Special Forces In W. Africa

Charts: Investors are fanatically watching the Euro. There is an 85% correlation between the direction of the Euro and the S&P 500. Virtually every hedge fund on Earth is short the Euro. This means a short covering rally in the Euro will lift the stock market. A stock market rally based on Euro short covering is obviously suspect. The positive reversal on Monday was just such a rally.

Geopolitics: On Tuesday the Pak Army killed 28 Taliban fighters and lost one soldier. The US Army lost 5 soldiers as the Afghan Taliban launched a suicide bomber into a NATO convoy. As the Long War grinds on in Afpak the Pentagon is preparing for the inevitable whack-a-mole effect that will scatter the bad guys to peripheral battle zones in a few years. The biggest chunk of bad guys will wind up working for Al-Qaeda in the Islamic Maghreb (AQIM). Maghreb means the “Sahara Desert.” AQIM is the most economically viable and self-sustaining of all Al Qaeda franchisees. It smuggles cocaine, cigarettes, and illegal alien workers into Europe from Africa, netting millions. Plus it makes millions more with a lucrative kidnapping operation. AQIM has a lock on organized crime in North and West Africa and pays its fighters very good salaries. Roaming the wide open expanses of the great desert, nobody knows how big AQIM is but we do know it is growing larger and more powerful because the national armies of Mali, Mauritania, and other Saharan countries are increasingly clashing with AQIM. A new front is opening in the Long War.
US Special Forces have unleashed Operation Flintlock against AQIM. Flintlock seeks to train local allied armies as well as strengthening local judicial systems to enforce the rule of law; in other words nation building. As the Pentagon turns its attention to these peripheral battle zones it not only relies on Special Forces but independent contractors, US defense companies. And it is relying on independent contractors in Afpak as well. The Pentagon’s “rogue” assassination/spy ring we talked about yesterday is administered by Lockheed Martin.