Israel Attack on Iran Seems Imminent

Sometime recently I came across a curious story in the Wall Street Journal that I felt had no right to be there. Its mere presence in print said something to me, that it had a purpose. In its article, Spy vs. Spy: Inside the Fraying U.S.-Israel Ties, the Wall Street Journal shares with the public for the first time the intimate details of Israel’s battle plan against Iran’s nuclear program. In my opinion, the story had a purpose, to stop Israel from attacking Iran in the near-term, but the only thing it may have accomplished is to alter and intensify the way Israel goes about it in the end. The Wall Street Journal story seems it could have been inspired by leaked intelligence, as its Freudian slip in the title wants to tell us. Alterations of the story since its initial publishing also imply mischief. One intimate detail within the report even implied a potential date for the strike, but that portion of the story was curiously altered over the last week or so to blur the view. The recent actions of Israel, the United States, Iran and Russia seem to confirm the possibility of a near-term Israel strike on Iran’s nuclear facilities. Now, maybe nothing will happen later today on November 11, 2015 (11-11-15) as was implied by the WSJ report, but I believe there’s a good enough chance for a near-term event to prepare my followers for what could be a catalytic event for oil (first and foremost), gold, stocks and the dollar.

Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

The WSJ report details the evolution of the Iran nuclear issue and the efforts of the United States and Israel to stop the troubling ambitions of the Middle Eastern keystone. It begins with a description of cohesive allies working together in all regards to stop their mutual nemesis which possesses clear ill-intent for each. However, the story goes on to show a mutating relationship as power shifts occur in both Israel and especially in the United States. Once President Obama took office, a relationship of trust mutated into one of distrust and dysfunction, full of secrets and spying on one another as much as the mutual foe. The story is a must read, but let me detail for you what I found most telling about it.

Israel and the United States had worked in concert to slow and disrupt Iran’s nuclear efforts. Over time, it became evident to Israel that its actions from distance could only go so far and that a more aggressive engagement would be necessary to deal Iran a hopefully more conclusive blow. However, President Obama came into office after promising the American public that the era of American military engagement in the Middle East would come to an end. His hopeful speech in Cairo was admirable, but only led to an Arab Spring that ushered in chaos and disorder in nations that were at least orderly before. Egypt, Libya, Iraq, Yemen, Afghanistan and Syria fell into chaos and the Islamic State came into being to replace a void left by the American presence now absent. Everything happened just as Mitt Romney and John McCain warned it would, with Obama’s on the job training in foreign policy proving dangerous. The foreign policy damage done by the Obama Administration could take a decade or more to repair if it is reparable at all, and Iran could become a nuclear power in the meantime.

As a result of the President’s plan for peace, and Israel’s disbelief in his logic, the two sides strayed. The President began to covertly work to open channels for discussion with Iran. He reportedly kept Israel in the dark because Israel showed a propensity to leak information it did not agree with, but I believe also to prevent Israel from acting unilaterally against Iran before a deal could be reached. Not much escapes Israel’s highest profile intelligence agency, and the Mossad learned of the secret talks. Distrust was born between two key allies, and the relationship has not been the same since. Benjamin Netanyahu’s National Security Advisor in 2013, Yaakov Amidror, revealed Israel’s awareness to the Obama Administration and said importantly that it was a big mistake to hide the talks with Iran from Israel. I believe the distance that formed between the two nations, and America’s interest in knowing what Israel was up to, may be one of the key reasons the United States spied on its close allies in Europe around the same time. If Israel was no longer working closely with the U.S., perhaps it had formed closer ties with other western powers. The U.S. would want to know what Israel was up to.

The article shows how Israel neared acting unilaterally in 2012, but backed away from military engagement. Israel was able to do so because of the help of the United States to work against Iran via other means. The United States stood strongly against Iran at the time and worked with Israel to unleash a computer virus on Iran’s facilities (Stuxnet) which caused considerable damage and delay. Israel was also active killing key nuclear scientists in Iran and further impeding the process. But Israel realized its efforts were only slowing Iran, and so planned more aggressive action.

I found it revealing that the Wall Street Journal article was altered since it was first published. One of the altered points was that Israel had accomplished a dry run and actually crossed into Iran with aircraft and commandoes in 2012. The article was altered to read that some in the Administration mistakenly believed Israel had done so. Another interesting detail was removed from this report: that Israel was perhaps working with Saudi Arabia because its aircraft could not manage the distance without a rest and refueling along the way. I read that there was the possibility of a temporary airbase being constructed in the desert to allow for that. Saudi Arabia has good reason to assist Israel in its effort to stop Iran, but it also has good reason to keep its assistance secret. And the final point that I noted altered was the portion about Israel’s plans to attack on the darkest of nights. Initially, this read that Israel was targeting exact dates of the new moon in the lunar cycle, or when there is little moonlight. Well, the next new moon is November 11, 2015 (tonight), and Israel has good reason to act sooner rather than later, as the article also reveals. Keep reading…

Importantly, while the US says it will include Israel in information sharing about Iran’s compliance with the nuclear deal, Israel retains its right to act covertly on its own against Iran. Meanwhile, the article suggests that a clause in the nuclear agreement indicates the major powers must help Iran safeguard its facilities against such sabotage. It does not outright indicate that the U.S. should stop Israel from bombing Iran’s facilities, but it is clear that once the deal is in place, Israel will be in a tougher spot. Thus, Israel has to go with its attack before the deal is sealed and the parties involved are complying with their responsibilities. So every new moon should be watched closely now as carrying the potential for war and chaos.

The west’s deal with Iran led by the U.S. looks to me like President Obama’s desperate attempt to stop war from breaking out in the Middle East; and to stop Israel from attacking Iran to start such a war. I wonder if U.S. negotiators even went so far as to tell Iran that they had better work with them or likely face war (we all knew that anyway). If Iran were to garner nuclear weapons and later use them on the United States, I wonder if these efforts for peace won’t be seen as treasonous, if not perfectly ignorant. Netanyahu said that he believed that the parties involved had sincere intentions and the best of them, but that good intentions do not prevent the worst of outcomes. I agree, and highly suggest any doubters read the writings of Iran’s Supreme Leader, through which he guarantees Israel’s nonexistence in a few decades. It’s his goal in fact, the man we just shook hands with.

The Wall Street Journal says its report was based on the accounts of nearly two dozen high ranking representatives of both countries, but I wonder. Has someone in the know revealed these details to the Wall Street Journal at this timely point before the deal is fully enacted in order to make it more difficult for Israel to move unilaterally? Was Israel’s Benjamin Netanyahu invited to the White House this week to ensure Israel does not act during this new moon? Or did Netanyahu come to forewarn the President of an imminent action, or to forewarn other allies of his in the United States. Would Netanyahu even warn the U.S. at this point in time? I perceived high concern on the face of our president and a secret behind the smile of Israel’s leader yesterday in their joint photos. I believe Netanyahu will be back home in time for Israel to still strike tonight (check that), but perhaps Israel would act on November 12 or 13 instead, to allow for the passing of the date that might be in the focus of its enemy now. Or does the alteration of this information within the WSJ piece mean they will go tonight or at the next new moon or near after?

In 2012, when the U.S. was concerned that Israel could act, it sent battle aircraft and a second aircraft carrier to the region, “just in case all hell broke loose.” Last week, the U.S. sent dogfighters, or aircraft that can only fight other aircraft to the region, it implied to protect our bombers from potential engagement by the Russians. That could be true, or they could be there to assist our allies in the event of all hell breaking out… And, maybe the Russians are not there for the reason they state they are either. Recently (last week), the U.S. Air Force took part in an exercise with the IAF; was that to keep an eye on the Israelis or is a joint plan in progress despite all the deal talk?

One thing seems clear to me, Israel believes it has no other choice now but to act unilaterally, though perhaps with assistance from certain allies. If the only thing that stopped Israel in 2012 was its other options thanks to the help of the United States and the economic blocks placed against Iran, then what’s to stop it now? If in the near future the west is obliged to safeguard Iran’s facilities, then why would Israel wait for that complication?

Readers of mine know that from time to time, and all throughout this Iranian nuclear story, I’ve expected conflict. In the early days of my blog I discussed a chance encounter with a French diplomat at a Greek restaurant that threw me for a loop. I could not at the time contemplate how a UN diplomat could believe that Iran wanted nuclear knowledge for any other purpose than to weaponize it. And at certain points in time, I’ve authored similar articles to this one. But, I ask you to review the last speech of Netanyahu at the United Nations, within which he paused for a full minute and stared down the representatives and asked them if they would be so passive if it was their nation under threat by this Iranian regime. I believe Netanyahu has reached the end of his patience and that Israel is about to bomb Iran.



Israel, in the past, asked for bunker buster bombs and Osprey air craft from the U.S. and was denied them. Perhaps Israel has developed or otherwise acquired the weapons it needs over the last three years. Or, perhaps because of the WSJ revelation about Israel’s plans to use commandos to destroy Iran’s facilities from the inside, it is now forced to use nuclear weapons to destroy Iran’s nuclear effort. So you wanted nuclear weapons Iran? Well here they are. Imagine the consequences.

Friends, an attack by Israel on Iran could set forth a series of events in the Middle East, given that far too many players are in the arena today. How far would Israel go and how far would Iran go in its response, assuming it will be capable of one? Will Saudi Arabia be involved? These types of questions and the importance of the region mean that oil prices will skyrocket on the sudden change in paradigm. The dynamics at work in energy prices today are of economic significance solely, and they are forcing oil prices to new lows as I scribble here. I wonder if Saudi Arabia has stubbornly kept to production in order to purposely deflate oil prices ahead of an event that would catapult them. At least, from a lower base point they might be less disruptive and reach a lower high point.

Nonetheless, I expect WTI Crude, today at roughly $43, would immediately surge to $60 and within minutes to $80 or higher. As investors contemplate the new paradigm and the possible repercussions (what Iran might do) over a series of days, oil prices could surge further to $100, $150 or even $200 as events unfold and depending on how they evolve.

Gold is today trading at a spot price of $1084, pressured lower by a strengthening dollar and expectations for Fed tightening. But the Fed will not matter for gold once global chaos is at hand, or regional chaos that could go global. Under similar circumstances and expectations for the Fed, when Russia invaded Ukraine, gold still surged higher despite the dollar factor. It would do the same here. Spot gold prices would surge and not look back until peace was once again at hand. And if any regional conflict at any time threatens the United States in any manner, gold could revisit its highs of the last decade and surpass them.

Indeed, an Israel attack on Iran is a special sort of event with dire consequences and meaningful impact for securities markets. Stocks would crash, just as they did during the Saddam Selloff of the early 90s. But this time, the outcome would be less certain and would take longer to be realized, so stocks could sink further and fail to recover immediately.

This is the sort of “crazy talk” you will never find from a major publisher because of their conservative nature, which results from a fear of risk taking at large organizations. But it’s the type of break-through contrarian work I’ve never strayed from sharing and never will. The only reason I held back this long was for concern of how intelligence agencies might construe my knowledge, which has come purely through discernment (and I may be wrong).

What I am saying here is that a geopolitical risk that has been all but forgotten is as hot as ever and should be given weighting now. As it has not been, investors foreseeing it have an opportunity to capture value. And given the players currently at play in the tight quarters of the Middle East, other error could also drive a similar result even if Israel does not now act on Iran. I feel the risk/reward highly favors buying energy here, and I am long the United States Oil (NYSE: USO); investors could also use the iPath S&P GSCI Crude Oil (NYSE: OIL), the Energy Select Sector SPDR (NYSE: XLE) and the SPDR S&P Oil & Gas E&P (NYSE: XOP) as well as other energy issues to capture this opportunity. Gold investors might use the SPDR Gold Trust (NYSE: GLD) and the Market Vectors Gold Miners (NYSE: GDX), or physical gold if you are very worried. Investors seeking bets against the market or hedges against it could apply the ProShares UltraShort S&P 500 (NYSE: SDS) or simply short the SPDR S&P 500 (NYSE: SPY) via put options. Highly sophisticated investors who understand the security’s risk could use the iPath S&P 500 VIX ST Futures ETN (NYSE: VXX) to hedge their portfolio against risk. I believe the best bets are made on oil on this thesis, and then gold. Follow my blog here, my feed here, my Seeking Alpha column here, my Twitter here, my Facebook here and my email list here.

Kaminis is long United States Oil (NYSE: USO). Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only. Article should interest investors in SPDR Dow Jones Industrial Average (NYSE: DIA), SPDR S&P 500 (NYSE: SPY), PowerShares QQQ Trust (Nasdaq: QQQ), ProShares Short Dow 30 (NYSE: DOG), ProShares Ultra Short S&P 500 (NYSE: SDS), ProShares Ultra QQQ (NYSE: QLD), NYSE Euronext (NYSE: NYX), The NASDAQ OMX Group (Nasdaq: NDAQ), Intercontinental Exchange (NYSE: ICE), E*Trade Financial (Nasdaq: ETFC), Charles Schwab (Nasdaq: SCHW), Asset Acceptance Capital (Nasdaq: AACC), Affiliated Managers (NYSE: AMG), Ameriprise Financial (NYSE: AMP), TD Ameritrade (Nasdaq: AMTD), BGC Partners (Nasdaq: BGCP), Bank of New York Mellon (NYSE: BK), BlackRock (NYSE: BLK), CIT Group (NYSE: CIT), Calamos Asset Management (Nasdaq: CLMS), CME Group (NYSE: CME), Cohn & Steers (NYSE: CNS), Cowen Group (Nasdaq: COWN), Diamond Hill Investment (Nasdaq: DHIL), Dollar Financial (Nasdaq: DLLR), Duff & Phelps (Nasdaq: DUF), Encore Capital (Nasdaq: ECPG), Edelman Financial (Nasdaq: EF), Equifax (NYSE: EFX), Epoch (Nasdaq: EPHC), Evercore Partners (NYSE: EVR), EXCorp. (Nasdaq: EZPW), FBR Capital Markets (Nasdaq: FBCM), First Cash Financial (Nasdaq: FCFS), Federated Investors (NYSE: FII), First Marblehead (NYSE: FMD), Fidelity National Financial (NYSE: FNF), Financial Engines (Nasdaq: FNGN), FXCM (Nasdaq: FXCM), Gamco Investors (NYSE: GBL), GAIN Capital (Nasdaq: GCAP), Green Dot (Nasdaq: GDOT), GFI Group (Nasdaq: GFIG), Greenhill (NYSE: GHL), Gleacher (Nasdaq: GLCH), Goldman Sachs (NYSE: GS), Interactive Brokers (Nasdaq: IBKR), INTL FCStone (Nasdaq: INTL), Intersections (Nasdaq: INTX), Investment Technology (NYSE: ITG), Invesco (NYSE: IVZ), Jefferies (NYSE: JEF), JMP Group (NYSE: JMP), Janus Capital (NYSE: JNS), KBW (NYSE: KBW), Knight Capital (NYSE: KCG), Lazard (NYSE: LAZ), Legg Mason (NYSE: LM), LPL Investment (Nasdaq: LPLA), Ladenburg Thalmann (AMEX: LTS), Mastercard (NYSE: MA), Moody’s (NYSE: MCO), MF Global (NYSE: MF), Moneygram (NYSE: MGI), MarketAxess (Nasdaq: MKTX), Marlin Business Services (Nasdaq: MRLN), Morgan Stanley (NYSE: MS), MSCI (Nasdaq: MSCI), MGIC Investment (NYSE: MTG), NewStar Financial (Nasdaq: NEWS), National Financial Partners (NYSE: NFP), Nelnet (NYSE: NNI), Northern Trust (Nasdaq: NTRS), NetSpend (Nasdaq: NTSP), Ocwen Financial (NYSE: OCN), Oppenheimer (NYSE: OPY), optionsXpress (Nasdaq: OXPS), PICO (Nasdaq: PICO), Piper Jaffray (NYSE: PJC), PMI Group (NYSE: PMI), Penson Worldwide (Nasdaq: PNSN), Portfolio Recovery (Nasdaq: PRAA), Raymond James (NYSE: RJF), SEI Investments (Nasdaq: SEIC), Stifel Financial (NYSE: SF), Safeguard Scientifics (NYSE: SFE), State Street (NYSE: STT), SWS (NYSE: SWS), T. Rowe Price (Nasdaq: TROW), Visa (NYSE: V) and Virtus Investment Partners (Nasdaq: VRTS).

Why the Iran Deal & Retail Sales Matter to the Fed & the Market

Tuesday’s market looked to be running into headwinds in the early AM, because weak retail sales were reported this morning for the U.S. economy. Also, an agreement on Iran’s nuclear program threatens to drive energy prices lower and detrimentally impact the U.S. economy. However, by noon investors were speculating that the bad news could serve them by holding off the Fed. Of course, much of their speculation will be forced to face reality when the Fed Chair speaks to Congress this week. While the rally may have some support here, let’s not forget that while a little bad news may be nice for fending off the Fed, recessions are worse for stocks than justified rate hikes. See the full report on Iran & the market here.

Market Sector Security	At the Open 7-14-15	At Noon
SPDR S&P 500 (NYSE: SPY)	+0.1%	+0.4%
SPDR Dow Jones (NYSE: DIA)	-0.0%	+0.3%
PowerShares QQQ (Nasdaq: QQQ)	+0.3%	+0.6%
iShares Russell 2000 (NYSE: IWM)	+0.1%	+0.6%
Vanguard Total Stock Market (NYSE: VTI)	+0.1%	+0.4%
iPath S&P VIX ST Futures (NYSE: VXX)	-0.3%	-2.3%

Auto Company Shares	7-14-15 11:30 AM EDT
Ford (NYSE: F)	+0.7%
General Motors (NYSE: GM)	+0.8%
Tesla (Nasdaq: TSLA)	+1.1%
Toyota (NYSE: TM)	+0.1%

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

Netanyahu Stirs Up Fear – Opens Opportunity for Traders

On a day with a light economic data schedule and only a few key earnings reports, the market, America and the world were focused on the speech of Israeli Prime Minister Netanyahu to the U.S. Congress. The Prime Minister laid out the case to not make a bad deal with Iran. Netanyahu also made an important statement that the days of a passive Israel in the face of aggression are over. The speech was scary as hell, as a potential strike on Iran by Israel would undermine the fragile stability the market needs for stocks to continue to rise. The uncertainty around the issue, one the market would rather look past, had stocks lower after a slow start to the day Tuesday. However, a war is not imminent and investors have recently been offered other good reasons to put money to work in risky stocks. So I expect a turn upward again, and so I would use weakness to buy stocks. Follow our Wall Street blog here.

Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

Sector Security	03-03-15 Midday
SPDR S&P 500 (NYSE: SPY)	-0.7%
SPDR Dow Jones (NYSE: DIA)	-0.7%
PowerShares QQQ (Nasdaq: QQQ)	-0.9%
WisdomTree US $ Bullish (NYSE: USDU)	-0.5%
United States Oil (NYSE: USO)	+0.8%
Sprott Physical Gold Trust (NYSE: PHYS)	+0.1%
PIMCO Total Return (NYSE: BOND)	-0.0%

The WisdomTree US$ Bullish (NYSE: USDU) was already lower on the day, coming off highs, in anticipation of today’s dire message. It’s clear the markets and market securities were anticipating this event from the start of trading today, as stocks opened lower off of yesterday’s break-through highs.

The day had little else to focus on, with few economic reports of significance on the slate. Redbook reported a weekly same-store sales increase of 2.7%, hardly changed from last week’s 2.8%. Motor vehicle sales were mostly up in February, save for Ford’s (NYSE: F). The weather was easy to blame for a relatively soft sales month, but I found the gains by General Motors (NYSE: GM) and most of the other automakers as positive news in the face of bad weather. Still, automakers’ shares were all lower on the day and decidedly so.

On the corporate earnings scene, Best Buy (NYSE: BBY) reported news investors found favorable, as its shares gained over 1% on the morn. It was the only corporate report capable of affecting stocks more broadly. But coming off record levels marked on Monday, stocks had reason to retrace and digest the new class level. Today’s speech by the Israeli Prime Minister gave investors a reason to do so. His presence alone in the American Congressional Halls had nerves on edge. It is clear there is a political divide between parties with regard to how to handle Iran. But what is likely to trouble markets more as time progresses and with a year and a half of a Democratic Party presidency assured, is fear that Israel might go it alone.

Uncertainty is bad for stocks, as is war, but a nuclear Iran is probably a worse option. It does not appear to me to present near-term danger to investors, but volatility is again on the rise today. The iPath S&P 500 VIX (NYSE: VXX) was up 3.8% as I scribbled. The dollar was lower and stocks were lower, as oil and gold gain. This day felt like it had been determined into the midday trade, but stocks should have a short memory. If there is a turn as I expect tomorrow, it only reinforces my view that the absence of recent causes of concern from Greece, Europe, Ukraine and the Fed are more important now to previously pent-up money. I say buy stocks on this fear induced drive downward. I follow the market regularly and so investors may find value in following this column.

DISCLOSURE: Kaminis is long SPY. Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

The Greece Iran Oil Connection

As the west prepares a steep set of sanctions geared to stifle Iran, Greece raises an important query. The debt laden Hellenes would like to know what will happen to their vulnerable economy if the nation’s preferable Iranian oil supply contracts are replaced with more costly sources? Furthermore, if its GDP is impacted as a result of the untimely action, causing it to fall short of qualifying thresholds for its foreign funding, would that be overlooked by its critical debt holders?

Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

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The Greece Iran Oil Connection

It’s a fair question for Greece to ask with its economic growth already under drag by the austerity demanded by the International Monetary Fund (IMF) and its European brothers. Greece sourced a significant 14% of its imported oil from Iran in the first half of 2011, and has sourced up to 23% of its oil imports from its ancient counterpart at times. According to a Bloomberg article quoting an anonymous Greek diplomat, Greece wants to ensure that if that oil is replaced, it will receive identical terms, which exclude financial guarantees.

Under normal circumstances, such a condition would not even be considered, but while Greece is under the economic microscope of the IMF, it wants to avoid new obstacles to reaching already challenging goals set by its lenders of last resort. Thus, last week, Greece held up the EU’s sanctions which would stop the flow of Iranian oil to the region. Agitated European officials have indicated that assurances will be made to Greece, but that the details will be worked out after this week’s agreement on sanctions is in place. It’s unclear whether such hastily made promises will be adequate for Greek politicians who cannot afford to place a single new burden on the shoulders of Greece’s aggravated populace.

Given Greece’s poor credibility, it is unlikely to find better terms on the open market than it gets from its likewise desperate Iranian trading partner. So, the question posed to Europe is, will it subsidize the difference in cost to Greece? Otherwise, some leeway must be given Greece, with regard to the steep economic goals it’s been forced to set.

What we are seeing in this latest situation is similar to the chaos that ensued when the former Greek Prime Minister proposed a referendum for the Greek people to decide for themselves whether their future would be with or without the euro currency. It shows that Europe is no stronger than its weakest link, and that the Greeks have more bargaining leverage than most understand. Finally, Greek politicians seem to be realizing that Europe needs Greece to stay solvent as much as Greece needs its financial assistance. Clearly, the most obvious concern to Europe is how a disorderly disposition of Greece would reel Portuguese, Spanish and Italian debt markets.

The current situation also highlights the important position Iran holds in the stability of the already shaky global marketplace. As the U.S. and Europe gear to pressure the Iranians, the question raised by Greece presents Iran with interesting information. Every plan to cut off Iranian oil is civil and arranged to ease the process, but the situation is not civil, if it is not economic warfare. So I have a question: What if the Iranians were to realize the plan set for them and understand their current position. They might just do the unexpected and cut off their own oil flow abruptly, and so, disruptively to Greece, Europe and the civilized world. Perhaps Greece’s negotiations with the EU in this regard should have been kept in closed quarters.

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Iranian and Saudi Oil Chess Play

Oil prices jumped 2% Wednesday on OPEC’s indecision and on news of a 4.8 million barrel draw from crude inventory in the latest measured period, according to EIA. High hopes of production increase were fed by recent Saudi chatter, but Iranian dissent should have been transparent. The two nations played an interesting chess match over recent weeks, with both coming out ahead Wednesday, while the West bears economic pain as a result.

Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

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Iranian and Saudi Oil Chess Play

When OPEC met Wednesday to discuss the oil market at the highly anticipated 159th conference of the consortium, it was widely expected to increase production. Oil prices had receded well enough ahead of the meeting, led in this direction by Saudi speak regarding its vision of a need for greater production. The result of the meeting was a letdown West, as OPEC ministers failed to find consensus on the subject. Rather, oil’s gatekeepers determined to watch the market over the next six months to get a better measure of its supply/demand balance. As we read between the lines, though, we see a clever Saudi, Iranian chess match at play, with each nation getting exactly what it wanted in the end.

Economic recovery started commodity markets, including energy, on the route of higher pricing. Supported by stalwart demand from emerging giants China and India, a floor held for oil long into economic downturn. Still, as the economic value destroying crises in the U.S., the U.K. and throughout Europe hit fever pitch in early 2009, oil joined all securities assets in panicked trading down to under $40. Thankfully, that panic was short lived, as stocks and commodities both swiftly started on recovery. Only real estate was left to languish further.

Through the early part of 2011, a political fervor gathered steam across North Africa and into the Middle East. This revolutionary movement set instability into the factor pool within the critical oil producing region. It started the already trending higher oil on a burst above $100 from about $90 at the turn of the year. On several occasions in April 2011, oil prices exceeded $120 a barrel, and gasoline prices at the pump in the United States touched $4, setting an unexpected new obstacle in place for a vulnerable economic recovery.

Within his opening remarks to the OPEC ministers, the Conference President and Acting Minister of Petroleum of the Islamic Republic of Iran HE Mohammad Aliabadi, attributed some of the volatility in oil prices through spring to Western trading speculators. He said that it was both the responsibility of supplier nations and consumer bodies to maintain balance and order in oil pricing. OPEC determined there was a speculative premium of at least $15 to $20 in oil. Aliabadi’s accusative statement, not unexpected from an Iranian government representative, ignores the fundamental driver of the nascent volatility, namely civil unrest in Libya and Bahrain, and the risk of its spread to more major producers.

His statement, it seems, gives clue to the basis of Iranian dissent against increasing oil production. Some basis needed to be fit to a predetermined decision from the Iranians, and so why not blame the same group often targeted by the Europeans, speculating profiteers. This argument seemed to win some approval from a biased group – biased to favor higher oil prices. It gave broad reason to maintain current production over increasing levels of activity, an action that should ease some pressure from prices.

But the Iranians are transparent anyway, and have always favored whatever drives higher prices or harms the United States. They see rich pricing as a win/win, driving greater revenues and strangling a threatening West. They ignore, however, the higher cost of gasoline their citizens end up paying for a resource born of domestic earth. This of course adds to its citizenry’s discontent with government, especially after the strained nation, burdened by U.N. sanctions, was forced to lift government subsidies for gasoline buyers these last years.

The Saudi strategy clearly illustrated the brilliant player, as it had vision, seeing moves ahead of the Iranians, and the Americans as well. Over recent weeks, Saudi Arabia, perhaps at the behest of the United States and other Westerners, began publicly declaring its view of need for increased oil production. While I suppose we could attribute the action to U.S. prodding or sincerity, I prefer conspiracy theory.

The Saudi’s were humiliated by WikiLeaks exposing its suggestions to the United States to attack a devious Iran, and to “cut off the head of the snake.” Since this disclosure, which was dangerously lost within the thousands of less lethal breaking news items, the Iranians see the intense interests and activity of their regional rival much more clearly. This, no doubt, played importantly in Iran’s latest prodding of Saudi Arabian and Bahraini Shiites to rise up against their governors.

Besides its exposure to the eyes of the Iranians, Saudi PR has never been in more need of clean up with regard to U.S. relations, and so the peculiarly western allied Arabs become the good guys in the week’s hopeless, predetermined losing battle. Nothing is lost in their positioning for production, but something is gained in the eyes and hearts of the west in seeming to seek it. Meanwhile, oil income streams are well preserved, at least for as long as demand destruction takes to destabilize the West. Finally, and perhaps most importantly to the Arabs, the Saudis must be grinning today, seeing the snake sticking its neck out a little further.



Article interests energy investors including Exxon Mobil (NYSE: XOM), BP (NYSE: BP), PetroChina (NYSE: PTR), Petrobras (NYSE: PZE), Royal Dutch Shell (OTC: RYDAF.PK), Total (NYSE: TOT), Chevron (NYSE: CVX), Repsol (OTC: REPYY.PK), ConocoPhillips (NYSE: COP), Eni SpA (NYSE: E), Sasol (NYSE: SSL), Encana (NYSE: ECA), Suncor (NYSE: SU), Imperial Oil (AMEX: IMO), Statoil (NYSE: STO), Cenovus (NYSE: CVE), Transocean (NYSE: RIG), Penn West Petroleum (NYSE: PWE), Continental Resources (NYSE: CLR), Noble (NYSE: NE), Concho (NYSE: CXO), Diamond Offshore (NYSE: DO), Ensco (NYSE: ESV), Whiting Petroleum (NYSE: WLL), Nabors (NYSE: NBR), Pride International (NYSE: PDE), Helmerich & Payne (NYSE: HP), QEP Resources (NYSE: QEP), Enerplus (NYSE: ERF), Rowan (NYSE: RDC), Cobalt (NYSE: CIE), Patterson UTI (Nasdaq: PTEN), SandRidge (NYSE: SD), Schlumberger (NYSE: SLB), Halliburton (NYSE: HAL), National Oilwell Varco (NYSE: NOV), Baker Hughes (NYSE: BHI), Weatherford International (NYSE: WFT), Cameron (NYSE: CAM), FMC Tech (NYSE: FTI), Oil States International (NYSE: OIS), Superior Energy (NYSE: SPN), Carbo Ceramics (NYSE: CRR), Helix Energy (NYSE: HLX), Pioneer (NYSE: PXD), CNOOC (NYSE: CEO), China Petroleum and Chemical (NYSE: SNP), Ecopetrol (NYSE: EC), Canadian Natural Resources (NYSE: CNQ), Apache (NYSE: APA), Anadarko (NYSE: APC), Devon (NYSE: DVN), EOG (NYSE: EOG), Chesapeake (NYSE: CHK).

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

Bavar-2: Iran's Flying Boat

Iran's Defiance!

In his latest piece, Wall Street Greek Global Affairs Columnist Daniel Padovano reviews Iran's latest asymmetrical warfare mechanism, the Bavar-2, Iran's flying boat. Three small squadrons of these pesky crafts threaten to disrupt the Strait of Hormuz should conflict erupt between Iran and its foes.

Daniel Padovano is an accredited historian and professor, with specialty in modern Middle Eastern and North American affairs. He is a regular columnist of the globally syndicated blog, Wall Street Greek, and has composed a series of articles for the publication on the topic of Iran.

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Bavar-2: Iran's Flying Boat

At the close of Iran's "Week of Sacred Defense" on September 28, 2010, commemorating the 1980-1988 Iran-Iraq war, Iran showcased its newest weapon, the Bavar-2. The Bavar-2 is a domestically produced fixed wing flying boat.

Iran's Defense Minister, Brig. Gen. Ahmad Vahidi said that:

"The Islamic Republic of Iran is one of the few countries which managed to design, build and use flying boats in a short time".



The concept of flying boats is not new; the Soviet Union embarked on such an undertaking back in the 1980's. The image above illustrates advanced Russian efforts on WIG Boats (Wing-in-Ground effect - also know as WISE or Wing in Surface Effect Ship).

Iran's flying boat, the Bavar-2 (Bavar is translated as Defiance), is a small two-man reconnaissance boat designed to fly at low altitudes. The Bavar-2 has an estimated top speed of 100 knots. The Bavar-2 is equipped with cameras and at least one machine gun. Future plans call for the addition of a second machine gun and possibly small missiles.

Iran claims that the Bavar-2 has stealth capability; however this has not been independently confirmed. If true, this new weapon system could greatly enhance Iran's military capability in the Persian Gulf. Stealth capability is questionable because of the loud sound of the overhead propeller. This protrusion also adds squares and angles to an otherwise sleek and curved profile which enhances stealth capabilities.

As a strategic weapon, the Bavar-2's value is an unproven quantity; however it is an example of asymmetric warfare (where one side uses low technology to offset an adversary's superior technical advantages).

On its own, the Bavar-2 will allow Iran to more closely and rapidly assess and know ship position and movements throughout the Gulf, and its own coastal areas. The Bavar-2 has the capability to harass vessels, but would stand little chance against a military or armed civilian ship if engaged in combat under its present configuration.

The true value of the Bavar-2 is that of a decoy vessel. Reconnoitering or "buzzing" civilian or military vessels would distract coalition or U.S. naval patrols. Buzzing ships can confuse and potentially overwhelm the target's observational and defensive capabilities, thereby allowing other elements of Iran's military to engage in more strategic operations. These other strategic operations could include mining and closing the Straits of Hormuz, or attacking targets of greater value and worth. The potential use of these flying boats as a kamikaze-type weapon cannot be underestimated, especially in a narrow waterway as the Straits of Hormuz.

According to press releases, three squadrons of these flying boats have been fielded and are under the command of the Islamic Republican Guard Corps (IRGC). They are currently based in Bandar Abbas, conveniently near the Straits of Hormuz.



Article Interests WisdomTree Middle East Dividend Fund (Nasdaq: GULF), T. Rowe Price Africa & Middle East Fund (Nasdaq: TRAMX), T. Rowe Price Institutional Africa & Middle East Fund (Nasdaq: TRIAX), Aberdeen Israel Fund (NYSE: ISL), Aberdeen Israel Fund (Nasdaq: XISLX), Northrop Grumman (NYSE: NOC), Raytheon (NYSE: RTN), Alliant Techsystems (NYSE: ATK), Lockheed Martin (NYSE: LMT), Boeing (NYSE: BA), NYSE: IWM, NYSE: TWM, NYSE: IWD, Honeywell (NYSE: HON), General Dynamics (NYSE: GD), Rockwell Collins (NYSE: COL), Goodrich (NYSE: GR), L-3 Communications (NYSE: LLL), SAIC (NYSE: SAI), FLIR Systems (Nasdaq: FLIR), EMBRAER (NYSE: ERJ), Spirit Aerosystems (NYSE: SPR), BE Aerospace (Nasdaq: BEAV), TransDigm Group (NYSE: TDG), CAE (NYSE: CAE), Hexcel (NYSE: HXL), Esterline Technologies (NYSE: ESL), Teledyne Technologies (NYSE: TDY), Curtiss-Wright (NYSE: CW), HEICO (NYSE: HEI), Triumph Group (NYSE: TGI), Orbital Sciences (NYSE: ORB), AAR Corp. (NYSE: AIR), Kaman Corp. (Nasdaq: KAMN), AeroVironment (Nasdaq: AVAV), Smith & Wesson (Nasdaq: SWHC), DigitalGlobe (NYSE: DGI), GenCorp (NYSE: GY), Hawk (AMEX: HWK), LMI Aerospace (Nasdaq: LMIA), Exxon Mobil (NYSE: XOM), BP (NYSE: BP), Chevron (NYSE: CVX), ConocoPhillips (NYSE: COP), Encana (NYSE: ECA), Eni SpA (NYSE: E), Enterprise GP Holding (NYSE: EPE), Petrobras (NYSE: PZE), PetroChina (NYSE: PTR), Repsol YPF SA (NYSE: REP), Total SA (NYSE: TOT), Halliburton (NYSE: HAL) and Schlumberger (NYSE: SLB).

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

HMI Reaction Shows Stocks Priced in Bad but Not Worst Case Scenario (Iran)

The reaction of housing stocks to today's depressing Housing Market Index seems to say the bad news has been well understood and priced in. The solid earnings report of a housing stock, Lennar, also went far in keeping homebuilder shares in the green today. However, global events bring our attention to the worst case scenario, which is not only absent in the valuation of housing stocks, but ignored by the entire market. We suggest our President tread carefully with regard to Iran, given the current vulnerability of our economy. We further urge our government to focus the entirety of its attention to first curing the economic situation and labor problem, before placing a vulnerable economy in the line of fire.

Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

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HMI Reaction Shows Stocks Priced in the Bad, but NOT the Worst Case Scenario: Iran

The Housing Market Index (HMI) for September stuck at a very low mark of 13, matching both August and the low point reached in March of 2009. Oh by the way, that was the low point for the stock market as well, when full panic had a grip of every American, especially those with 401K plans dwindling away. Thus, this latest check of builder confidence is worrisome, and it supports our case for a double dip in home prices and possibly the economy generally, should some new catalyst find this sensitive economic situation.

What sort of catalyst do I suggest? Well, there are more than enough possibilities, like for instance sovereign default within Europe; the disintegration of the European Union's troubled euro; an asset bubble burst in China, which would hurt the domestic demand that is supporting US manufacturing now; a significant terror attack (though we can’t live in fear of it); the loss of control of government debt and entitlement programs; war in any oil sensitive market, like Venezuela for instance.

And there is one major risk in focus this week, which threatens to send shipping costs skyrocketing and the economy deep into recession at a moment's notice. That moment would be the one in which Israel and/or the United States and Western nations engage Iran in conflict. Though this may be the necessary step, it would also mark the moment when Iran launches missiles, aircraft and maybe even troops, perhaps all over the Middle East, but most likely toward Israel and maybe into Kuwait, Iraq, Saudi Arabia, and Afghanistan. That's the day all hell breaks loose and oil prices top $150 on their way to plus $200 per barrel. Iran's real reaction may fall significantly shorter than where we have forecast, but we have not even spoken of China's reaction, given a major source of its oil supply could be shut to it.

So yes, things could get worse, and yes we do sit on the brink of economic depression; and yes, our government had better tread carefully while our economy is so vulnerable.

The Housing Market Index is sad enough, even without such a risk. Who needs a catalyst with homebuilder confidence already so low just on the lack of demand and the flood of distressed properties to meet that slim pool of home shoppers. Who needs such catalyst when banks will not give money away like they used to. Who needs such a catalyst when 10% of America is unemployed and another 7% not making enough money to pay for basic necessities, let alone a new home. They can't qualify for the loan anyway, not even applying old standards of lending (the legal ones anyway).

The National Association of Home Buiders' published its report today, and we quote: "In general, builders haven't seen any reason for improved optimism in market conditions over the past month," noted NAHB Chairman Bob Jones, a home builder from Bloomfield Hills, Mich. "If anything, consumer uncertainty has increased, and builders feel their hands are tied until potential home buyers feel more secure about the job market and economy."

"The stall in the nation's housing market continues," agreed NAHB Chief Economist David Crowe. "Builders report that the two leading obstacles to new-home sales right now are consumer reluctance in the face of the poor job market and the large number of foreclosed properties for sale. However, we do expect that moderate improvement in the job market will help boost consumer confidence and improve conditions for new-home sales in this year's final quarter." I'm not so sure about that last part!

The component indexes measuring current business (measured 13) and opportunities over the next six months (18) stuck at the same low marks seen in August. Perhaps these readings are so low now, that any further deterioration will be hard to find in the index. In other words, this may be about as bad as it gets for homebuilders.

The industry also reported that foot traffic dropped in September, as that index fell a point to a depressing mark of 9. I would have to say this is the most important component reported, as it measures real business opportunity.

By now, Greek readers are well aware of the impact the First-Time Homebuyers Tax Credit had on housing. At this point, you must understand that the synthetic demand it created was limited to the few folks in position to buy their first home, or who qualified for the tax incentives offered when the law was expanded. By now you understand that economic activity of the sort we are mired in, with unemployment laboring all things, cannot support gains in housing nor any consumption.

Regionally speaking, it looks as though the softening manufacturing space is having an impact on Midwestern activity, with the regional index dropping three points to a mark of 12. The honeymoon is indeed over in Detroit, and so those of you thinking about buying into GM's IPO, might think twice about the timing. It's certainly suspect that the offering is being sought this soon.

In the densely populated Northeast, the index also fell 3 points to a mark of 16. It seems it would be difficult for the West to get worse, as that index now sits at 8, unchanged from August. Only the South improved, with the regional measure gaining two points, to a mark of 14. Perhaps oil slick slowed Gulf activity is returning toward normal now, which would explain the different direction posted by the region's homebuilders.

Given the state of affairs was already understood to be harsh by the stock market, the report has had little impact on trading Monday. In fact, the Dow is up about 1% at this hour. Toll Brothers (NYSE: TOL), an important high-end homebuilder, saw share rise of 3% thus far today, as the entire housing sector benefited from a good report from Lennar (NYSE: LEN). LEN shares were up 9% at the hour of publishing, so a pretty bad scenario has already been priced in.

However, we argue the worst case scenario is one nobody wants to think about, and would send these shares tumbling, along with the entire market. Tread carefully my dear President. The economy is of highest priority now, because nothing else can be addressed until it is off cliff's edge vulnerability.



Editor's Note: Article should interest investors in Bank of America (NYSE: BAC), Freddie Mac (OTC: FMCC.OB), Fannie Mae (OTC: FNMA.OB), Goldman Sachs (NYSE: GS), Morgan Stanley (NYSE: MS), Wells Fargo (NYSE: WFC), Toronto Dominion (NYSE: TD), UltraShort Real Estate ProShares (NYSE: SRS), Ultra Real Estate ProShares (NYSE: URE), ING Clarion Global Real Estate Income Fund (NYSE: IGR), Xinyuan Real Estate Co. (NYSE: XIN), Rydex Real Estate Fund H (Nasdaq: RYHRX), T. Rowe Price Real Estate Fund (Nasdaq: TRREX), Toll Brothers (NYSE: TOL), Hovnanian (NYSE: HOV), D.R. Horton (NYSE: DHI), Beazer Homes (NYSE: BZH), Lennar (NYSE: LEN), K.B. Homes (NYSE: KBH), Pulte Homes (NYSE: PHM), NVR Inc. (NYSE: NVR), Gafisa SA (NYSE: GFA), MDC Holdings (NYSE: MDC), Ryland Group (NYSE: RYL), Meritage Homes (NYSE: MTH), Brookfield Homes (NYSE: BHS), Standard Pacific (NYSE: SPF), M/I Homes (NYSE: MHO), Orleans Homebuilders (AMEX: OHB), Vanguard REIT Index ETF (NYSE: VNQ), PNC Bank (NYSE: PNC), J.P. Morgan Chase (NYSE: JPM), Hooker Furniture (Nasdaq: HOFT), Ethan Allen (NYSE: ETH), Pier 1 Imports (NYSE: PIR), Williams Sonoma (NYSE: WSM), Home Depot (NYSE: HD), Lowes (NYSE: LOW), AMEX: VAZ, AMEX: NKR, AMEX: MZA, AMEX: NXE, AMEX: NFZ, Nasdaq: XNFZX, Nasdaq: FSAZX and Avatar Holdings (Nasdaq: AVTR), NYSE: HON, NYSE: GD, NYSE: COL, NYSE: GR, NYSE: LLL, NYSE: SAI, Nasdaq: FLIR, NYSE: ERJ, NYSE: SPR, Nasdaq: BEAV, NYSE: TDG, NYSE: CAE, NYSE: HXL, NYSE: ESL, NYSE: TDY, NYSE: CW, NYSE: HEI, NYSE: TGI, NYSE: ORB, NYSE: AIR, Nasdaq: KAMN, Nasdaq: AVAV, Nasdaq: SWHC, NYSE: HWK, Nasdaq: LMIA, NYSE: XOM, NYSE: BP, NYSE: CVX, NYSE: COP, NYSE: ECA, NYSE: E, NYSE: EPE, NYSE: PZE, NYSE: PTR, NYSE: REP, NYSE: TOT, NYSE: WMZ, Nasdaq: GULF, Nasdaq: TRAMX, Nasdaq: TRIAX, NYSE: ISL, Nasdaq: XISLX, NYSE: NOC, NYSE: RTN, NYSE: ATK, NYSE: LMT, NYSE: BA, NYSE: IWM, NYSE: TWM, NYSE: IWD.

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

Target Iran: Rumors or Disinformation?

Global Affairs

Wall Street Greek's Global Affairs & Geopolitics Columnist Daniel Padovano discusses a rumored military build up around Iranian territory. Mr. Padovano analyzes for us the possibility of the legitimacy of such information, and discusses potential strategy for a serious advance against Iranian nuclear facilities.

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Target Iran: Rumors or Disinformation?

The international news media has been largely silent on rumors of military movements that could quite possibly be the forerunner of an attack against Iran. Any attack against Iran in this context would be against Iran's emerging nuclear weapons capability.

News reports circulating over the last week claim that American ground forces are in place in Azerbaijan for possible deployment against Iran. Other news reports claim that Israeli troops are in Azerbaijan with the Americans. During the last week, a U.S. aircraft carrier battle group sailed through the Suez Canal south to the Arabian Sea. According to several news stories, one Israeli warship sailed with the American aircraft carrier battle group. Israel is also supposedly to have forward positioned aircraft in Tabuk, Saudi Arabia for a possible strike against Iran. The Times of London reported a week ago Sunday that Saudi Arabia would allow Israel to cross Saudi airspace in the event Israel opted to attack Iran's nuclear facilities.

The question that begs to be answered is this: Are these stories true, with an attack in the planning stages, or is this just disinformation meant to confuse the Iranians? Examining the claims in the news reports does open up some chilling possibilities.

One thing to keep in mind is that the dearth of these stories in the mainstream press may lead some to see these as rumors, wishful thinking and yellow journalism. Critics liken this to a news blackout. This closely resembles the prelude to the American invasion of Afghanistan.

What if these rumors turn out to be real? What are the pros and cons? What would be the strategy?

The planning and positioning of military assets would be daunting and not something done quickly. The reports claim that both American and Israeli forces are involved. Given the state of relations between the two countries, both governments must feel certain that the Iranian threat is much more dangerous than previously believed.

Coordination and agreements would need to be arranged between the U.S., Russia, Azerbaijan, Israel, Saudi Arabia and possibly both Iraq and Kuwait. Not an easy feat, even in the best of times.

The positioning of troops in Azerbaijan, deployment of additional ships in the Red and Arabian Seas and redeployed aircraft in Saudi Arabia indicate that any action against Iran would not be short term. Instead, this would be a prolonged military action involving joint operations between ground, air and maritime forces.

Airfields in Azerbaijan and Georgia could host American and Israeli aircraft, but most are near urban centers and share space with civilian air fields. The element of surprise would be lost. Although a public view of this buildup would send many messages to Iran. Using any airfield in Georgia and Azerbaijan would most certainly require Russian approval. Another concern for the U.S. is the ability of Azeri or Georgian airfields to accommodate American military aircraft.

Ground forces transported from Azerbaijan could be used to seize Iranian nuclear related facilities in Bonab, Tabriz, Mo-Allem Kalayeh, Kalaj and the weapons development center in Chalus on the Caspian shoreline.

Maritime forces in the region include two aircraft carrier battle groups and one amphibious battle group. These include the aircraft carriers Harry S. Truman (CVAN-75) and the Dwight D. Eisenhower (CVAN-69) and the helicopter carrier Nassau (LHA-4). The three battle groups are part of the 5th Fleet. Each aircraft carrier battle group includes the aircraft carrier supported and defended by twenty to thirty ships including guided missile cruisers, frigates, supply ships and attack submarines. These assets would be used to thwart Iranian moves to close the Strait of Hormuz as well as to tie down Iran's coastal defenses.

The Iranians could easily clog the Strait of Hormuz with mines or sunk ships. This is no small matter as 40% of the world's oil transits the Strait of Hormuz daily.

The air power is the main element. The Tabuk airfield is home to King Abdul Aziz Military City and the King Faisal Royal Saudi Arabian Air Force base. The U.S. Military Training Mission is also based at this facility. Tabuk has a unique geographical feature: it lies in an almost straight line as Bandar Bushehr, the location of Iran's only working nuclear reactor. The distance is just about 1,000 kilometers. Attacking aircraft could fly low (below radar view) before launching missiles at the Bushehr facility. Planned properly, this would be an attack the Iranians would not detect until the plant was already under fire.

Similar flight paths would also make attacks against Arak (heavy water processing), Isfahan (gas exchange and storage) and Natanz (uranium enrichment) much easier to plan and execute.

Attacks could also target Iranian petroleum pipeline junctions near Tabriz, Ahvaz, Bandar-Abbas, Isfahan and Tehran. Disrupting Iranian oil and gas production and transport could be just as fatal to Iran as attacking its nuclear facilities.

Time will answer these questions, and that time may be much sooner than later.



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