Right-Wing Critics Are Stupid

Charts: The S&P 500 closed at 1068. Up .27%. Today was quadruple witching expiration day which renders chart analysis almost meaningless. Still the mere fact that it was a quiet day in the face of expiration driven volatility was bullish.

Fundamentals: This week saw two gigantic oil discoveries in central Africa and off the coast of Africa. These titanic oil finds are the tip of the iceberg. Africa is the next great frontier for oil exploration. In Nigeria, non-Islamic rebel group MEND has extended its ceasefire with the government, potentially opening up millions of barrels worth of African oil production. In Africa geopolitics and fundamentals are converging. Professor Roubini tells us that if oil hits $100, our goose is cooked. The recession had a lot more to do with oil hitting $147 than Lehman Brother’s collapse. And the Long War has everything to do with keeping oil prices low by stopping the bad guys in Africa. Blood for oil? Hell yes!

Geopolitics: Team Obama is backing away from American ICBM defense (brilliant and bullish). North Korea and Iran are years away from building nuclear tipped ICBMs; therefore only Russia and China are helped by this move. We need Russia and China as allies in the Long War and they need us. China reported last week that it foiled a plot by its Islamic rebels to carry out suicide bombings. This was the first attempt to employ Al-Qaeda techniques in China (scary). The North Caucus region of Russia continues to suffer an unrelenting drumbeat of Islamic violence, steadily increasing week by week (bone-chilling). America, China, and Russia are taking a baby step toward forming a world-straddling alliance against Islamic bad guys with this move. Right-wingers are stupidly criticizing it. That’s good too. It makes the Team look dovish.
In Somalia, bad guys struck an African Union (AU) base and killed several good guys. But that attack only served to piss off the AU, now it is planning an offensive against an Al-Shabab village. The CIA is opening a public office in Mogadishu. Years of fighting lay ahead in Somalia but with the AU teaming up with the CIA and US Special Forces, the combat should be sustainable.
Indonesia security forces killed Southeast Asia’s #1 bad guy, Noordin Top. Indonesian good guys are trained by the US. In the West Bank, violence between Israelis and Palestinians is declining rapidly because Palestinian cops are trained by the US and doing a good job. These two factoids show how vital global US involvement is in the Long War.
The war is Northern Yemen is getting very hot. Yemeni warplanes bombed a refugee camp, killing scores of people. The camp was probably full of bad guys mixed with civilians. Human rights groups are all over the Yemeni government but there’s not much they can do. We don’t know how involved the US is in this war but Saudi Arabia is neck deep.
After the 6 Italian soldiers were killed in Afghanistan, European NATO countries all say that they have no immediate plans for pulling troops out of country. Opinion polls in Europe for the war effort are horrible, the pressure to pull out is enormous, but the leaders so far are holding firm. The Taliban’s mini-Tet Offensive isn’t working yet.
In Pakistan, bad guys killed more than two dozen civilians when a suicide bomber attacked a hotel full of Shiites. The Taliban and Al-Qaeda are Sunni and hate Shiites with a purple passion, plus they want to stir up a civil war between the two sects like they did in Iraq. The Paki Army killed 23 bad guys with zero good guys killed.
So ends another bloody day in the Long War. The above action resulted in roughly 200 people killed. I mention this because only big wars affect the stock market and the many disparate fronts of the Long War give the illusion that it is not a single big war. It is one big war and the good guys are winning, so far.

Specific Stocks: Team Obama isn’t simply canning ICBM defense, it is bolstering short and medium range missile defense. This helps Raytheon (RTN) and its Patriot system. Also, Turkey is buying Patriot batteries to defend against Iran. Killing super bad guy Noordin Top helps stocks in Indonesia (IF) and Malaysia (EWM).