Hillary Wants To Invade Pakistan

Charts: The S&P 500 has experienced its worst start to May ever by a huge margin. The second worst May start was 1930. It is not good when today’s charts resemble those from the 30s. The broad index is experiencing a historically severe waterfall pattern. This is the most damaging pattern possible. All indications are that the correction has further to go, although we have a headline driven market so a fundamental improvement in the Euro-periphery debt crisis could turn around equity and credit markets.

Fundamentals: The market is demanding that the ECB buy Greek sovereign debt or the EU extend its bailout to Portugal and Spain, putting a floor under the price of Euro-periphery bonds. If this doesn’t happen, then a second credit crunch will rock the globe and plunge the world back into recession. As of Sunday the ECB and EU are huddling, deciding what to do. The markets also want the US Fed to flood Europe with dollars. A small credit crunch is already underway as European banks refuse to lend to each other, causing a shortage of dollars. Trade finance will freeze if the Fed doesn’t step up to the plate.

Geopolitics: Because of the failed NY car bomb attempt the State Department is putting enormous pressure on Pakistan to launch an offensive in N. Waziristan, going as far as hinting that the US will send troops into Pakistan or radically beef up Special Forces already there unless the Pak Army gets into gear. Shahzad, the failed car bomber, trained with one or more Talibans in N. Waziristan. The Pak Taliban initially took credit for the car bomb attempt but has since fearfully recanted after the State Department started talking about invading N. Waziristan.
The Defense Department isn’t beating its chest nearly as hard as State. Sec. Gates points out that the Pak Army is currently halfway through an offensive grinding through a tribal land near N. Waziristan and is realistically doing everything possible. On Saturday the Pak Army killed another 15 bad guys. It’s easy for civilians to demand action; on the other hand it can't be denied that Hillary has big balls and I think the bad guys are terrified of her (as are the good guys).
America’s planned offensive in Kandahar isn’t exactly moving forward at warp speed. The US Army is bogged down designing a new system for road checkpoints that will kill fewer civilians. The new system will feature different types of checkpoints in different neighborhoods and elaborate checkpoints-in-depth. One study shows that Taliban checkpoints in areas that it controls kill fewer civilians than NATO checkpoints. As the Kandahar offensive gets underway NATO will take territory away from the Taliban and then set up checkpoints to help control the new turf. Obviously NATO checkpoints have to be superior to Taliban checkpoints. In fact the offensive can’t begin otherwise