Trump's Era - Acts to Save Democracy For Future Generations

Trump policies and beliefs are being criticized and condemned through the length and breadth of US and the world. Protests continue till date and seems to be increasing by the day. Before you get swayed by the protests, ask yourself the following questions:

1. Why should anyone object to plans to stop illegal immigration from southern borders of US?
2. Why create furore over travel ban on seven countries, viz Libya, Syria, Iran, Iraq, Sudan, Yemen & Somalia?

Illegal Immigration 
Anything illegal should be immediately stopped. That is the Rule of Law- bedrock of any democracy. If President Trump is trying to stop illegal immigration, why should there be such massive resistance from US citizens? Are you in favor of illegal activities?Here President Trump is brave enough to risk his political career in order to uphold democratic values in the oldest democracy of the world.  You are invited to give your opinion on following views :-

1. There will always be vested interest groups to protest against Trump's plans to stop illegal immigration from Mexico. Please remember that Illegal Immigration is big business involving numerous agencies and mega bucks.
2. Illegal migrants fall easy prey to criminals. When they cannot find legal work, criminal organizations like drug mafia step in and provide work to these illegal migrants. Why should you allow conditions wherein criminal activities get boost in US?
3. Do not get swayed by what Press says. Get to the bottom of any policy. Is it advantageous to your safety and security or not? President Trump has taken a historic and bold decision to stop illegal immigration into US, unmindful of his own popularity and world opinion. Very few politicians on planet earth can exhibit such courage!

As for Press and world opinion, please discount them since they form part of interest group. If illegal immigration is such a virtue then seek answer to following :-

• Why did Italy sign numerous accords with Gaddafi's Libya to stop illegal migrants to reach Italy's shores? Even after realizing that Gaddafi's regime was committing horrendous human rights violations to the returned migrants, Italy still carried on returning illegal migrants to Libya and kept filling the coffers of Gaddafi with compensation. Where was free Press and world opinion then?
• Why couldn't Australia accept illegal migrants into their society? These migrants were just a handful, and yet Australian PM went ahead and convinced Obama to accept them into US society. In Australia these illegal migrants were isolated and kept in inhuman conditions in offshore islands. No free Press or world capital erupted in indignant protests.
• Why did UK embrace Brexit, which was primarily against open door immigration policy of EU? Can they now turn around and organize massive protests on the streets of London on issue of illegal migration from Mexico.
• Why did EU enter into deal with Turkey to absorb illegal migrants in lieu of money? Where is free press and world opinion on such double standards?

Do understand that every nation has to look after its own safety and security. President Trump is doing just that for US and has the courage to stick his neck out against  overwhelming world opinion and hostile press.

As for negative Press, please realize that mainstream Media is owned and controlled by big corporations and conglomerates. They have myriad economic and vested interests globally. You need to take their opinion with a pinch of salt and decide on issues based on national interest.

Travel Ban
President Trump has issued an executive order to temporarily ban travel from seven countries, subject to review after 90 days. Iran,Iraq, Sudan,Somalia,Syria, Libya & Yemen figure in this list of temporary travel ban. Looking at this list, can you put hand on your heart and say that this executive order is against national interest? You are invited to express your opinion to following views :-

1. Is US dumping ground for world migrants? If world opinion is so sharp on travel ban by President Trump, why hasn't any country come forward to accept these migrants? On the contrary EU agrees to pay 6bn Euros to Turkey to stop migrants from Arab countries entering EU.
2. Why migrants from these seven countries are insisting on crossing the Atlantic and landing on US soil? Closer home, they can seek refuge in affluent nations like Qatar(highest per capita income in world), Brunei(5th highest per capita income), Kuwait(6th highest per capita income), UAE(9th highest per capita income), Saudi Arabia(10th highest per capita income) and other oil rich gulf countries like Bahrain etc. US is just 14th on this list of per capita income of countries and yet there is such a do or die situation being painted for their temporary ban to US. 

US and other western democratic societies have evolved painstakingly over the decades with certain value system which is inherent and intrinsic to their behavioral pattern. These societal mores and customs have now become ingrained in their outlook to life and way of living, conforming to democratic values.

President Trump is simply trying to preserve these Western democratic societal values by imposing this travel ban. Consider the following thoughts, which are factual and are in no way a judgement on any societal values being right or wrong :-

• Migrants from these seven countries have a different value system ingrained in them over centuries. Democracy is not part of their way of life. Recently some had violently brought about regime change in the name of democracy but still failed to install democratic governments. Do you want these values to get imported to US society?
• Democracy does not mean only democratic rights without responsibilities. First responsibility in democracy is maintaining sovereignty and integrity of your nation. Nation state does not mean that there will be only one sect, or religion or ethnic group. People from these seven countries have been brought up to believe to fight for rights of only one community, with scant respect for anyone else. Their generations have struggled over years to bring down regimes primarily on sectarian lines. Do you want to be swamped by such value system in US society?
• Religion is basically a matter of faith between an individual and God. Religious places are meant to cater for facilitating this union between man and God. But religious places in Islam are fully integrated with politics of that country and remain in forefront of political discourse on daily basis. Are you ready to accept religion to interfere in US politics in times to come?

President Trump is taking all steps to save democracy in the last and oldest bastion of true democracy. European nations will wake up to do the same at some later date.

You may have different views on all that has been said above. Do give your valued comments with facts and reasoning. There maybe many aspects that I have overlooked. Do shed light on missed aspects and I will feature them in my next blogpost with your credits.
Do seek comments from your friends and family also, and let me know differing views or more details on the subject for better understanding of a complex issue.

Dow Reaches Milestone 20000

It was tantalizing moment when Dow Jones touched historic milestone of 20000 on Friday 06 Jan 2017. It was  a moment to celebrate, specially for me. Way back in Oct 2014 I had predicted this milestone in Dow while commenting  in a MarketWatch column. Dow was then at 16400 level.

My comment had elicited a response from a reader and I decided to start this blog to track Dow's journey to projected 20000. To get the drift, check out my first blog post Dance of Dow. 

You can also access the above referred MarketWatch column here. My comments can be viewed in the Comments section

Out of my four predictions on movement of Dow, three have so far come true. My fourth and last prediction is the most frightening. It is Dow's fall to 10000 from level of 20000.

What possibly can be reason for such a cataclysmic fall to 10000? You may find an answer to this in my earlier blog post

Bears Sharpening Daggers - US Markets in Danger of Bear Grip

Crude and  Brexit have already done their bit in shaking the markets. China still remains the elephant in the room.

Bored of Being Unemployed - For Traders Only, Investors Keep Out

As of this moment Dow is trading  at 17716, down114 points. Traders be ready to jump into trade as discussed below.

What we are going to discuss today is for traders' eyes only. Investors please do not try this risky strategy that I am going to discuss today. One has to be nimble footed and there is no room for fat fingers.

I will be giving Dow levels to trade. Scrips which are co-related with Dow movement can also be traded, keeping given Dow levels in view. I hope I am clear. If yes, let's trade ;-


Condition # 1

• If Dow falls down to 17400/17450, then buy.
• Sell your position when Dow bounces back to 17850/17900
• To square off this trade should not take more than a week.
• If this trade materializes then you stand to gain 400/500 Dow points in quick time.

Condition # 2

• If Dow does not breach today's low of 17700, then wait for right conditions for sell to develop.
• Dow is going to trade sideways, so sell will come if Dow takes bounce from 17700.
• I will let you know in advance when sell conditions develop.

By now you must be aware that I had predicted these volatile trade conditions on 15 Apr 2016, when I had recommended exiting long positions in Dow. For those who are visiting this page for the first time, you may like to read that post titled Bears Sharpening Daggers -US Markets in Danger of Bear Grip

Further I had mentioned in this post that 18000/18200 is selling zone in Dow and bears would like to ferociously defend this last known territory. In that post, I have also discussed about my apprehension of "Bull Trap", which seems to be turning out correct.

Today I am giving out this trade, mentioned in Condition # 1 above, only for traders. From 15 April 2016 onward we have been unemployed as mentioned in my earlier post Out of Work But Thankfully Out of Danger - US Markets Dive. 

I am reminded of the cliche "Better safe than sorry". 

Japan Unsettles Global Markets - Havoc Spreads

Bank of Japan announced it's monetary policy today -  that announcement brought tsunami in local and global markets. What did Bank of Japan(BoJ) do to unsettle global markets so much that bulls had no place to hide? Long trades were decimated in all markets from Asia to Europe to America.

In Japanese markets there was bloodbath with Nikkie225  losing 624 points, down 3.6%. So what did Bank of Japan do in it's policy announcement that horrified the investor community and made them dump everything in sight? Bank of Japan took following monetary policy decisions:-

1. BoJ kept its Deposit Rate unchanged at -0.1%.
2. BoJ maintained it's Asset Purchase target at 80 trillion Yen (USD 738 billion as of current conversion rate). 
3. It gave some relief to quake hit areas by offering zero interest rate loans to those areas.

Result of BoJ Inaction: 

After the announcement by BoJ, Yen roared into super-drive and strengthened from 111.88 to 108 against US Dollar. Presently it is trading at 108.5 as of going to press. 

Japanese economy is export oriented and hence Yen gaining so much strength against US dollar means that export of  Japanese companies will no longer be competitive. That will directly hit the top line of companies, finally effecting their bottom line.

What was wrong with BoJ decision?

Will someone please tell me what was so terribly wrong with BoJ decision. It basically did not alter anything from what existed since February 2016. Maybe it was scared to shake the equilibrium in the market as it existed. And look what it achieved - just the opposite!.

Why did BoJ keep rates unaltered?

BoJ thought not to change anything because it got scared of consequences. When it decreased Deposit Rate from +1% to - 1% last February, a sharp drop occurred in stock prices. This time around it did not want to take the blame of upsetting the market. And yet it did!

What did market want from BoJ?

We live in bizarre times. Negative deposit rates mean that if you deposit money with Central Bank, you will have to pay for it and not get paid.. 

Did market participants want further cut in deposit rates? I don't think so. That would have been disastrous for Yen- Dollar trade. Japanese exports would have got further hit.

Did market participants want BoJ to increase deposit rate to pre-February rate of +1% ? That would have effected liquidity. Entire exercise of negative rates was meant to spur growth for Japanese economy so that it can come out of decade long stagnation.

Maybe market participants wanted BoJ to decrease the borrowing rates to negative territory. That would mean that you get paid for taking loan from Central bank. Point to ponder!

Illogical Market Reaction

Japanese companies are effected and so is Japanese economy. Economy will shrink and deflation will take roots. But that has been the state of this third largest economy of the world for nearly two decades. How does that effect global economy?

Global economy has been chugging along despite Japanese stagflation for years. What has materially changed in global economy with today's inaction of BoJ ? Then why such a violent reaction in global markets to BoJ decision? I have no answer. If anyone reading this can provide an answer, we all will get educated. Hit the comment button at the bottom of this post freely.

As of now Dow is trading 58 points down. US market participants have reacted more maturely to news from Japan. May be it will make rest of the world think and act logically tomorrow.

Sun is finally setting in the land of rising sun. That is a reality and we have to come to terms with it - earlier the better.

Beginning of End of Oil Age - Saudi Vision 2030

Saudi Arabia got its importance and wealth from US oil crisis in 1970s.

U.S. response to the energy crisis was to establish deeper relations with Saudi Arabia. Deeper relations boiled down to two main points of agreement:-

• Saudi Arabia will have to sell its oil in US dollars only. It's implication is that any country wanting to buy Saudi oil will first have to buy US dollars to pay for oil purchased from Saudi Arabia. Thus began dominance of Petro-Dollars in world economy.
• In return Saudi Arabia got military protection from US.

Importance of Saudi oil started to change from 2009, when US oil production increased year on year. Increase in US oil production carried on unabated and Saudi influence declined proportionately.

To add insult to injury, more factors surfaced on the horizon for Saudis' discomfort :-

• New technology  allowed further increase in US oil production through fracking (Shale gas).
• US no longer is energy dependent on Saudi Arabia.
• Saudi Arabia allowed oil price to plunge, hoping to make offshore drilling and Shale Gas production economically not viable. By doing so, Saudi's calculated that they will decimate competition and again rule the oil market.
• Instead something very strange happened. Unimaginably low oil price did not increase demand in oil. 
• Demand destruction in oil was due to global financial crisis in initial stage. Then governments across the world started to curb use of oil and started investing in cleaner and greener alternative energy sources
• G-7 countries have agreed to cut carbon emissions and totally end fossil fuel use by end of this century.
• Paris Agreement on Climate Change last December commits all countries to holding global temperature rise to "well below 2 degrees Celsius". This can be achieved by sincerely shunning fossil fuel in an accelerated manner world over.Some more thoughts on fossil fuel in this post:

                          Break Free from Fossil Fuel - Resolve on Earth Day

Saudi Arabia has now realized that it has lost control over oil price. Iran's entry into the fray as another major oil producer has not helped the Saudi cause. As last ditch effort Saudis played Doha Summit card for production freeze so as to contain Iran. But Saudi bluff was exposed by Iran and rest is history. Read more :

                      World Waits with bated Breath - Doha Summit Outcome
                              How Will This Sunday Be - Black or Grey?

Last Monday Saudi Crown Prince announced pompously that Saudi Arabia will become oil-independent for its survival in next four years. He unveiled "Saudi Vision 2030" - an ambitious plan to diversify into income streams not dependent on oil.

This is admission by Saudi Arabia that it has finally given up hope of controlling oil price. We can now expect to be freed from the vice like grip of oil cartel headed by Saudi Arabia.

Before Doha Summit, Saudi Prince had threatened to increase oil production in case Iran did not sign Production Freeze agreement. I had commented that it is empty threat to scare US, so that Iran can be pressured. You may again like to read my argument in: Dare Saudis to Execte Threat to Ramp Up Oil Production.

"Saudi Vision 2030" has finally brought curtains down on fight to control market share. This will help oil price to stabilize and get dictated by market forces of genuine demand and supply.

However we wish Saudis success in their new venture.

As for us, we are presently unemployed. We are sitting on the sidelines, watching fight between bulls and bears in US markets. For insight into our present idleness read " Out of Work But Thankfully Out of Danger - US Markets Dive "