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Wall Street Fearless as Iran Declares War


With a grave threat to world peace and stability emerging in yesterday’s news, there was the Dow Average, up 72 points at the time, as oblivious to reality as a swami who’s been in a trance for a week. Concerning the magnitude of the threat, don’t take our word for it.  Here’s a link to an article that makes clear how serious Iran is about running Israel’s blockade. Ahmadinejad has pledged warships and submarines to back up Turkey’s fleet, which at this moment is steaming toward Gaza.  The impending showdown, the Iranian president vowed, “will change many issues in the world and mark the final countdown for Israel’s existence. It shows that it has no room in the region and no one is ready to live alongside it.”  Does that sound like a bluff?  Contrast the palpable menace of his words with the whimsical sound bite from Hillary Clinton earlier this week when she predicted “Iran would pull some sort of stunt in the next couple of days” to divert attention from the unity with the Security Council. Are we actually supposed to believe that the U.N., which sat by idly as the mullahs went nuclear, has the will, let alone the ability, to prevent a deadly showdown between Israel and its enemies?

Yes, Iran actually does possess submarines, although they are not known to be nuclear-armed like Israel's Dolphin-class subs

And where is NATO when you need it? Turkey is a member, albeit one whose good standing may have been fatally compromised when the country almost overnight became a blood enemy of Israel (and therefore, of America).  One surmises that strategic alliances have shifted so rapidly in the post-American vacuum ushered in by Mr. Obama, that NATO doesn’t know where it stands. There really is no NATO any more, as this incident makes clear, and so it will be up to our President alone to put the kibosh on Iran’s brazen declaration of war on a nuclear-armed country.

Turkey’s Transformation

Almost as scary is the Jekyll-and-Hyde transformation of Turkey, with a well-equipped army that has been trained to NATO standards. It seems odd that the Turks should try to project power through a seaborne flotilla, since they cannot send in the troops to back up their warships. But it needn’t come to that, since picking a fight might entail merely sinking a ship, or torpedoing a submarine, to set in motion the larger war that Ahmadinejad evidently thinks is needed to settle old scores. For some brilliant insights into Turkey’s alarming turn against secularity, we urge you to read the remarkable essay by Spengler, Fetullah Guilen’s Cave of Wonders.

In the meantime, the stock market’s failure to reef the sails ahead of a possible military confrontation between Israel and two implacable enemies suggests the threat is not being taken seriously by investors.  As much could be said of bullion’s failure yesterday to extend the previous day’s promising rally.  In fairness to investors, however, we should concede that we don’t know how, exactly, they might go about discounting the worst possibility of all – that the Gulf oil spill will eventually turn the Atlantic Ocean into a dead zone.

Is the Dow not trading 6000 points lower simply because it is incapable of interpreting events that have the potential to end civilization as we know it?

  • Daniel June 21, 2010, 8:41 pm

    I hope that if there is a war with Iran the US will create enough destruction to last the world another 75 or 100 years. I think people forgot how nasty the world wars were so here we sit with this in our laps.

  • Rich June 10, 2010, 9:50 pm

    Just bot SPX puts for insurance…

  • John June 10, 2010, 6:04 pm

    And the stock market surges higher this morning sensing all those War created jobs?


    Yes, you’ve got the picture, John. RA

  • Bernard Ebner June 10, 2010, 5:34 pm

    Just how do you suppose an Iranian fleet would get to Gaza?


    Have you seen “Fitzcarraldo?” RA

    • Benjamin June 10, 2010, 6:39 pm

      Hell, I didn’t know Iran had a fleet worth speaking of. Didn’t they ride up to one of our ships in motor boat, shouting obscenities (ouch!) a couple years back?

      Kind of like Iraq’s “armour” division when we invaded. Guys in pick-up trucks. However we managed to defeat that will be much written about in future analysis, I’m sure.

  • Rich June 10, 2010, 4:54 pm

    and trading American jobs away:

  • Rich June 10, 2010, 4:54 pm

    Bunning reaming Geithner for breaking the law on timely currency reporting on China:


  • Rich June 10, 2010, 4:12 pm

    Funny truthful blogvid.
    In other news:

  • Rich June 10, 2010, 3:49 pm

    Hey Rick
    Sorry; just don’t see it.
    Gold not moving, while other markets moving up.
    Maybe tomorrow….

  • John June 10, 2010, 3:13 pm

    Reagen and Bush Sr. should have moved to bring Russia into NATO 20 years ago. They had the political power to get it done. It would have been a layup. This would have neutralized any would be dictators like Putin,and put the final nails in the Communist parties coffin. Instead we end up having to defend Georgia against him ? Oy vey!

  • Benjamin June 10, 2010, 3:11 pm

    All I can say about the warfare part is that both Iran and Israel were deliberately set up to be states that create, sustain, and intensify geopolitical and miltary tensions.
    The “experiment” has apparently been a resounding success.

    As to why the market (particularly in gold) has not responded… We’re on the dark side of capitalism, which is to say on the debt side. Before, when credit was easy, we expected commodities to rise at the expense of other things. I think it’s safe to say that those days are over.

    And funny that Botched Petroleum should come up again. For the first time since this began, I heard the word ‘bankruptcy’ in a Good Morning America story, albeit with a question mark attatched. I can’t say for sure, but maybe if oil prices were higher that question wouldn’t be asked. And so far, two other oil disasters (though much smaller) have occurred along with BP. Oil prices have fallen sharply. There’s a moratorium on deep sea drilling. Oil hasn’t budged. And now a war in which apparently there is no stopping (whether the will or the ability is lacking). My guess: Oil won’t budge. Not enough to save BP, anyway.

    So with an ongoing environmental disaster and possibility of great big war, we have an oil company (possibly more?) that may not be keeping itself afloat. One might say that they’ve started fail at a time when they absolutely must be too big to fail. In the past, I’ve said government can buy them up on the cheapening. But in light of yesterdays essay by Cameroni… why spend in these tough times, when taking over is so, so much cheaper?

    • Rich June 10, 2010, 3:46 pm

      BP = Anglo Persian Petroleum, described by some as still trading illegally with Iran…

    • Benjamin June 10, 2010, 6:35 pm


      I’ve read about that here and there. Don’t know, but it would make sense. Turn the West into OPEC nations, using a company with questionable colors and goals? Sure, why not. Not like the “free market” was going to allow for anything less than nationalization anyway.

      But eh… maybe I’m eating my popcorn too early as I watch the blank screen in the still empty theater. Or maybe something is wrong with my tin-foil hat.

      Anyone know where I can get a _good_ hat?!

  • Gary Paul June 10, 2010, 2:54 pm

    “the Gulf oil spill will eventually turn the Atlantic Ocean into a dead zone”

    That’s a pretty far-fetched conclusion there Rick.


    Yeah, don’t we wish. RA

    • Benjamin June 10, 2010, 6:48 pm

      I think he may have meant the Gulf of Mexico. Even so, with some 600 quadrillion gallons of water… But that’s assuming it evenly dillutes, over both depth and surface. It would be no problem at all if it could, but it won’t, with no reason to think it will.

  • Daman Prakash June 10, 2010, 7:23 am

    In my view President Obama represents new thinking on geo-politics. He has empathy for thinking of world which many hardliners may disagree vehemently.

    Gone are days of colonialism in post world wars era, Marshall Plans and doctrines unleashed by many presidents did generate NATO, detente, cold wars. AFter disintegration of Soviet Union and economic leadership of China in production of consumer goods have ended that neo colonialism.

    US did spend trillions of dollars everywhere for humanatarian cause but BIG Brother attitude displayed by policy makers, media and even influential US citizens might have inflicted fear but not respect.

  • Mercurious June 10, 2010, 7:11 am

    Rick, thank you for being one of the few serious financial commentators who actually can look beyond the ‘profit opportunities’ of the Gulf disaster to see the existential implications, not just in terms of this incident’s impact but in the message it sends. To my mind, that message is clearly a death-centric one: Money trumps the life of plants, animals, traditional livelihoods, indeed it trumps Life itself. It is so far beyond the pale, it it a caricature of obscene.When I see this disaster described in strictly financial and liability terms, I can only recall the Hopi prophecies about the ultimate outcome of our ways; it seems to me we are well along the way, perhaps irretrievably so. When you deal death in so many ways, death will find a way to deal with you.

    • Jim June 10, 2010, 2:04 pm

      Mercurious, well said! it seems that anymore, life is only is valued as a means to more cash for the plutocrats. Time for a revolution!

  • Celty June 10, 2010, 7:00 am

    Well if you want to look at history on the positive side, WWII did bring the US out of the First Great Depression.
    Look, in th early 90’s, Iraq had one of the top 5 armies in the World. It was decimated within hours for the most part.
    Iran would be no different. N. Korea could damage South Korea, but outside of Chinese cooperation, N Korea too would be subdued with in days, pounded to submission by US technology.
    I think N Korea remains tethered to China, so I have less fear there than Iran, who I think will bow to religious extremism and forego economic allegiance to either Russia or China. N Korea is more about Pride. Religion overrides pride (and common sense) anyday.
    I do not agree with everything Isreal does, and I think they can be as much as a provocatuer as anyone (expansion…really?), but they ain’t (yes ain’t) trying to blow me up in my quiet suburban US town.

  • TahoeBilly June 10, 2010, 5:46 am

    Iran and North Korea are the only regimes not in the grasp of the Bilderbergers. Would I want to live in either one? Probably not, but it’s getting pretty dismal living “outside” of them as well, what be the lying, cheatin’ thieves who run our “free” world.

    I don’t like Iran any more than I know it’s any real threat to anyone, let alone North America. Did we ever find Saddam’s WMD yet after what, 8 years later? And we are there why again? Oh yea, “nation re-building” “it’s the American thing to do after all”….where is the puke bucket for even having to watch this rerun again…

    • ExNav June 10, 2010, 7:20 am

      There is a Sixth Fleet carrier battle group deployed at all times in the Med along with a Amphibious Squadron with an embarked Marine Battalion.


      Yeah, but whose side would they be on — and would the carrier group’s role be offensive, or defensive? RA

  • mario cavolo June 10, 2010, 5:37 am

    PRS…because, as I think even Rick might acknowledge, the overwhelming deflationary forces on the horizon could be a sentiment counterforce which hits broadly across all asset classes including gold for awhile…everything will get slammed, then ultimately, yea, gold would continue its relative rise against the other asset classes…

  • JohnJay June 10, 2010, 5:35 am

    When you see the flash, duck and cover!
    Gold is about twice as dense as lead, does that make it twice as good at stopping gamma rays etc?
    Better go long lead just to be sure!

  • Occdude June 10, 2010, 4:34 am

    I have a solution to this whole affair. The United States needs to send over a couple of carrier groups to HELP break the Gaza blockade, the worst thing that could happen is some Gazan kid would get a new pair of shoes and maybe some antibiotics.

    The Israelis seeing they are so outnumbered would immediately capitulate draw in their horns and seek to be more reasonable and diplomatic without big brother wielding a stick over everyones head. Our esteem in the Arab world certainly would skyrocket and terrorists might go back to killing each other for Allah, instead of plotting to how to take out New York.

    We could then pull out all our troops out of the various hot spots of the world and use them to break up the coming bread riots in this country which according to your forecast, are certain to come. With the savings of all the money we both send to Israel every year to protect itself and the money we send to their enemies to not attack Israel, we could re-industrialize our decimated manufacturing sector and began the painful process of liquidating this multi-generational profligacy.

    There’s something to be said for peace and prosperity. I know its exciting to deal with unknowns like, “where are the terrorist going to strike next?” but, I would rather us invent the next transportation device, longevity drug or a softer ply of toilet tissue, than get embroiled in a long standing argument of who or what is God, and who owns a little barren piece of desert thousands of miles away from here.

    • Rick June 11, 2010, 2:12 am

      Are you Islamic? If the U.S. were to break the blockade, the Arab world would go for Isreal’s throat. Isreal would be alone, and they have sworn, “Never another Masada!” The Middle East would be a sheet of glass within days, cutting off the flow of oil, causing stock markets to crash. Will the last one out please turn out the lights?

    • ben June 14, 2010, 5:47 am

      Our esteem in the Arab world certainly would skyrocket ?!?!?!?

      Are you kidding me? We saved millions of Muslims in Serbia…and what did it get us? A thank you? A pat on the back from the Muslim world? No…it got us embassy attacks and eventually 9/11 within a few years. You seriously misunderstand the threat we face form the Muslim world…maybe you should reserve your opinions until you read a little history about the origins of Islam and the sanguinous centuries that followed Muhammad’s revelations. But even a look at the last two decades shows that appeasing Muslims does not bring peace…ever.

  • keith June 10, 2010, 3:54 am

    I don’t wish to sound cold but I actually hope there is war in the middle east so we can get the whole thing over with and the world can move on. It’s like the energizer bunny that just keeps going and going. Anyone who understands the conflict knows it can never be won with a peace treaty or the U.S. getting involved. They need to duke it out themselves and see who the victor is. I think an all out war would be good news. Right now both sides are holding the world back. Git er’ done people.


    If israel has a neutron bomb and EMP weapons as is rumored, the shooting part of the war could be over in just a few hours, Keith. RA

  • Don June 10, 2010, 3:13 am

    From my view Iran is a pawn in the hands of their main
    scrotum tickers; mainly Moscow and Beijing. Should they choose to attempt this blockade run, I would be greatly concerned but even more so about our friends in the previous mentioned capitals. Orders for Iran to sail on the Israeli blockade are not coming from Tehran. This would prove to Sr Hutin Putin that NATO is but a paper tiger. This would greatly enhance his strategic ambitions.
    This is why gold is relatively quiet at present, however can spring into action without a moments notice. Not a very nice chess game for Israel and US to be in with current ambivalent leadership.
    Should our leadership develop the huevos; move an aircraft carrier into the fray and the BS stops. For now.
    Keep in the back of our mind for Beijing to quell social unrest from 800+m is unity for sovereignty.

  • Tom Paine June 10, 2010, 3:03 am

    Somehow I doubt that the Iranian Supreme Leader is going to allow their president to commit what would probably amount to national suicide.

  • Bill Smith June 10, 2010, 2:26 am

    Rick, read your British friends article today. He struck out, getting his facts wrong on multiple occasions. By the way, let me know when Barack stops the printing presses, OK? So far, he is doing the opposite of what your friend says.

  • PhotoRadarScam June 10, 2010, 12:56 am

    How can this not send gold over $1300?

    • Rich June 10, 2010, 4:19 pm

      Gold down $10 and BP up 10% so far…

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