Saudi Arabia

The circus is back in town in Washington D.C. (actually, it’s part of a permanent residency), as a congressional panel spent Thursday peppering presidential candidate Hillary Clinton with questions about her role in the Benghazi consulate attack. It’s pure political theater, but sadly, no one on this congressional panel will ask the real questions to which Americans deserve answers. And this is because the real scandal presents questions that can’t be asked, because the answers indict the entire U.S. government.

With Russia now in the driver's seat in terms of supplying crude to China, and with Iranian supply set to come back online with the lifting of economic sanctions, Saudi Arabia faces a serious threat to its dominance of the global oil market. Given the increased cooperation between Moscow and Tehran in Syria, it comes as no surprise that Ruusia and Iran are now in talks on some $40 billion in energy projects which the two countries say could lead to the formation of a new development bank.

What if the U.S. had not invaded Iraq in 2003? How would things be different in the Middle East today? Was Iraq, in the words of presidential candidate Bernie Sanders, the "worst foreign policy blunder" in American history? Let's take a big-picture tour of the Middle East and try to answer those questions. But first, a request: after each paragraph that follows, could you make sure to add the question “What could possibly go wrong?”

"We know now just how wrong everybody was....and to the rest of the world: we are done with you. Yes we wronged you but we were driven by vain men who harmed us as well as you. Even the interventions across the globe were nothing more than a way to loot the treasury. In the guise of democracy and freedom we brought war and death. We are sorry. I am sorry."

"Anything that protects the Syrian people and Syria from partition, we will not spare any effort to carry it out with our Saudi and Turkish brothers, no matter what this is. If a military intervention will protect the Syrian people from the brutality of the regime, we will do it."

As John Kerry prepares to meet Sergei Lavrov in Vienna, Putin and Assad are drawing up plans to call for elections in Syria. The idea, of course, is that Assad will prevail in a landslide, allowing Moscow to claim that the people have spoken and the regime must rightfully be restored. 

As a desperate Saudi Arabia taps the bond market to mitigate the SAMA drawdown while simultaneously attempting to muscle in on Moscow's Eastern European market share, Russian crude sales to China soared 42% in September. The result: for the second time this year, Russia has overtaken Saudi Arabia as the number one crude supplier to Beijing. 

"We wish that Iran would change its policies and stop meddling in the affairs of other countries in the region, in Lebanon, Syria, Iraq and Yemen. We will make sure that we confront Iran's actions and shall use all our political, economic and military powers to defend our territory and people."

"In the West, they talk about ‘moderate opposition,’ but we so far haven’t seen any in Syria. Any person who takes up arms and fights the legal authorities, how moderate can he be?"

After yesterday's closing ramp "prudently" just ahead of an abysmal IBM earnings report with the lowest revenues since 2002, and the latest rally in capital markets which sent European stocks to their highest level since August on the back of a barrage of global bad data which has unleashed the Pavlovian liquidity dogs screaming for moar central bank bailouts, this morning has seen a modest decline in the Stoxx 600 driven by energy names, while S&P500 futures are set to open lower on IBM's disappointment at least until the latest massive BOJ USDJPY buying spree sends the pair to 120 and the S&P solidly in the green. The biggest political event overnight was the Canadian election, where Trudeau's liberals swept PM Harper from power, capping the biggest political comeback in the country's history; the Canadian dollar is largely unchanged after initially weakening then rising.

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Submitted for your consideration: 1) "A man from northern Sweden who has praised Adolf Hitler on Facebook and participated in Nazi demonstrations has answered a call from Sweden's Migration Agency for volunteers willing to offer accommodation to refugees," 2) "I said this to Merkel too. No one should expect Turkey to turn into a concentration camp where all the refugees stay in."