US can’t afford peace with Russia

With hundreds of trillions of dollars on the line, the US media is beating the drum on the 70-year-old plus Russia is bad narrative.

The entire military-industrial complex was built on that premise that we had to go toe-to-toe with Russia on every aircraft, tank and nuclear missile — even if the East did not have that weapon.

What will happen if the Bogey Man is not so bad after all.

Now along comes President Trump to stick a pin in that idea and it unleashes forces from the left and right beholden to escalating defense budgets and growing military bases in their districts.

Peace is too costly to break out across the US visa vis Russia. We need that 70-year-old premise that NATO and containment are what the world needs.

Of course Trump will survive the onslaught of criticism, however threatening to take the milk and honey away from the defense contractors and intelligence agencies is quite another matter.

It was JFK who threatened to break up the intelligence agencies –most notably the CIA — into pieces in 1963 that may have played a part in his assassination.

Let’s hope nothing untoward happens again.

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JPM’s Dimon eyeing Deutsche with Chinese cash

Is Jamie Dimon looking to goose-step into Frankfurt and take over troubled Deutsche Bank using Chinese money?

That appears to be to the story coming out of Germany as Deutsche’s stock spikes more than 6% in European trading on the news.

JPMorgan and Industrial and Commercial Bank of China are looking to take a stake — size unknown –to bolster the troubled bank, the report from the business weekly WirtschaftsWoche said.

WIWO also reported that German Chancellor Angela Merkel had met Axel Weber, the former Bundesbank head who is now chairman of Swiss bank UBS, to discuss his thoughts on Deutsche Bank.

Newly installed CEO Christian Sewing has not given the market any confidence in his ability to turn around the much maligned institution, which has paid nearly $500 billion in penalties and fines to global regulators for its bad banking actions over the last decade.

Sewing is also seen as an impediment to change since he made his bones at the bank during this troubling time as I have written before.

Before the summer ends something will happen with Deutsche Bank. Whether that’s a merger with fellow-troubled German firm Commerzbank or a bailout through cash injections from EU this bank right now is on the ropes and getting pummelled.

Tariffs and the Art of the deal German-style

As I wrote last week this is more of a tariff tiff than a war.

You announce a number — $50B, $200B in tariffs — it doesn’t matter. It’s just a number to begin negotiations.

Wednesday morning news broke that the German ambassador was about to announce that the EU would abandon all import tariffs for cars between the European Union and the US provided the Trump Administration drop its 25% border tax on all EU car imports.

See its all negotiations and never really gets implemented. It’s the Art of the Deal so to speak. Finally, America has someone who does not bow to pressure from other countries that have enjoyed decades of favorable treatment selling into the US market.

This has everything and nothing to do with President Trump. Presidents Obama, Bush, Clinton, Bush could have done this. They couldn’t because they took the money of the multi-national corporations and the globalist free traders who demanded that the US come out on the losing end of most trade deals as a way to pay back for our other sins.

Enter Trump. No ties that bind to these factions. Knows a thing or two about negotiations and plays hardball with them. As I wrote earlier, do you think any country would forgo its ability to sell into the US over tariffs or import taxes?

Of course not. I think I hear China working the abacus to figure out its new proposal right now.

Middle America banks unlocked from Dodd-Frank shackles

Congress has unshackled many of the medium-sized US banks from the onerous Dodd-Frank law, put in place after the 2008 financial crisis.

The House voted 258-159 to approve the legislation, which the Senate passes back in March. The bill now awaits for President Trump’s signature. Continue reading

It’s not crude to protect the American consumer

In the last three months crude oil has soared 18.6%, while the S&P 500 and the 10-year bond are flat.

But why is that the case? Please don’t give me the old “summer-driving season”.

The United States is fast becoming the largest producer of crude oil in the world, ahead of Saudi Arabia and Russia, according to the newest EIA report.

Yet the difference between European Brent Crude and West Texas Intermediate crude is only $3 a barrel. Surely that spread needs to be much wider given the Iranian sanctions.

While the White House is pressuring Saudi Arabia to make up the shortfall of Iranian production, it needs to get a handle on domestic production to curtail rampant price hikes, which amount to gouging for US suppliers, since they are not selling large quantities on the international market.

If the 1970’s and 1980’s were about OPEC dictating price and supply, the 21st century should be about our energy independence and a domestic price suiting that situation.

If American crude producers can survive on $50 a barrel, then why let crude trade here for $70 a barrel?

The higher price only emboldens countries that despise us to gather more profits in order to fund operations against us, while wiping out any monetary gains Americans might realize from slowly rising wages.