Defense Secretary Chuck Hagel says that US forces are "ready to go" if the administration decides to strike against alleged Syrian chemical weapon use. As Bloomberg notes in the infographic below, US Navy guided missile destroyers in the Mediterranean Sea are within range of Syrian targets.. and the ships have a combined inventory of more than 200 cruise missiles. On the other side, the Syrian Air Defense system is very robust, and as Stratfor notes, with an estimated 54,000 personnel, Syria's air defense network is twice the size of former Libyan leader Moammar Gadhafi's air force. Here is the Syrian theater of operations...
How do markets (US equities, Gold, Crude Oil, and the USD) react around US military conflicts...? Citi shows what happened before-and-after the Gulf War, Kosovo, Afghanistan, Iraq, and Libya... and why Syria is arguably more complex than these previous conflicts...
While most of the country is obsessing over Miley Cyrus, the Obama administration is preparing a military attack against Syria which has the potential of starting World War 3. In fact, it is being reported that cruise missile strikes could begin "as early as Thursday". The Obama administration is pledging that the strikes will be "limited", but what happens when the Syrians fight back? What happens if they sink a U.S. naval vessel or they have agents start hitting targets inside the United States? Then we would have a full-blown war on our hands. Could this be the beginning of a chain of events that could eventually lead to a massive global conflict with Russia and China on one side and the United States on the other? Of course it will not happen immediately, but we fear that what is happening now is setting the stage for some really bad things... Let us hope that cooler heads prevail before things spin totally out of control.
The letter below was sent a short while ago by House Speaker John Boehner to the president, voicing the Republican's displeasure with the Commander In chief, and criticizing the level of consultation about a potential military strike as well as demanding a clear explanation of any mission in advance of its start. Sadly, since not even Obama is quite clear why his Wall Street-based advisors demand that the US rush head first into this deficit-boosting campaign (and whose primary purpose as we have been explaining for a month is to make the Untaper possible), we doubt Boehner will get a response. Separately, as the WSJ reports, 114 House lawmakers— 97 Republicans and only 17 Democrats— have signed a letter calling on Mr. Obama to seek congressional authorization before embarking on military action in Syria. We suspect that 17 would have been substantially greater if the president engaging in unauthorized war had a last name beginning with "Buh" and ending in "Oosh."
Q. In what circumstances, if any, would the president have constitutional authority to bomb Iran without seeking a use-of-force authorization from Congress? (Specifically, what about the strategic bombing of suspected nuclear sites — a situation that does not involve stopping an IMMINENT threat?)
Obama: The President does not have power under the Constitution to unilaterally authorize a military attack in a situation that does not involve stopping an actual or imminent threat to the nation.
- Interview with Charlie Savage, December 20, 2007
If Syria is invaded by the West, then we should be getting ready for a hike in the price of Brent that some say may reach a much as $150 since it will escalate into a regional problem and affect supplies coming out of Iraq.
When it comes to the accuracy of its reporting, PressTV is somewhere just left (or right) of Debka, so take this with a metric ton of salt. However, it bears reporting on the off chance it is accurate. From PressTV:
US troops backed by tanks and fighter jets have been mobilized along the Jordan-Syria border, as the West appears to be moving toward military action against Damascus, reports say.
That said, we would wait for confirmation from at least SyriaNow before lending much if any credibility to this report.
The key overnight events were already discussed previously, but here they are again: the wholesale selloff in Asia (which subsequently shifted to Europe), the accelerating outflows from India (moment ago the SEBI website announced a net INR13.7 billion selling in Indian stocks yesterday and the near record collapse in the Indian Rupee to new record lows, and the ongoing uncertainty over Syria and what it will do to crude prices (if SocGen is right, nothing good). In brief: a market conditioned and habituated to a world in which Bernanke promises "to make everything ok" suddenly finds itself in the throes of uncertainty and following 4 years of dumb trend-following, has no idea what to do.
If SocGen is right in its just released oil price forecast in a "Syrian war world", then the global economy is about to undergo an apoplectic shock the likes of which have not been seen since the summer of 2008, when Lehman brothers had to be taken under to generate the deflationary shock sending crude from $130 to $30 in the matter of days. The French bank's forecast in a nutshell: "Base case scenario: $125 for Brent. We believe that in the coming days, Brent could gain another $5-10, surging to $120-$125, either in anticipation of the attack or in reaction to the headlines that an attack had started. In our base case, we assume an attack begins in the next week. Upside scenario: $150 for Brent If the regional spill over results in a significant supply disruption in Iraq or elsewhere (from 0.5 – 2.0 Mb/d), Brent could spike briefly to $150." And if indeed 2008 is coming back with a vengeance, the next question is who will be this year's unlucky Lehman Brothers?
The increasing likelihood of some form of limited US led military action in Syria is compounding concerns about the stability of the world’s key oil producing region and Barclays warns that it will likely exert upward pressure on prices until the nature of the possible military intervention becomes apparent. But the bigger risk for the oil market is the potential for the Syrian conflict to spread to neighboring producing countries and imperil regional output, as the Syrian conflict is fueling broader sectarian tensions across the entire Middle East and has become something of a proxy war. The problem for global oil prices is that all of this Middle East volatility is taking place against the backdrop of a recent rise in unplanned outages in the oil market outside Syria. In sum, Barclays is concerned that with geopolitical tension and physical outages on the rise, crude oil markets are at an inflection point.
Yesterday the Telegraph's Evans-Pritchard dug up a note that we had posted almost a month ago, relating to the "secret" meeting between Saudi Arabia and Russia, in which Saudi's influential intelligence chief Prince Bandar bin Sultan met with Putin and regaled him with gifts, including a multi-billion arms deal and a promise that Saudi is "ready to help Moscow play a bigger role in the Middle East at a time when the United States is disengaging from the region", if only Putin would agree to give up his alliance with Syria's al-Assad and let Syria take over, ostensibly including control of the country's all important natgas transit infrastructure. What was not emphasized by the Telegraph is that Putin laughed at the proposal and brushed aside the Saudi desperation by simply saying "nyet." However, what neither the Telegraph, nor we three weeks ago, picked up on, is what happened after Putin put Syria in its place. We now know, and it's a doozy.
Remember all of the propaganda ahead of the USA’s “democracy unleashing” invasion of Iraq in 2003. It went something like this: “We have evidence that Saddam Hussein has stockpiles of weapons of mass destruction, and even worse he has a histroy of using them, even against his own people!” Well unsurprisingly, Mr. Hussein had a little help from his friends. The United States of America. Let’s bear this in mind as our Noble Peace Prize winning President attempts to involve us in another unconstitutional war based on the fact that chemical weapons have been used. The message is clear: one man's propaganda bogeyman is another (CIA supported) man's mustard gas.
President Bashar al-Assad stressed that "Syria is a sovereign country that will fight terrorism and will freely build relationships with countries in a way that best serves the interests of the Syrian people." As Syrian TV reports, in an interview with the Russian newspaper of Izvestia, President al-Assad stressed that "the majority of those we are fighting are Takfiris, who adopt the al-Qaeda doctrine, in addition to a small number of outlaws." On the alleged use of chemical weapons, President al-Assad said that the statements by the US administration, the West and other countries were made with disdain and blatant disrespect of their own public opinion, adding that "there isn’t a body in the world, let alone a superpower, that makes an accusation and then goes about collecting evidence to prove its point." Al-Assad stressed that these accusations are completely politicised and come on the back of the advances made by the Syrian Army against the terrorists.
Syria Warns Will Defend Itself Using "All Available Means", Coordinating With Iran, Russia Ties StrongSubmitted by Tyler Durden on 08/27/2013 06:57 -0400
BREAKING: Syria says will defend itself using 'all available means' in case of US strike.
— The Associated Press (@AP) August 27, 2013