No-Fly Zone Lite or NFZL

Charts: A wedge pattern means that if you draw a line connecting recent highs and another line connecting recent lows, the two lines form a triangle. This is a pattern that cannot continue once the triangle narrows sharply, as it did yesterday. Once the triangle narrows, the market then makes a big move in either direction which typically signals the beginning of either a rally or a correction. Today the wedge was broken downward, so we are in a technical correction.

Long War: America has told France and Britain to write the rules of engagement for a No-Fly Zone over Libya and these rules will be presented to NATO and the UN Security Council for a vote. Both NATO and the Security Council will vote only for something symbolic. Today France said it is coming up with a "No-Fly Zone Lite." The NFZL would involve only bombing Gaddafi's air strips, unless he puts children on them. If the NFZL is implemented it will be much worse than nothing. Gaddafi is winning the Libyan Civil War and the US will look as though it is helping him with foolish symbolic military action. The Arab street will think America is being cunning and duplicitous, not stupid.
The only policy that makes sense would be to engage Gaddafi in an air war, where A-10 Warthog ground support aircraft tear apart all his armor and artillery, where fire rains down upon the Libyan Army from two US aircraft carrier battle groups and the combined might of all NATO air forces. That or nothing.
Seeing that Gaddafi is winning, today Saudi Arabia opened fire on demonstrators, an effort to tamp down Rage Rebels before a scheduled Day of Rage in the Kingdom tomorrow. The US will now have to condemn the Saudis. And the condemnation will fall on deaf ears as US authority ebbs in the Mideast.
Just as in the Cold War, the US must pick winners and losers in the Long War. Mubarak (Egypt), Ben Ali (Tunisia), and Gaddafi (Libya) were American allies in the Long War. America switched horses and declared that they were enemies. Okay, now America must make sure that the new horses win and that America has control over the new horses. But switching horses like this wasn't a deliberate strategy. It was a seat of the pants move and there were no future policy options planned when the move was made.
Here is an option that is not available: America doesn't pick any horses in the Long War, America becomes a giant Switzerland and is neutral in all global conflicts. Such a policy is physically possible to sustain for a short while. In time though it will result in a much bigger war than the one America ran away from.