War

The fighting between Israel and its neighbors is becoming increasingly scary. What started as a relatively minor Israeli sweep through Gaza has turned into a two front war.

In Israel, terrorist organizations permit themselves to kill, wound and abduct Israeli soldiers and civilians. It is awful.

The Bush administration as well as the Olmert government thinks Iran is the culprit behind Syria, Hamas and Hezbollah. It is commonly believed that the geopolitical fear driving the markets is that a widening of this conflict with Iran’s proxies will lead quickly to a war with Iran.

My own reading is that we are not very close to war with Iran. Oil prices are going up because the hedge funds are doing their monthly elephant stampede, and are piling into oil. The hedge funds believe $100 oil. They have the money and power to make it come true. Other markets do not confirm what is happening in oil. Natural gas is around $6. A normal ratio is 7:1 with oil, which would put oil at $42. The oil stocks, the gas stocks, the drillers, the coal stocks have all lost momentum and are not making new highs. Some have come down a lot. The stock market is having a correction for many different reasons, including the most obvious reason…why not? We’ve gone up for a few years; there are multiple problems in the world, time to take a breather. We are still at the “let us take some protection stage." So far there has been no massive sell off and no massive panic.

The coming weekend will be a serious one for Jews everywhere. All a Diaspora Jew can do right now is hope and pray the situation improves. We wish our brothers in Israel the strength and courage that will be necessary in the days ahead.