Really hear what I'm about to tell you. The center of gravity of the world economic system has moved from New York to Washington. Let me illustrate what I mean so you understand just how profound this is. Banks used to compete against banks. US carmakers competed against each other and the Japanese. And the New York financial markets told you how they're doing against each other.
Understand what's happening now. The US Treasury has become the only "customer" that matters. The Treasury is now the customerâ€”and investor -- with the $750+ billion checkbook. The Treasury is now the "investment banker" of last resort, arranging and financing mergers. Banks are competing against insurance companies for their slice of the bailout pie. Chrysler and GM (and the Michigan Congressional delegation) are looking to Washington, not Goldman or Merrill, to facilitate a merger. This is a seismic shift.
As investors, we have to start looking at the world in a completely different way, and getting our information from different sources. A company's 10-K is almost irrelevant if all it includes is financial statements and market outlooks. What matters now are the "exogenous" factors: government guarantees of the commercial paper market, currency interventions, direct capital infusions, etc. And how does a company describe in its Management Outlook that "Yes, our company is too big to fail."
In this environment, it's more important than ever to read unbiased geopolitical intelligence and analysis of government moves, and that's what my friend George Friedman at Stratfor offers. I'm enclosing below his team's Fourth Quarter Forecast. George's team analyzes US government policy as well as the moves that are being taken by central banks and governments around the world as the private sector gets taken public all across the globe. You will not be able to understand market moves if you don't understand who the real movers are now.
I'm sending you Stratfor's Fourth Quarter Forecast, and I strongly encourage you to join Stratfor and get access to all their daily intelligence. George has arranged a special offer on a Stratfor Membership for my readers: click here to take advantage of this opportunity. In this new era, I use Stratfor daily to give me a wide-lens, global view of politics and economics. I know you'll gain as much from reading Stratfor as I do.
For nearly 30 years, long before it was a charter member of the "Axis of Evil," Iran and the US have been locked in a hate-hate relationship. Walk down the street any Friday afternoon, and you're as likely to hear "Death to America!" as "Hi Ali, how are you?" Three decades of animosity, an externally opaque society, and no trade relations between the two countries mean that many of us have just the barest understanding of what's really going on over there. But whether it's a negotiated settlement with the US over Iraq, or a war-risk premium for crude oil, to threats and counterthreats with Israel and the US, Iran's decisions have enormous impact on the global economic system. All of the sudden, the picture of the "mad mullahs" you get from the papers seems expensively inadequate.
To understand Iran's impact on the world you need someone that wades through the complexities and distills out the salient facts. My friend George Friedman and his intelligence team at Stratfor are my go-to source for this kind of insight and understanding. For your financial analyses (I certainly hope!) you don't rely just on your daily newspaper's business section; if that's where you're getting your news on global events, well, hmmm....
Take a look at George's latest Geopolitical Monograph on Iran in the Special Edition of Outside the Box. This is part of a special series for Stratfor Members only - that George was kind enough to share this week. It's just stunning to me how the battles between Persia and Babylon are playing out yet again with Iranian involvement in Iraq. If you've ever wondered why the Iranians seem to have a bunker mentality, read this Monograph, and you'll see why. Want to understand why Iran works through proxies like Hezbollah? Here's your answer. Spend a few minutes on an invaluable investment in understanding Iran's global role.
The Geopolitical Monograph series is just one of the features of my Stratfor Membership that makes it so valuable to me. George's team also puts out daily analyses and a weekly Intelligence Guidance that highlight the critical geopolitical events that can move markets. You can get the same geopolitical intelligence I use via this special offer available to my readers. Click here for the full details, and start adding an intelligence perspective to your investing.
This week we step outside the box of conventional geopolitical analysis to hear the thinking of George Friedman, founder and chief executive officer of Strategic Forecasting, Inc. (Stratfor), on the geopolitics of Israel. George makes the key point that Israel's geography has been fundamentally important to its geopolitical successes and limitations, and has lent a surprising continuity to its foreign policy from the Biblical era forward to the present day.
This is the first in a series of monographs by George on the geopolitics of countries that are currently critical in world affairs, and he has kindly let us have a preview.
George Friedman and Stratfor have long been my single best source for commentary on geopolitics. They identify trends and predict world-changing events in a way that is consistently ahead of the curve - and that has earned them worldwide respect. I see about 3-4 Stratfor letters each day, each with thoughtful analysis of both breaking global events and longer-term situations. I find the work they do to be of the highest quality and very useful as I think about how everything fits together in our rapidly changing world.
And finally, if you have not yet subscribed to Stratfor, then you should. They have some very favorable offers just for my readers, which you can access here: https://www.stratfor.com/campaign/biblical_and_modern_israeli_geopolitics_0