Maybe it’s because the complexity is difficult to distill; maybe it’s because some just can’t give President Trump any credit; or maybe it’s because the scope is too challenging to comprehend against the constant belittlement meme du jour; regardless of reason, President Trump is fundamentally realigning international geo-political alliances and almost no-one is connecting the dots.
President Trump obviously held a long-ball strategy with the Chinese; he’s described the approach in his books and lived the approach in his business life:
At the outset, position yourself at the furthest oppositional point when it costs you nothing; then leverage inward toward your opponent as they expend their resources to meet your stance.
So far Trump is playing it straight down the line. His much touted backtracking on Chinese currency manipulation is not quite as straight forward as the MSM makes it out to be. Big surprise.
On April 14, the U.S. Treasury Department released its semiannual report on the currency exchange policies of major U.S. trading partners. The report found that currently no country’s policies could be considered manipulative within the context of both current definitions and past practices. However the US kept China, Japan, Germany, Taiwan, South Korea and Switzerland on the list of countries to monitor. The current reported findings are in contrast to Trump’s campaign rhetoric on China, but they are in line with current economic thinking and legal definitions regarding currency manipulation.
Trump’s administration is being constrained by the current legal definitions, case law and by past practice criteria — bilateral trade balances, current account balances and currency intervention policies — used in previous reports to determine which countries should be monitored. Nothing has changed so it’s no wonder the US bureaucracy had the same opinions that they’ve held for the past 8 years.
The current information war, that is raging globally, makes it difficult to assess which description of the Trump Tomahawk strike on the Syrian airfield at Shayrat is closest to the facts. Even the facts as to whether there was actually a chemical war-gas attack was being called into question. Emerging facts seems to reinforce that indeed there had been a release of war-gas in Khan Sheikhoun Syria and that people had died. Other than that probability we have to enter a ‘Wilderness of Mirrors’ where truth is a very slippery commodity. As Churchill was reported as to have said,” In war the first casualty is the truth”.
At first blush three possible scenarios come to mind:-
#1 Assad launched an aircraft bombing raid carrying Sarin gas munitions and attacked civilians in Khan Sheikhoun killing many innocents.
#2 The Syrian air force bombed a rebel / islamist logistics installations in Khan Sheikhoun using conventional bombs. Secondary explosions suggested that a major rebel munitions and possibly a manufacturing facility had been hit, releasing stored Chlorine & Sarin war-gasses, killing many innocents.
#3 This was an inside job by rogue US security services to tear the initiative from Assad’s grasp and forestall his victory in the Syrian Civil War. Collateral damage saw the killing many innocents.
Occam’s Razor suggests that either scenario #1 or #2 as most probably likely scenarios, with #2 shading scenario #1 based on current information.
Carrier Strike Groups
The USS Dwight D. Eisenhower is underway in the Atlantic Ocean for a sustainment exercise.
The USS Carl Vinson CSG is on a scheduled port visit to Singapore while underway in the U.S. 7th Fleet AOR.
The USS George H.W. Bush CSG is underway in a deployment in the U.S. 5th Fleet AOR supporting maritime security operations and conducting theater security cooperation efforts.
Amphibious Ready Groups/Marine Expeditionary Units
The USS America is underway for sea trials in the Pacific Ocean.
The USS Bataan ARG is underway in a deployment in the U.S. 5th Fleet AOR supporting maritime security operations and conducting theater security cooperation efforts.
The USS Bonhomme Richard is underway in the U.S. 7th Fleet AOR for a routine patrol.
The USS Iwo Jima is underway for routine training in the Atlantic Ocean.
The USS Makin Island ARG is underway in the Indo-Pacific region to enhance amphibious capability with regional partners.
Two small Italian banks, Popolare di Vicenza and Veneto Banca, recently reported their 2016 fiscal positions that showed losses of 1.9 billion euros ($2 billion) and 1.5 billion euros ($1.65 billion), respectively. Both banks have slipped below the EU mandated requirements for managing bad debt leading to erosion of their capital reserves. Though these two banks are small they are the ‘canaries in the fiscal coal mine’ when it comes to assessing the current overall financial problems besetting Italy. There is currently a total 360 billion euros of non-performing loans in the Italian banking system, making the sector extremely fragile.
Monte dei Paschi
Precedence setting mini-banks like Popolare di Vicenza and Veneto Banca, have a outsized influence on setting the rules underpinning the setting of controls and limits on the largest banks in Italy. Precedence setting on how the European Central Bank treats Italy’s large banks are administered, based on such weak guidelines is causing investors across the sector to re-evaluate their investments.