December Musings and Predictions for 2026

FRANK MCKENNA: We absolutely have got to recognize that we need to look after number one first, which is Canada, and we need to pay more attention to intellectual property protection.
PETER HAYNES: Welcome to episode 72 of Geopolitics with the Honorable Frank McKenna. My name is Peter Haynes. I'm the host of this podcast series where we discuss important geopolitical issues that impact investors, traders, and for that matter, interested citizens from around the world. We're going to do some December musings here first, and then we're going to get into predictions for 2026. I always like to get Frank's opinion on a bunch of things. And then we'll debate and discuss some of the predictions that he's making.
So, Frank, it's the festive season here. It's December. The show goes on, though, and I want to start this month with the release of a document that geopolitical pundits will argue is Monroe Doctrine 2.0, and that is the US's national security strategy that attempts, like its original precedent document published after the American Revolution, to reestablish US dominance over the Western hemisphere, leaving all other countries, including Canada, as essentially vassal states. It also appears to leave Europe on its own in terms of security.
According to Douglas Soltys, who's editor-in-chief of BetaKit, which is a journal for tech startups, Canadians should consider this document, quote, "Every 51st state comment and retaliatory tariff condensed into a single foreign policy document." End quote. Frank, tell us what your thoughts are on this document and what messages the rest of the world, and Canada in particular, should take from its contents.
FRANK MCKENNA: Well, Peter, I'm going to try to be circumspect because I used to be an ambassador, and I've got to deploy those diplomatic skills. But I was quoted in the Hill Times this morning as saying that it made me gag and puke. So that's not very diplomatic. But I did get a note in from one of the ministers with a big approval sign on that. So I suspect there's some resonance for that view within government.
So let's just go back a bit. The US national security strategy is something which is done to inform the world of the general priorities, or North Star of the US government. It started under the Goldwater-Nichols act back in 1986 and has been continued since that time. And it's designed to list national security priorities and issues.
It tends to reflect the personality of the government. And I would have to say, Peter, that this is not the United States speaking to Canada or the rest of the world. This is the administration, particularly, in all likelihood, JD Vance, speaking to the rest of the world because I'm not sure the president would have weighed in on this document to the extent that you would see some of the other members of the administration.
PETER HAYNES: Does this mean he used his autopen for this?
FRANK MCKENNA: [LAUGHS] Well, so you've mentioned that, but that's kind of fascinating. You can tell a lot about a document by the introduction to it. And so I'm going to take a moment and just read the president's introduction to this document.
And what he says is, "Over the past nine months, we've brought our nation and the world back from the brink of catastrophe and disaster. After four years of weakness, extremism, and deadly failures, my administration has moved with urgency and historic speed to restore American strength at home and abroad and bring peace and stability to our world. No administration in history has achieved so dramatic a turnaround in so short a time." And one of the other final lines he concludes on, which tells you everything. "In everything we do, we are putting America first."
So the president, as usual, uses extreme and intemperate language to introduce a document. But in this case, it probably describes what the document reflects. It's xenophobic. It's dark. It's a very dark view of the world and America's role in it. It's very much American first-- America first. But it's America first and America only, unfortunately.
It's very open on Russia, which is surprising to almost everybody. It's extraordinarily aggressive towards Europe, including after making a number of very negative comments, that Europe is headed towards erasure, which will be of some surprise to Europeans.
Peter, I'm going to take a moment on that. I've spent 20, 30 years going to international conferences, all the way from Bilderberg right through to Doha and other conferences around the world, and the Europeans are always there. And everybody always talks about the stresses and the strains and the cracking up of Europe. But I've never heard a more determined group to keep the country together than the Europeans.
And what they always say to me when I say, my God, you've got a lot of difficulty in managing this union. They will say, yes, but it's a lot easier than managing millions of lives lost in world wars, which you haven't experienced in the rest of the world, but we have. We've vowed we're going to do that again. And whatever the cost, we're going to keep Europe together. So you hear that everywhere you go with Europeans. So they'll be very surprised to hear that Europe is headed for erasure.
Bottom line, to sum it all up, is Ronald Reagan had this vision of the United States, which he enunciated as a shining city on a hill. The current president has a vision of America as a castle with a moat around it. And for us, it means no fortress North America. It's America first and America only. And we are viewed more as enemies or hostile neighbors than we are friends and allies.
PETER HAYNES: Frank, I've been reading a lot of comments lately from Jim Balsillie, who up until recently was, I think, the chair of the Council of Innovators and just, I think, retired from that position. He drew a lot of attention to this particular document, and he wants to focus on IP and the importance of Canada owning its own IP, and also, having more of an understanding of what technology we actually control ourselves. Do you think there's enough being done by our government, the Carney government, to meet the demands of Jim Balsillie?
FRANK MCKENNA: I think that we are directionally. He's not wrong. We absolutely have got to recognize that we need to look after number one first, which is Canada. And we need to pay more attention to intellectual property protection.
Over a period of time, we've lost Avro Arrow in aerospace. We lost Nortel, which would have been the Nokia or the Ericsson of the phones right now, BlackBerry, et cetera. And so we do. We have to be much more vigilant about protecting IP in Canada.
I think we're headed in the right direction. I think the rhetoric of the new administration in Canada is saying the right things. Canada First policy is probably the right thing, even though it's hostile to what I believe about the world that we should have, not the world that we're in. So I would say we're going in the right direction on that, Peter, but not there-- not there by a long shot.
PETER HAYNES: Yeah. And Balsillie certainly is drawing a lot of attention to this particular topic. I doubt we've heard the last from him.
FRANK MCKENNA: No, the Canadian Council of Innovators that Ben Bergen headed and recently changed leadership is speaking with approval about the budget but saying more to be done. I think we now have some very strong interest groups that are speaking publicly on this issue. That's a good thing.
PETER HAYNES: It sure is, Frank, last week, Canada's ambassador to the United States, the Honorable Kirsten Hillman, announced that she will step down from the position in early 2026. As you are a lifetime member of the ambassador's union, what exit words do you have about Kirsten Hillman's time in the post that you once occupied? And what advice do you have for whomever takes over the position? I know I've read speculation that Mark Wiseman is a name that's in the press on this particular file, or it could be someone else. What advice do you have for the person that takes that role on?
FRANK MCKENNA: Well, to start with, Ambassador Hillman, she deserves an enormous amount of credit. Her work has been heroic. She's helped to navigate both the NAFTA reboot and now the CUSMA discussions.
She single-handedly led the negotiations on the Trans-Pacific partnership. She helped us get rebates on the EVs under the IRA under the Biden administration, and negotiated the Safe Third Country treaty with the United States. So she's done a great job for the country and deserves her chance to leave when it works for her.
In terms of the new ambassador, I think it's pretty simple. Some of the attributes that I think are important-- you need to be business savvy, read a balance sheet, be networked with business, et cetera. Remember, you're managing $1 trillion, $1 trillion relationship, the biggest commercial relationship in the world. So you really need to be wired into the economic leaders within Canada and within the United States and all of the business associations that represent them.
You need to be media savvy. I think, especially now, when the president and his people get their news from cable TV rather than reading think tank journals and the written press, you need to be really media savvy. You need to be able to go on Fox News and engage in vigorous debate on Newsmax, on CNN. You need to be out there representing the country. And public servants find that a bit hard to do because it's not natural to them.
But you need somebody who's media savvy. You need somebody who's really politically savvy, who has that secret handshake that American legislators have, that knows what it's like to run for public office and keep the support of the people and is able to connect politically.
I can't pretend that I had all of these skills or any of them in great abundance. But I think the gift of getting along people was, for me, one of the great attributes of being a maritimer. With President Bush, I forged a real relationship around baseball. We were both big baseball buffs.
PETER HAYNES: That'll come as a shock to all our listeners.
FRANK MCKENNA: [LAUGHS] Yes. I think I've mentioned it here once on the air. We had a meeting of about 350 ambassadors at the White House, and I was getting really impatient and tried to sneak out the door. And Bush caught me on the way out. He said, McKenna, where are you going? I said, it's the World Series. I'm going home to watch the baseball game. He said, I'm right behind you. So we got along on that and some other things.
With Dick Cheney, it was about fishing in the Miramichi. We forged a good relationship. And with Hillary Clinton, we both had blackberries that we loved, and we used to bond over that. So you need to find something in common and bond over it.
So the new ambassador will have to lay trap lines all over the US. He's got to deal with the administration, but he needs to deal with where the puck is going, who's going to be at the head of the Democratic Party, who's going to be the leadership in the House. You need to deal with the governors. Who's on the way up? Who's on the way down? You need to really run this as a full-scale political campaign. And so you need the political chops to be able to do that.
PETER HAYNES: Well, Frank, one of the big disappointments of this podcast series for me was that I was never able to find the video of you throwing out the first pitch when you were ambassador in Washington, where you claim you threw a strike at a Washington Nationals game. Who were they playing? Were they playing the Jays that day? Or was it Canada Day that you did it on?
FRANK MCKENNA: I can't remember who they were playing, but I remember something else about it. One of my teeth fell out during the broadcast afterwards. I had to keep a hand on my mouth trying to hold my tooth in.
[LAUGHTER]
PETER HAYNES: The behind the scenes stories are always the best. Frank, just carrying on here in Canada a little bit. Last week, we had another conservative MP cross the aisle and join the Carney Liberal Party. This leaves the ruling party one seat short of a majority.
At our recent conference, Rona Ambrose, our colleague at TD here, suggested that the previous MP from Nova Scotia that had crossed in October from the Conservative Party was just a one-off event and there were some other ulterior motives there. But here we are with another defection and lots of rumblings of more to come.
What do you make of these defections? Do they signal deeper problems within Pierre Poilievre's Conservative Party? And what about the natural criticism of these aisle-crossers that voters in their municipality did not elect them to the Liberal Party?
FRANK MCKENNA: First of all, for Poilievre, it certainly represents a challenge, especially if there's another defection. That means the liberals have a majority, even if it's a very slim one. It changes the calculus completely in how you govern.
But every time there's a defection, there's a lot of wailing and gnashing of teeth and everything. But this has been going on, Peter, 100 years. And over that 100 years, there have been 300 floor crossings. So this is not a new phenomenon at all. And it all depends on whose ax is being gored here.
Conservatives were very happy when David Emerson, who was a very high-profile Liberal, crossed the floor two weeks from the time of his election. He accepted a cabinet seat in the Harper government. Or when Leona Alleslev crossed the floor as well. On the other hand, the Liberals have had Belinda Stronach cross over, Scott Brison, some pretty high-profile people. It's part of the cut and thrust of political life.
As to whether there'll be more, I think it's quite possible. I remember when I was just elected, even more naive than I am now, and just before I was elected, we had a prominent Liberal in New Brunswick, Robert McCready, cross over to become the Speaker of the House, which gave Richard Hatfield a majority. And so it was a very, very big event.
And I was elected shortly after that. And I asked one of the members, I said, why did McCready do that? He said, Frank, it's because he was the first one asked. And I realized then that there's a level of opportunism in politics that also manifests itself.
Anyway, there are a few things that people have been saying that I want to take objection to. One is that-- and I see this on national TV. Some people say Canadians didn't vote for a majority government.
Well, with respect, I don't think Canadians went into the voting booth saying, we're voting for a minority government or a majority government and that that was one of the guiding principles in their vote. And then as to the principle, you can argue this is as long as you want. I always thought that it came down to a question of whether you believed in the Hobbes or the Lockean version of government, the view of the social contract.
Under one view, you elect a person. You respect their judgment, and you let that judgment follow where it might. Under the other view, you have a slavish adherence to elector's views with no room for individual judgment. It's a very different views of the role of elected members. And I subscribe to the view that you elect a person and their judgment, and the world changes and they need to change with it.
PETER HAYNES: Well, you would think in a country like Canada where we govern, generally speaking, to the middle, it's not surprising when you say there's been 300 of these floor crossings occur in the last 100 years, just indicating how closely aligned and how to the center, generally speaking, Canadians are. Big contrast.
FRANK MCKENNA: So, Peter, you've said something profoundly important. Because I hope that is the case. I believe it to be, and I hope it continues. And I mentioned before here, but I'll reinforce it, that David Frum, on the event that I hold in the summer at Fox Harbor, and he's a conservative commentator who was not a Trump fan. But anyway, he opined that what happened in our last federal election was almost miraculous and couldn't happen anywhere else in the world, and that was that the Liberals would go from being 25 points down to winning in the space of a couple of months.
And he wasn't coming to that conclusion because he wanted Carney to win or Poilievre to lose. He didn't opine on that at all. He simply said, Canadian politics are not tribal. People are quite comfortable in moving across the political spectrum. And he said, that's a good thing in a world where there is so much polarization.
PETER HAYNES: Certainly agree. And for those listeners interested to learn more about David Frum, he hosts his own political podcast once a week, which I've subscribed to now. And I find it to be very, very good listening from someone who is a Republican but definitely has a lot of criticism for the current administration.
So switching gears here, Frank, and moving to the Republican Party, I want to revisit the topic we discussed previously last month, and that was Marjorie Taylor Greene's resignation from Congress. Last week, Greene appeared on 60 Minutes in an interview with Lesley Stahl. And some of the topics that were discussed included death threats on her family since she's gone against Trump, and how Republicans actually make fun of Trump behind his back.
When Stahl pressed MTG on her role in the toxic political dialogue in the US, it became quite clear that she is not willing to admit the extent of her role in contributing to a toxic political culture. MTG argues that she is America first. And in fact, Donald Trump is not. And that she remains critical of Trump's focus on nondomestic issues rather than dealing with issues that impact everyday Americans.
There is a school of thought that Trump is doing so because it's easier to bomb an Iranian nuclear facility or take over a Venezuelan oil tanker than it is to tamp down inflation and cost of living problems in the United States. What do you think about Greene's perspective and Trump's focus on nondomestic issues?
FRANK MCKENNA: Well, first of all, we have to realize she has been one of the big flame-throwers in the United States. Her comments over the years have been quite inflammatory, and she's been part of the polarization. She seems to have changed gears quite significantly in the last few months. And I guess there's no reason to question her authenticity.
I would note that there are some things in her own district and in Georgia which I think have propelled her, to some extent, in that direction. Health care costs have been particularly pronounced in Georgia. And the ACA subsidies and the loss of them is hurting her district very badly. I think tariffs are as well.
She's been quite vocal on Epstein. I think she heard a lot from her constituents about how they want transparency on that. Her constituency is not a big fan of the United States unquestioning support of Israel. And I think, generally speaking, she may be a politician who sees where the puck is going and wants to get there.
And where the puck is going, I think, is that Trump is losing some of his ironclad support from the MAGA group, and the numbers are going down in terms of his national support. And we're getting closer to the midterms. And just about every significant election held has resulted in huge drops in Republican popularity, from mayor of Miami, into the election in Tennessee, certainly to Virginia and New Jersey, and so on and so on. And so she may well be reading the tea leaves and is moving in that direction of a world where Trump has less influence.
But for whatever reason, it shows the polarization of America, that somebody who was such a standard-bearer for MAGA would now be receiving death threats from that community.
PETER HAYNES: Are you surprised, Frank, at Donald Trump focusing almost entirely his platform outside the United States?
FRANK MCKENNA: Yeah, I am. I think he's got more scope to do things there without any pushback, because presidents do have a huge amount of responsibility when it comes to foreign policy. And it's a bigger stage. He wants to be in the news every day, every hour, and this allows him to.
Plus, it gets him away from the tawdry, unpleasant work of trying to build coalitions around health care and tariffs and all of the day-to-day work that's involved in running the economy of a country. So presidents and prime ministers often find that foreign policy is a better sop to their ego than some of the messy domestic work that needs to be done.
PETER HAYNES: Yeah. He wasn't able to drain the swamp in his first term, and now he's realizing he doesn't want anything to do with the swamp in his second term. I will note as well that Marjorie Taylor Greene was critical today of Trump's post on Rob Reiner's murder, which he suggested was due to his dislike of the president, where MTG suggested this isn't about politics. So again, coming out and being critical of--
FRANK MCKENNA: Peter, why don't you remind our viewers what the president today said at the sudden and tragic death of a celebrated American performer and his wife.
PETER HAYNES: Yeah. Trump's comment was suggesting that Rob Reiner and his wife, who apparently were murdered yesterday and the son is in custody. It seems like an absolute tragedy. But regardless, Trump had suggested that Reiner had suffered from Trump derangement syndrome, and that that may have contributed to his reason why he was killed. And he did go on to say his thoughts were with the family. Although I think some of the others, like Marjorie Taylor Greene and a few others, have been fairly critical of the tone of that post.
FRANK MCKENNA: Yeah, I just mentioned that because this is not America. This is not the view of most Americans who are gracious and respectful. And unfortunately, we give a lot of prominence to some of these classless utterances. But let's not forget that this is not the America that you and I have respected and grown close to over so many years.
PETER HAYNES: A very tough weekend in different parts of the world, for sure, with various shootings. And once again, the dust will certainly settle here, and we'll have more to discuss down the road on those topics.
Just before we move into predictions for 2026, we spent an inordinate amount of time on this podcast on the topic of gerrymandering. A few years ago, we were talking about it. And then we started to focus again recently.
We had Krueger on. He was explaining to our listeners about Texas and their plans to gerrymander, which just recently got approved by the Supreme Court. And then more recently, California adjusted its electoral maps to favor a particular political party.
We had wondered if there would be a limit to these games, and maybe we've reached that with last week Indiana Republicans rejected a proposal to redraw the local map in favor of Trump. And apparently, Illinois, led by Democratic presidential candidate JB Pritzker, has said it would only move forward with a map redraw if Indiana voted in favor. Do you think this might actually spell the end, even temporarily, to the gerrymandering games?
FRANK MCKENNA: I pray. It's just an affront to democracy to see what's going on. And it's all about the 2026 election, and both sides are playing the game. Unfortunately, it's being aided, abetted, led, and encouraged by the President of the United States, who should be the one who's counseling restraint, and let's work together to develop a bipartisan approach to redistricting. But instead is leading the charge.
And unfortunately, it's also aided and abetted by a very pliant Supreme Court of the United States of America who seems to be prepared to let anything go. But I hope and pray that common sense prevail. I thought what the Indiana legislators did was extraordinarily courageous in the face of considerable provocation and threats. And now they're facing primary battles to hold their positions because the president is so angry at them for not going along with his outrageous scheme to try and game the election that's coming next year.
PETER HAYNES: And former California Governor Arnold Schwarzenegger has been very vocal on this topic as well, making it clear to Democrats as well that this is a two-way street when it comes to gerrymandering. I know he makes the point of certain states that have zero representation. Even though 40% of the votes might come from one party, they have zero representation in Congress because of the way that the districts are drawn. And it really doesn't make a lot of sense. So yeah, let's hope that--
FRANK MCKENNA: And it's a bipartisan failure. So it has to be fixed together because you just can't have a functioning democracy where such repugnant, egregious activities take place, I don't think. And I think that most Americans-- I think the vast majority would just say, let's find a bipartisan way that we can do redistricting on a 10-year basis or whatever, in a way that is going to be a process that has integrity. And, by the way, on that, Canada could offer a very good lesson. That's something that I think is a uniquely Canadian attribute, and it's widely supported by all the political constituencies.
PETER HAYNES: OK, Frank, we're on to 2026. Here are some predictions for next year. And this is how I'm going to referee today's discussion. I'm going to ask you 11 questions about 2026 events, and I'm going to go through them one by one. And I am simply looking for a one word yes or no answer. And then once we're done these topics, we can dig in on your reasoning from some of the more important of the issues that I'm raising here. Are you ready to go on that?
FRANK MCKENNA: I'm ready.
PETER HAYNES: OK. Number one. The Liberals will end the year with a majority of seats in Canada's parliament.
FRANK MCKENNA: Yes.
PETER HAYNES: Canada will approve a new pipeline to Northern BC.
FRANK MCKENNA: Yes.
PETER HAYNES: Canada will announce plans to sell Trans Mountain.
FRANK MCKENNA: No.
PETER HAYNES: The USA will rip up CUSMA.
FRANK MCKENNA: No.
PETER HAYNES: Trump will lose control of at least one chamber of Congress at November's midterms.
FRANK MCKENNA: Yes.
PETER HAYNES: Gavin Newsom will emerge as the leading candidate for the Democrats in 2028.
FRANK MCKENNA: No.
PETER HAYNES: Venezuelan President Maduro will be forced out of his position by the US, and he will flee the country.
FRANK MCKENNA: No.
PETER HAYNES: The war in Ukraine will end with a land swap, leaving Putin with new territory.
FRANK MCKENNA: Yes.
PETER HAYNES: China will invade Taiwan.
FRANK MCKENNA: No.
PETER HAYNES: The S&P 500 will be down on the year.
FRANK MCKENNA: No.
PETER HAYNES: Toronto Blue Jays will win the World Series.
FRANK MCKENNA: Yes.
PETER HAYNES: [LAUGHS] All right. Good. I'm going to hit you up on a few of these. Let's start with Trans Mountain. You gave me a no on that, and let's just recap. You had suggested in previous podcasts that the government will wait until they're getting maximum production throughput on Trans Mountain. You don't think that can be accomplished in 2026?
FRANK MCKENNA: I think they could even get a process started in 2026, but it only makes sense for them to do this when they've got all the bugs, all the decommissioning. So here's what needs to be done.
One, they've got to get to 100% capacity, which means they've got to convert some of the spot market to capacity. And that's not been done yet. In order to do that, they have to agree on tolling. That's not been done yet.
If they want to maximize the benefit to Canada and to shareholders, they need to debottleneck, introduce solvents in the pipeline, do some dredging in the harbor in Vancouver. All of those will add as much as 240,000 to 300,000 barrels a day. And it seems to me that you would want all of that done, at which time you'll get a maximum price for that. You'll have a full year or more of history around a pipeline that's absolutely full, with all of the additional barrels added to it. And that's when I think Canada gets maximum price.
PETER HAYNES: And that is when?
FRANK MCKENNA: I think that will not be done for a couple of years, actually. Yeah.
PETER HAYNES: All right. How are we going to get a trade agreement done with the United States? I was surprised by your answer on CUSMA. I actually thought that you were going to say that they're just going to-- they're just slow playing us to the point of ripping it up, which we know they can do.
FRANK MCKENNA: I think they're going to use it in a very destructive way in terms of negotiating. It'll be very corrosive negotiations and so on. But to actually rip it up, President has to give six-month notice. I think you can tell from the hearings into CUSMA that the US business community is almost universally strongly in favor of CUSMA. I think that you're going to feed right into the midterm elections a lot of anxiety, affordability issues. And I think that ultimately, Congress will push back and say, no, fix it if you must.
But tearing it up has got some real-world consequences. And if, as I think, the very threat of pulling the nuclear option does damage to both economies, three economies of the three countries, then I think that's even more reason for Trump to pull back. So I guess what I'm saying, I think at some point, the very passive Congress and business community in the United States are going to stand up and push back.
PETER HAYNES: Do you think that the Supreme Court decision pending on IEEPA tariffs has any bearing on whether they rip up CUSMA?
FRANK MCKENNA: No. I think that the IEEPA, which is the emergency tariff clause, will be defeated by the Supreme Court by a fairly sizable margin and with quite strong language. I think that will happen within the next 10 days. The president will lose that and probably have to disgorge over $100 billion in tariffs, but he will replace that with specific tariffs under Section 232, 308, 301, et cetera. So no, I don't think that'll ultimately factor into it.
PETER HAYNES: Gavin Newsom, not the leading candidate for the Democrats. Then who is?
FRANK MCKENNA: Well, I don't think we know who is.
PETER HAYNES: It's still too early. OK.
FRANK MCKENNA: Yeah, and that's been the case going back, by the way, over decades. Newsom's problem-- he's Hollywood handsome. He's got all that going for him. But he's from California. And California is a very powerful state, but it's also a very unpopular state with the heartland of America.
So sweeping California doesn't give you one more vote for President of the United States. You've got to be able to bring Michigan and Pennsylvania and Wisconsin and Georgia and North Carolina along. And I don't think he brings you votes there.
Who will? I don't think we know yet. But I find Governor Beshear in Kentucky a very interesting candidate. He's been able to persevere in a very, very red state. Leone in Colorado, Gretchen Whitmer in Michigan, Amy Klobuchar from Minnesota. Could be Pete Buttigieg, and it could be other names that I haven't thought of and names that haven't even emerged yet. Could be Ralph Emanuel, who is interested in the job. But it is a gauntlet. And many have tried, but few have made it through that gauntlet.
PETER HAYNES: Where is Maduro going to be? Is he going to be in the forest in Venezuela and still in the country? Or you think the Americans will not raise the war games in the area?
FRANK MCKENNA: Yeah. So that's really interesting. And I'm of two minds on that because it seems like Rubio really wants this to happen, and mainly use Venezuela as a means of taking down Cuba because the two economies are inextricably intertwined.
The reason why on the margins I don't think Maduro will be gone is one, the President of the United States, he's going to huff, and he's going to puff. Ultimately, I don't think he'll put troops on the ground in Venezuela in harm's way. His MAGA base are not going to like that. And I don't think Americans will like it very much.
And secondly, a lot of the people who are upset with Maduro have left. 8 million refugees have left Venezuela. In other words, the opposition is probably not on the ground in Venezuela. It's in Colombia and other countries.
And third, the fact the President of the United States is trying to overthrow the government of Venezuela will probably lead to an element of pride within that country and fighting against a common enemy. And if we look around the world, there's not been much luck in overthrowing governments, Iran being an example, Russia being an example. And I think Venezuela, the people are going to tend more to rally with the government.
And maybe most important of all, if Maduro has enemies, and he has a lot, including amongst the public, he's got a rock solid grip on the military. And usually, you have to jar loose the military if you want to effect a coup in a country.
PETER HAYNES: Frank, I should have brought this up earlier because there was just so many tragedies in the last few days, but one of them was in Syria, where there were a few members of the US military who were shot and killed by a Syrian national who was, I guess, becoming quite extreme.
I would bet the MAGA movement's probably upset to find out there were even troops still on the ground in Syria. I admit, I didn't realize that. Are you thinking that some of the various places that the US have troops may be narrowed in as a result of this particular event? I haven't heard too much about it.
FRANK MCKENNA: First of all, Syria, knock on wood, could be one of the good news stories of the year, a really rogue country that now seems to have found an element of stability under a rebel leader. So who would think? So it seems to be a little better news story.
I would say that not because of this. This is a pretty isolated incident that seems to revolve around a military guy with a grievance. But I think the United States will be reducing its troop exposure around the world.
The United States has got 50,000 troops in Japan, probably 50,000 in Europe. It's got 400,000 in the Pacific Basin. It's got tens of thousands now in the Caribbean, including a carrier group. It's got 10,000 on the Mexican border. It's got thousands in cities across America. The only place it doesn't have troops is on the Canadian border.
So obviously, of all the threats in the world, and of all the huffing and puffing from the United States of America, they don't view Canada as being a threat, and they don't view us as anything but very safe neighbors on that Northern border. It's kind of instructive, Peter-- I just had to throw in-- that America under Trump might be critical of Canada in a lot of ways, that we haven't done enough or anything else. But the United States doesn't have to spend a cent on defense on this border because we've got their back.
So I think there will be some reduction in US troops all around the world, not because of Syria, but because that's the direction that Trump administration is taking America. And I can't argue that it's a bad thing. I'm not sure why the United States needs tens of thousands of troops in Europe, or for that matter, in Japan. It's leftover from wars of 50 years ago.
PETER HAYNES: I was surprised your answer on Ukraine. How are you envisioning the war ending?
FRANK MCKENNA: Well, I had trouble with the way the question was worded.
PETER HAYNES: Yeah, because I didn't give you any flex on that. Do you want to answer it a different way or rewrite the question?
FRANK MCKENNA: Will it end with the land swap leaving Putin with new territory? I think it'll end with Putin getting new territory, but perhaps not new new territory, if I can put it that way. In other words, the territory that he's taken, I think that will be part of any settlement.
I think the big outstanding issue is whether he's turned around and granted new territory in the Donbas that he hasn't achieved with military force. The Ukrainians are going to have a very hard time with that. So I see a result which will end up with frozen borders, and Putin gets to keep the land that he's taken. And the United States and other countries guarantee the security of Ukraine, et cetera, et cetera.
But more importantly, that Russia becomes a trading partner with the United States, which Trump sees this just as a commercial transaction, and let Russia back into the G7, make it the G8. And Russia is going to be everybody's favorite dancing partner then. And that'll all be part of the deal, as far as the Trump administration goes.
So if I had to guess, the outstanding issue will be how much land Russia gets, with Putin saying no more than what you've taken. In fact, we want you to give back some. Russia is saying, we're not giving back anything, and we want more. But there's absolutely no doubt that whatever final resolution takes place, Russia will be keeping the territory that it acquired militarily.
PETER HAYNES: And will this allow Trump to hand in his FIFA Peace Prize in exchange for a Nobel Peace Prize?
FRANK MCKENNA: [LAUGHS] Well, I'm on the side of saying I'd give him the Peace Prize if he can achieve peace in the Middle East and peace in the Ukraine/Russia. And yeah, if he can bring those up, perhaps he deserves recognition for it.
I do give credit for trying. Honestly, I'm pleased to see the US weighing in and trying. I just wish they would be more balanced in the case of Ukraine/Russia, and not continue to make Russia seem like the victim here rather than the aggressor.
PETER HAYNES: So my final one I asked you was that the Jays would win the World Series. And I was going to be questioning if you didn't answer yes. Do you think we've done enough here, Frank, with Dylan Cease, the other starter we got from Korea. We got the sidearm pitcher for our bullpen, Rogers. We don't have a Bichette or a Tucker signed yet. Have we done enough, or do you want to see one of those guys in the Blue Jays uniform?
FRANK MCKENNA: Yeah, I want to see one more. So I think the pitching has been upgraded. I think that helps us. We'll have another year of Yesavage, and I think that is a good thing. Remember Santander, who basically didn't contribute a lick last year but is under contract for the next three or four years theoretically should be a 40 home run slugger. We'll see if he comes through. And then I think we need one of Tucker Bichette.
And I think if we do that, we'll have a pretty good team. And we've shown that we've got cohesion and we've got chemistry and total fan support. And I think the players are probably jacked coming into the spring because they were on a real team. They got a lot of jam.
I like the configuration of the team. I think adding to the pitching staff has been a good thing. And if Santander could perform as to who he is, and we could get Bichette or Tucker, it'd be quite a formidable team.
PETER HAYNES: I'll take Bichette over Tucker, personally.
FRANK MCKENNA: Well, I would, too. Honestly, I would.
PETER HAYNES: We have some familiarity there that we're comfortable with.
FRANK MCKENNA: Yeah.
PETER HAYNES: OK. So, Frank, final question is, are there any other predictions you want to make for 2026 that I didn't ask you?
FRANK MCKENNA: No, I don't think so. It's been an eventful year. If we'd have done this a year ago, I would have picked Poilievre to be the prime minister of Canada, for sure. And I wouldn't have picked the Blue Jays. Well, I might have for sentimental reasons, but it wouldn't have been an honest pick. But it'll be another eventful year-- AI and data centers. And there'll be a lot of market turmoil and bitcoins and stablecoins. And yeah, it's a whole new world out there.
PETER HAYNES: Yeah, I'll take the other side of your S&P 500. You said it would not be down on the year. I do think S&P 500 will trade down on the year. And it'll be Trump's biggest frustration that he won't be able to control the tape, which he likes to brag about the Dow all the time. So my prediction is down year next year as we start to absorb some of these Mag Seven investments in each other and AI and data centers and loans and all kinds of stuff.
So I think that-- Howard Marks actually wrote a really, really good piece-- and I know you know Howard from Brookfield-- a really good piece on bubbles, and just explaining how in the case of bubbles, there's the crazy bubbles that don't have any justification, whether it's meme coins or things like that. And then there's the bubbles, like the internet and like AI.
And in some ways, you need people to go crazy so that they overspend to ensure that enough spending took place in order to achieve all the benefits from this great new technology. And he went back to the railway, and then more recently, the internet, and then whether we're in a bubble now, which he didn't answer the question, but I thought it was very interesting. So I do think that bubble will come. We'll lose a little bit of the air on that next year, personally. But you seem more bullish.
FRANK MCKENNA: Well, it may be that I want the wish to be father of the thought on this one. And I do think that the trend line in Canada is actually quite good. The print numbers in the last few weeks have been very positive, Peter, in the country. And so I'm crossing my fingers that that can continue.
PETER HAYNES: Totally agree. Well, Frank, to you and your family, I wish you the best for the holiday season. I look forward to speaking again in January. Thank you.
FRANK MCKENNA: Thank you, Peter.
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PETER HAYNES: Thank you for listening to Geopolitics. This TD Securities podcast is for informational purposes. The views described in today's podcast are of the individuals and may or may not represent the view of TD Bank or its subsidiaries, and these views should not be relied upon as investment, tax, or other advice.