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Karen Eliott House was a former publisher of the WSJ. Now with WSJ in Murdoch's News Corporation's hands, she is a fellow at Harvard's Belfer Center. Here she points to the diverging situation between the USA and Saudi Arabia. She thinks the US cannot protect the Saudi monarchy (which dates back to Abdul Aziz and his support from President Roosevelt first by recognition of the new state of Saudi Arabia in 1932 and support during the war), from its domestic challenges. One of these domestic challenges is changing demographics as the young or people below 15 years age make up 40% of the population, rising unemployment, and pressures for modernization which the monarchy has done little to respond to, and the lack of democratic forms which would give people a chance to vent their feelings. For the U.S. the frustration is that the Saudis have done little or can do little for the USA in the way of moderating oil prices as they move still higher, because of speculative trends, decline of production in its own maturing oil fields, and needs to finance huge new plants and cities to provide employment to a growing population. In fact Libyan oil officials has been more of a moderating influence recently than the Saudi oil officials. So it appears that what Karen is saying is that the Saudis are pursuing their own interests in their region and the wider region that includes South Asia and Northern Africa, and the US is pursuing its own interests, which at this time are not as clearly defined, except securing oil supplies and protecting Israel. The 2 countries USA and Saudi Arabia are going their diverging and different ways in a way that is irreversible....

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Pierre Razoux, a French historian provides this account of the Iran-Iraq war that lasted from 1980 to 1988, at a cost of 680,000 people killed and $1.1 trillion in war destruction and money diverted from the economy. In 1980 Saddam Hussein of Iraq launched the war by attacking Iran which had just come under the Ayatollah Khomeini with the fall of the Shah of Iran in 1979. The war dragged on for 8 years with Khomeini persisting in the war. With U.S. and Saudi policy to increase production bringing the price of oil down from $30 to $10 designed to bring Iran and Iraq to the peace talks, as well as the Soviet Union to withdraw from Afghanistan, all three being major oil producers. The dollar also weakened by 37% during this period. The diplomatic isolation of the Khomeini regime made it more difficult for Iran to buy arms on credit than Iraq could, leading to the war ending with Iran finding it no longer possible to continue the human losses. The Carter administration, particularly with National Security Advisor Brzezinski, tilted towards Iraq to oppose Soviets in Afghanistan, and the Saudis also supported Iraq during the early period. Under president Reagan the U.S. began covert and direct assistance to Iraq to prevent an Iraqi defeat early in the war. Rumsfeld visited Baghdad in December 1983 and March 1984 to organize the U.S. effort to oppose Iran. This may have laid the seeds for future conflicts that lasted through the administrations of the elder and junior Bush. As Razoux points out the Revolutionary Guards became entrenched from this period in Iran's history, making it difficult for election process to work or elected governments to operate. 23 months following the end of that war in 1988 Saddam Hussein launched a war on Kuwait, leading to the U.S. led Gulf war and the entry of the U.S. into a ground combat role, which was followed by the invasion of Iraq under George Bush after 9/11 attacks. The twin wars in Afghanistan and Iraq are estimated to have cost the U.S. over 1 trillion dollars. The result today is largely the division on the ground into Shia regions under the Revolutionary Guards and the Shiite government in Baghdad, and Sunni regions led by Islamic State and autonomous Iraqi Sunni tribes, ignoring the Iran-Iraq boundaries set in the colonial period by the French and the British. In all the amount spent in the Khomeini-Saddam war of $ 1 trillion being about $2 trillion in today's money, and the $1 trillion spent by the U.S., means about $3 trillion has gone into the wars in this region. This comes at a time of deficits in government budgets in the U.S. and a deep recession in the U.S. and Europe. It also explains why the U.S. public is reluctant to take even the minor action such as giving a standoff "no-fly zone" protection to the rebels in Syria, and supported the Obama administration in its reluctance to keep even the basic military force in place to protect its diplomatic mission in Libya, where the cost would be small relative to earlier enlarged military missions under the two elder and junior Bush administrations. The result is that refugees are pouring into Europe from Syria and Libya, through Turkey. Turkey itself is host to millions of refugees in camps along its border. The vacuum and the withdrawal of the Obama administration from the region has led to the rise of Islamic State with covert assistance from Sunni regimes in the region to counteract the growing influence of Shiite Iran. It also may explain the Iranian people's support for the nuclear weapons effort through years of sanctions, leading finally to an agreement with the Obama administration that relaxes sanctions in exchange for a future possibility of acquiring nuclear weapons. Lost in the conflict is the Arab Spring of 2012-2013, with the Tunisian democracy the only surviving result of that movement for democracy and awakening among Arab peoples. The Reagan administration in its aggressive anti-Soviet position made large errors- including ignoring human rights abuses and use of chemical weapons in the Iran-Iraq war, by supporting Iraq and reversing position after Iraq's invasion of Kuwait, having a disastrous effect on the entire region decades later. Much of the Obama administration's reluctance for any action may stem from the U.S. role in this period and its consequences of protracted conflict. ...

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It may come as a surprise to know that there are as many new Saudi Arabian students in the U.S. as there are from Japan. Saudi Arabia sent 22,704 students to the U.S. in 2010-2011, according to the Institute of International Education. A big factor is the King's scholarship program which draws from all segments of the Saudi society. This is likely to have an impact on the modernization of Saudi Arabia.

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A surprise move that creates turmoil in financial markets and damages the reputation of the SNB as it failed to provide any communication to markets whatsoever. The SNB removed a cap on the Swiss Franc of 1.20 euros in a sudden move in Jan. 2015, seeing that its policy was increasingly untenable as the ECB prepared for massive monetary easing.

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Syria after the Houla massacres and the sharpening divide between Sunnis and Alawites in Syria. Pro government thugs called shabiha using small arms are said to be responsible. The Houla area is predominantly Sunni and villages near it Alawite. The army is predominantly Alawite in a largely Sunni country. This risks bringing in other Sunni Arab countries into the conflict. U.S. Secretary of State Clinton tells students at the Royal Library in Copenhagen that China and Russia, mainly Russia, were obstacles for the Security Council to taking strong action, and this could lead to civil war.

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Karen Eliott House on a Saudi monarchy out of touch with ordinary Saudis in a way that the Brezhnev government was losing relevance in the waning days of the Soviet Union.

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Within minutes of the SNB's decision to lift the cap on the euro the Swiss Franc surged 30% against the euro and 18% against the dollar. FXCM, retail currency broker, suffered severe losses and the company needed a $300 million investment from Leucadia National Corp. to survive. Citigroup and Deutsche Bank AG each had losses of $150 million. Hedge Funds Discovery and Comac also suffered losses. FXCM losses stem from use by FXCM clients of borrowed money, along with higher leverage the company also has lower margin requirements. Interestingly FXCM fought CFTC efforts under Dodd-Frank legislation to limit leverage to 10 to 1- saying "it would have a devastating impact and drive it overseas." The limit finally set at 50 to 1, meant that an investor could borrow $50 for every dollar he put in of his own. The leverage meant large losses for inexperienced investors and threatened the survival of FXCM in a matter of minutes.

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The owner of the Sips Cafe in midtown Manhattan is one of many investors stuck with large losses on the day the Swiss National Bank removed its cap on the Franc.

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The Wall Street Journal interviews Amr Moussa, leading candidate for the presidential elections in Egypt. He sees a change in policy towards Israel, and a parliament that has many Islamic legislators.

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Germany will provide 140 million euros in extra funding for Syrian refugees and at least 500 million euros in humanitarian and development aid for 2015-2017, according to Foreign Minister Steinmeier.