That seemed to get enough people involved that the ISIS jaunt down the nation was halted for the time being.
The Kurds moved into areas in the north so for now, the situation, while far from being resolved, is at least not as serious as it seemed late last week. Do not mistake what I am saying here - no one believes that there is "stability" in the region but on a relative scale, things today seem to be a bit less "horrific" may be perhaps a better way of putting it.
Whatever - the point being that the Crude oil market, which was poised last week to shoot vertical with the trading community terrified that there was going to be an imminent downfall of Baghdad and all manner of crude oil supply disruptions, seems a bit more sanguine about the events this morning.
I have been tracking both the crude oil market and the gold market in conjunction with one another to try gauging the "fear" factor a bit better.
Take a look at the HOURLY chart of Crude oil compared to the Gold price. When the ISIS offensive began garnering headlines Crude oil began rising and gold right along with it. That pattern has been continuing since the events first came onto traders' radar screens. Now that crude is weakening a tad, gold is also having trouble maintaining its upward momentum as well. The two seem to be trading in fairly close lockstep with each other.
Overnight in Asian trade gold bulls were able to reach the buy stops just above the $1280 level in gold and they set those off but once that buying was finished, the bids seemed to fade, along with crude oil weakness, and gold fell back below $1280.
Bulls need to keep prices at a level above $1280 to generate enough upward momentum to keep setting off each layer of buy stops as well as attracting fresh geopolitically driven buying.
The weakness in the mining shares is also feeding into the lack of aggressive buying over at the Comex at this point in the session.
Grains are all weaker today as heavy rains fell over the weekend in key growing areas. New crop corn is trying to hold near $4.40 but still looks heavy. July beans are leading the downside move in beans as bull spreads continue to come off.
More later...
70% of the Iraqi people is Shiʿi Muslim or other religions but not Sunni, the Iranian support comes from Shiʿi Muslims, the Kurds moved into areas in the north, and the ISIS crowd are Sunni Muslims (Sunni is a 30% minority in Iraq). I believe this fear of ISIS is quite overdone and as soon as Main Street Media realizes that, hedgefunds longs will retreat again from the oil and from the goldmarket.
ReplyDeleteThe Shia/Sunni thing is an interesting meme, but its more complicated than that -
Delete1. In Syria, 75% of President Assad's Government (and his wife) are Sunni - it's not a straight split down factional lines
2. Shiite or not, Iranians are not Arabs - just as, Sunni or not, nor are Pakistanis; these racial bonds/divisions are every bit as powerful as the religious ones
3. Saudi has a massive Shiite population, and that is what really terrifies the West
4. Like it or not, Iraq was doing ok / Libya was doing ok / Syria was doing ok until Uncle Sam decided to meddle; I always grew up believing that "If you Break It / You Own It", but that apparently doesn't apply to Fallujah or a dozen other cities which have benefited from being liberated http://revcom.us/a/027/vietnam-destroy-village.htm
I am afraid that one of the perps behind this sorry mess has previous, and the m.o. bears all the hallmarks of a Washington Op; if I were living in Nigeria, I'd be really quite worried at the moment, because that's where the party is next week
Addendum
DeleteDan, I fully appreciate that you take great pride in the US military, and it is not my intention to cause you any offence; I myself was a serving officer in the British Army during the 1980's and I too take pride in that institution
My point was twofold; firstly, the situation in Iraq and elsewhere is rarely what it seems - or, rather, how it is portrayed to us; there are frequently bigger players behind the scenes (as in Ukraine)
Secondly, whilst I respect and acknowledge the noble principles and traditions of the US military, it share two characteristics with any other military, insofar as it is directed by politicians far away from the front line for purposes which are frequently not noble or reputable, and that this "tone at the top" sometimes - often - percolates down to the rank & file and corrodes the moral fabric of individual soldiers, sailors and airmen. That is inevitable, but it is also an unavoidable fact, and the military history of the USA in the past 110 years and of the British Army before that has been studded with incidents of total inhumanity and callous barbarity.
What we have witnessed - and are continuing to witness in Iraq - was to my mind caused by the former and exacerbated by the latter, and there is an unfortunate legacy of this traceable from the Philippines War through WW2, Vietnam and Iraq right the way up to the present day.
My remark about Nigeria was well-studied, and to my mind AFRICOM is perhaps the most destabilizing and destructive force in the world today; anyone who has not hear of Boko Haram surely will do soon, and the model is the same as with ISIS. Our leaders - Blair, Bush, but also the Nobel Prizewinner - have blood on their hands, and who can be surprised if one or two scared, impressionable and misguided kids occasionally go off the rails? http://www.bbc.com/news/education-23346693
I have no disdain for our militaries; I have contempt for our politicians, and shame for some of our actions. Apologies in advance if that strikes an uncomfortable note
Postcolonial;
DeleteThanks for the comments. No offense taken here whatsoever.
One can most definitely admire, respect and esteem the nation's soldiers and their sacrifices while simultaneously being distressed over the political leaders whose choices often mean their death.
Way too soon to call, prete. And as far as MSM goes, they are worthless.
ReplyDeleteSteve
ReplyDeleteI think CIA gets most of their info about the area from media reports.
All:
The southern oil fields have not been awarded to anyone yet. Presuming the central government of Iraq does fall will Kuwait and Saudi share that huge prize ?
Remember, in the age of "Infinite Fiat", any and all inflation worries can be stopped cold by merely uttering "words".
ReplyDeleteHilarious how that big spike in grains didn't even need any help from the Fed, as they simply collapsed under their own weight.
Any time a commodity gets out of hand, Yellen will simply announce and remind everyone of her "price stability mandate" and you will see an instantaneous selloff in the CRB Index, and within weeks, a new bear market.
So far, its worked each and every time.
Just look what happened the last time this occurred, in 2011 when emerging market stocks and commodities were booming, then PRESTO!, the Fed heads utter some statement and here we are 18 months later and still in a bear market in emerging market stocks and CRB Index.
How easy is that?
gsci is 6 years off the top and 5 years off the bottom, so from where I come from, that is no-man's land and can go either way. Commod inflation may be subdued, but insurance, grocery stores and world-wide stk and bond valuations are clearly exhibiting inflationary profiles; really, would you be interested in financing Euro debt at these insane yields? Did not think so.
DeleteHow long will it be before the airstrikes begin?
ReplyDeleteI'm assuming there's already some "special" boots on the ground at this point.
Events are getting closer to Baghdad's core at a surprising pace.
"Obama Considers Special "Boots On The Ground" Forces In Iraq As Explosions Rock Baghdad Airport"
06/16/2014 - 16:40
If you like your boots on the ground, you can keep them - as long as they are Special Forces boots. Following promises that there would be no American "combat" 'boots on the ground', AP reports that President Obama is considering sending a small number of special forces to help the government in Baghdad. According to the official rules of "boots-on-the-ground"-edness, CIA and Special Forces do not count so 'officially' no promises have been broken. It's not clear how quickly the special forces could arrive in Iraq; or whether they would remain in Baghdad or be sent to the nation's north. With rumors of explosions rocking Baghdad airport, we suspect the former.
zerohedge.com