Selling SCO First Thing Monday

I have a hedge position in SCO, which is up nicely from $27.36 where I purchased it. I will be dropping it on Monday and not looking back. I don’t much care for trading positions based on global events. It’s a messy business, and rarely works out. But this is an exception.

Iran’s behavior has simply changed too much to be ignored. First by acknowledging the holocaust, now having a conversation with the President. It was a subtle shift at first, but it is very noticeable.

You must understand, the president of Iran operates beneath the Ayatollah. The same people have headed Iran since 1980. Supreme Leader Khamenei himself served as president of Iran from 1981 until 1989.

So, pretending that Iran has suddenly completely changed their whole outlook on life is stupid.

Which makes one ask, why is Iranian posture changing? Have incentives correspondingly changed, somehow? Perhaps we’ve finally broken their less charismatic personality traits with our sanctions?

Look, it was just four short years ago that I watched the Basij, with clear backing from the IRG, firing shots into crowds of protesters, running down students on the backs of motorcycles, and generally beating the hell out of anyone who opposed the Iranian government. These protests didn’t look that disruptive. The people who attended weren’t violent, or trying to declare a state of anarchy, or generally doing anything a reasonable person would consider unethical. They were just protesting. And this lot, directly supported by Iran, road in and just slaughtered everybody they could.

Also, we’ve been sanctioning Iran literally since the inception of its current form in 1979. We’ve upped those sanctions continuous, notably in 1992, 1995, 1996, 2001, and 2010, while the EU and international community got more involved in 2010 and 2012. So you’ll forgive me if I don’t think Iran has cracked under sanctions.

But this sudden shift in behavior is attention getting. And so I don’t want exposure to the short side of oil.

There are many reason Iran could be cooling off their rhetoric. Yes, a general outreach for peace with their neighbors is such a reason. Unfortunately, their immediate intention to set off a nuclear test warhead is another.

Iran cannot test a bomb in the middle of calling for the extermination of two UN members. While such foul language may be merely unnerving in normal circumstances (and good for riling up nationalism behind their government), if Iran were to succeed in setting off a bomb while shrieking for the eradication of the United States and Israel, the resulting emotions would be nothing short of panic. War-inducing, perhaps…

If they want to test a warhead, they need to put in the time to convince the rest of the world that they really aren’t as batshit crazy as they’ve been pretending, and can really be trusted not to ruin everything.

You can talk crazy while you build a Bomb. But you have to talk sane when you detonate it.

I can’t see the future. For all I know, this sudden, unexpected shift with Iran is exactly what the good men and women of the US Press thinks it is. But if you any experience with the track record of the US Press Corps, whether their first impression of major events (like the Arab Spring), judgement of character (such figures as John Edwards comes to mind), or general literacy of the complex (I can’t think of a piece on Obamacare this year not riddled with errors)…and it starts to actually make it worse that the press thinks this communication between Iran and the West is so cut and dry for the good.

These are not the lot with which you would want to run with first impressions…

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