In the past I have sometimes referred to the black swans as circling and likely to land one of these days soon. They landed in Crimea. Many of you might say, what does this have to do with US real estate and me. The answer is a lot. The situation is one that is fraught with total uncertainty and could explode in unanticipated ways at any moment. Putin clearly understands he can do almost anything and Obama will do nothing that matters. Europe is standing around instead of screaming, as they have done until it was too late in 1914 and 1935. Putin probably hard a hard time not laughing when Obama said the US will not be part of planning meetings for the G8, like he is supposed to care. Reality is Obama has made it clear from the start in 2009 when he ended the missiles in Poland, pulled out of Iraq, lied about Benghazi and did nothing in Syria and when the Iranian people tried to rise up in 2009. Putin is as smart and tough as they come and he will play this to the hilt. As Gates said in his book, “I looked into his eyes and saw a cold blooded killer.”

We already have a very unstable middle east, a likely failure of the nuclear talks with Iran, most of our former allies like Egypt, Saudi Arabia, Israel, India, and Japan taking matters into their own hands because they think Obama does not have their back. The bad guys of Iran, Syria, China and Al Quaeda all see the weakness and take advantage. This is likely to only create more instability, risk and disruption for the world. None of this has a good result on economic growth. The last thing Europe needed was a war risk on its doorstep, and pressure from Putin to go along or lose the flow of gas. Uncertainty just ramped up dramatically and there is no way for anyone to predict what might happen over the next few weeks, which just ramps up uncertainty.

One could argue this is good because capital will flee to safety in the US, and that could be good for US real estate. More likely, capital will do what it usually does in crisis situations, go to the sidelines for awhile. Maybe this will all get resolved in a way that the immediate risk of all out crisis is put to bed for awhile, but the continued weakness of the US and the continued ability of Putin to determine US actions and to do as he pleases will eventually result in a step too far. Some other bad guy who is aligned with Putin, Iran or Syria, will do another really bad act somewhere. Iran will not agree to what is needed on nuclear arms. Assad will continue creating what is likely one of the worst human disasters in history and will foster the new terror breeding ground which eventually will result in a major terror incident in Europe or here. You can pretty much count on that.