Wednesday, September 12, 2007


I'm not usually one for conspiracy theories but the pieces together seem to indicate that sometime material might be brewing in the Middle East. I still judge only a 25% chance of a major incident.

The pieces:

- The biggest one: Israeli warplanes struck somewhere in Syria on September 6. Israel has been unusually reticent about the strike which the US has confirmed. Israeli authorities typically are quite upfront after military ops are executed. Speculation has cited arms headed for Hezbollah, North Korean nuclear material in transit, testing new Syrian air defences have been floated.

- Anecdotal citings that Israeli soldiers not allowed to go home for Rosh Hashanah? Uncertain what typical practice is in the IDF

- Oil has been rallying steadily and indefatigably over the past few weeks trading at all time highs

- Gold has been rallying steadily and is within sight of highs made last year

If there is a major surprise, look for crude and gold to rally, global equities and the dollar to tank as a first reaction.

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