Deflationary recovery means “growth”, “yield”, “quality” remain structurally bid. We stay long US$, volatility, real estate & stocks>bond, but upside for risk assets now constrained until unambiguous handoff from liquidity to growth.
2--The Russian leadership has decided that Syria is a key guarantor of its interests in the Middle East, and that the Russian-Iranian alliance in Syria is a strategic priority.
Many considerations are behind this thinking. First, Russia is present on the ground to exercise influence, by turning the port in Tartous to a Russian military base, and the civilian airport in Latakia to a Russian air base.
Another consideration is the oil and gas reserves off the Syrian coast and its implications for Russian oil and gas interests.
There is also the consideration related to restoring Russian prestige, after the United States excluded Russia from Iraq and the war on terrorism there, and after NATO "tricked" Russia in Libya.
Another major consideration for Russia is seeking to prevent Islamists from taking power, as the United States and Britain tried to engineer in Egypt by supporting the Muslim Brotherhood. Russia is seriously worried about Islamist terrorism, and is convinced that its victory in Syria would bring it to Russian soil.
...Russia moved to replace the Geneva process with a new one that does away with the fundamental idea in the Geneva I communique, namely, establishing a transitional governing body with executive powers. For this reason, President Putin spoke about Assad's willingness to share power with the "sound" opposition - as defined by the Russian and Syrian governments....
Russian President Vladimir Putin tasked his foreign minister Sergei Lavrov to chair a ministerial session of the Security Council titled "Maintenance of International Peace and Security: Settlement of Conflicts in the Middle East and North Africa and Countering the Terrorist Threat in the Region."
President Putin has effectively declared to the world that Russia intends to fight a war directly against ISIS and similar groups in Syria, while keeping the Syrian regime as a key ally in this war. Russia wants the United States to be a military partner - including of the Syrian regime - in this bid....
The US-led international coalition, which comprises Arab countries, and which has focused on Iraq, does not include Russia and Iran as official members, even through Iran is a secret partner in the war on ISIS in Iraq. This coalition has proven its failure against ISIS, and has failed to factor in the important political elements that are key to success.....
The Russian-Iranian concern for the fate of the Syrian regime led to a shift in a direction opposite to the one predicted by President Obama, who had claimed Moscow and Tehran were willing to abandon Assad to preserve the regime. Both capital have instead decided that discussing Assad's fate is misplaced or premature, and that the developments instead require increasing political and military support for the Assad regime.
President Putin's announcement of this decision and linking it to the war on terrorism ushers in a new phase in the Russian role in Syria. Putin spoke about a regional-international alliance, and is now spoking about an international decision to build a coalition against terrorism. The bottom line is that Russia has decided to fight a war on terrorism in Syria.
The requirements of the Russian war on terror in Syria, according to the Russian president, include having Moscow in the lead. Putin is practically saying to Obama: You run the war on ISIS in Iraq, and I run the war on ISIS in Syria. This would require Washington to - publicly or tacitly - agree to Russia's strategy to win that war in partnership with the regime.
3--The Beauty of Truth and the Beast of Dogma John P. Hussman, Ph.D., Hussman Funds
The real problem isn’t what the Fed may do, but the ultimately unavoidable consequences of what the Fed has already done. The cost of reckless Fed-induced yield seeking will likely be felt first in the financial markets as previous paper gains evaporate, while defaults on excessive low-quality covenant-lite credit will emerge over the course of the economic cycle, and the impact of malinvestment will be to limit productivity and economic growth over the longer run. This is all rather inevitable except in the eyes of those who haven’t watched and memorized a dozen adaptations of the same movie. ....
investors should remember that the Fed did not tighten in 1929, but instead began cutting interest rates on February 11, 1930 – nearly two and a half years before the market bottomed. The Fed cut rates on January 3, 2001 just as a two-year bear market collapse was starting, and kept cutting all the way down. The Fed cut the federal funds rate on September 18, 2007 – several weeks before the top of the market, and kept cutting all the way down.
“What will matter significantly for investors is the condition of market internals, credit spreads, and other risk-sensitive measures in the event that U.S. economic activity begins to further reflect the downturn that is already evident abroad. It is that evidence of investor risk-preferences that will determine the proper response to any change in Fed policy.”
In short, my view is that activist Fed policy is both ineffective and reckless (and the historical data bears this out), and that the Federal Reserve has pushed the financial markets to a precipice from which no gentle retreat is ultimately likely. Similar precipices, such as 1929 and 2000, and even lesser precipices like 1906, 1937, 1973 and 2007 have always had unfortunate endings (see All Their Eggs in Janet’s Basket for a review). A quarter-point hike will not cause anything. The causes are already baked in the cake. A rate hike may be a trigger with respect to timing, but that’s all. History suggests we should place our attention on valuations and market internals in any event.
Moscow began “quiet support” to the Syrian regime
“Special Elite Russian combat forces arrived to Hama, Aleppo, Homs, Damascus, as well as Zabadani to monitor, participate and study the military map on the field and suggest future workflow Combat plans. These Special Forces submit to the operating room suggestions to determine the full plan to start the flow of further Russian special combat forces and troops on the battlefield all over the Syrian map where it is necessary”......
Russia is beginning with what we define as a” quiet support ” supplying advanced technology and preparing a spearhead force before reaching a further level we call the” stormy Support “. We expect a large presence of troops that will be supported by Russian Air Force. There are around 2500 Russian fighters, military expert and consultant in Syria. The number is expected to go much higher in the near future “, confirm the source that is in contact with the Russian units on the Syrian ground.
“There are two aspects for the Russian intervention in Syria: In the first, the front line should be reinforced, maintained and is expected later to recover more lands and lost cities. The second is to hunt and bomb the Islamic State (ISIS) group leaders as well as other extremist groups in Syria, without exception. There are no red lines for the Russian operational tactics against terrorism that may extend to Iraq if necessary. The Kremlin has decided to face and fight terrorism by all means and is determine to eliminate, not to contain, ISIS. The Russians are aware of the necessity of cooperation with the U.S. led coalition over the sky of Syria to prevent unnecessarily accidents “, the source said.
The senior commander explained, “Israel and the United States are also concerned about the possibility that Hezbollah could benefit from the advanced Russian military equipment pouring into Syria. As far as it concerns us, Damascus and Hezbollah are strategically linked and share the same destiny. Any sophisticated weapon owned by Syria and Iran that an organized but irregular force, like Hezbollah, can use in case of war against Israel is already in our possession. Israel is raising the alarm by saying that its “national security” could be in jeopardy if Hezbollah has this or that technology or could benefit from Russia’s presence to transport more weapons into Lebanon. Russia’s answer is that its own national security is already in jeopardy due to terrorism expansion. Russia is not fighting a battle but a war on terror on Syrian soil and elsewhere and is present in a hostile environment. Russia will pursue and won’t give up upon in this war, in Syria, regardless any possible international pressure to persuade it otherwise”....
○ US/Kerry says Assad must go, timing down to negotiation
Kerry said the United States welcomed Russia's involvement in tackling the Islamic State in Syria but a worsening refugee crisis underscored the need to find a compromise that could also lead to political change in the country.
"We need to get to the negotiation. That is what we're looking for and we hope Russia and Iran, and any other countries with influence, will help to bring about that, because that's what is preventing this crisis from ending," said Kerry.
Kerry said of Assad's removal: "For the last year and a half we have said Assad has to go, but how long and what the modality is ...that's a decision that has to be made in the context of the Geneva process and negotiation."Kerry added: "It doesn't have to be on day one or month one ... there is a process by which all the parties have to come together and reach an understanding of how this can best be achieved."
Obama may be the best Republican president we ever had, but he's a pretty shitty progressive. He is, in fact, America's high priest of austerity...more Milton Friedman than the original.
Additionally, congress has relinquished any role in providing stimulus for the economy, the whole kit-n-kabootle has been handed over to the Fed on a silver platter...
The Fed provides trillions for financial markets and underwater banks, but not a dime dribbles down to the workerbees below. Stocks have tripled in 6 years while workers get bupkis.
Thursday's FOMC meeting just confirmed that the recovery is a fraud and the Fed has no idea what its doing. So investors bailed out.
Can you blame them?