A New Sheriff In Town

Charts: First support for the S&P 500 is a band between 1498-1502, the band centers on the round number 1500. Next support is 1474, the 2012 peak. The index has screeched up 6% year to date. It needs to consolidate and bounce up off these support levels if we are to avoid the harsh corrections we've seen in this bull market thus far.

Long War: The presumptive CIA Director, John Brennan, recently completed his first round of Senate hearings. Anything involving the CIA is a closed hearing. The Senators left the hearing spitting mad. Normally they wouldn't say much to the media after this closed door hearing but the politicians were so angry they flapped their gums like gossipy schoolgirls. They said Brennan was not forthcoming on his views on enhanced interrogation (torture) or his views on rendition (farming torture out to allied intelligence agencies). They had specifically told the nominee to have his positions ready to go. But NOOOO, he stonewalled them, telling them to shove their questions about torture where the sun doesn't shine. My oh my, one simply doesn't talk to senators in that manner, especially when they have the power to can your nomination. Does anybody know how to spell brass balls?

But the senators won't can his nomination, they don't have the stones to do that. And they will be starting off in a very weak position once Brennan takes over. Civilian oversight may be almost nonexistent with the new Director. I can't imagine a better start to the Brennan era.

The French Foreign Legion had been knocking the crap out of Al-Qaeda in Mali. Over the last couple days the bad guys have regrouped and started fighting back, halting the string of lightning victories enjoyed by the good guys. AQIM is tough. AQIM doesn't just roll over and play dead. The French have responded by mobilizing Tuareg rebels, throwing them into the fight, even though this is controversial and anti-democratic; also it puts France in the position of dictating the eventual political map of Mali, tsk tsk. Good move, anything to win. This move has CIA fingerprints all over it. Isn't it nice to have a new sheriff in town?

Cold War II: Over the past year Japanese fighter jets have scrambled against Chinese fighter jets about 100 times. Nothing like this has happened since WW II. A week ago Chinese warships started painting Japanese warships with targeting radar, a prelude to launching missile volleys. This has never happened before. Defense experts say that war between Japan and China is impossible for two reasons: such a war is "unthinkable" and the trade flows between the two Asian giants are large. This is what I have to say about "unthinkable"... I just thought about such a war so its not unthinkable. As far as trade flows... there is no historic relationship between high economic activity between two great powers and peaceful outcome to disputes; in other words throughout history big powers that trade with each other go to war all the time.

America is about to slash its military spending. Conventional firepower is going take a big hit. Do you think this has anything to do with the Great Dragon roaring so loudly. Is this a good day to give up sniffing glue? No, it is a bad day to give up sniffing glue, which is my cute way of saying we need to keep all our firepower up to snuff, but that's not going to happen.