The Syrian War Already Underway

August 28, 2013

  • War drums drive oil to two-year highs: Jim Rogers weighs in on the asset classes set to soar once the missiles fire
  • “Major cyber event,” warns the Homeland Security secretary… Major federal contracts result, says our Byron King
  • The latest evidence that the “Affordable” Care Act is something other than advertised
  • The gift that keeps on giving for Ben Bernanke… a reader’s inquiry into why we “submit”… you ask, we listen… and more!

  The “fear premium” has pushed oil past $110 a barrel for the first time since May 2011. Then the driver was a “limited” U.S. military foray into the Arab world. Now the issue is… uh, the same.

Airstrikes against Syria are set to begin “within days,” according to a Reuters account of a meeting between Western diplomats and the “Syrian National Coalition” — a motley crew of exiles and jihadists united only by their opposition to president-for-life Bashar al-Assad.

The White House is promising to present evidence to the American people that Assad’s government carried out a chemical weapons attack — as soon as the White House gets its story straight, heh.

  Meanwhile, the pro-Assad hacker collective that calls itself the Syrian Electronic Army (SEA) appears to be hard at work.

The Times put out that tweet about 90 minutes after its site went down yesterday afternoon. The Gray Lady’s chief information officer said the disruption “was the result of a malicious external attack by the Syrian Electronic Army or someone trying very hard to be them.”

Twitter itself was also a target yesterday: “Viewing of images and photos was sporadically impacted,” a Twitter statement said. “No Twitter user information was affected by this incident.”

The SEA seems to get a charge out of messing with the media. In April, the hackers took control of the Associated Press’ Twitter account and put out a tweet saying two explosions had gone off at the White House and the president was injured.

The impact on markets was immediate, albeit brief…

“The effect of the hacks,” according to The Washington Post, “is typically not to steal information or sabotage institutions, but rather to hijack the targeted outlet for a few minutes, plastering it with the group’s message and perhaps some condemnation of U.S. policy toward Syria. Their hacking power seems to exist purely to demonstrate their hacking power, taking down popular sites purely to claim credit for it.”

Meanwhile, the SEA’s own website is down this morning. Imagine that…

100  In a parting gift, Homeland Security Secretary Janet Napolitano is warning of a “major cyber event.”

Around the same time as the SEA took down the Times yesterday, Napolitano issued “a kind of open letter to my successor” before she moves west and starts collecting a $570,000 salary to run the University of California system.

Among a multitude of threats she cited to justify her agency’s continued existence: “Our country will, for example, at some point, face a major cyber event that will have a serious effect on our lives, our economy and the everyday functioning of our society.”

  “Cyberwar is the war of the future,” says Sen. Mary Landrieu, chairwoman of the Homeland Security Committee.

The senior senator from Louisiana ticked off a list of vulnerable targets to a recent gathering of the Greater Lafayette Chamber of Commerce — banks, government agencies, power grids, emergency response services and the military.

“Landrieu,” the Lafayette Daily Advertiser reports, “said she plans to use her influence as chair of Homeland Security to ‘build a cyber footprint in Louisiana.’ She wants to move to Louisiana more governmental agencies and tech experts charged with protecting America from hackers.”

“Those jobs can’t all be based inside Washington, D.C., and Arlington, Va.,” Landrieu adds.

Hmmm… We wonder how many other Congress members have given the same gravy-train speech to the home crowd during their August recess.

Here’s one thing we know for sure: The Pentagon is going to issue $110 million in cybersecurity contracts this weekend — with nearly $16 billion more on the heels of that.

The cyber realm is what our Byron King calls “the fifth domain of warfare” — beyond land, sea, air and space. “Already,” he says, “one small company I’ve been tracking jumped 163% when the Pentagon spent just a few million dollars on their technology. And each time the government bought more and more technology — the stock jumped with triple-digit gains. Every time.

“But this small company received only a tiny fraction of what the Pentagon, the NSA, the CIA and Homeland Security are about to spend.”

The feds unleash the cash on Sept. 1 — this Sunday. So only a few days remain in which you can get in on the ground floor with the seven companies Byron believes have the inside track.

[Ed. Note: We’re still asking you to sign a confidentiality agreement before you review Byron’s research. No, we’ve never done anything like this before… but Byron has spent literally decades building a network of contacts within the government and the defense industry. He doesn’t want anything to mess that up.

The agreement doesn’t oblige you to do a thing. All you do is agree not to share the information with anyone, and then enter your initials. As soon as you do, you’ll have instant access to what Byron has uncovered based on his analysis of recently declassified documents. Here’s where you can get started.]

  Stocks have arrested their Syrian slide for the moment. As we write, the Dow has recovered about 40 points of yesterday’s losses, sitting at 14,818. The S&P’s at $1,635.

That said, a certain amount of technical damage is done. “The broad market has already retraced more than 50% of its summer rally,” writes Greg Guenther in today’s Rude Awakening. “If stocks can’t find a floor soon, it will be time to start mapping out some revised price targets for the S&P.”

In another not-so-hot sign from the housing market, pending home sales dropped 1.3% from June to July, according to the National Association of Realtors.

  Precious metals are holding on tight to yesterday’s gains — gold at $1,418, silver at $24.41.

That’s despite some strengthening in the greenback; the dollar index is up to 81.5.

  “I own oil. I own gold,” says Jim Rogers. “If there is going to be a war — and it sounds like America’s desperate to have a war — they’re going to much, much higher.”

A looming war in Syria is one more reason Rogers won’t call an end to the commodity bull whose beginning he nailed in 1998. “Some of the things I own, I’ll make a lot of money on,” he tells Reuters. “I’m not particularly keen on war, I assure you. But it sounds like they want it.

“Throughout history, whenever you’ve had war, things like food prices have gone up a lot, energy prices have gone up a lot, copper prices, lead prices — all these things go up a lot.”

  Another day, another Obamacare delay. Reuters reports the White House is pushing back final agreements with insurance plans to be sold on the vaunted “exchanges” starting Oct. 1

“The U.S. Department of Health and Human Services (HHS) notified insurance companies on Tuesday that it would not sign final agreements with the plans between Sept. 5-9, as originally anticipated,” the newswire reports.

The reason is fuzzy: “Sources attributed it to technology problems involving the display of insurance products within the federal information technology system.” Which sounds to us as though there’s still no reliable way to make the IRS’ computers that verify your income talk to the Homeland Security computers that verify your citizenship. Or for either to talk to the computers in your state capital.

We hinted at the problem last month, in a chart from a consultant that’s working with state governments on the exchanges…

Somewhere, the ghost of Rube Goldberg is smiling…

  Beyond the bureaucratic absurdity, real people are being affected. We’re admittedly a few days behind the curve, but in case you missed it…

  • UPS says it will no longer make health insurance benefits available to about 15,000 employee spouses. “In announcing the change,” the Christian Science Monitor reports, “the company referred to Obamacare as a reason it is having to battle to contain health care costs”
  • Delta Airlines says it will eat $38 million next year because of the law. Large employers must pay a $63-per-covered-participant fee next year. Since Delta has 160,000 enrolled employees, retirees and dependents, that works out to $10 million. “This fee, which is meant to help stabilize the state exchanges as they get started,” says a letter from Delta, “provides absolutely zero direct benefit to our participants.”

That’s in addition to $14 million to meet the requirement to cover adult children of employees until age 26. And another $14 million the airline anticipates from more people coming into the company plan, thanks to the individual mandate.

It’s becoming urgent that you do everything you can to “opt out” of Obamacare — as laid out in our package of special reports from the Laissez Faire Club. Follow their guidance and you might end up shelling out less money for better health care than you get now. Access here.

  “The Federal Reserve has released financial disclosure forms of the seven governors who run it,” according to The Washington Post.

We’ll cut to the chase: Chairman Ben Bernanke continues to collect a six-figure income from his textbooks, Principles of Economics, Principles of Macroeconomics and Macroeconomics. (The titles are as scintillating as his speeches.) The first two titles are worth at least $100,000 — maybe as much as $1 million — and the third at least $50,000.

A few random thoughts occur to us…

  • What’s worse — an unmatched record of punishing savers and devaluing the currency… or the guarantee a whole new generation of world-improvers is under his influence?
  • The power that comes with being Fed chief is surely out of line with the pay. Otherwise, Bernanke would be content to collect his royalties and forgo the chairman’s salary of $199,700
  • Bernanke wouldn’t have anywhere near as lucrative a payday were it not for federal meddling in higher education driving up the costs far beyond the rate of inflation.

And so it goes…

  “You write how and why Saudi Arabia, Russia and China are aiding Egypt, et al.,” says an item in our mailbag after we wrote on Monday about a new alliance filling a power vacuum left by the United States.

“While I agree with your explanation, you don’t appear the least bit concerned. Will you submit that easily?”

The 5: “Submit”… to what?

“Nation-states behave with logics, moralities and imperatives all their own,” Jim Norman writes in his intriguing book The Oil Card. Not least the nation-state with its capital located in Washington, D.C. — which was a central theme in Empire of Debt, the volume penned by our leader of the pack, Addison Wiggin, along with Bill Bonner.

That logic brings about events beyond your control. It’s much better to understand those events… and plan your life and portfolio accordingly… than to allow them to blindside you and your family.

That’s our “make the empire pay” thesis, and it’s the reason we’re making a big deal about Byron King’s cybersecurity research. Government channels huge flows of money; you might as well direct some of those flows to your own pocket.

Hey, it was already taxed away from you, right?

You can begin the process of reclaiming those dollars by initialing the confidentiality agreement and reviewing Byron’s research, right here.

Cheers,

Dave Gonigam
The 5 Min. Forecast

P.S. As promised yesterday, by popular demand, we’ve figured out a way to let more people take part in the experiment we’re calling the “30-Day Retirement Plan.”

It’s an aggressive catch-up strategy, tapping a subniche of the market that Wall Street can’t touch.

We’re still capping participation in this experiment, and once the quota is filled, that’s it. To decide whether this strategy is for you, look here.

rspertzel

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