Fundamentals: The market is waiting for the Greek elections for its next major move. We will know the results in a few weeks.
Long War: Three months ago the CIA and Special Forces launched a campaign against the Lord's Resistance Army in central Africa. LRA is the most powerful and dangerous of the radical Christian militias in Africa. This CIA semi-covert operation has already killed the number two leader of LRA. If radical Christianity is eliminated in central Africa, then Christian villages under siege by radical Islam will have to turn to the good guys for protection, not call in radicals to battle radicals.
You will recall in yesterday's blog I suggested that the CIA was grooming Italian Intelligence to take center stage in Libya with its very own drone fleet. Ethiopia is a pro-American powerhouse in Africa and a former Italian colony. Ethiopia and Italy should be able to work together in coming African Long War conflicts.
The Sudan vs South Sudan conflict also seems to be enjoying serious Langley influence to keep the situation stable.
A lot of energy is being poured into Africa.
The battlefield for Africa is being carefully shaped. There is long term planning going on that befits a hundred-year long war. In the medium term it seems that the master planners anticipate AQAP's fall in Yemen and a whack-a-mole effect that sees streams of bad guys pouring into Africa. The whack-a-mole effect is not desirable but it is inevitable. So it is smart to plan ahead for it.
Thursday, May 31, 2012
Tuesday, May 29, 2012
I Am An Italian Drone. I Am Now 100% CIA Compatible
Long War: The White House announced a strange new policy today. Italy's fleet of Reaper drones is to be weaponized with Hellfire missiles and upgraded in a host of other ways to make Italian drones identical in all respects to fully functioning CIA Reaper drones.
The official reasons given for this action are pretty thin. We are told that Italy's CIA compatible drones will be used to protect Italian troops in Afghanistan even though these troops never see combat. And then we are told that selling Italy Hellfire missiles for their drones will help America's balance of payments deficit by about .000001%.
Why does Italy even have non-weaponized Reaper drones in the first place? Again the official answers are unsatisfying. The current fleet of Italian Reapers are supposedly good for reconnaissance even though there are a bunch of other drones designed specifically for recon that are much better. Reaper drones are the most deadly drone platform in the world and having non-weaponized Reapers is like having an M1A1 main battle tank without a cannon and then saying this bizarre tank will sneak behind enemy lines and snoop about so it doesn't need a cannon. Pure nonsense.
And we also learned today that oil majors are getting contracts to begin exploring once again in Libya. Suddenly big oil companies are for one reason or another feeling very safe and secure in the former Italian colony of Libya. Italy has always maintained a very tight relationship with its former colony. At one point Italian oil companies did most of the exploration and development of the Libyan oil industry. Italy would certainly like to return to its old role of supervising and helping Libya advance economically.
Do you see a connection between these two news items? Do you see CIA fingerprints?
The official reasons given for this action are pretty thin. We are told that Italy's CIA compatible drones will be used to protect Italian troops in Afghanistan even though these troops never see combat. And then we are told that selling Italy Hellfire missiles for their drones will help America's balance of payments deficit by about .000001%.
Why does Italy even have non-weaponized Reaper drones in the first place? Again the official answers are unsatisfying. The current fleet of Italian Reapers are supposedly good for reconnaissance even though there are a bunch of other drones designed specifically for recon that are much better. Reaper drones are the most deadly drone platform in the world and having non-weaponized Reapers is like having an M1A1 main battle tank without a cannon and then saying this bizarre tank will sneak behind enemy lines and snoop about so it doesn't need a cannon. Pure nonsense.
And we also learned today that oil majors are getting contracts to begin exploring once again in Libya. Suddenly big oil companies are for one reason or another feeling very safe and secure in the former Italian colony of Libya. Italy has always maintained a very tight relationship with its former colony. At one point Italian oil companies did most of the exploration and development of the Libyan oil industry. Italy would certainly like to return to its old role of supervising and helping Libya advance economically.
Do you see a connection between these two news items? Do you see CIA fingerprints?
Friday, May 25, 2012
AQAP Fights Like Cornered Rats
Fundamentals: Opinion polls show that the hard left is gaining ground in the coming Greek election. This is very bad. So let's not ruin our weekend and even worry about the Euro-nightmare. Instead, let's focus on the Long War.
Long War: Abyan Province in southern Yemen is the Kingdom of Al-Qaeda, the true headquarters of the global jihadist network, and the fountain from which all evil flows. The largest city in Abyan is Zinjibar, Al-Qaeda's capital. The second must important city is Ja'ar. The number two city most fall before a thrust can be made into the heart of the beast, Zinjibar.
The Yemeni Army is pushing into Ja'ar. Over the last two days 60 Al-Qaeda soldiers have been killed and 40 good guys have been killed. Among the dead bad guys are numerous Gulf Arabs (non-Yemenis). These non-Yemenis are fighters pulled from every corner of Al-Qaeda's global empire, in a savage attempt to hold the big cities of Abyan province. So everybody can stop pretending that AQAP is an Al-Qaeda offshoot. AQAP is Al-Qaeda.
You will notice that the good guy kill ratios are declining. This is because the fighting is getting closer to the heart of the beast and the evil ones are fighting like cornered rats.
You will also notice that lately I am describing Al-Qaeda as pure evil, abandoning my usual detachment. To be honest I am doing so in an effort to be more accurate. Here's an example of why I am shifting my language: Recently in Afghanistan the Taliban has stepped up its efforts at poisoning and killing little school girls whose parents have the temerity to try to get an education for their daughters. Wells are poisoned, poison gas bombs are thrown into girls' class rooms, and so forth. So let's tear away the false veil of objectivity and speak the plain truth. Al-Qaeda and the Taliban are the personification of raw evil. Any analysis that does not speak to this point is flawed.
And while we are at it, let's admit that the CIA is the primary fountain of morality and justice on this troubled planet.
Long War: Abyan Province in southern Yemen is the Kingdom of Al-Qaeda, the true headquarters of the global jihadist network, and the fountain from which all evil flows. The largest city in Abyan is Zinjibar, Al-Qaeda's capital. The second must important city is Ja'ar. The number two city most fall before a thrust can be made into the heart of the beast, Zinjibar.
The Yemeni Army is pushing into Ja'ar. Over the last two days 60 Al-Qaeda soldiers have been killed and 40 good guys have been killed. Among the dead bad guys are numerous Gulf Arabs (non-Yemenis). These non-Yemenis are fighters pulled from every corner of Al-Qaeda's global empire, in a savage attempt to hold the big cities of Abyan province. So everybody can stop pretending that AQAP is an Al-Qaeda offshoot. AQAP is Al-Qaeda.
You will notice that the good guy kill ratios are declining. This is because the fighting is getting closer to the heart of the beast and the evil ones are fighting like cornered rats.
You will also notice that lately I am describing Al-Qaeda as pure evil, abandoning my usual detachment. To be honest I am doing so in an effort to be more accurate. Here's an example of why I am shifting my language: Recently in Afghanistan the Taliban has stepped up its efforts at poisoning and killing little school girls whose parents have the temerity to try to get an education for their daughters. Wells are poisoned, poison gas bombs are thrown into girls' class rooms, and so forth. So let's tear away the false veil of objectivity and speak the plain truth. Al-Qaeda and the Taliban are the personification of raw evil. Any analysis that does not speak to this point is flawed.
And while we are at it, let's admit that the CIA is the primary fountain of morality and justice on this troubled planet.
Thursday, May 24, 2012
Full Court Press Against Al-Qaeda
Charts: The market is in a rally attempt. I was wrong yesterday when I said the rally attempt had failed. Yesterday's blog was written at midday when the NASDAQ was down 1.7%. After I published yesterday's blog there was an upside reversal, which reaffirmed the rally attempt. So we are not in a correction or a rally. We need a follow through day for a technical rally to begin.
Long War: The Western media is reporting that the anti-nuclear peace talks between Iran and 5 plus 1 are faltering. This isn't true. The two sides are circling each other like scorpions in a bottle, but neither side has lashed out with its stinger. A new round of talks has been scheduled in a month in Moscow. To gauge if any progress has been made we need to listen to what Iran has to say, not the Western media. By this criteria, progress is being made.
America is supporting the Yemeni Army in its massive offensive against AQAP on several different fronts. The State Deparment is admitting to a huge internet hacking scheme which has turned Al-Qaeda websites into pro-American propoganda tools.
Elements of the deposed Yemeni dictator, Saleh, have been supporting Al-Qaeda. The US Treasury is installing economic sanctions against individuals loyal to Saleh. Treasury must be working with the CIA to do this, and the same can be said for the State Department. Clearly we are seeing another example of Director Petraeus reaching out to other parts of the US government and bending them to the will of the CIA.
What is at stake in this battle? The black flag of Al-Qaeda flies over the southern Yemeni port city of Aden. This port is located along a sea lane that carries a large percentage of the West's oil. Al-Qaeda wants to stop this oil from flowing and thereby crippling the world economy. So a lot is at stake.
Meanwhile, on the battlefield in southern Yemen, 35 Al-Qaeda soldiers were killed today by the Yemeni Army and a key town was captured.
If AQAP is crushed by the Yemeni Army in southern Yemen, then the good guys will attack the Houthi rebels in the north. The Houthis are puppets of Iran. If the Houthis in turn are crushed, then Iran will be more likely to cave-in at the peace talks with 5 plus 1. This will bring down the price of oil and perhaps prevent a global double-dip recession. You can see that the battle in Yemen is the most important in the world and why all parts of the American government are engaged in a full court press.
Long War: The Western media is reporting that the anti-nuclear peace talks between Iran and 5 plus 1 are faltering. This isn't true. The two sides are circling each other like scorpions in a bottle, but neither side has lashed out with its stinger. A new round of talks has been scheduled in a month in Moscow. To gauge if any progress has been made we need to listen to what Iran has to say, not the Western media. By this criteria, progress is being made.
America is supporting the Yemeni Army in its massive offensive against AQAP on several different fronts. The State Deparment is admitting to a huge internet hacking scheme which has turned Al-Qaeda websites into pro-American propoganda tools.
Elements of the deposed Yemeni dictator, Saleh, have been supporting Al-Qaeda. The US Treasury is installing economic sanctions against individuals loyal to Saleh. Treasury must be working with the CIA to do this, and the same can be said for the State Department. Clearly we are seeing another example of Director Petraeus reaching out to other parts of the US government and bending them to the will of the CIA.
What is at stake in this battle? The black flag of Al-Qaeda flies over the southern Yemeni port city of Aden. This port is located along a sea lane that carries a large percentage of the West's oil. Al-Qaeda wants to stop this oil from flowing and thereby crippling the world economy. So a lot is at stake.
Meanwhile, on the battlefield in southern Yemen, 35 Al-Qaeda soldiers were killed today by the Yemeni Army and a key town was captured.
If AQAP is crushed by the Yemeni Army in southern Yemen, then the good guys will attack the Houthi rebels in the north. The Houthis are puppets of Iran. If the Houthis in turn are crushed, then Iran will be more likely to cave-in at the peace talks with 5 plus 1. This will bring down the price of oil and perhaps prevent a global double-dip recession. You can see that the battle in Yemen is the most important in the world and why all parts of the American government are engaged in a full court press.
Wednesday, May 23, 2012
Do You Have a Puke Bucket?
Charts: The NYSE Composite is below its 200-day moving average, edging into bear market territory. Many emerging markets are now deep into bear market territory. At midday on May 23 the S&P 500 is barely holding above 1292, a key technical level that needs to hold or we are all in for a world of hurt. The two day rally attempt has failed and the market is back into a correction.
Dave's Investment Corner: Growth stocks are getting pulverized. The hour for value stocks may be arriving. Consider this ETF... DEF, this is an index of the 100 strongest companies in the US stock market on the basis of cash flow and dividend increases plus low valuations. And these are not cyclical companies, but defensive hence the ticker symbol. You should buy value on dips, but not just any dip, rather a dip so harsh you feel sick, like you're going to puke. If you actually do puke that is a good sign. You should have a puke bucket next to your desk, I just got one and I'm ready for action.
Long War: The Yemeni Army suffered a terrible blow the other day with the death of 100 soldiers by a suicide bomber. They have picked themselves up and resumed attacking Al-Qaeda, knocking the evil ones partially out of their capitol city. The Yemeni Army is now pissed off. Kill ratios have zoomed up to about 20-1. They are fighting like Americans now.
Saudi Arabia is giving about $3 billion to the Yemeni government. A wedge is being driven into the heart of the beast.
So far Iran is rolling over in the anti-nuclear peace talks with 5 plus 1. You can be sure the CIA led war against AQAP has got their attention.
Dave's Investment Corner: Growth stocks are getting pulverized. The hour for value stocks may be arriving. Consider this ETF... DEF, this is an index of the 100 strongest companies in the US stock market on the basis of cash flow and dividend increases plus low valuations. And these are not cyclical companies, but defensive hence the ticker symbol. You should buy value on dips, but not just any dip, rather a dip so harsh you feel sick, like you're going to puke. If you actually do puke that is a good sign. You should have a puke bucket next to your desk, I just got one and I'm ready for action.
Long War: The Yemeni Army suffered a terrible blow the other day with the death of 100 soldiers by a suicide bomber. They have picked themselves up and resumed attacking Al-Qaeda, knocking the evil ones partially out of their capitol city. The Yemeni Army is now pissed off. Kill ratios have zoomed up to about 20-1. They are fighting like Americans now.
Saudi Arabia is giving about $3 billion to the Yemeni government. A wedge is being driven into the heart of the beast.
So far Iran is rolling over in the anti-nuclear peace talks with 5 plus 1. You can be sure the CIA led war against AQAP has got their attention.
Tuesday, May 22, 2012
Israel Temper Tantrum
Charts: The S&P 500 hit 1292, the October peak, found support and bounced up sharply off that level on Monday in weak volume. It is a good thing that the index was able to respond to a technical support level, this at least broke the waterfall pattern. The weak volume is bad. Today the index finished almost flat after giving up a medium size gain in the middle of the day. This is a negative reversal, not good. The market is in a rally attempt, not a technical rally. This rally attempt is a little iffy because of the weak volume and the negative reversal.
Fundamentals: Opinion polls show Greek voters are evenly divided between pro-austerity parties and anti-austerity parties. This is an improvement because anti-austerity (hard left) parties had been surging before the upcoming election (only weeks away). The hard left is saying Greece cannot be forced out of the Euro-zone because there is no treaty mechanism to do that. This is how Greece will leave the Euro-zone if the hard left wins the next election: There will be a run on Greek banks (already happening to a small degree). Then Greek banks will run out of euros. The ECB will stop pumping euros into these banks because the government is breaking the deal allowing for ECB funding. Without euros the Greek government will have to print its own currency. At that point it has left the Euro-zone. In the long run (several months to several years) this will be a good thing. In the short to medium term it will hammer stocks very badly. So there is a 50/50 chance this will happen based on opinion polls.
Long War: A group of bad guys let off a suicide bomb in the middle of a (good guy) Yemeni military parade, killing 100 good guy soldiers. Al-Qaeda did not claim responsibility right away. So AQAP most likely did not set off this bomb. Probably anti-regime forces loyal to the old dictator Saleh are the bad guys. It is tough that the good guys in Yemen are facing a new enemy as they battle Al-Qaeda.
Israel is aggressively expanding settlements in the occupied territories. Furthermore these new settlements are strategically located to really screw the Palestinians. Israel is throwing a temper tantrum with this action. Why is it acting like a big spoiled baby? Because it is being prevented from attacking Iran by the US. So this is good.
As a consequence the Iran anti-nuclear peace talks with the US-led group of big powers called 5 plus 1 are off to a good start. This is pressuring the price of oil which is good of course.
Fundamentals: Opinion polls show Greek voters are evenly divided between pro-austerity parties and anti-austerity parties. This is an improvement because anti-austerity (hard left) parties had been surging before the upcoming election (only weeks away). The hard left is saying Greece cannot be forced out of the Euro-zone because there is no treaty mechanism to do that. This is how Greece will leave the Euro-zone if the hard left wins the next election: There will be a run on Greek banks (already happening to a small degree). Then Greek banks will run out of euros. The ECB will stop pumping euros into these banks because the government is breaking the deal allowing for ECB funding. Without euros the Greek government will have to print its own currency. At that point it has left the Euro-zone. In the long run (several months to several years) this will be a good thing. In the short to medium term it will hammer stocks very badly. So there is a 50/50 chance this will happen based on opinion polls.
Long War: A group of bad guys let off a suicide bomb in the middle of a (good guy) Yemeni military parade, killing 100 good guy soldiers. Al-Qaeda did not claim responsibility right away. So AQAP most likely did not set off this bomb. Probably anti-regime forces loyal to the old dictator Saleh are the bad guys. It is tough that the good guys in Yemen are facing a new enemy as they battle Al-Qaeda.
Israel is aggressively expanding settlements in the occupied territories. Furthermore these new settlements are strategically located to really screw the Palestinians. Israel is throwing a temper tantrum with this action. Why is it acting like a big spoiled baby? Because it is being prevented from attacking Iran by the US. So this is good.
As a consequence the Iran anti-nuclear peace talks with the US-led group of big powers called 5 plus 1 are off to a good start. This is pressuring the price of oil which is good of course.
Friday, May 18, 2012
Angela Merkel Needs to Stand Tall
Charts: The S&P 500 is experiencing a waterfall chart pattern, the most damaging of all patterns. A waterfall shows no respect for support levels, punching down through them without even pausing. It doesn't care that the market is oversold and should at least exhibit a dead cat bounce. A waterfall is like the Terminator killing robot in Scharzenegger movies. You can't reason with it. You can't negotiate with it. There is no pity. There is no love.
Fundamentals: The hard left in Greece is telling voters that Germany, the EU and the ECB are bluffing. The left claims Germany will keep bail out funds flowing even if Greece abandons its austerity program even though Germany is saying the opposite. This week the ECB cut off funding to Greek banks. Earlier the EFSF (one of two EU bail out funds) pulled back over a billion dollars worth of funding. So Germany and the EU are already pulling the plug on Greece, not just talking about it. This might change the outcome of the coming Greek election. If Greek voters think German chancellor Merkel is not bluffing, they might get scared straight.
Long War: The Obama administration has a theory, the veil of secrecy should be pulled off the CIA's drone program. It is broadcasting in advance plans to expand the drone campaign to Nigeria, Somalia, and other parts of Africa. The CIA is openly opposed to this White House proposal. Obama always starts screwing up foreign policy when he is suffering in the polls and his re-election prospects get shaky. He is very smart but lacks courage. This is his biggest weakness.
The war in Yemen is going very well. As the Yemeni Army advances, rolling back Al-Qaeda, citizens in the former occupied villages and lands are rising up and joining the fight against the evil ones. See? See what happens if you just leave the CIA the %#@& alone?
Fundamentals: The hard left in Greece is telling voters that Germany, the EU and the ECB are bluffing. The left claims Germany will keep bail out funds flowing even if Greece abandons its austerity program even though Germany is saying the opposite. This week the ECB cut off funding to Greek banks. Earlier the EFSF (one of two EU bail out funds) pulled back over a billion dollars worth of funding. So Germany and the EU are already pulling the plug on Greece, not just talking about it. This might change the outcome of the coming Greek election. If Greek voters think German chancellor Merkel is not bluffing, they might get scared straight.
Long War: The Obama administration has a theory, the veil of secrecy should be pulled off the CIA's drone program. It is broadcasting in advance plans to expand the drone campaign to Nigeria, Somalia, and other parts of Africa. The CIA is openly opposed to this White House proposal. Obama always starts screwing up foreign policy when he is suffering in the polls and his re-election prospects get shaky. He is very smart but lacks courage. This is his biggest weakness.
The war in Yemen is going very well. As the Yemeni Army advances, rolling back Al-Qaeda, citizens in the former occupied villages and lands are rising up and joining the fight against the evil ones. See? See what happens if you just leave the CIA the %#@& alone?
Wednesday, May 16, 2012
Underwear Triumphs Over All
Fundamentals: The Euro-crisis is so bad that it is out weighing good news from the Long War.
Long War: The beating heart of the dark beast is southern Yemen, where there are more Al-Qaeda jihadists than all of Pakistan and Afghanistan combined, where the evil ones have carved out a fetid kingdom and built a fully functioning modern army.
A huge offensive was launched against AQAP five days ago. The Yemeni Army has thrown 20,000 troops into a wrecking machine that includes at least another 10,000 allied tribal militiamen, trained by the CIA. The Green Berets are leading this juggernaut. CIA and Special Forces drones are filling the sky with hellfire missiles, too numerous to count, in obvious close air support, in fact directed by Green Beret commanders fighting and leading on the front lines. US Navy warships are also supporting the offensive with withering fire from positions close off shore.
Local Yemeni media reports that over 100 bad guys have been killed so far. The good guys are achieving 4-1 kill ratios. In previous battles AQAP had the favorable kill ratios, thank God this has reversed since this one statistic usually determines the winner of a battle. AQAP is getting knocked back from long held territory. A knife is being thrust into the dark beast's beating heart, splling acid blood on the desert sand.
And the western press is almost completely ignoring this battle. There are US boots on the ground, fighting without Congressional permission. The US Navy is in a war. The press is giving the most important battle in the world a big yawn. It's hard for me to believe but the big yawn seems to be a result of the Yemeni underwear bomb story. Today there is a press account circulating about the size and shape of the explosive underwear that the CIA acquired from its double agent. This deadly underwear is so tailored that it would pass any normal pat down, so the story goes. I guess there is only so much copy allowed in a given media publication concerning Yemen and fitted explosive underwear takes precedence over the most important battle of our time.
The Iranian leadership is not yawning. As the anti-nuclear peace talks ramp up, Iran is making all sorts of conciliatory noise. You can be sure that the combination of America up to its neck in a regional war and no media publications covering this fact is terrifying to bad guys around the world. Muzzling the media is a specialty of CIA Director Petraeus. I am in awe of his genius. How could he know that explosive underwear trumps US Navy frigates shelling bad guys?
Long War: The beating heart of the dark beast is southern Yemen, where there are more Al-Qaeda jihadists than all of Pakistan and Afghanistan combined, where the evil ones have carved out a fetid kingdom and built a fully functioning modern army.
A huge offensive was launched against AQAP five days ago. The Yemeni Army has thrown 20,000 troops into a wrecking machine that includes at least another 10,000 allied tribal militiamen, trained by the CIA. The Green Berets are leading this juggernaut. CIA and Special Forces drones are filling the sky with hellfire missiles, too numerous to count, in obvious close air support, in fact directed by Green Beret commanders fighting and leading on the front lines. US Navy warships are also supporting the offensive with withering fire from positions close off shore.
Local Yemeni media reports that over 100 bad guys have been killed so far. The good guys are achieving 4-1 kill ratios. In previous battles AQAP had the favorable kill ratios, thank God this has reversed since this one statistic usually determines the winner of a battle. AQAP is getting knocked back from long held territory. A knife is being thrust into the dark beast's beating heart, splling acid blood on the desert sand.
And the western press is almost completely ignoring this battle. There are US boots on the ground, fighting without Congressional permission. The US Navy is in a war. The press is giving the most important battle in the world a big yawn. It's hard for me to believe but the big yawn seems to be a result of the Yemeni underwear bomb story. Today there is a press account circulating about the size and shape of the explosive underwear that the CIA acquired from its double agent. This deadly underwear is so tailored that it would pass any normal pat down, so the story goes. I guess there is only so much copy allowed in a given media publication concerning Yemen and fitted explosive underwear takes precedence over the most important battle of our time.
The Iranian leadership is not yawning. As the anti-nuclear peace talks ramp up, Iran is making all sorts of conciliatory noise. You can be sure that the combination of America up to its neck in a regional war and no media publications covering this fact is terrifying to bad guys around the world. Muzzling the media is a specialty of CIA Director Petraeus. I am in awe of his genius. How could he know that explosive underwear trumps US Navy frigates shelling bad guys?
Tuesday, May 15, 2012
Green Beret in Yemen
Fundamentals: Greece says that it cannot form a unity government, therefore there will be new elections in June. The hard left is certain to win. This means Greece is almost certain to default on its debt. The entire Euro-zone is now at risk.
Long War: Press reports tell us that at least 70 US Army Special Forces troops are in Yemen, directing the Yemeni Army in a gigantic battle against Al-Qaeda. This is probably understated and there are likely many more Special Forces in country. I say this because we have news of US Navy warships moving into position off the Yemeni coast.
As I've pointed out, Al-Qaeda has an army in Yemen with main battle tanks and all the fixings. This army is being chewed up by the combined US/Yemeni Army. Combined Special Forces and CIA drone strikes are now too numerous to count and the pretense of not providing close air support seems to have been shredded. No Republican would dare criticize Obama for getting involved so heavily and overtly in this war right after AQAP was caught red-handed trying to blow up an American airliner.
I invite you to reconsider and rethink the media accounts of the CIA's foiling of this latest underwear bomb attempt. It is a strange coincidence that this whole incident occurred right before the media got wind that the US has boots on the ground in Yemen. Certainly there really was an underwear bomb attempt on the part of AQAP. But the whole thing is just way to useful to the CIA to be sheer chance.
The Syrian Civil War has spread into Lebanon. This is bad. The only thing that the CIA can do in this war is to somehow help the Free Syrian Army (FSA) purge its ranks of Al-Qaeda fighters and operatives. One way we will know if this is happening would be if suicide bomb attacks against Assad's forces diminish. When and if that happens, then the FSA has to fight and defeat Assad's army. This will take years. I have been saying that the CIA is doing nothing along these lines in Syria. Maybe I'm wrong. If I am wrong, then Iran would know that its ally (Syria) is in Langley's cross hairs. So another clue that the CIA actually is making progress purging Al-Qaeda fighters from the FSA would be if Iran bellies up to the bar in the peace talks with 5 plus 1 that are scheduled to restart in the near future. And indeed Iran made placating statements about the peace talks earlier in the week. This isn't enough to say there is CIA progress in Syria, but it is a hopeful sign. This Long War battlefield is ambiguous.
Long War: Press reports tell us that at least 70 US Army Special Forces troops are in Yemen, directing the Yemeni Army in a gigantic battle against Al-Qaeda. This is probably understated and there are likely many more Special Forces in country. I say this because we have news of US Navy warships moving into position off the Yemeni coast.
As I've pointed out, Al-Qaeda has an army in Yemen with main battle tanks and all the fixings. This army is being chewed up by the combined US/Yemeni Army. Combined Special Forces and CIA drone strikes are now too numerous to count and the pretense of not providing close air support seems to have been shredded. No Republican would dare criticize Obama for getting involved so heavily and overtly in this war right after AQAP was caught red-handed trying to blow up an American airliner.
I invite you to reconsider and rethink the media accounts of the CIA's foiling of this latest underwear bomb attempt. It is a strange coincidence that this whole incident occurred right before the media got wind that the US has boots on the ground in Yemen. Certainly there really was an underwear bomb attempt on the part of AQAP. But the whole thing is just way to useful to the CIA to be sheer chance.
The Syrian Civil War has spread into Lebanon. This is bad. The only thing that the CIA can do in this war is to somehow help the Free Syrian Army (FSA) purge its ranks of Al-Qaeda fighters and operatives. One way we will know if this is happening would be if suicide bomb attacks against Assad's forces diminish. When and if that happens, then the FSA has to fight and defeat Assad's army. This will take years. I have been saying that the CIA is doing nothing along these lines in Syria. Maybe I'm wrong. If I am wrong, then Iran would know that its ally (Syria) is in Langley's cross hairs. So another clue that the CIA actually is making progress purging Al-Qaeda fighters from the FSA would be if Iran bellies up to the bar in the peace talks with 5 plus 1 that are scheduled to restart in the near future. And indeed Iran made placating statements about the peace talks earlier in the week. This isn't enough to say there is CIA progress in Syria, but it is a hopeful sign. This Long War battlefield is ambiguous.
Monday, May 14, 2012
Grexit = Greek Exit from Euro-zone
Charts: Today the S&P 500 moved in and out of the key support level of 1340 about seven times. At the end of the day it punched through support and finished under this key level. What we saw then was hammering action as the bears repeatedly tested support and finally shattered it. This is not good.
Fundamentals: Greece is unable to form a government after its recent election so there will be another one in June. Polling data shows hard left parties are picking up support. The hard left in Greece is telling voters that Germany is bluffing when it says bail out money will be withdrawn if austerity measures and free market reforms are reversed. In this fantasy land Greece can go back to its old ways of living high on Germany's dime. Spain, Italy, Portugal, and the rest must step up to the plate and recommit to austerity and free market reform. If this happens convincingly, then Greece can get booted out of the Euro-zone without tearing the global economy apart. If it doesn't shake down this way, then all hell will break loose because the entire Euro-zone will be at risk.
Long War: Since the days right after 9/11 until only a few months ago America's strategy in the Long War was to try to win in a year or two, pack up its bags and go home. This is why in the early 2000s recruits for the Iraqi Army were not vetted for Al-Qaeda membership and given only a couple weeks worth of training. Back then America was just trying to shove warm bodies as rapidly as possible onto the battlefield in a blind, panicky attempt to cobble together something that sort of looked like victory and then declare peace. This policy was foolish beyond belief. One of the results is that today the Syria rebel movement is being taken over by Al-Qaeda in Iraq. There seems to be no push right now to stop AQII from having its way with the Syrian rebels because Yemen is the priority. Under the circumstances this is the right thing to do.
The CIA is not trying to win the Long War right now. At last we have the right policy. The groundwork is being laid for eventual victory many decades in the future. The global battlefield is being shaped in the Islamic world and in the halls of power in Washington DC. America is neither winning nor losing the Long War right now.
Fundamentals: Greece is unable to form a government after its recent election so there will be another one in June. Polling data shows hard left parties are picking up support. The hard left in Greece is telling voters that Germany is bluffing when it says bail out money will be withdrawn if austerity measures and free market reforms are reversed. In this fantasy land Greece can go back to its old ways of living high on Germany's dime. Spain, Italy, Portugal, and the rest must step up to the plate and recommit to austerity and free market reform. If this happens convincingly, then Greece can get booted out of the Euro-zone without tearing the global economy apart. If it doesn't shake down this way, then all hell will break loose because the entire Euro-zone will be at risk.
Long War: Since the days right after 9/11 until only a few months ago America's strategy in the Long War was to try to win in a year or two, pack up its bags and go home. This is why in the early 2000s recruits for the Iraqi Army were not vetted for Al-Qaeda membership and given only a couple weeks worth of training. Back then America was just trying to shove warm bodies as rapidly as possible onto the battlefield in a blind, panicky attempt to cobble together something that sort of looked like victory and then declare peace. This policy was foolish beyond belief. One of the results is that today the Syria rebel movement is being taken over by Al-Qaeda in Iraq. There seems to be no push right now to stop AQII from having its way with the Syrian rebels because Yemen is the priority. Under the circumstances this is the right thing to do.
The CIA is not trying to win the Long War right now. At last we have the right policy. The groundwork is being laid for eventual victory many decades in the future. The global battlefield is being shaped in the Islamic world and in the halls of power in Washington DC. America is neither winning nor losing the Long War right now.
Sunday, May 13, 2012
You Only Have One Friend
Charts: Last week the S&P 500 hit 1340, found support and traded out of the danger zone. The NASDAQ is finding support at 2900. If either of these support levels are breached it will probably get very ugly. The market is in a correction and you should be as nervous as a long tailed cat in a room full of rocking chairs. I am.
Fundamentals: We are staring in the face of Greece defaulting. That in itself cannot hurt the world economy. Greek bonds are owned by the ECB, Greek banks, and well protected hedge funds; everybody else has got out of Dodge a long time ago. The danger is not Greece per se but contagion to Spain and then the rest of Europe. Yield on the Spanish ten year note is over 6%, above the danger zone. This is why the long tailed cat analogy is apt. We must look to our only friend for succor.
Long War: The Yemeni Army is kicking the crap out of AQAP's army, destroying about a dozen AQAP main battle tanks on Sunday and killing 30 AQAP soldiers. Media reports tell us that CIA drones are operating in wolf packs for the first time in Yemen and are killing bad guys everywhere in southern Yemen except in and around the pitched battle between the Yemeni Army and AQAP. We are also told the Yemeni Air Force is enjoying unusual good luck in clobbering the bad guys. The CIA does not have permission to provide close air support to the Yemeni Army. We know that Petraeus asked for permission to do this, so he thought it was essential to provide drone close air support a few weeks ago. If we are to believe the media reports, then Petraeus was wrong. There is no need for drone close air support because the Yemeni Air Force is suddenly so awesome it doesn't need any help. Yeah right. CIA drones are probably protecting the Yemeni Army like a mother hen with a batch of chicks.
As an aside to the above story: The mere fact that Al-Qaeda has main battle tanks is chilling. It's not supposed to work that way. And you can see why Yemen is now the heart of the beast. The Syrian Civil War is important but Yemen is even more important.
Congress is in a twitter about a leak within the CIA revealing all the details of the CIA double agent who foiled the recent AQAP underwear bomb attempt on an American airliner. For instance, we know that the double agent was a Saudi who held British citizenship. We know his favorite color was red and he liked to take long walks on the beach (okay I made the last two items up, you get the point). Congress is outraged that somebody in the CIA leaked all this to the general public. Congress is going to spend a lot of energy with hearings and investigations to tighten up the loosey-goosey culture in Langley. And there might be hearings about why Congress wasn't informed about the operation in the first place. Petraeus is slowly twisting Congress into a knot. When he is done with them they won't know how to spell CIA.
Specific Stocks: Luxury watchmaker Fossil reported weakness in Asia and Europe. Coach is exposed to these same markets. Coach reported before Fossil and said it is seeing weakness in Europe but strength in Asia. The market is acting like Coach is just as weak in Asia as Fossil. I don't think this is true but I sold Coach after the Fossil report because I don't want to fight the tape.
For several days after the Fossil report Lulu Lemon was getting hammered, as if it faced the same problems as Fossil. But Lulu Lemon has almost no exposure to Europe or Asia. More recently LULU has stabilized and seems to be forming a basing pattern. Coach hasn't done this. In the long run Coach is an awesome company and it can be held for the long run, but you can also get retail exposure without much overseas risk with XRT, the index of American retailers.
You should buy growth stocks when they are just beginning to break out of a basing pattern and when the market is in a rally, not a correction.
Fundamentals: We are staring in the face of Greece defaulting. That in itself cannot hurt the world economy. Greek bonds are owned by the ECB, Greek banks, and well protected hedge funds; everybody else has got out of Dodge a long time ago. The danger is not Greece per se but contagion to Spain and then the rest of Europe. Yield on the Spanish ten year note is over 6%, above the danger zone. This is why the long tailed cat analogy is apt. We must look to our only friend for succor.
Long War: The Yemeni Army is kicking the crap out of AQAP's army, destroying about a dozen AQAP main battle tanks on Sunday and killing 30 AQAP soldiers. Media reports tell us that CIA drones are operating in wolf packs for the first time in Yemen and are killing bad guys everywhere in southern Yemen except in and around the pitched battle between the Yemeni Army and AQAP. We are also told the Yemeni Air Force is enjoying unusual good luck in clobbering the bad guys. The CIA does not have permission to provide close air support to the Yemeni Army. We know that Petraeus asked for permission to do this, so he thought it was essential to provide drone close air support a few weeks ago. If we are to believe the media reports, then Petraeus was wrong. There is no need for drone close air support because the Yemeni Air Force is suddenly so awesome it doesn't need any help. Yeah right. CIA drones are probably protecting the Yemeni Army like a mother hen with a batch of chicks.
As an aside to the above story: The mere fact that Al-Qaeda has main battle tanks is chilling. It's not supposed to work that way. And you can see why Yemen is now the heart of the beast. The Syrian Civil War is important but Yemen is even more important.
Congress is in a twitter about a leak within the CIA revealing all the details of the CIA double agent who foiled the recent AQAP underwear bomb attempt on an American airliner. For instance, we know that the double agent was a Saudi who held British citizenship. We know his favorite color was red and he liked to take long walks on the beach (okay I made the last two items up, you get the point). Congress is outraged that somebody in the CIA leaked all this to the general public. Congress is going to spend a lot of energy with hearings and investigations to tighten up the loosey-goosey culture in Langley. And there might be hearings about why Congress wasn't informed about the operation in the first place. Petraeus is slowly twisting Congress into a knot. When he is done with them they won't know how to spell CIA.
Specific Stocks: Luxury watchmaker Fossil reported weakness in Asia and Europe. Coach is exposed to these same markets. Coach reported before Fossil and said it is seeing weakness in Europe but strength in Asia. The market is acting like Coach is just as weak in Asia as Fossil. I don't think this is true but I sold Coach after the Fossil report because I don't want to fight the tape.
For several days after the Fossil report Lulu Lemon was getting hammered, as if it faced the same problems as Fossil. But Lulu Lemon has almost no exposure to Europe or Asia. More recently LULU has stabilized and seems to be forming a basing pattern. Coach hasn't done this. In the long run Coach is an awesome company and it can be held for the long run, but you can also get retail exposure without much overseas risk with XRT, the index of American retailers.
You should buy growth stocks when they are just beginning to break out of a basing pattern and when the market is in a rally, not a correction.
Wednesday, May 9, 2012
Shaping the Battlefield in Washington DC
Charts: We are in the middle of a harsh correction and the S&P 500 has been punching down through support levels. 1340 is the March intraday low. If 1340 holds with strong support we might be okay. If the broad index plunges through 1340 in big volume with a bad advance/decline line, then it might get really hairy.
Fundamentals: Mark Twain said that history doesn't repeat itself, but sometimes it rhymes. The past is a rough guide for the future. The Euro-zone crisis is just like the Asian Contagion of the late 1990s. Back then a sovereign debt crisis started on the periphery of Asia in Thailand. The crisis then moved into stronger Asian countries like South Korea. These two Asian countries are like Greece and France in the current crisis.
The IMF bailed out each new Asian country as the crisis spread domino fashion. The bail outs only made the crisis worse. Finally Russia was hit. After fumbling about Russia refused to be bailed out. This slammed global financial markets but it was the end game for the crisis and markets recovered in a few months. If Russia had been bailed out, then the crisis would have kept getting worse.
Greece is probably going to default on its debt and exit the Euro-zone, taking the path of Zimbabwe, printing money (after creating a new Greek drachma) to give salary increases to civil servants, lower state pension age requirements, etc. The resulting hyperinflation will be so disastrous that the other PIIGS will probably be scared straight. This could spell the end game of the current crisis.
Even if this rosy scenario plays out in the best possible manner, it will still be very rough for the stock market over the next few months. The wild card is, of course, the price of oil. If it drops far enough, we might catch a break because China could then loosen monetary policy and kick start global growth. So, as always, we only have one friend: the CIA.
Long War: The CIA is telling the whole world about the double agent it placed in AQAP who foiled an Al-Qaeda airliner bomb plot. It is practically shouting about this hugely successful mission, which also resulted in drone strikes in Yemen which killed top Al-Qaeda leaders. Congressional watchdog committees were not informed about this clandestine operation beforehand as required by law. Congress is complaining about being kept in the dark. The fight between the CIA and Congress is very public. The American public is not stupid and can see the wisdom of keeping the blabbermouth morons in Congress in the dark about future CIA clandestine operations.
Petraeus is kicking the Congressional watchdogs in the gut real hard, setting the stage for keeping them in the dark about all future operations. Slowly, bit by bit, the CIA is going rogue (a good thing).
Remember my blog about Petraeus reaching out and grabbing assets from Army Intelligence (DIA)? Along those same lines, new rules are being crafted for US Special Forces, giving Special Forces commanders greater operational freedom, taking them out of the control of the Joint Chiefs and the old guard at the Pentagon. This looks like another Petraeus asset grab. He is very grabby and likes to pull resources away from other parts of the US military/intelligence community, stuffing them into the CIA. You may have also read that the AQAP double agent was from Saudi Intelligence. It seems that Petraeus is expanding his power base into allied Islamic Intelligence Agencies.
Charts and fundamentals are very bad. The only thing standing in the way of Armageddon is the genius of the CIA Director. It is as if we are in an Indiana Jones movie where the hero is running across a collapsing rope bridge. Will he make it to the other side in time before the bridge collapses? Maybe. It depends on how brilliant Petraeus really is.
Fundamentals: Mark Twain said that history doesn't repeat itself, but sometimes it rhymes. The past is a rough guide for the future. The Euro-zone crisis is just like the Asian Contagion of the late 1990s. Back then a sovereign debt crisis started on the periphery of Asia in Thailand. The crisis then moved into stronger Asian countries like South Korea. These two Asian countries are like Greece and France in the current crisis.
The IMF bailed out each new Asian country as the crisis spread domino fashion. The bail outs only made the crisis worse. Finally Russia was hit. After fumbling about Russia refused to be bailed out. This slammed global financial markets but it was the end game for the crisis and markets recovered in a few months. If Russia had been bailed out, then the crisis would have kept getting worse.
Greece is probably going to default on its debt and exit the Euro-zone, taking the path of Zimbabwe, printing money (after creating a new Greek drachma) to give salary increases to civil servants, lower state pension age requirements, etc. The resulting hyperinflation will be so disastrous that the other PIIGS will probably be scared straight. This could spell the end game of the current crisis.
Even if this rosy scenario plays out in the best possible manner, it will still be very rough for the stock market over the next few months. The wild card is, of course, the price of oil. If it drops far enough, we might catch a break because China could then loosen monetary policy and kick start global growth. So, as always, we only have one friend: the CIA.
Long War: The CIA is telling the whole world about the double agent it placed in AQAP who foiled an Al-Qaeda airliner bomb plot. It is practically shouting about this hugely successful mission, which also resulted in drone strikes in Yemen which killed top Al-Qaeda leaders. Congressional watchdog committees were not informed about this clandestine operation beforehand as required by law. Congress is complaining about being kept in the dark. The fight between the CIA and Congress is very public. The American public is not stupid and can see the wisdom of keeping the blabbermouth morons in Congress in the dark about future CIA clandestine operations.
Petraeus is kicking the Congressional watchdogs in the gut real hard, setting the stage for keeping them in the dark about all future operations. Slowly, bit by bit, the CIA is going rogue (a good thing).
Remember my blog about Petraeus reaching out and grabbing assets from Army Intelligence (DIA)? Along those same lines, new rules are being crafted for US Special Forces, giving Special Forces commanders greater operational freedom, taking them out of the control of the Joint Chiefs and the old guard at the Pentagon. This looks like another Petraeus asset grab. He is very grabby and likes to pull resources away from other parts of the US military/intelligence community, stuffing them into the CIA. You may have also read that the AQAP double agent was from Saudi Intelligence. It seems that Petraeus is expanding his power base into allied Islamic Intelligence Agencies.
Charts and fundamentals are very bad. The only thing standing in the way of Armageddon is the genius of the CIA Director. It is as if we are in an Indiana Jones movie where the hero is running across a collapsing rope bridge. Will he make it to the other side in time before the bridge collapses? Maybe. It depends on how brilliant Petraeus really is.
Tuesday, May 8, 2012
You Do The Math
Fundamentals: We are told by the press that austerity doesn't work in the Euro-periphery, it only makes things worse. Latvia and Ireland are the only two Euro-periphery countries to actually implement austerity and serious free market reform. In 2009 GDP in Latvia contracted a startling 18%. This put the fear of God in the Latvians and they embraced the free market with both hands. Last year growth in Latvia was a robust 5%, among the strongest in the world. Ireland has one of the stronger economies in Europe. It is growing right now, it isn't growing very fast but it is growing while most of Europe is in recession. Ireland and Latvia did not have any riots or huge general strikes. Italy has had only a few riots, less than the other Euro-zone basket cases, and it has the next strongest economy among these so-called PIIGS countries. Italy has also had more free market reform than any PIIGS except Latvia and Ireland. There is a direct one to one relationship between free market reform in indebted Euro-zone countries and economic growth.
Editor's Note: Latvia is in the Euro-zone. It doesn't use the euro but it does peg its currency to the euro, which amounts to the same thing. So Greece has no excuse.
Long War: Netanyahu was eager to call for an early election. His only possible opponent is a woman named Shelly, who has no experience in the military and is weaker on defense than any other Israeli politician in history. Polls show most Israelis do not want an air strike on Iran. But they fear Shelly will make such a weak PM they would vote for Netanyahu even if it meant an unpopular war. Calling the early election seemed like a brilliant idea on Netanyahu's part.
Out of the blue, Netanyahu cancelled the early election and announced that he is instead forging an new coalition of political parties that will allow him to attack Iran. Except he is the only one talking about attacking Iran. His new coalition partners aren't saying anything like that.
So somebody just bitch slapped Netanyahu, the strongest and most hawkish Israeli PM ever. Who do you think is it was? The media would say Shelly was the one doing the bitch slapping. Shelly, the weakest politician in Israel's history. Give me a break.
Editor's Note: Latvia is in the Euro-zone. It doesn't use the euro but it does peg its currency to the euro, which amounts to the same thing. So Greece has no excuse.
Long War: Netanyahu was eager to call for an early election. His only possible opponent is a woman named Shelly, who has no experience in the military and is weaker on defense than any other Israeli politician in history. Polls show most Israelis do not want an air strike on Iran. But they fear Shelly will make such a weak PM they would vote for Netanyahu even if it meant an unpopular war. Calling the early election seemed like a brilliant idea on Netanyahu's part.
Out of the blue, Netanyahu cancelled the early election and announced that he is instead forging an new coalition of political parties that will allow him to attack Iran. Except he is the only one talking about attacking Iran. His new coalition partners aren't saying anything like that.
So somebody just bitch slapped Netanyahu, the strongest and most hawkish Israeli PM ever. Who do you think is it was? The media would say Shelly was the one doing the bitch slapping. Shelly, the weakest politician in Israel's history. Give me a break.
Monday, May 7, 2012
Pound Sand
Fundamentals: Socialists have won elections in France and Greece. They vow to eliminate austerity. But what can they do? The socialists will go to private investors in the bond market and say, "Loan us money so we can raise the retirement age on our state pensions." Private investors will refuse. So the socialists will make the same request to the ECB. The ECB will say, "Pound sand!" Then the socialists can either go back to their voters and actually implement austerity and free market reform or they can leave the Euro-zone. Leaving the Euro-zone will mean instant hyper-inflation a la Zimbabwe.
So long as the stock market sees the above scenario playing out with no major countries taking the Zimbabwe option, we might be okay.
Long War: This is what I think Petraeus is doing: He is shaping the global battlefield in preparation for future action. He is not trying to win the Long War in the near future, but rather move chess pieces around so that in a few years there can be a push to start rolling back the bad guys.
This shaping exercise seems to involve massive effort in one or two key spots and letting things slide elsewhere. For instance, we saw the big national and super-national armies of Kenya, Ethiopia, and the African Union pour everything they had into a mighty campaign to destroy the conventional fighting capabilities of Al-Shabab in North Africa. But there hasn't been much effort to rein in AQIM in Mali and Nigeria, where the bad guys are spreading unchecked. However they are spreading away from the center of the Long War, expanding out into the periphery, the edge of northern and central Africa. So the African part of the Long War is not smaller, it just has a different (better) shape.
Now we see massive effort poured into Yemen. Only yesterday an Al-Qaeda leader with a $5 million bounty on his head was killed by CIA drones. We are told this bad guy was plotting an attack on America. Along with massive drone action we are seeing huge battles in Yemen similar to the huge battles that dislodged Al-Shabab in Somalia.
At the same time the drone campaign has ramped up again in the Pak tribal lands.
Pressure is being applied at just two places. This will change the shape of the global battlefield which forms a gigantic arc starting with the ex-Soviet countries in central Asia through the Mideast and down into Africa. This evolving "new shape" seems to involve punching holes in the arc, cutting it up into little arcs.
So long as the stock market sees the above scenario playing out with no major countries taking the Zimbabwe option, we might be okay.
Long War: This is what I think Petraeus is doing: He is shaping the global battlefield in preparation for future action. He is not trying to win the Long War in the near future, but rather move chess pieces around so that in a few years there can be a push to start rolling back the bad guys.
This shaping exercise seems to involve massive effort in one or two key spots and letting things slide elsewhere. For instance, we saw the big national and super-national armies of Kenya, Ethiopia, and the African Union pour everything they had into a mighty campaign to destroy the conventional fighting capabilities of Al-Shabab in North Africa. But there hasn't been much effort to rein in AQIM in Mali and Nigeria, where the bad guys are spreading unchecked. However they are spreading away from the center of the Long War, expanding out into the periphery, the edge of northern and central Africa. So the African part of the Long War is not smaller, it just has a different (better) shape.
Now we see massive effort poured into Yemen. Only yesterday an Al-Qaeda leader with a $5 million bounty on his head was killed by CIA drones. We are told this bad guy was plotting an attack on America. Along with massive drone action we are seeing huge battles in Yemen similar to the huge battles that dislodged Al-Shabab in Somalia.
At the same time the drone campaign has ramped up again in the Pak tribal lands.
Pressure is being applied at just two places. This will change the shape of the global battlefield which forms a gigantic arc starting with the ex-Soviet countries in central Asia through the Mideast and down into Africa. This evolving "new shape" seems to involve punching holes in the arc, cutting it up into little arcs.
Friday, May 4, 2012
Correction begins
Charts: The S&P 500 smashed downward through its 50-day moving average today. Chartists will say that the market is now in a correction. While they are probably right we should be alert to the possibility that the market is entering a period of sideways movement. There are some ugly chart indicators smacking us in the face but there is one bright spot: correlation between stocks has dissipated. It is a stock pickers market but a very challenging one.
Fundamentals: Lately I've been talking about the super productivity of corporate America. Today the Journal ran an article that says productivity has peaked and is starting to come down. This means, once again, we have only one hope: that our good friends at Langley can straighten out the Long War and bring oil prices down. Which means we could move into consumer stocks even more than we already have.
Long War: There are more Al-Qaeda operatives in Yemen than in Afghanistan and Pakistan combined. Yemen is the true heart of the evil beast. The CIA has nearly finished purging the Yemeni Army of bad guys. Pro-American Yemeni President Hadi is establishing control over his armed forces and the war is being taken to the bad guys. The Western Press is reporting that Yemeni warplanes are making strike after strike. But it seems more likely that these air strikes are CIA drones firing Raytheon Hellfire missiles. This is probably happening while the Yemeni Air Force has an airplane or two loitering about, providing a plausible explanation for the aerial assault to the Western press. I am encouraged by the press management style of the new CIA Director.
AQAP is unable to spread out of Yemen and into Africa by way of Somalia because the CIA has destroyed Al-Shabab's conventional force structure and reduced the Somali bad guys to terrorists who have limited ability to seize and hold ground. This means AQAP and AQIM cannot combine forces through a kind of land/sea bridge. So there is good long term strategic planning and execution. AQIM is, however, spreading out in Africa and has its own kingdom now in Mali.
In Iran the Ayatollah seems to be gaining power over Ahmadinejad. This is bad.
Fundamentals: Lately I've been talking about the super productivity of corporate America. Today the Journal ran an article that says productivity has peaked and is starting to come down. This means, once again, we have only one hope: that our good friends at Langley can straighten out the Long War and bring oil prices down. Which means we could move into consumer stocks even more than we already have.
Long War: There are more Al-Qaeda operatives in Yemen than in Afghanistan and Pakistan combined. Yemen is the true heart of the evil beast. The CIA has nearly finished purging the Yemeni Army of bad guys. Pro-American Yemeni President Hadi is establishing control over his armed forces and the war is being taken to the bad guys. The Western Press is reporting that Yemeni warplanes are making strike after strike. But it seems more likely that these air strikes are CIA drones firing Raytheon Hellfire missiles. This is probably happening while the Yemeni Air Force has an airplane or two loitering about, providing a plausible explanation for the aerial assault to the Western press. I am encouraged by the press management style of the new CIA Director.
AQAP is unable to spread out of Yemen and into Africa by way of Somalia because the CIA has destroyed Al-Shabab's conventional force structure and reduced the Somali bad guys to terrorists who have limited ability to seize and hold ground. This means AQAP and AQIM cannot combine forces through a kind of land/sea bridge. So there is good long term strategic planning and execution. AQIM is, however, spreading out in Africa and has its own kingdom now in Mali.
In Iran the Ayatollah seems to be gaining power over Ahmadinejad. This is bad.
Wednesday, May 2, 2012
Coincidence? I Don't Think So
Charts: In 2011 the S&P 500 closed almost exactly flat after a roller coaster ride of savage volatility. The only other time we had a chart pattern like that was in 1948 when the broad index closed almost exactly flat after the same sort of roller coaster ride. The 1950s saw one of the greatest bull markets in history. The 50s were the golden age of the CIA. Never before or since has Langley had such earth shaking power.
Fundamentals: The most recent GDP data shows the US economy growing at a very weak 2.2%. Strip out inventory distortions and growth was only 1.5%. But corporate profit as a percent of GDP continues to hit new all time highs. In the 1930s corporate profit as a percent of GDP was also very high. Why? Because the loose monetary policies of the 1920s made corporate America fat, happy and stupid. When the Great Depression hit there was plenty of room to tighten up. In the 1980s, 1990s and early 2000s we also had overly loose monetary policy. When the Great Recession hit there were over 2 1/2 decades of fat, happy, and stupid to work off. Corporations keep getting more efficient and profitable because they are hacking off an enormous backlog of fat, happy and stupid business practices.
Long War: Israeli PM Netanyahu is being publicly attacked by the former head of Mossad, the former head of Israeli Internal Security, the former PM, the current top ranking Israeli military officer, and (not publicly) the current head of Mossad. All these powerful Israelis are saying the Israeli Air Force must not bomb Iran. It is a true revolt and more than the PM can counter.
Netanyahu is so weakened politically that he is calling for early elections, where the issue will be whether or not to attack Iran. The voters will probably boot him out and if so there will be no Israeli attack on Iran. And the world will be saved from a disastrous war that would clobber the stock market besides killing hundreds of thousands of people.
Do you think five of the most powerful Israelis spontaneously decided to rise up against the PM out of the blue? Do you think the anti-Israeli CIA actions that I talked about in my last couple blogs are a coincidence to this Netanyahu backlash? Do you think it is a coincidence that the CIA is now run by the most anti-Israeli director to have ever existed? Do you think it is a coincidence that Director Petraeus has demonstrated an ability to reach out and transform internal politics/ tribal structures within Middle Eastern countries?
The Long War is not WW II. And Vietnam was not WW II. Massive conventional firepower, the shock and awe we saw at the start of the first Gulf War, is not the answer to Long War battles. The answer is spooks not nukes.
Fundamentals: The most recent GDP data shows the US economy growing at a very weak 2.2%. Strip out inventory distortions and growth was only 1.5%. But corporate profit as a percent of GDP continues to hit new all time highs. In the 1930s corporate profit as a percent of GDP was also very high. Why? Because the loose monetary policies of the 1920s made corporate America fat, happy and stupid. When the Great Depression hit there was plenty of room to tighten up. In the 1980s, 1990s and early 2000s we also had overly loose monetary policy. When the Great Recession hit there were over 2 1/2 decades of fat, happy, and stupid to work off. Corporations keep getting more efficient and profitable because they are hacking off an enormous backlog of fat, happy and stupid business practices.
Long War: Israeli PM Netanyahu is being publicly attacked by the former head of Mossad, the former head of Israeli Internal Security, the former PM, the current top ranking Israeli military officer, and (not publicly) the current head of Mossad. All these powerful Israelis are saying the Israeli Air Force must not bomb Iran. It is a true revolt and more than the PM can counter.
Netanyahu is so weakened politically that he is calling for early elections, where the issue will be whether or not to attack Iran. The voters will probably boot him out and if so there will be no Israeli attack on Iran. And the world will be saved from a disastrous war that would clobber the stock market besides killing hundreds of thousands of people.
Do you think five of the most powerful Israelis spontaneously decided to rise up against the PM out of the blue? Do you think the anti-Israeli CIA actions that I talked about in my last couple blogs are a coincidence to this Netanyahu backlash? Do you think it is a coincidence that the CIA is now run by the most anti-Israeli director to have ever existed? Do you think it is a coincidence that Director Petraeus has demonstrated an ability to reach out and transform internal politics/ tribal structures within Middle Eastern countries?
The Long War is not WW II. And Vietnam was not WW II. Massive conventional firepower, the shock and awe we saw at the start of the first Gulf War, is not the answer to Long War battles. The answer is spooks not nukes.
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