Weekly PROPHET NOTES 12/30/24
Global Outlook: It's a Bird... It's a Plane... It's Both!
Aviation was at the top of the news cycle last week, but for all the wrong reasons. The holiday time was not only preceded by a tragic event, but also followed by two others with a potential third down the road. News industry thrives on drama and sadly it was their time.
On top of these, the world of politics, even when out of office, did not fail to deliver newsworthy subjects to discuss. Between the internal US discussions, the disasters, the announcements from Asia, the news from the Middle East and all the new prediction markets for 2025, there is plenty to analyze.
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Weekly Recap
The terminally online preferred to discuss US immigration vs eating at the family dinner table. But as it turns out it is hardly the headline of the week.
United States
While you were enjoying your scrambled eggs in the morning, the CDC is getting increasingly worried about the bird flu. The pathogen named A(H5N1) is currently roaming around poultry farms in Western United States (mostly in California), but experts warn that there are signs of new mutations that will make human-to-human spread significantly easier.
For now the CDC has only recognized 66 cases. Seemingly enough for MSM to start warning about the next pandemic. My comment: pandemics are very common, before COVID we had the 2009-2010 global swine flu pandemic from the big ones, several smaller ones like Ebola and at least 10 other regional epidemics in so many years. What I mean is do not worry too much, especially considering that influenza has negligible death rate.
Besides the possible pandemic, last week the US was focused on immigration policies. The discussion was around legal migration, especially the H-1B work visa. In the battle of the tech right vs OG MAGA, the former wanted to increase legal migration while the latter was strictly against it, pointing out that currently the H-1B visa program is broken (fringe OG MAGA was just plain racist). While the discussion was heated, the final effect was a sort of a consensus, where many agreed that the current system is broken and that top talent migration is good and necessary. For now the discussion has stalled, but we are bound to see part two in about a month.
From other US news, the former president Jimmy Carter has died at a round age of 100. Many official paid their respects, remembering only the good times he had.
Lastly, Trump has asked the Supreme Court to revoke the TikTok ban that currently is bound to take effect on the 19th of January. Influencers are counting on the incoming president, as probably is China.
The Americas
Just as Canada is to assume the G7 presidency, Trudeau is increasingly worried about losing his position, rather than being happy to be the G7 leader. Since earlier this month when his top minister resigned, the pressure on the Canadian Prime Minister is mounting, with many expecting him to resign in the coming months.
Trump’s comments about annexing Canada are surely not helping.
Asia
The Azeri plane was en route from Baku to Russian city of Grozny, but was diverted to Kazakhstan due to weather and Ukrainian missiles targeting the city. All three countries have opened an official investigation. Russia has issued an official apology, but did not admit to any wrongdoing, while many experts point to damage being consistent with missile fragments.
There is no clarity on what has caused the Jeju Air crash, but the videos point to many irregularities, especially the fact that the landing gear did not open. South Kore has opened an official investigation into the matter.
Staying with aviation, on Friday images have circulated on the web, showing a new generation of stealth warplane from China. The mysterious plane looks very modern, but we lack any further visibility on its abilities.
Lastly, coming back to South Korea, the officials are pressing to issue an arrest warrant for the current president Yoon.
Middle East & Africa
Middle East had no intentions of going out of the news cycle. Last week we heard from both Syria and Gaza.
The current organization in control of Syria hinted that any election can happen only after both a new constitution is signed and a new national census is made. They have given a timeline of three years to draft and sign a constitution and another year to conduct a census, giving an expected timeline of four years, before Syrians will be able to cast their ballots. If you read my markets section it is no shocker.
Meanwhile the Hamas x Israel ceasefire negotiations hit a stalemate with neither side willing to give key concessions. The outlook to reach an agreement before Trump’s inauguration is bleak.
Europe
In Europe, with the end of year in sight, bureaucrats are busy signing new regulations. Last week a major victory was touted as the EU has agreed to force everyone to use USB-C standard for charging all electronic devices. Meanwhile, European countries still use different wall sockets.
Moving to problems with Russia and Ukraine, Estonia and Finland are busy investigating the recent energy submarine cable cut, blaming a Russian tanker. Additionally while Ukraine is threatening to turn off the gas tap that goes through its land, Biden is sending additional $2.5 billion in aid, Slovakia is meeting Putin to ensure steady gas supplies and Trump is threatening Europe with tariffs if they do not purchase US gas. Energy-wise Europe is between a rock and a hard place.
Lastly (or not so) there was a first round of presidential election in Croatia with incumbent Zoran Milanovic getting 49.1% of the vote, just short of winning in the first round. The second place belongs to Dragan Primorac with 19.4%. The second round will be on the 12th of January, but there is little doubt Zoran will win.
Business, Finance & Economics
This time lastly on Europe, the EU is introducing a new stablecoin regulation in an effort to “keep European investors safe”. The new regulation puts increased burden on issuers of stablecoins.
The biggest issuer, Tether, is currently not compliant and is facing delisting from European exchanges as of today. Another win for the bureaucrats…
Global Outlook
While the world was full of news last week, the overall outlook remains stable.
United States
I expect US to remain fairly stable, with more hints from the incoming administration on various policies. In the meantime the current administration will try to finish the last pieces, especially by providing all the aid it can to Ukraine and scrambling to secure a ceasefire in Gaza.
The Americas
Stable outlook for The Americas, more on Canada in the markets section.
Asia
Outlook for Asia is also stable. While we are bound to see new teasers from China in terms of its military tech, the next week, month and most probably even year will be peaceful.
In the meantime we shall here continuing news from South Korea on both the ongoing impeachment process and more information on the plane crash. My expectation here is of a system malfunction, especially considering the plane was a Boeing.
Middle East & Africa
The Middle East is always full of surprises, but for the next week or so, I expect little news besides some leaks on ceasefire negotiations. I am bearish on them being successful.
Europe
While my mid-term outlook for Europe is bearish as I specified in my 10 predictions for 2025, in the short-term I expect little developments. We are all waiting for Trump to assume office to see how the Ukrainian war will play out. For now, we can expect continued Russian advances and missile exchanges.
Business, Finance & Economics
Nothing to report here, get some rest finance bros.
Markets ending this week
Coming to prediction markets, as it is expected with only a day before the end of year, there are many markets bound to resolve. I skipped the obvious bonds in search for the truly good deals.
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