Iraq

While 9/11 was far more traumatic for many Americans than for myself, it really messed me up emotionally for a while. I thought about joining the armed forces or the newly created Department of Homeland Security. I almost quit my job to get a graduate degree in something I could do to help fight the “war on terror.” The city of my birth was attacked and two great symbols I had seen repeatedly growing up had suddenly vanished. I never once questioned anything about 9/11 for many, many years. I was emotionally reprogrammed. I now realize that was the intent and I am not happy about it. Look, I will be the first to say I have no idea what really happened on that day, but I can tell you one thing. I am 100% convinced that it wasn’t 19 cave dwelling Al Qaeda members who hate us for our “freedoms.” I can also tell you that two planes didn’t take down three buildings. The real reason I am writing this piece today is because of a very, very important article from the NY Times, parts of which I have quoted at the top. The article shows how two former Senators have said in sworn statements that they believe the government of Saudi Arabia was directly involved in the attacks. Now, such speculation is not new; however, let’s not forget the very close relationships that many of the elite in the U.S. have with the Saudi government. Furthermore, let’s analyze some of the passages in the article in a little more detail.

Two Senators with Access to Classified Information Say Saudi Government Backed 9/11 Attack

Battle talk.

It is appropriate that as a post-mortem to tonight's GOP primary, which according to initial reports has Romney as winning both Michigan and Arizona, we have ConvergEx' Nick Colas providing an extensive summary of the factors in favor and against both the presidential incumbent, and the challenger, and in doing so handicap the possibility of election victory for either Obama or the Republican candidate, whoever he may end up being. As Colas says, 'it ain't over till it's over' - "As the battle for the 2012 Presidential election begins to pick up speed, we read a flood of reports that President Obama is a lock for reelection. And just as many that he is destined to be a one-termer. Those who believe that the winner of the 2012 election will be Republican claim that the keys to Obama’s downfall will be unemployment, skyrocketing oil prices, and increased federal spending. However, according to historical data and some political science theory, it looks like Obama has a pretty good chance of staying in the White House.... The GOP isn’t out of the race yet, but it’s up against some strong historical opposition." And while we would agree that all else equal Obama likely is a shoo-in, never before will there have been a full blown debt ceiling crisis in a repeat of August 2011 in the weeks and months leading into the election - that factor alone, in our humble opinion, could end up being the swing variable that pulls the otherwise ironclad victory away from Obama's clutch, and explains why the GOP caved so quickly on the payroll tax extension which will add $100 billion in debt, and force a debt ceiling breach ahead of November, as was first predicted on Zero Hedge. That, of course, and runaway oil: should crude continue its relentless surge, which it will if QE3 occurs, or an invasion or Iran becomes reality, Obama can kiss another 4 years goodbye.

It had been a quiet week in terms of geopolitical developments out of Middle East. Too quiet, well aside for that whole US escalating once again bit, and forcing Iran to eventually go over the edge. And while the role of the US and Iran has been extensively digested in the past few weeks, it is Iran that has remained in the shadows recently. No longer: as Al Arabiya reports, "Israeli officials say they won’t warn the U.S. if they decide to launch a pre-emptive strike against Iranian nuclear facilities, according to one U.S. intelligence official familiar with the discussions. The pronouncement, delivered in a series of private, top-level conversations, sets a tense tone ahead of meetings in the coming days at the White House and Capitol Hill. Israeli Prime Minister Benjamin Netanyahu and Defense Minister Ehud Barak delivered the message to a series of top-level U.S. visitors to the country, including the chairman of the Joint Chiefs of Staff, the White House national security adviser and the director of national intelligence, and top U.S. lawmakers, all trying to close the trust gap between Israel and the U.S. over how to deal with Iran's nuclear ambitions, according to The Associated Press." Needless to say, the thoroughly effete and comical US foreign policy has no response to follow up queries: "The White House did not respond to requests for comment, and the Pentagon and Office of Director of National Intelligence declined to comment, as did the Israeli Embassy." And while there may be no comments here, look for more warnings about Israeli citizens being targetted by deranged Iranian around the world. Because when all else fails, fearmonger. Next up: the Status Quo will be telling the world how not attacking Iran would be tantamount to global destruction. The only trade off - will the spike in crude to $150 outdo the surge in Obama's popularity rating as the Nobel Peace Prize winner puts his name in the hat for a nomination in the Nobel War Prize category as well.

Paging Paul Krugman ... Paging Professor Krugman to the White Courtesy Telephone ...

Has Anyone Noticed that the Guy Quoted Looks EXACTLY Like Sean Connery's Evil Twin?

A few days ago, before the latest breakout in crude sent Brent to all time highs in GBP and EUR (and Asian Tapis in USD just shy of all time highs), we said that "we hope our readers stocked up on gasoline. Because things are about to get uglier. And by that we mean more expensive. But courtesy of hedonic adjustments, more expensive means cheaper, at least to the US government." This was due to recent news out of Iran "where on one hand we learn that IAEA just pronounced Iran nuclear talks a failure (this is bad), and on the other Press TV reports that the Iran army just started a 4 day air defense exercise in a 190,000 square kilometer area in southern Iran (this is just as bad). The escalation "ball" is now in the Western court." We were not surprised to learn that the "Western court" has responded in precisely the way we had expected. The WSJ reports: "The Pentagon is beefing up U.S. sea- and land-based defenses in the Persian Gulf to counter any attempt by Iran to close the Strait of Hormuz. The U.S. military has notified Congress of plans to preposition new mine-detection and clearing equipment and expand surveillance capabilities in and around the strait... The military also wants to quickly modify weapons systems on ships so they could be used against Iranian fast-attack boats, as well as shore-launched cruise missiles" Which means the escalation slider was just shifted up by one more level, as Iran will next do just what every actor caught in an Always Defect regime as part of an iterated prisoners' dilemma always does - step up the rhetoric even more, as backing off at this point is impossible. Which means that crude will go that much more higher in the coming days, as now even the MSM is starting to grasp the obvious - from the Guardian: "The drumbeat of war with Iran grows steadily more intense. Each day brings more defiant rhetoric from Tehran, another failed UN nuclear inspection, reports of western military preparations, an assassination, a missile test, or a dire warning that, once again, the world is sliding towards catastrophe. If this all feels familiar, that's because it is. For Iran, read Iraq in the countdown to the 2003 invasion." And the most ironic thing is that the biggest loser out of all this, at least in the short-term is.... Greece.

Anyone Who Thinks that War Is Good For the Economy Has One Eye Covered ... And Is Only Looking At Half the Picture ...

And I thought securitization ment they where going to keep the loan docs in a safe place in some bank vault some where...

The better tone in risk markets is largely being driven by encouraging economic data from the US and Europe, which as a result saw Bunds trade in negative territory. Of note, ECB’s Liikanen has said that inflation is not a particular concern in Europe, adding that the ECB has never said that there is an interest rate floor. On the other hand, Gilts are being supported by comments from BoE’s Fisher, as well as less than impressive GDP report. Nevertheless, EUR/USD took out touted barrier at the 1.3400 level earlier in the session, while USD/JPY is trading in close proximity to an intraday option expiry at 80.60.

Why Is Social Media Censoring Criticism of the Government?

Would You Support a War Against Iran If You Knew the True Facts?

As if the market needed another bizarro catalyst to ramp even higher courtesy of an even more pronounced drop in corporate earnings courtesy of soaring energy costs, that is just what it is about to get following news of further deterioration in the Nash equilibrium in Iran, where on one hand we learn that IAEA just pronounced Iran nuclear talks a failure (this is bad), and on the other Press TV reports that the Iran army just started a 4 day air defense exercise in a 190,000 square kilometer area in southern Iran (this is just as bad). The escalation "ball" is now in the Western court. And if Iraq is any indication, after IAEA talks "failure" (no matter how grossly manipulated by the media), the aftermath is usually always one and the same...

Heading into the North American open, equities are trading lower with the benchmark EU volatility index up 1.6%, with financials underperforming on concerns that the latest Greek bailout deal will need to be revised yet again. Officials said that the deal will require Greece’s private creditors to take a deeper write-down on the face value of their EUR 200bln in holdings than first agreed. The haircut on the face value of privately held Greek debt will now be over 53%. As a result of the measures adopted, the creditors now assume that Greece’s gross debt will fall to just over 120% of GDP by 2020, from around 164% currently, according to the officials. However as noted by analysts at the Troika in their latest debt sustainability report - “…there are notable risks. Given the high prospective level and share of senior debt, the prospects for Greece to be able to return to the market in the years following the end of the new program are uncertain and require more analysis”. Still, Bunds are down and a touch steeper in 2/10s under moderately light volume, while bond yield spreads around Europe are tighter.