Permanent Drone Blitz

Charts: The S&P 500 rose 1.4% and closed at 1172. Graphic chart patterns are saying that the rally attempt has given way to an outright rally after resistance at 1170 was breached. Volume sucks, but it has sucked throughout the bull market; nevertheless volume patterns are saying we are still in a rally attempt. All technical indicators are good other than volume and the fact that China is in a bear market.

Fundamentals: Yesterday world stock markets were shaky because a trillion dollars is being thrown at indebted Euro-periphery countries but only Greece and Ireland have launched honest austerity programs. Today Spain announced it will slash government spending, making the rescue plan more credible. The US Treasury said that its April deficit hit an all-time record, about 60% higher than expected. Every country on Earth is exerting fiscal discipline except America. The only way the superpower can get away with this is by winning the Long War, dealing with North Korea, brokering peace between Israel and the PLO, and—well—running the world effectively.

Geopolitics: Word has leaked out that the Obama Administration has given the CIA new orders concerning drone strikes. The Agency had been using drones only to attack Taliban or Al-Qaeda leaders and great care was exercised to mitigate civilian casualties. The new policy is apparently to attack any jihadist fighter anywhere, no matter how lowly, and accept higher civilian casualties. CIA drones are now operating in giant wolf-packs of 9 drones and attacking makeshift tent camps on hillsides, motor vehicles, and other targets previously avoided. Missile salvos are much larger than before with drones coming back to base empty of ordnance, similar to WW II bombing missions. And the drones are hitting targets every day; perhaps the beginning of a permanent drone blitz. Anti-American editorials are gushing from the Pak media.
How important is pro-American sentiment? When Britain and Rome ran the world they were reviled and hated. This was especially true when they were at their military peaks and their world empires were running smoothly. The old saying, “The sun never set and the blood never dried on the British Empire,” provides reasonable guidance.
As far as North Korea sinking the South Korean frigate, there is no way for us to know whether the US 7th Fleet is moving into Koreans waters and dealing with this problem. My guess, however, is that this is in fact happening. The North Korean submarine fleet is a joke and it is well within the 7th Fleet’s capability to make sure no more torpedoes hit our ally.