“When I was a child, it was my greatest dream to someday own a used bicycle and ride it through my village,” said the Pakistani, whisking me through Abu Dhabi. “I was no higher than a common animal you see.” As he spoke, the fingers of his right hand drew together into the shape of a lotus, that gently opened as he completed each thought. “I knew only Pashto. Now English, with no formal education, only studies. Faith has given me great strength.” A prayer call echoed off skyscrapers surrounding a nearby mosque. “I own this car and with my profits I care for 32 people in my village. I send my youngest brother to university. He is our first.” And he turned his head to make eye contact. “My life is a dream you see. Praise God.”

Overall: “I think the Chinese leadership at this juncture is overwhelmed by its internal challenges,” said Taiwan President Tsai Ing-wen. “My thought is perhaps this is not a time for them to consider a major invasion of Taiwan,” she continued, and reasonable people across the planet prayed she’s right. “This is largely because of the economic, financial and political challenges, but also because the international community has made it loud and clear that war is not an option, and that peace and stability serves everyone’s interest.” War, of course, is always an option. And peace and stability do not serve everyone’s interest, they serve almost everyone’s interest. For the few, war is lucrative. Which is why conflict features so prominently in human history. After a brief respite in hostilities, the war in Gaza resumed. Fighting continues unabated in Ukraine. And mankind’s enduring struggle to tame nature showed no sign of material advance. That said, the UAE announced a $30bln climate fund in partnership with Blackrock, Brookfield, and TPG. The hope is to leverage this sum to attract $250bln in investment by 2030, with an increasing focus on the Global South, which stands to suffer most profoundly in this war. And if you squint your eyes and gaze at the horizon, you can almost see a world where China becomes more focused on internal growth than its Taiwan ambitions. With the West increasingly intent to disengage economically and with over 20% youth unemployment, sluggish growth, and a stock market at 4-year lows, it would be in Beijing’s interest to seek peace and stability. The prosperous nations of the Middle East seek peace and stability as they determinedly drive to diversify their economies away from oil and gas. And it’s not inconceivable that we are approaching an end to the conflict in Ukraine, having accomplished little more than untold suffering. Take those three conflicts off the table, focus humanity’s efforts on our battle with nature, perhaps throw in some productivity gains due to AI, and you have the makings for an increasingly prosperous world. Let’s hope this is what the market in its infinite wisdom sees, rather than the recent rise in asset prices being little more than hopes for a Fed pivot.

Week-in-Review: Mon: Israel/Hamas agreed to extend truce for 2 days, early signs point to strong Black Friday sales – although large jump in ‘buy now, pay later’ sales, ECB’s Lagarde sees softening of the labor market / expects to discuss PEPP reinvestment policy in not-too-distant future, Israel CB unch as exp, Saudi continues to ask other OPEC+ members to reduce output, Japan services PPI 2.3% (2.1%e), US New home sales 679k (721k e), US Dallas Fed mfg activity -19.9 (-16.0e), S&P -0.2%; Tue: Fed’s Waller says more infl declines could warrant rate cuts / Bowman expects more hikes to reach price target, OPEC+ talks hit stalemate, Hamas release 10 hostages despite skirmishes in northern Gaza, ECB’s de Cos says too early to discuss rate cuts, RBA’s Bullock suggests demand is still strong despite slower spending, EU M3 money supply -1.0% (-0.9%e), Brazil IPCA infl 4.84% (4.82%e), US Case Shiller house prices 3.92% (3.9%e), US cons conf 102.0 (101.0e), US Richmond Fed mfg index -5 (1e), S&P +0.1%; Wed: Fed’s Barkin won’t take another hike off the table / Mester signals support for remaining on hold in Dec / Bostic increasingly convinced prices and economy will moderate, Banxico Gov Rodriguez Ceja said advances in disinflation process are significant enough to consider debating a rate cut in early 2024, copper rallies on announcement from Panama it will shut giant mine, Australia CPI 4.9% (5.2%e), S. Africa M3 6.08% (7.10%e), EU economic conf 93.8 (93.6e), Germany CPI 2.3% (2.5%e), US 3Q GDP 5.2% (5.0%e) / personal consumption 3.6% (4.0%e) / Core PCE price index 2.3% (2.4%e), Russia IP 5.3% as exp / ret sales 12.7% (11.7%e) / unemp rate 2.9% (3.1%e), S&P -0.1%; Thu: OPEC+ reaches agreement with 2.2 mbpd of voluntary cuts only and increases in production targets for some African nations / Brazil to join OPEC+ next year, BOK on hold as exp / raised infl forecast for 2024 but one less dissent for a hike, Fed’s Daly ‘not thinking about cuts at all’,  S. Korea IP 1.1% (4.5%e), Japan ret sales 4.2% (6%e) / IP 0.9% (0.4%e) / cons conf 36.1 (35.6e), Australia private credit 4.8% (5%p), China PMI mfg 49.4 (49.8e) / non-mfg 50.2 (50.9e) / comp 50.4 (50.7p), Germany ret sales -0.1% (-1.9%e), Turkey GDP 5.9% (5.3%e), France CPI 3.8% (4.1%e) / 3Q GDP 0.6% (0.7%e), Germany unemp 7.8% (7.4%e), Poland CPI 6.5% (6.6%e), S. Africa PPI 5.8% as exp, EU CPI 2.4% (2.7%e) / Core 3.6% (3.9%e) / unemp rate 6.5% as exp, Mexico unemp 2.75% (2.8%e), India GDP 7.6% (6.8%e), Canada GDP 0.6% (0.8%e), US init claims 218k as exp, US pers inc 0.2% as exp / spending 0.2% as exp, US PCE Deflator 3% (3.1%e) / Core PCE 3.5% as exp, US Chicago PMI 55.8 (46e), US pending home sales -6.6% (-8.8%e), S&P +0.4%; Fri: ceasefire between Israel / Hamas officially ends, Powell strikes neutral tone in two appearances – mkt views the lack of pushing back against Waller’s comments as dovish, RBNZ’s Hawkesby reiterates hawkish message, Japan unemp 2.5% (2.6%e), China Caixin PMI mfg 50.7 (49.6e), Indonesia CPI 2.86% (2.70%e) / Core CPI 1.87% (1.9%e), UK Nationwide house px -2.0% (-2.3%e), EU PMI mfg 44.2 (43.8e), UK PMI mfg 47.2 (46.7e), Brazil IP 1.2% (2.0%e), Canada emp chg 24.9k (14.0k e) / unemp rate 5.8% as exp, US ISM mfg 46.7 (47.8e) / ISM prices paid 49.9 (46.0e), S&P +0.6%.

Weekly Close: S&P 500 +0.8% and VIX +0.17 at +12.63. Nikkei -0.6%, Shanghai -0.3%, Euro Stoxx +1.4%, Bovespa +2.1%, MSCI World +0.3%, and MSCI Emerging +0.7%. USD rose +2.0% vs Ethereum, +0.5% vs Euro, +0.4% vs Mexico, and +0.2% vs Turkey. USD fell -1.8% vs Yen, -1.6% vs Chile, -1.3% vs Australia, -1.0% vs Canada, -0.8% vs Sterling, -0.8% vs Sweden, -0.7% vs Bitcoin, -0.7% vs South Africa, -0.5% vs Indonesia, -0.4% vs Brazil, -0.3% vs China, -0.1% vs India, and flat vs Russia. Gold +3.3%, Silver +4.7%, Oil -1.9%, Copper +2.6%, Iron Ore +0.0%, Corn +0.5%. 10yr Inflation Breakevens (EU -11bps at 2.10%, US -5bps at 2.23%, JP -2bps at 1.33%, and UK -12bps at 3.59%). 2yr Notes -41bps at 4.54% and 10yr Notes -27bps at 4.20%.

Nov Mthly Close: S&P 500 +8.9% and VIX -5.22 at +12.92. Nikkei +8.5%, Shanghai +0.4%, Euro Stoxx +6.4%, Bovespa +12.5%, MSCI World +9.2%, and MSCI Emerging +7.9%. USD rose +2.0% vs Turkey, +1.1% vs South Africa, and +0.2% vs India. USD fell -11.8% vs Ethereum, -8.9% vs Bitcoin, -6.1% vs Sweden, -4.1% vs Australia, -3.7% vs Sterling, -3.7% vs Mexico, -3.5% vs Russia, -3.1% vs Chile, -2.9% vs Euro, -2.5% vs China, -2.4% vs Indonesia, -2.4% vs Brazil, -2.3% vs Yen, and -2.3% vs Canada. Gold +2.1%, Silver +10.2%, Oil -5.6%, Copper +4.5%, Iron Ore +5.6%, Corn -2.1%. 10yr Inflation Breakevens (EU -11bps at 2.14%, US -17bps at 2.25%, JP -6bps at 1.30%, and UK -16bps at 3.60%). 2yr Notes -41bps at 4.68% and 10yr Notes -61bps at 4.33%.

Year-to-Date Equities (high to low): Argentina +111.3% priced in US dollars (+330.6% priced in pesos), Poland +46.1% priced in US dollars (+32.8% priced in zloty), Hungary +41.6% in dollars (+32.5% in forint), Greece +39.9% in dollars (+37.7% in euros), NASDAQ +36.7% in dollars, Venezuela +30.8% (+174.6%), Italy +28.3% (+26.2%), Brazil +26.7% (+16.8%), Mexico +26.2% (+11.2%), Spain +25.2% (+23.2%), Denmark +23.3% (+21.7%), Ireland +21% (+19.1%), Taiwan +20.5% (+23.3%), S&P 500 +19.7% in dollars, Germany +19.6% (+17.8%), Euro Stoxx 50 +18.3% (+16.5%), Russia +18% (+45.9%), Czech Republic +16.6% (+15.7%), MSCI World +16.2% in dollars, France +15.3% (+13.5%), Japan +14.3% (+28.1%), Netherlands +13.7% (+12%), India +11.2% (+11.9%), Chile +10.7% (+11.9%), Sweden +10.6% (+10.1%), Colombia +9.6% (-10.4%), Korea +9.2% (+12%), Austria +7.8% (+6.1%), Switzerland +7.5% (+1.5%), Saudi Arabia +6.9% (+6.7%), Portugal +6.8% (+5.1%), UK +6% (+1%), Canada +5.8% (+5.5%), Russell +5.8% in dollars, Indonesia +3.6% (+3.1%), Norway +1.7% (+10.4%), Australia -1.7% (+0.5%), Belgium -1.8% (-3.3%), New Zealand -3.3% (-0.9%), Philippines -4.2% (-4.9%), Singapore -4.6% (-5%), South Africa -4.6% (+4.2%), China -5% (-1.9%), Turkey -5.7% (+45.7%), UAE -6.6% (-6.6%), Israel -6.9% (-1.1%), Finland -7.3% (-8.7%), Malaysia -8.2% (-2.6%), HK -15% (-14.9%), and Thailand -17.8% (-17.3%).

Traffic: “One of the world’s ten largest cities - a merging of Abu Dhabi and Dubai into a giant metropolis that stretches from the gulf far inland,” he said. I’d asked the strategist to tell me what will happen here by 2050. “As an American, you have no real idea how powerful it is to think in increments of decades, and to consider what you want to accomplish in a century.” He was European, working in the Ministry of Economy. And I recalled my first trip to UAE in 2001. The twelve-lane highway from Dubai to Abu Dhabi was empty. I thought it absurd. It now has traffic.

Traffic II:“NY, Chicago, and DC mayors don’t care about the long-term,” continued the European. “Here, the equivalent leaders and their families profit from growth. They want more building, jobs, trade, more booze consumed,” he said. “Everything generates profits, taxes, and flows to the people who have vested interests in growth, stability, safety.” Both Abu Dhabi and Dubai have set up English common law zones to attract businesses from all over the world. 14 major global financial institutions announced plans to open operations in Abu Dhabi this week.

Lines: “There is a plan for a high-speed rail that connects Israel and Saudi,” said a strategist. “It would speed commerce and tie the region more closely together. The efforts to deepen economic integration are what sparked the strike by Hamas,” he said. “Leaders here are upset with Hamas, and they are also upset with Israel. They want to move forward, and conflict makes progress more difficult,” he said. “You may notice that no one speaks about what is happening there. You will not see images of the war on television. It is a distraction. Our focus is on the future.”

Lines II: The planned rail line travels south from Israel to a port near Neom, on Saudi Arabia’s west coast. It is where The Line is being built – it is a giga-project, a brand-new city constructed as a single building that will be 105-miles long, 200-yards wide, and taller than the Empire State Building. A high-speed rail will carry residents end to end in 20 minutes. It will cost hundreds of billions and be home to 9mm of Saudi Arabia’s 37mm population. Construction has begun and The Line is targeted to house 1.5mm people by 2030. The city will be a special economic zone.

Reverse Takeover: “MBS is changing Saudi rapidly,” said the strategist. “But he can move only so fast without creating a social explosion,” he said. “The young are very different from those over 45 years old; they want to progress far faster.” 63% of the nation is under 30. “Young people will move to The Line, where English common law and other more liberal approaches to life and business will be the norm. And then, as they age and the country demographics shift by 2050, some will return to the old cities, Jeddah, Riyadh, and the nation will be transformed.”

Anecdote: “My great grandfather and his family lived in the desert, in tents,” said the Emirati, a young man, soft spoken, with a quiet confidence, a calm. “My grandfather had no formal education, but he was curious, adventurous, interested in other cultures and traveled to many places, taught himself English.” Six of us ate dinner, sharing our life stories. “He brought many of the largest foreign companies to UAE and became their local 51% partner.” For centuries, the economy was subsistence agriculture, fishing, pearl diving, trade. Oil was discovered in 1958. The United Arab Emirates formed in 1971. “He was a simple man, humble, and despite his substantial wealth, he lived to help his people and his country.” We sat outside, a warm evening, within ADGM, the international financial center of Abu Dhabi. To entice foreign business and innovators, English common law now governs the economic zone. Cranes rotate day and night to accommodate the influx. “Please know that I am not saying this to be boastful, but I was his favorite grandson, and we shared the same name,” he explained. “As is our custom, we all lived together, his five sons, my uncles, their families. So, I grew up with twenty cousins. It was exciting, all the time.” As the oldest of eight, I could only just imagine. “My grandfather would have me join him when business leaders came from all over the world to visit our home, which was all the time. I would pour coffee to our guests, which in our culture is a great privilege. So, I have spent my life with people much older,” he explained. “I learned to listen carefully to the perspectives of different people from other countries, cultures. Often, they share a thought that may seem trivial to them but helps shape my perspective in important ways - these are small gifts, I am grateful,” he said, carefully repeating one thing we had each shared from our life stories and explained why he found it interesting. “I aspire to accomplish what my grandfather did with his life but for these new times and 10x as big, to care for my people and help my country. Bringing businesses, ideas, technologies, and talented people from all over the world to UAE.”

Good luck out there,

Eric Peters

Chief Investment Officer

One River Asset Management

Disclaimer: All characters and events contained herein are entirely fictional. Even those things that appear based on real people and actual events are products of the author’s imagination. Any similarity is merely coincidental. The numbers are unreliable. The statistics too. Consequently, this message does not contain any investment recommendation, advice, or solicitation of any sort for any product, fund or service. The views expressed are strictly those of the author, even if often times they are not actually views held by the author, or directly contradict those views genuinely held by the author. And the views may certainly differ from those of any firm or person that the author may advise, converse with, or otherwise be associated with. Lastly, any inappropriate language, innuendo or dark humor contained herein is not specifically intended to offend the reader. And besides, nothing could possibly be more offensive than the real-life actions of the inept policy makers, corrupt elected leaders and short, paranoid dictators who infest our little planet. Yet we suffer their indignities every day. Oh yeah, past performance is not indicative of future returns.