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FRED
07-18-06, 06:29 PM
Worst of the worst of the worst (http://money.cnn.com/2006/07/17/markets/toughseason/)
July 18 2006 (CNNMoney.com)

Think things are choppy now? Get ready for August and September, the worst months of the year for stocks.

As if it hasn't been tough enough already, markets are about to move into what is typically the worst time of the year for stock investing: late summer and early fall.

Wall Street is also in the midst of what is typically the worst quarter of the year: the third. And those who follow the four-year cycle of the presidency will tell you that the second year of a presidential term of office, like 2006, is the worst of the four.

OK, so the market's seasonal patterns don't hold true every year.

But consider the reasons this year is likely to follow suit. Investors are nervously eyeing the worst violence in years in the Mideast; oil prices are near record highs; worries about a slowing economy and rising interest rates abound; a possible slowdown in corporate profit growth is looming, and a 3-1/2 year old bull market may have very well peaked last spring.

Add to that a cooling housing market, an expected slowdown in consumer spending, and less money going into stocks than there has been in some time, and you've got quite a challenging environment for investors, said Jim Melcher, president of Balestra Capital, a New York-based hedge fund.

"You've almost never had a confluence of factors like this where it didn't lead to a recession or a bear market," said Melcher. "It's just not a great time to be in stocks."

AntiSpin: The contrarian in us says, hey, maybe things aren't so bad. Everyone is feeling so bearish, and when everyone is feeling bearish, then that's bullish, right? As the Chinese say, "The crowd is blind." Well, not always. Collective bearishness drives collective investment behavior, and when that bearishness is irrational, that is, not based on real economic potential, then there are long term upside opportunities. But, unfortunately, the crowd can stay bearish long enough that their irrational expectations become self-fulfilling. Oh, and the crowd can also be right. Knowing when the crowd is trekking into a land of great discovery and wealth or following each other off a cliff into the sea takes more than contrarianism, it takes informed skepticism.

In our opinion, the market is reacting mostly to what appears to be a power play by Iran. No matter what they're after, they appear to think that when all is said in done they're going to wind up with more chips than they started off with. Our chips. How far things go, no one knows. What Iran really has in their hand, no one knows. But it can't be good, because if they succeed in goading Israel into sending troops into Lebanon to search for the estimated 8,000 missiles that are hidden all over the country, that will give them an excuse to show a card or two (http://www.edmontonsun.com/News/World/2006/04/01/1515397-sun.html) they appear to be itching to show us, and they may be more than the markets expect them to be.
(http://en.rian.ru/russia/20060403/45107320.html)
Also, on May 20th, before things got really ugly, 61% of 488 iTulip.com Community members voted that the markets were due to crash and burn (http://www.itulip.com/cgi-bin/vote.cgi?view=1148142339) this summer. While the crowd may be blind, the iTulip.com Community is not.

jk
07-19-06, 09:39 AM
re the link to the edmunton sun article re iranian missiles. i can find no reference to such a missile in the ny times archive. i might have missed it, but i wonder if you noticed the dateline for the sun article. [april 1]

FRED
07-19-06, 12:18 PM
re the link to the edmunton sun article re iranian missiles. i can find no reference to such a missile in the ny times archive. i might have missed it, but i wonder if you noticed the dateline for the sun article. [april 1]

iTulip.com only reports the facts.

http://www.forbes.com/business/energy/feeds/ap/2006/04/02/ap2640264.html

metalman
07-19-06, 01:26 PM
iTulip.com only reports the facts.

http://www.forbes.com/business/energy/feeds/ap/2006/04/02/ap2640264.html

yeh, the MIRVs tested on April Fool's day (ha-ha!) and the next day these underwater torpedos. gee, wonder who they got 'em from?

http://en.wikipedia.org/wiki/VA-111_Shkval_torpedo

lessee... MIRVs tested by Iran they say worked... can't seem to find a report that says they didn't... torpedos that can knock out any US ship or sub, 250 nuclear warheads that the Ukraine never gave back to Russia that maybe got sold to Iran or maybe not.

i dunno. someone's lying and I hope its them.

ChessMan
07-19-06, 03:05 PM
My guess Iran has some of those 250 warheads, fancy torpedos, and relatively well-working MIRVs. It explains why Iran is causing a disturbance.

Now, I'd like to see some guesstimates on what fancy new weapons the U.S. has yet to reveal... I wouldn't want to see them revealed, however, because that would probably mean some very nasty shit has happened for a secret weapon or two to come to light.

jk
07-19-06, 07:11 PM
with the clue from forbes, saying the test was of a fajr-3, i tracked down the ny times description:
Iran Fires Versatile Missile in a 'Defensive' Test

<nyt_byline version="1.0" type=" "> By NAZILA FATHI (NYT) 358 words
</nyt_byline> Published: April 1, 2006

TEHRAN, March 31 - Iran test-fired a new missile on Friday that it said could carry multiple warheads and evade radar systems. The air force chief of the Revolutionary Guards, Brig. Gen. Hossein Salami, said the missile, the Fajr-3, was made in Iran with ''very advanced'' features.

It can carry several warheads, and ''can also evade enemy's most sensitive radar systems,'' he told state television. ''It can avoid antimissile missiles and strike the target.''
A State Department spokesman, Adam Ereli, said Friday that the administration did not have any technical details about the missile, but that the test showed that Iran had ''a very active and aggressive military program.''
An Israeli missile expert quoted by Reuters expressed skepticism, however, saying Iran ''could be bluffing.''
The expert, Uzi Rubin, a former director of the Arrow missile defense program, said if it was true that Iran had such rockets, there was no way it could have produced them without outside help.
The range of the Fajr-3 was not clear. Iran's midrange missile, the Shahab-3, or ''Shooting Star,'' which has been test-fired successfully, has a range of about 1,000 miles.
The Fajr-3 test was part of naval maneuvers in southern Iran along the Persian Gulf and the Sea of Oman.


however, the fajr-3, according to both stratfor and the times, has a range of 28-30 miles, and carries a warhead of 100 lbs. this is a long way from the multiple warhead icbm's i think we all have in mind.

there appears to be some confusion here.

metalman
07-19-06, 11:06 PM
with the clue from forbes, saying the test was of a fajr-3, i tracked down the ny times description:
Iran Fires Versatile Missile in a 'Defensive' Test

<nyt_byline version="1.0" type=" "> By NAZILA FATHI (NYT) 358 words
</nyt_byline> Published: April 1, 2006

TEHRAN, March 31 - Iran test-fired a new missile on Friday that it said could carry multiple warheads and evade radar systems. The air force chief of the Revolutionary Guards, Brig. Gen. Hossein Salami, said the missile, the Fajr-3, was made in Iran with ''very advanced'' features.

It can carry several warheads, and ''can also evade enemy's most sensitive radar systems,'' he told state television. ''It can avoid antimissile missiles and strike the target.''
A State Department spokesman, Adam Ereli, said Friday that the administration did not have any technical details about the missile, but that the test showed that Iran had ''a very active and aggressive military program.''
An Israeli missile expert quoted by Reuters expressed skepticism, however, saying Iran ''could be bluffing.''
The expert, Uzi Rubin, a former director of the Arrow missile defense program, said if it was true that Iran had such rockets, there was no way it could have produced them without outside help.
The range of the Fajr-3 was not clear. Iran's midrange missile, the Shahab-3, or ''Shooting Star,'' which has been test-fired successfully, has a range of about 1,000 miles.
The Fajr-3 test was part of naval maneuvers in southern Iran along the Persian Gulf and the Sea of Oman.


however, the fajr-3, according to both stratfor and the times, has a range of 28-30 miles, and carries a warhead of 100 lbs. this is a long way from the multiple warhead icbm's i think we all have in mind.

there appears to be some confusion here.

since ya put so much stock in the NYT...

Arming of Hezbollah Reveals U.S. and Israeli Blind Spots

WASHINGTON, July 18 — The power and sophistication of the missile and rocket arsenal that Hezbollah has used in recent days has caught the United States and Israel off guard, and officials in both countries are just now learning the extent to which the militant group has succeeded in getting weapons from Iran and Syria.

While the Bush administration has stated that cracking down on weapons proliferation is one of its top priorities, the arming of Hezbollah shows the blind spots of American and other Western intelligence services in assessing the threat, officials from across those governments said.

American and Israeli officials said the successful attack last Friday on an Israeli naval vessel was the strongest evidence to date of direct support by Iran to Hezbollah. The attack was carried out with a sophisticated antiship cruise missile, the C-802, an Iranian-made variant of the Chinese Silkworm, an American intelligence official said.

At the same time, American and Israeli officials cautioned that they had found no evidence that Iranian operatives working in Lebanon launched the antiship missile themselves.

But neither Jerusalem nor Washington had any idea that Hezbollah had such a missile in its arsenal, the officials said, adding that the Israeli ship had not even activated its missile defense system because intelligence assessments had not identified a threat from such a radar-guided cruise missile.

They said they had also been surprised by the advances that Hezbollah had made in improving what had been crude rockets — for example, attaching cluster bombs as warheads, or filling an explosive shell with ball bearings that have devastating effect.

The Bush administration has long sought to focus attention on Iranian missile proliferation, and regularly discusses with journalists intelligence evidence of those activities. But American officials in Washington made clear this week that they were reluctant to detail Iran’s arming of Hezbollah in the current conflict.

The reason, according to officials across the government, was a desire by the Bush administration to contain the conflict to Israeli and Hezbollah forces, and not to enlarge the diplomatic tasks by making Iranian missile supplies, or even those of Syria, a central question for now.

Still, some officials in Washington admitted to being blindsided by the abilities of Hezbollah’s arsenal.

“You have to acknowledge the obvious — we’ve seen a new capability in striking the naval vessel and in the number of casualties that have been sustained from the Hezbollah missile attacks,” a Bush administration official said.

“In the past, we’d see three, four, maybe eight launches at any given time if Hezbollah was feeling feisty,” the official added. “Now we see them arriving in large clusters, and with a range and even certain accuracy we have not seen in the past.”

The officials interviewed agreed to discuss classified intelligence assessments about Hezbollah’s capabilities only on condition of anonymity.

While Iranian missile supplies to Hezbollah, either by sea or overland via Syria, were well known, officials said the current conflict also indicated that some of the rockets in Hezbollah’s arsenal — including a 220-millimeter rocket used in a deadly attack on a railway site in Haifa on Sunday — were built in Syria.

“The Israelis did forensics, and found several were Syrian-made,” said David Schenker, who this spring became a senior fellow at the Washington Institute for Near East Policy after four years working on Middle East issues at the Pentagon. “Everybody recognizes that Syria has played an important role in facilitating transshipment — but not supplying their own missiles to Hezbollah.”

Officials have since confirmed that the warhead on the Syrian rocket was filled with ball bearings — a method of destruction used frequently in suicide bombings but not in warhead technology.

“We’ve never seen anything like this,” said one Western intelligence official, speaking about the warhead.

But it was Friday’s successful launching of a C-802 cruise missile that most alarmed officials in Washington and Jerusalem.

Iran began buying dozens of those sophisticated antiship missiles from the Chinese during the 1990’s, until the United States pressured Beijing to cease the sales.

Until Friday, however, Western intelligence services did not know that Iran had managed to ship C-802 missiles to Hezbollah.

Officials said it was likely that Iran trained Hezbollah fighters on how to successfully fire and guide the missiles, and that members of Iran’s Al Quds force — the faction of the Revolutionary Guards that trains foreign forces — would not necessarily have to be on the scene to launch the C-802.

At the same time, some experts said Iran was not likely to deploy such a sophisticated weapon without also sending Revolutionary Guard crews with the expertise to fire the missile.

An administration official said intelligence reports have concluded that a small number of Iranians are currently operating in Lebanon, but the official declined to disclose their number or mission.

http://www.nytimes.com/2006/07/19/world/middleeast/19missile.html

---

"But it was Friday’s successful launching of a C-802 cruise missile that most alarmed officials in Washington and Jerusalem."

that's a Chinese missile.

hey, maybe we can ask them to stop selling these to our enemies or, seeing as how we're living off their cheap labor pool and loans, why we'll, um, why we'll... we'll huff and puff and bow their house down!!!

jk
07-21-06, 07:25 AM
there's a saying that if you owe the bank $10,000, you have a problem. but if you owe the bank $10,000,000, the bank has a problem.

i wish it were that simple.

EJ
07-21-06, 12:32 PM
there's a saying that if you owe the bank $10,000, you have a problem. but if you owe the bank $10,000,000, the bank has a problem.

i wish it were that simple.

It is tempting to use the "If you owe the bank enough money, you own the bank" analogy. But countries are not banks. The US has defaulted on its sovereign debts more than once in the last century, either via inflation or directly. And countries have called in debts to their borrowers due to a local crisis in the lender's economy or due to political or military conflicts between the lender and borrower. The UK defaulted on its debts to the US in teh 1930s, making the depression worse for the US. That's one of the reasons, but not the most significant reason, why the US dragged its feet getting into WWII to help the UK. If China suffers a local economic or financial crisis, it may not be able to loan the US as much. If China is providing weapons to Iran that wind up getting used by enemies of the US against US interests -- if a few C-802s hit a US ships and lives are lost -- the US will have to put serious pressure on China but the US is for reasons of indebtedness not in a strong position to do so.

Pilot Fish
07-21-06, 01:38 PM
[QUOTE=EJ] The UK defaulted on its debts to the US in teh 1930s, making the depression worse for the US.

And would it be fair to say that at that time, the UK was still considered the world's preeminent financial power? If so, that should serve as a warning to those complacent enough to believe that the US will remain number one "forever". No need to go all the way back to ancient Rome really.

jk
07-21-06, 03:26 PM
If China is providing weapons to Iran that wind up getting used by enemies of the US against US interests -- if a few C-802s hit a US ships and lives are lost -- the US will have to put serious pressure on China but the US is for reasons of indebtedness not in a strong position to do so.

maybe that's where the "if you owe the bank.." analogy comes in. the uk ran up debt and then defaulted in the 30's. anything they could do, we can do better!