AGF Management Limited

03/25/2024 | News release | Distributed by Public on 03/25/2024 04:05

Five Ways Why ISIS Changes the Landscape; House Still in Disarray

IT'S PROBABLY A GOOD THING that Congress is out of town for two weeks, which will allow time for a dispassionate debate over the comeback by ISIS, which clearly was behind the terrorism in Moscow last Friday. There are five implications:

First and most important, ISIS has sent a signal that it is prepared to strike once again outside of the Middle East. An immediate focus will be on the Olympic games in Paris, scheduled for July 26 through Aug. 11. Security will be unprecidented.

Second, Russian President Vladimir Putin has to explain a major security breach. As ordinary Russians gradually understand that the terrorists were from Tajikistan, Putin's credibility will decrease.

Third, U.S. intelligence during March consistently pointed to a looming ISIS attack within Russia that had no connection with Ukraine, the lame excuse Putin offered over the weekend. Chalk this up as a major victory for U.S. spies, who got this exactly correct, even suggesting the venue would be a music hall.

Fourth, while Kyiv had nothing to do with this, Ukraine will have to endure massive Russian air strikes, which began yesterday. But longer-term, will Putin have to move troops in Ukraine back to Russia?

Fifth, the dithering Congress will have to acknowledge new geopolitical risks, and will have to approve aid to Ukraine, Israel and other allies. Republicans will find a way to blame President Biden, but more military aid is coming.

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STILL ANOTHER CRISIS IN THE HOUSE: Rep. Marjorie Taylor Greene is prepared to oust House Speaker Mike Johnson, and she needs only one other vote to throw the House into chaos once again. For now, even the Freedom Caucus radicals are reluctant to join her, but Johnson must realize that he's on very thin ice. His strongest argument to the GOP rank-and file: there's no one preferable to him right now.

MAINSTREAM HOUSE REPUBLICANS are disgusted and embarrassed by Greene, and they are resigning in droves - Johnson only has only a one or two vote majority, and he has to rely on Democrats to get anything done, which enrages the hard-liners. Aid to Ukraine and Israel will be the big issue in April, and we think Democrats once again will make the difference on key votes.

WITH CONGRESS NOW ON VACATION, THE POLITICAL FOCUS will be the enormous legal challenge that looms for Trump, starting this week, as he weighs bankruptcy and tapping into his communications company once it goes public. Trump's razor-thin lead in polls has slipped, as most surveys now show the presidential race is a virtual tie.

ADDING TO THE SENSE OF UNCERTAINTY are recent polls that show Robert F. Kennedy Jr. now running at - or even above - 10% support. Kennedy will get publicity this week when he announces his running mate on Tuesday in Oakland.

LAWYER AND INVESTOR Nicole Shanahan, a wealthy Democratic fundraiser, is the apparent frontrunner; she has no name recognition but plenty of money to spend on ads like the Super Bowl commercial she put together for Kennedy last month.

The views expressed in this blog are those of the author and do not necessarily represent the opinions of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies.

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