Tuesday, August 4, 2015

Today's Links


 "...the most serious threat to the existence of Turkey, as we know it, is Erdoğan himself. The president's uncontrollable need to remain the chief political protagonist in Turkish politics is the strongest driving force propelling Turkey toward ethnic and sectarian crises, something the nation cannot endure."  Lebanonization in Turkey, Abdullah Bozkurt, Today's Zaman
http://www.todayszaman.com/columnist/abdullah-bozkurt/lebanonization-in-turkey_395405.html





1--Turkey in Turkish Stream talks with Russia: Minister

2--Obama authorizes escalation of US war against Syria, wsws 


3--The problem is Erdogan  Survey: Turks want formation of coalition gov’t, view Erdoğan as major hurdle, Today's zaman


A full 70.2 percent of respondents expressed their desire for the formation of a coalition government, an increase from the 53.6 percent who expressed the same in a previous survey by the company before the June 7 election.
The survey found that 66 percent of those who voted for the Justice and Development Party (AK Party) in the June 7 election are also in favor of a coalition government and want Erdoğan and interim Prime Minister Ahmet Davutoğlu to increase their efforts to that end.
When asked which factor has contributed to the failure of the formation of coalition government, 56.8 percent said Erdoğan was the biggest hurdle to the emergence of a coalition.


Following the June 7 general election in which no single party received enough seats in Parliament to form a government, Erdoğan has been criticized for conducting a strategy aimed at preventing the formation of a coalition government.
Speaking to journalists on Friday on his way back to Turkey from a visit to China, President Erdoğan said a coalition government would not bring the country any benefit. “However, it is possible to form a minority government that would bring Turkey to a snap election,” he said. Erdoğan also told reporters in İstanbul on July 24 that if no parties are able to form a coalition, the country would then hold another general election within 90 days.


Atmosphere of chaos benefits AK Party...


When asked whether the AK Party was successful in solving the problems of the country and in governing the country, 70.9 percent of those surveyed responded negatively.
Citizens are also concerned about their security in the country, with 85.5 percent of respondents saying security along Turkey's borders was not under control.
A full 84.2 percent also stated their opposition to a military campaign against Syria, deeming such an operation unnecessary.
When it comes to the economic well-being of the citizens, the survey reveals major dissatisfaction by citizens over their financial statuses, with 67.4 percent of respondents saying they have a hard time making ends meet. Furthermore, 21.2 percent stated they were unemployed.


Of those surveyed, 61.8 percent believe their economic status will improve if a coalition government is formed.
The respondents were also disgruntled with the extensive powers of the president, stating their preference for a president with more limited powers. A total of 67.2 percent of respondents said the government should be more independent from the president when making decisions.
Erdoğan is also seen as more authoritarian and oppressive by citizens. Of those surveyed, 66.1 percent said Erdoğan acts as a one-man show and adopts a harsh discourse in politics, with 67.6 percent qualifying Erdoğan as becoming more authoritarian and oppressive.
Since his presidential term began last August, Erdoğan has filed 718 lawsuits on charges of insulting the president against journalists and other people over news reports as well as their social media posts.
The record number of legal proceedings against dissidents is considered a new method of intimidating political opponents who do not share the government's views


4---‘US air cover to Syrian rebels could be game-changer


If the US puts its weight behind the Pentagon-trained rebels in their fight against the Assad government would neutralize the only advantage the Syrian Army has over the rebels, i.e. an air force, journalist and political commentator Alaa Ibrahim told RT.
Barack Obama has given authorization for US planes to bomb Syria to help defend anti-government rebels. Theoretically, the new rules of engagement could even allow troops loyal to President Bashar Assad to be directly targeted. ...


If the USA puts its weight behind the rebels, even as they say now, a small rebel force they have trained and better to fight [Islamic State or IS, formerly ISIS or] ISIL- if they put this weight behind the rebels and their fight against the government of President Assad, this could be very dangerous for the Syrian Army, because the main advantage it has over rebels right now is having an air force and once this advantage is neutralized- all odds are on the table and there would be little [that] Syrian Army has to offer in confronting these rebel groups, as the rebels are more capable of providing a higher number of fighters because of the ongoing influx of foreign fighters crossing in from the Turkey into Syria to join in the fight against the Syrian government.


5--Endless War: US Training New 'Monsters' in Ukraine
6--Yemen: Under-reporting of war deaths – or genocide?7--The Cruel And Aimless War On Yemen

8--Russian Airborne Troops chief says paratroopers ready to help Syria in combating terrorism
Russian Airborne Troops are ready to assist Syria in countering terrorists, if such a task is set by Russia’s leaders, commander of the Airborne Troops Colonel-General Vladimir Shamanov told reporters on Tuesday.
"Of course we will execute the decisions set forth by the country’s leadership, if there is a task at hand," Shamanov said, in response to a Syrian reporter’s question about the readiness of the Russian Airborne Troops to render assistance to Syria’s government in its battle against terrorism.
Shamanov noted that Russia and Syria have "long-term good relations." "Many Syrian experts, including military, received education in the Soviet Union and in Russia," Shamanov added


9--Lebanonization in Turkey


As the violence surges in Turkey, perhaps deliberately provoked by beleaguered political Islamists who are struggling to stay in power ahead of a likely snap election, the country's embattled president seems to have given an extra nudge to stoking fears about a Lebanonization of Turkish politics, something he has been trying hard to accomplish since the 2013 anti-government protests related to Gezi Park in order to survive political and legal challenges.


President Recep Tayyip Erdoğan dumped the settlement talks with Kurds in a snap by abandoning the peace process altogether when he realized it was not working in his favor. His dream of becoming an all-powerful executive president was dashed by the popularity of the pro-Kurdish Peoples' Democratic Party (HDP) in the June general election. The commanders of the terrorist Kurdistan Workers' Party (PKK), seen as affiliated with the HDP and apparently concerned about their future in the face of consolidation in Kurdish politics, have seized the opportunity presented by Erdoğan to reclaim their weakened strength. The patting on the back of hard-core militants who were apparently encouraged to resort to violence by Erdoğan-directed undercover intelligence agents helped escalate the clashes a great deal....


Taken aback by this blow for a while, the president is perhaps now flexing his muscles in the face of growing resistance to his authority and wants to send a stern message that he is still the man who is calling the shots. I believe this high-stakes game is the last act Erdoğan will play before the nation fully realizes that the most serious threat to the existence of Turkey, as we know it, is Erdoğan himself. The president's uncontrollable need to remain the chief political protagonist in Turkish politics is the strongest driving force propelling Turkey toward ethnic and sectarian crises, something the nation cannot endure.


(Erdogans) popularity has plunged and the negative perception of him has increased amid open interference in politics and lavish spending on his costly new palace. He is disliked by the majority of Turks, despised by the opposition and even distrusted by political figures within his former party. The business community, civil society groups and the middle class do not trust what they perceive as a double-dealing president who is always hungry for more power


10--Going to war to crush Demirtaş? , Amanda paul


the main aim of Turkey's new ISIL policy has less to do with ISIL, and more to do with political power. The success of Selahattin Demirtaş' Pro-Kurdish Peoples' Democratic Party (HDP) in the June 7 parliamentary elections, with the party passing Turkey's high 10 percent electoral threshold to enter Parliament, was bad news for Turkish President Recep Tayyip Erdoğan and the ruling Justice and Development Party (AKP). It prevented the AKP from forming a fourth single-party government while also crushing Erdoğan's dream of creating an executive presidency that would have given him unprecedented powers. So Erdoğan had to recalculate.


Turkey still has no new government. Coalition talks have yet to produce a deal. If they do not, there will be early elections. For the AKP to stand a chance of returning to single-party governance they need to remove the main obstacle -- Demirtaş. Therefore, it comes as no surprise that Demirtaş has been explicitly accused of being in cahoots with the upsurge of violence by the Kurdistan Workers' Party (PKK). While the AKP has done more to seek a solution to the Kurdish problem than any other government, ultimately it seems the settlement process has become hostage to a struggle for political power that is apparently more important than Turkey's security and stability...


The PKK blamed the Turkish government and its ISIL policy for the recent terrorist attack in Suruç, leading to the PKK killing two police officers. Erdoğan is trying to pin all of this violence on Demirtaş. For the PKK too, the demise of Demirtaş would not be a bad thing because the PKK has been losing its position in the Kurdish question to the HDP...


While fighting ISIL allows Turkey to go after the PKK and blame Demirtaş for the fallout, at the same time Ankara probably does want to shore up ties with the US due to concerns over the increasingly friendly cooperation between Washington and the PYD. Washington has included PYD fighters as spotters in its air campaign against ISIL, and a PYD official was invited to sit in the operations room in Arbil in northern Iraq. This worries Turkey. Ankara also continues to fear that the PYD's ultimate goal is to create an autonomous canton next to Turkey's border, which would be viewed as a threat to Turkey's national unity and that ever closer ties with Washington may facilitate.
Turkey's security is entering a period of high risk. Until recently Turkey has had a more or less “open door” policy with foreign fighters having easy access to Syria via Turkey. The Turkish authorities have allowed ISIL and other jihadist group insurgents to integrate themselves into Turkey's infrastructure. There are reportedly thousands of sleeping terrorist cells throughout the country. Again, until recently, the Turkish authorities hardly lifted a finger to close down the thousands of websites full of ISIL propaganda. Why did the Turkish authorities not take measures to crack down on ISIL earlier?


11--US Commits to Defend Tiny Group of Syria Rebels
           Military Support 'No Matter Whom They Come Up Against'


It’s not a lot of guys for the US military to protect, at least, as the Pentagon only managed to train 54 rebels in the first place, 18 of them were reported captured by al-Qaeda last week, and at least one has been reported to have been killed in fighting with al-Qaeda.
That’s roughly a third of the force gone already, so the suggestion that the NSF is somehow going to be a game-changer is just silly. That’s not stopping the Pentagon from making what could be a monumental military commitment in trying to keep what’s left of this faction from getting overrun in short order.
What’s left of the force has fled into Kurdish territory in the Aleppo Province for the time being. The plan beyond that is unclear, as wherever the group goes it will be dramatically outnumbered, and the heavy US commitment is likely to paint a major target on their backs.


12--Drones now in Turkey


For the first time, American forces are flying armed drones out of Turkey’s Incirlik air base in support of the U.S.-backed rebels battling the Islamic State in Syria.
The drones will operate mainly as a protective umbrella for the handful of Syrian fighters trained by U.S. forces to fight the militants, in effect giving the 60 or so guerrillas their own air support capability with American precision-guided missiles. The Pentagon has spent about $36 million on this first class of trainees — or about $600,000 each — as part of $500 million program that originally promised to have 5,000 fighters ready to go by the end of this year.
Lawmakers from both parties on Capitol Hill have derided the number of fighters as woefully inadequate. Nonetheless, the White House has requested another $600 million to train Syrian forces in 2016.


A U.S. airstrike supporting the NSF on Friday illustrated this point. The NSF and allied rebels from the so-called 30th Division in northern Syria were attacked by the al Qaeda-affiliated al-Nusra Front, who were then hit by American warplanes. U.S. officials couldn’t confirm that this was the first time that al-Nusra Front fighters were targeted in the year-long bombing campaign, which has focused on the Islamic State.
The drone strikes come after a deeply embarrassing incident last week when a group of rebels who had gone through the training program were captured almost immediately upon entering the country by Nusra fighters. It is not clear precisely how many were captured, but U.S. defense officials insist that they were not part of the group of 60 NSF fighters sent into Syria.....


The strike on Friday came after months of hand-wringing by Pentagon and White House officials over what kind of protection the United States owes the NSF fighters — who have been trained in Turkey by U.S. special operations forces — once they have been sent back into Syria to fight.
U.S. pilots will be somewhat constrained in their support of the rebels, however. The overall policy to hit the Islamic State when and where the U.S.-led coalition finds them will remain in place. But pilots can only provide “defensive fire support” for the NSF after the group is attacked




Monday, August 3, 2015

More Links

1--All eyes on Brent crude and Apple after sluggish session
2--Lavrov Reiterates Rejection of US Air Attacks in Syria


Russian Foreign Minister Sergei Lavrov denounced today the US violation of international law by launching air attacks in Syria under the pretext of protecting the moderate opposition from terrorist groups. The latest activities of the international coalition created by Washington to fight the extremist Islamic State are counterproductive, commented Lavrov in a Moscow teve-broadcast conference at the end of meetings with the Qatari leadership.

Some opposition groups trained in the past by US instructors later joined extremist groups against the Syrian government, he recalled.

But we consider negative to place under the coalition's air force defense a part of rebels in Syria because it will give freedom to US air force to destroy anything in its way, commented Lavrov.

We discussed the Syrian issue with US State Secretary John Kerry in a three-party meeting in Doha, he explained. When in 2014 the Whote House formed the coalition against the IS, it had Iraq's permission to act, but not Syria's, where it launched air raids in violation of international law, noted Lavrov.

Cooperation with ther Syrian army and with Kurd rebels is also needed to fight terrorism, said Lavrov, who acknowledged differences in this regard existing between Moscow and Washington.




3--The real message of plunging commodities


4--Deflation Is Winning – Beware!
Expect the ride to get even rougher         


5--Commodities Are Screaming Trouble But the Fed Isn’t Listening

Today's Links

1---Smart Money Dumps Assets at Record Pace, But Who the Heck Is Borrowing and Buying Like There’s No Tomorrow?


Corporations have been buying back their own shares. They’ve been buying privately held companies, including those dumped by PE firms. And they’ve been buying each other in the most awe-inspiring wave of merges and acquisitions the world has ever seen. The higher the price and the premium, the better. Corporations have become the relentless bid.


And they’re funding this binge with cheaply borrowed money. Junk bonds have seen rough waters recently, with investors getting re-spooked by the energy debacle, and issuance is down so far this year, compared to last year. But high-grade bonds are still booming though the first ripples have appeared.
US corporations issued a total of $802.9 billion in investment-grade bonds this year through July, according to Dealogic, up 27% from the same period in 2014. The most ever.
Of that, $701.7 billion were issued in the US, the highest ever, up 32% from the prior record set during the M&A bubble in 2007 (a now paltry $531.3 billion).


2--Market manipulation goes global, Stephen Roach


China’s efforts at market manipulation are no less blatant. In response to a 31 per cent plunge in the CSI 300 (a composite index of shares on the Shanghai and Shenzhen exchanges) from its June 12 peak, following a 145 per cent surge in the preceding 12 months, Chinese regulators have moved aggressively to contain the damage.
Official actions run the gamut, including a US$480 billion (S$656 billion) government-supported equity-market backstop under the auspices of the China Securities Finance Corporation, a US$19 billion pool from major domestic brokerages, and an open-ended promise by the People’s Bank of China (PBOC) to use its balance sheet to shore up equity prices. Moreover, trading was suspended for about 50 per cent of listed securities (more than 1,400 of 2,800 stocks).
...
While the government has assembled considerable firepower to limit the unwinding of a spectacular bubble, the overhang of highly leveraged speculative demand is disconcerting.
Indeed, in the 12 months ending in June, margin financing of stock purchases nearly tripled as a share of tradable domestic-equity-market capitalisation.


3--Special Forces disguised as ISIS fighters operating in Syria – military sources


Special Forces soldiers from Britain’s most shadowy military unit are dressing as Islamic State militants and traveling deep into the badlands of Syria to track and destroy enemy assets, according to military sources.
It is reported that up to two SAS squadrons of men, around 120 personnel in all, are operating inside the borders of Syria as part of Operation Shader, which aims to destroy equipment and munitions used by the Islamic State (IS, formerly ISIS/ISIL).


The troops are operating under US command as part of the Coalition Joint Special Operations Task Force.... it was revealed that UK drone crews had been routinely operating under US command from Creech air base in Nevada.
Concerns were immediately raised about whether RAF (Royal Air Force) personnel were involved in strikes on Pakistan and Yemen, nations which the US has been bombing for some time, but with whom the UK is not ‘legally’ at war.


4--Pipeline taking Iran's gas to Iraq ready in 20 days: Official


Based on the agreement, 25 mcm of gas will be delivered to Sadr, Baghdad and al-Mansouryah power plants through the 270-kilometer pipeline.


5---Washington stunned by attack on US mercenaries in Syria


Following the capture of its commander and the other fighters, Division 30 issued a communique appealing to “our brothers” in the Al-Nusra-dominated “Support Front” to “release the colonel and his companions as quickly as possible, avoiding shedding the blood of Muslims and out of eagerness to maintain a united front.”


The statement could not be clearer. The force being trained by the US military is attempting to operate as part of a “united front” with the Syrian affiliate of Al Qaeda, which the American people have been told for nearly 14 years represents the foremost threat to the US....


Washington's apparent objective was to rely on the Nusra Front to serve as its principal proxy force while utilizing the US-trained mercenaries of Division 30 to influence the Al Qaeda-affiliated militia. The fighting at the end of last week has thrown this strategy into disarray.....


In the midst of the latest debacle with Division 30 and one year after the Obama administration began its bombing campaign against ISIS targets in Syria and Iraq, US military and intelligence officials have told the Associated Press that both the CIA and the Defense Intelligence Agency have concluded that the strategy has resulted in “no meaningful degradation” of the number of fighters fielded by ISIS. US intelligence puts this number at between 20,000 and 30,000. Nor have any significant gains been registered in retaking Iraqi territory that has fallen under ISIS control.....


has been sold to the American people as a war against terrorism is in actuality being waged in a de facto alliance with Al Qaeda. Its real purpose is to oust a Syrian government allied with Russia and Iran and impose a US puppet as part of a strategy to impose US hegemony over the entire Middle East and prepare for global war.


Friday's attack came a day after the Nusra Front captured the head of Division 30, a Syrian army defector Col. Nadim al-Hasan, and another officer known as Abu Hadi, who was in command of the small band of US-trained fighters who have been funneled back into Syria from Turkey. Another six fighters were also taken prisoner.
The Pentagon initially issued carefully worded statements claiming that none of the US-trained fighters had been captured. These claims were dashed by Saturday, when the Syrian Al Qaeda front released a video in which the captured fighters appeared. One of them, speaking to the camera, explained how US trainers had, after a month and a half training in Turkey, provided him and others with M-16 assault rifles and cash and sent them into Syria.


The US-trained fighters are hardly a formidable force. According to the Pentagon's own admission, barely 60 have been vetted and trained since the program was first proposed nearly a year ago, with the stated aim of fielding an army of 15,000 US-backed mercenaries.
The difficulties encountered by this program stem both from the inability of the Pentagon to vet Syrian fighters, who are overwhelmingly drawn from Islamist extremist groups like the Nusra Front, and the unwillingness of these same fighters to be identified as US-paid mercenaries.


6---The Fake War on ISIS: US and Turkey Escalate in Syria


It is now also documented fact that Turkish intelligence (MIT) has been an active player in the ongoing campaign to arm and resupply the terror groups such as the al Nusra Front and others. The evidence of this fact was made public by the Turkish daily Cumhuriyet which published video footage along with transcripts from wiretaps confirming what many eyewitnesses have stated:  Turkish security forces have been directly involved in shelling and support operations for Nusra front and other jihadi groups in and around Kassab, Syria, among other sites. Many of the very same terrorists who have been armed and supported by the Turkish government are today being held up as enemies of Turkey, and rationalization of the need for Turkish military intervention.
So, with the inescapable understanding that Turkey’s government is the primary supporter and sponsor of terrorist groups in Syria, the justification for war becomes flimsy at best. But, if it’s not about fighting terror, then what exactly is Ankara’s objective? What does it hope to gain?...


 the Brookings Institution just last month issued a policy paper entitled Deconstructing Syria: Towards a regionalized strategy for a confederal country, which brazenly laid out a plan to, as political analyst Tony Cartalucci astutely pointed out, “divide, destroy, then incrementally occupy” Syria using the pretext of ISIS and terrorism. And that is precisely what we’re witnessing now.


7--Gross: Low rates are the problem, not the solution


When central banks, particularly the Federal Reserve, began their aggressive easing programs, the thought was that boosting asset prices and lowering the cost of money would spur business investment that would flow through the broader economy.
The S&P 500 indeed has soared about 210 percent during the bull market that began in 2009. But as evidenced—again—by Thursday's tepid 2.3 percent quarterly gain in gross domestic product, aggressive growth has proved elusive....


In the fallout, Gross wondered what would happen to the "zombie" companies issuing junk bonds, as well as those firms that have spent trillions on stock buybacks to boost share prices.
"Low interest rates may not cure a fever, Gross said, "they may in fact raise a patient's temperature to life threatening status


8--US-Trained Syrian Rebels Routed by al-Qaeda, Flee Into Kurdish Territory
           Al-Qaeda Rules Out Working With US-Backed Groups


9---

Saturday, August 1, 2015

Today's Links

1--Iran city hits suffocating heat index of 165 degrees, near world record


2--Wintershall to join Russia-led Nord Stream-2 gas pipeline


Biggest gas customer
In a Friday press release Wintershall confirmed its forecast of 0.8 percent annual growth in gas demand in the EU which would continue until 2040 and gas production in the region would fall 2 percent annually. This would help Russia retain its position of the main provider to the market.
In May 2015 Germany purchased 68 percent more gas compared to May 2014, Gazprom CEO Aleksey Miller said at a meeting with President Putin in June.


“This points to the fact that the demand for Russian gas is growing and there is no doubt that the issue of new contacts for long-term Russian gas supplies to the European market is on the agenda of talks with our European partners,” he said.
Germany has been the biggest customer of gas from Gazprom, buying 38.7 billion cubic meters in 2014. This is roughly a third of all Gazprom exports to Western Europe


3--US, allies still dedicated to ouster of Assad: International rights lawyer


Develay said that “it is also important to take into consideration that no effort has been undertaken to cut-off financial support to [ISIL]; that is the flow of money and arms being channeled to these groups by Saudi Arabia.
“Indeed, the kingdom has seemingly taken it upon itself to check Shia power in the entire region while the United States works diplomatically to engage Iran via the Vienna nuclear deal.
“It is thus a regional situation comparable to Japanese Kabuki theatre: a casting of shadows aimed at obfuscating the real objective of the West and its allies, which remains the toppling of Bashar al-Assad.”...


“On a more worrying note, the recent Turkish bombing raids across its border with Syria; a move allegedly aimed at curbing ISIS activities, has essentially been targeting Kurdish forces, thus preventing an ally of the coalition from conducting its own operations against the terrorists,” Develay noted.
“We now hear about the establishment of a ‘no-fly zone’ several dozen miles inside Syria along the border with Turkey. This notion has notably been featuring prominently in the British prime minister's recent interventions these last few days,” he stated.




4--‘Erdogan, Obama in collusion against Syria’


5---US, Turkey agree to train militants fighting in Syria: Report


6--US Army Building Roads in Eastern Europe, Citing 'Russian Aggression'


7--Turkey: Erdogan responds to election with war


8-- Öcalan and Erdoğan will spike Demirtaş’s guns


9--Britain’s secret ties to governments, firms behind ISIS oil sales  nafeez ahmed

One of ISIS’ most significant sources of revenue is oil smuggling. The Islamic State controls approximately 60% of Syria’s oil, and seven major oil-producing assets in Iraq.
Using a carefully cultivated network of intermediaries and ‘middlemen’ in the Kurdish region of Iraq, as well as in Turkey, ISIS has been able to produce a phenomenal 45,000 barrels of oil a day, raking in as much as $3 million a day in cash by selling the oil at well below market prices.
But the sheer scale and impunity of this oil smuggling network has caused local politicians to ask whether certain officials in the KRG and Turkey are turning a blind eye to these operations.
https://medium.com/insurge-intelligence/britain-s-secret-ties-to-governments-firms-facilitating-isis-oil-sales-210d21470e65




Elements of the KRG and Peshmerga militia directly facilitated secret ISIS oil smuggling through the Kurdish province. This was known to the Americans, which shared intelligence on the matter with the Iraqi government in Baghdad.”...


“US intelligence is monitoring many of these smuggling operations in minute detail. Some of this intelligence has been passed on to us. The Americans know what is going on. But Erdogan and Obama don’t have a great relationship. Erdogan basically does what he likes, and the US has to lump it.”...


Turkey has sponsored Islamist groups in Syria, including ISIS, since the beginning, and continues to do so. The scale of ISIS smuggling operations across the Turkish-Syrian border is huge, and much of it is facilitated with the blessings of Erdogan and Davitoglu, who see the Islamists as the means to expand the Turkish foothold in the region.”...


“… extraction wells in the area of bombardments have yet to be targeted by the US or the air-assets of its allies, a fact that can be readily attributed to the at times ‘toxic’ politics in the Middle East.”....




Turkey also plays a crucial role in the ISIS oil smuggling operations according to the Iraqi source. As the end-point through which much of this oil reaches global markets, Turkish authorities have routinely turned a blind eye to the IS-run black market. “The Turks have an acrimonious relationship with the Americans,” he claimed, but admitted that US intelligence is familiar with Turkey’s role:
“US intelligence is monitoring many of these smuggling operations in minute detail. Some of this intelligence has been passed on to us. The Americans know what is going on. But Erdogan and Obama don’t have a great relationship. Erdogan basically does what he likes, and the US has to lump it.”...


While KRG government officials and their relatives are directly profiting from lucrative oil and gas contracts brokered by the KRG, the same officials — who are responsible for anti-terrorism in the Sulaymani province — oversee the Nokan Group, which is implicated in facilitating ISIS oil smuggling....


The refinery, owned by the Nokan Group whose trucks were seen transporting IS oil through the Kurdish province earlier this year, is supplied from the KRG’s Taq Taq field. The oil field produces a total of around 100,000 barrels per day, most of which is shipped to local refineries. British-Turkish firm Genel Energy has a 45 percent stake in the Taq Taq field...


According to the final report of the House of Commons Select Committee on Foreign Affairs’ inquiry into the British government’s policy toward the KRG, published in January 2015, Genel is the only major British investor in the province.
The report noted that the Kurdistan region holds an estimated 45 billion barrels of oil — in the same league as Libya and Nigeria — and a further 110 trillion cubic feet of gas, placing it around tenth or twelfth in the world for reserves. The KRG aims to export as much as 2 million barrels per day by 2020, a prospect of huge interest to Western companies including, according to the report, “Exxon, Chevron, Repsol, Total, the local giant KAR, and the British-Turkish company, Genel Energy.”

Just a month earlier, David Cameron’s then Energy Minister Matthew Hancock told the 4th Kurdistan-Iraq Oil & Gas Conference in Erbil, that Iraq “has a critical role to play in meeting the world’s future demand for oil.” Remarking that US oil production is “forecasted to peak in 2020,” he said that therefore “the world is expected to become ever more dependent on Iraqi supply.”
Iraqi oil production will treble to over 8 million barrels a day by 2040, he added: “Reserves in Kurdistan play a significant role in this increase. The region is not only thought to be one of the largest untapped areas of oil in the world, but also has significant gas potential.”

split up Iraq to boost profits for private corps

The 2015 UK parliamentary report repeatedly justifies calls for cementing British-KRG ties due to the KRG’s role as a reliable “partner in the fight against terrorism.”
While the parliamentary report goes to pains to emphasise the British government’s formal position in favour of a unified Iraq, it also leans heavily toward a federal solution granting the KRG considerable autonomy, based on its ability to exploit oil and gas resources in the province.
Pointing to the UK Foreign Secretary’s recommendation of “devo max” (maximum devolution) as the best possible model of democratic governance in Iraq, the report recommends that the British government should be prepared for “the possible consequences of Iraq’s break-up.”
The KRG’s “increased self-governance, or even independence, is itself rational, given its economic potential and demonstrable capacity for effective self- governance, and also understandable, given its recent history.” While the move to independence is not imminent, “it is a medium-term possibility, depending in large part on the Kurdistan Region’s energy export strategy, for which the UK Government should be prepared...

The eagerness of American and British oil companies to exploit Iraqi Kurdish resources, however, raises urgent questions as to whether US-UK government support for the KRG-Turkish oil nexus is undermining the war on ISIS, if not fuelling the terror group.
Neither the British nor American governments appear to be willing to answer these questions.

European energy security will gain from their ability to supply gas through the projected southern energy corridor for a century. This deserves UK recognition and support.” 



 a symbol of how the US punches above its weight, nothing beats the pre-eminence of its currency. The US may account for just a fifth of global gross domestic product, but dollar assets make up three times as great a proportion of global reserves. Most commodity trading uses the greenback as the medium of account.
This influence is telling. A working paper from the Bank of International Settlements found almost $8tn of dollar credit issued to non US borrowers. More recently the IMF pointed out how past episodes of dollar strength have coincided with a rash of emerging market crises. Now that the greenback is surging again — the dollar index is up 20 per cent since last autumn — the implications are moving into focus


Dissecting the dollar is something of an art; a bet on its strength can reflect confidence in the US, or darkening clouds elsewhere and a rush to safe assets. The same IMF paper has shown that rising US rates are beneficial when they reflect optimism about growth, but not if driven by tighter money. On many occasions dollar strength has coincided with fears about growth; last autumn, for example, a spell of global deflation may have helped propel the dollar on its recent run. Of late, attention has focused more closely upon how well the US is doing. ...

IMF, which recently warned of “significant and abrupt rebalancing of international portfolios” should the Fed raise rates. A further reason for the dollar’s strength is confirmation of a lack of credible alternatives. Those Cassandras fretting about how monetary ease damages the dollar’s reserve currency status fail to appreciate how this is built not on its strength but its depth. Dollar assets are pervasive and easily sold.

Friday, July 31, 2015

Today's Links

1--Worst Wage Growth In History Sparks Bond & Stock Buying Frenzy, Rate Hike Expectations Crater


2--Say A Little Prayer" Bill Gross Warns, "Zombie Corporations Now Roam The Real Economy"


3--Outflows from EM funds accelerate Financial Times. Central bankers of emerging markets countries have been complaining about Fed-induced hot money flows for years, and the Fed has acted as if it has nothing to do with


4--Big companies warn on China slowdown Financial Times




5--One In Eight Americans Burdened By Student Loan Debt, Including 700,000 Seniors
6--US homeownership rate hits lowest level since 1967
By Tom Hall
31 July 2015
Last month marked six years since the official end of the 2007-2009 recession, and, if official commentators are to be believed, six years since the beginning of the economic “recovery.”
Yet by many indicators, American households are actually far worse off than they were during the depths of the 2008 crisis.
According to data released on Tuesday by the US Census Bureau, the share of Americans who own their homes has fallen to the lowest level since 1967.
Only 63.4 percent of American households owned their homes in the second quarter of 2015. This was a decline of 1.1 percentage points over only twelve months, and 5.8 percentage points less than the peak of 69.2 percent reached in 2004.
7--Fifty years on: Medicare under assault
8---National home prices reach housing bubble peak nine years later


9--RealtyTrac: Single-family home sales reach highest level since 2006

FHA buyer share climbs to two-year high; Cash buyers dwindle








Wednesday, July 29, 2015

Today's Links

1--US, EU 'Give Up' Ukraine to Seek Russian Political Support


The United States and the European Union (EU) are "selling out" Ukraine to Russia to gain the Kremlin's support in dealing with Iran's nuclear program and looking for Moscow's approval of taking out Syrian leader Bashar al-Assad, the Atlantic Magazine reported.
According to Brian Whitmore, over the past few weeks, the Europeans and Americans have been busy trying to strike a political deal with Vladimir Putin.
"The United States and Europe might give up Ukraine in exchange for Russia's support of securing a deal to curb Iran's nuclear program. Additionally, Washington has been seeking Moscow's backing in securing a managed, orderly, and negotiated exit for Syrian leader Bashar al-Assad," Whitmore said in the Atlantic.


Then, US Deputy Assistant Secretary of State Victoria Nuland went to Kiev and persuaded Ukrainian lawmakers to make changes in their constitution to recognize the special status of the Donetsk and Lugansk People's Republics. Something that Kiev has been long opposed to, Whitmore argued.


2--AKP, MHP reject inquiry about ISIL, PKK terror


A proposal for the establishment an inquiry commission by the Republican People’s Party (CHP) was rejected by votes from the Justice and Development Party (AKP) and the Nationalist Movement Party (MHP).

Meanwhile, the Peoples’ Democratic Party (HDP) supported the proposal. CHP and HDP lawmakers then protested the AKP-MHP rejection of the establishment of the commission.

Lawmakers from the four political parties came together upon the initiative of the CHP, with the intention of discussing a terror wave by the Islamic State of Iraq and the Levant (ISIL) and the Kurdistan Workers’ Party (PKK) in the last 10 days.

“We warned the government about the birth of the ISIL and we have submitted necessary motions to the parliament for an in-depth examination but all have been rejected by the government,” deputy parliamentary group leader of the CHP, Levent Gök said in his address to parliament. “If we do not form a commission to inquire into the ISIL threat, what else will we do?”


3---On the Causes of Investment Decline in the US Economy , Jack Rasmus


the chronically stagnant US economic recovery since 2009 (predicted in my 2010 book, ‘Epic Recession: Prelude to Global Depression’), the result of insufficient income growth for most households—that is then necessary to stimulate consumption demand that, in turn would result in real investment that would create jobs? Or has the escalation of financial asset prices since 2009—itself the consequence of $10-$15 trillion of Fed and central bank liquidity injections— resulted in lower real investment in the US and thus the failure of job and income growth?

To restate more simply: does the lack of wage and income growth determine real asset investment; or are the expanding opportunities for more profitable financial asset speculative profits globally driving the decline of US real asset investment (and thus jobs, wages, and income growth)?
Which is the more primary causal relationship? If one believes lack of income is the primary cause of declining real investment today in the USA, then the solution is simply to raise wages and income of households that typically spend by whatever means—tax cuts, subsidies, etc. The problem is simply an insufficient level of income.


4--Turkey stepped up its offensive against Kurdish militias in northern Iraq early Wednesday, pounding targets in six locations from the air, officials said.
The Iraqi government condemned the airstrikes, calling them “a dangerous escalation and an assault on Iraqi sovereignty.”
Turkish officials said the airstrikes were carried out in response to a string of terrorist attacks in Turkey by militants of the Kurdistan Workers’ Party, or P.K.K., a separatist group that waged a 30-year insurgency against Turkish rule. The office of Prime Minister Ahmet Davutoglu said in a written statement that the strikes on Wednesday were against shelters, depots and caves used as hide-outs by the group. No information was released concerning casualties

5---Restoring peak housing prices required record low mortgage rates during a period of weak growth and a falling home ownership rate

It’s time to celebrate! National home prices reached the peak of 2006. Surviving homedebtors are regaining equity, surviving lenders have collateral backing behind the bad debt they’ve preserved for the last decade, and new homeowners are stretched to the max to repay the bad debts of previous generations, albeit at lower rates.
Since the housing market peaked in 2006, the powers-that-be resisted the price decline with a variety of government relief programs, and most importantly, record low mortgage rates. The recession caused by the 2006-2009 housing market crash left many people unemployed and underemployed, removing their demand from the housing market, and millions of foreclosures caused the home ownership rate to plummet — not the conditions one would expect to cause a robust price rally in house prices.


However, house prices did go up — a lot. When the market manipulations finally worked in 2012, house prices went nearly vertical. While economic fundamentals were slowly improving in the background, there was no significant fundamental support for the rally that reflated the housing bubble, certainly not a level of economic improvement commensurate with the dramatic increase observed in prices.
The entire rally was fueled by record low mortgage rates engineered by the federal reserve. Plus, changes in policy at the major banks held back the tide of foreclosures and greatly restricted the MLS inventory. Demand was up slightly, mostly due to investors as owner-occupants remained absent from the market, and first-time homebuyer participation fell to very low levels.


Homes are officially being sold at the highest prices, ever

Existing-home sales also reach highest pace in 8 years

Thanks to rising demand and shrinking supply, the median existing-home price for all housing types reached an all-time high in June.
According to the latest data from the National Association of Realtors, the median existing-homes sales price rose to $236,400, which exceeds the previous peak median sales price set in July 2006 of $230,400. …


Despite record prices, existing-home sales also reached their highest pace in more than eight years.
Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, increased 3.2% to a seasonally adjusted annual rate of 5.49 million in June from a downwardly revised 5.32 million in May.
Sales are now at their highest pace since February 2007 (5.79 million), have increased year-over-year for nine consecutive months and are 9.6% above a year ago (5.01 million)....


All-cash sales dropped to the lowest share since December 2009, reaching just 22% of transactions in June, down from 24% in May and 32% a year ago....


The problem is that Potential buyers can’t afford peak prices at higher interest rates. When interest rates go up, sales volumes will fall, and house prices may follow


6--Pentagon chief threatens Iran with war, despite nuclear agreement


7--Supreme Leader's Sermons at Eid ul-Fitr Prayers, July 18th, 2015
Sayed Ali Khamenei, the Supreme Leader of the Islamic Revolution    
      

The following is the full text of the sermons delivered on July 18, 2015 by Ayatollah Khamenei, the Supreme Leader of the Islamic Revolution, at the Eid ul-Fitr prayers in Tehran.



Another issue is a domestic one: the issue of the nuclear negotiations. I deem it necessary to raise a few points in this regard......The next point is that ....no one will be allowed to take advantage of this document in any way and to undermine the fundamental principles of the Islamic Republic whether this document is ratified or not. ..... The Islamic Republic will never give in to the enemy's greed in the area of protecting its defense capabilities and security- particularly in this environment filled with the enemies' threats...
The next point is that whether this document is ratified or not, we will not abandon our regional friends: the oppressed people of Palestine, the oppressed people of Yemen, the people and government of Syria, the people and government of Iraq, the oppressed people of Bahrain and the sincere mujahids of the Resistance in Lebanon and Palestine. These people will always enjoy our support.

The next point is that our policy towards the arrogant government of America will not change in any way despite these negotiations and the document that has been prepared..... As we have said many times, we have no negotiations with America on different global and regional issues. We have no bilateral negotiations with America. Sometimes, we have negotiated with them in exceptional cases such as the nuclear issue and we have done so because of our interests. The nuclear issue was not the only case. There were other cases as well which I have referred to in my previous public speeches. The American policies in the region are 180 degrees the opposite of the policies of the Islamic Republic.....

There was one point in the statements that the American president made in recent days: he admitted to America's past mistakes. Of course, he said a hodgepodge of things. He admitted that the Americans made a mistake in Iran on the 28th of Mordad. He admitted that the Americans made a mistake in helping Saddam Hussein. He admitted to two, three mistakes, but he did not mention tens of others. He did not speak about the 25-year oppressive and treacherous rule of the second Pahlavi monarch. He did not speak about the many instances of torture, looting, massacre, disaster and calamity that were caused by America. He did not speak about the destruction of the Iranian peoples' dignity and America's efforts to trample upon their domestic and foreign interests. He did not speak about the Zionists' domination, the killing of Iranian passengers on a passenger plane and many other things. Nonetheless, he mentioned a number of mistakes. ......


.... today they have signed on paper that they have no problem with our nuclear industry. Apart from stressing the power of the Iranian people, what other meaning does this have?....This has been achieved because of the people's resistance and steadfastness and our dear scientists' courage and innovation.....God's mercy be upon our nuclear martyrs. God's mercy be upon their families. God's mercy be upon a people who stand by their truthful claims and rights.








 

 


Today's links

1--Our monumental Turkey blunder, Salon


Erdoğan’s No. 1 ambition remains, by much evidence, deposing Assad; defeating ISIS is secondary in his priorities—if, indeed, it is that. Turkey’s record as a conduit for weapons and anti-Assad foreign fighters into Syria is beyond question. Even since the accord Erdoğan signed with Obama last week we have indications that his view of ISIS is at the very least ambivalent.
Second point. This agreement effectively licenses the Erdoğan government to break a two-year cease-fire with Turkey’s Kurdish minority, arrest dissident Kurds wholesale and begin shelling Kurdish positions in Iraq and Syria. In effect, Erdoğan now has American approval to attack one of America’s most loyal allies against ISIS in northern Iraq in the service of his domestic political conflicts.
We must try to rewrite the old adage to accommodate this absolutely wild arrangement. The enemy of my unstable tactical ally is my enemy even if he is my friend. Doesn’t quite make sense, does it? Exactly right: It makes none.
The big payoff for Washington in this pact is that American fighter jets will now fly missions into Syria and Iraq from two bases in southern Turkey. The logic is purely tactical but plain: Turkish bases are far closer to zones of conflict in Iraq and Syria than bases in the Persian Gulf are; surveillance planes and bombers can spend less time commuting and more finding and bombing targets.
The initial report of the accord in the New York Times noted, “The agreement was described by one senior administration official as a ‘game changer.’” Think about this. Put the two new realities just outlined next to the military expedient of having bomber bases closer to the warfront....


Obama named John Allen his special envoy last year to manage what we are calling the coalition against ISIS. It was Allen who wangled the deal wherein U.S. fighter jets will now operate from southern Turkey. To be clear, the BBC called the negotiating process “arm-twisting.”
Consider who this man is: Here is Allen’s State Department biography. He retired from the Marine Corps a four-star general after commanding U.S. forces in Afghanistan for a year and a half. In a 38-year career, Allen held senior positions in NATO and the Defense Department, in the latter assignment advising on Marine Corps positioning in the Pacific (where the Marines are key to the American security structure).
By way of training, Allen’s degrees include  a bachelor’s from Annapolis, a master’s from the National Intelligence College and an honorary doctorate from the National Intelligence University. (He has another honorary doctorate, this one in humane letters, from Monmouth College, and one cannot quite make out where this fits.)

Allen is an operations man only recently out of uniform, in short. He is versed in military strategy, tactics, intelligence and not much else (unless we count “humane letters”). What is a soldier with this narrow a purview doing negotiating a deal with a leader whose position on Middle Eastern questions is as politically, ideologically and, indeed, religiously charged as Erdoğan’s?
Second question: What kind of deal did the Obama White House expect Allen to produce? Third: What kind did it want?
All the answers lie in the deal Allen got. It is a military deal, nothing more. As such is it a near-perfect specimen of what Washington gets in consequence of the militarization of foreign policy that has proceeded more or less unchecked since Truman armed the Greek monarchy at the start of the Cold War in 1947


Apart from relocating American warplanes, the pact also mobilizes Turkish F-16s to begin their own bombing runs as part of the coalition Allen oversees. In this the Erdoğan government wasted not a minute. The day after the Obama- Erdoğan telephone call, Turkish tank and artillery units shelled militants across the border into Syria for the first time; Turkish fighter jets began bombing runs into Iraq and Syria the next day. The latter continue....




Until last week. Speaking at a security forum in Aspen after the agreement was announced, Allen said of the no-fly zone, “No. It was not part of the discussion.” It took the BBC’s Mark Lowen a few hours to sort out the semantic ruse: The agreement provides for a “safe area” in northern Syria, not a no-fly zone. On Monday, cat out of the bag, American officials finally acknowledged plans for a “buffer zone,” or an “Islamic State-free zone,” and we will have to see what this amounts to: There is simply no saying now.....


Then came the agreement with Washington, and Turkish authorities have since arrested hundreds of “extremists.” On Sunday afternoon a source in Istanbul wrote, “About 20 supporters of Daesh [the Arabic for ISIS] were taken in and about 200 were Kurdish militants.”
How is that for a telling proportion? Here is the same source on the Turkish F-16s airborne since Friday: “The Turkish airstrikes on Kurdish positions in Syria and Iraq were much heavier and more numerous than on the Daesh positions in Syria.”
That is to put it too mildly. Of eight air raids flown last Friday, three targeted ISIS units and the other five Kurdish positions in Iraq and Syria. And shame, shame on the government-supervised Times for its report in Saturday’s paper: “Turkey Strikes 3 ISIS Targets in Syria With Jets,” the headline announced. You had to read three paragraphs in to discover the five attacks on Kurds, and these were “not independently verified.” Sure thing....


Jens Stoltenberg, NATO’s Norwegian secretary-general, suggested Monday that Turkey was unlikely to get “any substantial NATO military support.” This was a straw man: Material support is not what the Erdoğan government wants. In its fight against ISIS and the Kurds—against both, note—it wants “solidarity and support from our NATO allies,” as the foreign ministry in Ankara later made clear.
Legitimacy, in other words. And it got it Tuesday in Brussels, where Stoltenberg announced, “We all stand united in condemning terrorism, in solidarity with Turkey.”  See the problem? Not “united against ISIS,” but “united in condemning terrorism.”
Erdoğan understood. Within hours he declared that no peace process with the Kurds is possible—and then urged parliament to strip legislators with ties to the PKK of immunity from prosecution. An Istanbul source wrote Tuesday afternoon to say that some sitting parliamentarians have already been arrested.


2---China’s Stock Market Falling Off a Cliff: Why, and Why Care?


3---Kurd leader attacks Turkey's 'safe zone' plan for Syria


A "safe zone" Turkey and the US are creating in Syria is an attempt by Ankara to stop Kurds from forming their own territory, the leader of Turkey's pro-Kurdish party has told the BBC


State Department spokesman John Kirby said "more coalition effort and energy" would now be focused on the border area.
But he rejected suggestions that the US had sanctioned Turkey's air strike on Kurdish forces in northern Iraq.
Over the past week, analysts say, Turkey has turned its approach to the US-led coalition against IS on its head
...


But Mr Demirtas, who leads the HDP (People's Democratic Party), told the BBC that Turkey's real intention was to make an incursion into Kurdish areas in Syria so as to stop Syrian Kurds from controlling contiguous territory.
"Turkey doesn't intend to target IS with this safe zone. The Turkish government was seriously disturbed by Kurds trying to create an autonomous state in Syria," Mr Demirtas said.
..
Tuesday also saw Nato discuss the Turkish campaigns against IS and Kurdish militants. All 28 Nato member countries met in Brussels to discuss what it called "the threats against Turkey", a key member of the alliance.
In a final communique, Nato expressed "strong solidarity" with Turkey, and sent condolences to Ankara and "the families of the victims in Suruc and other attacks against police and military officers".
However, Nato officials quoted by news agencies said alliance members used the closed-door meeting to urge Turkey not to use excessive force, and to continue peace talks with representatives of its Kurdish minority


4---Fighting ISIS??? Turkey launches heaviest air strikes yet on PKK, stoking Kurdish ire


Turkish jets launched their heaviest assault on Kurdish militants in northern Iraq overnight since air strikes began last week, hours after President Tayyip Erdogan said a peace process had become impossible.
The strikes hit Kurdistan Workers Party (PKK) targets including shelters, depots and caves in six areas, a statement from Prime Minister Ahmet Davutoglu's office said. A senior official told Reuters it was the biggest assault since the campaign started.
Iraq condemned the air strikes as a "dangerous escalation and an assault on Iraqi sovereignty", saying it was committed to ensuring militant attacks on Turkey were not carried out from within its territory.
Turkey launched near-simultaneous strikes against PKK camps in Iraq and Islamic State fighters in Syria last Friday, in what Davutoglu has called a "synchronised fight against terror".
The NATO member also opened up its air bases to the U.S.-led coalition against Islamic State, joining the front-line in the battle against the jihadists after years of reluctance. NATO gave Turkey its full political support on Tuesday.
But Turkey's assaults on the PKK have so far been far heavier than its strikes against Islamic State, fuelling suspicions that its real agenda is keeping Kurdish political and territorial ambitions in check, something the government denies....


On Tuesday, fighter jets also bombed PKK targets in the southeastern Turkish province of Sirnak, bordering Iraq, after an attack on a group of gendarmes.
The PKK has said the strikes are an attempt to "crush" the Kurdish political movement and create an "authoritarian, hegemonic system" in Turkey.
...


Many Kurds believe that by reviving conflict with the PKK, Erdogan seeks to undermine support for the HDP ahead of a possible fresh election. He has made no secret of his desire to change the constitution and amass stronger powers, virtually impossible without a strong single-party AKP government.


5---Russell Napier: What Happens When Markets Realize China Is A Forced Seller Of Treasuries


The Great Reset , which began with China’s first reported foreign reserve decline in 2012, is now accelerating. The ultimate destination for China is either to continue to support the exchange rate and accept ever lower growth, probably accompanied by deflation, or to devalue. Either option will further exacerbate global deflationary pressures and place huge pressure on other EMs that compete with China and are linked to the USD.
So could the liquidation of US Treasuries by EMs, in an effort to defend their exchange rates, also push up Treasury yields? This was the forecast in the May 2011 paper and it was very wrong. It was wrong because the Fed was an aggressive buyer of Treasuries, but the Fed is not currently in the marketplace.


Today the yield on Treasuries is set by the actions of foreign central bank activity and the global private sector. The Solid Ground has long wondered how US Treasury bulls in the private sector would react if they knew in advance that the second largest owner of Treasuries, the PBOC, was a forced seller of Treasuries. Such compelled selling would be obvious before US markets opened each morning as downward pressure on the RMB exchange rate in Asia forced the PBOC to liquidate foreign currency assets to defend the fixed exchange rate. Would even Treasury bulls stand in the way of such a large and predictable liquidation? If they didn’t then the second phase of The Great Reset would come to pass and the decline of EM external deficits would force tighter monetary policy in both EM and DM.
.....
The Great Reset was very wrong about the US. US equities simply ignored the travails of Europe, EM and commodity markets and sailed ever higher. Ask any fund manager why developed-world equities ignored the deflationary trends since 2011 and they will point to the monetary love spread by The Federal Reserve, The Bank of Japan, The Bank of England and The European Central Bank. But fixating on the expansion of these central bank balance sheets has only distracted investors from the monetary tightening that started in 2011 and is now accelerating in EM as forecast in The Great Reset....


This is why The Solid Ground considered the end of the rise in EM foreign exchange reserves to be so key in shifting the outlook towards deflation and not inflation. The lack of reserve accumulation would either force deflation upon EMs or force them to devalue. The impact of either adjustment, whether through lower growth or lowered USD selling prices, would be deflationary and not inflationary.
Given the huge role China has played since its 1994 devaluation in spurring global growth, the adjustment process in China could be particularly detrimental to the stability of global prices. Events of the past few weeks are finally focusing investors’ attention on the lack of monetary control in China and thus on the lack of control generally. Local owners of RMB denominated capital have been voting with their feet since 2012 and capital has been pouring out of the country


6---Ongoing Security Concerns In Kurdistan Have Oil Companies On Edge


7---As cited in written evidence by Nafeez Ahmed to a UK Parliamentary inquiry in 2010: “According to Graham Fuller, former Deputy Director of the CIA’s National Council on Intelligence, the selective sponsorship of al-Qaeda terrorist groups after the Cold War continued in the Balkans and Central Asia to intensify the rollback of Russian and Chinese power (2000): ‘The policy of guiding the evolution of Islam and of helping them against our adversaries worked marvelously well in Afghanistan against the Red Army. The same doctrines can still be used to destabilize what remains of Russian power, and especially to counter the Chinese influence in Central Asia.


8--Lawmakers consider how to stop US heroin epidemic


9---Prosecutors have recognized NED’s activities in Russia as undesirable and undermining national security after the US NGO spent millions on attempts to question the legitimacy of Russian elections and tarnish the prestige of military service.
According to the release published on the Prosecutor General Office’s website deputy head of the agency Vladimir Malinovsky on Tuesday signed the decision to recognize as undesirable on the territory of the Russian Federation all activities of the foreign non-government organization the National Endowment for Democracy. On the same day this decision was forwarded to the Justice Ministry that must now include NED in the list of undesirable foreign organizations


10--McCain: US Must Improve Propaganda to Win Cold War Without Firing a Shot


“One of the key elements of winning the Cold War without firing a shot… is the propaganda, the message, the social networking,” McCain said in a speech to the Hudson Institute.
McCain, however, argued that US messaging to Russian speaking audiences is something “we are going to have to do a lot more of.”
The US Congress has recently taken action to increase funding to the government-sponsored media agency, the Broadcasting Board of Governors (BBG). In April 2015, the BBG requested $15.4 million to expand its Russian-language programming and social media content.

11--S&P 500 Companies Spend 95% of Profits on Buybacks and
http://www.bloomberg.com/news/2014-10-06/s-p-500-companies-spend-almost-... CEOs have increased the proportion of cash flow allocated to stock buybacks to more than 30 percent, almost double where it was in 2002, data from Barclays show. During the same period, the portion used for capital spending has fallen to about 40 percent from more than 50 percent. - See more at: http://www.thomhartmann.com/forum/2014/10/sp-500-companies-spend-95-profits-buybacks-and-payouts#sthash.gafJuSj3.dpuf


12--Nuclear deal paves way for Iran's full SCO membership: SCO secy. gen


13---Turkish generals afraid of breaking Internatl law  Haaretz


was convinced that as on previous occasions, national security would suffice for the government to do as it wished. Turkey was planning to send 18,000 troops 30 kilometers deep and 90 to 110 kilometers wide to set up refugee camps, but the plan was actually designed to set up a buffer zone between the two Kurdish-controlled areas.
But Erdogan realized that not only did the opposition — some of them potential coalition partners — object, but the army wasn’t rushing to battle. The high command demanded clearly written directives from the politicians for fear of violating international law. It also demanded that the government consult with Russia and Iran to ensure that Turkish military involvement wouldn’t spur direct involvement by those countries.
           
It’s a weighty argument, though the army didn’t hesitate a few months ago to enter Syria to capture the ancient tomb of Suleyman Shah and rescue Turkish soldiers guarding it. The main reason for the army’s objection this time was the understanding that any invasion of Syria to establish a buffer zone meant long-term involvement in the Syrian war.
The public dispute between the army and government laid bare something in the wake of Erdogan’s expulsion of the army from politics: The army still has widespread support and can challenge the president, even after Erdogan made changes to the high command.
           
Erdogan held an urgent meeting of the National Security Council, resulting in the decision not to invade Syria. At the same time, Turkey deployed tanks and other armor along the border near the cities of Sanliurfa and Gaziantep, a few kilometers from the Syrian border where the Syrian Kurds are in control. ...


Despite Erdogan’s efforts, these Kurdish militias, which have recruited a few hundred volunteers from abroad, are winning. The fighters have driven Islamic State forces out of dozens of villages along the border, helped from the air by Western, particularly American, planes.
American praise for the Kurds showed Erdogan that the Kurdish threat isn't only on the border. The Kurds have become Washington’s ally, and Erdogan’s plan to block their control of the border region is doomed to failure. Special U.S. envoy John Allen visited Turkey to express Washington’s objections to a Turkish operation in Syria.
Officially, Allen discussed possible military cooperation with Turkey, but in practice Washington clarified its opposition to a buffer zone and warned against Turkey’s continued cooperation with radical forces in Syria, based on reports that the Islamic State continues to use Turkish border crossings to reach Syria.
The United States is struggling to establish rebel ground forces to operate in tandem with airstrikes. The effort to recruit rebels for this grandiose plan in the war against the Islamic State, for which Congress has allocated $500 million to train 3,000 fighters, is facing intense difficulties. According to Secretary of Defense Ashton Carter, only 60 of 7,000 volunteers have been trained so far.
While the air campaign has stung some of the Islamic State’s income sources and halted its progress at least in Iraq, it’s far from turning things around. The control territory between the militias and the government is becoming permanent, without any side capable of making a decisive blow.




13----“The level of US investment is at its lowest since 1947. - Tom Hartmann


As Edward Luce pointed out in a recent piece for The Financial Times, “The level of US investment is at its lowest since 1947. Last year, according to Goldman Sachs, S&P 500 companies spent more than $500bn on share buybacks. This year it is expected to hit $600bn…. For every dollar the top US public companies spend on investment, they are returning eight or nine dollars to shareholders.” - See more at: http://www.thomhartmann.com/blog/2015/07/who-does-our-economy-serve#sthash.aVOn3IKa.dpuf


This is the sign of an economy that’s gone insane. Stock buybacks don’t grow the economy as a whole; they just make giant rich corporations - and their CEOS - even richer. They’re the perfect symbol of a system that puts profits before people, progress, and, well, pretty much everything else. It’s hard to imagine given the state of American capitalism these days, but things weren’t always this way. Between the 1930s and the 1980s, corporate America actually behaved - or was made to behave as a result of smart regulations - in ways that benefited everyone, not just their shareholders or CEOs. Back then, the saying “what’s good for GM is good for America and what’s good for America is good for GM” wasn’t just a saying - it was a statement of fact.


But then Reagan came to town and everything changed. As part of his big push to “reform” the economy, Reagan changed the compensation laws for CEOs so that they could be paid in stock options. Their income now depended on the value of their company’s stock. Theoretically, this was supposed to give executives an incentive to make good business decisions, but what it actually did was give them an incentive to skim their bit off the top and screw everyone else. Instead of long-term success, the focus was now on boosting stocks as quickly as possible and therefore making as much money as quickly possible. This is why big corporations are now spending billions and billions of dollars to buy back their own stock -- they’re just trying to keep their CEOS rich and happy. And who do you think suffers as a result of all this? The American worker, of course! Who else? - See more at: http://www.thomhartmann.com/blog/2015/07/who-does-our-economy-serve#sthash.aVOn3IKa.dpuf


14--NATO backs Turkish/US regime-change offensive in Syria
  While the US had for several years rejected Erdoğan’s Justice and Development Party (AKP) proposals for “no fly zones” in Syria, it has now agreed to “safe zones” that are tantamount to the same thing....
The latest plans are a blatant attack on Syrian sovereignty and amount to a de facto declaration of war on Damascus. They are part of Washington’s broader strategy of dominating the entire resource-rich Middle East.


Mevlut Cavusoglu, Turkey’s foreign minister,...“There is no difference between PKK and Daesh [ISIS]. You can’t say that PKK is better because it is fighting Daesh.”
NATO on Tuesday gave President Recep Tayyip Erdoğan unanimous support for Turkey joining the US-led military offensive against the Islamic State of Iraq and Syria (ISIS), which is being used as a cover to escalate Washington’s intervention against the Syrian regime of President Bashar al-Assad.
The quid pro quo secured by Turkey involves US support for attacks on Kurdish forces that, until last week, were being hailed by Washington, Berlin and other NATO powers as the bedrock of the anti-ISIS struggle.
NATO Secretary General Jens Stoltenberg said, “We stand in strong solidarity with our ally Turkey… to address instability on Turkey's doorstep and on NATO's border.”
Turkey, which has a 700,000-strong army, the second largest in NATO, is planning to invade Syria, seize territory and establish buffer zones along the Turkish border that will allow its forces to target ISIS militants. Such zones will also provide staging posts against the Syrian Kurdish forces of the Democratic Unity Party and its militia, the Popular Protection Units (PYD/YPG)....


For all its talk of a global war on terror, in its supposed efforts to contain ISIS, the US military will likely provide air cover for Al Qaeda-linked forces on the ground, serving as their de facto air force.
The 90-minute meeting in Brussels was preparation for a full blown NATO war for regime-change in Syria. It was called at Turkey’s request under Article 4 of the NATO Treaty, to enable Ankara to consult with its allies over threats to its security.
Erdoğan said, “At the moment, Turkey has come under attack and is exercising its right to defend itself and will exercise this right until the end.” He added, “there could be a duty for NATO, and we ask NATO to be prepared for this.”




15--Deconstructing Syria: A new strategy for America’s most hopeless war , Michael E. O'Hanlon , Brookings


The plan would be directed not only against ISIL but in part against Assad as well. In a bow to reality, however, it would not explicitly seek to overthrow him, so much as deny him control of territory that he might still aspire to govern again. The autonomous zones would be liberated with the clear understanding that there was no going back to rule by Assad or a successor. In any case, Assad would not be a military target under this concept, but areas he currently controls (and cruelly bombs) would be. And if Assad delayed too long in accepting a deal for exile, he could inevitably face direct dangers to his rule and even his person. ....




The idea would be to help moderate elements establish reliable safe zones within Syria once they were able. American, as well as Saudi and Turkish and British and Jordanian and other Arab forces would act in support, not only from the air but eventually on the ground via special forces. The approach would benefit from Syria’s open desert terrain which could allow creation of buffer zones that could be monitored for possible signs of enemy attack. Western forces themselves would remain in more secure positions in general—within the safe zones but back from the front lines—at least until the reliability of such defenses, and also local allied forces, made it practical to deploy and live in more forward locations.


Creation of these sanctuaries would produce autonomous zones that would never again have to face the prospect of rule by either Assad or ISIL. They would also represent areas where humanitarian relief could be supplied, schools reopened, and larger opposition fighting forces recruited, trained, and based. U.N. agencies and NGOs would help to the extent possible; regardless, relief could certainly be provided far more effectively than is the case today. 


The end-game for these zones would not have to be determined in advance. The interim goal might be a confederal Syria, with several highly autonomous zones and a modest (eventual) national government. The confederation would likely require support from an international peacekeeping force, if this arrangement could ever be formalized by accord. But in the short term, the ambitions would be lower—to make these zones defensible and governable, to help provide relief for populations within them, and to train and equip more recruits so that the zones could be stabilized and then gradually expanded....


Third, multilateral support teams, grounded in special forces detachments and air-defense capabilities as needed, would be prepared for deployment into parts of Syria once opposition elements were able to seize and reliably hold strong points. 
This last part would of course be the most challenging, and the actual deployment of any such teams the most fraught. It need not be rushed. It could be undertaken in the safest zones first—perhaps in Kurdish areas, for example, and then near the Jordanian border in conjunction with Jordanian forces. But it’s a necessary part of the effort. Beginning the planning immediately would not only help prove American seriousness about the overall campaign plan, but also allow for coordination with humanitarian and development groups (So the terrorists seize the ground in Syria and then US special forces come in and hold it)