The increasing likelihood of some form of limited US led military action in Syria is compounding concerns about the stability of the world’s key oil producing region and Barclays warns that it will likely exert upward pressure on prices until the nature of the possible military intervention becomes apparent. But the bigger risk for the oil market is the potential for the Syrian conflict to spread to neighboring producing countries and imperil regional output, as the Syrian conflict is fueling broader sectarian tensions across the entire Middle East and has become something of a proxy war. The problem for global oil prices is that all of this Middle East volatility is taking place against the backdrop of a recent rise in unplanned outages in the oil market outside Syria. In sum, Barclays is concerned that with geopolitical tension and physical outages on the rise, crude oil markets are at an inflection point.

• MILITARY OPERATION AGAINST SYRIA WOULD ONLY WORSEN CONFLICT - DUMA CHAIRMAN
• MOSCOW ALARMED BY SOME COUNTRIES' DELIBERATE ACTIONS TO UNDERMINE PRECONDITIONS FOR POLITICAL-DIPLOMATIC SETTLEMENT OF CONFLICT IN SYRIA - FOREIGN MINISTRY
• LAVROV DISAGREES WITH U.S. ON BLAMING SYRIAN GOVERNMENT FOR CHEMICAL ATTACK IN TELEPHONE CONVERSATION WITH KERRY - RUSSIAN FOREIGN MINISTRY
• RUSSIA BELIEVES EXPERTS' WORK IN SYRIA SHOULD BE SUPPORTED, FACILITATED AS MUCH AS POSSIBLE - FOREIGN MINISTRY

Presented with little comment aside to note that it seems appropriate to watch the following 133 seconds to get some context of just what is occurring once again...

But the U.S., Britain and Israel have Used Chemical Weapons within the Last 10 Years

There has been much discussion as of late about the need for interest rates to rise as they have been historically way too low for too long.  However, is that really the case? The average long term interest rate in the U.S. has been 5.49%  (median is 4.91%) since 1854.  However, that average rate would be much lower if the "spike" in interest rates in the 1960's and 70's were removed which would mean that the current long term interest rate is likely more aligned currently with historical norms.  This is particularly the case when compared to the much slower rates of economic growth that currently exists. What we find find most interesting currently are the ongoing discussions about whether or not the U.S. is in a recession.  The reality is that such discussions are relatively pointless in the broader context.  The "Great Depression" was not just one very long "recessionary" period but rather two recessions that "bookended" a period of relatively strong economic growth.

An ugly day all around...

30Y Treasury yield - biggest 4-day yield compression in 15 months
Dow Transports - biggest single-day loss in ~5 months (2nd worst in 11 months)
Nasdaq - 2nd worst day in 10 months
AAPL - worst day in 3 months (2nd worst day of 2013)
USDJPY - biggest gain in JPY in 10 weeks
WTI - biggest single-day gain in 10 months
Financials - worst day in 10 months

In no particular order: Weak (and strong) US data (good or bad news?), War, Taper (Treasuries 'special'), Debt Ceiling, German elections, New Fed Chairman, imploding developing markets and collapsing global currencies... (S&P 500's first close <100DMA in 2013) it is on... (oh and S&P 500 futures 2nd biggest volume day in 2 months)

Financialization and the Neocolonial Model of credit-based exploitation leave immense human suffering in their wake when speculative credit bubbles inevitably implode.

Yesterday the Telegraph's Evans-Pritchard dug up a note that we had posted almost a month ago, relating to the "secret" meeting between Saudi Arabia and Russia, in which Saudi's influential intelligence chief Prince Bandar bin Sultan met with Putin and regaled him with gifts, including a multi-billion arms deal and a promise that Saudi is "ready to help Moscow play a bigger role in the Middle East at a time when the United States is disengaging from the region", if only Putin would agree to give up his alliance with Syria's al-Assad and let Syria take over, ostensibly including control of the country's all important natgas transit infrastructure. What was not emphasized by the Telegraph is that Putin laughed at the proposal and brushed aside the Saudi desperation by simply saying "nyet." However, what neither the Telegraph, nor we three weeks ago, picked up on, is what happened after Putin put Syria in its place. We now know, and it's a doozy.

Syrian President Bachar al-Assad has warned President Obama not to take military action against his country since: “Failure awaits the United States as in all previous wars it has unleashed, starting with Vietnam and up to the present day”.

The US has been stockpiling helium in ‘The Federal Helium Reserve’ (no, really) – an underground reservoir near Amarillo – since it was built in 1929. There is also a processing plant and 450 miles of pipelines. The US produces about 75% of the world’s helium, with half of that stored in the aforementioned reserve. Although helium is abundant, it is not economically feasible to capture and extract it from the atmosphere. The problem is that the Congress passed ‘The Helium Privatization Act’ in 1996, which stated that the government would effectively end sales from the reservoir once its debt was paid off. And this is expected to happen in, um, early October.

The US is demanding a sum of $6 billion - the total loss associated with the "London Whale" debacle - in compensation for JPMorgan's mis-selling of mortgage-backed-securities. The FT reports that, unsurprisingly, the bank is resisting the payment, which would be its single biggest penalty in a catalog of expensive run-ins with US authorities and one of the largest post-crisis settlements by any bank. The FHFA said the bank falsely claimed that loans backing $33bn of mortgage-backed securities complied with underwriting guidelines and that it "significantly overstated the ability of the borrowers to repay their mortgage loans". It seems, perhaps, it is time to trade in the old jewelry for some new Kremlin cufflinks (the enemy of your enemy is your friend?)

For the first time since the most recent rally began in November, S&P 500 futures have retested (and broken below) the 100-day moving average within days of a previous break (without making new highs). It would appear the BTFD mentaliity is less exuberant with war and a tapering Fed in the background. And for those great rotators... 30Y yields are at 2 week lows...

As with all propaganda - be it war-mongery, politics, or economics - one can always find some data 'fact' to support your opinion. Presented with little comment - a tale of two consumer confidences...

Chess is a violent sport...We've all heard this record before... (here, have another freedom lie)

Just when the world thought Europe was the new cleanest dirty shirt, ECB's Asmussen and Germany's Merkel have opened the can of European worms once more. First Asmussen...

• *ASMUSSEN SAYS ECB IS NOT AN ECONOMIC ALL-PURPOSE WEAPON
• *ASMUSSEN SAYS OMT PROGRAM LEGALLY POSSIBLE (a year later, still not sure?)
• *ASMUSSEN SAYS GERMANY 3Q WILL BE 'SOMEWHAT WEAKER' THAN 2Q

and then Merkel...

• *MERKEL SAYS GREECE SHOULDN'T HAVE BEEN LET INTO EURO AT ENTRY
• *MERKEL SAYS SCHROEDER RESPONSIBLE FOR `FALSE' GREECE DECISION

So that would appear to be it for those hoping for her to soften her stance post-elections... and remember Greek debt is soaring once again.