Weekly PROPHET NOTES 2/17/25
Global Outlook: The Munich Incident
Happy Monday Tuesday! Chaos is the new modus operandi as Trump wastes no time challenging leaders around the world. Fun times we live in. There is no rest now in politics.
Today I’ve tried to use the new Grok 3 to summarize the news from last week and it was… bad. It hallucinated a climate conference in Belem (that will happen only in November), a South Korean ambassador being summoned in China (last time it happened was in 2023) and another halt in hostage release by Hamas (not really sure where it got that).
The best model yet (supposedly), but it still cannot do a simple and accurate summary of the headlines. And people trust it with “Deep Research”? Coding and image generation are great, but as of now I don’t trust it to do summaries, briefs or deep research. Maybe it will change with the updates, for now let’s see what really happened in the world.
Weekly Outlook
The highlight of the week was definitely the Munich conference and its aftermath. I left a few comments on this on X, more below
United States
Key from Trump this week was starting the Ukraine talks. First by calling Putin, then Zelensky and finally by sending Rubio to Riyadh. Everyone has a different opinion on this, my take is that a lasting ceasefire is extremely unlikely.
Regardless, the US is looking to focus more on the Middle East and South China Sea, as it would like Europe to grow up and be a proper partner. Difficult times are coming and the US cannot fight a war on three fronts. Europe was of course caught by surprise and now cries in disbelief after the speech by JD Vance. More on that later.
In the meantime, Trump is sitting comfortably at home where he meets with world leaders - most notably Modi and King of Jordan recently. First on is in progress and they discuss trade and worker visas. The second one went not so great as Trump was ignorant of a two state solution.
The Americas
Only one minor news here. On February 9, Ecuador’s first-round presidential vote gave Noboa 44.3% and González 43.8%. Neither hit 50%, so a runoff is set for April.
Asia
In Asia China is angry as the US has removed the wording of not supporting Taiwan’s independence from official website. The website also says that the US supports a peaceful resolution of cross-Strait differences.
Taiwanese should be rather happy about this development as it suggests that the US won’t leave it hanging. Meanwhile there are rumors of Taiwan mulling over a multi-billion dollars weapons purchase from the US. Seems like they understand how the new game is played - If you buy from the US, Trump will like you.
Middle East & Africa
Middle East is surprisingly steady, with only minor tensions resulting from Trump comments on Gaza. For the time being the ceasefire in Gaza continues, however a lack of updates on the Phase 2 indicates that the negotiations are not especially fruitful.
Moving to Africa, the Rwanda supported M23 rebels continue to attack DRC, capturing Goma recently. There are calls for stopping the invasion (as there always are), but so far Rwanda seems keen on pushing.
Europe
So, where to begin? Maybe Munich… well JD Vance said what I was expecting, but for some reason the European leaders were caught by surprise. Contrary to popular commentary, it is not a betrayal of Europe - no one said that. The message was different:
Focus on free speech and allow right wing to have a say as the left wing clearly failed Europe.
Grow up - we cannot defend you forever. You are capable countries and we are happy to assist you, but you need to organize and be more of an equal partner as we have other issues around the world that we need to attend to.
Behind the scenes the comms were supposedly softer, emphasizing point 2.
Much of an outrage is on point 1, but I guess that point 2 must have hit the mark as yesterday, the key EU leaders went to Paris to discuss what they can do. Unsurprisingly they couldn’t agree to anything though - no consensus on sending troops to Ukraine in case of a ceasefire or no definitive promises in terms of even military spending. Nice photo-op was done and even nicer words were said on supporting Ukraine, but in the end it was Russia that decided about the military presence of Europe as they said that it is out of the question.
How can Europe be a meaningful party to the peace negotiations if it can’t align internally on what it wants? The big boys are at the table as I write this so we are bound to see a lot of hot takes during the week.
Business, Finance & Economics
Short segment here: inflation in the US has once again hit 3%, sparking renewed fears of higher inflation. All I can say for now is that we can wave goodbye to further rate cuts. Even hikes are on the table now, not for the March meeting, but beyond.
From more fun news, Sam Altman is scrambling to take OpenAI for-profit, but supposedly there are a lot of shenanigans as the implied valuation is significantly lower than the last round. For fun probably, Elon Musk put out an offer to buy that is almost 2x higher than Sam’s at ca. $97 billion. Board needs to consider it, but after the botched ousting of Altman in 2023 I am pretty sure he has the board in his pocket.
Markets
I’m ditching the markets ending this week section in favor of new markets as it was a short and unimpressive one anyway. Enjoy the selection!
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