TRUMP’S CODE: Making Money on Populist Disorder X
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Translation: Fairpress

Author: Munir Podumljak

The quid pro quo
Diplomatic and business relationships are not one dimensional or linear. But they do reflect the motivations of the actors involved. And the actors in this story include some great strategic thinkers. This story brings together three sets of actors. We suggest that they largely acted independently and for their own benefit, but at certain times cooperatively. Vladimir Putin and a group of Russian oligarchs around him were one set of protagonists. Ever since he consolidated Russia’s finances, Putin has sought to destabilize the western world, especially targeting the EU and the United States. In response to the US/EU Russia-related sanctions following Russia’s assault on Ukraine and the joint western effort to limit the price of oil on world markets, Putin launched an information warfare campaign against the West that, with the help of domestic players in the UK and US, yielded great success for his doctrine. As Putin’s economic and consequently military power is highly dependent on the price of the world’s oil, the Brexit referendum and Trump success were big victories for him. With Britain outside the EU, any global response to Russia’s military showdowns will be weak, and future economic and political sanctions will have a limited impact. This is why Putin allowed and backed – financially, politically and technologically – his operatives (intelligence, business, and science) in cooperating with some of the Western players.

In the case of the US, Putin’s objective was more far reaching. With the frequent multi-layered connections between Trump’s team and Vladimir Putin, as evidenced and observed earlier in the text, Putin set his sights on the jackpot – an increase in global oil prices which would immediately translate into Russian economic and military power. As the US withdraws from global agreements, Putin engages with the rising economic powers of China, India and Brazil and moves closer to his ultimate goal of matching the political influence of the US globally. Almost every step made by Trump since the election furthers Putin’s objectives – destabilization of the Middle East, including the Israel-Palestinian relationships, his clumsy response to the feud between Saudi Arabia and Qatar, and finally the US withdrawal from the Iran deal (JCPOA), one of Putin’s ultimate objectives. Since Donald Trump took office, the price of crude oil has almost doubled (see Figure 13):

Source: Statista[1]

This has also played well for Putin’s closest oligarch allies.

Putin is a master manipulator, cultivating intermediaries instrumentally and providing them with opportunities which exploit weaknesses or serve mutual interests. WikiLeaks played a key role in supporting the Russian operation in the US (Translator project), but most likely it was just an asset run by Russian intelligence, most likely military intelligence. They needed only to prod Julian Assange’s hostility towards the US administration and Hillary Clinton in particular. Robert Mercer and his allies were also a crucial set of players. While direct connections between Mercer and Putin’s close circle have yet to be thoroughly explored, there appears to be a link through Robert Mercer’s involvement with Deutsche Bank in tax evasion and money laundering, and through the Cambridge Analytica. Robert Mercer has undoubtedly benefited. His Fund has made billions since the Brexit referendum

and his first “controlled” market distortion (see Figure 14):

 

Source: WhaleWisdom LLC[2]

In the period from the Brexit referendum (second quarter of 2016) until the JCPOA withdrawal (first quarter of 2018), the value of Renaissance Technologies has increased by USD45 billion (from USD billion 52.5 to USD 91.4 billion) while its turnover has remained the same, around USD 27 billion. Mercer’s ability to predict events seems to have improved significantly, and warrants explanation.

Renaissance Technologies invests in a wide range of financial products, as shown in Figure 15:

Source: WhaleWisdom LLC[3]

However, for a fund that is so dispersed, it shows a surprisingly high correlation with global oil prices.

Source: Authors’ own computation based on data from WhaleWisdom LLC[4] and Federal Reserve Bank of St. Louis[5]

The Pearson coefficient on the correlation between global oil prices and the value of the Renaissance Technologies fund is 0.031, a highly statistically significant correlation. While this correlation does not prove causality between the two, it is suggestive of the possible incentives for cooperation between Vladimir Putin, Robert Mercer and Trump’s team.  Observed in this context, Trump’s strange exit from JCPOA has provided rich benefits to many key actors.

Cambridge Analytica (through its parent company SCL) has also been working in Latvia, Lithuania, Ukraine, Romania, Italy, Moldova, Albania; there may be some more predictable instabilities in these countries and in Europe in the time ahead.[6] However, Mercer is closing his businesses and seeking to distance himself legally from these operations. Cambridge Analytica has gone out of business, Mercer has sold his stock in Breitbart, and he has stepped down as Renaissance Technologies CEO (remaining as the chief analyst).[7] This may complicate efforts to bring these key players to justice.

Read more in the next article

 

This article was created with the support of the Fund for the Promotion of Pluralism and Diversity of Electronic Media within the project “Media Reality” – Developing and Encouraging the Media Literacy Programme

 

 

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[1] Statista (2018) Average monthly Brent crude oil price from May 2017 to May 2018 (in U.S. dollars per barrel). [online]. Available at: https://www.statista.com/statistics/262861/uk-brent-crude-oil-monthly-price-development/ [Accessed 10 Jul. 2018].

[2] WhaleWisdom LLC (2018) 13 F Metrics Renaissance Technologies. [online]. Available at: https://whalewisdom.com/filer/renaissance-technologies-llc#tabsummary_tab_link [Accessed 10 Jul. 2018].

[3] WhaleWisdom LLC (2018) 13 F Metrics Renaissance Technologies. [online]. Available at: https://whalewisdom.com/filer/renaissance-technologies-llc#tabsummary_tab_link [Accessed 10 Jul. 2018].

[4] WhaleWisdom LLC (2018) 13 F Metrics Renaissance Technologies. [online]. Available at: https://whalewisdom.com/filer/renaissance-technologies-llc#tabsummary_tab_link [Accessed 10 Jul. 2018].

[5] Federal Reserve Bank of St. Louis (2018) FRED Economic Data, Excel; Spot Crude Oil Price: West Texas Intermediate (WTI), Dollars per Barrel, Quarterly, Not Seasonally Adjusted. [online]. Available at: https://fred.stlouisfed.org/series/WTISPLC#0 [Accessed 10 Jul. 2018].

[6] Ghoshal, D. (2018) Mapped: The breathtaking global reach of Cambridge Analytica’s parent company. Quartz, [online]. Available at: https://qz.com/1239762/cambridge-analytica-scandal-all-the-countries-where-scl-elections-claims-to-have-worked/ [Accessed 10 Jul. 2018].

[7] Goldstein, M. (2017) Robert Mercer to step down as head of Renaissance Technologies. Quartz, [online]. Available at: https://www.cnbc.com/2017/11/02/robert-mercer-to-step-down-as-head-of-renaissance-technologies.html [Accessed 10 Jul. 2018].

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