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Market Commentary

Today, let’s talk Turkey. And Syria. And Iraq.

 President Trump’s Sunday night decision to withdraw US troops from northeastern Syria, greenlighting a Turkish invasion of Kurdish-held territory along the Euphrates river, was met with blistering bipartisan criticism in Washington. Though Turkey’s stated goal is to repatriate more than a million refugees who have fled Syria since 2011, it has made no secret of its desire to clear the border of Kurdish militias whom it accuses of harboring terrorists. The Kurds have been US allies since the first Gulf War, and were instrumental in the territorial defeat of ISIS in Iraq and Syria.

 One of the under-reported tragedies of the Syrian Civil War has been the various ethnic cleansings carried out by warring factions, and the degree to which Syria’s demographics have been destabilized for generations to come. In addition to the documented genocides of Yazidi and Christian minorities by ISIS, millions of Sunni Arabs were pushed from their homes in western Syria by Assad’s troops, and forced to flee abroad. Government forces then expropriated their land, rewarding it to the Shia and Alawite populations who remained. Many of these refugees now live in Turkey, and it is they who Turkish President Erdogan wishes to repatriate. Unfortunately, this will just incite further ethnic tensions, as the territory to which the Arabs will be sent is controlled by the Kurds, who speak a different language, follow different customs, and consider themselves independent from the rest of Syria. Invading a foreign territory to dump millions of refugees, who are themselves foreigners of the region, is a recipe for disaster and will surely prolong the nearly decade-old civil war.

 In neighboring Iraq, hundreds have been killed in recent weeks as citizens across the country lash out against the government for its crippling corruption and ineffectiveness. Tugged between rival foreign interests since the US invasion in 2003, the Iraqi protests are notable because they have crossed sectarian lines, binding the country’s youth together against a moribund bureaucracy.

 If the situation further deteriorates, expect upward pressure on oil and a rally in US treasuries as investors flee to safety.


10/04/2019 Market Strikes

10 Year Treasury:


S&P 500:


FN 3.0:


FNCL 102:


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