Into a New Year

Pressures on Europe, US. And: Canadian drama, hostages and Jimmy Carter

No, I will not bore you with an end of year round-up of my favourite posts on this newsletter. Or what stood out in 2024. But it was an eventful year, sure, and last quarter saw one of the biggest increases in readership and subscriptions here on the newsletter. Thanks for joining and commenting. I have a number of paid subscriptions on other newsletters and you can of course do the same here and support my efforts into 2025.

We are gearing up for a new year that is on track to outdo this year in terms of news, political drama and groundbreaking global shifts. Think about it: Germany has elections in February, France is in deep political turmoil and these two developments will rock the foundation of what once was the peaceful and powerful core of Europe. Beset by economic setbacks, unmanageable immigration and a Ukraine war that is slowly and steadily shifting in Russia’s favour: the old continent is no longer in a comfortable driving seat. It’s a divided and troubled house at exactly the point in time that a radical new and more isolationist government is taking over in Washington, DC. Trump has already and not so subtly hinted at how the US is going to shore up its outer borders (acquiring Greenland, putting Canada into servitude) while giving Musk room to streamline the US government and boost the tech sector. The latter part will not only address the deep challenges posed by China as an innovator in all areas, but also spur the US into becoming an economic and tech powerhouse, again. One of Canada’s top tech investors points out that beneath all the Trump rhetoric there is a crop of talent with a plan:

That said, the Trump/Musk effort will run into many headwinds if you think about the importance of China to Tesla and Apple to name only a few. And that is with Trump getting advice from his new national security advisor Mike Waltz, a noted China hawk.

Also, the idea that the new administration will be able to force a Ukrainian-Russian ceasefire and settlement, while also managing an unfinished war in Gaza while Yemen keeps attacking Israel with missiles is in all likelihood a pipe dream. Internal conflicts, hard to manage international conflicts with multiple interests, the Trump honeymoon may already be over as we are gearing up for the real work which starts on January 20th.

Meanwhile in Canada the holiday party circuit was dominated by talking about the demise of Justin Trudeau where many centrists and centre-lefties have now thrown in the towel. There was an attempt to resurrect former deputy PM & finance minister Chrystia Freeland as a new potential leader citing her above average intelligence, but it all feels like a lame attempt to try and salvage a sinking ship. An election may happen sooner rather than later and this was the temperature as of yesterday, blue is the conservative party under Pierre Poilievre, red is Trudeau’s party:

Hostage News

If you recall, Trump also threatened that all hell would break loose if the hostages are not released by January 20, 2025. The progress on the deal remains hopelessly slow and you got to wonder what is required to move it forward. Israel this week submitted a detailed report on the hostages to the UN, summarizing the horrors the hostages that were released in November 2023 were subjected to. In case you have been offline during the holiday period, here are some of the findings:

The terrorist captors forced two minors to perform sexual acts on one another … and whipped their genitalia. The same two former hostages also reported that “they were held bound and were beaten throughout their captivity. Signs of binding, scars, and marks consistent with trauma were found,” the report says.

“Additionally, two young children had burn marks on their lower limbs,” the report adds. “One child stated that the burns were the result of a deliberate branding with a heated object.

The report says that some hostages were kept for days in darkness, with their hands and feet bound, and received little food or water. They were beaten all over their bodies, and some had hair pulled out.

“One of the returned hostages described being sexually assaulted at gunpoint by a Hamas terrorist,” the report says. “On several occasions, captors forced women of all ages to undress while others, including the captors, watched.

The men, meanwhile, “endured severe physical abuse, including continuous starvation, beatings, burns with galvanized iron (branding), hair-pulling, confinement in closed rooms with a limited amount of food and water, being held in isolation with hands and feet tied, and being denied access to the bathroom, which forced them to defecate on themselves.”

Words fail. And note that these were the hostages that were released some six weeks after October 7th, the ones that were considered to be in relatively decent shape. Traumatized for life. Imagine the state of the ones still there, more than a year later.

James Earl Carter Jr.

The reactions to Jimmy Carter’s death are all over the place, deeply negative on the right, while often lauded on the left. His one-term presidency was often seen as an attempt to address Americas’s Vietnam trauma, while trying to also revive its then moribund economy. Both notably failed, inflation when he left office stood at 10%, and it was Reagan who in 1980 defeated Carter and brought in the ‘Morning in America’ recovery. That narrative gained momentum and it was built to a large extent on the deeply negative perception of the Carter years which were also characterized by the inept handling of Iran: losing the Shah and the resulting hostage crisis.

Yet few will recall how the necessary de-regulation of the airline and utility industries were actually Carter initiatives, as was the appointment of Paul Volcker as Fed chief and the man to ultimately drive the monetary policies that benefitted Reagan’s recovery. In my years in finance in Asia I was always reminded by American bankers and investors that it was Carter who had set the stage for the proliferation of deregulated industries. And that helped power an economy in a way that we can still feel today.

Yet the bigger debate is over Carter’s record when it comes to Israel. The 1978 Camp David Accords that established peace between Egypt and Israel - lasting until this very day - was a monumental game changer for both countries and the Middle East. It is to his eternal credit to have pushed and salvaged the incredibly difficult negotiation between Anwar Sadat, who paid for this deal with his life and Menachem Begin. While not always the most cordial and overly collaborative, Egypt and Israel have maintained peaceful relations ever since. Yet, after his time in office Carter changed his tune on Israel and legitimized the worst factions of the Palestinian side of the conflict by validating Hamas, an organization designated as a terrorist organization under US law. This included multiple meetings with its leadership, Khaled Meshal and Ismail Haniyeh (photo), the one who deservedly was blown to pieces in Tehran earlier this year by Israel. Carter also pushed the Israel is ‘an apartheid state’ narrative which gave the term credence where it should of course have none. The wildly antisemitic and anti-Israel protests we see on our streets these days were in part seeded and validated by the actions of this Nobel Peace Prize winner, James Earl Carter Jr.

So his legacy is a mixed bag. There are accomplishments and respect, but on the other hand the noted failures (Iran) and misguided post-office excursions (Hamas) will be a stain on his record. Sandwiched between Nixon/Ford and Reagan, Carter’s presidency will go into the history books as an odd blip. Come to think of it, there is another US president whose tenure sits somewhat uncomfortably between two Republican presidencies. Let’s see what Joe Biden will do to polish his legacy.

That’s it for now. Back to regular programming starting next week. Wishing you all the very best for 2025.

Photo: sunset on the beach of Tarifa in Spain, at the end of November this year. The photo below is of the same beach, but taken from the AirBnB and looking south-west where you will see the Moroccan coast in the distance. It was nice to hang out on one of Europe’s more unique and spectacular locations.