World View: Market Plunge Revives Fear of 1929

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

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

[Al-Qaeda] has no connection with the group calledthe ISIS, as it was not informed or consulted about itsestablishment. It was not pleased with it and thus ordered itssuspension. Therefore, it is not affiliated with al-Qaeda and hasno organizational relationship with it. Al-Qaeda is notresponsible for ISIS’s actions.

There are three groups of anti-Assad militants in Syria: theJabhat al-Nusra, consisting of Syrian citizens who are salafists; andthe 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 Basharal-Assad, in that both of these groups are cooperating with each otherto fight the other rebel groups (SNC and al-Nusra). Al-Assad’s armyhas been focusing its bombing campaigns on rebel areas, but has notbeen striking any ISIS camps or supporters. This has apparentlydistressed al-Zawahiri who would like to see the rebels focus onfighting the Shia/Alawite al-Assad, rather than each other.

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

Monday’s market plunge continues ‘that 1929 feeling’

The Dow Industrials index fell more than 2% Monday, continuing adecline that has been almost steady since the beginning of 2014. Theexperts blamed Monday’s plunge on bad manufacturing data and an apparent slowdown in China.

The S&P 500 Price/Earnings index (stock valuations) fell to 16.9%.This is lower than the 18.72 peak of last year, but it’s stillastronomically high by historical standards. It was only as recentlyas 1982 that the P/E index was 6, and it’s about due to return to thatlevel, as it does periodically, every 30 years or so. This would pushthe Dow Jones Industrial Average from its current 15,400 down to the3,000-4,000 level, or lower, which is what Generational Dynamics ispredicting.

A week ago, I wrote “‘that 1929 feeling’ may be back on Wall Street”. As I said, what I’mlooking for is 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 theway. That’s the pattern I’m watching for today. The market has, infact, been declining gradually since Jan 1, but we’ve only begun tosee the wild gyrations. If the decline continues, and if there’s afall of 6% one day, followed by a rise of 8% the next day, or somesort of abrupt change like that, then that would indicate a looming crash.

However, there are no guarantees, one way or the other. The marketmight fall 10% and then go back up. The stock market is in a hugebubble, and Generational Dynamics predicts a major financial panic andcrisis, but the exact date that the bubble will burst is impossible topredict. However, as I said, this is the first time in a long time thatI’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 agreementapproaches, with not even the whisper of any sort of agreement insight, the bitterness and mutual finger-pointing between Israel’sBenjamin Netanyahu administration and America’s Obamaadministration is increasing.

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

You see, for Israel there is an increasingdeligitimization campaign that has been building up. People arevery sensitive to it. There [is] talk of boycotts and other kindsof things. Are we all going to [get] better with all ofthat?

The Israeli cabinet took these remarks as a direct threat thatthe U.S. will not oppose an international boycott of Israel, and mighteven support it:

Attempts to impose a boycott on the State of Israelare immoral and unjust, [and] they will not achieve theirgoal.

Kerry later issued a statement saying that the Obama administrationopposes any boycotts of Israel. The relationship between theNetanyahu and Obama administrations has been testy from the start, butas the deadline approaches, it’s becoming more hostile. It was justtwo weeks ago that an Israeli minister said that Kerry was “acting outof misplaced obsession and messianic fervor.”

Kerry is now calling the April 29 deadline “artificial,” indicatingthat he wants the so-called “peace process” to continue into thefuture. However, there may be a problem. The main reason that thePalestinians haven’t walked out is that Israel is releasing 104prisoners, in four evenly spaced groups of 26, from Israeli jails. Ifthe “peace talks” are to continue, then Kerry will have to convinceIsrael to release some more prisoners, or to make some otherconcession. VOA and Jerusalem Post

Permanent web link to this article
Receive daily World View columns by e-mail