How I Became An Investor

It Wasn't By Accident, But It Wasn't Planned Either

I'm not a great investor. I'm no Warren Buffett or Charlie Munger. My portfolio would tell you that. At best, I'm a speculative kind of investor putting in small amounts to long shots and long positions. I do it the way I do it because it works for me. I came to this in the wake of the GFC like somebody taking up a craft . If you read back this blog all the way back to August 2007, you'll see the early inklings of me thinking about how low the market will go as a result of the unfolding financial crisis. I followed the indices all the way down to the bottom, which turned out to be March 2009, and it was then that I bought my first shares through my bank's website. 

Prior to that I only saw the Dow Jones and All Ordinaries and all the other indices on the news and paid scant attention to them, except for the big falls. The notable big falls in my youth were in October 1987 and 1989, and then the Dot-Com Bubble in 2000. Each time I would see the indices do a swan dive and wonder about the people with money in the markets and how they felt watching their holdings lose 20-30% of their value. Then I noticed something weird. A few months after the Dot Com Bubble burst and indices went south, the All Ordinaries in Australia were going for about 30% up from the previous peak. And realised a fundamental truth about markets - that they are volatile and if you can work around that, you could may be make some money. 

So when the GFC bottomed out in March 2009, I was able to pluck up some courage and start buying because I could easily figure the bottom was indeed the bottom. The rest of it weirdly, was all upside. 

All this happened a decade before Meme stocks, Robin Hood and Equity Bros and Spending the Stimmies on Stonks. Like the bros that started with USD600 stimulus cheques, I started with about AUD1000 and dicked around buying and selling stuff. I got to the first 10k on the back of a company called Boart Longyear and promptly lost half of it thanks to the end of the mining boom. I learnt a few tough lessons about the hot money that flows in and out of Australia on a seasonal basis, and I learned that no stock is safe from sudden turns in fortune.  

At the end of the day, putting money in equities as an activity is mostly about speculation. I might think I'm investing and there are moments where it looks like investing, yet in essence I'm placing bets on people, things, and money.  I'm not exactly gambling rent, but there are days I feel like maybe I am just gambling at the Casino Capitalism. 

The Speculative Impulse

I've had time to ponder the nature of my own spec-i-ness (so to speak).

When I was young I lived in Western Australia. We didn't play Cops and Robbers or Cowboys and Indians as we roamed the newly developing suburbs. Instead we played this game called Gold Miners. The idea was to find a mound of sand - these seemed to be everywhere where they were building a house - and we would "stake a claim", then start digging into the pile of sand. And at an appropriate moment somebody would yell "gold!" and hold up his hand holding some stone he found. We would all gather around him and slap him on the back and 'celebrate' with a big cheer. It's quite absurd when I look back on it, but we used to do it after school every day. Consequently I never really wanted to be a Cop or a Cowboy with a gun. But I always wanted to try my hand at a gold field. 

When I think about it, my whole life's been kind of speculative choices made, one after the other. I've never been in love with the daily grind of going to work to do the same thing day after day. I quit university to play in a rock band - and people don't do that unless they're speculating on success. Same with my time at Film School. I chucked in my regular paying job at the ABC to go be a film maker in the hopes that I'd end up successful as Steven Spielberg. My innate spec-i-ness has featured in all these bad decisions. Even today I think up harebrained ideas for start ups and angles on things. In a way, playing the markets is very tame as a preoccupation, especially since I only play with my own money. It has certainly cured me of wanting to play at casinos. 

I don't recommend these kinds of life choices to people. The share market is for a certain kind of fool. Some people are wired for the real estate market, others are for bonds, and others still are for cryptocurrencies or antiques or art or collectibles. Each to their own - I'm not arguing in favour of equities. For equities, you need a bit of optimism, intuition and an eye for a narrative. Details are important, but then, there's nothing on the planet where the details don't matter. I like equities more than real estate simply because your time frames are shorter and moving in and out of positions is easier. If you have a rental property and it turns 5% p.a., and you get your negative gearing going, sure that could be attractive with the ever-rising real estate market, but you don't really know how much that capital gain is until you sell it, and selling it is a pain in the ass. In some ways you're better off just having bank shares that pay a 5% dividend and ride the capital gains. At least you can see just how much the capital gains are every day as a concrete number. 

Where Are We Now?

The markets this year have been choppy. May, June and July gave me heartburn. Even then I had this stubborn faith that things would turn around simply because the flow of hot money does that. Every year, the hot money flows out of Australia in April, and then mysterious arrives back for the late year run towards a Santa Rally. After a while you get a feel for these things. Sure enough, things have been heading up again since the new financial year. That's a new pattern. The pick up used to be from mid-August or so. 

We're in a strange kind of race this year. One part of the race is to get through the reporting season with all the good consumer spending showing up as profits. That makes everybody feel good and shares go up. One part is this business in Russia and Ukraine. Thanks tot the war and the sanctions, supply chains have been screwed up beyond repair. This has led to a supply-side inflation that is prompting rises in interest rates so everybody is looking to see what the US Fed will do in October. The other race is to do with China and its bursting property bubble. They will try and re-inflate it with more debt but God only knows if that would even work. It's not a fix for what ails them. So after 13 years of everybody banging on about the Chinese property bubble, we'll finally see what impact the burst Chinese Bubble will have on the world economy. On the one hand there are reasons for bourses to go high well into later this year. On the other hand there are reasons why they could collapse. All those reasons seem to converge in late October. 

If I put on my realist hat, I would say the US markets will be good until it decides to freak out about interest rates; but then it freaked out abut inflation and how the Fed wouldn't move initially, so that's not saying much. The war in Ukraine will necessarily drag on into winter. There are no choices there, good or bad. And realistically Xi Jinping will win his third term as China's paramount leader, and probably turn on the money spigot to rescue his economy. When you add that together, we'll probably just muddle through. People are complaining it will be like the 1970s again with stagflation. If only. I'd take a Jimmy Carter Leonid Brezhnev kind of world over whatever the hell is happening with Biden, Trump, Putin, and Xi. I'm telling you, things were peaceful back then. 

The Sino-Reality War

Market Bears On The Loose

Pleiades slipped me an article about China that's behind the paywall on Crikey. It's a rather depressing article because it spells out the essential problem of having our economic drivers hitched firmly to China. China for its part, keeps telling it is growing at 7% rate, but the growing evidence is that this is simply not true. Earlier in the year I linked to a talk which included an analyst who is closer to the ground and pointed out that China's growth figures are more 'aspiration' than actually measured. In the past, the Party would have said, 7.5% and then the political cadres would crack the whip to make the 7.5% figure stand, so as not to embarrass the party - but the problem has simply gone beyond that point. They bought the economic growth through debt, and the debt has been piling up at various levels and locations and municipalities.

Earlier in the week Zero Hedge had this entry about how nobody outside China who is a serious analyst of China's economy believes in the GDP growth announcements from China any more. If you go to that link you will find a procession of charts covering various areas of the Chinese economy that simply contradicts the 7% growth figure. You simply can't be having 7% growth while all these other negative things are going on in your economy.

And so with that we go back to the Crikey entry from which I want to lift some lines:

What is instructive about the series of daily crashes that continue to break records in whopping out trillions of dollars is that the sharemarket run was a strategy by the government to put more equity into companies and less debt into the growing Himalayan debt mountain. 

With government encouragement, millions of ordinary Chinese piled in and eventually lost, in many cases, their life savings, after efforts by the party to “control” the market forces failed. This will surely give very real pause on implementing key liberalisation polices such as the freeing up of the capital account — just how much more money will start gushing out of the country now the government has broken its promise on the sharemarket? 

Trust and most importantly confidence have been dented — badly. And confidence, that intangible yet vital mass mood, is as critical to economic management as interest rates. With growth sliding, not one rational economist or China-watcher will admit privately they believe the 7% growth figures for last quarter. The real work indicators show the country is, in many parts, falling into recession. 

Oil is falling again, dragging all commodities back with it, and while iron ore is having a mild surprise surge, forecast supply and demand indicate this is only short lived. A good theory is that the steel mills that operate in Hebei, not far from Beijing, are working overtime before the World Championships in Athletics clean-air policy comes into effect in a few weeks. The market-leading Atlas Iron is on life support once more. Its share price collapsed by 70% last week after it revealed that it had failed in a bid to raise US$180 million. So, one suspects, it is good night to them. Many analyst are still tipping iron ore will fall to US$45 in the next six months from US$51 a tonne on Friday.

The cat is out of the bag, so to speak. The whole collapse phase in share prices in China prompted some interesting policy announcements whereby it was illegal for you to sell shares, and illegal for you not to buy shares. That was bound to look like the whole market was rigged.
Indeed, the Chinese gambling share investors are getting out altogether.

What is interesting about the Crikey article is that it argues the leading economists who busily hitched Australia's wagon to China were wrong, and worse still, wilfully misrepresented the reality on the ground for their own self enrichment. It's a big call, but it's also hard to ignore the evidence. Let's face it. If China really was so damn remarkably good, why are so many people trying to get themselves sand some money off-shore?

That all brings into stark relief the problem of just what Australia is supposed to do in sight of China's economic slowdown. In the years since the GFC, Australia has essentially doubled down on mining to support China. It has been argued in may places that China's process of 'emerging' is such a great engine for growth that they will continue to need the commodities Australia digs up from the earth. Even the big fuss about the Adani mine and the coal in the Galilee basin represents our attempts to keep digging up ever more commodities for this very process.

The futures market on the other hand has been signalling for a drop in commodities far into the future. If the collapse of their price has ben the product of OPEC trying to force out US shale oil from their positions (and failing), then it is certainly true that the collapse in iron ore prices represents BHP, Rio Tinto and Vale trying to force out the smaller places by not cutting supply in an over-supplied market. Basically, there is a general glut in all the commodities because there has ben ramped extraction in commodities based on the figures presented in the past by China about its growth. If China has been lying about its growth for some years, then it would follow the Chinese market is nowhere near as big as we think it is, and the oversupply is going to be much larger as a result.

In a nutshell, we're producing way too much of commodities and it is leading to the accelerated decline in the prices for the very commodities we produce; and by extension our national income is going to fall. now, you can add an adverb like precipitously or dramatically in front of the fall, but the essential point is, we are going to find ourselves were we were in the late 1980s and early 1990s when the Japanese bubble burst.  This time, there won't be a Chinese economy for us to hitch our growth. We may be just about to hit the roughest patch of the economy in 25 years - the roughest patch since "the recession we had to have".

Oh, and when it comes to fossil fuels, the world is divesting, which means the impact will be even worse.

“I haven’t noticed one negative reaction from the shareholders. Look back and would you have been a conscious investor in the 50s or in the 60s in asbestos-related companies, had you known what would come afterwards? Probably not. I am not saying it is the same thing, but there are some techniques, some sectors, some products where the case is now very clear – everything shows that it is not sustainable. Do you really want to be the last investor?”

That last investor is looking like it's us, by dint of a very unimaginative government committing us to be the last investor.

Post-Capitalism, And Post-Bronwyn-Bishop

Looking For (A Tangible) Future World

I've been sort of tucked away watching 'Orange Is The New Black' and so have had little time to write stuff here. In the intervening weeks, clearly the world has moved on, but always seems to me there is a fundamental stodginess with the way this government goes about its business. Maybe it is because it's not really conservatism but flat-out intellectual coward dressed up as conservatism, that is being passed off as the framework for all the half-arsed policy decisions being cast about.

Anyway...
Pleiades sent me an article by Guy Rundle a few weeks ago that blasts the Abbott government's position on Renewables. It's behind a paywall so it behooves me to copy the whole thing (Though tempting it certainly is) I will share these bits with you.

The rise of things like household solar presage far greater shifts than alternative energy models and competition to existing supply; such new forms of power undermine the very form of value on which a high-profit energy sector is based. The plain fact is that the spread of household solar and the advance of a two-way grid is not merely an expansion of private competition -- it is the beginning of a socialisation of the grid, and of the production of energy in society. And much more beyond that. 

This radical effect has crept up on people because the only prior model of socialisation we have known is state-nationalised enterprises, a la the old State Electricity Commission of Victoria. Such statist social democracy arose in the 20th century, for a variety of political and economic reasons. In the '80s, it was unbuckled into privatisation -- which produced some efficiencies and investment through profit and competition, which were quickly swamped by higher energy prices and underinvestment as take-away profit margins were widened. 

Thus we became accustomed to the idea that a "socialist" form of managing energy was the old, bad way, and private capitalist methods were superior. So few, least of all Big Energy, saw coming the technological revolution, which would make a form of energy supply possible that was socialised, while being independent of the state. Rooftop solar is 2% of the energy supply. One way or another it will start to grow exponentially. Once it passes a critical point, the grid will be neither a private nor a state entity, but a social one. As other technologies grow and proliferate -- such as the CSIRO's printable solar cells -- establishment and repair costs will plummet. Sooner rather than later, in new build, roofs will be cells, and the distinction will collapse entirely. With the advancing revolution in battery storage, the "grid" will cease to exist in its current form. The "grid" will be a network of shared abundant power, the production/consumption division collapsed.
That's a ways away -- though closer than you think -- but what terrifies Big Energy is the transition to it, which is a long slide zone of unknowable investment and profit effects, headed only one way. Headed only one way, without the intervention of a capitalist state, that is. Where at one stage of national development the capitalist/social democratic state saw its role as connecting science, technology and production together, the neoliberal Australian state now sees its role as decoupling them. 

Why? Because all that capitalism now has on its side is the maintenance of scarcity. That becomes all the more urgent as technological development, driven in various areas by the exponential advances governed by Moore's law, swamps existing scarcity so comprehensively as to destabilise basic rates of profit. Property and the market were once forces of innovation -- now, with so any committed to spontaneous tech development, open-source sharing and hybrid involvement/investment models, there is a faster mode of co-operation and innovation. So capital must put the brakes on. On everything. Which is why a government like Abbott's now gives the appearance of being a gangsterish bunch of rent-seeking enforcers. Their only job is to hold innovation back. They abolished the minister of science position, because science itself is now their enemy. 

Why isn't there anyone in the Labor Party who can speak to this, with some form of vision, tying amazing technical developments to families in the burbs having easier, more prosperous, cleaner, greener lives? Quite aside from Labor paralysis, there is labour paralysis too. The labour movement doesn't know what to do about these rapid shifts, even if it recognises them occurring. The Labor/Labour complex needs to come up with a comprehensive answer to the imminent crisis of jobs and work about to envelope half a dozen industries, including energy. If they stay isolated and simply defend increasingly low value -- and often boring, dangerous and unpleasant -- jobs as they are, without any sort of transition plan, then they will find their only ally is Old Capital, which makes its money by exploiting them.

Yes, what does future industry look like? How are we going to find meaningful employment in a world where machines ill soak up the menial or repetitive jobs? The world on the other side of capitalism isn't exactly clear, and the tenor of discussions in this country has been more barren than bleak, mindlessly resistant rather than embracing of the future and more stupid than clever (although that last one can always be sheet home to the current government).

Renewable energies and supplies aren't just some fad dreamed up by the lunar left. It's a necessity born of our own civilisation. If we are to accept our place in a civilised world ti all its trappings, then we have to understand the consequences of such acceptance. One of which has been global warming. We may have hit the point of nu return, and yes, Australia's economy is heavily weighted towards export of fossil fuels, but it doesn't mean it has to always be that way, nor is it any good reason to stay so reliant on the export of energy and infrastructure commodities. It's not as if this is a particularly subtle observation. The fact that the Abbott government much prefers to indulge in a kind of double-think, double-speak, where they try to please the mining lobby at all costs consigns us to the kind of crony capitalism rampant in Asia which gives rise to tremendous social inequalities. 

But worse still is that when it really gets down to brass tacks, this government has no vision for how Australia is going to survive climate change induced by Global Warming, let alone have an industrial policy with a bunch of actions plans. So much for the adults benign charge, if by adults they meant people with a view to enrich themselves at the expense of the nation. And if that seems too harsh an assessment, keep in mind that the businesses they've helped the most seem to be either mining or foreign.

The RBA and Treasury have been waiting for sometime for a non-mining sector led recovery, but it is simply not manifesting itself. Part of the problem is that measures to boost consumer confidence are also disproportionately pushing up house prices and rent, so people are not willing to spend any more money than they have been when the real wages remain stagnant. And while this may be a short term situation (unlikely given the state of the world economy), it is disturbing that the non-mining sector simply hasn't regained its mojo even in the era of TwIRP.

What's even more vexing is that while mining delivers only around 10% of the GDP, it earns around 65% of Australia's income from overseas. The Australian economy in effect has become one big life-support system for the mining sector, and everything else we do is kind of irrelevant to the world. We don't do tech or Hi-Tech; we don't do manufacturing any more (those jobs got eaten by the rise of Asia); we don't do science or research, and we're refusing to move over to renewables. The ironies that we're producing more and more tertiary educated people - and charging them a motza for the privilege of getting educated - and sending them into a world where their chosen fields of expertise are most likely in declining demand.

Worse still, the process of dumbing down has progressed to the point where most of these newer graduate cannot be trusted to be competent as graduate even 10years ago. So maybe it's not such a bad thing - but it's also product of the kind of wall-eyed scatter gun approach to how, the tertiary sector is sold as a product as opposed to education being respected for being education on its own terms. And worse still, we're exporting this 'education' while we busily run down funding to our universities. It is perverse to say in the extreme.

It is exactly as Rundle says - the government is so afraid of the future, it is pretending it does not exist. Yet time has a way of simply marching on; and all these acts of denials are going to come home to roost, with tangible price tags that will make us rue the day we elected the Abbott Government.
Clearly I'm not writing something earth shatteringly new or amazing here. 

Goodbye Farewell, Piss Off, Bronwyn Bishop

For a few weeks now, Bronwyn Bishop has catapulted herself into the headlines as the poster child of what is wrong with this government. In that time, the Prime Minister has tried to protect her and let her keep her job as Speaker of the House, but he's basically had to abandon her over the weekend, and so her time as Speaker of the House came to an end.

For as long as we've known her in public life, Bronwyn Bishop has been a ratbag; a hard right fascist with nary the wit to mount a sensible argument; in fact she may be the original politician who brought down the tone of politics in this country through her un-nunaced, unsophisticated sloganeering. She is also the original Ayn-Rand-influenced nut-job with nary a conscience or compassion or common sense. She's always been the woman who, whenever you saw her on television you thought, "Ugh, she's still there," with all the personal revulsion you normally reserve for turds in the swimming pool.

It has been entertaining seeing all the social media memes with helicopters, but more importantly, it has been most excellent that she has been exposed as the biggest of rosters amongst rosters in the government. That somehow, the fact that she seemed to think and operate under the misapprehension that rules of accountability din't apply to her, finally got to see the light of public scrutiny was wonderful thing. Furthermore, it showed that this government really isn't any kind of government to end entitlements any more than it is a government of adults. Witless, shameless and gormless, the government tried to ride out the impossibly scandalous as some minor glitch in proceedings.

If anything can rob the government of its dignity, authority and gravitas, it is these kinds of scandals. Bronwyn Bishop and her travel perks have singlehandedly reduced this government to a joke.

Between July 1992 and June 1993 the backbencher had spent $93,456 of taxpayers' money on airfares and car hire while criss-crossing the nation and – at the same time – undermining John Hewson's leadership of the Coalition. 

Bishop had form when it came to travel. On one occasion, between 1987 and 1988, she had allegedly hired a helicopter – again at taxpayers' expense – to take her from a fete to a dog show because, as her staffer Ellis Glover told me, she didn't want to be late.
But it was not just Bishop's travel expenses that caused concern amongst her colleagues. It was also her fund-raising methods. 

Four months before the 1990 federal election the state executive of the NSW Liberal Party ordered Bishop to stop going outside the organisation to raise funds for her re-election campaign. This followed a cocktail party in which she reportedly received pledges of up to $5000 a head, money she wanted to put into a private bank account for use as she saw fit. 

Bishop was told this breached party guidelines. No member of parliament, or candidate, was entitled to accept money on the party's behalf for their own campaigning. That was the responsibility of the finance committee.

These are not failures of the system as claimed by Tony Abbott; they are rightly - as characterised by Malcolm Turnbull - Bronwyn Bishop's own character failings writ large, driving right by common sense with pedal to the metal. 

One wonders how she could have carried on like this under John Howard. It's amazing that people like Peter Costello, Brendan Nelson, or Malcolm Turnbull didn't rein her in. As for the Prime Minister who once claimed to be the ideological love child of this woman, it seems salient now to question what exactly this ideology might be, and of what substance it is constituted. As far as we can tell, it is a government formed by a bunch of hungry rorters trying to fill their pockets quickly before they are inevitably voted out for their sorry performances. 

At this point in time, it is a tragedy that there is still so much more time before they have to call an election.

Quick Shots -19/Apr/2014

What I Lie Awake Thinking

I was thinking in my half-waking sleep dream mode this morning that the world's free market could be understood very clearly as this giant chaotic mass of fear and greed. The bears and bulls are exactly that, animal spirits of fear for the market and greed for the market. It then occurred to me that Karl Marx could see the logical ramification of this capitalist system as a giant train wreck and that somehow human beings with our superior rational intellect would want to add rationality in to the mix.

Of course the communist experiment of the Twentieth Century ended up being mostly fear: fear of Stalin, fear of Mao; fear of counter-revolutionaries; fear of freedom and the corrupting influence of capitalism and so on. But you look at something like the post-Soviet economy of Russia and it is clear that the logical outcome of capitalism is the kind of oligarchic Kleptocracy and all that inequality that comes with such structures. China has similarly headed straight to the income inequality and disparity between the oligarchs and the ever-suffering peasants.

The most worrying aspect of free market capitalism isn't even this disparity in income or the mis-valuing of labour or the reification of money or the degradation of government and public finnances or the emergence of these oligarchs. It's that the more we commit to it, the more extreme our reliance becomes, upon a system that is essentially held up by our collective fear and greed. Think about the fact that we are 72hours away from starvation and riots. All that fear and greed has taken us to the ledge and here we are thinking this is the best deal going on how to distribute goods and services.

I'm not about to go become a communist but you'll pardon me if some mornings I think to myself there must be a much better way than what we've got.

Is QE Really Working?

This is what makes me ponder each and every day. It seems that the most successful thing Quantitative Easing has done is shore up the prices of equities and risk assets. The second most successful thing it has done is gone out of the first world into emerging markets in the carry trade - which is another way of saying it didn't really go to the places in the economy for which it was intended. This is disturbing because the ramification of this is that the economies that most propped up asset prices did so by shipping inflation out to the emerging markets.

I don't know about you, but I imagine this is having an effect on commodity prices because frankly, you can't print that much money and not have inflation showing up somewhere.  It sure hasn't been appearing in America or Australia or the UK, but lately the price of food staples have gone up steadily. The last time this happened it prompted the Arab Spring so we may be headed for even more instability around the globe.

Just to make things a little tricky, Bernanke's successor Yellen has announced the taper will progress at a constant rate and this is sending investment money back to America, but you have to wonder if the emerging markets are going to be able to handle the drop in liquidity and the rise in commodity prices for food staples.

Then there is the little issue of moral hazards associated with the bail outs. It seems the people who benefited the most from QE and TARP and all the socialised losses governments have taken on around the world as debt (and bad debt at that), were not the people on 'main street' as they are called but the top echelon of the wealthy. Not the 1%, but in fact the top 0.1% have made the most wealth out of this exercise. If you lost your house and job in the GFC, I think you'd be entitled to feel quite duped by all of this stuff. The data coming out of the USA saying there's a recovery going on seems to betray the fact that a lot o the jobs created since the GFC are lower in value than the jobs lost. If the Fed and the US Government worked so hard for this outcome, then surely there's a problem in reflexively thinking that the bail outs were a success. Thus,  seven years on from when the GFC started to happen, we should be asking just who is benefiting from all this Quantitative Easing?

Ukraine, The Ugly

It's one of those situations that won't go away. Russia has essentially taken the opportunity of the instability to annex Crimea back into Russia. While there has been much tub thumping condemnation of Russia by the first world, it seems the other nations in the BRICS have tacitly moved behind Russia. NATO i making noises about moving troops in to Ukraine while the interim government in Kiev has declared the Russia-sympathisers as terrorists. You can see that this is not going to go in any direction of pretty.

Putin and his government have been saying this week that Ukraine is on the brink of a civil war. They may well be heading in that direction right now. All the while I'm a little curious as to what exactly the Obama Administration thinks it is going to accomplish in Ukraine. There is a growing bit of incredulity every time the White House announces it's going to send a ship through the Bosphorus into the Black Sea. This lone vessel encountered (or rather, got buzzed by) a Russian jet that came within 1000yeards.

It's enough to make you wonder if Obama and Putin want to repreise the Cuban missile crisis. Unlike Kennedy ad Khrushchev who had to work through elaborate diplomatic channels. Obama and Putin have been on the phone 6 times with very little to show for it. Putin being an ex-KGB man makes it immensely difficult to read, let alone game for advantage, while Obama has a record of drawing lines in the sand and letting people walk all over them.  If all of this ends up as a hot war in Ukraine with NATO troops on the ground, I think that would be the day things have gone incredibly wrong.