But it was Scaramucci's insights into the failure of political systems around the globe that impressed financial advisors in attendance and offered cause for caution when it comes to portfolios. Here were a few of his observations, several of which serve as a warning to the increasing nationalistic approach of the president and many other world leaders.
• As the World War II generation dies off, the developed world is losing its wartime memory. That is exactly what happened in the years leading up to World War I. For anyone managing money, this is where the exogenous risks surface.
• Society is bifurcating in much the same way that it did from 1890 to 1912. Sixty-four percent of Americans have received no raise since 1980.
Today, a heavy crane operator like Scaramucci's father would be earning 40 percent less than he did in 1975. "You don't want to live in" a McMansion ring-fenced by barbed wire while most people are suffering.
• Dismantling parts of Dodd-Frank that disabled community banks are necessary to jumpstart loans to small business. But banks cannot be given free rein. In 2005, bank loobyists managed to to convince the SEC to allow financial institutions to increase their leverage ratios from 20-to-1 to 40-to-1, allegedly so they could compete in a global economy. It then took them "only 30 months to crash" the entire American economy.
• Rising ethno-nationalism is one consequence of inequality, and political elites seem impotent in their efforts to defeat it. Both political parties in the U.K. opposed Brexit and EU officials in Brussels are likely to face independence movements within their member countries. Spain finds itself in a precarious situation with Catalonia, and other provinces in Spain and now Italy are watching. Nationalist parties won in Austria and advanced in Germany. In America, the GOP establishment was steamrolled by Trump's campaign, and now tech billionaires want to split California into multiple states. But it is in major nuclear powers like Russia and China where nationalism may hold the most currency.
• Many Americans may view Kim Jong-un as a lunatic, but Scaramucci said the people at the CIA and State Department see him as a young Vladimir Putin and a force to be reckoned with. In 1953 when President Eisenhower and Mao Tse-Tung negotiated the Korean War armistice, China was an agrarian economy and didn't want a budding industrial power on its border. North Korea provided a buffer zone. Kim Jong-un's goal is to take North Korea out of China's orbit and establish his nation as a power in its own right.
• In this kind of world, it might not take much to unleash a major conflict. In 2015, NATO member Turkey shot down a Russian jet for allegedly violating its airspace. Scaramucci voiced concern that such an incident could come out of anywhere and policy makers could react badly, triggering a dangerous conflagration.
• Hedge funds have been battered by global central bank policy, which upended traditional long-short and global macro strategies that once constituted more than 60 percent of all hedge fund assets. Cheap money also lifted the values of many risky assets and benefited affluent people all over the world. Scaramucci acknowledged that some underperforming hedge funds deserved to go out of business. But financial markets seem oblivious to many potential threats lurking beneath the surface. Financial advisors might want to look for a way to buffer clients' portfolios against some potential black swan.