Wednesday, July 29, 2015

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 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:

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:

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:

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)

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