Nimitz Rerouted To Syria As More Destroyers Arrive; Syrians Mock Obama; Saudis Drum Up Support For Syrian StrikesSubmitted by Tyler Durden on 09/01/2013 - 21:07
While it is unknown is the US is suddenly focusing more on non-Cyprus based air support in the aftermath of the Cypriot decision to prohibit the launch of air strikes from its territory (just in time following a Russian agreement to restructure Cyprus debt), what is known, according to Reuters, is that while broad popular opinion is that the war drums are beating far more quietly following Obama's Saturday punt to Congress (a decision which can certainly still go either way), the US has decided to reroute CVN-68 USS Nimitz, and other ships in its strike group including four destroyers, in direction west toward the Red Sea "to help support a limited U.S. strike on Syria, if needed, defense officials said on Sunday."
With US President Obama now seeking authorization from Congress to attack Syria, the already spirited debate surrounding the advisability of such military action is bound to get even more lively in the coming days.
S&P futures are up 10 points (though below Friday's highs) as they open amid better-than-average volume for the Sunday evening session. Treasury futures prices have dropped notably implying around a 6-7bps yield increase with the 10Y trading around 2.84% (above Friday's high yield). The USD is modestly higher as JPY weakens but it is the oil complex that saw early chaos as it flash-crashed over $3.50 at the open before bouncing back. WTI is now holding steady at around $106. Gold and Silver followed WTI's lead with the yellow metal dropping over $20 at the open before bouncing back.
Ten days ago, it was a tongue in cheek suggestion that the Reserve Bank of India should lease their gold in a last ditch effort to procure much needed USD and keep the economic engine going. Then it was an offer so good, the citizens could simply refuse (or maybe not if it was enforced) that the millions of ounces of local wealth preserving gold be converted into Rupees in a wholesale gold purchasing campaign by the domestic banks. Now, the India Times, reports that as the dollar-starved desperation deepens, the local central bank is "discussing with banks on how to convince temple trusts to deposit their hoard of idle jewellery that could be converted into bullion." In other words, the government is going for the sacred gold which will be sold to keep the petrodollar economy functioning for another several months. Surely, yet another "transitory" measure.
Presented with little comment aside to ask (as Rick Santelli did a few months back)... just who is Ben Bernanke working for?
Someone wants to get the United States into a war with Syria very, very badly. Cui bono is an old Latin phrase that is still commonly used, and it roughly means "to whose benefit?" The key to figuring out who is really behind the push for war is to look at who will benefit from that war. If a full-blown war erupts between the United States and Syria, it will not be good for the United States, it will not be good for Israel, it will not be good for Syria, it will not be good for Iran and it will not be good for Hezbollah. The party that stands to benefit the most is Saudi Arabia, and they won't even be doing any of the fighting.
The “Great Rotation” consensus is now under pressure. A “buyers strike” is suddenly visible in late August as investors see the potential for event risk in coming weeks. September is seasonally the weakest month of the year for risk assets and the S&P500 has not recorded an official “10%” correction in 2 years, so it is no surprise that US equities, in particular, are taking a bit of a breather here. But is there something more sinister at play than a healthy correction in risk assets? Conflict (policy, military), Rates (liquidity), Asia, Speculation (forced selling) and Housing are all potential catalysts for a much more contagious autumn market event.
The Obama Administration believes military action will send a powerful message. In that, they are correct. Where they are wrong is in what message it will send and in what way that message will elicit a response. In much of the world where people share the religion common to much of Syria, the message will be: America attacks yet another Moslem nation. In the rest of the world, where governments have already declined participation in any message-sending action (except for the one exhibiting the quintessential Napoleon Complex), the message will be: there they go again, doing something they would never want done to them, and demonstrating that they alone think they can decide what deaths constitute a moral obscenity and what constitute mere unfortunate collateral damage.
September is likely to be dominated by a number of key event risks, in addition to ongoing uncertainty around the US growth outlook, the Fed’s reaction function and heightened EM volatility. We highlight the major events and likely market implications.
Want to know why things are falling apart? Just look at our soaring systemic debt and the diminishing returns on that debt. We are in a long-term trend where additional debt undermines the system as the positive returns on that debt turn negative.
After bringing the world to the edge of WWIII and nearly giving the first order to launch the ironically named Patriot missile, then dramatically punting in the very last second whether to invade Syria to Congress, something he should have done from the every beginning, Obama went on to do what he does best.
U.S. President Barack Obama is evidently not getting the multinational coalition his administration was expecting to share the burden of a limited strike operation against Syria. The British parliament has voted against a military intervention, and NATO has said it would not participate in a U.S.-led mission. The United States can either unilaterally fire a symbolic but ineffective shot to demonstrate action for the sake of action, wage a highly unpopular multi-month air-land attack alone or abandon the military campaign altogether.
The most likely path of collapse to take place within the U.S. includes economic destabilization caused by a loss of the dollar's world reserve status and petro-status. This fiscal crisis event will likely not occur in the midst of a political vacuum. The central banks and international financiers that created our ongoing and developing disaster are not going to allow the destruction of the American economy, the dollar, or global markets without a cover event designed to hide their culpability. They need something big. Something so big that the average citizen is overwhelmed with fear and confusion. A smoke and mirrors magic trick so raw and soul shattering it leaves the very population of the Earth mesmerized and helpless to understand the root of the nightmare before them. The elites need a fabricated Apocalypse. Enter Syria...