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Generational Dynamics Web Log for 4-Feb-2014
4-Feb-14 World View -- Monday's market plunge continues 'that 1929 feeling'

Web Log - February, 2014

4-Feb-14 World View -- Monday's market plunge continues 'that 1929 feeling'

Bitterness between U.S. and Israel increases as 'peace process' collapses

This morning's key headlines from GenerationalDynamics.com

Al-Qaeda's Zawahiri picks sides among Syria's jihadist terrorists
Monday's market plunge continues 'that 1929 feeling'
Bitterness between U.S. and Israel increases as 'peace process' collapses

Al-Qaeda's Zawahiri picks sides among Syria's jihadist terrorists

ISIS fighter parade in Syrian town on January 2 (Reuters)

ISIS fighter parade in Syrian town on January 2 (Reuters)

Al-Qaeda's top leader, Ayman al-Zawahiri, is repudiating any connection with the Islamic State in Iraq and Syria/Sham/theLevant (ISIS or ISIL). A statement by al-Qaeda General Command was published on a jihadist web site on Sunday:

"[Al-Qaeda] has no connection with the group called the ISIS, as it was not informed or consulted about its establishment. It was not pleased with it and thus ordered its suspension. Therefore, it is not affiliated with al-Qaeda and has no organizational relationship with it. Al-Qaeda is not responsible for ISIS's actions."

There are three groups of anti-Assad militants in Syria: The "moderate" Syrian National Coalition (SNC); the Islamic Front, or Jabhat al-Nusra, consisting of Syrian citizens who are salafists; and the jihadists in ISIS, an extension of the old Al-Qaeda in Iraq, consisting of many foreign fighters.

ISIS has essentially become an ally of Syria's president Bashar al-Assad, in that both of these groups are cooperating with each other to fight the other rebel groups (SNC and al-Nusra). Al-Assad's army has been focusing its bombing campaigns on rebel areas, but has not been striking any ISIS camps or supporters. This has apparently distressed al-Zawahiri, who would like to see the rebels to focus on fighting the Shia/Alawite al-Assad, rather than each other.

However, al-Zawahiri's statement is unlikely to make much difference in Syria. ISIS is attracting jihadists from all over the world, and it's becoming increasingly powerful. The fight between ISIS and al-Nusra is likely to get a lot more bloody. BBC and AFP and The National (UAE)

Monday's market plunge continues 'that 1929 feeling'

The Dow Industrials index fell more than 2% on Monday, continuing a decline that has been almost steady since the beginning of 2014. The experts blamed Monday's plunge on bad manufacturing data, and other an apparently slowdown in China.

The S&P 500 Price/Earnings index (stock valuations) fell to 16.9%. This is lower than 18.72 peak of last year, but it's still astronomically high by historical standards. It was only as recently as 1982 that the P/E index was 6, and it's about due to return to that level, as it does periodically, every 30 years or so. This would push the Dow Jones Industrial Average from its current 15,400 down to the 3,000-4,000 level, or lower, which is what Generational Dynamics is predicting.

A week ago, I wrote "'that 1929 feeling' may be back on Wall Street". As I said, what I'm looking for a certain pattern that preceded the 1929 crash.

For the seven weeks preceding the 1929 crash, starting from 9/3/29, the market declined gradually, but with some wild gyrations along the way. That's the pattern I'm watching for today. The market has, in fact, been declining gradually since Jan 1, but we've only begun to see the wild gyrations. If the decline continues, and if there's a fall of 6% one day, followed by a rise of 8% the next day, or some sort of wild gyration like that, then that would be the pattern I'm looking for.

However, there are no guarantees, one way or the other. The market might fall 10%, and then go back up. The stock market is in a huge bubble, and Generational Dynamics predicts a major financial panic and crisis, but the exact date that the bubble will burst is impossible to predict. But as I said, this is the first time in a long time that I've thought that the market has that "1929 feeling." Reuters

Bitterness between U.S. and Israel increases as 'peace process' collapses

As the April 29 deadline for an Israeli-Palestinian peace agreement approaches, with not even the whisper of any sort of agreement in sight, the bitterness and mutual finger-pointing between Israel's Benjamin Netanyahu administration versus America's Obama administration is increasing.

In an attempt to get Israel to make additional concessions, especially to renounce any further West Bank settlement construction, Secretary of State John Kerry said at the weekend international security conference in Munich:

"You see for Israel there is an increasing deligitimization campaign that has been building up. People are very sensitive to it. There are talk of boycotts and other kinds of things. Are we all going to better with all of that?"

The Israeli cabinet took these remarks as a direct threat that the U.S. not oppose an international boycott of Israel, and might even support it.

"Attempts to impose a boycott on the State of Israel are immoral and unjust, [and] they will not achieve their goal."

Kerry later issued a statement saying that the Obama administration opposes any boycotts of Israel. The relationship between the Netanyahu and Obama administrations has been testy from the start, but as the deadline approaches, it's becoming more hostile. It was just two weeks ago that an Israeli minister said that Kerry was "acting out of misplaced obsession and messianic fervor. ( "15-Jan-14 World View -- Israeli remarks about Kerry grow into international incident".)

Kerry is now calling the April 29 deadline "artificial," indicating that he wants the so-called "peace process" to continue into the future. However, there may be a problem. The main reason that the Palestinians haven't walked out is because Israel is releasing 104 prisoners, in four evenly spaced groups of 26, from Israeli jails. If the "peace talks" are to continue, then Kerry will have to convince Israel to release some more prisoners, or to make some other concession. VOA and Jerusalem Post

(Comments: For reader comments, questions and discussion, see the 4-Feb-14 World View -- Monday's market plunge continues 'that 1929 feeling' thread of the Generational Dynamics forum. Comments may be posted anonymously.) (4-Feb-2014) Permanent Link
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Generational Dynamics Web Log for 4-Feb-2014 4-Feb-14 World View -- Monday's market plunge continues 'that 1929 feeling'

Al-Qaeda's Zawahiri picks sides among Syria's jihadist terrorists

Monday's market plunge continues 'that 1929 feeling'

Bitterness between U.S. and Israel increases as 'peace process' collapses

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Generational Dynamics Web Log for 4-Feb-2014
4-Feb-14 World View -- Monday's market plunge continues 'that 1929 feeling'