Saudi Arabia

Two weeks ago, we revealed one part of the "Secret Deal" between the US and Saudi Arabia: namely what the US 'brought to the table' as part of its grand alliance strategy in the middle east. What was not clear is what was the other part: what did the Saudis bring to the table, or said otherwise, how exactly it was that Saudi Arabia would compensate the US for bombing the Assad infrastructure until the hated Syrian leader was toppled, creating a power vacuum in his wake that would allow Syria, Qatar, Jordan and/or Turkey to divide the spoils of war as they saw fit. The full answer comes courtesy of Anadolu Agency, which explains not only the big picture involving Saudi Arabia and its biggest asset, oil, but also the latest fracturing of OPEC at the behest of Saudi Arabia which however is merely using "the oil weapon" to target the old slash new Cold War foe #1: Vladimir Putin.

At the moment, the Ebola virus is ravaging three countries - Liberia, Guinea and Sierra Leone - where it is doubling every few weeks, but singular cases and clusters of them are cropping up in dense population centers across the world. Ebola's mortality rate can be as high as 70%, but seems closer to 50% for the current major outbreak. This is significantly worse than the Bubonic plague, which killed off a third of Europe's population. Previous Ebola outbreaks occurred in rural, isolated locales, where they quickly burned themselves out by infecting everyone within a certain radius, then running out of new victims. But the current outbreak has spread to large population centers with highly mobile populations, and the chances of such a spontaneous end to this outbreak seem to be pretty much nil. The scenario in which Ebola engulfs the globe is not yet guaranteed, but neither can it be dismissed as some sort of apocalyptic fantasy: the chances of it happening are by no means zero.

It was heinous. It was underhanded. It was beyond the bounds of international morality. It was an attack on the American way of life. It was what you might expect from unscrupulous Arabs. It was “the oil weapon” -- and back in 1973, it was directed at the United States. Skip ahead four decades and it’s smart, it’s effective, and it’s the American way. The Obama administration has appropriated it as a major tool of foreign policy, a new way to go to war with nations it considers hostile without relying on planes, missiles, and troops.  It is, of course, that very same oil weapon.

"The audience in the ballroom of the Hotel Derek included engineers for shale drillers such as Marathon, Continental and Rice. Pamela Allen, a senior reserves coordinator for Marathon, raised her hand and told Lee that she was worried that using outsized forecasts in public presentations would run afoul of the SEC and “come back to haunt us.” Singhania, the Marathon spokeswoman, said she was unable to comment on Allen’s remarks without seeing a transcript. “If a lot of people get burned -- and I think a lot of people can and will be burned -- by these numbers in the investor presentations, there may be a push by investors to get the SEC to do something about it,” Lee said during the workshop."

And just like that. everything is crashing. Whether it is Asia, Europe, or even US futures, an entire generation of traders are waking up to something few have seen in the past 6 years: a very rare sea of red only this time with the main difference that the perpetual backstop of all risk, the Fed and/or "Edward Quince", may not be there to halt the collapse.

Thesis:  Oil supply is where the pressure is coming from and the China-Russian oil deal has not undermined the dollar, but OPEC. 

Global economic growth remains weak and vulnerable and the global financial system remains very fragile. The ebola virus has the potential to be the straw that breaks the proverbial camel’s back. 

Stocks and commodities fell globally today due to concerns about the spread of Ebola and declining economic growth. Precious metals bounced from near multi month lows.

Ranking 5th in the world for 'executions', as we noted previously, the US is among proud executing-nations like Iran, Saudi Arabia, and China. But when we drill down, there are a handful of states that are carrying the 'execution' weight for the rest of America as they try to reach #1 in the world (even as fewer Americans support the death penalty)...

Having accidentally stumbled upon the awkward truth - that many governments in the Middle East are either implicitly or explicitly funding terrorist organizations, such as ISIS, to fight Syria's al-Assad regime - Vice President Joe Biden has been doing the rounds the last few days apologizing for any inconvenience his Harvard speech last week may have caused. As Biden's spokeswoman explained, "the vice president apologized for any implication that Turkey or other allies and partners in the region had intentionally supplied or facilitated the growth of ISIL or other violent extremists in Syria." Today it was Saudi Arabia's turn (following Turkey and UAE) to hear Biden "clarify his recent remarks," and as Al Arabiya notes, "the two parties agreed that the issue was closed." Of course, one can hardly blame him for the gaffes, juggling who are friends, frenemies, and foes remains a tricky task for anyone.

Another humanitarian catastrophe may be just hours away at Kobani - a Syrian Kurdish town on the border with Turkey that is now surrounded by ISIS tanks and is being pounded day after day by ISIS heavy artillery. Already this lethal phalanx, which fuses 21st century American technology and equipment with 12th century religious fanaticism, has rolled through dozens of Kurdish villages and towns in the region around Kobani, sending 180,000 refugees fleeing for their lives across the border. Self-evidently the lightly armed Kurdish militias desperately holding out in Kobani are fighting the right enemy - that is, the Islamic State. So why has Obama’s grand coalition been unable to relieve the siege?

Here are some three dozen YouTube videos released over the past two days, showing just how the Syrian "rebels", those which the US is allegedly helping, feel about America, and US intervention "on their behalf." One man's inquiry summarizes the mood on the ground the best: "Why are you striking Nusra Front and civilians." Sadly, the US itself has no idea either. But nothing shows the complete strategic confusion that still reigns in Obama's camp than the following poster held by a "rebel"child protester...

The composition of the force carrying out airstrikes in Syria highlights the logistical complexity of this kind of operation. Most of the U.S. aircraft taking part in the operations over northern Iraq and Syria are based in and around the Persian Gulf, meaning they are operating far from their origins. Bahrain, Jordan, Saudi Arabia, the United Arab Emirates and Qatar reportedly participated in the initial operations in Syria, adding further complexity and coordination issues.

For those to whom the recent US campaign against Syria seems a deja vu of last summer's "near-war" attempt to ouster its president Bashar al-Assad, which was stopped in the last minute due to some very forceful Russian intervention and the near breakout of war in the Mediterranean between US and Russian navies, it is because they are.  And as a reminder, just like last year, the biggest wildcard in this, and that, direct intervention into sovereign Syrian territory, or as some would call it invasion or even war, was not the US but Saudi Arabia - recall from August of 2013 - "Meet Saudi Arabia's Bandar bin Sultan: The Puppetmaster Behind The Syrian War." Bin Sultan was officially let go shortly after the 2013 campaign to replace Syria's leadership with a more "amenable" regime failed if not unofficially (see below), but Saudi ambitions over Syria remained. That much is revealed by the WSJ today in a piece exposing the backdoor dealings that the US conducted with Saudi Arabia to get the "green light" to launch its airstrikes against ISIS, or rather, parts of Iraq and Syria."The process gave the Saudis leverage to extract a fresh U.S. commitment to beef up training for rebels fighting Mr. Assad, whose demise the Saudis still see as a top priority."

Thanks to a dizzying barrage of lies, mainstream media fear-mongering and a couple of beheadings, the Obama Administration finally achieved its long sought after war in Syria. The tactic that proved most effective in mobilizing the American public back into a shivering, post-9/11 fetal position, was the same tactic used by elites in the UK to convince Scotland against voting for independence. That tactic... is fear.

"We did it for your own good," could perhaps be the mantra of President Obama's address to The United Nations' General Assembly this morning as the Nobel Peace Prize winner looks his fellow world-leaders in the eye and explains why the US unilaterally invaded Syria to save them all from the Dread Pirate Roberts ISIS/ISIL/Islamic State (and now The Khorasan Group). As AP reports, on Wednesday afternoon, Obama will convene an unusual meeting of the U.N. Security Council, during which members were expected to adopt a resolution that would require all countries to prevent the recruitment and transport of would-be foreign fighters preparing to join terrorist groups such as the Islamic State group. Good luck with that.