In the last 24 hours, the ceasefire talks with Hamas and Israel have broken down, hacking attacks are hitting websites and governments across the Middle East, the Russia-Ukraine war is picking up in tempo and this author maintains there is a greater risk to the markets and the world next week, not this one.
So why starting on Monday, August 26th?
The Powell Radioactive Fallout
To say that Fed Chair Jay Powell has a track record at the Kansas City Fed Symposium is an understatement. Here it is, year by year, and via the charts of the S&P 500 in August since he became the Federal Reserve Chairman.
August 27, 2020 The “Covid” Speech
August 26, 2022 – The Don’t Call Me Arthur Burns Speech
Or could everyone go long again? Despite Powell’s flowery speech, within days the market rolled over even harder.
Keep your powder dry as the market reaction after Powell’s Jackson Hole speeches can sometimes be much harsher than the reflexive trading reactions we will see on Friday.
Iran and this Date in History
As far as Persian history, it is of little importance but to the Shi’ite sect of Islam, August 26th of this year falls on a very important event in Muslim history.
Arbaeen (or Arba’in) is defined as follows via Middle East Eye:
For Shia Muslims, Arbaeen is a significant religious event that brings hundreds of thousands of the faithful to the streets of the holy city of Karbala in Iraq.
Literally meaning ’40’, the event signifies the end of a 40-day mourning period for the Prophet Muhammad’s grandson, Hussein ibn Ali, the third imam of the Shia tradition.
Hussein, known as Imam Hussein to Shia Muslims, was killed by soldiers loyal to the Umayyad Caliph Yazid I during the Battle of Karbala in the seventh century. The imam’s followers, who came to be known as the Shia, believe that the Umayyads had usurped the leadership of the Muslim community from descendants of the Prophet Muhammad’s family.
The rumblings from Tehran have already begun, with Chief of Staff of the Iranian Armed Forces Major General Mohammad Baqeri commenting that the holiday is a display of “Islamic Power,” in comments earlier today.
If there ever was a time for the all bluster this would be the time for the Iranian Revolutionary Guard to launch a strike against Israel, even with limited effectiveness, that date or any time in the hours of that evening would seem to be logical. The pilgrims and mullahs will be in a peak religious fervor emotionally and would support the “sacrifices” the Iranian nation would endure from the “Great Satan” and their enemies in the region.
Stay sharp folks, as between the financial markets and Middle East instability, it could explode simultaneously creating problems that very few in Europe or America are prepared for.
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