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Markos N. Kaminis was a leading stock-picker (23% AAR over 5 years; 2nd among 60 over 5 years) as a Senior Equity Analyst over a seven-year period at Standard & Poor's. After proving his value in-house, he was promoted into a special role as an idea generator, supporting the portfolios of... More
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  • WikiLeaks Creates Paradigm Shift in Geopolitics & Threatens Stocks 1 comment
    Nov 29, 2010 12:20 PM | about stocks: BCS, LYG, AIBYY, BP, SKYAY, FXB, EWU, ICE, NYX, DIA, DOG, SPY, SDS, QQQ, NDAQ, QLD, KF, KEP, KEF, EWY, PKX, HYMTF, SHG, LGERF, NOC, RTN, OA, LMT, BA, HON, GD, COL, GR, LLL, LDOS, FLIR, ERJ, SPR, BEAV, TDG, CAE, HXL, ESL, TDY, CW, HEI, TGI, OA, AIR, KAMN, AVAV
    If all were logical in the world, or at least made sense in our climate controlled American environment, stocks should absorb a significant shockwave Monday. The blast would emanate from a series of new WikiLeaks on hot topics centered around Iran and North Korea. Information has been released offering many troubling insights on these two points in the Axis of Evil.

    The information made public in many cases was already generally known, and not just in the common subconscious, but in plain sight of the stock market for years. Yet, perhaps due to its duration overhanging global order, the potential Iranian event has become something we have grown too accustomed to. The documents show intense Middle Eastern pressure on both the Bush and Obama Administrations to wage war on Iran. Meanwhile, those same Islamic nations have held subdued stances publicly, even perhaps appearing to Iran as allies. As a result, depending on how Iran interprets the leaked information, world order looks to have been reshuffled overnight. Thus, Iran, Israel and the US start the new week with completely different perspectives and images, and that is a frightening consideration for investors to ponder.

    WikiLeaks was smart in its distribution methodology, releasing to several select major media organizations, so as to prevent the knock-down of its website today. This information is public and going to stay that way, like it or not. So the US is now engaged in damage control, with some analysts calling the damage catastrophic. The US is concerned that its allies may temper future candor in their communications with US representatives now, given this lesson served.

    The WikiLeaks information itself is vast, and so I cannot cover it completely, but I can cover some of the key points of impact to US diplomacy and Iranian perspective (see www.wikileaks.org for details). Europe is flustered this morning, given revealed American intelligence indicating a potential sharing of missile technology between North Korea and Iran, passed down from Russia initially. The info expands Iran's missile strike range to 2K miles, from 1,200. That puts Berlin within range with about half of Europe. Iran could already touch all of the Middle East.

    Information has been released showing Israeli interest in aiding the Palestinian Authority to wage a war against Hamas for Gaza. There are also indications that Iran provided secret aid to Hezbollah in its war with Israel. Clearly, with all the cards turned up, the game has changed globally.

    What Iran should find most troubling is the allegations that its Islamic neighbors have been some of the harshest critics of it behind the scenes. Reports indicate that Saudi Arabia has been aggressively lobbying the US to use its military might against Iran before long. Reportedly, Saudi Arabia is even engaged in the weaning of the Chinese off their dependence of Iranian oil, committing to provide a new source flow in exchange for China's support against Iran in the UN.

    Now, given the changed Iranian lens of perspective of the situation, and the realization of this by Israel and the US and its allies, you might have expected stocks to reflect a sort of wake-up call sounded in the investment community Monday (we did). After all, war could now be days away originated by any party, given the bluff is up. However, in early trading through 2:00 AM ET, Asian shares did not reflect such concern, outside of South Korea. However, these markets often simply follow the lead of US shares. European stocks better reflected a paradigm shift in geopolitical factors today. American shares have definitely done so, with the broad indices down more than 1%. As the WikiLeaks information is sifted through and understood more perfectly, most equities are at significantly greater risk, along with global order.

    This article should interest investors in the shares of Barclay's (NYSE: BCS), Lloyds Banking Group (NYSE: LYG), Allied Irish Bank (NYSE: AIB), British Airways (NYSE: BAY), BP (NYSE: BP), British Sky Broadcasting (NYSE: BSY), Currency Shares British Pound (NYSE: FXB), DFA United Kingdom Small Company Fund (Nasdaq: DFUKX), iShares MSCI UK (NYSE: EWU), NYSE: BAC, NYSE: JPM, NYSE: GS, NYSE: MS, NYSE: C, NYSE: DB, NYSE: CS, NYSE: UBS, NYSE: STD, NYSE: WFC, NYSE: NBG, NYSE: AIG, Korea Fund (NYSE: KF), Korea Electric Power (NYSE: KEP), Korea Equity Fund (NYSE: KEF), The Korea Fund (Nasdaq: XKFDX), iShares MSCI South Korea Index (NYSE: EWY), Samsung (Korea: 005930.KS), Posco (NYSE: PKX), Hyundai Motor (OTC: HYMTF.PK), Shinhan Financial (NYSE: SHG), Lg Chem (OTC: LGCEY.PK), LG Electronics (OTC: LGERF.PK), Hynix Semiconductor (Korea: 000660.KS), 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).

    Disclosure: No Positions
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  • fiso11
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    The third round of Wiki leaks publications has done irreconcilable harm to resolving the issue of Nuclear Proliferation and Iran. It is a rallying cry for hardliners such as Ahmadinejad who now believe that they are surrounded on all sides. This mentality of a cornered animal is extremely dangerous to global peace because rational thought has flown out the window. Now more so than ever, can Iran justify pursuing a nuclear arsenal in aims of defense. Conflict in this region would be the tipping point and break and already fragile global economy. Check out the effects of an armed conflict in the region.

     

    Conflict with Iran- www.hiddenlevers.com/h...
    We know if something bad happens we know oil prices will spike, but it would baffle me if the correlations between oil and S&P would hold. For the past year S&P has moved with Oil, but look to 5 years and we see the two can move independently.
    S&P vs Oil @ 1 year- www.hiddenlevers.com/h...

     

    S&P vs Oil @ 5 years- www.hiddenlevers.com/h...
    29 Nov 2010, 01:08 PM Reply Like
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