Skiracer's stock slopes

[skiracer]

I bought SPIL this morning at 9.95. I have high expectations for this stock and think this is a decent entry level right here. All the specifics regarding the play are noted. Still time for an entry on this one but I don't think we will see it any cheaper than todays close for awhile. I was thinking we might see it fall a bit farther but I liked this entry this morning and took it. I missed the boat on the first breakout and didn't want to miss it again.

Doug
actually I brought SPIL to the forum on 4/26 and had taken a position in it that day. I probably mentioned it before that. I think Jiensen had it before me.

[IIC]

Doug
actually I brought SPIL to the forum on 4/26 and had taken a position in it that day. I probably mentioned it before that. I think Jiensen had it before me.

Who's Jiensen???

Cool...When I click your Skiracer's link in your signature it takes me right to my Stockcharts homepage...How'd you do that???

SPIL...Well, I'm thinking about coming out w/ the IIC 10,000...That way whatever goes up...I can claim that I told everybody ahead of time

[james1962]

500 Trading System

Take a look at the track record page of
www.consensus-trading.com That's very good trading.

[riverbabe]

Quote:
Originally Posted by riverbabe
Wow, look at ONT go!

I feel good about it but I don't like to count my money at the table and everytime I open my mouth to say how well one of my trades is going it reverses on me. It was a highlighted stock on my chartlist when it was around 2.40 range and a very strong symetrical triangle formation so the percentages were on the long sides favor. Wish you would have had it. ZIXI showing some interest this morning. I like to see that one go off.

Hope everybody got out of this one on time! River

[skiracer]

i thought this was an iteresting take on the subprime lending situation and puts it in a perspective and light based upon some qualifying parameters. Stratfor Intelligence is a well repected intelligence gathering service that provides several levels of subscriptions that provide daily reports in a CIA type daily briefing
on all the important geopolitical events and hotspots throught the international community. I subscribe for a number of reasons but what i really like is their straight forward no bs unbiased take on events. They are neither dems or repub. nor doves or hawks but do call a spade a spade regardless of where the chips may fall.





[url=http://imageshack.us][/URL

[skiracer]

All U.S. presidents eventually become lame ducks,though the lameness of any particular duck depends on the amount of power he has left to wield. It not only is an issue of the president's popularity, but also of the opposition's unity and clarity. In the international context, the power of a lame duck president depends on the options he has militarily. Foreign powers do not mess with American presidents, no matter how lame one might be, as long as the president retains military options.

The core of the American presidency is in its role as commander in chief. With all of the other presidential powers deeply intersecting with those of Congress and the courts, the president has the greatest autonomous power when he is acting as supreme commander of the armed forces. There is a remarkable lot he can do if he wishes to, and relatively little Congress can do to stop him -- unless it is uniquely united. Therefore, foreign nations remain wary of the American president's military power long after they have stopped taking him seriously in other aspects of foreign relations.

There is a school of thought that argues that President George W. Bush is likely to strike at Iran before he leaves office. The sense is that Bush is uniquely indifferent to either Congress or public opinion and that he therefore is likely to use his military powers in some decisive fashion, under the expectation and hope that history will vindicate him. In that sense, Bush is very much not a lame duck, because if he wanted to strike, there is nothing legally preventing him from doing so. The endless debates over presidential powers -- which have roiled both Republican and Democratic administrations -- have left one thing clear: The courts will not intervene against an American president's use of his power as commander in chief. Congress may cut off money after the fact, but as we have seen, that is not a power that is normally put to use.

The problem for Bush, of course, is that he is fighting two simultaneous wars, one in Iraq and one in Afghanistan. These wars have sucked up the resources of the U.S. Army to a remarkable degree. Units are either engaged in these theaters of operation, recovering from deployment or preparing for deployment. To an extraordinary degree, the United States does not have a real strategic reserve in its ground forces, the Army and the Marines. A force could probably be scraped up to deal with a limited crisis, but U.S. forces are committed and there are no more troops to scatter around.

The United States faces another potential theater of operations in Iran. Fighting there might not necessarily be something initiated by the United States. The Iranians might choose to create a crisis the United States couldn’t avoid. That would suck up not only what little ground reserves are available, but also a good part of U.S. air and naval forces. The United States would be throwing all of its chips on the table, with few reserves left. With all U.S. forces engaged in a line from the Euphrates to the Hindu Kush, the rest of the world would be wide open to second-tier powers.

This is Bush's strategic problem -- the one that shapes his role as commander in chief. He has committed virtually all of his land forces to two wars. His only reserves are the Air Force and Navy. If they were sucked into a war in Iran, it would limit U.S. reserves for other contingencies. The United States alone does not get to choose whether there is a crisis with Iran. Iran gets to vote too. We don’t believe there will be a military confrontation with Iran, but the United States must do its contingency planning as if there will be.

Thus, Bush is a lame-duck commander in chief as well. Even if he completely disregards the politics of his position, which he can do, he still lacks the sheer military resources to achieve any meaningful goal without the use of nuclear weapons. But his problem goes beyond the Iran scenario. Lacking ground forces, the president's ability to influence events throughout the world is severely impaired. Moreover, if he were to throw his air forces into a non-Iranian crisis, all pressure on Iran would be lifted. The United States is strategically tapped out. There is no land force available and the use of air and naval forces without land forces, while able to achieve some important goals, would not be decisive.

The United States has entered a place where it has almost no room to maneuver. The president is becoming a lame duck in the fullest sense of the term. This opens a window of opportunity for powers, particularly second-tier powers, that would not be prepared to challenge the United States while its forces had flexibility. One power in particular has begun to use this window of opportunity -- Russia.

Russia is not the country it was 10 years ago. Its economy, fueled by rising energy and mineral prices, is financially solvent. The state has moved from being a smashed relic of the Soviet era to becoming a more traditional Russian state: authoritarian, repressive, accepting private property but only under terms it finds acceptable. It also is redefining its sphere of influence in the former Soviet Union and reviving its military.

For example, a Russian aircraft recently fired a missile at a Georgian village. Intentionally or not, the missile was a dud, though it clearly was meant to signal to the Georgians -- close allies of the United States and unfriendly to Russian interests in the region -- that not only is Russia unhappy, it is prepared to take military action if it chooses. It also clearly told the Georgians that the Russians are unconcerned about the United States and its possible response. It must have given the Georgians a chill.

The Russians planted their flag under the sea at the North Pole after the Canadians announced plans to construct armed icebreakers and establish a deepwater port from which to operate in the Far North. The Russians announced the construction of a new air defense system by 2015 -- not a very long time as these things go. They also announced plans to create a new command and control system in the same time frame. Russian long-range aircraft flew east in the Pacific to the region of Guam, an important U.S. air base, causing the United States to scramble fighter planes. They also flew into what used to be the GIUK gap (Greenland-Iceland-United Kingdom) probing air defenses along the Norwegian coast and in Scotland.

Most interestingly, they announced the resumption of patrols in the Atlantic, along the U.S. coast, using Blackjack strategic bombers and the old workhorse of the Russian fleet, the Bear. (The balance does remain in U.S. favor along the East Coast). During the Cold War, patrols such as these were designed to carry out electronic and signal intelligence. They were designed to map out U.S. facilities along the Eastern seaboard and observe response time and procedures. During the Cold War they would land in Cuba for refueling before retracing their steps. It will be interesting to see whether Russia will ask Cuba for landing privileges and whether the Cubans will permit it. As interesting, Russian and Chinese troops conducted military exercises recently in the context of regional talks. It is not something to take too seriously, but then they are not trivial.

Many of these are older planes. The Bear, for example, dates back to the 1950s -- but so does the B-52, which remains important to the U.S. strategic bomber fleet. The age of the airframe doesn't matter nearly as much as maintenance, refits, upgrades to weapons and avionics and so on. Nothing can be assumed from the mere age of the aircraft.

The rather remarkable flurry of Russian air operations -- as well as plans for naval development -- is partly a political gesture. The Russians are tired of the United States pressing into their sphere of influence, and they see a real window of opportunity to press back with limited risk of American response. But the Russians appear to be doing more than making a gesture.

The Russians are trying to redefine the global balance. They are absolutely under no illusion that they can match American military power in any sphere. But they are clearly asserting their right to operate as a second-tier global power and are systematically demonstrating their global reach. They may be old and they may be slow, but when American aircraft on the East Coast start to scramble routinely to intercept and escort Russian aircraft, two things happen. First, U.S. military planning has to shift to take Russia into account. Second, the United States loses even more flexibility. It can't just ignore the Russians. It now needs to devote scarce dollars to upgrading systems along the East Coast -- systems that have been quite neglected since the end of the Cold War.

There is a core assumption in the U.S. government that Russia no longer is a significant power. It is true that its vast army has disintegrated. But the Russians do not need a vast army modeled on World War II. They need, and have begun to develop, a fairly effective military built around special forces and airborne troops. They also have appeared to pursue their research and development, particularly in the area of air defense and air-launched missiles -- areas in which they have traditionally been strong. The tendency to underestimate the Russian military -- something even Russians do -- is misplaced. Russia's military is capable and improving.

The increased Russian tempo of operations in areas that the United States has been able to ignore for many years further pins the United States. It can be assumed that the Russians mean no harm -- but assumption is not a luxury national security planners can permit themselves, at least not good ones. It takes years to develop and deploy new systems. If the Russians are probing the Atlantic, Pacific and Arctic again, it is not the current threat that matters, but the threat that might evolve. That diverts budget dollars from heavily armored trucks that can survive improvised explosive device attacks, and cuts into the Air Force and Navy.

The Russians are using the window of opportunity to redefine, in a modest way, the global balance and gain some room to maneuver in their region. As a result of their more assertive posture, American thoughts of unilateral interventions must decline. For example, getting involved in Georgia once was a low-risk activity. The risk just went up. Taking that risk while U.S. ground forces are completely absorbed in Iraq and Afghanistan is hard for the Americans to justify -- but rather easy for the Russians.

This brings us back to the discussion of the commander in chief's options in the Middle East. The United States already has limited options against Iran. The more the Russians maneuver, the more the United States must hold what forces it has left -- Air Force and Navy -- in reserve. Launching an Iranian adventure becomes that much more risky. If it is launched, Russia has an even greater window of opportunity. Every further involvement in the region makes the United States that much less of a factor in the immediate global equation.

All wars end, and these will too. The Russians are trying to rearrange the furniture a bit before anyone comes home and forces them out. They are dealing with a lame duck president with fewer options than most lame ducks. Before there is a new president and before the war in Iraq ends, the Russians want to redefine the situation a bit.


this is a service that i subscribe to. very informative and they tell it like it is. i thought their take on Bush's remaining time left in office was an interesting read in relation to several developing geo-political issues confronting the united states.

[skiracer]

The latest National Intelligence Estimate (NIE) summarizing the U.S. intelligence community's view of Iraq contains two critical findings: First, the Iraqi government is not jelling into an effective entity. Iraq's leaders, according to the NIE, neither can nor want to create an effective coalition government. Second, U.S. military operations under the surge have improved security in some areas, but on the whole have failed to change the underlying strategic situation. Both Sunni insurgents and Shiite militias remain armed, motivated and operational.

Since the Iraq insurgency began in 2003, the United States has had a clear strategic goal: to create a pro-American coalition government in Baghdad. The means for achieving this was the creation of a degree of security through the use of U.S. troops. In this more secure environment, then, a government would form, create its own security and military forces, with the aid of the United States, and prosecute the war with diminishing American support. This government would complete the defeat of the insurgents and would then govern Iraq democratically.

What the NIE is saying is that, more than four years after the war began, the strategic goal has not been achieved -- and there is little evidence that it will be achieved. Security has not increased significantly in Iraq, despite some localized improvement. In other words, the NIE is saying that the United States has failed and there is no strong evidence that it will succeed in the future.

We must be careful with pronouncements from the U.S. intelligence community, but in this case it appears to be stating the obvious. Moreover, given past accusations of skewed intelligence to suit the administration, it is hard to imagine many in the intelligence community risking their reputations and careers to distort findings in favor of an administration with 18 months to go. We think the NIE is reasonable. Therefore, the question is: What is to be done?

For a long time, we have seen U.S.-Iranian negotiations on Iraq as a viable and even likely endgame. We no longer believe that to be the case. For these negotiations to have been successful, each side needed to fear a certain outcome. The Americans had to fear that an ongoing war would drain U.S. resources indefinitely. The Iranians had to fear that the United States would be able to create a viable coalition government in Baghdad or impose a U.S.-backed regime dominated by their historical Sunni rivals.

Following the Republican defeat in Congress in November, U.S. President George W. Bush surprised Iran by increasing U.S. forces in Iraq rather than beginning withdrawals. This created a window of a few months during which Tehran, weighing the risks and rewards, was sufficiently uncertain that it might have opted for an agreement thrusting the Shiites behind a coalition government. That moment has passed. As the NIE points out, the probability of forming any viable government in Baghdad is extremely low. Iran no longer is facing its worst-case scenario. It has no motivation to bail the United States out.

What, then, is the United States to do? In general, three options are available. The first is to maintain the current strategy. This is the administration's point of view. The second is to start a phased withdrawal, beginning sometime in the next few months and concluding when circumstances allow. This is the consensus among most centrist Democrats and a growing number of Republicans. The third is a rapid withdrawal of forces, a position held by a fairly small group mostly but not exclusively on the left. All three conventional options, however, suffer from fatal defects.

Bush's plan to stay the course would appear to make relatively little sense. Having pursued a strategic goal with relatively fixed means for more than four years, it is unclear what would be achieved in years five or six. As the old saw goes, the definition of insanity is doing the same thing repeatedly, expecting a different outcome. Unless Bush seriously disagrees with the NIE, it is difficult to make a case for continuing the current course.

Looking at it differently, however, there are these arguments to be made for maintaining the current strategy: Whatever mistakes might have been made in the past, the current reality is that any withdrawal from Iraq would create a vacuum, which would rapidly be filled by Iran. Alternatively, Iraq could become a jihadist haven, focusing attention not only on Iraq but also on targets outside Iraq. After all, a jihadist safe-haven with abundant resources in the heart of the Arab world outweighs the strategic locale of Afghanistan. Therefore, continuing the U.S. presence in Iraq, at the cost of 1,000-2,000 American lives a year, prevents both outcomes, even if Washington no longer has any hope of achieving the original goal.

In other words, the argument is that the operation should continue indefinitely in order to prevent a more dangerous outcome. The problem with this reasoning, as we have said, is that it consumes available ground forces, leaving the United States at risk in other parts of the world. The cost of this decision would be a massive increase of the U.S. Army and Marines, by several divisions at least. This would take several years to achieve and might not be attainable without a draft. In addition, it assumes the insurgents and militias will not themselves grow in size and sophistication, imposing greater and greater casualties on the Americans. The weakness of this argument is that it assumes the United States already is facing the worst its enemies can dish out. The cost could rapidly grow to more than a couple of thousand dead a year.

The second strategy is a phased withdrawal. That appears to be one of the most reasonable, moderate proposals. But consider this: If the mission remains the same -- fight the jihadists and militias in order to increase security -- then a phased withdrawal puts U.S. forces in the position of carrying out the same mission with fewer troops. If the withdrawal is phased over a year or more, as most proposals suggest, it creates a situation in which U.S. forces are fighting an undiminished enemy with a diminished force, without any hope of achieving the strategic goal.

The staged withdrawal would appear to be the worst of all worlds. It continues the war while reducing the already slim chance of success and subjects U.S. forces to increasingly unfavorable correlations of forces. Phased withdrawal would make sense in the context of increasingly effective Iraqi forces under a functional Iraqi government, but that assumes either of these things exists. It assumes the NIE is wrong.

The only context in which phased withdrawal makes sense is with a redefined strategic goal. If the United States begins withdrawing forces, it must accept that the goal of a pro-American government is not going to be reached. Therefore, the troops must have a mission. And the weakness of the phased withdrawal proposals is that they each extend the period of time of the withdrawal without clearly defining the mission of the remaining forces. Without a redefinition, troop levels are reduced over time, but the fighters who remain still are targets -- and still take casualties. The moderate case, then, is the least defensible.

The third option is an immediate withdrawal. Immediate withdrawal is a relative concept, of course, since it is impossible to withdraw 150,000 troops at once. Still, what this would consist of is an immediate cessation of offensive operations and the rapid withdrawal of personnel and equipment. Theoretically, it would be possible to pull out the troops but leave the equipment behind. In practical terms, the process would take about three to six months from the date the order was given.

If withdrawal is the plan, this scenario is more attractive than the phased process. It might increase the level of chaos in Iraq, but that is not certain, nor is it clear whether that is any longer an issue involving the U.S. national interest. Its virtue is that it leads to the same end as phased withdrawal without the continued loss of American lives.

The weakness of this strategy is that it opens the door for Iran to dominate Iraq. Unless the Turks wanted to fight the Iranians, there is no regional force that could stop Iran from moving in, whether covertly, through the infiltration of forces, or overtly. Remember that Iran and Iraq fought a long, vicious war -- in which Iran suffered about a million casualties. This, then, simply would be the culmination of that war in some ways. Certainly the Iranians would face bitter resistance from the Sunnis and Kurds, and even from some Shia. But the Iranians have much higher stakes in this game than the Americans, and they are far less casualty-averse, as the Iran-Iraq war demonstrated. Their pain threshold is set much higher than the Americans' and their willingness to brutally suppress their enemies also is greater.

The fate of Iraq would not be the most important issue. Rather, it would be the future of the Arabian Peninsula. If Iran were to dominate Iraq, its forces could deploy along the Saudi border. With the United States withdrawn from the region -- and only a residual U.S. force remaining in Kuwait -- the United States would have few ways to protect the Saudis, and a limited appetite for more war. Also, the Saudis themselves would not want to come under U.S. protection. Most important, all of the forces in the Arabian Peninsula could not match the Iranian force.

The Iranians would be facing an extraordinary opportunity. At the very least, they could dominate their historical enemy, Iraq. At the next level, they could force the Saudis into a political relationship in which the Saudis had to follow the Iranian lead -- in a way, become a junior partner to Iran. At the next level, the Iranians could seize the Saudi oil fields. And at the most extreme level, the Iranians could conquer Mecca and Medina for the Shia. If the United States has simply withdrawn from the region, these are not farfetched ideas. Who is to stop the Iranians if not the United States? Certainly no native power could do so. And if the United States were to intervene in Saudi Arabia, then what was the point of withdrawal in the first place?

All three conventional options, therefore, contain serious flaws. Continuing the current strategy pursues an unattainable goal. Staged withdrawal exposes fewer U.S. troops to more aggressive enemy action. Rapid withdrawal quickly opens the door for possible Iranian hegemony -- and lays a large part of the world's oil reserves at Iran's feet.

The solution is to be found in redefining the mission, the strategic goal. If the goal of creating a stable, pro-American Iraq no longer is possible, then what is the U.S. national interest? That national interest is to limit the expansion of Iranian power, particularly the Iranian threat to the Arabian Peninsula. This war was not about oil, as some have claimed, although a war in Saudi Arabia certainly would be about oil. At the extreme, the conquest of the Arabian Peninsula by Iran would give Iran control of a huge portion of global energy reserves. That would be a much more potent threat than Iranian nuclear weapons ever could be.

The new U.S. mission, therefore, must be to block Iran in the aftermath of the Iraq war. The United States cannot impose a government on Iraq; the fate of Iraq's heavily populated regions cannot be controlled by the United States. But the United States remains an outstanding military force, particularly against conventional forces. It is not very good at counterinsurgency and never has been. The threat to the Arabian Peninsula from Iran would be primarily a conventional threat -- supplemented possibly by instability among Shia on the peninsula.

The mission would be to position forces in such a way that Iran could not think of moving south into Saudi Arabia. There are a number of ways to achieve this. The United States could base a major force in Kuwait, threatening the flanks of any Iranian force moving south. Alternatively, it could create a series of bases in Iraq, in the largely uninhabited regions south and west of the Euphrates. With air power and cruise missiles, coupled with a force about the size of the U.S. force in South Korea, the United States could pose a devastating threat to any Iranian adventure to the south. Iran would be the dominant power in Baghdad, but the Arabian Peninsula would be protected.

This goal could be achieved through a phased withdrawal from Iraq, along with a rapid withdrawal from the populated areas and an immediate cessation of aggressive operations against jihadists and militia. It would concede what the NIE says is unattainable without conceding to Iran the role of regional hegemon. It would reduce forces in Iraq rapidly, while giving the remaining forces a mission they were designed to fight -- conventional war. And it would rapidly reduce the number of casualties. Most important, it would allow the United States to rebuild its reserves of strategic forces in the event of threats elsewhere in the world.

This is not meant as a policy prescription. Rather, we see it as the likely evolution of U.S. strategic thinking on Iraq. Since negotiation is unlikely, and the three conventional options are each defective in their own way, we see this redeployment as a reasonable alternative that meets the basic requirements. It ends the war in Iraq in terms of casualties, it reduces the force, it contains Iran and it frees most of the force for other missions. Whether Bush or his successor is the decision-maker, we think this is where it must wind up.

Tell George what you think

been rather dull around here of late. these last two posts are really rather important to the direction and the foreign policy direction of the US and it's actions in the middle east. any thoughts on the topic would be interesting to hear. this outfit, Stratfor Intelligence, presents the whole picture in very unbiased layman's terms. thought is would be another interesting and informative read.

[skiracer]

The Israel Lobby in U.S. Strategy

By George Friedman

U.S. President George W. Bush made an appearance in Iraq's restive Anbar province on Sept. 3 -- in part to tout the success of the military surge there ahead of the presentation in Washington of the Petraeus report. For the next month or two, the battle over Iraq will be waged in Washington -- and one country will come up over and over again, from any number of directions: Israel. Israel will be invoked as an ally in the war on terrorism -- the reason the United States is in the war in the first place. Some will say that Israel maneuvered the United States into Iraq to serve its own purposes. Some will say it orchestrated 9/11 for its own ends. Others will say that, had the United States supported Israel more resolutely, there would not have been a 9/11.

There is probably no relationship on which people have more diverging views than on that between the United States and Israel. Therefore, since it is going to be invoked in the coming weeks -- and Bush is taking a fairly irrelevant pause at the Asia-Pacific Economic Cooperation summit in Australia -- this is an opportune time to consider the geopolitics of the U.S.-Israeli relationship.

Let's begin with some obvious political points. There is a relatively small Jewish community in the United States, though its political influence is magnified by its strategic location in critical states such as New York and the fact that it is more actively involved in politics than some other ethnic groups.

The Jewish community, as tends to be the case with groups, is deeply divided on many issues. It tends to be united on one issue -- Israel -- but not with the same intensity as in the past, nor with even a semblance of agreement on the specifics. The American Jewish community is as divided as the Israeli Jewish community, with a large segment of people who don't much care thrown in. At the same time, this community donates large sums of money to American and Israeli organizations, including groups that lobby on behalf of Israeli issues in Washington. These lobbying entities lean toward the right wing of Israel's political spectrum, in large part because the Israeli right has tended to govern in the past generation and these groups tend to follow the dominant Israeli strand. It also is because American Jews who contribute to Israel lobby organizations lean right in both Israeli and American politics.

The Israel lobby, which has a great deal of money and experience, is extremely influential in Washington. For decades now, it has done a good job of ensuring that Israeli interests are attended to in Washington, and certainly on some issues it has skewed U.S. policy on the Middle East. There are Jews who practice being shocked at this assertion, but they must not be taken seriously. They know better, which is why they donate money. Others pretend to be shocked at the idea of a lobbyist influencing U.S. policy on the Middle East, but they also need not be taken seriously, because they are trying to influence Washington as well, though they are not as successful. Obviously there is an influential Israel lobby in Washington.

There are, however, two important questions. The first is whether this is in any way unique. Is a strong Israel lobby an unprecedented intrusion into foreign policy? The key question, though, is whether Israeli interests diverge from U.S. interests to the extent that the Israel lobby is taking U.S. foreign policy in directions it wouldn't go otherwise, in directions that counter the U.S. national interest.

Begin with the first question. Prior to both World wars there was extensive debate on whether the United States should intervene in the war. In both cases, the British government lobbied extensively for U.S. intervention on behalf of the United Kingdom. The British made two arguments. The first was that the United States shared a heritage with England -- code for the idea that white Anglo-Saxon Protestants should stand with white Anglo-Saxon Protestants. The second was that there was a fundamental political affinity between British and U.S. democracy and that it was in the U.S. interest to protect British democracy from German authoritarianism.

Many Americans, including President Franklin Roosevelt, believed both arguments. The British lobby was quite powerful. There was a German lobby as well, but it lacked the numbers, the money and the traditions to draw on.

From a geopolitical point of view, both arguments were weak. The United States and the United Kingdom not only were separate countries, they had fought some bitter wars over the question. As for political institutions, geopolitics, as a method, is fairly insensitive to the moral claims of regimes. It works on the basis of interest. On that basis, an intervention on behalf of the United Kingdom in both wars made sense because it provided a relatively low-cost way of preventing Germany from dominating Europe and challenging American sea power. In the end, it wasn't the lobbying interest, massive though it was, but geopolitical necessity that drove U.S. intervention.

The second question, then, is: Has the Israel lobby caused the United States to act in ways that contravene U.S. interests? For example, by getting the United States to support Israel, did it turn the Arab world against the Americans? Did it support Israeli repression of Palestinians, and thereby generate an Islamist radicalism that led to 9/11? Did it manipulate U.S. policy on Iraq so that the United States invaded Iraq on behalf of Israel? These allegations have all been made. If true, they are very serious charges.

It is important to remember that U.S.-Israeli ties were not extraordinarily close prior to 1967. President Harry Truman recognized Israel, but the United States had not provided major military aid and support. Israel, always in need of an outside supply of weapons, first depended on the Soviet Union, which shipped weapons to Israel via Czechoslovakia. When the Soviets realized that Israeli socialists were anti-Soviet as well, they dropped Israel. Israel's next patron was France. France was fighting to hold on to Algeria and maintain its influence in Lebanon and Syria, both former French protectorates. The French saw Israel as a natural ally. It was France that really created the Israeli air force and provided the first technology for Israeli nuclear weapons.

The United States was actively hostile to Israel during this period. In 1956, following Gamal Abdul Nasser's seizure of power in Egypt, Cairo nationalized the Suez Canal. Without the canal, the British Empire was finished, and ultimately the French were as well. The United Kingdom and France worked secretly with Israel, and Israel invaded the Sinai. Then, in order to protect the Suez Canal from an Israeli-Egyptian war, a Franco-British force parachuted in to seize the canal. President Dwight Eisenhower forced the British and French to withdraw -- as well as the Israelis. U.S.-Israeli relations remained chilly for quite a while.

The break point with France came in 1967. The Israelis, under pressure from Egypt, decided to invade Egypt, Jordan and Syria -- ignoring French President Charles de Gaulle's demand that they not do so. As a result, France broke its alignment with Israel. This was the critical moment in U.S.-Israeli relations. Israel needed a source of weaponry as its national security needs vastly outstripped its industrial base. It was at this point that the Israel lobby in the United States became critical. Israel wanted a relationship with the United States and the Israel lobby brought tremendous pressure to bear, picturing Israel as a heroic, embattled democracy, surrounded by bloodthirsty neighbors, badly needing U.S. help. President Lyndon B. Johnson, bogged down in Vietnam and wanting to shore up his base, saw a popular cause in Israel and tilted toward it.

But there were critical strategic issues as well. Syria and Iraq had both shifted into the pro-Soviet camp, as had Egypt. Some have argued that, had the United States not supported Israel, this would not have happened. This, however, runs in the face of history. It was the United States that forced the Israelis out of the Sinai in 1956, but the Egyptians moved into the Soviet camp anyway. The argument that it was uncritical support for Israel that caused anti-Americanism in the Arab world doesn't hold water. The Egyptians became anti-American in spite of an essentially anti-Israeli position in 1956. By 1957 Egypt was a Soviet ally.

The Americans ultimately tilted toward Israel because of this, not the other way around. Egypt was not only providing the Soviets with naval and air bases, but also was running covert operations in the Arabian Peninsula to bring down the conservative sheikhdoms there, including Saudi Arabia's. The Soviets were seen as using Egypt as a base of operations against the United States. Syria was seen as another dangerous radical power, along with Iraq. The defense of the Arabian Peninsula from radical, pro-Soviet Arab movements, as well as the defense of Jordan, became a central interest of the United States.

Israel was seen as contributing by threatening the security of both Egypt and Syria. The Saudi fear of the Palestine Liberation Organization (PLO) was palpable. Riyadh saw the Soviet-inspired liberation movements as threatening Saudi Arabia's survival. Israel was engaged in a covert war against the PLO and related groups, and that was exactly what the Saudis wanted from the late 1960s until the early 1980s. Israel's covert capability against the PLO, coupled with its overt military power against Egypt and Syria, was very much in the American interest and that of its Arab allies. It was a low-cost solution to some very difficult strategic problems at a time when the United States was either in Vietnam or recovering from the war.

The occupation of the Sinai, the West Bank and the Golan Heights in 1967 was not in the U.S. interest. The United States wanted Israel to carry out its mission against Soviet-backed paramilitaries and tie down Egypt and Syria, but the occupation was not seen as part of that mission. The Israelis initially expected to convert their occupation of the territories into a peace treaty, but that only happened, much later, with Egypt. At the Khartoum summit in 1967, the Arabs delivered the famous three noes: No negotiation. No recognition. No peace. Israel became an occupying power. It has never found its balance.

The claim has been made that if the United States forced the Israelis out of the West Bank and Gaza, then it would receive credit and peace would follow. There are three problems with that theory. First, the Israelis did not occupy these areas prior to 1967 and there was no peace. Second, groups such as Hamas and Hezbollah have said that a withdrawal would not end the state of war with Israel. And therefore, third, the withdrawal would create friction with Israel without any clear payoff from the Arabs.

It must be remembered that Egypt and Jordan have both signed peace treaties with Israel and seem not to care one whit about the Palestinians. The Saudis have never risked a thing for the Palestinians, nor have the Iranians. The Syrians have, but they are far more interested in investing in Beirut hotels than in invading Israel. No Arab state is interested in the Palestinians, except for those that are actively hostile. There is Arab and Islamic public opinion and nonstate organizations, but none would be satisfied with Israeli withdrawal. They want Israel destroyed. Even if the United States withdrew all support for Israel, however, Israel would not be destroyed. The radical Arabs do not want withdrawal; they want destruction. And the moderate Arabs don't care about the Palestinians beyond rhetoric.

Now we get to the heart of the matter. If the United States broke ties with Israel, would the U.S. geopolitical position be improved? In other words, if it broke with Israel, would Iran or al Qaeda come to view the United States in a different way? Critics of the Israel lobby argue that, except for U.S. support for Israel, the United States would have better relations in the Muslim world, and would not be targeted by al Qaeda or threatened by Iran. In other words, except for the Israel lobby's influence, the United States would be much more secure.

Al Qaeda does not see Israel by itself as its central problem. Its goal is the resurrection of the caliphate -- and it sees U.S. support for Muslim regimes as the central problem. If the United States abandoned Israel, al Qaeda would still confront U.S. support for countries such as Egypt, Saudi Arabia and Pakistan. For al Qaeda, Israel is an important issue, but for the United States to soothe al Qaeda, it would have to abandon not only Israel, but its non-Islamist allies in the Middle East.

As for Iran, the Iranian rhetoric, as we have said, has never been matched by action. During the Iran-Iraq War, the Iranian military purchased weapons and parts from the Israelis. It was more delighted than anyone when Israel destroyed the Iraqi nuclear reactor in 1981. Iran's problem with the United States is its presence in Iraq, its naval presence in the Persian Gulf and its support for the Kurds. If Israel disappeared from the face of the Earth, Iran's problems would remain the same.

It has been said that the Israelis inspired the U.S. invasion of Iraq. There is no doubt that Israel was pleased when, after 9/11, the United States saw itself as an anti-Islamist power. Let us remind our more creative readers, however, that benefiting from something does not mean you caused it. However, it has never been clear that the Israelis were all that enthusiastic about invading Iraq. Neoconservative Jews like Paul Wolfowitz were enthusiastic, as were non-Jews like Dick Cheney. But the Israeli view of a U.S. invasion of Iraq was at most mixed, and to some extent dubious. The Israelis liked the Iran-Iraq balance of power and were close allies of Turkey, which certainly opposed the invasion. The claim that Israel supported the invasion comes from those who mistake neoconservatives, many of whom are Jews who support Israel, with Israeli foreign policy, which was much more nuanced than the neoconservatives. The Israelis were not at all clear about what the Americans were doing in Iraq, but they were in no position to complain.

Israeli-U.S. relations have gone through three phases. From 1948 to 1967, the United States supported Israel's right to exist but was not its patron. In the 1967-1991 period, the Israelis were a key American asset in the Cold War. From 1991 to the present, the relationship has remained close but it is not pivotal to either country. Washington cannot help Israel with Hezbollah or Hamas. The Israelis cannot help the United States in Iraq or Afghanistan. If the relationship were severed, it would have remarkably little impact on either country -- though keeping the relationship is more valuable than severing it.

To sum up: There is a powerful Jewish, pro-Israel lobby in Washington, though it was not very successful in the first 20 years or so of Israel's history. When U.S. policy toward Israel swung in 1967 it had far more to do with geopolitical interests than with lobbying. The United States needed help with Egypt and Syria and Israel could provide it. Lobbying appeared to be the key, but it wasn't; geopolitical necessity was. Egypt was anti-American even when the United States was anti-Israeli. Al Qaeda would be anti-American even if the United States were anti-Israel. Rhetoric aside, Iran has never taken direct action against Israel and has much more important things on its plate.

Portraying the Israel lobby as super-powerful behooves two groups: Critics of U.S. Middle Eastern policy and the Israel lobby itself. Critics get to say the U.S. relationship with Israel is the result of manipulation and corruption. Thus, they get to avoid discussing the actual history of Israel, the United States and the Middle East. The lobby benefits from having robust power because one of its jobs is to raise funds -- and the image of a killer lobby opens a lot more pocketbooks than does the idea that both Israel and the United States are simply pursuing their geopolitical interests and that things would go on pretty much the same even without slick lobbying.

The great irony is that the critics of U.S. policy and the Israel lobby both want to believe in the same myth -- that great powers can be manipulated to harm themselves by crafty politicians. The British didn't get the United States into the world wars, and the Israelis aren't maneuvering the Americans into being pro-Israel. Beyond its ability to exert itself on small things, the Israel lobby is powerful in influencing Washington to do what it is going to do anyway. What happens next in Iraq is not up to the Israel lobby -- though it and the Saudi Embassy have a different story.




Tell George what you think

[skiracer]

Broad Market Analysis - A tale of two markets. . .

As anticipated, overhead resistance of the 50-day moving averages in the S&P and Dow weighed on the stock market yesterday. After gapping lower on the open, the major indices fell further in the first hour of trading, but stabilized and traded in a choppy, sideways range throughout the rest of the session. The resilient Nasdaq Composite held up the best, dropping 0.9%. The S&P 500 lost 1.2% and the Dow Jones Industrial Average fell 1.1%. The small-cap Russell 2000 and S&P Midcap 400 indices were lower by 1.3% and 0.9% respectively. All of the main broad-based indexes settled in the bottom third of their intraday ranges.
Turnover rose across the board, causing both the S&P and Nasdaq to register "distribution days" indicative of institutional selling. Nevertheless, volume increased only modestly. Total volume in the NYSE came in 2% above the previous day's level, while volume in the Nasdaq ticked 4% higher. The Nasdaq's volume has risen in each of the past two days, an "accumulation day" followed by a higher volume "distribution day." However, trading in that exchange still remains below its 50-day average level. In both the NYSE and Nasdaq, turnover has trickled in below average levels for the past twelve consecutive days. The passing of the Labor Day holiday has, so far, only led to a minor increase in trading activity.
Comparing the technical patterns of the Nasdaq Composite and Dow Industrials, we see a tale of two different markets shaping up. The most noticeable difference is that the Nasdaq has broken out above its 50-day MA, which also acted as support during yesterday's drop. Conversely, resistance of the 50-day MA perfectly marked the high of the Dow's bounce on Tuesday, which subsequently lent a hand in yesterday's broad-based decline. The Nasdaq is also very close to breaking out above its August high, but the Dow is not. Compare the daily charts of the two indexes below:



Drilling down to the shorter-term hourly charts, one will quickly see another big difference between the two indexes. The Dow closed below support of its hourly uptrend line (from the August 16 low), but the Nasdaq is still well above it. Further, the Dow is back below its August 24 high, but the Nasdaq is still above it. We've removed the moving averages on the hourly charts below so that you can more easily see the trendlines:



As you can see, the bullish divergence in the Nasdaq is apparent on multiple time frames. As such, the Nasdaq will most likely do the heavy lifting if the overall market attempts to climb higher. Even if further downward momentum builds on yesterday's broad-based losses, the Nasdaq should drop at a much slower pace than the Dow and S&P. Although not illustrated above, the chart pattern of the S&P 500 resembles the Dow, as both are stuck below their 50-day MAs. But unlike the Dow, the S&P 500 is still (barely) above lower channel support of its hourly uptrend line off the August 16 low.
Putting it all together, the divergence and tug-of-war within the broad market could result in choppy trading conditions in the coming days. To combat this, consider positioning yourself on both sides of the market by selling short an industry sector or index with relative weakness (such as the Dow), while simultaneously being positioned long in a sector with relative strength (such as the Nasdaq). If the broad market makes a clean and decisive break in either direction, one can simply cut the positions on the opposite side and/or get heavier in the direction of the trend. Alternatively, sitting in cash and watching from the sidelines is never a bad idea when the stock market is at an inflection point.
Following our own advice, we now have a mix of long and short ETF positions. We took profits on our OIH long position yesterday, then subsequently sold short the Dow Industrials when it broke support of its hourly uptrend line. Rather than selling short the DIAMONDS (DIA), we bought the inversely correlated UltraShort Dow 30 ProShares (DXD). Despite the weakness in the broad market, each of our other long positions in Biotech (IBB) and Fixed-Income (TLT and LQD) moved higher yesterday

Very sage advice for choppy range bound volitaile markets.

[riverbabe]

Ski, I also read Stratfor! I find the articles well-reasoned and insightful! Happy that you thought of sharing them here. Where did the article on the Broad Market come from? River

[riverbabe]

Tour

Ski, thank you for your offer of the tour of the southern NJ shore. It sounds like a very idyllic place. I remember driving up from Atlantic City, through Cape May and along the shore and being so surprised at how beautiful it is. New Jersey is truly a Garden State, from the parts I have seen of, especially up north, around Ridgewood and west in the Morristown/Basking Ridge area, and the Delaware water gap. Also have hiked in the Ramapos, and explored the old civil war iron mines. Will look forward to seeing a clear cedar bog stream for the first time! (That's a new concept for me!) Just Googled the area you were describing and would really like to paddle and/or hike there, in the south, some day! River

[skiracer]

i thought the three articles from Stratfor Intelligence were timely and quite informative regarding the current geopolitical situations in the middle east. did anyone read them or find them of any interest at all. i thought that maybe i would get some kind of response and i wasn't looking for a specific response to any of them other than maybe how others felt about the topics and to maybe express their take on them. aside from them the last one from Morpheus certainly hit the nail right on the head with the markets in general and the charts were a decent technical backup to what he was talking about. i mean it is not like there is so much great stock talk coming out of this place in general anymore i thought this might generate some type of commentary or interest.

[skiracer]

i own some call options on MSFT and am therefore prejudiced in that respect but the chart is showing some positive reinforcement right here and i think it is a good time to cosider an entry in either the stock or the Oct 32.50 or 35 calls. notably the 32.50 Oct 7 calls at .05 or .06 look appealing for a short period of time right here.

[peanuts]

... i think it is a good time to cosider an entry in either the stock or the Oct 32.50 or 35 calls. notably the 32.50 Oct 7 calls at .05 or .06 look appealing for a short period of time right here.

MSFT has been part my portfolio for quite some time, now. Maybe I'll sell it in 35 years when I'm ready to retire. Do you think I should sell some Oct puts in the mean time?

[skiracer]

MSFT has been part my portfolio for quite some time, now. Maybe I'll sell it in 35 years when I'm ready to retire. Do you think I should sell some Oct puts in the mean time?

i would buy the Oct. 32.50 or 35 strike calls right here at .05 or .06. you could sell the puts to serve the same basic purpose but why not just buy the calls. i like the long side and think that the distribution is over and the accumulation is going to start to show through. look at all the green in the last few weeks after the big selloff and drop from the 31.50 range.