Israel

Memo to the Arab World: Good news and bad news with the re-election of Barack Obama to the White House. The good news is that a victory by the Republican candidate Mitt Romney would have given Israel and its current leadership a free hand at continuing a policy of arrogance that will lead the region towards greater mayhem. On the other hand, with Obama in the Oval Office, don’t expect anything drastically different to happen in the Middle East in so far as US involvement goes. And if Obama’s acceptance speech is anything to judge by, where his only mention of anything related to foreign affairs was a reference to "freeing ourselves from foreign oil," it seems obvious that the Obama administration will want to focus on solving domestic issues. At the end of the day these are issues that matters most to the average American who would rather not have to worry about the Middle East and terrorism – that is until they come knocking at our doors as they did on September 11, 2001.

Of all the hollow and uninspired elections that this country has suffered through over the past several decades, one might think that at some point long ago the American public would have finally struck a plateau of disenfranchisement; that we could sink no further into despondency, that there is a saturation limit to the corruption of our voting process.  Unfortunately, there has been no such luck.  We have to say that in all honesty we have never seen more people gut jumbled and disgusted with our electoral system than we have in 2012. In 2012, it will not be about voting.  It will not be about “winning”.  It will not even be about getting to the next election.  It will be about survival. We're sorry to say that the idea that one man will do less damage than the other is a naïve sentiment.  Democrat?  Republican?  Obama?  Romney?  The crimes and calamities wrought will be exactly the same.  Take a look into our crystal ball and see the future.  Here is how the winner will destroy America.

"Around the year 2005, a sudden spark will catalyze a Crisis mood. Remnants of the old social order will disintegrate. Political and economic trust will implode. Real hardship will beset the land, with severe distress that could involve questions of class, race, nation and empire." Strauss & Howe wrote these words in 1997. They understood the dynamics of how generations interact and how the mood of the country shifts every twenty or so years based upon the generational alignment that occurs as predictably as the turning of the seasons. The last generation that lived through the entire previous Crisis from 1929 through 1946 has virtually died off. For those who doubt generational theory and believe history is a linear path of human progress, I would point to the last week of chaos, disarray, government dysfunction, and misery of those who didn’t prepare for Superstorm Sandy, as a prelude to the worst of this Crisis. The lack of preparation by government officials and citizens, death, destruction, panic, anger, helplessness and realization of how fragile our system has become is a perfect analogy to our preparation for this Fourth Turning. The regeneracy of the nation will occur during the next presidential term. The mathematical impossibility of sustaining our economic system is absolute.

It would appear, based on the latest war games from Israel's Institute of National Security Studies, that we should all go back to sleep and not worry about the impact of an Israeli strike on Iran's nuclear infrastructure. The reason not to worry is simple - either it ignites World War III (which we presume means it will be all over very rapidly and we will be blissfully unaware until its too late to be capable of achieving anything) or - as they suspect (and gamed out) - there will be a focus on 'containment and restraint' with Iran unable to ignite the Middle East. The result is predicated on 'actors' motivated by rational considerations; which seems entirely irrational. All the gory details below...

With everyone's attention focused on the aftermath of hurricane Sandy, some may have forgotten that the Middle East is the proverbial powder keg, just waiting for an Archduke and a lit match, not necessarily in that order. Moments ago, Israel's military reminded us of just that when it reported that 3 Syrian tanks have entered the Golan Heights DMZ. Because it appears that the absolutely deranged and insane (or at least that's how it will be portrayed) Syrian regime is not satisfied with provoking the humanistic Western media with "offensive" measures taken against both Turkey and Lebanon, it now has decided to enter the lion's mouth, and is begging, just begging, for a UN-endorsed retaliation. How soon until Syria floats a submarine into New York harbor where it explodes but only after leaving a convenient note saying "Death to the Infidels, Love Syria." Or something just as realistic.

• Scope of Sandy's devastation widens, death toll spirals (Reuters)
• On Staten Island, cries for help replaced by a loss for words (Reuters)
• China responds to Japan’s provocation (FT)
• Japan governments open to compromise to avoid “fiscal cliff” (Reuters)
• It's Global Warming, Stupid (Businessweek)
• Sharps says there is "Material Doubt" about its ability to survive (Bloomberg)
• Thomson Reuters operating profit slips, trading faces pressure (Reuters)
• Germany's Schaeuble says debt reduction is global task (Reuters)
• The Luxury Repo Men (Businessweek)
• Deutsche Bank Faces Top Surcharge as FSB Shuffles Tiers (Bloomberg)
• Storm over ‘Lagarde list’ intensifies (FT)
• Greek, European Officials Dispute Budget Reprieve (WSJ)
• Rivals part ways over economy (FT)

• Millions still lack power (WSJ); New York Region Transit Tracker (WSJ), Blackouts Remain for 6.1 Million as Power Repairs Begin (Bloomberg)
• U.S. regulator seeks $470 million from Barclays (Reuters)
• J.P. Morgan Sues Whale's Ex-Boss (WSJ)
• London Frets Future as Financial Hub Outside Bank Union (Bloomberg)
• SNB now selling EUR: Swiss Central Bank Pulls Off Euro Sleight of Hand (WSJ)
• United Said to Study Biggest Airbus A350 to Replace Jumbos (Bloomberg)
• Draghi expands role in fight to save euro (FT)
• Panasonic Plunges by Daily Limit on Loss Forecast, CDS Soars (BusinessWeek)
• Italy risks economic ‘vicious circle’ (FT)
• Starbucks's European tax bill disappears down $100 million hole (Reuters)
• Bernanke Depression Guru Seeks Roosevelt Well-Being (Bloomberg)

A cyber attack does not have to be limited to a single country and its networks.  It could be used to strike multiple countries and fuel a global firestorm of systems failures.  Globalists need a macro-crisis, a world-wide catastrophe, in order to present their “global solution” to the desperate masses. This solution will invariably include more dominance for them, and less freedom for us.  A global crisis can also be used to manipulate various cultures to forget concerns of sovereignty and think in terms of one-world action.  Surely, a worldwide breakdown can only be solved if we “all work together and all think alike”, right...? Without a doubt, a cyber attack serves the interests of elitist entities and banking monstrosities like nothing else in existence.  Set off a nuke, start WWIII, turn the U.S. dollar into stagflationary dust; a cyber attack tops them all, because a cyber attack can lead to them all while maintaining deniability for the establishment.  The fact that whispers of cyber threats have turned into bullhorn blasted propaganda should concern us all.  Are we being conditioned for a cyber event in the near future?  That remains to be seen.  However, none of us should be surprised if one does occur, especially in light of the many gains involved for globalists, and all of us should be ready to dismantle and expose any lies surrounding the event before the American public is whipped into a 9/11 style frenzy yet again

Whitney Tilson, who needs no introduction given his omnipresence on the business media and anti-omniscience (e.g. the Anti-Tilson ETF here) when it comes to stock-picking, may just have put the final nail in the coffin of Obama's chances of winning the election. Via the quill of the man that top-ticked NFLX, "Why I'm Voting for Obama Again":

In virtually every area – the economy, jobs, social issues, foreign affairs, etc. – I think Obama has done well in his first term (and am optimistic that he’ll be even better in his second term), and going forward I believe Obama and the Democrats have a more clearly defined, realistic, better plan for our country than Romney and the Republicans.

It is cloudy out there as Sandy enters the mid-Atlantic region, although for all the pre-apocalypse preparations in New York, the Frankenstorm may just be yet another dud now that its landfall is expected to come sufficiently south of NYC to make the latest round of Zone 1 evacuations about overblown as last year's Irene hysteria (of course it will be a gift from god for each and every S&P company as it will provide a perfect excuse for everyone to miss revenues and earnings in Q4). That said, Wall Street is effectively closed today for carbon-based lifeforms if not for electron ones, and a quick look at the futures bottom line, which will be open until 9:15 am Eastern, shows a lot of red, with ES down nearly 10 ticks (Shanghai down again as the same old realization seeps day after day - no major easing from the PBOC means Bernanke and company is on their own) as the Friday overnight summary is back on again: Johnny 5 must defend 1400 in ES and 1.2900 in EURUSD at all costs for just two more hours.

This past Wednesday, nobody reported that a squadron of 8 Israeli F-15 jets dropped 4 two-ton bombs on the giant Yarmouk missile factory on the outskirts of Sudan's capital Khartoum. Which is just as Israel wanted it. Because what otherwise would be a provocative incursion tantamount to war (if only Sudan wasn't a complete basket case of a country), was really nothing short of a dry-run for an Israeli attack on Iran. At least according to the Sunday Times. "A long-range Israeli bombing raid last week that was seen as a dry run for a forthcoming attack on Iran’s nuclear facilities has destroyed an Iranian-run plant making rockets and ballistic missiles in Sudan.... The raid, in which two people died, triggered panic across the city. Witnesses said they heard a series of loud blasts followed by the sound of ammunition exploding. “It was a double impact — the explosion at the factory and then the ammunition flying into the neighbourhood,” said Abd-al Ghadir Mohammed, 31, a resident. "The ground shook. Some homes were badly damaged." And... nobody cares. Here we leave it up to readers to imagine the epic horror, deep revulsion that would greet news that Iran had conducted a pre-emptive strike against Israel by blowing up a missile factory in Turkey, killing two innocent people, just to make sure it can.

Between today and the American elections; virtually nothing else will matter. Gone are the promises of social redemption from Mr. Obama’s speeches because, in my view, the promises were not delivered upon. There is no ground swell of younger voters campaigning and voting for some sort of Orwellian new world order and I wonder just how many in this sub-set will actually vote for anyone. Gone are the speeches promising new hope for the next generation because America has run up the debt to the point that something must be done and we have reached the limit of our social indulgence and so that hard choices, tough choices, are going to have to be made by whoever assumes the American presidency.

Was it just us - or was that a bit of a snoozer? Some fascinating 'off-topic' debates that dragged us from Mali to Massachusetts 1st grade math scores, and from Bayonets to Obamacare. Some reasonable amount of agreement between the two on foreign policy punctuated by flip-flopper and weakling name-calling. Ironically, given our boxing-match meme - the counterpunches were incessant though Romney seemed to play defense more and Obama appeared to more urgently change the discussion (with little impact). Lots of braggadocio on naming multi-syllabic foreign towns and leaders. Obama won the drinking-game challenge by a long-way 53:34. Obama also won the 'time-spoken' challenge (by the narrowest margin of the 3 debates) 41:42 to 41:07. Obama's odds of an election win levitated modestly from the beginning (from around 59.5% to 61.5%). Of course, Wal-Mart got very, very quiet when the cheap China import bashing started, but luckily it too was based on generic 10 second attention span talking points, and led nowhere, so the Waltons can get back to doing what they do best. So far an Obama clean-sweep on our scientific study, which of course was highly irrelevant: all the truly important foreign issues (EU, China economic ascendancy, Japanese decline) were ignored. Why? The "Mr. Chairman will get to work" of course, showing once again who is truly in charge.

This evening's main event (well aside from the baseball and the football), taking place in beautiful Boca Raton, Florida will be fought over six rounds focused on the 'never-a-dull-moment' topic of Foreign Policy. After last week's STFU stare on the Benghanzi bungle, we expect the incumbent from the blue corner to come out swinging (on his experience). The challenger from the red corner, will likely keep his distance early on as general items such as 'America's role in the world' are discussed but once his jab has been measured, and the debate switches to 'The changing face of the Middle East', we would expect the haymakers to start to be thrown. Let's get ready to deeeeebbbaaaatttteeeee! And may the first person to point out where the Straits of Hormuz are on a map, win!

With less than 20 days to go to the election, the Presidential race has tightened following Romney's performances in the debates, as the Republican challenger has overtaken the president in the national averages for the first time this year (and RealClearPolitics has him with an edge in the electoral college also). But ever the fair-and-balance bank, Citi believes that Obama's advantages remain substantial, as an incumbent president in an improving economic environment. In this broad discussion, the Pandit-less bank addresses 'the data' driving their Obama call, what would have to happen for a Romney win, the Senate and House split, The Tea Party (and other unusual events), and the 'bungee jump'-causing headline risk of the pending Fiscal Cliff debate. Everything you need to know about the election-critical states, players, and events (and who would win in a fist-fight), but were afraid to ask Wolf Blitzer.