Fulcrum Perspectives

An interactive blog sharing the Fulcrum team's policy updates and analysis.

Francis Kelly Francis Kelly

Global Events this Week April 17 - 23, 2022:

This is Fulcrum Macro Advisors weekly calendar of key political and economic events we are watching in the coming week.  Please let us know if you have any questions.

___________________________ 

Sunday, April 17, 2022:

Political/Social Events:

Economic Reports/Events:

  • Nothing significant to report.

Monday April 18, 2022:

Political/Social Events – 

Economic Reports/Events –

  • Markets closed in most of Europe, Singapore, Australia, New Zealand, South Africa for Easter holiday

  • World Bank/International Monetary Fund (IMF) Spring Meetings commence (until April 23rd).

  • US National Association of Home Builders April Index

  • Russia expected to soften cash operations restrictions and allow banks to sell hard currency.

  • China GDP for Q1, March growth data, retail sales, fixed assets, property investment, residential property sales

  • Canada March housing starts

  • Spain trade balance figures

  • German Buba Monthly report

  • Brazil inflation index

  • Tesla plans to resume production at its Gigafactory in Shanghai after 3 weeks of COVID lockdown.

Tuesday April 19, 2022:

Political/Social Events – 

  • Sri Lanka’s main opposition party is expected to submit a no-confidence motion again the government and impeachment motion against the President as a result of the ongoing economic crisis.

  • NATO begins annual cybersecurity wargames – Operation Locked Shields – in Tallinn, Estonia

  • Armenia’s President Nikol Pashinian to travel to Moscow.

  • The UN Security Council holds consultations on its mission in Libya.

  • African Union holds an expert session on migration, refugees, and internal displaced people.

  •  Timor Leste holds second round of presidential elections.

Economic Reports/Events –

  • IMF releases April 2022 World Economic Outlook

  • US building permits (Mar.), housing starts

  • China’s People’s Bank of China loan prime rate

  • Japan exports/import figures, trade balances, industrial production, capacity utilization figures

  • Canada existing home sales (Mar.)

Wednesday 20, 2022: 

Political/Social Events – 

  • G-7 Finance Ministers meet in Washington DC to discuss global financial issues including a coordinated response to rising inflation (they are all in Washington for World Bank/IMF Spring Meetings).

  • G-20 Finance Ministers meet in Washington DC to discuss global financial issues.

  • China holds Boao Forum in Hainan, China.

  • Honduras’s former President Juan Orlando Hernandez to be extradited to the US to face trial for drug trafficking charges.

  • Democratic Republic of the Congo’s parliament debates proposed electoral reform law.

Economic Reports/Events –

  • US March existing home sales, Fed’s Beige Book released, crude oil inventories, gasoline production, heating oil stockpiles

  • Japan March trade balance

  • Germany March PPI

  • Italy February trade balance

  •  Eurozone February industrial production, trade balance

  •  Canada March CPI

  • Russian government expected to submit proposals for raising wages, pensions, and minimum wage; PPIs scheduled to be reported

  •  South Africa inflation (Mar)

  • Ghana GDP (Q4 and all of 2021)

Thursday, April 21, 2022:

Political/Social Events – 

Economic Reports/Events –

Friday, April 22, 2022:

Political/Social Events – 

Economic Reports/Events –

  •  Federal Reserve “Black-Out Period” begins in advance of next Open Meeting

  • US PMIs, retail sales figures

  •  France PMIs

  • Germany PMIs

  • Eurozone PMIs

  • Hong Kong PMIs

  •  Japan PMI (Mar.), Jibun Bank PMIs

  • UK GfK Consumer Confidence (Apr.), retail sales (Mar.)

  • Canada industrial production price (Mar.), retail sales (Feb.)

  • Mozambique gets S&P Global Ratings assessment

Saturday, April 23, 2022: 

Political/Social Events – 

  •  France holds second round of Presidential Elections

  •  Slovenia holds National Assembly elections

Economic Reports/Events –

  • World Bank/IMF Meetings conclude in Washington DC

 

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Francis Kelly Francis Kelly

Global Calendar April 11 - 17, 2022

Monday, April 11, 2022

Political/Social Events –

Economic Report/Events –

  • China consumer price index (CPI), producer price index (PPI) data (Mar)

  • Czech Republic CPI data (Mar)

  • Japan PPI figures (Mar), machine tool orders Bank of Japan holds its quarterly branch managers’ meeting with opening remarks delivered by governor Haruhiko Kuroda

  • UK GDP (Mar) estimate, trade figures, construction output data

  • South Africa manufacturing production (Feb)

  • Malaysia industrial production (Feb), manufacturing sales (Feb)

Tuesday, April 12, 2022

Political/Social Events –

  • EU Affairs ministers meet in Luxembourg

  • United Nations Security Council to discuss Colombia as Colombian President Duque addresses the body

  • Ukrainian President Zelensky to address the Lithuanian parliament

Economic Reports/Events –

  • European CentralBank’s Q1 euro area bank lending survey

  • France trade figures(Feb)

  • Germany CPI data(Mar)

  • Eurozone ZEW economic sentiment survey

  • India industrial production figures (Feb), March CPI data (Mar)

  • OPEC’s monthly oil market report

  • UK labor market statistics

  • US CPI data (Mar)

Wednesday, April 13, 2022

Political/Social Events –

  • Mexico’s lower House of Congress expected to vote on electricity sector reform

  • The US Senate Armed Services Committee is scheduled to hold a hearing on ballistic missile defense strategy and needs

Economic Reports/Events –

  • China trade balance (Mar)

  • Bank of Canada interest rate announcement

  • Eurozone industrial production data (Feb)

  • Italy industrial production figures (Feb)

  • Reserve Bank of New Zealand monetary policy meeting

  • UK CPI (Mar) and retail price index (RPI) data

  • US PPI (Mar)

  • South Africa retail sales (Feb)

  • Namibia’s Central Bank interest rate decision

  • Ghana inflation (Mar)

 

Thursday, April 14, 2022

Political/Social Events –

  • Russian President Putin expected to meet with the lower house of Parliament (Duma)

  • Kenyan United Democratic Alliance to hold primary before Kenya’s August 2022 general election

  • The Sikh festival of Vaisakhi is celebrated, marking the Sikh New Year

  • North Korea observes the birth of the late North Korean Leader Kim Il Sung, father of current North Korean leader Kim Jun-Un

Economic Reports/Events –

  • European Central Bank’s monetary policy meeting/rate decision in Frankfurt

  • India trade statistics

  • Israel Q4 GDP figures

  • UK Q1 credit conditions and bank liabilities surveys

  • US March retail sales figures, Michigan Consumer Sentiment (Apr)

  • South Africa mining production (Feb), Trade conditions survey (Feb & Mar), Bloomberg Economic survey (Apr)

  • Nigeria inflation numbers (Mar)

  • Namibia inflation numbers (Mar)

  • Uganda Central Bank interest rate decision

  • Turkey Central Bank interest rate decision

  • Philippines overseas remittances (Feb)

  • Brazil current account (Feb)

Friday, April 15, 2022

Political/Social Events –

  • Passover observed

  • Good Friday observed

  • China expected to sell 500,000 tons of soybeans from national reserves

  • US deadline for individuals to file their tax returns

  • 110th anniversary of the sinking of the Titanic

Economic Reports/Events –

  • People’s Bank of China meeting

  • France CPI figures (Mar)

  • Italy CPI figures (Mar)

  • Poland CPI figures (Mar)

  • US, March industrial production figures, US Empire manufacturing index (Apr)

  • India trade balances (Mar)

  • China's new home prices (Mar)

  • European Central Bank Survey of Professional Forecasters 

Saturday, April 16, 2022

Political/Social Events –

Economic Reports/Events –

  • Nothing of significance

Sunday, April 17

Political/Social Events –

  • Easter Sunday Observed in Western Christian churches

Economic Reports/Events –

  • China’s GDP, retail sales (Mar), industrial production (Mar)

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Francis Kelly Francis Kelly

San Francisco is always beautiful…

After a long week on the West Coast that ended in San Francisco, I am still in awe of the beauty of the City by the Bay. It has tremendous social and political challenges but it will be back.

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Francis Kelly Francis Kelly

Global Events This Week

March 26 - April 3, 2022

This is Fulcrum Macro Advisors weekly calendar of key political and economic events we are watching in the coming week.  We hope this is helpful. Please let us know if you have any questions.

Saturday, March 26:

Political Events/Social Events –

Economic Events -

  • China February industrial profits

 

Sunday, March 27:

Political Events/Social Events –

Economic Events -

  • No significant reports/events to report.

 

Monday, March 28:

Political Events/Social Events –

Economic Events –

  • US reports goods trade balance (Feb), wholesale inventories (Feb), Retail inventories (Feb), Dallas Federal Reserve manufacturing index (Mar)

  • Brazil reports foreign direct investment, current account, Brazilian Central Bank Market Readout

  • Mexico reports balance of trade (Feb)

  • Argentina retail sales (Jan)

  • South Korea consumer confidence (Mar)

  • Japan unemployment rates, jobs/applications (Feb), Bank of Japan summary of opinions

  • Israel unemployment rates

Tuesday, March 29:

Political Events/Social Events–

Economic Events –

  • US S&P/Case-Schiller Home Price (Jan), House price index (Jan), JOLTS job openings and job quits (Feb), Conference Board’s consumer confidence (Mar), Dallas Fed Services Index (Mar)

  • UK Consumer credit, mortgage approvals, mortgage lending, net lending to individuals (all Feb)

  • Canada weekly earnings average

  • Germany CfK Consumer Confidence (Mar)

  • Australia retail sales (Feb)

  • Argentina economic activity (Jan), API crude oil stock change

  • Japan retail sales (Feb)

  • South Africa unemployment rate, SACCI Business Confidence (Mar & Feb)

  • Spain retail sales (Feb)

  • Kenyan Central Bank rate decision

 

Wednesday, March 30:

 Political Events –

Economic Events –

  • US GDP price index, GDP growth rate, PCE prices, Core PCE prices, Real consumer spending, GDP sales, EIA crude oil stocks, EIA gasoline stocks, EIA heating oil stocks, EIA refinery crude runs change, EIA distillate stocks change, EIA distillate fuel production change, EIA cushing crude oil stocks change, EIA crude oil imports change, mortgage applications, 30-year mortgage rates, mortgage market index, mortgage refinance index, MBA purchases index, ADP employment change (Mar)

  • Germany import prices (Feb), inflation rate figures

  • Turkey economic confidence (Mar)

  • Italy industrial sales (Jan)

  • Eurozone economic sentiment, industrial sentiment, services sentiment, consumer sentiment, and consumer inflation expectations (all for Mar);

  • Italy PPI (Feb)

  • Spain inflation rate figures, business confidence (Mar)

  • Brazil PPI (Feb), bank lending (Feb), net payrolls (Feb)

  • South Africa price sector credit (Feb), money supply, budget balance (all Feb)

  • Mexico unemployment (Feb)

  • Russia  GDP (Feb), unemployment rate (Feb), real wage growth (Jan), retail sales (Feb), business confidence (Mar), corporate profits (Jan)

  • South Korea industrial production (Feb) retail sales (Feb), manufacturing production (Feb), construction output (Feb)

  • Japan industrial production (Feb)

  • Mexico fiscal balance (Feb)

  • Mozambique Central Bank interest rate decision

  • Egypt GDP

 

Thursday, March 31:

Political Event/Social Events –

 Economic Events –

  • US personal spending, personal income, PCE price index (all Feb), intial jobless claims figures (Mar), Core PCER price index figures (Feb), Chicago PMI (Mar), EIA natural gas stocks (Mar), quarterly grain stock figures, prospective planting figures (Mar)

  • China NBS manufacturing PMIs (Mar); struggling Chinese real estate company Evergrande expected to miss publication deadline of 2021 financial results

  • Japan housing starts (Mar), construction orders (Mar), Tankan large manufacturers index Q1, Tankan non-Manufacturing outlook Q1, Tankan Small Manufacturers Index Q1

  • Germany retail sales (Feb), unemployment rate (Feb), unemployed persons, unemployment change, unemployment rate (Mar)

  • UK GDP growth (final Q4), business investment numbers

  • France inflation rate, household consumption (Feb), PPIs (Feb), harmonized inflation rate (Mar)

  • Italy unemployment rate (Feb), inflation rate (Mar)

  • Spain concurrent account (Jan)

  • Eurozone unemployment rate (Feb)

  • Turkey balance of trade (Feb), foreign exchange reserves (Mar)

  • South Africa PPIs (Feb), trade balance (Feb)

  • India government budget value (Feb), infrastructure output (Feb), current account, external debt

  • Brazil unemployment rate (Feb), nominal budget balance (Feb)

  • Canada GDP (Jan), CFIB business barometer (Mar)

  • Australia building permits, private house approvals, private sector credit (Feb), Markit manufacturing PMI (Mar)

  • Angola Central Bank interest rate decision

  • Namibia 2021 GDP, money supply (Feb)

  • Zambia 2021 GDP, inflation figures (Mar), trade balance (Feb)

  

Friday, April 1:

Political Events/Social Events –

  • European Union-China Summit held virtually to discuss trade and political tensions

  • The UK assumes the presidency of the UN Security Council

  • Russia expected to implement indexation of pensions and other social safety net measures

  • Iran celebrates Republic Day – the anniversary of the 1979 Islamic Revolution

  • April Fools’ Day (no fooling!)

Economic Events –

  • US unemployment rate, non-farm payrolls, participation rate, avg. hourly earnings; avg. weekly hours, government payrolls, manufacturing payrolls, Markit manufacturing PMI, ISM’s  manufacturing figures, ISM manufacturing PMI, ISM manufacturing employment, ISM  manufacturing prices, construction spending, Baker Hughes oil rig count (Apr), total vehicle sales (Mar)

  • UK nationwide housing prices (Mar)

  • Turkey’s Istanbul Chamber of Industry Manufacturing PMI (Mar)

  • Spain Markit manufacturing PMI (Mar)

  • Italy Markit Manufacturing PMI (Mar)

  • France Markit Manufacturing PMI (Mar)

  • Germany Manufacturing PMI (Mar)

  • Eurozone inflation rate (Mar), CPI, Manufacturing PMI (Mar)

  • South Korea exports, balance of trade, imports (Mar), Markit PMI (Mar), inflation rate (Mar)

  • Australia home loans (Feb), commodity prices (Mar)

  • Indonesia Markit manufacturing PMI (Mar), inflation rate, core inflation rate

  • China Caixin manufacturing PMI (Mar)

  • Russia GDP YoY/Q4, Markit manufacturing (Mar)

  • Japan Jibun manufacturing PMI (Mar)

  • India foreign exchange reserves (Mar), balance of trade, exports, imports (Mar)

  • Brazil industrial production figures (Mar), Markit manufacturing PMI (Mar), balance of trade

  • Canada Markit manufacturing PMI (Mar)

  • Mexico Markit manufacturing PMI (Mar)

  • Nigeria PMIs (Mar)

  • South Africa manufacturing PMI (Mar), Moody’s rating assessment

 

Saturday, April 2:

Political Events/Social Events –

 Economic Events –

  • No significant reports/events

  

Sunday, April 3:

Political Events/Social Events –

Economic Events –

  • Israel foreign exchange reserves

  • Mexico business confidence (Mar)

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Francis Kelly Francis Kelly

Read Around the World in a Weekend: March 25, 2022

Please find our recommended weekend reads covering key issues and events around the world.  We hope you find these informative, useful, and perhaps even fun.  Please let us know if you want us to add anyone to our mailing list.

Russia/Ukraine/Belarus

  • Rand Corporation “Russian Grand Strategy: Rhetoric and Reality”

    First published in September 2021 (and included in an earlier Read Around the World), we thought it worthwhile to reconsider this large review and assessment of Russia’s – and Putin’s – Grand Strategy going forward.

  •  Chatham House’s Belarus Initiative “Poll of Belarusians’ Views on the military conflict between Russia and Ukraine”

    The poll, conducted between March 5-14, showed only three percent of the urban population support Belarusian troops being involved in the war on Ukraine. And a majority of them do not support Russian troops being based in Belarus as well expecting the war will have “serious socio-economic consequences” on their way of life.

United States

  •  Defense One “State of Defense”

    The daily defense publication takes an in-depth look at the state of the US Defense posture, branch by branch, in the face of growing security risks around the world.

  •  Foreign Policy “US Grand Strategy After Ukraine”

    Seven leading foreign policy strategists weigh in on how the war will shift US foreign policy in the short, medium, and long term.

  •  AmCham EU “The Transatlantic Economy 2022”

    The Transatlantic Economy 2022 presents the most up-to-date facts and figures about the economic relationship. The study includes dedicated profiles for 30+ European countries and all US states. This year’s study features new insights into how the war in Ukraine affects the transatlantic relationship, the impact of the COVID-19 pandemic, prospects for the recovery, global supply chain issues, relations with China and the transatlantic energy economy.

     

  • University of Virginia Center for Politics “Are Latinos Deserting the Democratic Party? Evidence from the Exit Polls”

    One key question in American politics is the trajectory of Latino voters. Donald Trump performed better in 2020 with Latino voters than he did in 2016, particularly in places like South Texas and South Florida.  However, an analysis of the longer-term trend in Latino presidential voting shows that this growing voting bloc is not necessarily trending one way or the other. Presidential incumbency appears to have a stronger influence on Latino voters than on other demographic groups.

Africa

  • Institute for Security Studies (South Africa) “Africa holds the answers to Europe’s wartime energy crisis”

    Europe needs to swap its dependence on fossil energy from Russia with renewables from Africa. For example, Theoretically, the Sahara could supply four times the world’s current energy demand. Even a fraction of that could replace the energy from Russian gas imports. Solar can also ramp up rapidly, perhaps beating the plans to build more liquefied natural gas terminals.

Latin America

  •   Wilson Center “China’s Investments and Land Use in Latin America”

    The report argues that in order to understand the environmental impacts of China’s trade and investment in Latin America requires nuance. It focuses on multiple factors behind the environmental degradation associated with the soy, copper, beef, and pork industries: the nature of the resource, local legal frameworks, and global industry standards. The report highlights cases in which poor decision-making by both Chinese companies and Latin American countries is driving resource extraction to a tipping point.

Middle East

  • Carnegie Middle East Center “Only Going to Get Worse”

    In this YouTube interview, the chief of water, sanitation and hygiene (WASH) at the United Nations Children’s Fund (UNICEF) discusses the growing challenge of the water scarcity situation in the Middle East and Africa.

Book Recommendation of the Week:

The Anarchy: The East India Company, Corporate Violence, And the Pillage of an Empire

(by William Dalrymple, Bloomsbury Press 2019, 552 pages)

Imagine a giant private equity firm that operates with complete impunity, no government regulation or oversight, no bounds on their greed. They take over a large swath of a foreign country and begin to mint money, figuratively and literally. And they also have their own army, which they deploy to subdue the locals whenever they complain too much.

 

Welcome to the East India Company, which we learn all about in the superb  “The Anarchy: The East India Company, Corporate Violence, and the Pillage of An Empire,” written by William Dalrymple.

A corporate history that grabs you and gives you a vivid, and at many points, horrifying portrait of arguably the most powerful companies in history.

 

What makes Dalrymple’s book particularly interesting – and differentiates it from numerous other histories of the East India Company – is his deep and thorough research of Indian source material. He gives a fresh, holistic account of the Company not just from the Western perspective but also from the Indian perspective. And that is important because with it comes an illuminating portrait of the majesty and richness of the various Indian, Iranian, and Afghani dynasties that thrived – and died – during the Company’s operations. 

 

What I found rather stunning in Dalrymple’s history of the Company is something I suspect most readers will not expect: The Company was, by and large, a rather poorly run operation. There are numerous instances of near-collapse – once almost cratering the entire British economy and forcing the collapse of multiple leading British and Continental European banks (which Dalrymple cleverly compares to the 2008 financial crisis).  

 

But the money the Company  made in the good years. Oh, the money! Staggering sums even by today’s standards.  Many a poor or lower-middle-class English boy with a sense of adventure struck out to Bombay or Madras or some other balmy place in India where they Company operated, returning to London years later filthy rich (albeit, only if they survived the near constant warfare and deadly sicknesses).  The most prominent of all of them being Lord Clive. Richard Clive was born in 1725, one of thirteen children to a modestly successful lawyer. He proved to be a violent, nasty boy – even running a protection racket as a teenager. With these rough skills and dangerous disposition, he journeyed to India in 1744 as a simple clerk.

I do not want to ruin Dalrymple’s extraordinary and devastating portrayal of Clive in India, but I’ll tease you with this: when all was said and done, Clive ended up being the wealthiest man in all of Europe. He became Lord Clive, 1st Baron Clive, a man so rich that his wife’s pet ferret even had its own diamond-studded necklace. But money doesn’t buy happiness, and clearly, Clive never found it. He ended up killing himself in 1774 at his massive Berkley Square mansion at the age of 49 by stabbing himself in the throat with a penknife.

 

This is an important book to understand how Britain gained much of its long-term wealth that survives even today and how India – once a great empire itself – was devastated by the Company and still struggles with the repercussions. It is beautifully written with countless colorful stories of battles and palace intrigue, transporting the reader to the place and a time long ago.  It is indeed a great read.ke it stand out

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Francis Kelly Francis Kelly

Washington Look Forward:

March 21-25, 2022

Spring is finally in the air in Washington, and the famed Cherry Blossoms are starting to pop on the Tidal Basin in D.C.  But it is going to be another busy week in Washington and internationally. Here is a quick run-down of what we are watching:

  • Ukraine and the Meeting of Western Leaders in Brussels and then Visit Poland: Ukraine continues to dominate Washington’s focus, particularly President Biden’s. We will see President Biden travel to Brussels for meetings Thursday and Friday with fellow NATO heads of state. He will begin Thursday with a NATO Extraordinary Summit to discuss the Russia-Ukraine conflict. In particular, the focus will be to reassess the Alliance’s long-term strategy and also take the opportunity to show strong support for the Baltic nations who are feeling increasingly at risk from Russia.  

    Biden will then join a meeting of the European Council Thursday and again on Friday to further discuss diplomatic efforts and the US-EU alliance.  Watch for the NATO meeting and E.C. meetings to result in further sizeable commitments for increased defense and security spending by all member states.

    Biden will then travel on Saturday to Poland to show solidarity with Poland, who, like the Baltic states, are feeling the risk of Russia on their border. There has been chatter of Biden then making a surprise visit to Kyiv, Ukraine, to meet with Ukraine President Zelensky – something British Prime Minister Boris Johnson apparently expected to do later this week. We note the Prime Ministers of Poland, the Czech Republic, and Slovakia made such a trip to Kyiv last week. However, the White House has said the President “has no plans” to make such a dangerous trip, but we will closely watch if this changes.

  • Is Congress Getting Closer to Passing the CHIPS Act?: We have written previously about this critical piece of investment legislation and how it has struggled for focus and passage in both the House and Senate. To briefly recap, the bill has seen four previous iterations but has languished in Congress for a variety of odd reasons. 

    However, Senate Majority Leader Chuck Schumer (D-NY) filed motions late Friday for the Senate to take up the House version of the bill (H.R. 4521) this week. The bill would shower tens of billions of dollars on the semiconductor industry to encourage re-shoring of semiconductor chip manufacturing to the U.S. as well as pouring tens of billions of more money on R&D efforts to grow and expand the U.S. technology base. The legislation is seen by both Democrats and Republicans as a means of competing more strongly versus China, and we expect the final product will garner considerable bi-partisan support.  

    But, with all things Congress, there is one potential sticking point: Several Democratic senators want to include a provision that would give the Federal Maritime Commission more power to regulate large container ships to help “fix” the supply chain challenges out there.  There will likely be considerable push-back on this provision from those who do not see the container shipping industry as the culprit to supply chain issues and growing inflation.

    The big question we have is around timing. Whatever the Senate ends up passing this week after amendments are added will be different than what the House passed last month, meaning the two chambers will have to iron the differences in a conference session in the coming weeks and maybe months. We believe they are much closer to an agreement than further apart, thus the conference negotiations will likely be short.  We will keep you updated.

  • Russia is about to Lose Normal Trade Relations with the U.S.: Late last week, the House passed legislation revoking Russia’s Normal Trade Relations with the U.S. What does that mean with all the heavy sanctions already in place on Russia? Not much. President Biden would be empowered to bring hefty tariffs on Russian goods and services. But considering the fact Biden has already banned the import of Russian energy, seafood, alcohol, and luxury goods, this may be less impactful than meets the eye.

  • Supreme Court Confirmation Hearings: This week, Congress will be primarily focused on the confirmation hearing of Judge Ketanji Brown Jackson for the Supreme Court. The hearings kick off today (Monday). Unlike the last few Supreme Court nominations, we do not expect this one to be very controversial. By and large, Republicans seem much more at ease with Judge Jackson’s nomination for two reasons 1) she is clearly qualified, and; 2) she is replacing a liberal justice, not a conservative one. Therefore the balance of the Court is not being altered. Our guess is the full Senate confirms her in the next two to three weeks – and three or four Republican senators will vote for her confirmation.

 We hope this helps you get a general perspective of what is going on in Washington this week.  Please let us know if you have any questions.

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Francis Kelly Francis Kelly

Fulcrum Macro Advisors’ Read Around the World in a Weekend: March 18, 2022

Russia/Ukraine War

  • The New Yorker “The Weakness of the Despot”

    New Yorker Editor David Remnick interviews Stephen Kotkin who is considered one of the greatest scholars on Stalin and Russian history. They discuss Putin, Stalin, and the West and why Putin decided to invade Ukraine.

  • Foreign Affairs “The End of Globalization”

    Peterson Institute for International Economics President Adam Posen writes on what Russia’s War in Ukraine means for the world economy.

  • Center for Strategic and International Studies “Cryptocurrency’s Role in the Russia-Ukraine Crisis”

    Since Russian forces invaded Ukraine on February 24, the United States and its partners have levied an unprecedented series of sanctions on Russia. These efforts have raised questions, including in Congress, about whether cryptocurrencies can be used by Russian actors to bypass sanctions. More broadly, the Russia-Ukraine crisis comes at a time when policymakers are trying to decide how to regulate digital assets. 

  • Carnegie Endowment for International Peace “Moscow’s Southern Accent?”

    The Ukraine war will reshape Russia’s influence in the Middle East, the Mediterranean, and Africa where they have long been active politically, economically, and militarily.

  • American Purpose “Preparing for Defeat”

    Scholar Francis Fukuyama writes that he believes Russia is “heading for outright defeat in Ukraine” and “the collapse of their position could be sudden and catastrophic” and the West needs to be ready.

  • Center for European Policy Analysis “The Suwalki Corridor”

    The Suwalki Corridor, a 65-kilometer-wide strip of territory linking Poland with Lithuania, is NATO’s most vulnerable chokepoint along its eastern flank. In the event of a conflict between Russia and NATO, Russia’s military—operating from the Kaliningrad exclave and from Belarus—could attempt to close the Suwalki Corridor and incapacitate NATO as a security provider for its three Baltic members.

China 

United States

  • Gallup Polls “Americans Still Pro-Israel, Though Palestinians Gain Support”

    Americans continue to express greater sympathy for the Israelis than the Palestinians in the Middle East conflict, as they have throughout Gallup's trend -- 55% now sympathize more with the Israelis and 26% with the Palestinians

Latin America

  • Center for Strategic and International Studies “Russian Invasion of Ukraine Force a Rethink about Russian Presence in the Americas”

    Given the global revulsion toward Russia’s unprovoked invasion of Ukraine, governments in Latin America and the Caribbean should rethink their relationship with Russia The brutality of this invasion should make Argentina and Brazil, two countries flirting with Putin, think twice about a deeper partnership with the Kremlin. The rest of the region should see Russia’s invasion as a wake-up call and reduce their ties in the coming weeks and months.

Africa

  • “Mali Magic: The Digitized Manuscripts of Timbuktu Dating Back to the 16th Century”

    An amazing interactive experience: Mali Magic, a collaboration among Google Arts & Culture and a number of local and international organizations, allows users to read thousands of documents. Once, long ago, the city of Timbuktu was once an economic hub for trade on the continent and a center of learning. During a 10-month occupation in 2012, Timbuktu was taken over by rebel groups, where thousands of priceless ancient manuscripts came under threat and more than 4,000 were either burned or stolen by jihadis. Malian librarians and their assistants secretly transported hundreds of thousands of volumes into family homes in a bid to save them from destruction. Through those efforts, some 350,000 manuscripts from 45 libraries across the city have been kept safe. 

Terrorism

  • Carnegie Endowment for International Peace “The Insurgency of ISIS in Syria”

    Since the “defeat” of ISIS in Syria in 2020, the Islamic State has morphed into a non-spatial insurgency capable of conquering territorial boundaries.  For ISIS, their rural insurgency and desert combat is no less important than urban warfare as a means of achieving its objectives and ensuring its resurrection which now has an estimated 24,000-30,000 recruits. 

Global Markets/Commodities

  • IMF Blog “War-Fueled Surge in Food Prices to Hit Poorer Nations Hardest”

    Global food prices are poised to keep climbing even after jumping to a record in February, placing the heaviest burden on vulnerable populations while adding to headwinds for the global economic recovery. Food commodity prices rose 23.1 percent last year, the fastest pace in more than a decade, according to inflation-adjusted figures from the United Nations Food and Agriculture Organization. February’s reading was the highest since 1961 for the gauge tracking prices for meat, dairy, cereals, oils, and sugar. 

Book Recommendation of the Week:

The Twilight Struggle: What the Cold War Teaches Us About Great-Power Rivalry Today

(By Hal Brands, Yale Univeristy Press, January 2022, 318 pages)

The Cold War is a distant memory for many of us of a certain age and nothing more than a textbook history lesson for the rest of us under the age of 40.  But now, in the wake of Vladimir Putin’s brutal and bloody onslaught against Ukraine amid our collective prolonged worry and apprehension about an increasingly aggressive China, many seem to be struggling to understand what it will take to keep the peace.  History can and will guide us, so we go back to the history books for guidance and enlightenment.  

The first place we should start is with Hal Brand’s latest book.  Brands, a noted Cold War historian and former Pentagon advisor, presents an illuminating and richly researched lesson of how the US dealt with the challenge of the Cold War – that “Twilight Struggle” the West fought from the end of World War II until 1991 when the Soviet Union dissolved itself.  Brands gives us a crisp examination of the many successes, and more than a few missteps US leaders experienced during these anxious years.  Ultimately, it was the power of ideas and free markets brought the West victory against a hollowed-out Communist empire – but it took extraordinary work, innumerable policies and programs, and a willingness to stand strong that won the peace.  

Brands ventures deep into those many challenges, strategies, and tactics the Cold War American Presidents, beginning with Truman to ending with Reagan and Bush, took up to win that “Twilight Struggle.” To be fair to potential readers, this is not light reading.  But it is an excellent read for those fascinated by Cold War history.  For everyone else who picks up this book, it is something of an incredibly well-timed primer for what it will likely require from all of us to strenuously defend freedom and democracy as we know it once again.  

 

 

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Francis Kelly Francis Kelly

The Twilight Struggle, Then and Now

The Cold War is a distant memory for many of us of a certain age and nothing more than a textbook history lesson for the rest of us under the age of 40. But now, in the wake of Vladimir Putin’s brutal and bloody onslaught against Ukraine amid our collective prolonged worry and

apprehension about an increasingly aggressive China, many seem to be struggling to understand what it will take to keep the peace. History can and will guide us, so we go back to the history books for guidance and enlightenment. The first place we should start is with Hal Brand’s latest book. Brands, a noted Cold War historian, and former Pentagon advisor, presents an illuminating and richly researched lesson of how the US dealt with the challenge of the Cold War – that “Twilight Struggle” the West fought from the end of World War II until 1991 when the Soviet Union dissolved itself. Brands gives us a crisp examination of the many successes, and more than a few missteps US leaders experienced during these anxious years. Ultimately, it was the power of ideas and free markets that brought the West victory against a hollowed-out Communist empire – but it took extraordinary

work, innumerable policies and programs, and a willingness to stand strong that won the peace.

Brands ventures deep into those many challenges, strategies, and tactics the Cold War American Presidents, beginning with Truman to ending with Reagan and Bush, took up to win that “Twilight Struggle.” To be fair to potential readers, this is not light reading. But it is an excellent read for those fascinated by Cold War history. For everyone else who picks up this book, it is something of an incredibly well-timed primer for what it will likely require from all of us to strenuously defend freedom and democracy as we know it once again.

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Francis Kelly Francis Kelly

Read Around the World in a Weekend: March 11, 2022

Russia/Ukraine

>      Rice University’s Baker Institute for Public Policy “Reroute, Reduce, or Replace? How the Oil Market Might Cope with a Loss of Russian Exports After the Invasion of Ukraine”

This paper examines the potential for disruptions and possible direction of change in Russia’s participation in the global oil market, and in the market itself. For a companion discussion of the natural gas dimensions of this issue by the Center for Energy Studies, please see “Strategic Response Options If Russia Cuts Gas Supplies to Europe” (February 2022).

>      Pew Research Center “Split between Ukrainian, Russian Churches Shows Political Importance of Orthodox Christianity”

The recent decision by the Ukrainian Orthodox Church to split from its Russian counterpart after more than 300 years of being linked reflects not only the continuing military conflict between the two countries in recent years but also the important political role Orthodox Christianity plays in the region

>      Politico EU “Russian Military’s Corruption Quagmire”

Bogged down in Ukraine, Russian forces battle the consequences of systemic sleaze.  This article references a Transparency International report detailing the corruption in Russia’s defense sector.  You can access that report HERE.

>      BBC “Ukraine: Why so many African and Indian students were in the country”

Ukraine was home to over 76,000 foreign students, according to government data from 2020. Nearly a quarter of the students were from Africa, with the largest numbers coming from Nigeria, Morocco, and Egypt. India easily accounts for the highest portion with over 20,000 students. Why were there so many foreign students in Ukraine?

 

United States

>      Office of the Director of National Intelligence “2022 Annual Threat Assessment of the US Intelligence Community”

This assessment focuses on the most direct, serious threats to the United States during the next year. The order of the topics presented in this assessment does not necessarily indicate their relative importance or the magnitude of the threats in the view of the IC. All require a robust intelligence response, including those where a near-term focus may help head off greater threats in the future, such as climate change and environmental degradation.

>      Federal Reserve Bank of New York “Cyber Risk and the US Financial System: A Pre-Mortem Analysis”

The New York Fed models how a cyber-attack may be amplified through the U.S. financial system, focusing on the wholesale payments network. We estimate that the impairment of any of the five most active U.S. banks will result in significant spillovers to other banks, with 38 percent of the network affected on average. The impact varies and can be larger on particular days and geographies. When banks respond to uncertainty by liquidity hoarding, the potential impact in forgone payment activity is dramatic, reaching more than 2.5 times daily GDP. In a reverse stress test, interruptions originating from banks with less than $10 billion in assets are sufficient to impair a significant amount of the system. Additional risk emerges from third-party providers, which connect otherwise unrelated banks, and from financial market utilities.

>      Lloyd’s of London & Cambridge’s Centre for Risk Studies  “Cyberattack on US Power Grid Could Cost Over $1 Trillion”

The report examines scenarios in which hackers crash sections of the US power grid in 15 states and Washington, DC – an attack that could leave 93 million people in the dark. The report claims that the blackout would result in a “rise in mortality rates as health and safety systems fail; a decline in trade as ports shut down; disruption to water supplies as electric pumps fail and chaos to transport networks as infrastructure collapses.” In the end, the damage to the US economy would be anywhere from $243 billion to $1 trillion depending on the scenario. It estimates that insurance claims related to the blackout could range between $21.4 billion to $71.1 billion depending on the severity of the attack.

>      Pew Research Center “Majority of Workers Who Quit a Job in 2021 Cite Low Pay, No Opportunities for Advancement, Feeling Disrespected”

The COVID-19 pandemic set off nearly unprecedented churn in the U.S. labor market. Widespread job losses in the early months of the pandemic gave way to tight labor markets in 2021, driven in part by what’s come to be known as the Great Resignation. The nation’s “quit rate” reached a 20-year high last November.

Italy

>      European Council on Foreign Relations “Italy’s Challenging Divorce from Russia”

Russia’s war on Ukraine has prompted urgent changes in Italian foreign policy. Rome’s efforts to distance itself from Moscow are creating major challenges at home.

Tunisia

>      Carnegie Middle East Center “Becoming Toast”

The Ukraine conflict has led to a sharp increase in global energy and wheat prices, exacerbating Tunisia’s fragile economic situation. Tunisians had already been suffering from delays in the payment of public-sector salaries and shortages of wheat, medicines, sugar, and sunflower oil.  Egypt is facing similar challenges, too.

China

>      National Defense “Algorithmic Warfare: China Outpacing US in Key Science Metrics”

China is pulling ahead of the United States when it comes to key indicators of science and engineering prowess, the National Science Board is warning. The nation is falling behind China in important areas such as growth in research-and-development investment, the manufacturing of critical emerging technologies, and patents for innovative systems, according to the National Science Board’s “State of U.S. Science and Engineering 2022” report (which you can access HERE).

India

>      European Council on Foreign Relations “Why India’s Silence on Ukraine is an Opportunity for Europe”

India’s dependency on Russia has left it reluctant to publicly criticize Putin’s war on Ukraine. Rather than pressure India to pick a side, the EU should show India that it is a serious geopolitical partner.

>      Foreign Policy “In Sri Lanka, Organic Farming Went Catastrophically Wrong”

Faced with a deepening economic and humanitarian crisis, Sri Lanka called off an ill-conceived national experiment in organic agriculture this winter. Sri Lankan President Gotabaya Rajapaksa promised in his 2019 election campaign to transition the country’s farmers to organic agriculture over a period of 10 years. Last April, Rajapaksa’s government made good on that promise, imposing a nationwide ban on the importation and use of synthetic fertilizers and pesticides and ordering the country’s 2 million farmers to go organic. The result was brutal and swift. 

Book Recommendation of the Week:

 

>      The Last Emperor of Mexico by Edward Shawcross

In 1864, Hapsburg Archduke Maximilian, the brother of Austrian Emperor Franz Joseph, landed in Mexico to establish a monarchy where he would-be Emperor of Mexico.  Done at the behest of France’s Napoleon III (who famed historian AJP Taylor said “learned from the mistakes of the past how to make new ones”), the effort was doomed from the start.  In his engrossing book, Shawcross brilliantly details this last pathetic gasp of European colonial aspirations in the Americas.  The United States, in the grip of a bloody Civil War, nevertheless was having none of Napoleon’s grand plans and helped the legitimate President, Benito Juárez, defeat Maximilian (who ended up in front of a firing squad).  This sad episode in Mexican history has had ramifications on Mexico’s politics as well as impacting broader US Latin American policy ever since.

 

 

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