Greetings from stunning Copenhagen, Denmark.

Pam and her sister, Meg, wanted to see Michael Learned to Rock, a Danish band from the 80s and 90s, perform in their native country. They play tonight at the local venue.

Since Meg lives with her husband Kenneth in Belgium, and we live in Italy, it’s easy to make these trips happen with a bit of planning. Of course, Kenneth and I hadn’t even heard of this band, so we’re here with Micah, taking in the sights and eating superb Danish cuisine.

It’s times like these I’m so grateful to have this job. But it isn’t a job; it’s more of a good habit I complete every morning. If only I could exercise as regularly!

With this “habit,” I can work in the morning and then spend the afternoon walking around one of the most pristine cities on Gaia’s green earth.

All I can say is, “Thank you.”

Thank you for spending eight or nine minutes with me every morning, for putting up with my exasperated rants on the West’s downfall, and for trying to see things just a bit differently than everyone around you. I can’t overstate the importance of this particular point. That you do this really matters.

On To Year Four

This week marks the third year of me writing the Rude; quite frankly, it’s the greatest job in the world.

I’d love to tell you I’ve planned what’s coming this year. But honestly, the world is so topsy-turvy that I don’t know what’s coming.

As it stands, I pretty much wake up every morning and try to figure out what to write. Occasionally, I get a day or two ahead of schedule with some special inspiration, usually sponsored by Potatohead Biden and his muddleheaded minions.

So instead of re-evaluating what I write and going from there, I thought I’d ask you about the Rude’s format.

But before I do that, let me make a point about geopolitics as a subject.

Geopolitics as a Necessary Evil

Yesterday, you may have chuckled at Nemo, who called my Suez Crisis comparison of the US and its current position “The Dumbest Thing I’ve Ever Read on the Internet.”

I cracked up myself. But he concluded, “Stick to financing, money, and stock suggestions, and keep your stupid, uninformed, ill-educated rants about politics out of our faces, please, and thank you!”

Sorry, no dice.

And that’s because geopolitics shapes our investable universe.

Let me give you some hard facts.

This paper from the CFA Institute demonstrates it’s impossible to ignore geopolitical risk:

• Caldara and Iacoviello (2019) constructed a dedicated Geopolitical Risk (GPR) index by looking for words associated with wars, civil wars, and terrorism in 11 newspapers in the United States, Canada, and the United Kingdom since 1985. For historical purposes, they went back to the year 1900 with the help of three newspaper archives.

• Caldara and Iacoviello (2019) found that moderate increases in geopolitical risks tend to have a negligible impact, but for a two-standard deviation spike in the GPR index, they noted that company fixed investments declined by 1.8% over the subsequent 12 months. To put this into perspective, such a two standard-deviation event corresponds to a spike in the GPR index of 82 points and is roughly what happened when Russia annexed Crimea in 2014 and after the 2005 London bombings. 

• In addition to the decline in company fixed investments, Caldara and Iacoviello (2019) found a temporary setback in consumer confidence and a 0.4% decline in employment in the 12 months following a two-standard deviation spike in the GPR index.

And finally:

• Caldara and Iacoviello (2018) investigated the immediate impact of an increase in the GPR index on stock markets around the globe and found that in the month after a 100-point spike, stock markets typically declined by 1% to 3%.

In short, I'm negligent if I don’t write about geopolitics. It’s that simple. Central banks, governments, and, yes, geopolitics are far too intertwined in our markets not to write about them.

Enough about that now… back to the ask.

Freeform Your Response, Please

Questionnaires are littered with the biases of those asking them. So, instead of filling in one, I’ll ask you to write to feedback@rudeawakening.info after you’ve defeated the tyranny of the blank page.

Just freeform what you’d like the Rude to look like every morning. I can’t guarantee it’ll happen, but you may give rise to a great idea that will happen.

Would you like more cheap stock opportunities, like Jim T? More sarcasm? More politics? I’ll only ask you to remember that I have only four hours in the morning to write the Rude before we go to press.

I write five Rudes and one Morning Reckoning each week, except when the esteemed Byron King gives me a break; bless his cotton socks!

So, in-depth exposés are impossible, I’m sorry to say.

But anything else, just ask…

Wrap Up

Once again, thank you for reading and subscribing.

It’s a thrill to see you each day.

Now, I must take a walk to the Little Mermaid statue, where the family awaits my arrival.

Have a wonderful weekend!