Since in the New Normal no geopolitical events appear to have any adverse impact on risk and asset prices (because the central banks are always there to protect investors should the market "plunge" by say 5%) with general newsflow completely irrelevant on what has been a straight line up in the S&P since the announcement of QE4 in December 2012, one might as well see how much further geopolitical events can be pushed further before it all crashes.
In other words, time for this weekend's geopolitical update.
Overnight both Pakistan and Iran have done their best to add to the geopolitical instability, which has already englufed Ukraine, and half the middle-east and north Africa, when on one hand Indian and Pakistani troops intensified firing across the border over the weekend killing at least four, an Indian official said on Sunday, straining ties between the arch rivals who recently called off top-level diplomatic talks. On the other moments ago news broke that Iran had shot down an Israeli spy drone heading for Iran's Natanz nuclear enrichment facility.
Taking these one at a time.
First, Reuters reports that lime last week India said its foreign secretary would not meet with her Pakistani counterpart as scheduled on Monday because of plans by Pakistan to consult separatists from the border state of Jammu and Kashmir ahead of the meeting.
The cancellation dashed any hopes of near-term peace deliberations, chances of which had risen after Pakistani Prime Minister Nawaz Sharif attended the inauguration of Indian Prime Minister Narendra Modi about three months ago.
The Himalayan region of Kashmir has been a bone of contention between India and Pakistan since both countries became independent in 1947. They have fought three wars and came close to a fourth in 2001 and there have been regular clashes on the Line of Control that divides Indian- and Pakistan-controlled Kashmir.
Giving ammunition to hawks on both the sides against resuming talks, firing across the border has picked up.
According to India's Defence Ministry, there have been 70 ceasefire violations by Pakistan in Jammu and Kashmir since Modi took over.
Naturally, both sides accused each other: "Pakistani troops violated ceasefire again today and restored to heavy firing targeting 22 Border Security Force (BSF) posts," BSF Inspector General for Jammu frontier, Rakesh Sharma, told Reuters. Sharma said two people were killed on Saturday and four were injured, including a BSF man. "We gave them befitting reply causing equal casualties on their side," he said. On the other hand, Pakistani military sources said on Saturday night that in July and August BSF had committed 23 ceasefire violations by resorting to unprovoked firing. Pakistani media reported on Sunday that three people were killed and 11 injured in "unprovoked firing" by Indian troops.
The fact the cross-border violence has resumed just as Pakistan is facing its own internal political crisis, with the movement of Imran Khan seeking to destabilize the Sharif government and lead to a political overhaul (in the process throwin some choice words America's way), will hardly facilitate a prompt de-escalation of hostilities.
In other news, Iran said it had shot down an Israeli spy drone that was heading for its Natanz nuclear enrichment site, Iranian media reported. "The downed aircraft was of the stealth, radar-evasive type and it intended to penetrate the off-limits nuclear area in Natanz ... but was targeted by a ground-to-air missile before it managed to enter the area," state news agency ISNA said, citing a statement by Iran's Revolutionary Guards.
Israel's desire to halt Iran's nuclear enrichment process has been ongoing for years, and was the reason for the first infamous "Red Line" comment made several years ago at the UN by Israel's Netanyahu. Iran and six world powers are trying to negotiate an end to the standoff which has led to damaging economic sanctions imposed on the Islamic Republic.
Israel, widely assumed to have the Middle East's only atomic arsenal, demands Iran be stripped of all nuclear technologies, something Tehran rules out and which most foreign diplomats deem unrealistic.
Iran has accused Israel and its allies in the West of assassinating its nuclear scientists and attacking its nuclear sites with computer viruses. Israel has always declined comment on such accusations and on Sunday its military said it did not comment on foreign reports.
The Revolutionary Guards said of the drone incursion: "This wily act further exposed the Zionist regime's adventurous temperament and added yet another black page to a record filled with crime and mischief."
If confirmed, an aircraft built by Israel's state-owned Aerospace Industries known as the Heron, or the more powerful Heron TP, is likely to have been involved for such a long-range mission. Military commanders in Israel have described both as a possible means of monitoring Iran and other countries.
Of course, Iran could be merely pulling an Ukraine and making it all up just to make Israel's foreign standing appear incompetent in the global arena, although it will have to work very hard for it to attain "America incompetence" status.
Finally, Al Jazeera reported that Islamic State fighters have seized the Tabqa military air base, the last stronghold of the Syrian army in Raqqa province, a monitoring group said. The Syrian Observatory for Human Rights said clashes were still taking place on the outskirts of the airport on Sunday, but the facility was under the group's control and strewn with bodies of "dozens" of soldiers.
Syrian state television, meanwhile, reported the "evacuation" of the airport, citing a military source. "After heavy fighting by the forces defending the Tabqa airport, our forces implemented a regrouping operation after the evacuation of the airport," state television said in a breaking news alert.
It added that army troops were launching "precision strikes" against "terrorist groups in the area, inflicting heavy losses".
Regime forces had repelled three previous attacks on the base. Warplanes backed forces on the ground and carried out six new raids on Sunday on different targets.
The air base is one of the most significant government military facilities in the area, containing several warplane squadrons, helicopters, tanks, artillery and ammunition.
Rami Abdel Rahman, director of the Britain-based Observatory, said the fighters had also seized several checkpoints, hanging up at one the head of a soldier who had been killed in the fighting and decapitated.
And speaking of ISIS, the "Junior Varsity" al-Qaeda has once again managed to unite not only the US and Syria (which was bomed by the former fore several years giving rise to ISIS in the first place), but also Iran and Iraq, with the former sending "hundreds of troops into Iraq to join battel against the Islamic State."
Hundreds of soldiers crossed the border on Friday in a joint operation with Kurdish Peshmerga forces to take back Jalawla in Diyala province, an official Kurdish source who asked not to be identified told Al Jazeera. He said the Iranian forces retreated back across the border early on Saturday.
Foreign Ministry spokeswoman Marzieh Afkham dismissed the reports of any Iranian military presence in Iraq.
According to the official IRNA news agency, she said Tehran "has a close watch on field developments in Iraq sensitively with regards to mutual cooperation and international commitments and takes into consideration cooperation with the Iraqi government".
Wrapping up the ISIS coverage, also over the weekend, Qatar, the state long suspected, and confirmed, of funding not only Syrian rebels but also ISIS, spoke up rejecting "accusations of giving financial support to fighters of the Islamic State group who have seized large swathes of territory in Iraq and Syria, and condemned their "barbaric" murder of a US journalist."
Foreign Minister Khaled al-Attiyah's comments on Saturday came a day after the German government apologised for remarks by a minister accusing Qatar of financing the self-declared jihadists. Attiyah described the comments as ill-informed.
"Qatar does not support extremist groups, including [the Islamic State], in any way. We are repelled by their views, their violent methods and their ambitions," he said in a statement released in London.
"The vision of extremist groups for the region is one that we have not, nor will ever, support in any way."
The best news: Obama is heading back to DC from his well-deserved 2-week vacation, and is sure to make all of these geopolitical troubles promptly go away.