Pot Stocks

I have wanted to do this for a while.

Let's look at pot stocks in Canada.

The Financials:

Aurora Cannabis.  This company had Operating Revenue of $55 Million for its last fiscal year ending June 1, 2018, and Operating Expenses of $122 Million, for an Operating Loss of about $67 Million.  For every dollar they received in revenue, they lost $1.21.

The company expects operating revenue of $50 - 55 Million for period from Oct 1, 2018 to Dec 31, 2018.  This would be a 327% jump.

With the Q2 financial report due February 11, 2019, this company just secured a loan of $250 Million.  They had $219 Million on hand in June, 2018.  One would think they have spent most of that trying to build new production facilities, and marketing in anticipation of the legalization of pot in Canada.

Canopy Growth.  This company announced it Q3 results on Jan 15, 2018. Unless you go to their website and read their report yourself, the company's propaganda will not tell you how they are doing - they claim an $11 Million "net profit" for the quarter.

If you go to their financial reports you see a whopping $214 Million LOSS in one quarter! Yes, their revenue was as they have announced in their relentless propaganda - $23.3 Million.  What they neglected to tell you about was the Operating Expenses of just over $180 Million! 

But it is not that bad. WEED issued $95 Million worth of options to its officers, directors and managers in the quarter, and booked them as operating expenses, so I think the Operating Loss for the three months was probably only something like $57 Million. If I owned this, I would be very worried about $95 Million in options being issued when revenues were only $23 Million or so.

Like Aurora, the company did raise over $200 Million, which is likely for expansion of production - or is because this what you have to do when you are losing tens of millions a quarter, and you want to stay in business? We will eventually find out.

WEED has acquired a number of small companies, and has started selling in Germany, showing an initial $1 Million in sales there. It has invested in a pot-based beverage business.

At this point, I can see no indication that these companies actually make money from the production and sale of pot. I see no path forward to profitability in the short run - 12 months. I expect their next results will show continuing operating losses. 

The 30 P/E Challenge:

Growth stocks are expected to expand production and profits rapidly over time, and therefore are generally given a bit of a pass regarding valuations in light of this supposed happy future.  While a Price to Earnings ration for a company like a chartered bank should be somewhere around 16, for a growth stock, having a P/E in the range of 30 is perfectly acceptable.

Canopy Growth is trading at about $63 a share today. There are about 343 Million shares out. To get to a P/E of 30, WEED would need profits of about $2.10 a share, or total profits of about $720 Million a year. Recall that their total revenues were only $23 Million in the last quarter.

How much revenue may WEED need to generate each year to justify a $63 share price with a 30 P/E?

To calculate this, we have to assume some level of net profit margin for this company - how much money will they make from every dollar of revenue received? 

The beer industry might be a good comparator, and a very quick Internet search reveals a net profit margin in that industry is likely close to 25%. Based on this, let's assume that WEED eventually gets to a profit margin of 25%, meaning that they make about twenty-five cents from every dollar worth of pot and pot derived products that they sell.....recall that they have a negative margin right now.... 

To get to a profit of $720 Million a year, with an assumed net profitability of 25%, WEED would need about $2.88 Billion in revenue per year. This would support today's share price at a 30 P/E.

Aurora is trading at about $9.00 today, with about 1 Billion shares out. To get to a P/E of 30, Aurora would need a profit of $0.30 per share, or about $300 Million a year.

Assuming that Aurora can also get to a net profit margin of 25% at some point, Aurora would need revenues of about $1.2 Billion a year in order to justify today's share price at a P/E of 30. 

Together, these companies will need, at a bare minimum, $4 Billion in sales a year to justify their present share price. 

Right now, WEED is projecting revenues of only about $1.2 Billion by the end of 2021. That is less than half way to the mark they may need to meet. In that year, they predict a P/E of, not 30, but 214. By way of comparison, I think that at the height of the Tech Boom madness, Nortel's highest P/E was 124.

Aurora's sales are projected to get to about $840 Million by the end of 2020. This is much closer than WEED will get to in order to meet the target noted above.  Aurora will have an expected P/E of not 30, but 130.

These are real companies that will survive and likely thrive, but they may be many years away from generating the type of profit they need to show to justify their present share prices.  

Will today's investors be willing to wait that long? 

Monkey Wrenches:

The above projections assume that many things will go well for these companies.  

While these are the two biggest companies in the space at the moment, there are at least eight other competitors out there that are worth over $500 Million already. For WEED and Aurora to succeed, this competition will have to be purchased, merged with, or beaten. 

The projected size of the market is also an issue. A quick search sees estimates for the size of the pot market in Canada ranging from a low of about $4 Billion a year to well over $10 Billion.  If it is the lower of the two, Aurora and WEED would essentially have to own the entire market for pot in Canada in order to justify their share price of today at a 30 P/E and a 25% net profitability - an impossibility.

The international markets may help, or they may not....no one knows. As pot is an agricultural product, it is worthwhile keeping in mind that agriculture is the most heavily subsizided and protected industrial sector on earth. If the world does legalize pot, will this be an opportunity for Canadian companies, or will countries subsidize their own growers and put up trade barriers just as they do with other agricultural products, effectively shutting our producers out? And what will happen when foreign companies demand access to the Canadian market?  

Finally, the existing black market has been around for decades. One would think that these people will fight to keep market share, with the probable effect being lower prices on the part of legal producers who will have to work to avoid being undersold. But this will cut directly into net profit margins, and with that, into share price levels.

Conclusion:

This ship has sailed...I'm not buying.






 

The Giuliani Follies

Is Giuliani trying to get fired?

Manafort was apparently sharing polling data with the Russians as the chairman of Trump’s 2016 election bid. This is known as “collusion”. Since that revelation, Rudy Giuliani has started to act “strangely”.

First and foremost, he went off script on CNN of all places and ADMITTED that this sharing of polling data constitutes “collusion” on the part of some in the Trump Camp, just not on the part of Trump himself. He maintained that he only ever said that Trump had not colluded…that this denial did not cover anyone else. Of course, this is total BS, as the replaying of his many, many denials of any collusion on the part of anyone since he was hired by Trump make clear.

Later, in an interview with the NYT, Giuliani apparently took the position that negotiations around building a Trump Tower in Moscow went ahead throughout the 2016 campaign, citing Trump himself as the source. 

Finally, he has also commended that some people working on the Mueller team as “good people”.

The Trump Camp’s standard lines are that there was no collusion by anyone, ever; that any negotiations regarding a Trump Tower in Moscow were over before he announced that he was running for office; and that the Mueller investigation is a “witch hunt” by pro-Democrat “deep staters”.

Holy Trumpian Chaos Batman!  

This bears repeating, so to recap – ACCORDING TO TRUMP’S PERSONAL LAWYER there WAS collusion; Trump admitted that the Trump Tower negotiations went on throughout the campaign (but this is not a crime); and Mueller has some good people working for him!  

Giuliani has walked all of these comments back, still, how does he still have a job!?

As noted on this blog previously, the revelation that polling data was shared with the Russians has likely rocked the Trump Team to the core. (…the Trump Camp may have done it so that the Russians could assess the effectiveness of their “fake news” propaganda campaign on Trump’s behalf, and/or to help them target their campaign on states where Trump had a chance for a breakthrough…like Minnesota…) Giuliani probably does not want to go down in history as the lawyer who represented the guy who tried to steal an election with the help of the Russians.

Giuliani is not an idiot. He knows he is off script. 

What else does he know?

Collusion As A Tragedy AND A Farce...

Marx famously said that, "History repeats itself, first as a tragedy, and then as a farce."

The history of the Trump Campaign's collusion with Russia is breaking new ground, emerging both as a tragedy and as a farce at the same time!

Last week, when commenting on the fact that Manafort shared polling data with the Russians when he was the Trump Campaign's campaign manager, Rudy Giuliani admitted on CNN that the Trump Campaign DID collude, just that Trump did not.

https://www.cnn.com/2019/01/17/politics/donald-trump-rudy-giuliani-collusion/index.html

Please see this previous blog...

https://mewetree.blogspot.com/2018/12/from-no-contact-to-no-collusion-to-no.html

We are almost at the point where the Trump Camp will openly admit to collusion on the part of some, but maintain that their man had no personal knowledge of this collusion.

Query - will Trump throw everyone associated with this sad affair under the bus to save his skin, maintaining that he did not know?  

Expect Giuliani to be gone from the scene fairly soon...he well understands the devastating implications of the revelation that Manafort shared polling data with the Russians, and America's Mayor wants to be able to show his face in his country after this sad episode in US history is said and done.

Kim Jong-un and Me!

I share a birthday with Kim Jong-un!  We were both born on January 8th!

Belated happy birthday to you, Great Successor, Brilliant Comrade, Eternal General Secretary, and Shining Sun!!

Hey...born the same day as me..and Elvis...how bad can the guy be???

Still Short!!

The USA recently had a blockbuster employment report! The USA may relax tariffs on China. The markets have roared back - the S&P 500 is up 8% since January 1st!!!

Is all A.OK now? Well, no...let's look at the state of the world.

China: I think China’s economy is in a deep recession – they just won’t admit it. 

The banking system there is on the verge of a serious crisis – the Chinese reduced bank reserve limits a few weeks ago to spur even more lending and spending. Doing this is like eating your seed corn…it tastes great for a while, then you starve. 

China has threatened Taiwan – foreign adventures is what leaders do when the news at home is bleak. They would not have raised the Taiwan issue if they did not see dire economic issues in their immediate future.

New outlets like the Epoch Times have reported that millions of Chinese workers have returned to the country-side where they originally came from, as thousands of businesses are failing all over the country. Auto sales fell last year in China for the first time in 20 years.

This is not good. It is not the fault of the Trump tariffs, although these have hurt. China was moving South well before Trump took them on.

North Korea: Trump will meet Kim Jong-un again! All good, and let's hope for the best, but such a meeting is replete with risk.

North Korea has recently laid down some significant markers – basically, the USA has to cancel the sanctions or they will keep going “Boom!” I think the US will likely take a more bellicose stance on North Korea now that Boulton is firmly ensconced in the White House. Regardless of the meeting, I don't think the sanctions are going anywhere…the North Koreans will very likely keep going “Boom!”

Brexit: Brexit is an insane farce! They have a deal that no one will approve! Apparently, May will not seek a mandate from the people of Britain to approve it. She needs a Plan B, and her ally is supposedly Corbyn! 

Something will break – it will be May’s determination to not have another referendum. I thunk she will stoke the chaos and will wait until the last moment – mid to late March – which will maximize the international stress. Brexit will die. May will be out of office by June. Thank God.

USA: The US economy? 

Public sector borrowing in the USA is now at 135% of GDP. The USA will borrow over $1 Trillion this year. I think they will face a debt downgrade in 2019 that will rock the market. With complete stasis in the Congress, the deficit will only grow more, undermining confidence. 

At the same time, interest rates have gone up after being at their lowest level ever for almost a decade. The market heard that rates will rise more slowly recently, but it is too late - rates have to go back to zero for this market bubble to continue, and that will not happen before the bubbles in real estate and the stock markets burst. 

What we are seeing in the stock market is a slow unwind that started about this time last year, and which could take the rest of 2019 to complete. Last year the market was only supported by buy-backs that will not continue now that rates have moved up and Trump's tax cuts are over. Further rate reductions will not be enough to ward off the next great recession.

France: France will see continuing turmoil. The latest "yellow vests" uproar stems from the fact that the professional political class in that country has started to tell the populace that it is time for austerity, going right to the heart of everything the French have been promised for decades - lucrative pensions, six weeks of annual vacation, the best medical system on earth and so much more, all while borrowing 3% of GDP every year. 

The populace is "on to" these people now - they know that their esteemed political class lied to them for decades about their entitlements, and they are outraged. The almost unbelievable arrogance of Macron doesn't help. There is no answer for this, as it stems from upset that has its origins in how the French state has been set up and with a French President who is not going anywhere.

Yes, I am quite negative. I call it like I see it. 

And so, I'm still short. When the S&P 500 hits 1,500, I'll take my short position off.

Simply The Best On Trump/Mueller

Forget the mainstream CNN, or Fox News, or any of the other many charlatans who pass themselves off as "the press" in the USA today.

This is the best and most insightful coverage of the Mueller Investigation to date, anywhere...

https://www.wired.com/story/president-trump-mueller-russia-agent-putin/

Mr. Graff gets it.

The Barr Appointment

Trump’s chosen replacement for Jeff Sessions will soon be running the Justice Department as Attorney General. What may we expect?

For the first time, Trump will have someone in place who is not limited in terms of what he can do by his previous relationship with Russia, as was Sessions. Trump has always said that if he had known beforehand that Sessions had such a conflict of interest, he would never have put him forward as AG. Now that “the gloves are off”, I think William Barr will be gingerly directed by Trump to do the following.

1. Expand the on-going investigation into the Clinton Global Initiative (CGI) to more obviously include investigation of the Clinton’s themselves.

This investigation into the CGI predates the last presidential election. It was revived and has been quietly underway for over a year now. It has not been in the news, but this has “bombshell” potential, as it could see Hillary and Bill Clinton indicted to face a range of charges related to “kickbacks” and “influence peddling” while Hillary Clinton was the Secretary of State.  

The starting point of any such investigation could be the Douglas Band memo. This memo was apparently requested from Mr. Band by Chelsea Clinton who was reportedly concerned that some of her parent’s business dealings and the actions of the CGI could look a bit shady, and she wanted a full explanation of what was going on between Band’s company, the CGI, the Secretary of State, and the former President.

To many, this memo reads like a recipe book for influence peddling, where Douglas Band’s company, Teneo acted as the go-between facilitating the greasing of the palms of everyone involved, with the Office of the Secretary of State as the apparent leverage for the grease. This is how it may have worked….

1. A company gave money to the CGI. Because of this…

2. The company got a meeting with the Secretary of State, at which the Secretary of State gave certain undertakings to help the company out, possibly including such things as contracts for services for Haiti Relief, which was financed by the US taxpayer. And then…

3. The company met with Bill Clinton and gave him a “personal services contract” worth many times more than what the company originally gave to the CGI.

These contracts were worth $116 Million to Bill Clinton during the time that his wife was Secretary of State. 

None of the allegations of influence peddling have been proven, but this situation raised the notice of the FBI prior to the last election. It is interesting that the investigation was slowed down while Obama was President and while Hillary Clinton was running for office. Without Wikileaks, we would never have known about the Band memo at all. I guess the Russians may be useful after all!

2. Reopen the investigation into Hillary Clinton’s use of a personal e-mail server while she was Secretary of State. 

It is illegal for a federal government employee in the USA to send or receive official communications by way of a personal e-mail; for them to send or receive any secret or top secret information through a personal e-mail; and for such an employee to dispose of e-mails that were for government business in such a way that they cannot be recorded in National Archives. Clinton did all three of these things, literally tens of thousands of times, because at no time while she was the Secretary of State for the United States did she ever use the government’s official and secure e-mail server.

It is important to note that every single e-mail that she sent was technically illegal. While the law would normally not take notice of an official communication by way of a personal e-mail to do something like call the official limo to pick someone up, the sending and receiving of secret and top secret information by way of something as secure as a “gmail” account would normally result in someone getting a lengthy prison term.

Let’s reflect for a moment on what Clinton actually did, and why she likely did it. 

By using a personal e-mail server, Clinton controlled the entire e-mail history of her time in office as Secretary of State. By making sure that she never used a government e-mail, there is no way that her political opponents could comb though her e-mail history to find anything that could embarrass her should she, for example, run to be the President of the United States someday. Note that she actually deleted 30,000 of what must have been the more embarrassing e-mails, which would have been impossible if she had used the government e-mail server, as they would have been in the government’s e-mail system or in National Archives.

It therefore seems obvious that, even when she was made Secretary of State in 2011, she still harboured ambitions to be the President and she was biding her time until she could run again, and she did everything she could to shield herself from her future critics while she bided her time. But using a personal server to prevent anyone from learning about her real history in office put the national security of her country, and likely the lives of many Americans in jeopardy. As always with the Clintons, ambition trumped loyalty. Besides being illegal, her conduct was, in a word, reprehensible.

And talking about reprehensible, Comey’s finding that there was not enough evidence on which to base a prosecution of Hillary Clinton, as announced in the middle of the last US presidential election, was totally bizarre. 

There are two parts that need to be proven to make out a criminal offence – the Act and the Intention. 

There is no question that Clinton brazenly refused to EVER use the government server, in spite of having been offered government Blackberries on numerous occasions, including when her own cellphones were inoperable. There is no question that she committed the Act, or Acts.

The Intention element means that the person must have intended to have committed a crime for the criminal accusation to be made out – they had to know what they were doing, and had to have “a guilty mind”. Clinton is a lawyer and one of the smartest people in that country. It is inconceivable that she did not know that what she was doing was illegal, and that she did not intent to do “it”, as she actually did “it” – that is, send and receive e-mail over an illegal and non-government server - literally tens of thousands of times over a period of four years.

While not a conspiracy theorist, and while I normally give the Cops the benefit of the doubt, Comey’s effective exoneration of Clinton in the middle of a presidential election smacks of purposeful political interference. His demented comments regarding Trump since he was fired - he even wrote a book! - strongly suggest that he may have knowingly attempted to influence that election on Clinton’s behalf – his comments betray his own “guilty mind”. As noted in a previous blog, he was properly fired by Trump.

3. Appoint a second special prosecutor.

I think Barr will appoint a second special prosecutor to pursue the above two investigations. To do this, he has to show that the FBI somehow has a conflict of interest that can only be resolved by way of resort to a special prosecutor.

The FBI staff who were there when Comey ran the place are still there. Comey’s comments both before and after his firing should be enough to show an actual bias in favour of the Clintons, or at least the possibility of bias on the part of some persons in the FBI, which I think would also be enough to spark the appointment. And so, I suspect that soon enough, Comey may come to realize why he needed to keep his mouth shut all along.

The point of all of this would, of course, be to deflect attention from the Mueller investigation. In fact, if the existing FBI investigation into the CGI is already well along, and should Mueller take many more months before tabling a report or issuing final indictments, it is actually possible that we may see some of the Clintons indicted before anyone in the Trump family.

Collusion Proven!

We know that the Russians tried to subvert the last US presidential election, in favour of Donald Trump.

We know that they tried to gain access to the Trump Campaign through various intermediaries.

Until last week, Trump's supporters and defenders could say "No Collusion!", claiming that there is no evidence that the Trump Campaign cooperated with the Russians.

Last week, courtesy of a mistake made by Manafort's lawyer in a court filing, we now know that Mueller has proof that Manafort, as the campaign manager of the Trump Campaign, shared polling data with a Russian associate who has ties to Russian Intelligence.

Why would Manafort send polling data to a Russian with links to the very people who were actively subverting the election in favour of his boss? 

There can be only one answer to that question...to actively collude in the Russian subversion of a US presidential election.

Sorry Trump supporters, this is the first of what I think will be many smoking guns. 

It is inconceivable that Trump would not have known about this - the man is a traitor.

Normal Political Ethics Require Trump's Immediate Recusal

We now know that Trump is being investigated by the FBI as a possible asset or tool of a foreign power. 

Normal political ethics would require that a politician step aside until his/her name is cleared in such a situation, as no one who is under such a criminal investigation should actively occupy an executive office. 

While the problem is cured somewhat by having a special investigator who does not report directly to Trump, the allegations against Trump are so serious that he should immediately step aside until Mueller completes his investigation. 

Put another way, you can't have someone who you suspect is a possible traitor running your country.

Hmmm...for some reason, I suspect Trump will just keep going.  

"Make America Great Again!"...by dragging its political ethics lower than they have ever been.

Trump Under Investigation

Please read this...

https://www.nytimes.com/2019/01/11/us/politics/fbi-trump-russia-inquiry.html

The shifts the possibility of an obstruction finding against Trump from one where he may have fired Comey to obstruct an investigation into Flynn, to one where he may have fired Comey to obstruct an investigation into his own relationship with the Russians.  

The implications of this are massive. The prospect that an American President may be compromised by, or may even be actively working for a foreign country against his own country's interests has no known precedent in American history.

Some have questioned why a special prosecutor had to be brought in to look into Russia's attempt to influence the US presidential election - which is now known to have happened. These people have asserted that this was a "witch hunt", and that there was no potential conflict of interest on the part of anyone at the Justice Department that would prompt this appointment.

Now we know.  The potential conflict was not on the part any particular official - it was on the part of the Commander in Chief himself, who was under active investigation as a possible traitor to his own country.  The appointment of a special prosecutor was crucial in order to insulate this investigation from the ability of the chief executive officer in the USA to direct where it may go, as he was one of the targets of the investigation.

And now?

Expect to see a new torrent of abuse directed at the FBI and Mueller by Trump and his minions. As has been noted in previous blogs, this constant attack on law enforcement officials in the USA is unprecedented and deeply unethical, but with Trump in charge we are living in "different times" driving different standards of conduct. 

Also expect some of Trump's supporters to start to quietly back away now. The magnitude of this bombshell is so massive that even the most die hard Trump supporters will likely pause and take notice. 

For his close allies and associates, the obvious question they are asking themselves this weekend is this...

"If this investigation into Trump and Russia has any factual basis at all, what are the implications for me and my career from my on-going close association with this man?"

There are rats and there are ships. I think some of the rats on the good ship Trump are about to part ways with their captain. 

2018 Predictions, Revisited

How did I do? Here are the results from last year's predictions...

Fearless Predictions 2018!

Having missed on just about every prediction for 2017, it is time to try, try again!

Sports:

Baseball: The Blue Jays win the World Series, beating the Chicago Cubs in 6. 

Wrong....really, really wrong.

Note - this is conditional on the Blue Jays keeping Donaldson; trading TU-Low and Martin; and hiring Arrieta, and Navarro. They also need average help in the outfield and infield. 

Hockey: Hell freezes over and the Toronto Maple Leafs win the first of three consecutive Stanley Cups. They will beat LA Kings, who will surge in the second half of the season. People from Toronto become insufferable.

Wrong.

Basketball: The Toronto Raptors will make the playoffs, will win the East, but will lose to the Warriors in the NBA Championship.

Wrong - they made the playoffs, but lost to Cleveland in the second round.

NFL Football: Pittsburgh Steelers! 

Wrong.

CFL Football: Calgary Stampeders, beating the RedBlacks.

OMG!  I was right!!!!

MLS: TFC.

Wrong.

Olympic Hockey: Canada will win with its Spengler Cup team.

Wrong - we came third.

Politics:

Ontario: Progressive Conservative minority government; NDP in Opposition; Wynne on board of directors of Ontario Hydro.

Close - PC Majority government.

BC: Minority government will fall, leading to an NDP majority. Electoral reform referendum will fail.

OMG! Minority government stays, but the electoral reform referendum on proportional representation did fail! Two right!

US Congressional Elections: Democrats barely take the Senate (51 Dem/47 Rep/2 Ind), but not the House of Representatives. Candidates from neither the Republicans or Democrats will do better than at any time since before the Civil War. 

Wrong - complete reverse of what happened!

Pre-Prediction!!! - The 2020 Presidential campaign will be a real four way race. 1. Traditional Republican; 2. Tea Party Wingnut; 3. Clinton Democrat (who will be Clinton herself running for the female vote with her daughter); and, 4. Sanders Socialist. The Sanders Socialist will win as the Millennials show up in droves to overturn the five-decade rule of the Boomer Generation.

TBD.

Trump: Impeached by Congress in Spring, 2018 – before the Congressional Elections - after his son and son-in-law are charged with Conspiracy against the USA.

Wrong - amazing he is still in power...the wealthy in the USA know a friend when they see one.

Putin: Will be re-elected...again and again.

OMG! I almost didn't see that one coming!  Three right!

Economics:

Interest Rates: Will be increased 2 x in USA and Canada. As a direct result…

Close - raised 3X in the USA.

Housing: Toronto prices down 15%; Canada prices down 10%, by June, 2018. 

Wrong - Bursting Bubble delayed; market is slowing.

Markets: Will experience a steep 20% drop in first three months, followed by a partial recovery for the rest of the year. Will end the year down 10%. 

Wrong, but Close. Markets down 10% in first few months, then recovered to new heights, and down 20% at year end. OK, I'll give myself that one - Four Right!

Gold: Will hit $1,400 an ounce by June 1, 2018, and end the year well above $1,300.  

Wrong- ended lower after hitting $1,280.

Note - The bubble that has moved from Japanese real estate in the 1980s; to the Asian economies by the mid-1990s; to the IT sector in the late 1990s; to US housing, housing markets elsewhere, and equity markets in the mid 2000's; and now into just about everything courtesy of the lowest interest rates in human history, will finally start to move to Gold.

Bitcoin: Will collapse as nation states assert that it is a haven for criminals, and shut down exchanges/outlaw its use. Reality - there is no way that the world's central banks will allow a competitor like this to survive, unless they control it.

Right! Number Five!

Europe: Will be rocked by anti-austerity/labour market reform demonstrations in Greece, Spain and France. Greece will default, triggering a crisis that will see it prepare to leave the Eurozone. Spain will endure a second independence declaration by the Catalans. Brexit will be reversed following a new referendum in the UK after the minority Conservative Government falls. In spite of all this, Europe will continue to be a bastion of sanity and civility.

Mostly Wrong, except for demonstrations in France.

NAFTA: The US President will threaten, but back away from a pledge to cancel the trade agreement. The negotiations will go on...and on...and on.

Somewhat right - no cancellation, and new deal done!

World:

Syria: Will be at peace via an accord brokered by Russia and Iran. Up to 200,000 Syrians will head home from Europe. The West will swallow its pride, and participate in a rebuilding plan.

Wrong - hopefully this year.

North Korea: Kim Jong-Un and his family will be assassinated in a military coup when a North Korean missile lands near Los Angeles, and the USA begins targeted airstrikes in retaliation. Peace talks will follow, aimed at unifying the Korean peninsula.

Wrong.

Saudi Arabia: Will experience an attempted coup by hardliners. It will fail, and many of these people will be exposed as ISIS sympathizers and financiers....

Wrong - but some weird stuff there anyways!

ISIS: Will launch a coordinated attack on cities throughout the world at same time and day to demonstrate that it is still very much alive – an ISIS version of the Tet Offensive. It will decline rapidly after this.

Wrong - ISIS caliphate is no more.

China: Will be rocked by demonstrations nation-wide as housing prices and stock markets there start to collapse, threatening the deal that the Communists have made with the people of that country - wealth in return for political subservience. The resulting repression will shock the world.

Wrong - Maybe this year?

Culture:

Music: Punk!

Wrong - Too bad!

Summary - I think that is about 5.5 Right!

Happy New Year!