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  • Syria, Iran, and the Balance of Power in the Middle East

    Let's peel our eyes away from the eurozone disaster momentarily and take a look at another crisis – one with just as much potential to impact our global financial system.

    As we've discussed in Outside the Box before, Iran's trump card is not its nuclear capability but rather its opportune location next to the very narrow, very important Strait of Hormuz ... through which no less than 40% of the world's seaborne oil passes.

    As the US leaves Iraq, Iran is ready and waiting to fill the void and extend its regional influence. So where's the next turf war? A shaky Syria, where the Iranian-Saudi-US balance of power will continue to play out.

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  • Iran’s Nuclear Program and its Nuclear Option

    Take a minute – and maybe a deep breath too – and imagine the markets at opening bell on a hypothetical morning when live video shows burning oil tankers in the Strait of Hormuz (through which 40% of the world's seaborne oil passes). Couple that with the already shaky state of the current global economy and you get ... well, what does chaos in a mosh pit look like?

    Iran is back in the headlines, and once again behaving in a less-than-cooperative fashion regarding its nuclear enrichment program. After they've failed to deliver on promise after promise, it does not appear that Iran will come clean anytime soon, and definitely not in time for the IAEA (International Atomic Energy Agency) inspection report due out any day now.

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  • Iraq, Iran and the Next Move

    For those of you that have read about my new book, Endgame, you know I make the point that, while there are no good options for dealing with the debt crisis, the worst choice of all is doing nothing. In today's Outside the Box, you'll see a similar argument—but this "lesser of two evils" situation deals with the U.S. troop withdrawal from Iraq, and the ever-present Iranian push to dominate the Persian Gulf region.

    George Friedman—my friend, and founder of STRATFOR, a global intelligence company—discusses the potential "bad options" the U.S. has in its attempt to rein in Iran, and arrives at what he considers the least detrimental: negotiation. The worst of course is doing nothing, thus allowing Iran to increase its hold on the entire region—a region on which the global economy is dependent for its oil... You can see why all this matters.

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  • Second Quarter Forecast 2009: Global Trends

    I've been in this business a long time. Some days it feels like a very long time. But never in all the years that I've been in the financial markets have I felt like business per se has less impact on my investment decisions. Let me explain.

    GM shares have gone from being a claim on earnings from car sales to being a call option on whether the US government will extend another lifeline. Banks' capital structures have gone from being the province of Boards of Directors and CFOs to the "expertise" of Congressional committees and appointed regulators. Used to be when I thought about Financial Centers New York and London came to mind. Instead now I have to think about Washington and Brussels.

    My friend George Friedman and his team at STRATFOR are where I turn when I need help thinking about these new realities. George's team provides me context and understanding of the environment in which financial developments are going to take place. I may tweak him about his ties, but if you saw George speak at my conference in La Jolla, you know that he's an absolutely compelling speaker. And it's small wonder that his latest book spent those weeks on the New York Times bestseller list too.

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  • Iran: Using Oil as a Weapon, But Only Rhetorically

    The hottest media topic of the New Year is the Israeli-Palestinian conflict in Gaza. And as I was reading the New York Times on Tuesday, I came across this sentence in one of the articles that was staggeringly truthful and more than a little unsettling in its implications for me as an investor. 'There are other ways to construe the context of this conflict of course. But no matter what, Israel's diplomats know that if journalists are given a choice between covering death and covering context, death wins.' Now, I'm NOT trying to get into a debate about the rights and wrongs of either side, but if you're an investor, and you're trying to make decisions about where this conflict might drive oil prices, for example, then context is everything. And according to the New York Times, if you're relying on journalists for context, forget it. But you do have an alternative....
  • Fourth Quarter Forecast 2008

    Really hear what I'm about to tell you. The center of gravity of the world economic system has moved from New York to Washington. Let me illustrate what I mean so you understand just how profound this is. Banks used to compete against banks. US carmakers competed against each other and the Japanese. And the New York financial markets told you how they're doing against each other. Understand what's happening now. The US Treasury has become the only "customer" that matters. The Treasury is now the customer—and investor -- with the $750+ billion checkbook. The Treasury is now the "investment banker" of last resort, arranging and financing mergers. Banks are competing against insurance companies for their slice of the bailout pie. Chrysler and GM (and the Michigan Congressional delegation) are looking to Washington, not Goldman or Merrill, to facilitate a merger. This is a seismic shift....
  • The Real World Order

    Today I'm passing along a piece from George Friedman, Chief Intelligence Officer at Stratfor. He makes the absolutely compelling argument that issues of war and peace follow these same guidelines. There are ebbs and flows, but war between countries is an inevitable part of history, and it's driven by simple geography. The recent war between Russia and Georgia was precisely such a "reversion to the mean," double-entendre fully intended. Navigating financial markets requires an understanding of the geopolitical issues - the war & peace - that drive them. What does this war mean for Russian gas supplies to Europe? What does this war mean for the future of the BTC pipeline? Does this war make Iranian inclusion in global markets more or less likely? Is Russia just "vertically integrating" its control of energy flows with less-than-subtle tools?...
  • A Mystery in the Middle East

    This is a Special Edition of Outside the Box from my friend George Friedman and Stratfor. You've heard me say before that these guys see the world in a different way, but this piece just makes it crystal clear. There are serious rumblings about a...
  • War Plans: United States and Iran

    This week in our Special Outside the Box, George Friedman of Stratfor addresses what many believe to be the looming war with Iran, the potential wars' strategic futility, the underlying geopolitical implications, and the inherent threats that abound...
  • Israel, Syria and the Glaring Secret

    Introduction One of the things I found out in my recent survey of readers is that many of you really like the special Outside the Box I send every now and then from George Friedman and Stratfor. I share your enthusiasm for the really unique world view...
  • The Major Diplomatic and Strategic Evolution in Iraq

    Introduction This week in a Special Outside the Box good friend George Friedman addresses the Byzantine geopolitical ramifications of recent three party discussions between the Americans, Iraqis, and Iranians. With no obvious reason to trust one another...
  • Two Busted Flushes: The U.S. and Iranian Negotiations

    Introduction This week's special edition of Outside the Box touches on the strained relationship between the U.S. and Iran as the war in Iraq continues to loom. Bush is nearing the end of his tenure as President and is (as well as has been) seeking...
  • Russia's Great-Power Strategy

    Introduction Today's special edition Outside the Box discusses the long-term strategy that Russian President Vladimir Putin is setting in place. Stratfor President George Friedman has written an intriguing article on what he sees as some motives,...
  • Rhetoric and Reality: The View from Iran

    Introduction Today's Special Edition of "Outside the Box" by my friends at Stratfor gives us a very insightful analysis of the difference between the rhetoric of Iran and the reality of the world they face. George Friedman, President of...