While the capital markets and oil seem to have found a temporary base, the world situation and the US election continue to be as uncertain and disruptive as ever. The election has turned into a bizarre circus with a bribe taking criminal on one side and a sleazy bully on the other as the front runners. This is being noted offshore and it is not engendering happy thoughts in the minds of major real estate investors. It is hard to say what impact the election of either of these terrible people would have, but it is not helpful to the investment climate. If we are lucky Trump will not get the nomination and someone else will be president. The threat of a major terror incident grows by the day and the likelihood a attacks in Europe are very high. So long as Obama is in office ISIS will continue to rampage and the Russians will gain further control of the Mideast. Iran now has an extra $100 billion to spend on arms and promoting terror, so the threat of a really bad event in the region is greater than ever. The Obama Clinton legacy of disastrous foreign policy will be with us for a decade.

The flip side is there is nowhere for capital to run other than the US right now. Compared to Europe, our financial system is far more sound and our economy is more stable and doing much better. The European banking system remains a weak and unstable problem. They still have not dealt with all the bad loans and errors of the crash. Management is possibly getting more competent, but we will have to wait to see. Were it not for Draghi, things would be far worse. Europe has years to go before it makes a real recovery, and all of that could be upended by Russia and terror incidents.

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