Archive for the ‘Behaviour’ Category

Obama opposition to Trump could increase the anti-establishment wave in his favour

March 17, 2016

My theory is that Trump has activated and is riding an anti-establishment wave. Whenever an establishment figure (politician or main stream media) comes out against Trump, it increases the anti-establishment support for him. Therefore – my theory says – the only way to defeat Trump is by taking his ground away from him, not by attacking him from an establishment position. So Sanders, in my opinion, would have had a better chance against Trump. Hillary Clinton is the epitome of establishment.

Obama image: Sean Gallup-Getty

Obama image: Sean Gallup-Getty

Now it is reported that Obama and his advisors are strategizing against Trump and will likely come out, not just in favour of Clinton, but aggressively against Trump. Firstly there can hardly be a more establishment figure than the POTUS. Secondly, Obama and strategy don’t really go together. He will likely over-analyse the problem and try to make rational arguments against Trump. Which would be futile. It will be far too easy for Trump to counter-attack after Obama’s strategic and tactical fiascos in Syria against Putin. That added to Hillary Clinton’s own Benghazi fiasco will just be playing in to Trump’s narrative.

Washington Post: ….. President Obama is plunging into the campaign fray, not only to help Democrats retain the White House but in defense of his own legacy in a political climate dominated by Trump. ………

….. Obama and his top aides have been strategizing for weeks about how they can reprise his successful 2008 and 2012 approaches to help elect a Democrat to replace him. And out of concern that a Republican president in 2017 — either Trump or Sen. Ted Cruz (Tex.) — would weaken or reverse some of his landmark policies, Obama and his surrogates have started making the case that it is essential for the GOP to be defeated in November.

Assuming it becomes a Clinton / Trump election, Clinton would be far better off with Obama being silent. She does not need his support to become a visible confirmation that she is the establishment candidate. Obama being openly and vocally against Trump will only cement the anti-establishment wave behind Trump. It could even convert the wave into a tsunami.


 

How does Breivik qualify for “human” rights?

March 13, 2016

There is something obscene in the manner in which so called “human rights” are being exploited by the mass murderer Anders Behring Breivik in suing the Norwegian government for keeping him in isolation. Apart from the fact that he has been sentenced to just 21 years in prison for the murder of 77 people (which is less than 100 days in prison for every person murdered), I find it objectionable that

  1. he is considered “human”, and
  2. he is allowed to sue

Of course it is up to any society to make whatever rules it wants and to decide what it wants to consider “human rights”. It is also up to any society to be as stupid as it wishes, and if the Norwegian people wish to treat Breivik with the respect due to a human then they can do so.

But surely they don’t have to treat a criminal lunatic as a sane rational being?

Breivik

Breivik

Euronews:

Mass killer Anders Behring Breivik is about to return to court – but this time it is to sue the Norwegian state, claiming it is violating his human rights by keeping him in isolation.

The right-wing extremist will appear in a gym-turned-courtroom within the prison in which he is being held on Tuesday. It will be a testing time for his victims’ families and survivors of his attacks.

“Personally I think it is a little bit hilarious but many of the others…the support group, doesn’t like him being in the media again,” said Dag Andre Anderssen, who survived Breivik’s island shooting massacre.

“That is actually the most important thing for us – that he gets to be in the spotlight again – and we don’t like that. We would rather that he be forgotten.”

It was 2011 when Breivik detonated a bomb at Oslo’s central government building, killing eight people and injuring more than 200. He then headed to the island of Utoeya where his gun rampage killed 69 people at a Labour Party camp, most of them teenagers.

Jailed for 21 years, Breivik has his own cellblock at Skien prison, south of Oslo as well as access to a computer, TV and Playstation.

“Human rights” are not absolute and certainly not some divine right. They are just privileges afforded by societies to their members. There is no reason for them not to be subordinate to common sense. There is no reason for stupidity in the name of “human rights”.


 

Hillary Clinton’s health is suspect after fourth coughing fit

March 13, 2016

When one has a coughing fit one can’t do anything much and neither can Hillary Clinton. But she has now had her fourth major coughing fit in 3 months while making a public speech. She is left completely incapacitated. There has always been a question about her health (68 going on 69) and these questions are now coming to the fore. The speech incapacitation lasts for over 2 minutes and it is embarrassing to watch.

She is clearly in distress which lasts much longer than the actual coughing fit itself. I have acid reflux and asthma and I think I can recognise how she feels.

Maybe it is just acid reflux reaching the throat. But I doubt that.

The risk is that she is a lot sicker than she is letting on.

Inquistr: In July (2015), her campaign released medical records pronouncing her sufficiently healthy to serve as president and that also indicated that the Democratic front-runner in election 2016 is taking medicine for an underactive thyroid as well as another prescription for the above-mentioned blood clots following a concussion suffered in December 2012.

There are claims that the media is covering up the fact that she is suffering from hypothyroidism/Hashimoto’s disease.

The liberal press believes that these health concerns are a right wing conspiracy.

Gawker: These theories are promulgated by far-right fringe figures like Jerome Corsi at World Net Daily, but they’ve been amplified by people as mainstream as Karl Rove. They’re common knowledge to regular readers of Breitbart and the Daily Caller. The “Hillary Clinton is hiding a serious medical condition” theory has rapidly become an alternate conservative narrative of the election—it is, in other words, already the birtherism of 2016. How did that happen?

It is easy to dismiss over the top reports about Benghazi flu or brain injury or a heart problem, but it is not just a simple cough due to acid reflux.


 

Six months of Russian intervention shows up 5 years of Obama’s ineptitude in Syria

March 13, 2016

Russia began its current intervention in Syria on September 30th last year, whereas the US began its anti-Assad campaign in 2011:

……… with the financing, training and encouragement of selected “moderate rebels”. They have no doubt weakened Assad but have also been instrumental in creating ISIS.

The Russian intervention has had a focus and an end-game in mind, both of which were missing from the US/NATO “strategy”. The “ceasefire” that is currently in place allows Russia (and Assad) to continue operating against the “terrorists” (ISIS, Al Nusra…) who are not party to the ceasefire. The US is now just following Russia’s lead much to the chagrin of the many Sunni opposition groups and of Saudi Arabia.

The only objective which Obama and Kerry ever had in Syria was to remove Assad but they had no strategy either for that or for what would follow. In Syria, Vladimir Putin has highlighted Obama’s ineptitude.

Canada Free Press:

On February 27, 2016, a ceasefire went into effect in Syria between the forces of the Assad regime and the opposition. The ceasefire was achieved after the United States and Russia reached understandings regarding the terms of the agreement; Bashar al-Assad and the representatives of the opposition who took part in the contacts accepted its terms; and the ceasefire was grounded in a UN Security Council resolution.

The Islamic State, Jabhat al-Nusra, and other jihadist rebel groups are not party to the ceasefire, and Russia and the United States have agreed that they would continue fighting them in cooperation with one another. In actuality, the ceasefire was reached as a result of the combined efforts of the two superpowers currently engaged in leading the campaign for a political solution to the Syrian crisis. All the other actors are dependent on the assistance of these two powers and are subject to their influence.

In order to translate its military achievements in the Syrian arena into achievements in the realm of international politics, Russia worked intensively to advance the ceasefire along two parallel channels. The first channel was operational – specifically, a joint air and ground offensive against rebel forces aimed at exhausting them, carried out by a pro-Assad coalition including Iran, Syrian military forces that are loyal to Assad, Hezbollah, and Shiite militias. The severe damage sustained by the rebel forces is what brought them to the negotiating table. The second channel focused on advancing a political process, primarily vis-à-vis the United States, but also Saudi Arabia.

Moscow sought to promote the political dialogue while it enjoyed the upper hand on the military battlefield and was able to dictate the outcome of the process. Russia translated its achievements on the ground into a political roadmap for a cessation of hostilities and the establishment of a transitional period toward a solution to the conflict within 18 months. Russian policy with regard to the Syrian crisis was also motivated by Russia’s aspiration to promote its standing within the international arena and reduce the Western foreign and economic pressure leveled against it following its actions in Ukraine. In this context, Moscow led the joint offensive of the forces of the pro-Assad coalition in an effort to demonstrate its determination and to create pressure on the West and on Turkey by means of a massive flight of refugees toward Turkey from the embattled areas. It is unclear whether Russia received anything in return from the contacts that took place behind the scenes between Washington and Moscow, such as an easing of the Western sanctions.

Syria conflict map 13th March 2016 Carter Center

Syria conflict map 13th March 2016 Carter Center

The Russian intervention has seen the ISIS expansion halted and reversed. They have secured breathing space for the Assad regime though they expect to have him replaced in an orderly manner in time. ISIS will shift (is already shifting) to Libya which is in chaos (for which Obama passes the buck to Cameron and Sarkozy). The EU with its shambles of a refugee policy is providing the sink which swallows the bulk of those displaced.

The real Middle East end-game is a very long way away but Russia is reaching its immediate objectives of supporting the Syrian regime, halting the march of Sunni- groups, restraining the ambitions of Saudi Arabia and of getting in the good books of Iran.

The US and Europe will still have to handle ISIS in Libya but here they will not have the Russians to rescue them.


 

The “niqab” is a pre-Islamic, Jewish tradition

March 10, 2016

I didn’t know that.

In Egypt, a Member of Parliament has introduced a bill to ban the niqab in public places and in government institutions:

Independent:

The Egyptian parliament is drafting a law banning women from wearing the niqab veil. The ban will apply to wearing the clothing in public places and government institutions, it has been reported.

……..

MP Amna Nosseir, professor of comparative jurisprudence at Al-Azhar University, who has backed the ban, said that wearing the veil is not a requirement of Islam and in fact has non-Islamic origins. She has argued that it is a Jewish tradition which appeared in the Arabian Peninsula prior to Islam and that a variety of Quran passages contradict its use. Instead, she has advocated that the Quran calls for modest clothing and covered hair, but does not require facial covering.

Jewish niquab image - Faisal Kutty

Jewish niqab (image – Faisal Kutty)

There are some Jewish sects which today use the niqab or something similar – a frumka, (a Haredi sect and some Sephardic women). There are references in the Old Testament which refer to women putting on a veil before meeting with strange men.

Certainly there seems to be strong evidence that the full-face veil was in use for at least a 1000 years before Islam was invented. Even in Islam, the Qur’an seems to call for modesty rather than specifying a particular mode of dress.


 

The “Oh God! Anybody but Hillary” effect could take Trump all the way

March 3, 2016

The US Presidential election is getting to be extremely entertaining and well beyond my expectations. It looks like it is going to be Trump (85%) versus Hillary (98%) in November. An additional and quite unexpected source of entertainment has emerged as Republicans become contortionists to escape from their previous criticisms of Trump and find a convoluted way to align themselves behind him.

(I note also that many of Trump’s critics in Europe are beginning to realise that it might not be very healthy to be too loud in their criticism and disdain of somebody who could be the next President of the US. The Pope has already backtracked. Some Scottish Nationalists are also becoming intellectual contortionists.)

The Republican “elite” are in abject disarray it seems (but they have been in disarray ever since the Tea Party gained ground). As an opposition they have been pathetic. Even with a resounding majority in the House their establishment chinless wonders (guess who I mean?), have been remarkably ineffective.  “Stop Trump” is their new game, but they can’t. They can – possibly – dislodge him from being the GOP nominee but then he goes independent and then the GOP disintegrates.

For a Trump – Clinton battle in November, all conventional thinking is going to be of little use. The play-book for that game does not yet exist. It will be written from now on. It would, I think, be quite wrong to assume that the Trump then (in the mind’s eye of the electorate) will be the Trump we see now. It will be the perceptions he creates from now on, not those he has created so far, which will turn out to be decisive. Trump is turning out to be a rather smart – and clever – operator, in a clown’s clothing. He is becoming the champion of common sense and seems immune to attacks from “liberal McCarthyism” and from the tyrants of “political correctness”.

The conventional wisdom seems to be that Hillary Clinton would beat Trump easily. Her grass-roots organisation and the “Clinton brand” would, it is thought, rally the hordes to her cause and Trump would be wiped away. But I think conventional wisdom will turn out to be conventional folly in such a battle. Even on the feminism front, Clinton does not appear to have any decisive edge over Trump’s over the top support of being “feminine” (as opposed to feminism), which is sexist only to the most ardent of feminists. Clinton versus Trump will not be about ideologies but will be a battle of perceptions engendered and the emotions that are aroused. Clinton versus Trump will be black-and-white TV versus colour, it will be Blackberry versus the iphone, it will be – put simply – boring but known versus exciting if unknown. Normally unknown would be frightening – but not if the status quo is even more hopeless.

I have a sneaking suspicion that in a Clinton – Trump match-up, Clinton will defeat herself. Boring but known has its attractions when things are going well and the voter wants the status quo to be maintained. But for an electorate wanting “change” there will be little enthusiasm for Hillary. She projects the antithesis of “change”. She represents the worst of the establishment entrenched in their towers of elitism. Even adopting some of Bernie Sanders’ socialist ideas does not lift her up from “boring”. Obama promised “change” and “hope” and delivered neither. “American values” which made America “great” seem to have been diluted by too many years of wishy-washy liberalism.

“Oh God! Anybody but Hillary” and an anti-establishment tsunami could make Donald Trump President of the United States.

Trump and Brexit are both manifestations of a “class revolution”

February 27, 2016

Glen Reynolds makes the case of anti-establishment, anti-elite revolution being the driver behind both the Trump wave in the US and the surge for BREXIT in the UK. He has a point.

In America, Donald Trump — who many of the experts thought had no chance — is dominating the polls. In Britain, meanwhile, much of the public seems to be mobilizing in favor of exiting the troubled European Union — a British Exit, or Brexit.

Writing in The Spectator, Brendan O’Neill puts this down to a class revolt on both sides of the Atlantic. And he’s right as far as he goes, but I think there’s more than just a class revolt. I think there’s also a developing preference cascade. O’Neill writes: “In both Middle America and Middle England, among both rednecks and chavs, voters who have had more than they can stomach of being patronised, nudged, nagged and basically treated as diseased bodies to be corrected rather than lively minds to be engaged are now putting their hope into a different kind of politics. And the entitled Third Way brigade, schooled to rule, believing themselves possessed of a technocratic expertise that trumps the little people’s vulgar political convictions, are not happy. Not one bit.”

Well, that’s certainly true. Both America and Britain have developed a ruling class that is increasingly insular and removed from — and contemptuous of — the people it deigns to rule. The ruled are now returning the contempt.

I think this is certainly partially correct. Every attack on Trump has contained a large degree of intellectual contempt, and every such attack has only increased his support. Now we may be seeing signs that the establishment is going to have to get off their superior backsides and treat with the contemptible. Similarly Cameron is being reduced to telling the UK electorate that he knows best what is best for them. He is treating the BREXIT supporters also with a contempt which is now back-firing. I expect that he, too, will have to come of his high horse. It does not help him that the bottom line is the EU will make their real concessions only after the UK votes – if they do – for a BREXIT. So far they have tried to fob him off with cosmetic changes.

This trend is visible across other parts of Europe as well and it has been brought to a head by the refugee/immigration issue. It has become the habit for the establishment, ruling elite to be contemptuous of the far right and in many cases, of avoiding debate with them. Just talking to the disaffected right has been seen as being beneath their interest. That disaffection has now spread to the middle ground and I expect that every election in Europe in the near future will be dominated by an anti-establishment wave.

Political correctness is taken as the child of the establishment elite and has therefore become the target of this new class revolution.


 

Tiffin carrier lunch culture is alive and well (and thriving)

February 25, 2016

As a child in Poona (now called Pune to mollify the nationalists), my mother packed a “tiffin carrier” for my brother and myself with our school lunch. Our driver brought this to school arriving about half an hour before the lunch break and we grew up thinking that having a hot, home-cooked lunch every day at school was nothing out of the ordinary. A tiffin carrier was and still is a supremely practical way of carrying a meal consisting of a variety of dishes. The versions from my childhood were nearly always made of brass or stainless steel but modern versions come in a variety of materials.

traditional tiffin carrier (yk antiques)

traditional tiffin carrier (yk antiques)

In the 1960’s I worked at a research establishment in the UK and we often worked 12 hour shifts when conducting programmes on prototype test equipment – generally for about a week or 10 days at a time. For a while I took to using a tiffin carrier to take my meals to work when on shift, much to the envy of my colleagues with their plastic boxes of sandwiches. The tiffin carrier with the variety of food it carries is naturally conducive to sharing food and that kind of sharing creates – I think – a social environment somewhat deeper than merely eating a meal together at a cafeteria.

I have just returned from India and was more than a little pleased to see that the practice of groups of 5 – 8 people gathering in the work place, each with his or her own tiffin carrier, sharing their home-cooked lunches was not just alive, but well and thriving. The gathering at lunch time, with each person in turn opening his or her tiffin carrier to reveal the days delicacies was a ritual seriously observed. In this fast food world, the tiffin carrier may seem anachronistic but the pleasures of home-cooked food clearly still survive. Often the variety of food being shared was extremely wide, reflecting home cooking styles from across the sub-continent. It was possible to have dosais from the south with channa masala or jeera aalu from the north. Or bhaturas from the north being eaten with onion or coconut chutney from the south. Biriyanis being mixed with kootu and chapattis with sambar or avial. Paratthas with poriyal or aapams with a Bengali fish curry. And perhaps jelebis or mysore pak or sandesh for desert. Inevitably the conversation also included comments about food and cooking and the home environment, and an insight into the lives of colleagues which carried social bonding to a far deeper level than without the sharing of home-cooked meals

This account of using a tiffin carrier  to school by Krishnamurthy Yenugu predates my experiences by just a few years. I find it incredibly nostalgic about a world long gone. But the tiffin carrier culture is still going strong in the work place – and long may it continue into the fast-food world.

YK Antiques: This vintage brass 5-tier tiffin box was used by me during my school days to carry lunch to my school. I was born in the year 1940. My grandfather who was a head master for the only elementary school we had in our village Someswaram, in the East Godavari District of Andhra Pradesh, India, had admitted me into the school when I was five years old after doing proper pooja and ceremonial Akharabhyasam (writing OM first time on the slate). I started going to school along with my grandfather Sri Yenugu Krishna Murthy carrying a palaka and balapam (stone slate and stone pencil) in a cotton bag. This was all my school kit. I graduated from 5th standard when I was 10 years old and that was the maximum education my school could offer. The nearest high school was 5 kilometres away and the only way to reach there was by a bicycle. Since I was considered as too young to go alone on a bicycle, my grandfather decided I should stay with my uncle Sri Rajupanthlu garu in the town Peddapuram.

I was admitted in the ULCM High School, Peddapuramin the 1st form (now equivalent of 6th standard) and I successfully completed my 3rd form when I was 13 years old. By then, I was considered eligible to ride a bicycle. So I was shifted back to our village Someswaram and got admitted in a high school in a village named Rayavaram about 5 kilometres from my village. I got a new cycle and a tiffin carrier with 5 boxes in the year 1953. I do not know if I got a brand new lunch box or an already old one by then. Let us consider that as new at that time. That brings us to the age of this 5-tier brass tiffin box set at 60 years old.

Complete assembly of Tiffin carrier showing 5 dabbas, frame, spoon and handle

Complete assembly of Tiffin carrier showing 5 dabbas, frame, spoon and handle

This 13 inches tall lunch carrier has an assembly of five containers- a large one with 3 inches height, three medium sized ones with 2 inches height and a one small one (5th one) with one inch height. All the round boxes are 4.5 inches wide (diameter). All the five containers are held tight by a brass strap frame resembling an inverted “U”shape that has a bent at the top. The two parallel sections have grooves that fit snugly into the knobs on the lower container. The upper most box tightly fits into the bent part of the “U”. The top part of the “U” is used as a handle to carry the tiffin carrier assembly. There is an aluminium spoon that holds the boxes and the frame together. The brass frame has two holes at the bent, and the top vessel lid has a knob with one hole. When the frame is pushed on to the five container assembly, the two holes in the frame and the hole at the top box lid come in a single straight line and the aluminium spoon is inserted through the 3 holes. That seals the assembly tight.

The lunch carrier has a stamping on the top vessel cover reading as ” 41/2“meaning there are four and half containers in the assembly.The top box which is of 1 inch height is considered as half box. There is also another stamping giving the patent details reading as “Patent1937 HK22729”. This reveals that this design was patented in the year 1937. I do not know who the manufacturer is but with the help of patent number maybe we can find the manufacturer. All the vessels are coated with tin coating, locally known astagarampoota. This coating is given to prevent the contact of the food with brass metal since brass reacts chemically with certain types of food materials, particularly Tamarind juice, which is profusely used in Andhra food preparations, and also with lime juice.That is precisely the reason as to why an Aluminium spoon is used instead of a brass spoon.The spoon is used for locking purpose and also as a spoon for serving and eating purpose.You cannot eat food with brass spoon for the reason of chemical reaction. Hence aluminium spoon is used which serves both the purpose. …

I used to start from home at 9 a.m. every day to school and my mother used to keep my lunch carrier, which she used to call it dabba, ready by the same time packed with hot food for my mid-day meal. She used to pack rice in the big dabba at the bottom, the second one with the pulusu or pappu, the third one with vegetable curry, the fourth one with curd and the top one with pickle. The pickle will be eitherAavakaya with badda ( mango slice) or Maagaya with juicy tenka (mango seed). I used to keep the hot brass tiffin box into a cotton bag with handles and hang the bag on the left side of the handle bar of the cycle. My school books were pushed into another similar bag and it was hung on the right side of the handlebar. This was how my journey to school started. If there was an item of interest, it was the carrier. My mind would always be on the carrier instead of on the class subject and I would wait impatiently for the lunch time bell. The children of our village used to sit together and eat our lunch and most of the times we used to share our lunch. Our school used to be at the far end of the village amidst paddy fields.There used to be small canals (bodikalva) to irrigate the paddy fields. We would sit on the banks of these canals under a mango tree and eat lunch with a picnic atmosphere. After that we would wash our tiffin carrier in the canals, reassemble them and put it back in the cotton bag.

I was using this vintage brass lunch carrier for three years during my studies for 4th,5th forms and SSLC (Secondary School Leaving Certificate) which is equivalent to present day 10th. After my SSLC, I had gone to Kakinada to study my Intermediate in PR College. Thus, my cycle journey and my dear lunchbox carrier were given rest. While my cycle was disposed, I retained the brass lunch carrier, my companion for 3 years. It is now an integral part of my antiques collection. This fabulous 5-tier tiffin box is my goddess Annapoorna which fed me for three years in my life.

The best deal for the UK in the EU will only come after a NO vote in the referendum

February 8, 2016

A view from afar of Cameron’s negotiations with the EU.


I have seen my share of negotiations over 40 years and my judgement is that the current negotiations are far away from the crunch. They are just not serious. In fact they are a little naive. To think that the UK can get a “best deal” without first formally rejecting a proposal goes against everything I think I know about negotiations. The simple, fundamental reality is that the UK will get a better deal only after it has first rejected the “best deal” that the EU and Cameron can cobble together.

No party in a negotiation ever gives up some cherished position except when it perceives a real threat. There is just no real threat or incentive for the EU to pursue real reforms as long as Cameron has effectively promised that he will campaign in favour of whatever “deal” he brings to the referendum. The EU will not negotiate seriously with the UK until after a NO vote in the referendum.

The EU desperately needs to reform. The bureaucracy of the European Commission and the parasitic European Parliament need to be respectively, defanged and eliminated. The EU needs the UK to stay in and the UK would be better off in a reformed EU (but could be better off outside if the EU insists on setting up the Holy European Empire).

The current negotiations are not serious. They are primarily cosmetic and known – by both parties – to be cosmetic. The discussions will only get serious when a referendum has delivered a resounding NO and it is seen by the EU countries that a BREXIT is really possible. Right now they expect that some cosmetic changes – especially about high visibility issues like benefits and non-EU immigration, will be sufficient for placating Cameron and for allowing him to take a “good deal” into the referendum. But they are not even talking about the real issues of EC autocratic rule and the redundant layer of the EU parliament.

Of course Cameron would have to be sacrificed. The sequence would be:

  1. Cameron brings “best deal” to a referendum,
  2. the referendum would reject the deal and vote for BREXIT
  3. Cameron resigns,
  4. new PM would initiate formal move to request an exit from the EU,
  5. EU would come with a “better” deal,
  6. a new referendum would be called on the grounds that “substantial” improvements had been offered
  7. 2nd referendum votes YES and for BREXIN

 

Positive effects of oil price drop should kick-in by Q2

February 8, 2016

The net effect of lower oil price has always been expected to be positive.

Although oil price gains and losses across producers and consumers sum to zero, the net effect on global activity is positive. The reasons are twofold: simply put, the increase in spending by oil importers is likely to exceed the decline in spending by exporters, and lower production costs will stimulate supply in other sectors for which oil is an input.

Since June 2014, oil price has dropped by over 70%, but the boost to the global economy has not materialised as yet. The “explanations” being produced include – but are not limited to – the turn-down in China, the collapse of various economic “bubbles”, the fear factor, the reluctance of governments (especially in Europe) of allowing a pass-through of the price reduction to consumers and  the too rapid decline of tax revenues in oil producing countries.

Oil price 8th Feb 2016 - Nasdaq

Oil price 8th Feb 2016 – Nasdaq

Certainly the “fear factor” and the reluctance of governments and private players to plan for any extended period with low prices has been a major factor. The stock markets have not hit bottom yet. But the strange thing is that the money pulled out of the stock markets has not all shifted to gold and has resulted in only a modest increase of gold price.  The other traditional safe havens of government paper are providing very low yields.

While company earnings are down they are nowhere near as bleak as the stock markets would indicate. Dividends are somewhat down but also do not match the decline in valuations. Now I see that sales volumes are also not as far reduced as the valuations and that margins are generally holding up. But the first lot of dividends I have received in 2016 convince me that while absolute values are down, the “yield” based on current valuations has actually increased.

Of course markets can still go down. But the drop in earnings will be far less than the loss of valuations that has already taken place. P/E ratios are beginning to look quite attractive and if earnings can hold up in line with sales volume, I expect that dividends will still provide a good “yield” through 2016.

As the IMF puts it:

Low oil prices provide a window of opportunity to undertake serious fuel pricing and taxation reform in both oil-importing and oil-exporting countries. The resulting stronger fiscal balances would create space for increasing priority expenditures and/or cutting distortionary taxes, thereby imparting a sustained boost to growth. In a number of low- and middle-income countries, energy sector reforms aimed at broadening access to reliable energy would have important development benefits.

Maybe I am just an optimist, but new company budgets – especially those for the year starting April 2016 – are now factoring in some of the 70% drop of oil price as being sustainable (typically an oil price of $45 as being taken as a “safe” but sustainable level). That leads me to expect a change of mood and a corresponding change in markets in the second quarter of 2016.