Air Strikes

AirstrikeSummary

Eurozone: Draghi talks down the Euro again
Eurozone: Poor data weights on sentiment
Taiwan: Exports slow, some concern for global growth
United States: Corporate earnings exceed expectations once again
United States: Data still looking good

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Good morning,

We highlighted the worsening situation in Iraq yesterday (see here), without anticipating such a rapid response from the US. President Barack Obama has authorized limited airstrikes against Sunni militants in Iraq, potentially reengaging the U.S. military in a conflict that Obama pledged to leave behind when he first won office.

Obama said yesterday that the strikes, if needed, would be used to protect U.S. personnel and Yezidis, a minority sect concentrated in northern Iraq, who have been targeted by militants and are stranded on a mountain. The president also said American military planes are dropping food and water for thousands of Yezidis.

I am worried that the very fabric of the Middle East – the Sykes/Picot agreement 1917 – is coming apart at the seams. We rarely understand just how when we are living through momentous times. Here we have the US trying to maintain the political status quo and a group like ISIS trying to tear it asunder. History shows that the intent, militant group tends to succeed, if not in its aims entirely, in destabilising the status quo. History also reveals just how normal things can be until they become abnormal. If this abrupt change from normal to abnormal is the type of stuff that interests you, I recommend you read the magisterial book “1913 – The year before the Storm” by Florian Illies – (review).

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Global Macro-Daily Note 8th Aug 2014

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