investorpolitico

The House Majority leader Eric Cantor, Republican, has been defeated by the little known Tea Party member David Brat.

This is a big surprise….as 2 days ago David Brat was so unknown that its wikipedia entry was just 2 lines. And the Republican party is reeling from the shock.

I think that the reason for the change is that Eric Cantor was seen to weak against President Obama (specially now with the new US Bill on Immigration) and starting to be part of the establishment.

It is really early news, but this could see the rise (again) of the Democratic-Republican conflict that made so much damage.

There is very little info on David Brat, but he seems a theologist (he even did a Master in Divinity at Princeton) and two published books have titles pretty much on the Christian Orthodox side “God and advanced Mammon” – Mammon being in the New Testament a false deity representing wealth and greed.

Here, we go again…..

Where we are at now?

Russia

Vladimir it is softening the position on Ukraine – its main scope is to neutralize it, not invade it. Neutralize it means not make it to be too Western. Invasion would be the last choice (Russians do not trust people and do remember very well Hitler’s Germany).

It cannot push too much the friendship as the US as the US is much stronger, both economically and as military.

What Putin is trying to do it is actually more on the economic front. So he is trying to de-dollarize the economy, pivot to Asia and trying to diversify the economy as the most profound weakness of Russia is its dependence on oil price (which with Saudi Arabia is practically in the hands of US). Logically they will try to establish alliances with China, Saudi Arabia (scared by re-alignement US-Iran), Cyprus,  Asia and South America. But it does not have the power projection of the USSR. It will continue trying to destabilize the ex Soviet states. The alternative weapon that Russia as it is to start a Great Financial Crisis 3 (there are enough hidden issues that the FSB (Current KGB) could exploit), but it would be really a weapon of mass (including self) distruction

US – US is the one that is acting very aggressively here. It reinforced the presence in the Baltic countries, Poland and specially Romania (important as it counterbalance the Russian fleet in the Black Sea). It is trying to block an Eastern Europe pipeline and creating an oil alliance Turkey, Iraq, Iran, so, with Saudis, as the control on the ultimate weapon against Russia (oil price, same tactic the used to cripple the USSR revenues in the USSR invasion of Afghanistan). The US must show to be prepared to use the oil price card, without really using it as it would create issues for a lot of allies.

Germany is trying to pacify the two belligerents, as it depends from Russian energy and does not be caught in between.

This is actually one of the strategic reasons (as described in a 3 years old blog of mine)  as why US is disengaging from the Middle East – to focus on a containment of Russia (which had the upper hand until 2 years ago).

So now the advantage is squarely in the US field.

But this is also a dangerous game. For China, I think this “bring forward” the confrontation with Russia when it is still weak -as just one logical consequence. When the US will have neutralized the Second Rise of Russia…they will turn on China.

I am sure that it does not keep a genius to see this. In turn the Sino – Russian alliance could really turn into an Eastern Bloc.

Well, this is very good news for one of oldest headache.

In my opinion most of the failings (as Sub Prime, but also the various mortgage brokers) where simply due to the conflict of interest in remunerations that the research houses had in approving the product.

Now the Federal Court in Australia rejected an appeal and now the New South Wales Council can reclaim the lost AUD 30 millions.

What is most interesting is that the IMF is also looking at the case, as a potential guide-case. The worldwide claims can be as high as US$200 billion. That would be an extinction event for the main research houses involved