Kuwait

At least back in 2009 the most promising targets for damaging the Iranian nuclear program, specifically the weapons related development, were Plutonium production facilities (characterized primarily by the Plutonium Production Heavy Water Nuclear Reactor in Arak) and facilities critical to the "Nuclear Fuel Cycle" (most obviously the Uranium Enrichment Facility in Natanz and the Uranium Conversion Facility in Esfahan).  The Center for Strategic and International Studies' Abdullah Toucan released a detailed report comparing the mission requirements of strikes on these (and other) facilities with Israel's capabilities and concluded the mission was within Israel's grasp operationally.1  Normally we would call this report a "must read," but instead we've read it so you don't have to, as well as added some of our own research and secondary sources.  The report also examined the ballistic missile strike option and delved into some of the political and instability costs that an attack would extract (which we ignore for the purposes of this discussion).  Those sections are well worth reading, even if the political reality on the ground has changed since early 2009.

• 1. Abdullah Toukan, "Study on a Possible Israeli Strike on Iran's Nuclear Development Facilities," Center for Strategic and International Studies (March 16, 2009).

• China kept Yuan's exchange rate unchanged against the dollar, after saying it was unhitching its de facto peg.
• Crude-oil futures inched closer to the $80/bbl in late Monday morning trading in Asia.
• Stocks, commodities, US futures rally as China gets Yuan off the USD peg.
• US corporate defaults have fallen to an annualized rate of barely 1% in 2010; future uncertain.
• Yuan climbs most in 18 months as China signals end to peg; Forwards jump.

There are some, like Pimco and Whitney Tilson's T2, who enjoy talking their book, and demonstrating they just love to live dangerously by buying the stock of a company which has an Upside/Downside ratio of 1 (or 100% on both sides, with the government dead set on pushing the "equation" solidly to the D side). Then, there are those, who would rather go to Vegas, breathe in deeply some beta radiation courtesy of the Us DoD and DoE, play some serious blackjack, get the presidential suite and all the Grey Goose comped, and have the very same wining odds as a BP investment, even as the house is gamed to win in the long run (thank you HFT).For those in the first camp, below, courtesy of My Investing Notebook, is Whitney Tilson's case on why BP's stock price belongs tens of dollars higher. For the sake of Blackrock and every pensioner in the UK, we hope Tilson is correct. For now, he has a ways to get above hist cost basis.

We are currently in the midst of a Fourth Turning. This twenty year Crisis began during the 2005 – 2008 timeframe with the collapse of the housing bubble and subsequent repercussions on the worldwide financial system. It is progressing as expected, with the financial crisis deepening and leading to tensions across the world. It will eventually morph into military conflict, as all prior Fourth Turnings have. The progression from High to Awakening through the Unraveling took from 1946 until 2006. The most treacherous period of the Saeculm is upon us. The intensity of a Crisis is very much dependent upon how a country and its citizens prepare for the Crisis during the final years of the Unraveling. The last Unraveling period in U.S. history from 1984 through 2005 was symbolized by Boomer greed, materialism, debt and selfishness. When Michael Lewis graduated from Princeton University in 1985 and joined Salomon Brothers, I’m sure he didn’t realize that he would end up book-ending the Unraveling period in his two best-selling books about Wall Street.

Middle East oil countries should increase production of heavy oil as oil prices remain higher and improved technology makes it easier, those attending an industry conference in Bahrain were told. Bahrain’s oil minister, Abdulhussain Mirza, told the Heavy Oil World MENA conference that heavy oil reserves in the region were estimated at 1 trillion barrels, or 28% of total world reserves, but historically accounted for little more than 10% of production. “The vast reserve demonstrates the importance of heavy oil as a future energy source, one that cannot be overlooked and, therefore, companies that position themselves early in the heavy oil business are likely to win the game,” Mirza said, according to local news reports.

First a glance at the macro scene in China and then a look at how our China short thesis has played out thus far. Feel free to compare my work to Goldman and the other big banks, the challenge is welcome.

In an exclusive for Oilprice.com, the Wayne Madsen Report (WMR) has learned from Federal Emergency Management Agency (FEMA) and U.S. Army Corps of Engineers sources that U.S. Navy submarines deployed to the Gulf of Mexico and Atlantic Ocean off the Florida coast have detected what amounts to a frozen oil blob from the oil geyser at the destroyed Deep Horizon off-shore oil rig south of Louisiana. The Navy submarines have trained video cameras on the moving blob, which remains frozen at depths of between 3,000 to 4,000 feet. Because the oil blob is heavier than water, it remains frozen at current depths.

So everybody is asking if "Greece will make it through the Pan-European Sovereign debt crisis and if not, then who's next?" Well, we have spent at least 3 man-months answering this very question, and I am finally getting around to publishing these answers in a formal report. It is the calculations behind this very same report that has allowed me to call this Pan-European Debt thing quite accurately for the last 4 or 5 months - calls that were in direct contravention to practically every quoted political leader and most Wall Street banks may I add. Let's walk through recent history...

The following article is the first of three examining the recent unrest in Kyrgyzstan and its implications. Part 2 tomorrow will deal with the regional fallout from the “Tulip Revolution V2.0” and Part 3 will examine in detail Washington’s highest priority in Kyrgyzstan - its ongoing access to the Manas Transit Center airbase. The extraordinary events of last week in Kyrgyzstan, which saw the overthrow of President Kurmanbek Bakiyev’s administration by a popular uprising and its replacement by a provisional government have been portrayed by many in the "Beltway-istan" (Washington DC) as the latest tussle betwixt Russia and the U.S. in the ‘Great Game” for influence in the post-Soviet space. The truth is considerably more complex, however, and like a set of Russian matruishka nesting dolls, the further one digs, the more the complex realities of the situation emerge. While Moscow and Washington’s rivalry for influence with the interim leader, 59-year-old former diplomat Rosa Otambaeyva’s administration is indeed paramount, there are other players watching the debacle, from local superpowers China and India to neighboring “Stans” Tajikistan, Kazakhstan and Uzbekistan. Any final disposition of the problems emerging from the “Tulip Revolution - Part Two” will have to include consideration of these factors beyond the U.S.-Russian struggle for influence in the post-Soviet space.

In a recently declassified report by the CIA, the agency focuses on some of the core observations from the Iraq-Iran War. While still largely redacted and dated (the original memo came out in 1982), it does provide some incremental data that may be of significance should the recently disclosed bomb shipment, be put into use. Some key points: "Iran's most vulnerable choke point is the Kharg Island oil export terminal. The terminal, designed to export more than 6 million b/d, consists of an oil-loading jetty on one side of the island, a sea island off the other side, and a conventional buoy-mooring system. Approximately 25 million barrels of storage capacity are also located on the island... Other important petroleum facilities in Iran include three mainland booster stations that pump crude from the oilfields to Kharg Island. Iran has more than sufficient capacity to enable it to bypass damage to Gurreh and still maintain export levels."The CIA's views on imminent conflict driven market disruptions: "The oil market has reacted relatively calmly to the Iranian invasion because fighting has inflicted no major new damage to oil facilities or seriously threatened supply routes. The risk to the market is that the conflict will escalate to neighboring regions and disrupt the flow of oil. Surplus capacity, including inventories outside the Gulf, is insufficient to handle the potential loss of supplies if the conflict spreads. Excess oil production capacity outside the Gulf now amounts to about 3 million b/d."

Earlier we presented a very bearish piece on Emerging Markets from UBS. Now we present a somewhat opposite view from Hermitage Capital Management, which does not share quite the bearish sentiment on EM's but rather is very bullish on "frontier" markets: Kazakhstan, Saudi Arabia, Abu Dhabi, Lebanon and Nigeria. One interesting observation from Hermitage when asked which currency to own: "The answer is none of the developed market currencies...If the supply of fiat currencies is changeable at the whim of government policy, while the supply of gold or oil is fixed by the physical limitations on new production, which would you rather own as a store of value? The answer seems pretty clear to us. You want to own the commodities because they are insulated from the actions of vote-seeking politicians and their amenable central bankers who in our view will carry on in debasing their currencies." Can we get a Gold, B#@$&*s?

The United States of America, in global strategic terms, is tumbling down a series of misadventures, declining in a “step of sighs” through frustrating economic and military endeavors as it discovers that its superpower structures and massive capital wealth are insufficient to cope with a transformed world.

This transformed world was created by the very superpower capabilities and massive wealth of the West. Even the People’s Republic of China (PRC) is beginning to recognize that massive financial holdings are inadequate to address all challenges to national survival and well-being.

One nagging question that the industrial world has been asking itself since the discovery of the first oil well is what happens when the wells begin to run dry. The answer is relatively simple to imagine. We had a dry run, so to speak, when Dubai’s economy tanked a few years ago. And although the causes of Dubai’s ills and ails were financial and not oil related, the drama which unfolded gave us a watered-down version of what might transpire if and when the oil wells stop producing.

We need another six Saudi Arabias, and now!The $10 trillion price tag for Decarbonization

Remember all that pooh-poohing when the gulf states were talking about their own currency? About how silly that would be? That it would never happen? Yeah well, sort of looks like it might. True, there is a deep and very comfortable denial in the United States such that the country can spend anything it wants, pump debt to any level it likes, play whatever games it wishes with the way it counts spending, and still enjoy the benefits of a reserve currency indefinitely. That denial may be just about ready to hit reality.