United States

Just after Putin hosted trilateral talks on Syria and the Middle East in Sochi involving Russia, Iran, and Turkey, President Trump spent part of his Friday after Thanksgiving on the phone with Turkey's Erdogan. While the two discussed Syria and other regional issues, it appears they broached the delicate and contentious topic of US support to Syrian Kurdish fighters (namely, the Kurdish YPG, which forms the core of the Syrian Democratic Forces).

Authored by Patrick Buchanan via Buchanan.org,

Our aim is to “starve the whole population - men, women, and children, old and young, wounded and sound - into submission,” said First Lord of the Admiralty Winston Churchill.

He was speaking of Germany at the outset of the Great War of 1914-1918. Americans denounced as inhumane this starvation blockade that would eventually take the lives of a million German civilians.

Pretty soon the scenes of tiny Iranian speedboats taunting U.S. Naval Destroyers may not be confined to just the Persian Gulf as Iran's new naval commander has vowed to send warships to the Gulf of Mexico "in the near future."  Per NBC:

Rear Adm. Hossein Khanzadi said plans were being drawn up for vessels to be deployed to the Gulf of Mexico and Atlantic Ocean "in the near future." They would also visit South American countries, he added.

 

Yesterday we laid out the reasons why French bank SocGen unveiled a surprisingly contrarian forecast, according to which the S&P would tumble from its current level over 2,600 to 2,000 in 2018, representing a more than 20% bear market drop...

... the drop catalyzed by rising interest rates pressuring P/E multiples, a late cycle economy nearing recession, equities trading at record valuations, and with everyone short vol begging for a vol short squeeze. Not surprisingly, SocGen's unspoken advice was to get out now.

Yesterday's China stock market rout, in which the Shanghai Composite tumbled the most since June 2016 to three month lows, and which prompted traders to question the dedication of Beijing's plunge protection team, appears to have been forgotten, with the Composite closing unchanged on Friday after some early session weakness, as Chinese yields declined broadly across the board from 3 years highs.