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War on Iran Has Begun
July 13, 2006 (DAVID TWERSKY - New York Sun)
The war with Iran has begun.
Just last Friday, Iranian President Ahmadinejad warned that Israel's return to Gaza could lead to an "explosion" in the Islamic world that would target Israel and its supporters in the West. "They should not let things reach a point where an explosion occurs in the Islamic world," he said.
"If an explosion occurs, then it won't be limited to geographical boundaries. It will also burn all those who created [Israel] over the past 60 years," he said, implicitly referring to America and other Western nations who support Israel.
Years from now, the kidnapping of Corporal Gilad Shalit will be regarded like the assassination of Archduke Ferdinand. Against the backdrop of Kassam rocket fire on Israelis living within range of the Gaza Strip, it was the fate of Corporal Shalit that triggered the Israeli return to Gaza, which in turn brought the Hezbollah forces into the game.
AntiSpin: Markets are starting to price in WWIII. iTulip.com's John Serrapere has this to say:
"If the 50 DMA crosses below the 200 DMA on a week end basis (Friday July 14) it is more bearish (month-end is even more bearish). If we see the above, we would be set up for an oversold S&P crash on Monday – Tuesday July 17-18. Current market conditions are similar to conditions in Oct-1929, Oct-1987, Oct-97 (intra-day -10%) and Sep-2001, which were all times when we experienced quick declines greater than 10%. Current times have greater geo-political risks than prior crashes. I expect hedge funds that hold too much beta to be reducing beta (adjusting their exposures) at the same time as institutional portfolios are making asset allocation move out of low quality and into high quality stocks. These moves create a condition that is ripe for a bid-ask vacuum, which can customarily precipitate -3% to -5% downdrafts in the market. However, hedge funds could also push stocks down another 5% or so, creating a -10% mini-crash. If others panic we will decline even more. As I indicated last week, these crashes are usually market bottoms that take place in the autumn. Current conditions are extremely ripe for a crash with perhaps a low later in the fall, or in the spring of 2007. I do not think this summer's low will be a bottom because, there are too many negatives to discount, which take time to digest.
"Be very careful out there."
July 13, 2006 (DAVID TWERSKY - New York Sun)
The war with Iran has begun.
Just last Friday, Iranian President Ahmadinejad warned that Israel's return to Gaza could lead to an "explosion" in the Islamic world that would target Israel and its supporters in the West. "They should not let things reach a point where an explosion occurs in the Islamic world," he said.
"If an explosion occurs, then it won't be limited to geographical boundaries. It will also burn all those who created [Israel] over the past 60 years," he said, implicitly referring to America and other Western nations who support Israel.
Years from now, the kidnapping of Corporal Gilad Shalit will be regarded like the assassination of Archduke Ferdinand. Against the backdrop of Kassam rocket fire on Israelis living within range of the Gaza Strip, it was the fate of Corporal Shalit that triggered the Israeli return to Gaza, which in turn brought the Hezbollah forces into the game.
AntiSpin: Markets are starting to price in WWIII. iTulip.com's John Serrapere has this to say:
"If the 50 DMA crosses below the 200 DMA on a week end basis (Friday July 14) it is more bearish (month-end is even more bearish). If we see the above, we would be set up for an oversold S&P crash on Monday – Tuesday July 17-18. Current market conditions are similar to conditions in Oct-1929, Oct-1987, Oct-97 (intra-day -10%) and Sep-2001, which were all times when we experienced quick declines greater than 10%. Current times have greater geo-political risks than prior crashes. I expect hedge funds that hold too much beta to be reducing beta (adjusting their exposures) at the same time as institutional portfolios are making asset allocation move out of low quality and into high quality stocks. These moves create a condition that is ripe for a bid-ask vacuum, which can customarily precipitate -3% to -5% downdrafts in the market. However, hedge funds could also push stocks down another 5% or so, creating a -10% mini-crash. If others panic we will decline even more. As I indicated last week, these crashes are usually market bottoms that take place in the autumn. Current conditions are extremely ripe for a crash with perhaps a low later in the fall, or in the spring of 2007. I do not think this summer's low will be a bottom because, there are too many negatives to discount, which take time to digest.
"Be very careful out there."
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