investorpolitico

1. HAPPY Under pressure the Syrian Government buckles. The Alawites stage a coup against Assad with the help of Russia. This would be the preferred outcome of US, Saudi, Russia. This would spur a rally in the market – Oil USD 95 Chances 15%

2.  SLIGHTLY WORRIED A limited strike against Syria with no major consequences – this would practically take the edge from the Syrian Army (taking down the air superiority). The repercussion will be mainly felt in Lebanon with the Hezbollah under pressure. This would produce a 2-5% fall in the market – Oil US D 115  Chances 45%

3  WORRIED A limited strike against Syria with a limited response from Syria and Hezbollah. The biggest threat from Syria are two. The Syrian Electronic Army (already attacked New York Times, Twitter and the water infrastructure of Haifa (Israel)- attack repelled). This would produce a 5-10% in the market – Oil US D 130 Chances 30%

4 ABOVE ALL FEARS -A limited strike against Syria and full retaliation against Israel and Turkey and US/EU Electronic Infrastructure . As Turkey is a NATO member NATO will have to be involved. Israel will retaliate against Iran and Iran would probably attack also Saudi Arabia (in reality Syria is a proxy war Iran/Saudi) . Critical EU/US infrastructure will be targeted and the US would retaliate with EM Pulse bomb (similar to the one seen in Sci Fi movie such as Transformers). This would be a full blown recession and a second Arab spring . OIL US D 150-200 Chances 10%

Already the fog of war is settling over Syria.

Israel and Turkey have  deployed is missile batteries along the borders.

There are unconfirmed report of Assad in Tehran and a Russian airplane carrying away top Syrian official families.

There are unconfirmed report of Syrian strategic centers to be evacuated.

Even the Al Qaeda jihadist are in a kind of an issue as they cannot be seen supporting the US, but they are (there is even a rift between Al Qaeda core and Al Qaeda Iraq).

Newspapers give list of potential targets as they were lollies

And the first real resistance for oil prices is USD135 (a mini one at USD118), +20USD

As Hezbollah (Iranian proxy) declared that, in case of US Syrian attack, they will attack Israel, in Israel the IDF is starting distributing gas mask and the population is on the verge of hysteria. As of markets..don’t try and catch a falling knife. PS first electronic shot has been done..the Syrian Electronic Army brought down the NYT and twitter websites

I always talked about the US shale oil gas revolution is a world game changer. One of the first hints is a quick data I found: the new smartphone Motorola Moto X made by Google in the US equivalent to the IPhone or Galaxy S4 made in China costs just USD 4 more to make. And no transport. This is just the start.

As I wrote yesterday the markets are rebounding, more for technical reason than anything else (bollinger bands on SP500 for one) – maybe a good moment for getting out?

Ladies and Gentlemen make your choice:

– Quantitative Easing US – yield on US T bond 1=

– Next Federal Reserve Chairman

– US Debt Ceiling

-German Elections

-Greek bailout (new one) or other wobbles in Eastern Europe

-Berlusconi/Italian Government or Rajoy/Spanish Government

– Syria and Egypt (oil prices)

– Japan or China surprises

Plenty to worry about, these two months!

The market is showing considerable strength today, supported also by good Chinese data. I would not be surprise if it tried to do a false break of ASX200: 5,165 before rolling over (SPX 1,650)

The news of the mass scale chemical attack in Syria is a bit worrying. One year ago President Obama has said that the usage of chemical weapons was a clear red line.

President Obama does not want another Middle Eastern war, but he also cannot afford to be seen as going back on his word.

There will be UN resolutions and this time Russia and China will have difficulties in blocking them. And also if they get blocked, the “crime against humanity” involved in using gas against civilian is grave enough to justify an action from the “allies of Free Syria”.

What President Obama can do short of a full involvement? The easiest solution would be a “no fly zone” or, even better, as time and resource deployment, a cruise missile attack that eliminates the Syrian Air force (you cannot target the chemical weapon directly as the fall out would be even worse than a chemical attack).

Together with the situation in Egypt, the geopolitical risks are start to increase again