With markets fading some during today’s session, the bulls will soon be looking to take some profit. Markets have run up on very light volume, and people feel somewhat uneasy with the markets trading at these levels, while no mess is fixed. We have not really had any bad news lately, and the question is, how would the market react to some not expected bad news. The Geopolitical space has been very calm, but that could change abruptly. Iran could resurface as the main geopolitical risk sooner than many think. We learnt about the Strait of Hormuz some days ago, but there is more. From Bllomberg;
One of the arguments often made in favor of bombing Iran to cripple its nuclear program is this: The mullahs in Tehran are madmen who believe it is their consecrated duty to destroy the perfidious Zionist entity (which is to say, Israel) and so are building nuclear weapons to launch at Tel Aviv at the first favorable moment.
It’s beyond a doubt that the Iranian regime would like to bring about the destruction of Israel. However, the mullahs are also cynics and men determined, more than anything, to maintain their hold on absolute power.
The European mess risks taking focus from other important event. The Geopolitical space is still alive. From Stratfor on US, Iran and the Strait of Hormuz.
The United States reportedly sent a letter to Iran via multiple intermediaries last week warning Tehran that any attempt to close the Strait of Hormuz constituted a red line for Washington. The same week, a chemist associated with Iran’s nuclear program was killed in Tehran. In Ankara, Iranian parliamentary speaker Ali Larijani met with Turkish officials and has been floating hints of flexibility in negotiations over Iran’s nuclear program.
This week, a routine rotation of U.S. aircraft carriers is taking place in the Middle East, with the potential for three carrier strike groups to be on station in the U.S. Fifth Fleet’s area of operations and a fourth carrier strike group based in Japan about a week’s transit from the region. Next week, Gen. Michael Dempsey, chairman of the Joint Chiefs of Staff, will travel to Israel to meet with senior Israeli officials. And Iran is scheduling another set of war games in the Persian Gulf for February that will focus on the Islamic Revolutionary Guard Corps’ irregular tactics for closing the Strait of Hormuz.