Iraq is back, Wall Street, Big Oil not amused

Iraqi soldiers. Where are they today?
Iraqi soldiers. Where are they today? (Public domain photo, Spc. Jeffrey Alexander, US Army, via Wikipedia.)

WASHINGTON, June 12, 2014 – Since the media, the Democrats and the organized left decided to go collectively ballistic after the Y2K elections, business, the markets, and politics itself have been increasingly and inextricably entwined in an ever-tightening Gordian knot.

Latest case in point: the ongoing and seemingly instantaneous collapse of the at-least-moderately independent Iraq and Afghanistan that this country shed a great deal of blood to set in place. Yes, Iraq is back, and Wall Street, Big Oil and ultimately the voters will not be amused at what comes next.

As the hard left’s designated water carriers, the MSM have almost universally created a pernicious new myth of a perpetually evil America that’s succeeded in undermining almost any remaining political or economic advantage this country has left. This has aided and abetted Barack Obama, who is at last being recognized as likely the worst president the U.S. has ever had.

READ ALSO: Eric Cantor’s election defeat: Wall Street loses a good right arm

Obama can’t solve the current Iraq disaster without essentially repealing his own utterly disastrous international policies or lack thereof, which, of course, he will never do since he is more infallible than the Pope. So this story, a veritable American Dunciad, is likely to end badly while somehow being reported by the media as yet another manifestation of the brilliance of the current administration. Everything else must still be Bush’s fault.

Case in point: this morning’s beyond-stupid international newspaper headlines, as in the Syndney Morning Herald’s “Western invasion paved way for Iraq’s terror crisis,” and the predictably Maoist Guardian trumpeting “We anti-war protesters were right: the Iraq invasion has led to bloody chaos.”

Headlines like these are bloody stupid as far as we’re concerned, including the media insistence on describing the resurgent, beheading-happy Al Qaeda terrorists, aka “ISIS,” as “militants.” Please.

In truth, it’s the left’s suicidal tendencies that are enabling the current mess that’s endangering long-stable Western institutions and democracy itself. American business, investments, and the American people themselves will pay dearly for this along with the editors and headline writers who pen such stupid stuff.

All this, of course, began to have a serious impact on the markets, in evidence during yesterday’s trading and in the forefront yet again today. While markets have arrived at historical or near-historical peaks this month, the continuing low-volume rally is getting long of tooth, and “sell in May,” which didn’t work this year, may soon become a more convincing “sell in June.”

As of roughly noon today, the Dow is down over 60 points, with the S&P 500 off about 7.50 and the NASDAQ down roughly 14. Averages are weak, though not yet a disaster, but traders—at least those who aren’t enjoying their mansions and yachts out in the Hamptons—are getting nervous.

READ ALSO: Gorilla in the room: Obamacare and unemployment

The Eric Cantor upset yesterday got the country club Republicans all wobbly with uncertainty. The seemingly-out-of-nowhere Iraq collapse has goosed oil prices nicely even as OPEC is allegedly tightening the supply strings to counter the current U.S. fracking-led crude oil bounty.

As CNBC reported this morning, “Brent futures rose above $110 a barrel and crude jumped above $106 a barrel, with futures lately up $1.50, or 1.6 percent, at $106.02 a barrel, amid a Sunni militant uprising in Iraq that had rebels controlling two cities.”

And this cynical Administration has literally opened the floodgates for hundreds of thousands of amnesty-seeking illegal aliens to swarm into the American Southwest—a veritable World War Z of permanent, lockstep Democrat-to-be voters who, when forcibly legalized as citizens through mass amnesty, will put an end to America’s two-party system.

For markets, which traditionally hate uncertainty, all this miserable convergence of events may begin to look like fiscal Armageddon, so mass selling in a thin market could commence at any time. Indeed, there’s evidence that a lot of professional traders were slipping out the back door as early as February this year.

It’s a mess, all right, and there’s no way out. Although we were never there, it’s beginning to feel to us like it must have felt in this country circa 1859-1860 when another disastrously feckless Administration, led by Democrat James Buchanan, sat around watching the Nation collapse into Civil War while the country was forced to await for many long months, the arrival of an actual new and effective President to take a stand.

Hopefully for both the American people and the markets, the interregnum period of this utterly failed presidency will not lead to similar bloodshed when a new leader attempts to repair this country before it goes the way of the Roman Empire, not with a bang but a whimper.

Today’s trading

Just when we were getting cautiously optimistic, the world is getting out of control again as per our above observations, souring the remaining optimism of those American investors who aren’t on summer hiatus and of headline-driven HFTs alike.

Stocks are trending broadly down today, and this trend could continue off and on for quite some time.

As Iraq boils, beaten down precious metals, particularly gold and iffy supplies of palladium could be a decent trade, although we hesitate to put the yellow metal in an uptrend as of yet. Our favored ways of trading these, as we’ve mentioned before, are the ETFs SGOL for gold and PALL for palladium, in part because they’re supported by actual bullion in their vaults and also because our discount brokerage lets us trade them without a commission.

Short to midterm treasurys, via ETFs, may temporarily be a good trade as well, although the general trend is likely in the opposite direction longer term.

Meanwhile, we’re challenged as to just what will benefit in this kind of environment, so we’re back to what we started doing in April, selling, little by little, positions where we’re decently up at the moment.

I.e., it’s “defense time” again, so caution is the watchword. If things deteriorate faster, we may decide to hedge with a few different short ETFs. But not yet.


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Terry Ponick
Biographical Note: Dateline Award-winning music and theater critic for The Connection Newspapers and the Reston-Fairfax Times, Terry was the music critic for the Washington Times print edition (1994-2010) and online Communities (2010-2014). Since 2014, he has been the Business and Entertainment Editor for Communities Digital News (CDN). A former stockbroker and a writer and editor with many interests, he served as editor under contract from the White House Office of Science and Technology Policy (OSTP) and continues to write on science and business topics. He is a graduate of Georgetown University (BA, MA) and the University of South Carolina where he was awarded a Ph.D. in English and American Literature and co-founded one of the earliest Writing Labs in the country. Twitter: @terryp17
  • Joe V.

    Remember that this POTUS has been hell bent on destructions since day one. I am sure he had seen this would be the results of pulling out our troops too early. No we also have to worry about the 10,000 troops he will leave behind to die in Afghanistan. Destruction of the US is his goal, to include destruction of all US credibility from all foreign nations that now see us as week and no longer respect us. Destruction of our military by inserting political goals and action into the war against terrorists by tying the hands of our soldiers with the politically charged Rules of Engagement. Destruction of the American citizens by disarming, igniting race, and class wars, limiting the freedoms, and destroying the constitution that have always kept us free.

  • MrD

    How about a simple math test? The Muslim Brotherhood:Wahhabi/Sunni + 73% of Kenyan Muslims Sunni,+ Al Qaeda Sunni.Iran (Valerie Jarrett born and raised Iran)Sunni.Sadam Shiite,Iraq regime Shiite.Iraq falls,Iran moves in,the Sunni caliphate begins.Add it up folks.Is Obama a Sunni Muslim?

    • Barry Penders

      Sunni….his birth dad was Sunni.

  • Sandra Leigh Olson Rogers

    “When the Whip Comes Down” (sorry Mick & the Stones), Americans will wake-up, but it will be too late. We’re going to hell in a handbag & the ones of us who see it & have been trying to warn people are looked at like we grew a 2nd head, their disbelief is so evident. July 1 is only a mere 19 days away when yet another of oblahblah’s EO’s goes into effect, which will not be fun. I am currently unemployed, have no health insurance & I will resist oblahblah care!! Our time to act is quickly coming to a close.

  • Liberalism is Nonsense

    In related news, here are the US deaths in Afghanistan, by year:Bush2001: 52002: 302003: 312004: 492005: 942006: 872007: 1112008: 151Total = 558Obama2009: 3032010: 4972011: 4942012: 2942013: 115Total = 1,703

    • amadaun

      Thanks for the stats, gents. Accurate, too, as far as I can tell. The Washington Post used to regularly print pages and pages of color pictures of GI’s killed in Iraq and Afghanistan when Bush was President. This heavy coverage stopped, of course, not long after the current White House golf champ took office. I’m sure this was just a coincidence, though.

  • coalgateOps

    In related news, here are the US deaths in Afghanistan, by year:Bush2001: 52002: 302003: 312004: 492005: 942006: 872007: 1112008: 151Total = 558Obama2009: 3032010: 4972011: 4942012: 2942013: 115Total = 1,703