Putin’s Market

Putin’s Market

If you thought I was joking about Putin, the Middle East, Eurasia, et al, just look at the chart below. The U.S. Stock Market, as illustrated by the Standard & Poors 500, hit an intraday all-time high of 2931 on October 2. We now stand at 2501, or 14.6% lower in a short six weeks.

S&P 500 - 20181219

I know, everyone is talking about President Trump’s troubles, the Fed, the Democrats, the Wall, the Shutdown, the mundane stuff. I could add Money Supply, the Multiplier, the Z-1 account. I don’t. Instead, I have a one-track mind. October 2 is the date when Jamal Khashoggi disappeared in the Saudi Consulate in Istanbul – and the date U.S. policy gurus, the media, and Monday morning generals decided to part ways with the Kingdom of Saudi Arabia. This, to me, is the big picture. The next thing you knew, Putin was playing footsie with Mohammed bin Salman at the G-20 on November 30. And the next thing you knew, the U.S. Senate, oblivious to Geopolitics 101, was voting to pull out of Yemen. Today, the President even announced he was pulling out from Syria.

It is too early to tell who of John Bolton, who understands the situation better than no one, or the President, if he is serious, will prevail, and the only schizophrenic comment I have seen so far comes from Senator Lindsey Graham – opposed to Yemen, yet opposed to withdrawal from Syria. But I know one thing for sure. Yemen is Iran’s to take. Syria is also Iran’s to take, as well as Turkey’s who is looking to decimate the Kurds, whether Syrian or not. And all three are in Putin’s bailiwick. Rest my case – the Truman Doctrine is dead, and Putin is back on his way to control the Persian Gulf. This is what the Stock Market has been telegraphing since October 2, which is why every rally has been a dead cat bounce, despite all the jawboning and commendable shows of strength.

That said, President Trump understands the big picture, hence his lonesome cowboy attitude on MBS and Yemen. KSA, UAE, Egypt and Israel also know their history book. So why pull out of Syria? The narrative sounds palatable, “we defeated ISIS,” but the reality is the same as always – who says vacuum shows the way either to the Muslim Brotherhood, Iran’s Hezbollah, Turkish forces, or Russian paramilitaries. Chaos ensues, Russia always wins. So, why pull out of Syria?

Maybe because this is not a first degree game. Maybe we need a trigger to get the pundits to understand how serious the situation is. Maybe that trigger is the vacuum, and the chaos, and Russia in the streets of Syria, and Hezbollah and Hamas at the Israeli border. Maybe this is when The End begins.

 

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