Iran

Even more mysterious update #2:

• IRANIAN CENTRAL TV CONFIRMS THAT EIGHT UK EMBASSY STAFF TAKEN HOSTAGE

Mysterious update confirming that something very fishy is going on here:

• IRAN'S MEHR NEWS AGENCY REMOVES REPORT OF HOSTAGE TAKING FROM ITS WEBSITE - NO EXPLANATION GIVEN

Today's developments are rapidly turning into a repeat of Iran-Contra:

• SIX UK EMBASSY STAFF TAKEN HOSTAGE BY PROTESTERS IN NORTHERN COMPOUND OF TEHRAN EMBASSY - MEHR NEWS AGENCY

Expect a very formal, and very forceful UK response imminently.

Luckily the market is all stable and stuff and can handle the prospect of a potential Iran war.

• SARKOZY WRITES LETTERS CONCERNING IRAN'S NUCLEAR PROGRAM
• SARKOZY SAYS IRAN'S PROGRAM IS A 'SERIOUS AND URGENT' THREAT
• SARKOZY SAYS NEW SANCTIONS WOULD FORCE IRAN TO NEGOTIATE

Now where is that weekly US naval update...

A fascinating article by Reuters this morning really brings to bear the reality that Greece faces as lenders and trade creditors refuse to help (and why should they realistically) with energy needs. The harsh reality that Iran (yes that nuclearized Iran) is the main provider of Greek oil needs surely puts into perspective what seemingly unlikely events can occur when a person, corporation, country, gets desperate. Perhaps we should reflect the other way that while all the world's bankers and money-men refuse to lend Greece money, Iran has truly become the lender of last resort for Greek survival - as it strikes us that energy needs will/should trump a coupon payment any day.

The near paralysis of oil dealings with Greece, which has four refineries, shows how trade in Europe could stall due to a breakdown in trust caused by the euro zone debt crisis, which is threatening to spread to further countries.

 

"Companies like us cannot deal with them. There is too much risk. Maybe independent traders are more geared up for that," said a trader with a major international oil company.

 

"Our finance department just refuses to deal with them. Not that they didn't pay. It is just a precaution," said a trader with a major trading house.

Let's face it: with the Iranian invasion foreplay having gone on about 3 years too long, everyone is just waiting for the flashing red "GDP boosting" headline. But to know how close we are to I-day, there is one question needing an answer: where are the boats? Below we share the latest weekly update of US naval positioning, as usual courtesy of Stratfor. The chart is self explanatory: the 5th Fleet AOR is getting just a little too crowded.

While we are looking for the full IAEA report blasting Iran and specifically its nuclear program, claiming that Iran carried out work relevant for developing nuclear arms according to a UN report citing 'credible' info, as well as having information of activities in Iran specific to nuclear weapons, we already know what Iran's response is to any potential 'provocations' from Israel. To wit: "We'll show you 'hell'" UPI explains: "Israel will learn the true meaning of "hell" if it decides a military strike against Iran is worth the risk, an Iranian national security official said. Israeli Prime Minister Binyamin Netanyahu is said to have been reviewing strike plans against Iran's nuclear infrastructure as the International Atomic Energy Agency expressed concerns about Tehran's nuclear ambitions. Iranian officials have said any attack on its nuclear infrastructure would be suicidal." And the soundbites keep getting better: "If a military challenge is started against Iran in the region, the Zionist regime will definitely be faced with a hell," Javad Jahangirzadeh, a lawmaker on Iran's national security commission, told the semiofficial Fars News Agency." Israeli Defense Minister Ehud Barak, in a Tuesday interview with Israel Radio, said Israel doesn't want war. If dragged into conflict, he said, the casualties would be low. "Israel is the strongest country in the region and it will stay that way," he added." And while a few weeks or even days ago, the outcome of this event would have been easily predictable, following the just announced "microphone" gaffe involving Sarkozy, Obama and Netanyahu, suddenly the odds are far more interesting. Regardless, at this point, aside from concluding that Keynesians everywhere must be rejoicing at the imminent GDP boost driven by the military-industrial complex, we can also venture to gamble: short glass manufacturers. In a few months there may be a natural glut.

What is today's most underreported news of the day, and the reason Brent is breaking out, is that according to WaPo, IAEA is about to report that Iran is on the verge of becoming a nuclear state: needless to say this is just the green light all of its enemies need to launch a pre-emptive strike (not to mention, GDP-boosting). Below is some must read commentary from Emad Mostaque of Religare Capital Markets on what this IAEA finding will mean for the region, for the world and for what really matters: capital markets.

First Fukushima made a repeat appearance last night with news of a repeat fission incident, a topic which has gotten absolutely zero media coverage as discussing beta, let alone gamma decay, is considered uncouth in refined society; now it is time for the fallback geopolitical hotbed to enter the stage. Sky News has reported that Israeli Prime Minister Benjamin Netanyahu is trying to rally support in his cabinet for an attack on Iran, according to government sources. "The country's defence minister Ehud Barak and the foreign minister Avigdor Lieberman are said to be among those backing a pre-emptive strike to neutralise Iran's nuclear ambitions. But a narrow majority of ministers currently oppose the move, which could trigger a wave of regional retaliation. The debate over possible Israeli military action has reached fever pitch in recent days with newspaper leader columns discussing the benefits and dangers of hitting Iran. Mr Lieberman responded to the reports of a push to gain cabinet approval by saying that "Iran poses the most dangerous threat to world order." But he said Israel's military options should not be a matter for public discussion." Which makes one wonder: why is Sky News reporting on this, and why is it a matter for public discussion?

That there are theories (and facts) blasting manipulation by various central banks to supress the price of gold over the years is not a secret to anyone (which incidentally is good for anyone who wishes to purchase gold at cheaper price, but that is the topic for another day). Yet one "conspiracy" we had not heard of until now is that America is actively doing what it can to send gold higher. That is no longer the case. A few days ago, none other than the capo di tutti Mexican cappi, Iran president Mahmoud Ahmedinejad, proclaimed that "Iran's enemies were deliberately causing the price of gold and foreign exchange to rise in a bid to undermine the Islamic Republic's economy. "The enemies and ill-wishers want to make a fuss and present wrong information to provoke and deviate the market." The plot thickens. From Reuters: "In order to disturb the market they buy a lot of gold coins with their huge amount of money ... they do the same in the foreign exchange market. But we have got enough reserves to meet all the country's needs." And there you have it: America is willing to risk the reserve status of its currency and send everyone chasing after gold simply so it can destabilize the Iranian economy... And now we've heard it all.

Ignore Slovakia: everyone has a price. This is the real news:

• RPT-SAUDI EMBASSY IN U.S. SAYS PLOT IS "DESPICABLE VIOLATION" OF INTERNATIONAL NORMS
• SAUDI OFFICIAL SAYS IRAN PLOT TO ASSASSINATE SAUDI AMBASSADOR "IS NOT GOING TO PASS EASILY"

And logically:

• IRAN REJECTS AS "PRE-FABRICATED SCENARIO" US ACCUSATION ON TWO IRANIANS ALLEGEDLY PLOTTING AGAINST SAUDI ENVOY - STATE TV

Take home: Talk is cheap but Brent here is even cheaper... Either way, it is a win win for Saudi which needs crude to go up in price.

The war watchers (such as Marc Faber and everyone else who knows what follows an episode of epic Keynesian failure) have just lowered DefCon to level 2 after in a very surprising development the US accused Iran of backing a plot to assassinate the Saudi ambassador to the US and to blow up the Saudi and Israel embassies in Washington. "The plot was part of a $1.5m “international murder-for-hire scheme” that was directly linked to Iran’s Islamic Revolutionary Guard Corps, said Eric Holder, attorney-general." Now, any press report that details Eric Holder being active in any capacity is almost certainly a confirmation of a false flag, although we will gladly reserve judgment for now. However, if this is indeed the precursor to war, at least CVN 74 and CVN 77 will be quite busy in the next few months. Also, the price chart of Brent will surely to quite surely point from the lower left to the parabolic up.

It was only a matter of time: the weakest link in the otherwise awesome idea that is a remote-controlled military, represented by the thousands of Predator and Reaper drones, has always been its biggest strength: the fact that it is remote-controlled. Which means that with no person on location, the system has always been susceptible to infiltration in the form of intermediation between the offsite pilot and the actual equipment. Such as a virus. And as Wired reports, a viral infestation, the biggest nightmare for the the US drone fleet, has just struck. "A computer virus has infected the cockpits of America’s Predator and Reaper drones, logging pilots’ every keystroke as they remotely fly missions over Afghanistan and other warzones. The virus, first detected nearly two weeks ago by the military’s Host-Based Security System, has not prevented pilots at Creech Air Force Base in Nevada from flying their missions overseas. Nor have there been any confirmed incidents of classified information being lost or sent to an outside source. But the virus has resisted multiple efforts to remove it from Creech’s computers, network security specialists say. And the infection underscores the ongoing security risks in what has become the U.S. military’s most important weapons system." Well that is truly Ironic: the "western" world tried to cripple (and failed) Iran's nuclear program with Stuxnet; it will, then, be supremely ironic if Iran retaliates by maxing out the credit cards of the US Air Force logging the credit card number as pilots purchase stuff online, and uses these to buy weaponized plutonium from Russia using Uncle Sam's credit card. 

The good old Iraq playbook is being played to the dot, just less than a decade later, and now with Iraq neighbor off by just one letter: Iran. According to Haaretz, the UN Security council "denounced Iran's failure to abide by United Nations resolutions demanding an end to the possible weaponization of its nuclear program. The Denouncement comes after International Atomic Energy Agency submits a report claiming Iran continues to make advances in uranium enrichment beyond its needs for medical applications. The United States, Germany, France and Britain joined forces in exposing Tehran's advanced 20-per-cent uranium enrichment, which is considered military weapons grade. Tehran said its enrichment program was needed for medical and civilian uses. But the UN said Tehran has not been transparent and failed to cooperate with the Vienna-based International Atomic Energy Agency (IAEA), which recently submitted a report that Iran continued to make advances in uranium enrichment beyond its needs for medical applications." Whether the US, pardon the UN, will follow up with ever escalating following directives that ultimately lead to nothing short of a land invasion is unknown for now, but if history tis any precedent, the answer is a resounding yes. Furthermore, today's decision should be taken in context with the major article in the WSJ "US Eyes Covert Plan to Counter Iran in Iraq" which does nothing but set the scene for what will inevitably follow in a few weeks or months. Expect a flare up in anti-Iran rhetoric in the next few days.

It always seems that just when there is a lull in news of geopolitcal tension, we get an update that the Iranian situation gets that more unstable. After a nearly year long hiatus brought courtesy of allegedly Israeli supervirus Stuxnet taking out Iran's entire nuclear infrastructure offline for many months, the topic of Iran's nuclear capability is once again back, and starting to stink up the join. The NYT has just reported that in an attempt to preempt a possible air strike by the US or Israel, "Iran is moving its most critical nuclear fuel production to a heavily defended underground military facility outside the holy city of Qum, where it is less vulnerable to attack from the air and, the Iranians hope, the kind of cyberattack that crippled its nuclear program, according to intelligence officials." Not surprisingly, Iran has ceased any ties with the US in terms of nuclear fuel delivery: "We will no longer negotiate a fuel swap and a halt to our production of fuel,” head of Iran’s atomic energy agency, Fereydoon Abbasi said “The United States is not a safe country with which we can negotiate a fuel swap or any other issue." Well, it took the US minutes to respond: "Tommy Vietor, a spokesman for the National Security Council, said that the Iranian plan “to install and operate centrifuges at Qum,” in a facility whose existence President Obama and Europeans leaders made public two years ago, “is a violation of their United Nations security obligations and another provocative act." Next up: an update of US Naval assets in the just passed week. Time to start focusing on those Straits of Hormuz again.

One of the more notable events in the past week was the previously discussed reopening of the Iranian Oil Bourse, an attempt by Iran to launch a venue that bypasses US sanctions against Iran which has prevented payment in the world's reserve currency for Iranian goods. "Big deal", some will say, this is not the first time Iran has attempt to upstage the Great Satan. Well, true, although as OilPrice said last week, "what it would take for Iran’s new exchange to survive and flourish are some heavy-duty customers that Washington would be wary of picking a fight with, and Tehran already has one – China... China, the world's largest buyer of Iranian crude oil, has renewed its annual import pacts for 2011. In 2010 Iran supplied about 12 percent of China's total crude imports. According to the latest report of the China Customs Organization, Iran's total oil exports to China stood at 8.549 million tons between January and April 2011, up 32 percent compared with the same period last year. Iran is currently China's third largest supplier of crude oil, providing China with nearly one million barrels per day." Still, the perceived provocation to Uncle Sam should China go ahead and slap America in the face by accepting the existence of the Kish exchange, would echo around the world. Which is why many don't think much if anything will happen. Until today, that is: according to the FT, China has decided to commence an barter system in which Iranian oil is exchanged directly for Chinese exports. The net result: not only a slap for the US Dollar, but implicitly for all fiat intermediaries, as Iran and China are about to prove that when it comes to exchanging hard resources for critical Chinese goods and services, the world's so called reserve currency is completely irrelevant. The implications of this are momentous, especially for US debt, whose indomitability is only predicated upon the continued acceptance of the currency it backs as a global reserve. If China is now openly admitting to the world that it does not need US monetary intermediation, and by implication, the "debt" backing said intermediation, what then? And who will follow China next?

The last three years of global recession have dealt a major blow to American capitalist ideas trumpeted throughout the world on the value of “free markets.” Wall St has been revealed as a form of casino economy, with the bankster insiders gambling with other people’s, and eventually, the government’s money in the form of bailouts. As the Republicans in Congress, scenting victory in the 2012 presidential elections, hold a gun to the Obama administration’s head and rating agencies consider downgrading U.S. government bonds in light of Washington’s possible defaulting, many ideas around the world that previously seemed implausible because of the dominance of the U.S. economy are garnering renewed interest.