Friday, November 13, 2015

Today's Links

1---US attacks on Syrian oil fields on the rise: White House
What took so long?

2--Oil Market Supply Imbalance Getting Worse, Not Better
One word: Manipulation

3--Turkey to be offered €3bn to help curb influx of refugees to EU
No money for Greece, but plenty to stop refugees

4--ISIS Jihadi John targeted in US airstrike – Pentagon
Putin kills hundreds of Isis in a week. US kills Jihadi John.. No one in media notices.

5--Kurds enter Iraqi Sinjar, raise flag, ISIS ‘defeated & running’ – reports
Well, that was easy

6-- Russia deploys S-400 in Syria
Just in time for the F-15 fly-overs

7--Real -life Red October missile system

The presentation slide titled “Ocean Multipurpose System: Status-6” showed some drawings of a new nuclear submarine weapons system. It is apparently designed to bypass NATO radars and any existing missile defense systems, while also causing heavy damage to “important economic facilities” along the enemy’s coastal regions. The footnote to the slide stated that Status-6 is intended to cause “assured unacceptable damage” to an adversary force. Its detonation “in the area of the enemy coast” would result in “extensive zones of radioactive contamination” that would ensure that the region would not be used for “military, economic, business or other activity” for a “long time.” According to the blurred information provided in the slide, the system represents a massive torpedo, designated as “self-propelled underwater vehicle,” with a range of up to 10 thousand kilometers and capable of operating at a depth of up to 1,000 meters.

8--Kurds’ Operation Underway in Sinjar, Blocks Key ISIL Supply Line

In a rare admission, the Pentagon said US troops advising the Kurds on their offensive were close enough to the front to identify ISIL targets and call in air strikes.
Pentagon spokesman Peter Cook told reporters most of the US-led coalition troops are behind the front lines working with Kurdish commanders, but that “there are some advisers who are on Sinjar mountain, assisting in the selection of air strike targets

9--Russian Warplanes Hit 289 Terrorist Targets in Syria in Two Days

Russian aviation destroyed a column of fuel tankers with crude oil, which was heading toward Iraq, the Russian Defense Ministry said.
"As a result of the aerial reconnaissance near Al Mayadin in the province of Deir ez-Zor, a convoy of fuel tankers heading toward the Syrian-Iraqi border was uncovered. According to data, the vehicles transported crude produced in the ISIL-controlled oil fields to refineries of terrorists located in Iraq."

A strike carried out by a Su-34 bomber completely destroyed the convoy of fuel tankers, Igor Konashenkov said.

10--Russia Acting in Sync With Moderate Opposition in Syria Putin

11--Turkey's path to dictatorship

Under the AKP’s proposed presidential system, the head of state would have the power to issue executive and legislative decrees, which effectively would mean that both the executive and legislative powers would be concentrated in the president’s hands. Parliament would retain its legislative function, but the president would have veto power over the laws it passes. Moreover, parliament would need a three-fifths majority to override a veto and pass it for a second time. The president would appoint the ministers and half of the members of higher courts, and would have the power to dissolve parliament. Unlike other presidential systems, the one proposed by the AKP stipulates that presidential and parliamentary elections be held simultaneously.

According to prominent law professor and lecturer Levent Koker, the idea of holding both elections on the same day is designed to ensure that the president and the dominant party in parliament are of the same political stripe. Professor Ergun Ozbudun, one of Turkey’s top constitutional scholars, is also seriously concerned about the AKP’s intentions. He said the AKP proposal amounts to “one-man rule with no mechanism of checks and balances.”

But analyzing the AKP’s presidential system hypothetically on paper may not be the best way. One has to take into account also the state of affairs on the ground. In a country where press freedom has hit a deplorable low and judicial independence is constantly on the wane, the question looms: Who can check and balance a strongman sitting at the heart of the system

12---For Iran, Syria outcome is critical

It is well known that there are Afghan, Iraqi, Iranian and Lebanese forces present in Syria. However, Salami has made it clear that Iran has based Pakistani forces in Syria as well. The armed forces that fight against Assad’s army have one thing in common: Their members come from a variety of nationalities. Because of the fatwas issued by the Sunni ulama (religious authorities), Muslims from Indonesia to the United States have gone to Syria to take part in what is referred to as a holy war, or jihad. It appears that the Islamic Republic is now also operating based on a similar fatwa and is organizing Shiite forces from the region and sending them to Syria to take part in a jihad, too. Such a scenario, if public opinion accepts it, can make up for the lack of human resources in the Syrian army and also lend religious legitimacy to Assad’s side.

Iran views the United States, Europe, NATO, most Gulf Cooperation Council states, Egypt and Jordan as direct threats. On the other hand, Iran also considers the cooperation of its neighbors such as Azerbaijan, Pakistan, Turkmenistan and Turkey with the United States and the West as a potential threat. Bearing in mind the UN Security Council sanctions on Iran and the stalled delivery of Russian S-300 air defense missiles, it is evident that Russia does not have a good record when it comes to Iran, either.

Therefore, looking at the situation from Tehran’s point of view, the only reliable allies of Iran in the region are the Iraqi and Syrian governments, as well as Hezbollah. Geopolitically, the survival of this “Shiite Crescent” is dependent on the survival of Assad’s Alawite regime. While willing to sit down and negotiate with the world powers over its nuclear program, Iran is not willing to endanger its vital and strategic interests in the region. Therefore, just as Salami noted, Iran is capable of participating in direct, and proxy, wars in the future.

13--Turks say No to dictatorship

Adil Gür, the owner of the A&G research company, declared that according to its survey in December 2014 and January 2015, 70 percent of respondents said no. He concludes that the Turkish public is against the presidential system.

A report by another polling company, Konsensus, says the same thing in different words: “We have been asking this question since 2010. Turkish people do not want a presidential system. In September 2014, 67 percent of respondents said they are against a presidential system. Also, 55 percent of Justice and Development (AK Party) voters are against this system.”

14--who backs al-Nusra? Even though it is officially denied, rumors that it is backed by MİT are being tossed around. It is further claimed that this support is given with the help of the organization that arranged the Mavi Marmara campaign.

“Now let us proceed by asking questions: Is there any link between the organization that arranged the Mavi Marmara incident and Syria's al-Nusra Front? Does MİT support it, knowing this connection? Are finance and arms provided to them via this organization?
“As is known, there are a number of humanitarian organizations operating in Syria. Most of these organizations rely on donations from people. Are funds transferred from the Turkish Treasury to some of these organizations? Which units transfer funds to the organization that arranged the Mavi Marmara incident? It is alleged that the Humanitarian Aid Foundation (İHH) uses funds from the government for its humanitarian campaigns in the region. Is this true? Does any public institution audit these fund transfers from the Treasury?

15--US behind effort to weaken Turkish military

Turkey's former top military official, who was convicted in the Ergenekon coup-plot case, has accused the US administration under then-President George Bush of being part of a plot against the Turkish Armed Forces (TSK), which resulted in his and other TSK members' conviction.
“The George W. Bush administration supported the plot carried out against the TSK,” İlker Başbuğ, a former chief of general staff, said in his statement during the appeal hearing of the Ergenekon case at the Supreme Court of Appeals on Wednesday.

Maintaining that the Bush administration saw the TSK as the core of a deep state in the Turkish political system, a roadblock before its projects regarding Turkey and the Middle East, Başbuğ said: “This deep state posed an obstacle before the restructuring of the Middle East, the implementation [in Turkey] of the concept of moderate Islam, the production of a ‘political solution' to the terrorism problem in Turkey.”

He said in the hearing held at the court's 16th. Penal Chamber: “It can be said that this administration was sympathetic to what the TSK was subjected to [in the years that followed], that some state institutions and officials in these institutions took part in this plot or offered their support to it.”

16--A meaningful pose for photos by top Turkish commander

Turkey, perhaps for the first time, allowed its soil to be used for combat operations by both NATO allies and non-NATO countries when it struck a deal with the US in late July to open İncirlik Air Base in southern Turkey to the US-led coalition forces of about 60 nations in their fight against the Islamic State in Iraq and the Levant (ISIL).

Now, US F-16s, A-10s and KC-135 tanker aircraft, in addition to MQ-1 armed unmanned aircraft, are largely based at İncirlik, while some are situated at the Diyarbakır base in the Southeast. The deployment of various types of aircraft at Turkish bases has been followed by the arrival into Turkey of six F-15C Eagle fighters, famed for their air superiority. However, the deployment of the F-15s has been made upon the Turkish government's request, to help protect its airspace, which has lately been frequently violated by the Russian forces in Syria

The first six of 12 US F-15C Eagle jet fighters, which arrived in İncirlik Air Base on Nov. 6, were sent by the US government to conduct combat air patrols in Turkish airspace at the request of Ankara, Pentagon Press Secretary Peter Cook told reporters on Nov. 10.....

The approved use of İncirlik thus marks a major shift in Turkey's position towards its allies operating from Turkey, with US F-16s and A-10s also now having been deployed to the base since July.
As a matter of fact, Turkish Chief of General Staff Gen. Hulusi Akar recently posed for photographs with foreign officers deployed to İncirlik, indicating the Turkish Armed Forces' (TSK) openness to hosting foreign forces for combat missions. Moreover, photographs of him with foreign officers can also be interpreted as preparing the generally ultranationalist Turkish citizens for the fact that foreign forces can use Turkish soil for the purposes of attacking a target -- i.e., ISIL -- now deemed a threat to Turkey. Turkey's perception of ISIL as a threat only came recently when ISIL started to direct its attacks on Turkish soil with the October suicide bombing outside Ankara's main train station, which killed more than 100 people, and with a similar incident taking place in Suruç, Turkey, in July.

17---The so called "moderate opposition"...What a farce: U.N. envoy meets with representatives of more than 230 Syrian groups

Secretary of State John Kerry assured members of the Syrian opposition on Thursday that they will play a key role in charting the future of their country, insisting diplomatic efforts to end the conflict in the Arab state are “not about imposing anything on anyone.”...

There are numerous Syrian opposition and other groups, many of them not moderate by U.S. standards but acceptable to other countries. Kerry himself noted that a U.N. envoy has met with representatives of more than 230 Syrian groups, including the Syrian government of Bashar Assad.
“I want to be clear: the Syrian people will be the validators of this whole effort,” Kerry said during a speech at the U.S. Institute of Peace in Washington, D.C. “Our own special envoy, Michael Ratney, has also been in constant communication with Syrian representatives, and I have met with opposition leaders myself. So this is not about imposing anything on anyone.”

18--Strange days: Corporate bond inventories below zero
Where's the liquidity?

Market moves that aren't supposed to happen keep happening

Barnaby Martin, a credit strategist at Bank of America Merrill Lynch, made this point earlier this year. The number of assets registering large moves—four or more standard deviations away from their normal trading range—has been increasing. Such moves would normally be expected to happen once every 62 years.

While Martin blamed much of the confusion on unexpected decisions by central banks—such as the Swiss National Bank's surprise decision to scrap its long-standing currency cap—there have been sharp market moves with seemingly little reasons behind them. Perhaps the best-known example is Oct. 15, 2014, when the yield on the 10-year U.S. Treasury briefly plunged 33 basis points—a seven standard-deviation move that should happen once every 1.6 billion years, based on a normal distribution of probabilities.
Some market participants have also blamed lower market liquidity for the wild moves. At TD Securities, analysts Priya Misra and Gennadiy Goldberg argued that similar liquidity issues to the ones related to corporate bonds could also be extending into the $12.8 trillion U.S. Treasury market

Volatility is itself more volatile

19---Moody’s Warns about Credit Crunch, Unnerves with Parallels to 2008!

The US bond market has swollen to $40 trillion. Over $8 trillion are corporate bonds, up a mind-boggling 50% from when the Fed unleashed its zero-interest-rate policy and QE seven years ago.
So far this year, $1.34 trillion in new corporate bonds have been issued, up 6.8% from last year at this time, which had already been a record year, according to the Securities Industry and Financial Markets Association (SIFMA). Bond issuance in 2012, 2013, and 2014 set ever crazier records; 2015 is on track to set an even crazier one: close to $1.5 trillion.

That’s a lot of newly borrowed moolah. Much of it is being used to pay for dividends, stock buybacks, M&A, and other worthy financial engineering projects designed to inflate stock prices, though that strategy has turned into a sorry dud this year.

Junk bonds now make up $1.8 trillion of this pile of corporate debt, nearly double the $944 billion in junk bonds outstanding at the end of 2008 before the Fed saved the economy, so to speak.
But what happens when this flood of cheaply borrowed money begins to dry up as an ever larger percentage of that $1.8 trillion in junk bonds begins to default, while ever more high-grade bonds get downgraded to junk?
That’s the end of the credit cycle – and the beginning of financial nightmares. It’s the phase the bond market has already entered, according to a report by John Lonski, Chief Economist at Moody’s Capital Markets Research.

And these “projected and actual default rates” are already taking off. The Expected Default Frequency (EDF) of US and Canadian junk-rated companies, a metric of future defaults, hit 5.6%, the highest since the 6.4% of August 2009.
Moody’s unnerving parallels to 2008, 2009!


  1. During the August market bust the Dow and WTI index paired closely. They bounced back together but then oil plunged again while the Dow has continued to rise. But for how long? Won't torpedo-ing oil price hurt America's economy?Therefore is Washington to be fingered for oil market manipulation? Or is it Saudi Arabia as FW Engdahl posits? ISIS seems the most likely suspect for glutting the oil market, but their ongoing destruction by Russia's airforce hasn't stemmed the price collapse.

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