Trump's BBB legislation if you are in the individual market place (and yes the preexisting condition is baaaack) you are looking at $22k in premiums for a husband and wife and an individual $13k deductible (ie before our insurance company pays a penny we pay $48k).  Unless you have a net worth of over $1m its just not worth paying that kind of money---better off to hope to be healthy and risk bankruptcy than pay that level of insurance to protect your assets.  Is it good for our country to have large numbers of people risking bankruptcy?  Probably not, but don't tell Donald that. He loves bankruptcy.  But lets be really clear, when someone doesn't pay the hospital those debts get socialized to the rest of us---which will drive up our costs.  The GOP's BBB will create a negative reinforcing spiral of rising health costs for all.

We are in the process of building an all electric house (our neighborhood isn't serviced by a gas utility).  We are using heat pumps and all kinds of highly efficient appliances along with lots of insulation and excellent windows.  Still the ROI (return on investment) of our solar system is ....4% A 4% ROI when money market rates are 3.5% is really bad.  Most investors would look for an ROI of 8-12%.   With the tax credits our ROI would be 7.8%.  Still a touch low, but in the right neighborhood.  4% is horrible, and only makes sense if you think the cost of energy is going to skyrocket---which I suspect it will.  So we are going to pay up for a solar system and if energy costs stay low hope that powers the US economy and if energy costs explode then our investment is wise.  Still discouraging people from adding energy production to the US seems profoundly stupid.

On the plus side extending the tax breaks is saving me $15k a year, while adding an estimated $2 trillion (CBO scoring) to the deficit over the next decade.  No surprise that our CEO in chief's various businesses have declared bankruptcy 6 times.

to my GOP friends a question from the way back machine

I have many friends who used to and many who continue to describe themselves as Republicans,  For you I have a quick thought experiment.  If I had asked you 11 years ago if you would vote for or support the following positions from the president

1.  ending the independence of the FED (in my money and banking class in 1988 this was sacrosanct and unquestioned, now not so much)---while at it fire the head of the BLS because they don't like the unemployment numbers

2.  being pro random universal tariffs to reward and punish individual countries and companies

3.  the government taking ownership stakes in companies and profit sharing

4.  a budget that added 3.4 trillion to the national deficit with dynamic scoring (and only 3 trillion without dynamic scoring---ie the president and his party managed to create a budget that cuts taxes and hurts growth--something I have never seen in half a century)

5.  a president who would put his image on our currency

6.  a president who would ignore the emoluments clause and watch his net worth grow by $3 billion in his first 10 months in office--including trading weapons and AI chips for businesses deals with his companies with Islamic state supporting countries

7. a president who would go to war with Venezuela for ...well its not clear either their oil reserves or because he doesn't like Maduro and blow up ships in the Caribbean because he says they have drugs on board

8.  a president who would increase the DHS budget (department of homeland security ) to over 100 billion per year.  Only the US, China and Russia have a defense budget larger than the US DHS budget--the DHS budget is now more than double the Israel defense budget

9.  would suspend habeas corpus.  Have masked unidentified agents arrest and deport people without due process

10.  would call out the national guard and the active military over the wishes of mayors and governors to attack peaceful protestors who disagreed with the suspension of habeas corpus

11.  would demand comedians lose their job, use the power of the federal government (FCC and FTC) to control the media

12.  would side with Russia in a hot war Russia started in Europe over Europeans

13.  would weaken NATO by questioning article 5

14.  would put an anti-vax tin foil hat leader as head of HHS and watch measles rates in the US hit the highest in 20 years 

15.  would demand/ expect tribute from companies (FIFA peace prize, Apple gold thing etc)

ok I am going to stop, but this list could go on and on and on.  Would a Reagan, Bush 1 or 2, Ford, Nixon Romney Republican vote for this?  NO.  No no.   GOP frogs please jump out of the boiling water and realize the current party leader is not someone you would have ever considered voting for a decade ago.

this just in ---Soros Open Society funds Antifa

 Stephen Miller found the receipts---Open Society Fund bought a dozen frog costumes and 100 bikes and sent to the war zone in Portland OR.

Frog Resistence