Blowback from Iran?
I will keep my social/political thoughts to myself. But I can't help but wonder if I'm seeing a pattern - and if that pattern will affect the market.
The subject is Iranian efforts to get the bomb and counter-efforts to block them. Put aside whether they are or are not trying to get a bomb (they are). Focus instead on what could happen at the UN and what the impact will be.
Bush trip to China a Smoke Screen?
Usually high level trips like these achieve concrete goals, already hashed out in advance. Economic prizes are awarded, political concessions made. China announced more airplane purchases, but nothing else that I know of. It's like the agenda is vague.
Meanwhile, this trip follows hard on the heels of China's Premier visiting the White House last month. And now this week Russia announced it's concern with Iranian nuclear ambitions.
I think Bush is lobbying China hard. He has removed Russia as a potential veto threat on Iranian sanctions. That leaves China. China can hide behind Russia no longer. China no longer has wiggle room. Handling North Korea will be harder if it lets Iran get away with the same thing.
What next?
Sanctions. Economic sanctions. No direct market impact, but psychologically, it shows the US picking another fight. That's a potential market shock. And Iran has a history of threatening and retaliating (albeit through proxies). Iranian spies have been caught throughout the West in some strategic locations with video cameras, scouting out locations, one might say. They are sending a message: we can strike back. We have many willing proxy groups in Iraq, in Lebanon, in Europe, and in South America. I believe the recent bombings in Iran by unnamed Arabs were a message back to Iran by the Western Allies: we too can hit back.
How it could Play Out
One scenario is that Iran will play ball, choose a slower path to nuclear weapons, and maybe throw some Al Quaeda guys out as a sign of good faith. Syria has been taking that tack the past few months by kicking out some Palestinians and Iraqis.
Or, Iran will direct their cells to stage terror attacks in Iraq, Europe or elsewhere. Or they will practice sabre rattling and say "no." Both of these paths will lead to sanctions.
The market will drop, and that will be a major buying opportunity.
In any case, the drama of a UN showdown will affect oil prices (fears over oil supply disruption) and cause general market nervousness.
The subject is Iranian efforts to get the bomb and counter-efforts to block them. Put aside whether they are or are not trying to get a bomb (they are). Focus instead on what could happen at the UN and what the impact will be.
Bush trip to China a Smoke Screen?
Usually high level trips like these achieve concrete goals, already hashed out in advance. Economic prizes are awarded, political concessions made. China announced more airplane purchases, but nothing else that I know of. It's like the agenda is vague.
Meanwhile, this trip follows hard on the heels of China's Premier visiting the White House last month. And now this week Russia announced it's concern with Iranian nuclear ambitions.
I think Bush is lobbying China hard. He has removed Russia as a potential veto threat on Iranian sanctions. That leaves China. China can hide behind Russia no longer. China no longer has wiggle room. Handling North Korea will be harder if it lets Iran get away with the same thing.
What next?
Sanctions. Economic sanctions. No direct market impact, but psychologically, it shows the US picking another fight. That's a potential market shock. And Iran has a history of threatening and retaliating (albeit through proxies). Iranian spies have been caught throughout the West in some strategic locations with video cameras, scouting out locations, one might say. They are sending a message: we can strike back. We have many willing proxy groups in Iraq, in Lebanon, in Europe, and in South America. I believe the recent bombings in Iran by unnamed Arabs were a message back to Iran by the Western Allies: we too can hit back.
How it could Play Out
One scenario is that Iran will play ball, choose a slower path to nuclear weapons, and maybe throw some Al Quaeda guys out as a sign of good faith. Syria has been taking that tack the past few months by kicking out some Palestinians and Iraqis.
Or, Iran will direct their cells to stage terror attacks in Iraq, Europe or elsewhere. Or they will practice sabre rattling and say "no." Both of these paths will lead to sanctions.
The market will drop, and that will be a major buying opportunity.
In any case, the drama of a UN showdown will affect oil prices (fears over oil supply disruption) and cause general market nervousness.
posted by Andrew at
4:12 PM
0 Comments:
Post a Comment
Subscribe to Post Comments [Atom]
<< Home