Stocks and Precious Metals Charts - The Crazy Man School of RealPolitik

 

"Mass propaganda discovered that its audience was ready at all times to believe the worst, no matter how absurd, and did not particularly object to being deceived because it held every statement to be a lie anyhow.   The totalitarian mass leaders based their propaganda on the correct psychological assumption that, under such conditions, one could make people believe the most fantastic statements one day, and trust that if the next day they were given irrefutable proof of their falsehood, they would take refuge in cynicism; instead of deserting the leaders who had lied to them, they would protest that they had known all along that the statement was a lie and would admire the leaders for their superior tactical cleverness."

Hannah Arendt, The Origins of Totalitarianism

"Nothing is so unworthy of a civilized nation as allowing itself to be 'governed' without opposition by an irresponsible clique that has yielded to base instinct.  It is certain that today every honest German is ashamed of his government.  Who among us has any conception of the dimensions of shame that will befall us and our children when one day the veil has fallen from our eyes and the most horrible of crimes— crimes that infinitely outdistance every human measure— reach the light of day? 

If the German people are already so corrupted and spiritually crushed that they do not raise a hand, frivolously trusting in a questionable faith in lawful order in history; if they surrender man’s highest principle, that which raises him above all other God’s creatures, his free will; if they abandon the will to take decisive action and turn the wheel of history and thus subject it to their own rational decision; if they are so devoid of all individuality, have already gone so far along the road toward turning into a spiritless and cowardly mass— then, yes, they deserve their downfall."

The White Rose, First Leaflet, Munich 1942

"When humanity, subjugated by the terror of crime, has been driven mad by fear and horror, and when chaos has become the supreme law, then the time for the empire of lawlessness will have come."

Fritz Lang, Das Testament des Dr. Mabuse, 1933


The US president made a somewhat shocking announcement about the US taking long term possession of Gaza, clearing the land and developing it, and relocating the 2.2 million Palestinians to 'someplace nice.'  

There are several plausible interpretations of this development. It was something pre-written on paper which he read out, so it was not something just said 'off the hip.'

So either he meant it, and is in keeping with intentions put forward by a number of groups in the US and Israel.

Or, he was trying to break the 'deadlock' in the area by throwing an outrageous offer on the table, in order to provoke some of the parties towards alternatives.  

And acting crazy and off the wall is one negotiating tactic that has been used to some effect.  Richard Pryor had a famous bit about this and his 'pay negotiations' with club owning mobsters in Youngstown.  And Nikita Khrushchev famously took off his shoe and started banging it on the podium at the UN.  I remember seeing ad posters on buses at the time with a picture of this and the quote, "We will bury you."

There were some obvious whoppers rolled into his proposal, like how everyone he discussed it with thought it was a great idea.  That may be right, if the only people he discussed it with was his son-in-law the developer and some of the warhawks in his cabinet.

I won't bother speculating on what he intended.  It can be argued either way.  Narcissists are a difficult read and applying the normal rules of logic may not be appropriate and sound.

But I do know that negotiating in geopolitical flashpoints might not be the same business venue as one would use when negotiating a real estate deal in NY or NJ, or a payment issue with the mob in a nightclub. 

When I was running a global business unit I had someone pull that sort of thing on me at a contract signing that was settled, and that required me to travel to Washington DC in the winter.  They did not read the room correctly, and the power balance in the relationship.   It was not a macho thing.  But I made a rather compelling example out of the inappropriateness of it, which was exactly the right thing to do.   It never happened again, with any partner or vendor.  I even did it once with a very large computer software company who was clearly above my weight class, so you won't think I was a bully.  That was a calculated risk.

I would never, ever do that with a customer, let's be clear.  Even if they are being ridiculous, and abusive, you just walk away smiling and politely after having tried your best.  They are always right, even when they are wrong.

And of course, there is the possible chance that someone will call your bluff.  And make you back it up.

But as for the markets, they seemed to shrug all this off and moved higher.

VIX fell back below its moving averages again.

The dollar did a sideways wash and rinse, and finished slightly lower.

Gold and silver rallied quite sharply, but then fell to selling pressure in the afternoon, as is usual.

NY likes to play when the rest of the world goes to sleep.

Let's see how we finish out the week.

Have a pleasant evening.