Saudi Arabia

Unnamed Lebanese sources claim US spec ops are now operating near Latakia, and while we must consider the source, that would mean direct combat between American troops and Iranian ground forces is virtually a foregone conclusion and would also help to explain why the Pentagon has reportedly sent in the dogfighters to patrol the skies. 

The story behind Malaysia PM Najib Razak's Goldman-backed slush fund just got even stranger as it now appears some $2.3 billion in mystery money tied to an ill-fated investment with the Saudis ended up being managed by an Australian penny stock pusher via a shady Cayman Islands account. 

Why is the price of oil so low now? In fact, why are all commodity prices so low? We see the problem as being an affordability issue that has been hidden by a growing debt bubble. As this debt bubble has expanded, it has kept the sales prices of commodities up with the cost of extraction (Figure 1), even though wages have not been rising as fast as commodity prices since about the year 2000. That period is ending as the productivity of additional debt is falling.

There's a long way to go for the Saudis and the UAE to get back into the black and indeed, even Qatar is now set to post red ink...

When Saudi Arabia moved to Plaxico themselves last November by killing the petrodollar in an effort to bankrupt the US shale space and tighten the screws on Moscow, Riyadh set in motion a series of events that culminted in a 20% fiscal deficit and, most recently, an S&P downgrade. Now, the kingdom is not only running out of money, but water and food as well.

Ahead of US spec ops deployment in Syria, the US is sending F-15C Eagle twin-engine fighters to Turkey, suggesting The Pentagon is preparing for aerial combat with the Russian air force. 

In the latest example of Washington playing catch up in the global "war" on terror PR battle, “officials familiar with the matter” have told WSJ about a concerted effort to cut off the flow of dollars to ISIS. Allegedly, the US became concerned about the amount of hard currency being shipped to Iraq over the summer. The problem: the requested amounts didn’t seem to be consistent with the country’s economic fundamentals and so, the US cut off Iraq’s access to dollar funding, nearly plunging the country into crisis.

The Fed is weighing the negative consequences of a strong dollar on corporate profits vs. unleashing inflation on the electorate, pressuring long term interest rates. We will soon see which negative scenario they favor and why.

There are a multitude of fuses affixed to dozens of powderkegs and little kids with matches are on the loose.

This weekend we saw an important action in the downgrade of Saudi Arabia, highlighting just how far the EM crisis has carried. As Ice Farm Capital's Michael Green notes, in response, Saudi CDS continues to climb, reaching its highest since 2009 (amid both default risk and devaluation concerns). The rising risks in Saudi Arabia are a reminder that growth weakness has its own feedback mechanism – if oil prices stay at these levels for an extended period of time, it appears unlikely that Saudi Arabia will remain the reliable source that the world is currently counting on.

"There's no point in other countries getting together and deciding about a system of government and the head of that state. This is a dangerous innovation which no government in the world would accept being imposed on itself. The solution to Syria's problem is elections."

The Pentagon just won another small skirmish in its long war with Social Security and Medicare. That is the unstated message of the budget deal just announced gleefully by congressional leaders and the President.  To understand why, let’s take a quick trip down memory lane.

"So again, I repeat, we're not considering any open-ended commitment. We're not considering any boots-on-the-ground approach."

"Russia and Iran have very similar objectives in that they both want to eject U.S. influence from Iraq. Any success that the militias have bolsters that goal."

ISLAMIC STATE CLAIMS RESPONSIBILITY FOR RUSSIAN PLANE CRASH IN EGYPT

In other words, a proxy organization of US "shadow government destabilizing operations", trained in U.S. ally Turkey, and openly funded by both U.S. allies Saudi Arabia and Qatar, just took down a Russian plane.