Sunday, August 22, 2010

Iran: The Most Dangerous Game... Election Cycles... Market Moves...

Iran:  The Most Dangerous Game
If you feel a bit uneasy about Iran possessing a nuclear power plant, you are not alone. It is scary enough that regimes like North Korea (more affectionately known as China's lap dog) and Pakistan (the most unstable of all nuclear powers) have the ability to enrich weapons grade uranium... However the continued proliferation of radioactive material isn't just dangerous for Israel, and the West. It could in many ways mean the beginning of the end for humanity....  Billionaires Warren Buffet and Bill Gates have listed proliferation as one of their top agendas  for their charitable trusts... Consider the following time-line since 2009 and one can see the writing on the wall.

September 25, 2009 - The IAEA says Iran has told it about a second uranium enrichment plant being built. Construction of the plant began in 2006.

October 1 - Iran meets six world powers in Geneva and accepts a plan to send 75 percent of its low-enriched uranium (LEU) to Russia and France, where it would be made into special fuel for a Tehran reactor making medical materials.

October 25 - U.N. nuclear experts inspect the newly disclosed enrichment plant being built near the Shi'ite holy city of Qom.

October 30 - Iran tells IAEA it wants fresh nuclear fuel for a reactor in Tehran before it will agree to ship some enriched uranium stocks to Russia and France, according to the U.N.

November 18 - Iran says Tehran will not send enriched uranium abroad for further processing but would consider swapping it for nuclear fuel within its borders.

November 19 - U.S. President Obama warns Iran of the consequences of its failure to respond to the nuclear deal.

November 26 - Outgoing U.N. nuclear watchdog chief ElBaradei says Iran's blockage of a plan to divest it of possible nuclear bomb material "disappointing."

November 27 - The IAEA censures Iran for developing the plant near Qom in secret and demands Iran freeze the project.

November 29 - Iran says plans to build 10 more nuclear sites.

January 19, 2010 - Iran rejects key parts of the deal to send abroad for processing most of its enrichment material.

February 2 - President Mahmoud Ahmadinejad says Iran is ready to send enriched uranium abroad, apparently easing his position.

February 9 - Iran begins making higher-grade nuclear fuel, enriched to a level of 20 percent, at its Natanz facility.

February 18 - An IAEA report suggests, bluntly and for the first time, that Iran is actively pursuing nuclear weapons capability.

March 18 - U.S. Secretary of State Hillary Clinton criticizes Russia's plans to start the Bushehr power plant.

-- Russian Prime Minister Putin announces Russia will start up the reactor at the Bushehr plant in summer 2010.

March 25 - The United States, Britain, France and Germany start talks with China and Russia on a U.S.-drafted proposal for a new round of U.N. sanctions against Iran.

April 12 - Obama's drive for tougher sanctions on Iran gains momentum at a two-day summit of nearly 50 countries that Obama has called to highlight the global threat of nuclear terrorism.

April 19 - Iran says it will start work on a new uranium enrichment plant.

April 27 - Brazil offers to mediate to help end the West's standoff with Iran over its nuclear program. May 12 - U.N. resolutions aimed at increasing sanctions against Iran over its nuclear program "are not worth a penny" and Tehran will give no ground to pressure, Ahmadinejad says.

May 17 - Iran, Brazil and Turkey sign a nuclear fuel swap deal. Iran says it has agreed to transfer 1.2 tons (2,646 lb) of its low-enriched uranium to Turkey within a month in return for higher-enriched nuclear fuel for a medical research reactor.

May 18 - The United States hands the U.N. Security Council a draft resolution that will expand U.N. sanctions against Iran by hitting its banking and other industries.

May 31 - A new IAEA report shows Iran's low-enriched uranium stockpile has grown to 2.4 tons, so that even if the 1.2 tons was shipped out now it would still leave Iran enough material for a nuclear weapon if enriched to higher levels.

June 9 - The U.N. votes to extend sanctions against Iran.

June 24 - U.S. Congress approves tough new unilateral sanctions aimed at squeezing Iran's energy and banking sectors, which could also hurt foreign companies doing business with Tehran. They are signed into law on July 1.

July 26 - The EU imposes tighter sanctions on Iran, aiming to block oil and gas investment and curtail its refining.

-- Iran says it is ready to hold talks on a nuclear fuel swap without conditions.

July 30 - Iran says it will never give up its right to enrich uranium, but could suspend higher-level work if a fuel swap can be agreed with foreign powers.

August 6 - The Institute for Science and International Security (ISIS) says Iran is now using a second set of centrifuge machines at its Natanz pilot plant to enrich uranium, stepping up its nuclear work despite sanctions.

August 13 - Russia announces it will begin loading nuclear fuel into the Bushehr reactor on August 21.  (1)
The unfortunate fact is that the U.S. has squandered a portion of its political capital on Iraq and Afghanistan. While we have not been an honest broker in helping solve long-standing Middle East Peace Issues, the opportunity to bring a more peaceful resolution to this matter has passed. Chances are that Israel will have to take matters into their own hands. This time, the stakes are a bit higher with Russian supervisors on the ground at Iran's nuclear facility.  An old U.S. Ambassador once told me that armed conflict happens when diplomacy fails. Should diplomacy fail, look for gold and oil to make a hard move North... and the rest of the financial markets to move the other direction...

Election Cycles...
In his latest op. ed. piece Thomas Friedman not so gently suggested that Obama and Congress are politicizing an ever frail economy.  He puts forth a reasonable argument suggesting that Obama's timing on a national healthcare program was poorly timed in lieu of the ever deepening Federal debt. Meanwhile, Republicans can do no better that develop schemes to ensure that the top 1% of Americans retain their tax cut. 

What seems to be missing is a general concern to get things done... get people back to work... and address the bigger problems that are facing our nation. Friedman's suggestion that Obama invite top Democrat and Republican leaders to Camp David to hammer out some type of a plan sounds good in theory. However, the political atmosphere in D.C. could be as polarized now as it was under W. Bush... if that is possible.

Market Moves...
I took a 34% profit on ADM selling the contract as a limit order at .59 cents.  I also added another position of YRCW (at .25) to my portfolio as the word on the street is that the workers and drivers are working as much overtime as they want. The economic calendar this week has more than one potential pitfall. The question is whether these poor numbers have already been figured into the market. BTW YRCW just gained a strong working-relationship with Teamsters Union.
 MarketWatch consensus (2)

Aug. 24Existing home sales4.78 mln5.37 mln
Aug. 25Durable goods orders2.5%-1.0%
Aug. 25New home sales339,000330,000
Aug. 26Jobless claims495,000500,000
Aug. 27GDP revision1.4%2.4%
Aug. 27Consumer sentiment68.569.6

No comments: