Saudi Arabia Imposes Naval Blockade On Red Sea Strait, Deploys 150,000 Troops As Iran Condemns Military ActionSubmitted by Tyler Durden on 03/26/2015 07:51 -0400
As noted earlier, the biggest significance of any Yemen conflict has little to do with its own domestic oil production, which at 133,000 bpd is negligible, but due to its location, which not only shares a border with Saudi Arabia, but more importantly due to the Bab el-Mandeb strait which connects the Red Sea with the Gulf of Aden: it is the fourth-biggest shipping chokepoint in the world by volume (3.8 million barrels a day of oil and petroleum products flowed through it in 2013) and is just 18 miles wide at its narrowest point. It’s located between Yemen, Djibouti, and Eritrea, and connects the Red Sea with the Gulf of Aden and the Arabian Sea. And since to Saudi Arabia preserving the logistics of oil supply is critical, it is hardly surprising that as Egypt's Ahram Gate reported earlier, the Saudi-led Firmness Storm coalition imposed a naval blockade on Bab El-Mandab strait earlier today. The Saudi navy's western fleet has also secured Yemen's main ports including Aden and Midi.
In a somewhat surprising turn of events, this morning's futures reaction to last night's shocking start of a completely unexpected Yemen proxy war, which has seen an alliance of Gulf State launch an air, and soon land, war against Yemen's Houthi rebels, is what one would expect: down, and down big. This is surprising, because on previous occasions one would expect the NY Fed, or its pet hedge fund, Citadel, or the BOJ or ECB (via the CME's "Central Bank Incentive Program") to aggressively buy ES to prevent a slide, something has changed, and for the BTFDers, that something may be very fatal with the e-Mini rapidly approaching a 1-handle yet again. The offset to tumbling stocks, as previously observed, is oil, with WTI soaring over 6% in a delayed algo response to the Qatar headlines.
- Saudi Arabia, allies launch air strikes in Yemen against Houthi fighters (Reuters)
- Pilot on Crashed Jet Was Locked Out of Cockpit, NY Times Says (BBG)
- Why Bombing This Tiny Oil Producer Is Roiling the Energy Market (BBG)
- U.S.-led coalition, Iraqis pound Islamic State in Tikrit (Reuters)
- Munger Says Prepare for Harder World as Buying Power Slides (BBG),Mocks Greek ‘Idiotic Idea’ You Can Vote Yourself Rich (BBG)
- The Central Banker Who Saved the Russian Economy From the Abyss (BBG)
- Bank of Canada says foreign buyers complicate housing market (Reuters)
- Investors Scoop Up Companies’ Bonds (WSJ)
- Espirito Santo Probe Turns Mariana Mortagua Into Portuguese Star (BBG)
Update: *OBAMA AUTHORIZED LOGISTICAL AND INTELLIGENCE SUPPORT TO GULF, U.S. MILITARY TAKING MILITARY ACTION TO DEFEND SAUDI BORDER, TO DEFEND AGAINST HOUTHI VIOLENCE (so US weapons are being used on both sides)
John McCain - "This is as bizarre as it is misguided – another tragic case of leading from behind.”
Earlier today we reported that, on very short notice, Saudi Arabia had moved heavy military equipment including artillery to areas near its border with Yemen, "raising the risk that the Middle East’s top oil power will be drawn into the worsening Yemeni conflict." In other words, Saudi Arabia was preparing for war. Moments ago all these warnings were borne out when Al-Arabiya reported that the latest middle-east war is now official after Saudi Arabia and Arab Gulf States had launched a bombing campaign against Yemen.
Curious to learn more about Yemen, and why over just 24 hours it has become the location of the latest war in the middle east? Then the following brief summary on the balance of power, or lack thereof, in Yemen from Stratfor should provide some useful background information.
Forget about Rig Counts, we need to see Producer Counts go down considerably, until that happens the oil market hasn`t bottomed.
UPDATE: *PRESIDENT OF YEMEN SAID TO HAVE LEFT THE COUNTRY ON BOAT FROM ADEN, AP SAYS
The countdown for yet another proxy war, this time involving Iran and Saudi Arabia, has begun.
Ignoring the considerable risks in the mid 2000s led to the global financial crisis. Irish politicians, bankers and financial experts, like their international counterparts, are slow learners ...
After three days of unexpected market weakness without an apparent cause, especially since after 7 years of conditioning, the algos have been habituated to buy on both good and bad news, overnight futures are getting weary, and futures are barely up, at least before this morning's transitory FX-driven stop hunt higher. Whether this is due to the previously noted "blackout period" for stock buybacks which started a few days ago and continues until the first week of May is unclear, but should the recent "dramatic" stock weakness persist, expect Bullard to once again flip flop and suggesting it is clearly time to hike rates, as long as the S&P does not drop more than 5%. In that case, QE4 is clearly warranted.
Did De-Dollarization Just Reach Escape Velocity? China's New Silk Road & Putin's Eurasian Trade NetworkSubmitted by Tyler Durden on 03/24/2015 23:00 -0400
The New Silk Road, actually roads - boosted by a special, multi-billion-dollar Silk Road Fund and the new Asian Infrastructure Investment Bank (AIIB), which, not by accident, has attracted the attention of European investors - symbolizes China’s pivot to an old heartland: Eurasia. Beijing has been quick to dismiss any notions of hegemony. It maintains this is no Marshall Plan. China, on the other hand, is focused on integrating “emerging economies” into a vast, pan-Eurasian trade/commerce network. And that, crucially, would have to include Russia, which is a vital part of the New Silk Road through an upcoming, Russia-China financed $280 billion high-speed rail upgrade of the Trans-Siberian railway. This is where the New Silk Road project and President Putin’s initial idea of a huge trade emporium from Lisbon to Vladivostok actually merge.
Israel Spies On U.S. Negotiations With Iran, Gives Info to Congressmen Trying to Block a Deal ... The BIGGER PictureSubmitted by George Washington on 03/24/2015 16:48 -0400
Of COURSE Israel Was Spying On U.S. Negotiations With Iran
The Wall Street Journal is reporting that Israel secretly gathered information regarding nuclear talks between Iran and the US then shared the information with members of Congress in an attempt to undermine support for the talks in what turns out to be a comically absurd game of spy vs. spy.
Following its "visual to the world" message last night by test-firing an ICBM, America appears to shifting to 'big stick' diplomacy. Following Iran's naval drills last week (attacking a replica US aircraft carrier), Sputnik News reports that as the nuclear negotiations between Iran and the P5+1 nations come to a head, the US begins Eagle Resolve, a massive military exercise in the Persian Gulf. Eagle Resolve will involve tactical exercises from the US Army, Marines, and various other military branches "with simulated portions of the exercise based on a fictional adversary." Careful to ensure Obama does not lose his Nobel Peace Prize, a CENTCOM official explained, "the exercise is not intended as a signal to Iran."
Orwell and Kafka have come to America - a nation that once was a democracy and could once claim to live under rule of law. Wake up and smell the stench of a gilded gulag, America; we're living in one whether you care to admit it or not. Due process and rule of law have been replaced with "legalized" looting by government in America.