E Market Briefing For Jan. 13, 2020


Special Saturday commentary: as we were about to post the weekend report Friday night, the first glimmer of truth was emerging from a source in Qatar, suggesting that Iran was going to do what we implored them to do; 'man up and admit they shot down the Ukrainian jetliner'. So I held up the Daily Briefing to better see the revised backdrop.  

Everything was prepared, including the videos; and I won't change them at all. I think it's self-evident as reflects where things appeared prior to the news.  

By now we all know that Tehran (imagine the future for the officer who did launch the missiles) accepts responsibility and blame for the atrocity. It's highly unusual, perhaps unprecedented, for the theocratic regime; and it might be an overture for progress emerging from the disaster; though as I hope that's not just a dream, I could see how sobering this could be.

It's not just the awakening of 'some' Persians to the reality of demagogue, incompetent, aggressive, intolerant and corrupt governance, nor even the realization they cannot win (that's why confronting them matters) before it gets to the point of more overthrows or undermining of regional states as their use as their only effective weapon.. hence removal of Soleimani as part of that. Increasingly the masses in Iran realizing they've been played by their government, which can't even have decent command and control between civil aviation and the military; or a military over the IRGC's more radical elements. A high price to pay but the death of the beautiful people on the 737 may awaken a degree of humanity within Iran... we pray. 

People can hate Trump. Fine. They can have an agenda to get rid of him. Fine. (If they don't realize what the alternative might be, since he is not a warmonger and that's clear by how he dangerously rolls the dice, but with a goal to end conflict.) However, in reading news this week, we know how vitriol by U.S. and Iranian sides is merely a 'superficial face' (like Twitter) and not the real story. Even anti-Trumpers, given a balanced view, might continue to hate or oppose Trump; but as Americans not to distort what's done to avoid compounding possibly earlier missteps (by both sides).

What am I driving at? Now we know that amidst ongoing accusations with Iran, that the Swiss in Bern were intermediaries, and Trump begged Iran to start deescalating; and that the Iranian Foreign Minister concurred with Trump; amidst the chaos that got so much fervor going in Tehran, as it all transpired, or those who don't understand the tactics, going nuts here.

This was several days before truthful admission surfaced today, of Iran shooting down the 737. I understand desires for political change; but also how Trump was truthful about 'other things' going on behind the scenes. It was the Swiss (known for confidentiality) and the now-recognized very private communiques between Trump, Pompeo and the Iranians, entirely absent of vindictive propaganda, and working toward stabilizing matters.  

So what's my dream? Something else happened you likely know of now; the death of the 79 year old Sultan of Oman. He took over by coup years ago; but served as sort of a 'Switzerland of the Middle East', hence the meeting ground for all the players; Iran, Saudi Arabia, UAE, Iraq, even for the USA and Israel. His successor (he didn't leave an heir) promises that the same policies will continue; ie: communication between adversaries in one sense; but 'real politik' in another. Hence a way to keep order. 

So, it is speculated that in the Sultan's Funeral, global leaders will attend. It means from Iran, Saudi Arabia AND the United States (probably UK & France as well). One can only hope that at the Funeral for the Sultan of Oman, our leaders recognize the precipice that region is hurtling toward, and actually meet to try to find some common ground to go forward. Or in the best of circumstances, with the mourning for the losses in the crash uppermost in whatever part of their brains is advanced and not mired in a 12th Century mentality, Iran consider actually moving towards peace; and I would say that to the Saudi's as well (mostly who attacked us on 9-11).

Personally I have no affection for intolerant Wahhabi Sunnis or Shia; and do respect 'real' Persians and Sunnis, such as in Jordan and Egypt, who cast extremism aside, tolerate other religions and human rights (more or less, but still backward compared to the more-civilized world), and realize that Trump, with all his faults, brings this forth as a means for extrication from the region; not further involvement. As frankly that was his pledge; and he's said that this week; if anyone listened and didn't gloss it over. In any event, it matters not if you like Trump or not; we are Americans and we grieve for what has happened; and finally a hint of grief emerging out of Tehran, while still spinning it somehow to cover their grave fanaticism.  

Maybe the U.S. will sign an Alliance with Israel so she'll be protected, and otherwise wind things down? Ya think it's possible? Don't know; but think, wishful as it is, that if a 'summit' could be planned to sort all this out after the Funeral for the Sultan of Oman; perhaps in Switzerland or Vienna; it must might be a fitting memorial for the 176 victims of Iranian lunacy. In fact, it might be appropriate for everyone to meet in Kiev to ponder what's sensible for the future of mankind, and the region. And help move Islam a bit more into the 21st Century, as some have tried to do for years now.

My prayers and best wishes for the weekend; the rest of the report again follows without any changes. Sadly the world will 'superficially' jump back to the 'blame-game' but I refuse to give up on humankind progressing. Oh and yes, I think the S&P will bounce back at least temporarily.

Structural market strength - isn't 'essentially' sound based on valuation. It persists because of monetary policy perceived as an 'immovable force', and the perception that is unlikely to change basically for the whole year.

No denying the Labor Market and wage info was not constructive; but in a sense that keeps the Fed at bay and ironically slow growth persists as a plus for the market. If they ever get the growth Wall Street and Trump for sure calls for, then the market will be in-trouble because the Fed will have to reassess, more than simply vacillating about a lateral low policy. At the moment the market is sort of stalled, and that's not unexpected.

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