Bumpy Ride Ahead

Charts: The S&P 500's 50-day moving average is 1378. The broad index closed below the 50-day line today. The market is therefore in a correction.

Fundamentals: The European Central Bank pumped $1.3 trillion into European private banks at the beginning of the year with the understanding they would buy Euro-periphery government bonds, which they did. That $1.3 trillion is now gone and the Euro debt problem is once again out of control. The ECB has to pump another trillion dollars worth of cheap loans into its banks or all hell will break loose. The ECB will only act once hell starts breaking loose, not before. Buckle up, its going to be a bumpy ride.

Long War: The UN has hammered out an extensive monitoring mission with Assad's government in Syria. Now the UN is talking with the rebels to get them to sign on. The rebels have to start policing themselves and purge Al-Qaeda militants from their ranks for the ceasefire to keep holding. I'm not going to guess whether that is possible or not. Al-Qaeda attacks within Syria seem to be going down. The ceasefire is holding by the skin of its teeth.

The new rebel government in Mali is not tackling the Kingdom of Al-Qaeda that has sprung up in its backyard, despite promising the Western alliance that it would do so. It is intolerable for Al-Qaeda to build sovereign nation-states and not face withering attacks. A CIA drone campaign will someday have to be launched in Mali.

All these major Long War issues are CIA problems, in other words there is nothing the Pentagon can do about them. I keep thinking there isn't enough CIA to go around. And then I remember how CIA Director Petraeus launched the Sunni Awakening Movement in Iraq, the most brilliant military campaign in the Long War so far. So there is a sort of race between Petraeus' brilliance and the lack of resources he has been given.