- Posted by DynamicHedge
- on December 14th, 2012
Traditional state-on-state violence is on the decline. International interventions, sectarian flare-ups and geopolitical skirmishes, however, are popping up with increasing frequency. You never know where the next incident will erupt or when the tipping point will be reached. The bombing campaign against the Libyan government in 2011 came as a huge surprise to most and rocked the energy markets. The recent successful launch of North Korean long-range missile and troops being sent into Turkey for a possible intervention in Syria is a reminder that things can change fast in the geopolitical specter.
Which area will blow up next? Here’s a list of contenders.
An entrenched government still trying to suppress a massive internal uprising. Assad has completely gone off the reservation and alienated himself from virtually everyone in the region by massacring his people. The US government has just formally recognized the Syrian rebel opposition as a “legitimate representative” of the country’s people. There is very good grounds for international intervention but there isn’t much margin for error. Turkey is emerging as the power broker/boss of the Mideast.
Japan – China – Taiwan
China, Japan, and Taiwan have all laid claim to a couple of uninhabited islands in the East China Sea. These disputes happen from time-to-time. Problem is they all insist on sailing through the disputed waters with their middle fingers in the air. To ratchet up the tension the US and Japanese Navy brought a couple thousand troops to conduct scheduled military exercises in the region. What were those exercises? Mock drills defending an uninhabited island against a foreign threat. While China has publicly stated it has no plans for territorial expansion, they feel that they deserves respect from their neighbors and aren’t getting it. Let’s hope they don’t test the international community’s will with a couple “starter islands.”
The Tuareg people want Northern Mali to be independent so they made alliances with some bad guys in order to advance their agenda. Now Northern Mali has become overrun with a bunch of assholes associated with Al Qaeda. The situation has deteriorated and the government was ousted in a coup. France, Germany, and the US are ready to stomp out the last remains of Al Qaeda and will not likely stand by. Libya is the blueprint for Mali.
Check out this British travel warning:
There is a high threat of kidnapping in Mali. A number of Westerners have been kidnapped by terrorists in Mali and the Sahel region. These attacks have on occasion resulted in the murder of the hostage. Since the coup in March 2012, and in the ongoing political unrest, we judge there is a heightened threat of kidnap in Mali. Further attacks are highly likely.
As if there isn’t enough going on in the world without North Korea testing long-rang missiles. This has been described in the diplomatic channels as “another example of North Korea’s pattern of irresponsible behavior,” “highly provocative act that threatens regional security,” and “kind of a dick move.” North Korea seems to get a permanent pass on being a backwards hell-hole run by a lunatic regime and I don’t expect that to change. But who knows?
Israel – Palestine – Iran
The UN granted Palestine “enhanced status” on its way to official statehood, while Hamas denies that Israel even exists. Israel ushered in a new era of surreal when it live-tweeted the strike against a Hamas military leader. Palestine tried to shell Tel Aviv but was thwarted by the iron dome. There is an uneasy ceasefire at the moment. The whole world wants to tell Netanyahu to stop with the West Bank construction but the US might be going to war with Israel against Iran next year so it’s diplomacy over division. Iran has slow-played its uranium enrichment program in order to keep international pressure at bay. They’ve anticipated that the US would not want to get tangled up in another protracted war, but this may not be a correct assumption. Iran with nuclear weapons is intolerable to not only the West but every Gulf state .
Disclaimer: Nothing on this site should ever be considered to be advice, research or an invitation to buy or sell any securities, please click here for a full disclaimer.
DynamicHedge is an equities, futures and derivatives trader based on the West Coast. He runs a long/short opportunistic relative-value strategy within a proprietary trading group. More
- Volatility expands at the end of a bull market
- Market maps and cycle changes
- Macro that matters
- Is your brain a fortress or a wild bus ride?
- Sector Momentum Visualized
- Simple rule to improve financial decisions
- Quick observations on the 200-day moving average
- Momentum Mechanism
- How does Apple trade after earnings?
- 70 days of suffering in WalMart