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...
From The Guardian:
The UN nuclear agency has declared its latest inspection visit to Iran a failure, with the regime blocking access to a key site suspected of hosting covert nuclear weapon research and no agreement reached on how to resolve other unanswered questions.
The statement from the International Atomic Energy Agency was issued shortly after an Iranian general warned of a pre-emptive strike against any nation that threatens Iran.
"We engaged in a constructive spirit but no agreement was reached," the statement quoted IAEA chief Yukiya Amano as saying.
The communique said that Iran did not grant requests by the IAEA mission to visit Parchin, a military site thought to be used for explosives testing related to triggering a nuclear weapon. Amano called this decision "disappointing". No agreement was reached on how to begin "clarification of unresolved issues in connection with Iran's nuclear programme, particularly those relating to possible military dimensions", the statement said.
Apparently it is Iran's fault for seeing right through the IAEA's track record of being nothing but the catalyst for all out aggression. Here is a reminder why, courtesy of Hans Blix. And with that out of the way, we continue:
The fact that the statement was issued early Wednesday, shortly after midnight and just after the IAEA experts left Tehran, reflected the urgency the agency attached to announcing the failed outcome. The language of the statement clearly if indirectly blamed Tehran for the lack of progress.
We can already see the statements from Clinton, who will do anything to make her transition to head of the World Bank as seamless and as "deserved" as pobssible.
In the meantime, Iran is not playing possum:
Iran’s Khatam al-Anbia Air Defense Base started the four-day exercises codenamed Tharallah on Monday within an area of 190,000 square kilometers in southern Iran, with the key objective of boosting the country’s air defense near the Persian Gulf and the nation’s Bushehr nuclear power plant.
During the military drills slated in four tactical phases, the Iranian army will test and assess the operation of its surface-to-air and radar equipment, and will collect new data on the procedures.
State-of -the-art radar, artillery and missile systems as well as interceptor fighter aircraft of the Air Force will be used in the military drills.
In the first phase of the drills, the fighter aircraft of the hypothetical enemy launched attacks against local air defense forces as part of an electronic warfare exercise.
Using passive and active sensors and multilevel data collection and communications systems, the air defense forces managed to thwart the mock enemy’s measures promptly and effectively, and safeguard the country’s radar network.
Meanwhile, Iran’s Islamic Revolution Guards Corps (IRGC) Ground Forces wrapped up another drill codenamed Val Fajr in the central province of Yazd on Monday, to further enhance the combat preparedness of Iranian armed forces.
Why is Iran doing this now?
Iran maintains that the military drills are defensive in nature and meant to convey a message of peace and friendship to regional countries.
Tehran has also sent a public invitation to regional states to conduct joint naval drills with Iranian forces.
Rhetorical questions aside, 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.