Matein Khalid
Who would have thought that an elegiac hillbilly like J.D. Vance would articulate the requiem for the Western Alliance and NATO at Munich even as Donald Trump prepares for his alpha male sword dance in the Saudi desert, though I really hope POTUS-47 does not try to take on Putin in judo because the little guy is a certified black belt, who can pulverize DonnyT on the tatami mat.
The risk premium on European assets just got fatter as Uncle Sam has moved to a pay to play model on collective security and no longer gives a hoot about all those Normandy/Cold War emotional lollipops. Turkey is the second largest military in NATO and Erdogan is talking with Öcalan to negotiate a historic disarmament deal with the PKK, which will turbocharge my fav debt and bank stocks on the Bosphorus as well as trigger geopolitical shock waves in Syria/Rojava/post Hezbollah Lebanon and Iraq/KRG Erbil as Trump touts the idea of Gaza sur-mer as the next Club Med destination resort.
Europe has now been dumped in the game of nations. Vance argued that Europe’s biggest threat is not the Kremlin’s nuclear missiles and China’s EV revolution but its own broken multi-culti model that no longer projects the muscular Christian evangelist ideal that so mesmerizes the princes of MAGA from their Palm Beach death star at Mar-a-Lago. Europe should be proud to uphold the Redneck Central principle that might is right and might is lily white, as the sports emporium in Piccadilly Circus so proudly attests.
I did not know that culture wars in the Old World were more dangerous to Europe’s fate than Putin’s nuclear threats and polonium armed FSB hitmen who did not hesitate to subject half of Mayfair and Bristol to radiation poisoning as long as they nailed their target, invariably a Kremlin dissident. The trans-Atlantic alliance is now as dead and gone as Byzantium, the Third Reich and the Holy Roman Empire, which was neither holy nor Roman and after Napoleon not even an empire. Ukraine was the geopolitical sacrificial lamb that Vance offered in Munich 2025, as Czechoslovakia was to Neville Chamberlain in Munich 1938, “a faraway country of which we know nothing”.
European equities have sizzled since mid-December and outperformed the US broad index by 11% in 2025 as the market bets on a center-right win in the German election with the CDU’s Herr Friedrich Merz as the next chancellor. The obvious lesson from Munich is to accumulate French, German, British and Italian defence stocks since the merchants of death have outperformed the Mag-Lag-Sag-7 by a ton since Trump’s election on November 5th. Europe was trading at 14X earnings while the S&P 500 index flirted with a nosebleed valuation of 22X on New Year’s Day and King Dollar’s macro wrecking ball run had reached its climax at Euro 1.02.
In Planet Trump, it pays to invest in guns and not butter, circuses and not bread, in showbiz and not realbiz. Higher defence budgets in Europe also means higher deficits and rates on OATs, Gilts, Bunds, BTANS and Bonos. AFD is no longer an assemblage of racist sad sacks from the smokestack nowhere villes of the GDR but a potent political force that can win 20% of the vote this weekend. Achtung baby! Is Europe ready for a neo-Nazi party as the political king maker in Berlin while the National Front’s Marine Le Pen plays the same role in the France? No. The deep state exists in both Paris and Berlin while it has existed in Rome and Calabria via the Catholic Church and La Cosa Nostra for centuries to run the secret politics of La Bella Italia.
The traumas of history have shaped European politics in our time. Marshal Paul Hindenburg democratically appointed Adolf Hitler of the NSDAP as Reich Chancellor in January 1933. The ghosts of Vichy and Petian still haunt the coalition politics of France even now. In both cases, the center-right handed over power to the far-right and precipitated the worst bloodletting in the history of the human race. Do we really learn anything from our specie’s past? As I watch 2025’s imperial geopolitical theater turns surreal, I am certain that, like the restored Bourbons, we forget and forgive nothing.
Also published on Medium.
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