16-Jan-12 World View — U.S.-Israel Tensions Grow Over Military Action in Iran

This morning’s key headlines from

  • Pakistan Taliban leader reportedly killed by U.S. drone attack
  • Terrorist bomb kills 18 people in Punjab province, Pakistan
  • U.S.-Israel tensions grow over military action in Iran
  • U.S. Joint Chiefs chairman headed to Israel to improve relations
  • Al-Qaeda’s expands control in Yemen to town near Sanaa
  • Abbas travels to Europe to pressure Israel as as peace talks end
  • Falling earnings estimates portend falling stocks

Pakistan Taliban leader reportedly killed by U.S. drone attack

Hakimullah Mehsud in 2009 (Reuters)
Hakimullah Mehsud in 2009 (Reuters)

Hakimullah Mehsud, the leader of the Pakistani Taliban (Tehrik-e-Taliban Pakistan – TTP), has reportedly been killed by an American drone strike on January 12. If true, this kill would be greatly welcomed, since TTP has been responsible for numerous terrorist attacks, attacking Nato soldiers and Afghan officials in Afghanistan, and Shia and Sufi worshipers in Pakistan. The conclusion that Mehsud was killed was reached by intercepting wireless radio chatter between Taliban fighters detailing how Hakimullah Mehsud was killed while traveling in a convoy to a meeting in the North Waziristan tribal region near the Afghan border. However, on at least two occasions in the past, officials announced that Mehsud was dead, only to be proved wrong by new videos on Youtube. Reuters

Terrorist bomb kills 18 people in Punjab province, Pakistan

Terrorist bomb in Khanpur (BBC)
Terrorist bomb in Khanpur (BBC)

Hundreds of Shia Muslim worshippers were killed by terrorists in Pakistan during 2011, and a new attack on Sunday killed 18 people, injuring 30 others, when a remote-controlled bomb exploded near a procession on a Shia Muslim holy day. No one has yet claimed responsibility for the attack, but they have been targeted by al-Qaeda and Taliban linked Sunni Islamist groups that claim that Shia Islam is apostate. Daily Times (Pakistan) and BBC

U.S.-Israel tensions grow over military action in Iran

Growing tensions between the United States and Israel over military plans to counter Iran’s nuclear development have caused the U.S. to postpone a joint military exercise, “the largest and most significant joint exercise in the allies’ history,” from May until the end of the year. The reason being given for postponement of the “Austere Challenge 12” exercise is “budgetary constraints.” It was originally announced over the Administration’s concern that Israel would preemptively attack Iran without notifying the U.S., but now the exercise is apparently being delayed for the same reason. 9,000 American troops have already landed in Israel for the military exercise, and plans for them have not been announced. Israel has been critical of the Administration for its reluctance to attack Iran, and tensions rose further this week when Secretary of State Hillary Clinton denied “absolutely” any U.S. involvement in the killing of an Iranian nuclear scientist, indirectly appearing to imply that Israel and Israel alone was responsible. LA Times and Debka

U.S. Joint Chiefs chairman headed to Israel to improve relations

American Joint Chiefs of Staff Chairman Martin Dempsey will travel to Israel this week to calm relations between the two countries, and to encourage Israel to stay calm with respect to Iran, and allow sanctions to work. However, Moshe Yaalon, Israel’s vice prime minister, and a close confidant of PM Benjamin Netanyahu, is expressing disappointment in the Obama administration on Sunday, saying “election-year considerations” lay behind its caution over tough Iran sanctions. He contrasted the administration’s posture to that of France and Britain, which he said “are taking a very firm stand and understand sanctions must be imposed immediately.” Reuters and Fox News

Al-Qaeda’s expands control in Yemen to town near Sanaa

Al-Qaeda on the Arabian Peninsula (AQAP) on Saturday have seized the town of Radda, meeting little resistance. AQAP has previously been in control of several towns in the southern province of Abyan, so the capture of Radda, north of Abyan and just 170 km southeast of Yemen’s capital Sanaa, presents a new threat and a setback to efforts to restore order in Yemen. AQAP has been taking advantage of nearly a year of internal turmoil over demands that President Ali Abdullah Saleh step down to take control of areas in Yemen’s south. Yemen Observer and Reuters

Abbas travels to Europe to pressure Israel as as peace talks end

Israeli and Palestinian negotiators met on Saturday in Amman for the third time this year — not to negotiate, but just to talk. The talks, sponsored by King Abdullah II of Jordan, were a last-ditch attempt to spark a new “peace process,” something that was never going to happen. The non-negotiation talks are scheduled to end on January 26, and Palestinians have said that they won’t resume unless the Israelis stop building West Bank settlements, and agree to negotiate starting from the pre-1967 borders. Palestinian Authority president Mahmoud Abbas is touring European as part of a broad diplomatic initiative, starting January 27, to isolate and pressure Israel. The National (UAE)

Falling earnings estimates portend falling stocks

2011 S&P 500 consensus EPS by quarter
2011 S&P 500 consensus EPS by quarter

The adjoining graphic contains a fair amount of bad news. It shows the analysts’ estimates of earnings per share (EPS) for the S&P 500 stocks, and how those estimates have changed over time. It shows that estimates for Q4 were high early in 2011, but since July have been falling steadily, and are now at $24.09 earnings per share, and continuing to fall. Politicians and analysts who have been predicting a full-fledged return of the stock market bubble have based those predictions on steadily increasing earnings, and those assumptions are now failing. Q4 earnings report season begins on Monday, so we should have some answers soon. This is all happening at a time when China’s real estate bubble is finally deflating, and Europe’s public debt is close to explosion. The Generational Dynamics prediction that a full fledged global financial panic and crash is coming with 100% certainty has not changed. Zero Hedge


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