Frank's 2024 Geopolitical Predictions

FRANK MCKENNA: Taylor Swift is a phenomenon. A year or two ago, she issued a simple message that people should register to vote. 35,000 people signed up that very day.

PETER HAYNES: Welcome to episode 48 of Geopolitics with the honorable Frank McKenna. My name is Peter Haynes at TD Securities. And I get the pleasure to host this monthly podcast series where we travel around the world to cover the most important global geopolitical issues of the day, all from our perch here in Canada. Well, Frank, it's January. And it's predictions time again.

So last year at this time, I conned you into making some geopolitical predictions. And believe it or not, it became our top-listened-to podcast in 2023. So I figured we'd need to get back at the predictions game for '24. And I did go back and re-listen to last year's predictions. And I can't let you away without at least a brief look at how you did last year. I'll be honest with you, just as a quick heads up, I thought you did really well in hindsight in terms of your predictions. And we'll see how you do this year.

So we're going to start in Canada. We're then going to the US. And we're going to finish up with the rest of the world here. And hopefully, by the end of it, we'll have stimulated some debate and discussion for our listeners to follow up with. So I'm going to start on question number one here right here in Canada.

Last week, Newfoundland liberal MP Ken McDonald, first elected alongside prime minister Justin Trudeau in 2015, became the first Liberal Party member of parliament to call for a review of Prime Minister Trudeau's leadership, claiming the prime minister is past his, quote, "best before date." Shortly thereafter, he changed his story. And I'm assuming this was after pressure from his caucus partners.

But nonetheless, there is a feeling that the prime minister's popularity is waning. And that is evidenced in polling. What are the chances the Liberal Party tells Trudeau it is time to step down? And if so, will he do so?

FRANK MCKENNA: Yeah, OK. Very simply zero. There's zero chance that they will tell him to step down. There's always a chance that he might leave. It's not a majority percentage, but there is a percentage chance of that. But it will not be because he's pushed out.

And the reason it's zero is this. Liberal Party is very aware of its recent history. People around Paul Martin, thinking that he would be the very best choice to continue the Liberal winning streak, people around Paul Martin pushed Chrétien hard, to push him out. Ultimately, Paul Martin became the prime minister. And that episode led to the Liberal Party really being resigned to the woods for a long period of time. They're well aware of that memory, number one.

Number two, a lot of these Liberals are pretty sophisticated when it comes to politics, aren't sure whether they would actually be better off going into another election with a leader to replace Justin Trudeau. Or would they simply burn another leadership candidate? So that gets into the question of whether or not a campaigner who is as good as Justin Trudeau is more of an asset than a liability as we go into election.

And people are making that calculus, trust me. But that's not a sure thing. We look at the recent memory, again, of Paul Martin, memory of Kim Campbell and so many others, where leaders were replaced and it didn't help the cause. That would be my answer-- zero chance of being pushed out, small chance might leave.

PETER HAYNES: OK, so I guess this follow-on question is a little less relevant right now, given the answer to your question. But I will ask you, if Trudeau was to leave, let's say-- and admittedly, that might mean that the Liberal Party has to burn a good candidate-- but regardless, who would be the frontrunners to be the next leader of the Liberal Party as of today?

FRANK MCKENNA: Well, it's interesting. People don't spend much time talking about bench strength. But I think the Liberal bench, if you like, is as strong as it's been historically. When you watch some of these people and understand their credentials in real-life experience and university education, et cetera, can't help but be impressed.

So I would say the bench would include-- not exclusive-- but would include Chrystia Freeland, Mélanie Joly, Anita Anand. And then you've got Francois-Phillipe champagne. I would say Mark Carney would have to be considered and probably a more dark horse candidate. But increasingly moving up is Sean Fraser.

There are others out there who may be potential candidates. Jonathan Wilkinson would be a name that comes to mind, probably others within the caucus and cabinet. Dominic Leblanc, for example, would be a superb leader, interim possibly, but has the best communication skills of all. So it's a pretty deep bench. But those would be the leading names.

PETER HAYNES: Well, we'll take it as a zero here that that's going to happen in 2024. Although, as you say, there's always the small possibility that the prime minister himself decides he's going to move on. So I'm sure we'll be talking about that should that happen in our monthlies.

So let's move on here to Canada-India relations, question number 2. Presumably at some point in 2024, Canadian authorities are likely to make public evidence gathered in the case involving the murder of a Sikh Canadian living in Surrey BC who the Indian government accused of promoting a separatist Khalistan state for Sikhs.

Prime Minister Trudeau announced in parliament in September that Canadian authorities had, quote, "credible evidence that the Indian government was involved in the Sikh murder," an accusation the Indian government vehemently denied. This spat led India to expel several Canadian diplomats and to discourage Indian students from attending Canadian schools and led to a high-profile diplomatic row between the two nations.

And to boot, Canadian security partners who were aware of the evidence against the Indian government, which includes the US, refuse to aggressively denounce India for its alleged role in this event. While tensions between India and Canada have lessened in the months that followed this event, what's going to happen, Frank, when the evidence comes out?

FRANK MCKENNA: Yeah, so this is a great question I'm going to take a minute on because it's very consequential to our country. India is a rapidly growing economy and a major trade partner of Canada. I had thought the likelihood was that charges would be laid before Christmas. I'd been led to believe that was the direction we were headed in.

The fact that charges haven't been laid yet just tells you how complicated it is in matters of national security in laying charges, because it often involves other partners. It often involves form of intelligence gathering that we're not particularly fussy about making public.

So here are a few things to keep in mind in assessing the current situation. One, there are some escalating factors in this, when charges are laid, that would escalate. The commission being launched during the coming days has now added India as a party. And I'm talking about the commission that's looking into foreign interference in Canadian elections. That will keep the issue alive, as well.

And also, the fact there's an election in India, where Modi may very well decide to use an issue like this as a political issue, all of those will help keep the issue alive. But on the other hand, and I think a more compelling story, is the fact that Canada has a lot more allies going forward. The United States has gone public with allegations that India was attempting to do the same thing with an American citizen, that is carry out an extraterritorial assassination.

Just in the past week, Pakistan has accused India of assassinating two citizens on Pakistan soil. And in the past week, California Sikhs have actually voted to support Khalistan separation. So we're not alone. And I think India is starting to realize that might be unwise to try to single out a single country and turn this into a cause celebre.

I also want to note that some extraordinary diplomacy has been taking place between the two countries. And full marks to those efforts. I would say that we've seen a significant normalization of the relationship. Bottom line-- cooler heads have prevailed and will continue to prevail.

PETER HAYNES: Very encouraging, Frank. I wasn't sure that was going to be the answer that you would come up with. And you're right, we don't give enough credit to those diplomats that are working behind the scenes to lower the temperature on these events. They often go without any credit. So I'm glad that you're pointing that out in this case.

OK, let's move on to the next question as we transition into the US, but first start in Canada. And that's related to immigration. So this is a two-part question, the first is Canada. The Liberal Party recently cut back foreign student permits by 35% for 2024 and 2025 to help ease the pressure on housing in Canada.

Critics, including from the colleges and universities across this country, will argue this rule will cause them huge funding problems, is ill conceived, reactionary, rushed, and will have consequences for local employers who rely upon students for the part-time workforce. Does this government move achieve its intended goal of easing the Canadian housing crisis? Or do the unintended consequences outweigh the benefits?

FRANK MCKENNA: Yeah, I think "easing" is the right word. Doesn't solve the housing crisis by itself. "Easing" is the right word. And considering the velocity of our take-in of foreign students, it's something that had to be done. We have tripled the number of foreign students coming to Canada in the last eight years. We now have about a million, which is very, very significant.

We've had forces at play within the country that have exacerbated the situation. An example of that would be a four-year tuition freeze in Ontario that has pushed universities to take in more foreign students, who pay twice the tuition. But that helps to balance the budgets for these universities. And you'll note the trouble that Queens is in financially at the present time, my old alma mater. And part of that is due to the tuition freeze.

So what we have seen is foreign students being used by governments as a way in order for us to have tuition freezes, saving some money for the government. We've also created what I would call degree mills-- and especially true in Ontario-- where degrees are simply churned out in public-private-partnership institutions without regard to the quality of the education.

And then you get some just old-fashioned gamesmanship in Nova Scotia, for example. Cape Breton University has added 2,000 students in the last year alone, 2,000. They now have a total complement at the University of 9,100. 77% of those are foreign students. You can imagine a small community like Cape Breton, Sydney, Cape Breton, having 77% of 9,000 being foreign students.

So some of these are just egregious examples of abuse. And the bottom line is government had to do something. Unfortunately, there will be some universities, who have played much more diligently, that are going to suffer perhaps more than they should. But we have to do something to stop this.

I would note that master's and PhD students continue to be able to come unabated. And that's a good thing because we need those skill sets in our country. But overall, government did the right thing. And it will help, but not solve the housing issue.

PETER HAYNES: Yes, those school mills you refer to, I read a lot about how they would make promises about getting citizenship after you've come to their school and charge ridiculous amounts of money. And unfortunately, people outside, from foreign countries, just don't fully understand what they're getting into there. So in some ways, I think this was cleaning up a mess that needed to be cleaned up.

Speaking of messes, the US have one. And it's on the southern border. So let's talk about the US immigration problem. President Trump's being accused of interfering in a bipartisan Senate proposal to help solve the southern border immigration crisis in the United States. Trump would prefer to solve this problem on his watch for political gain.

Meanwhile, feeling the feds were not doing enough, I think it was last week that Texas Governor Abbott invoked his state's constitutional right to defend and protect itself against illegal immigration. And now you have border control and Texas officers that are in a territorial standoff. Where will the crisis on the southern border stand at the end of 2024?

FRANK MCKENNA: This is a really important question in terms of domestic politics in the United States. There are three big political issues all kind of wrapped up in one. There is the crisis at the border, where I think something like 10,000 illegal immigrants cross every day and are now increasingly showing up in northern cities, putting huge stresses on the social support systems there.

But you've also got this all tied up with aid to Ukraine, a $70-billion package, which is desperately needed to help Ukraine in the days ahead, and support for Israel, as well. So there is a considerable amount of political support for getting something done. But politics is certainly creating a problem in getting to a final solution.

There's no doubt Trump doesn't want a solution to it. I don't think the fact is that he wants to solve this on his watch for political gain. I think he wants this issue to remain as a major obstacle for President Biden, a convincing message that Republicans will have going into the next election campaign.

But on the other hand, there is a lot of bipartisan support to get this solved. Senator Jim Lankford, on the Republican side, has made the point that President Trump, or that former president Trump, is no longer the president and doesn't play on this. A number of other senators have effectively used plate language to tell him to butt out, that this is an issue that has to be solved by elected legislators.

There is a package coming together in the Senate which will address all of the outstanding issues. This will push Democrats far beyond their comfort zone in terms of their progressive caucus, in terms of the type of border measures they will undertake. If this were to go through, it will relieve some of the political pressures on President Biden in dealing with that as an issue going forward.

The Republicans in the Senate-- we tend to see more adults in the Senate than other parts of the legislative process-- believe that the Democrats have never been more vulnerable and will never make a better deal in terms of the Republican side than at the present time. And think they're probably right on that. So their feeling is this is absolutely the best time to solve the problem but not necessarily change the politics.

So I think there's going to be a strong Senate deal coming together. So then the issue gets down to the House. And as we know, the House is just in a state of chaos. The MAGA caucus within the Republican Party exercise a huge amount of control. Speaker's afraid of losing his job. There's about a two-vote majority. So the only way it can get through the House is with massive support from the Democratic side, which the Republicans absolutely hate to see legislation introduced that way.

So if I had to predict, I would predict they ultimately get a package through. There is significant but not universal support on Ukraine, Israel, and on this immigration issue to get this through. But it won't be without more pain, stresses, and strains. But I do believe-- [CHUCKLES] I think it was Winston Churchill who said it, but I do believe, because it plays out almost every year in the United States, that when all other possibilities are exhausted, the United States will do the right thing.

PETER HAYNES: It's interesting, Frank, how closely tied the different questions I'm asking you today are. As we move into the world, we're obviously going to talk about Ukraine and Israel. And it's interesting how closely tied they are to this topic of immigration and the southern border.

I have to get your view, though, Frank, while we have you on this topic on some of the candidates for the Republican leadership, including Nikki Haley, who has performed very well, talking about a northern border. I'm just curious what your thoughts are on that being a former premier with a province that actually bordered into Maine.

FRANK MCKENNA: I think a lot of this is just rhetoric, trying to create a bit of moral equivalency. But if you looked up, in a word bubble, "southern border" and "northern border," you'd probably find a thousand times' more reference to "southern border."

[CHUCKLES] I recall when I was an ambassador in Washington, a few rabble rousers decided they wanted to set up on the northern border and act as kind of a citizen militia to protect people coming across the border. And so they went to Vermont. And I don't know, half a dozen of them, they set up there.

And finally, the good people of Vermont went to them in the woods one day and said, look, we really don't mind what you're doing. We don't care what you're doing. But you are looking in the wrong direction. [LAUGHS] You should know. And most people on the northern border say, look, this is just craziness. We've got a great relationship with our Canadian neighbors.

So leave that aside. Let's talk, if you don't mind, a bit about vice presidential picks because when you get a 77-year-old presidential candidate on one side and an 81-year-old on the other side, that starts to become a little more ominous. So if you don't mind, I'll just handicap the names of the people that I think that Trump, assuming he's the candidate-- and I think he will be-- will be likely to pick.

At the top of the list, but not necessarily in that order, Elise Stefanik, congresswoman in northern New York. She checks off a box in terms of gender support. And let's just assume that at the election Trump will continue to have a big deficit with suburban women and will want a woman on his ticket. And also, New York is an important constituency.

And then you get to Tim Scott who, of course, is an African-American Senator from South Carolina. And that's another constituency that gets shored up with his nomination. Sarah Huckabee Sanders-- well known as a former White House spokesperson-- governor in Arkansas, would be another possible name. Ron DeSantis-- I don't think that will float.

Nikki Haley-- I doubt if she'll do it. And I don't think President Trump will choose somebody who has not been as respectful of him as he would like. Kristi Noem, the governor of South Dakota, somebody who's been very, very supportive of the president, but doesn't-- other than ticking off the gender box, doesn't give you much geographically.

JD Vance in Ohio. Kari Lake-- but I don't think Kari Lake will happen. She's fighting her own lost election, saying that the election was stolen from her. And somebody pointed out the last thing you need are two crying towels in the White House instead of one, about people who think that the election was stolen. So she doubles down a little bit too much on chaos.

And so speaking of doubling down on chaos, the last name that gets mentioned a lot is Vivek Ramaswami. And of course, he was the other presidential candidate. And some pundit pointed out, then you'd have, in the White House, the bully and the brat. And the last thing that we would need is the country-- and Trump for that matter, who's quite astute politically-- to double down on chaos.

So I think a lot of those other names are unlikely. President Trump would certainly like somebody who would not be like Mike Pence and abandon them at the last minute. He'll look for people who have proven their fealty to him. He'll also want to shore up certain constituencies and not double down on the things that people don't like about Trump.

PETER HAYNES: Well, that's a great segue because the next question is about President Trump. He's facing indictments in four different cases, which political pundits refer to as his running mates for the 2024 election campaign. So just to recap, we have the Stormy Daniels catch-and-kill hush payment. We have the January 6th Capitol Hill insurrection. We have the Georgia election interference. And then, finally, we have Mar-a-Lago documents' scandal. How does each indictment play out? And where is former President Trump living on December 31, 2024-- in Mar-a-Lago, in Bedminster, in Trump Tower, or in a minimum security prison in Georgia, Washington, or New York State?

FRANK MCKENNA: Well, I don't think that he'll be in jail. And secondly, I can tell you, he's got a massive number lawyers working for him, high-priced lawyers. And their objective here is to delay, obfuscate, delay, obfuscate. And it's exactly what I would do if I were his lawyer. And in fact, it's exactly-- [CHUCKLES] --what I used to do when I was doing this kind of work.

Delay is his friend. In almost every case here, except the Georgia one and the civil ones, there is a presidential pardon available. So if he can get himself elected in the White House, even if he's convicted, he can pardon himself on most of these offenses. The insurrection is the most serious one. But it's got to go all the way through a court of appeal process and to the Supreme Court on issues around presidential immunity. And delay would be his friend on that, no doubt about that.

The documents case-- scheduled for May the 20th. And by the way, the insurrection case was scheduled for March 4. I doubt if it'll see that. And I suspect that's one where he-- it would be embarrassing to go through that whole thing. But he might have a decent chance with the jury on that. The documents case, I think, is the toughest case against him by a long shot-- scheduled for May the 20th. But he has, if can use the term, a compliant judge there, one that he appointed, Judge Cannon, who seems to continue to entertain delay requests there. So that one could get pushed out.

The Georgia RICO case should be the one he would worry about the most because it involves a state process and not available for pardon. But for some inexplicable reason, the prosecutor there, Fani Willis, has got herself embroiled in another controversy around an affair with another prosecutor. And undoubtedly, that will cloud the waters in that case. The hush money case, Stormy Daniels, possibly in March, although that seems unlikely.

You've got the E. Jean Carroll case, where the $83.3 million verdict is going to be appealed. That will probably end up in the Supreme Court. He does have probably the most ominous peril in the immediate future, is the civil fraud case in New York, where the judge expects to render a verdict before the end of January and where talk is all the way up to 370 million. I suspect it'll be less than that, but it could be a $200-million hit to him on top of the $83.3-million hit.

In that one, it most certainly will go to the Supreme Court of the United States, as well, as will the E. Jean Carroll case because the issue of collateral estoppel is going to be litigated there. But the fact that Trump wasn't allowed, in the second case, to make an argument on the merits of the original allegation, that will undoubtedly be litigated.

So there are issues in all of these cases that can end up taking them to the Supreme Court. So I'm going to make one other observation. I think a criminal conviction will have salience with some voters, not with all of the die-hard Trump voters. But all you need is some cohort of that group to be affected. Polls indicate that it will have some salience. So it becomes very important. And that's why the president and his team will do everything they can to delay judgment.

But here's the point that I'm going to make. There are going to be a lot of cases going to the Supreme Court of the United States on this, and genuinely litigious issues, but a lot of them will be going. I think this puts Chief justice Roberts in a very difficult situation. Every chief justice and every court wants to be seen as being credible when the full scrutiny of history is applied. And if they were to issue a half a dozen or more verdicts on behalf of President Trump, I think they have the potential of becoming a laughing-stock court.

So they're not going to want to do that. So I suspect they're going to try to find a case or two where they can be less supportive of the president. So I think that's his danger. I think the danger is that, by having so much pressure put on the Supreme Court of the United States, that the Supreme Court is going to try to find a case or two where they can assert their independence.

PETER HAYNES: Are you expecting any of these cases to reach the Supreme Court by November the 4th?

FRANK MCKENNA: Yeah, some of them will. There's no doubt. I would say definitely the insurrection case will get there before that date. Yeah, some of them will. I mean, the Supreme Court will understand the importance of dealing with some of these issues and fast-tracking them. But others, the easiest thing they can do, of course, is delay so they don't have to opine "the system of justice grinds slowly but exceedingly fine."

The great shame of it all, whether you are pro-Trump or anti-Trump, is that the public really should have a right to know where these cases will come out before they vote because nobody, I think, wants a president who has been convicted of criminal offenses in the White House. But I would say that there is going to be a huge cloud of ambiguity around these cases right up until the election.

PETER HAYNES: San Marcos, Texas, September 16, that is the date of the first of three presidential debates in the United States. Name the party leaders for the Democrats and the Republicans that will be on stage.

FRANK MCKENNA: Yeah, it'll be former President Trump and current president Joe Biden.

PETER HAYNES: On November the 5th is the US presidential election. Who wins?

FRANK MCKENNA: OK, I'm going to give you a counterintuitive answer here. The polls highly favor Trump at the present time, should he be the candidate. All of the battleground states are tilting Republican at the present time. And I think Biden's age is definitely an issue, which can only be exacerbated as we go along. And the presence of third parties is not a friend of the incumbent government.

So all of those things would say that, if I were putting real money on the table, one would bet on President Trump. But I'm going to go the other way for a couple of other reasons. One, the state of the economy has been a hugely salient factor in every election held in the United States. A good, strong economy tends to favor the incumbent.

President Biden has had a very tough economy with high inflation, interest rates, et cetera. The United States is now emerging from that and, by all accounts, is enjoying the best economic recovery on the planet, where we're getting moderated levels of inflation while simultaneously good levels of economic growth. Point in favor of Biden on that.

Secondly, the criminal conviction potential is material. Pollsters have discovered that even the most ardent Trump supporters have to think twice when asked if they would vote for President Trump-- former president Trump, but President Trump-- should he have a criminal conviction. And all you need to do is to bleed off a small percentage of voters. So that's number two.

And number three is Taylor Swift. And I know you'll laugh at this one, but Taylor Swift is a phenomenon. She has 279 million Instagram followers. A year or two ago, she issued a simple message that people should register to vote. 35,000 people signed up that very day. In the last election, she supported Joe Biden. And she's tended to support progressive causes like LBGQT issues.

Who knows whether she will get into this election campaign or not? But if she were to come out even on the side of registering to vote and getting out to vote, that would move the dial because President Biden's problem is not the number of Democrats in the country, it's the number of Democrats who will vote.

Every single poll ever taken shows there are more Democrats than Republicans in America. And that is why, logically, rationally, I understand and acknowledge why Republicans would engage in more voter-suppression activities than Republicans, whether it's gerrymandering or whether it's absentee balloting and so on. It's the logical thing for them to do. And the constituencies that vote Democrat are less likely to vote. And that includes young people or Latinos or African-Americans.

So if somebody like Taylor Swift-- or the other one is Selena Gomez who's a huge influencer. But if several of these major influencers with huge numbers of followers were to put their fingers on the scale and say, get out the vote, you've got to register to vote, and vote, those constituencies who lean Democratic but are somewhat less enthusiastic about voting may come out to vote. So I'm simply throwing a bit of comic relief in here, but telling you that the Taylor Swift phenomena should not be underestimated.

PETER HAYNES: Well, we learned in the last election that you can't trust the polls. 538 had a tough go. Everyone did, for that matter. And you mentioned the economy or gas prices and the inflation and how the economy has recovered.

I know that that factors into the calculus on how President Biden's going to be responding to the recent attack on American soldiers in the Middle East, because the last thing he wants is to have that spiral out of control, impact gas prices, and then have it be a negative when it comes to the election. I hate to think that election calculus comes into it, but I know it does. OK, who controls the House and the Senate when the dust settles after November 5?

FRANK MCKENNA: After November the 5th, the Senate will be controlled by Republicans. The math is strongly in their favor. And that is a high degree of probability prediction. In the case of the House, much lower degree of probability, but I'd say, marginally, it's likely that the Democrats will control the House. It's almost dead-even now.

The MAGA-dominated House has been dysfunctional, to put it mildly. Very little legislation through. They have very, very low levels of public support. Several redistricting situations have gone against them, one in Louisiana-- there will be some in New York-- which will mean they'll go in almost dead even. And so I think there's a decent chance the Democrats will control the House.

Even more importantly than that is 2026, which is coming quickly in the United States. And then the Senate races tilt strongly in favor of Democrats. We have 20 Republicans up for office, 13 Democrats. The math strongly favors Democrats. And especially if Trump were elected president, I can predict with almost certainty that the Senate will switch in 2026, meaning we're back in complete gridlock, which a state of affairs that many Americans think is very acceptable and has worked out quite well for them over the years.

PETER HAYNES: I think the framers did, as well. The 2026-- I immediately think about the comment you made several years ago on this podcast about the US being in a constant election cycle. The fact that you're already talking about it now is just proof of that point. Let's finish up here on some global issues, Frank.

Last week, there were rumblings that Vladimir Putin, the president of Russia, used backchannels to send a message to the US about engaging in talks to end the Russia-Ukraine war. While US officials denied any knowledge of the overture, it is thought that Putin feels he currently has the upper hand, with factions of the Western world, which you've mentioned earlier-- and the United States-- fracturing in support of Ukraine. And this leaves Putin the power to negotiate an agreement that might include land that Russia seized since the start of the war and had claimed previously in exchange for really just the allowance of Ukraine to join NATO.

Ukrainian President Zelenskyy remained steadfast in his position of wanting a full withdrawal by Russia and nothing less to end the war. With the war in a pretty much given that it's in a stalemate, is there an offramp in sight in 2024 that will leave both parties not totally happy but result in lasting peace? And if so, what does it entail?

FRANK MCKENNA: Number one, I would say that, all things considered equal, the answer would be yes, there are offramps. And that would be a logical result. But all things aren't equal. No doubt there is so-called deal tension on both sides. Ukrainians are paying a huge price for this. Support seems to be waning, even within Ukraine, but around the globe. And they are not making significant gains on the battlefield.

The Russians are hurting, as well. They're having to sell oil and gas below market prices. Their shipping is being attacked, like other shipping. They've got almost two million job vacancies in Russia that they can't fill because people are in the armed forces or have left the country. And they're rapidly dwindling their foreign reserves. So they have tension, as well.

But again, the same name enters the mix as always, and that's Donald Trump. Trump has made it clear that he would resolve this issue on the first days in office. And there's only one way that he can resolve it. And that's by putting his finger on the scale on behalf of Russia and throwing Ukraine under the bus. Putin knows this. Putin probably knows American politics as well as many Americans.

And I believe that even though the deal tension will be substantial to get a deal during this current year, Trump will want to wait before all the cards are played, and that includes the election in November of 2024. And because of Trump and some other-- not the majority-- but some other Republicans favoring cutting Ukraine off from support, I suspect that Trump is going to want to play that last card before he makes a deal.

PETER HAYNES: That, as we know from your earlier discussion, factors into the southern border and the next topic, which is Israel. Shoppers in mostly Arab Middle-Eastern countries, such as Egypt and Jordan, are boycotting US brands like Starbucks and McDonald's in protest of the US's perceived lack of pressure on Israel to end its offensive in Gaza.

Company officials are scrambling to distance from the US government's position on Israel-Gaza to no success to date. Financial analysts suggest this boycott against Western goods will reverse itself when the war ends. How much longer do you expect Israeli troops to be fighting Hamas? And how does this war end?

FRANK MCKENNA: Well, we talked about deal tension. There's massive deal tension in terms of the Middle East because this war is increasingly spreading beyond its borders. We saw very recently an attack on-- a very bloody attack on US troops that will be met with retaliation. And that was in Jordan. And Jordan is a very peaceful participant in the Middle-Eastern political drama.

And so you're seeing Hezbollah units-- or let me put it this way-- Iran proxies in Iraq, in Syria, in Lebanon, in Yemen, as well as Hamas all becoming increasingly aggressive, which is pulling, much more aggressively than they would like, the United States and other allies to become involved in this conflict.

So everybody recognizes the stakes are high. And there are a lot of Mid-Eastern countries-- Qatar, Saudi Arabia, and others-- who would like to deescalate the situation, as well. So lots of deal tension. I predict there'll be some kind of a middling solution. I think there will be a hostages deal that will involve hostage releases and some form of ceasefire.

But I don't think that we will get what we would call a total end of hostilities. There are two reasons for that. One, Israel accepts, almost in its entirety as a nation, that this existential threat from Hamas has to be dealt with. And so there's widespread support for that. But secondly, Netanyahu's political survival depends on keeping the conflict alive. He has a lot to answer for.

And whether it's the political chaos that led Israel in the first place to let its guard down or whether it was the failure to anticipate this attack, there's no doubt that Netanyahu has a huge amount of opposition within Israel. And there's no doubt, as well, that, like Trump, staying out of jail in some cases involves for him continuing to be in conflict.

So I suspect that even though there may be deals made and there may be pauses and ceasefires, that he's going to want to keep the conflict alive so that he can continue to stay in office. And I think the only way that he can keep his coalition together is if there's an external enemy that is being prosecuted. And for that reason, I don't think we will have a complete peace in the Middle East in the near future.

PETER HAYNES: I think the tensions with the United States are only going to rise if that's the case, especially when it comes to funding. So that will be one I think we all agree we wish we weren't having to talk about for the rest of 2024. But it sounds like, from what you're saying, this is not one that's going to disappear to the back pages anytime soon.

Last of the 10 topics here, Frank-- last year, I asked you to name the next country you were worried about creating global geopolitical risk. And your answer was North Korea, mainly because its leader, Kim Jong Un, needs attention, and the world was focused on two other hotspots. Thankfully, nothing came to pass with that prediction.

However, last week, The New York Times reported that the North Korean leader has taken a harder line recently on its neighbor, South Korea. And US officials believe these threats need to be taken seriously. Apparently, Kim Jong Un thinks the US military is in global retreat. And he feels emboldened by his ties with Russia in particular. Is this just more attention-seeking? Or do you see something ominous coming to pass with North Korea in 2024?

FRANK MCKENNA: I'll still go down on the side of attention-seeking. North Korea has got huge domestic issues. People are starving, literally. And I think he likes to keep them distracted by showing off his weapons and saber rattling. But I don't think North Korea is equipped to go very far with this.

PETER HAYNES: OK, so I'll ask you as a follow-on, Frank, is there a new geopolitical hotspot you're watching for 2024?

FRANK MCKENNA: Yes, there is. I would say the Middle East would be it just because of the scale of what's taking place. We're seeing world shipping disrupted, of course, by atmospheric conditions in Panama canal, but now in the Suez with what's taking place in the Red Sea.

That has the potential to, of course, escalate the prices for commodities, put pressure on inflation, lower the reduction of interest rates, and really affect a lot of world economies at a time when something like 70% of democracies are going through elections in the coming year. That has pretty ominous consequences.

But it's just the fact that it seems like everybody that's got a pickup truck can have a drone or a missile. And we're seeing threats coming out of Iraq and Syria and Lebanon and obviously Hamas, but Yemen, as well. And Iran seems to be able to prosecute all of these proxy wars with considerable impunity. So I think that will, the tension in the Middle East will continue to rise.

And then we've got, within the Holy land, what is going to happen? Netanyahu has made it clear he is not in favor of a two-state solution. European allies, the United States, other countries around the world have made it clear they're not prepared to accept any solution that doesn't include room for a Palestinian state in some form or other. So that obviously is going to be a point of inflammation, as well.

But I'm going to throw one other in gratuitously, and it's not an original thought. But the Eurasia Group that I respect a lot for their insights-- Ian Bremmer-- indicated three world hotspots or zones of conflict in the coming year. Of course, one is Ukraine. One is the Middle East. And the third, he said, is the United States. And so I have to throw that out, as well, not in terms of military conflict, but I just can't even predict, or can anybody, what it's going to be like going into an election in November with the polarization of the current level.

And what happens if we have a repeat of the last election and Trump doesn't end up winning? I can't believe that he and his followers are going to accept that quietly. So how does this all play out? We just don't know. The feelings are running so high and the polarization is so extreme that one has to look at the United States as being a source not of actual military conflict but an area where there's going to be a lot of civil unrest.

PETER HAYNES: And yeah, the one thing you didn't mention in there, Frank, is, what's going to be the role of social media in how the election is litigated this year, too? So I got some quick-hitters. We did these last year. I'm going to ask you real quick here. 2024 year-end Canada CPI? Just so you know, 2023 year-end number was 3.4. What will we be at the end of 24?

FRANK MCKENNA: 2.6.

PETER HAYNES: Year-end WTI? 2023 was 71.65.

FRANK MCKENNA: Yeah, well, just because some of the things that we've talked about, the asymmetric risks around the planet, I'm going to go with 72.

PETER HAYNES: 2024 year-end S&P 500 index level? In 2023, the year-end level was 4770.

FRANK MCKENNA: 5000.

PETER HAYNES: Wow. OK, I'm going to add a different one, a new one here. 2024 Stanley Cup winner? And 2024 World Series winner?

FRANK MCKENNA: Stanley Cup, I'm going to definitely go counter-intuitively here. I think, with the addition of Corey Perry and the momentum that Edmonton has, that Edmonton has a real shot at the Stanley Cup. In terms of World Series winners, there's nobody but nobody who has done more to ensure that result than the Dodgers. They've signed Ohtani. They've signed Yamamoto, Tyler Glasnow. They have Mookie Betts there. They've spent a billion in free agency. If money matters, I've got to pick the Dodgers.

PETER HAYNES: OK, and I will finish just quickly with some review of last year. The first question was on Ukraine, what happens. You thought there would be a stalemate, no victory by either side; the US is not likely to stop funding Ukraine; and China and India will not force Russia to end the war. I'll give you that one.

China, what is more likely, that they continue to saber-rattle in Taiwan or attempt to thaw relations with the US? You suggested they would attempt to thaw relations. Very shortly after you made that suggestion, a balloon flew over the United States. So that was unfortunately a bit of a delay. But you get that one right, too, because I didn't even mention China in our 10. It's not to say we're forgetting about it, but clearly the tensions have been eased in that relationship.

Outside of China and Russia, what's the next country that threatens to upend global geopolitical stability, which you answered North Korea because of their nuclear weapons and that they need attention. So thankfully, that one you didn't get right.

Can the Freedom Caucus be tamed, or is the House paralyzed? At the time, they were negotiating McCarthy as chair. And they hadn't got to the point where one single House representative could actually take the Chair out of his seat. And so certainly, you said that would continue. And you were absolutely right.

Will Donald Trump be indicted? Your answer was yes. You thought the documents scandal was most likely. I don't think you would have suggested there would be four indictments. Will Biden run again in 2024? You didn't think he should run despite having a good record. You were worried about his diminishment of capabilities but that, yes, he will run in '24. You're going to get that one right.

Donald Trump, who will be his three leading candidates against him at the primaries, which we're going through right now? You had suggested Ron DeSantis, Mike Pence, and Glenn Youngkin. So you got one right there. Pence dropped out early. Youngkin didn't enter the race. But you had some honorable mentions, where you picked up Chris Sununu, who never ran, Tim Scott, who was out early, and Nikki Haley. So your final comment on that one was, don't count out the Donald. And you are so right about that.

Will Pierre Poilievre lead the polls at the end of 2023? You summarized Trudeau's record, which you had mentioned some of the positive things that he had done despite all the negative sentiment, and that you mentioned both leaders had improved their positions at that time and it would come down to the performance of the economy and that Poilievre would hold the lead. You definitely were right on that one. And you also referenced the fact that leaders do become stale-dated. And that might be one of the reasons why Poilievre would hold the lead.

The next question was whether or not, was Elon 'Lord Vader' Musk lured to the dark side and whether Twitter would exist at the end of 2023? You talked about him being tortured by the demons of his genius and that the world was going to be very negative on him if he carried out, continued with his know-it-all ways and that you thought Twitter might not exist at the end of the year. So I think Musk has toned things down. He had some comments recently about not understanding anti-Semitism as well as he should have. And Twitter's still running along, although maybe not at the same level.

And here's one you got wrong, Frank, will Danielle Smith beat Rachel Notley in May 2023 in Alberta? You predicted Notley would win. She did not. And now, I think, she's announcing that she is resigning. So on your 2023 quick-hitters, you predicted CPI at 4.5. It turned in to be 3.4. You were directionally very right there. You had suggested WTI would be 60 when it was 73.50. And it ended at 71.65. So you are directionally correct, but not quite. A little too negative on WTI.

You had suggested that the S&P would end at 4500. It was at 3830 when you did this prediction, and it ended at 4770. So you did very well on that one. And your worst prediction of all, Frank, was the one I asked you about who would win the World Series, and you said the Blue Jays.

FRANK MCKENNA: [LAUGHING]

PETER HAYNES: And you were worried about giving up on Moreno, giving up Gabriel Moreno in the Varsho trade. And that's the understatement of the world. So, Frank, we covered a ton of material. I'll just give you a quick second. Any of those predictions you made last year that you regret?

FRANK MCKENNA: Well, I regret that I let my emotions take over on the Blue Jays trade. I don't regret the Alberta one. It was actually a pretty hard-fought election. So I don't regret my prediction there. I think the NDP are going to be far less competitive without Rachel Notley. She's quite an impressive political leader. I have a lot of respect for her.

PETER HAYNES: Well, thank you, Frank. That was a lot of fun. And I'm sure the listeners will enjoy that. And they'll also enjoy me being able to rib you a little bit a year from now when we review them. So we'll check in again at the end of February. We'll get back into our monthly routine. I need to ask you one question before we go. Do you have any plans to attend spring training in 2024?

FRANK MCKENNA: I'm seriously thinking about it. I kind of looked at the calendar this week. And yeah, I'm seriously thinking about it. On that, I don't think the Blue Jays have done much in the offseason to improve their club. But I think they have a right to expect more from the players who are in the lineup. And if we get that, we'll be competitive.

PETER HAYNES: Baseball America, top 100 prospects. The Baltimore Orioles have five of the top 32 prospects, including the number 1. The Blue Jays have two-- Ricky Tiedemann at 29th and Orelvis Martinez at, like, 75th. I don't like our prospects, Frank. I don't think we have a lot to deal with. I'm concerned.

Well, they did say something that would-- watch out for the Blue Jays. They're one of the few teams that still has money available in the free agent market. And there's still some free agents out there. So I don't think we can judge the Blue Jays until the spring training starts and we've seen exactly what's happened in the winter. So I'll put a pause on that one. And we'll definitely be debating that in future months. So thanks again, Frank. And we'll talk to you soon.

FRANK MCKENNA: Thank you.

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