Monday, February 29, 2016

Today's links

1--Valuations Will Fall Back”: Bank of England Gov. Carney Pooh-Poohs NIRP Miracle, WS

When the yield of 10-year Japanese government bonds fell below zero, it marked a new milestone in the negative yield absurdity: it pushed the amount of global government debt sporting a negative return for investors to over $7 trillion...

The ECB too is still gobbling up government debt, as Bank of England Governor Mark Carney noted dryly in his speech on Friday at the G20 conference in Shanghai:

The largest four central banks bought assets worth $1.2 trillion in 2015, similar to the amounts purchased post-Lehman and during the 2013 euro-area crisis. Adjusting for lower government debt issuance, that leaves an unprecedented flow of net QE, with only $400 billion of additional government debt sold to the private sector, compared to $3 trillion in 2010.

However, the effect of QE on the wealth channel cannot last forever. Monetary neutrality means real asset prices are not boosted indefinitely by such policies; their economic effects must ultimately unwind.

Said differently, unless an improvement in fundamentals boosts the underlying cash flows of these assets, real valuations will fall back.

But NIRP can’t solve the problem. Already, in countries that together produce about a quarter of global output, “policy rates are literally through the floor.” And yet, financial markets have plunged, and banks are in trouble 

2--OtterWood Capital Management's Outlook for 2016, Otterwood Capital (video)

3--Global shares fall on G20 disappointment, Fed hike prospect

G20 finance ministers and central bankers, meeting in Shanghai on Friday and Saturday, agreed to use "all policy tools – monetary, fiscal and structural – individually and collectively" to reach the group's economic goals.

But there was no plan for coordinated stimulus, which some investors had been seeking after concerns about a slowdown in China depressed markets at the beginning of 2016.


Weaker stocks helped raise investor appetite for low-risk government debt. U.S. 10-year Treasuries US10YT=RR yielded 1.74 percent, compared with 1.77 percent in New York on Friday.

German 10-year Bund DE10YT=TWEB yields fell 4 basis points to 0.11 percent and British gilt GB10YT=RR yields were down 4 bps to 1.36 percent.

4--Just Negative (Rates)

5--Kuroda Negative Rate Bazooka Fizzles on Overnight Lending Freeze

While Kuroda wants to lower the starting point of the yield curve to reduce borrowing costs and spur shift of funds into riskier assets, the interbank rate has fallen only about as far as minus 0.01 percent, above the minus 0.1 percent charged on some BOJ reserves. The swings on bond yields will make it harder for financial institutions to determine how much business risks they can take, weighing on lending in a weak economy even as they are penalized for keeping some of their money at the central bank....

BOJ board member Takahide Kiuchi said on Thursday that adopting the negative-rate policy might have increased market instability. Ten-year Japanese government bond yields plunged to a record low of minus 0.075 percent on Friday, while 40-year JGB yield slid below 1 percent for the first time the day before

6--Pending Sales of U.S. Existing Homes Fall by Most in Two Years

7--G-20 summit rules out coordinated stimulus


The G-20 meeting of finance ministers and central bankers held in Shanghai over the weekend has failed to come up with any coordinated plan of fiscal stimulus to revive the global economy. In fact such a plan was not even considered because of the deepening divisions among the major economic powers.

The communiqué from the meeting said downside risks to the global economy had increased, amid volatile capital flows and a large drop in commodity prices, but did nothing to initiate coordinated fiscal policies to boost growth. This was despite calls for a move in this direction from the International Monetary Fund and the Organisation for Economic Cooperation and Development in the lead-up to the meeting....

Summing up the summit, financial analyst David Loevinger, a former China specialist at the US treasury, told Bloomberg “hopes of coordinated policy actions proved to be pure fantasy. It’s every country for themselves.”

8--Russian TV crew films Turkish fortifications, tanks on Syrian border

9--Syria fighting continues into third day of US-Russian “truce”

“Syria’s cease-fire frays as Russia resumes strikes,” the Washington Post declared Sunday evening, citing a handful of Russian strikes against unidentified targets in northern Syria.

“Russia, Syria resume airstrikes despite cease-fire,” ran the Wall Street Journal’s headline. “Pentagon, CIA Chiefs Don’t Think Russia Will Abide by Syria Cease Fire,” the Journal warned earlier this week


Within the American ruling class there are deep divisions over the cessation of hostilities brokered by US Secretary of State John Kerry and Russian Foreign Minister Sergei Lavrov last week. Powerful factions within the Central Intelligence Agency and Pentagon are hostile to the truce deal and are pressing for strategic and military escalation against Russia.

After nearly five years of continuous covert warfare and subversion against Damascus, destroying hundreds of thousands of lives, the Obama administration seeks to use the ceasefire to regroup its own proxy forces in Syria. The Obama administration is probing the possibility of a negotiated carve-up of Syria, while at the same time working to outline a “Plan B” scenario, i.e., a huge military offensive to topple Assad. This could quickly bring the US into direct military conflict with Russia.

10--US housing market finds strength in the eye of a financial hurricane

11--(archive) Turkey 'let Isil cross border to attack Kobane': as it happened

Kurds accuse Turkey of allowing Islamic State to cross border and attack key border previously secured by US air strike 

Saturday, February 27, 2016

Today's Links

1---This is why you can expect another global stock market meltdown, MW

The mispricing of assets across world markets has reached epidemic proportions.

Stock prices have made strong advances over the past several years, yet ... this rise in stock values has been underpinned by financial engineering and liquidity — setting the stage for a global financial crisis rivaling 2008 and early 2009.

The conditions for a crisis are now firmly established: overvaluation of financial assets; significant leverage; persistent low-growth and deflation; excessive risk taking reliant on central banks for liquidity, and the suppression of volatility...

For example, U.S. stock buybacks have reached 2007 levels and are running at around $500 billion annually. When dividends are included, companies are returning around $1 trillion annually to shareholders, close to 90% of earnings.....

To be sure, stronger earnings have supported stocks. But on average, 70% to 80% of the improvement has come from cost-cutting, not revenue growth. Since mid-2014, corporate profit margins have stagnated and may even be declining....

The S&P 500 SPX, -0.19%  now trades at around 17-18 times forward earnings, a level that is historically expensive and only exceeded during the 1999-2000 tech-stock bubble.

2---Distress” in Bonds Spirals into Financial Crisis Conditions

3--Subprime Auto Loans Implode (in Your Bond Fund)

Auto loan ABS delinquencies reached 4.7% in January, the highest since February 2010, according to data from Wells Fargo, cited by Bloomberg. During the Financial Crisis, delinquencies topped out at 5.4%. During normal times, they range from 2% to 3%.

John McElravey, head of Consumer ABS Research at Wells Fargo Securities, warned that these delinquencies would entail a wave of defaults. The default rate is already skyrocketing. It hit 12.3% in January, up from 11.3% in December, the highest since 2010.

4--Recession time?

...a few days ago, Evan Koenig, Senior Vice President at the Dallas Fed, gave a presentation that showed that manufacturing contractions preceded service contractions in the run-up of the past two recessions. When service sector growth begins to dwindle – so still growth, but slower growth – after the manufacturing sector has already begun to shrink, that’s the point he called “prelude to recession.” And when the service sector begins to actually shrink, that event marks what officials will later call the beginning of the recession [read…  “Prelude to Recession”: the Dallas Fed’s Unsettling Charts].

That “prelude to a recession” happened a few months ago. At the time, manufacturing was already shrinking; and the services index had just started heading south. But now the services index entered a contraction as well. So this could mark the beginning of what will much later be officially called a recession

5--Another G-20 fiasco

"Investor hopes of coordinated policy actions proved to be pure fantasy," said TCW's David Loevinger, a former China specialist at the U.S. Treasury. "It’s every country for themselves."

“The global recovery continues, but it remains uneven and falls short of our ambition for strong, sustainable and balanced growth," the statment continues, in a rather dour assessment of the economic landscape. "While recognising these challenges, we nevertheless judge that the magnitude of recent market volatility has not reflected the underlying fundamentals of the global economy," officials added. 

Right. If markets were "reflecting the underlying fundamentals" of this global deflationary trainwreck, things would probably be even more volatile. 

Predictably, everyone called on fiscal policy to save the day, in what amounts to a tacit admission that central banks have failed. "Countries will use fiscal policy flexibly to strengthen growth, job creation and confidence, while enhancing resilience and ensuring debt as a share of GDP is on a sustainable path," the statement reads.

6--Bank of America is preparing big layoffs in investment banking and trading

7--G-20 finance chiefs eye market stability at two-day meeting in Shanghai

Finance leaders from the world’s 20 major economies on Saturday called for using every possible measure to improve market stability and prop up sagging growth, according to a statement that was to be issued upon conclusion of their two-day meeting in Shanghai.

“We will use all policy tools — monetary, fiscal and structural — individually and collectively” to enhance “growth, investment and financial stability,” according to a final communique released in Shanghai despite German disquiet over fiscal and monetary stimulus

“Investor hopes of coordinated policy actions proved to be pure fantasy,” said David Loevinger, a former China specialist at the U.S. Treasury and now an analyst at fund manager TCW Group Inc. in Los Angeles. “It’s every country for themselves.”

On the first day of the meeting, disagreements about the right remedy to counter the slowdown in global expansion emerged after German Finance Minister Wolfgang Schaeuble said attempts to boost economies with monetary loosening could be counterproductive and fiscal stimulus — governments spending more or cutting taxes — had run its course.

“Fiscal as well as monetary policies have reached their limits,” he said. “If you want the real economy to grow there are no shortcuts without reforms.”

8--G20 to say world needs to look beyond ultra-easy policy for growth

"The global recovery continues, but it remains uneven and falls short of our ambition for strong, sustainable and balanced growth," said the communique, issued at the end of a two-day meeting in Shanghai.

"Monetary policies will continue to support economic activity and ensure price stability ... but monetary policy alone cannot lead to balanced growth."

The G20 ministers agreed to use "all policy tools – monetary, fiscal and structural – individually and collectively" to reach the group's economic goals.

A communique from the Group of 20 (G20) finance ministers and central bankers flagged a series of risks to world growth, including volatile capital flows, a sharp fall in commodity prices and the potential "shock" of a British exit from the EU.....

But there was no plan for specific coordinated stimulus spending to spark activity, as some investors had been hoping after markets nosedived at the start of 2016. Over the course of the two-day meeting in Shanghai comments by policymakers made clear the divergence of views on the way forward.

Finance chiefs had agreed that "the magnitude of recent market volatility has not reflected the underlying fundamentals of the global economy", the communique draft said.

To pep up the global economy, faster progress on structural reforms "should bolster potential growth in the medium term and make our economies more innovative, flexible and resilient", it said.

"We are committed to further enhancing the structural reform agenda," it added

9--G-20 needs to 'man up' to avert more market turmoil, says Citigroup's Englander

there appears to be little prospect of a deal along the lines of the 1985 Plaza Accord, where the governments of the US, UK France, West Germany and Japan agreed to weaken the greenback...

Investors burned by turmoil in global markets are looking for signs the world's top finance officials are ready to take action to bolster growth and calm currency moves.

As finance chiefs and central bankers from Group of 20 nations gather in Shanghai, Citigroup's Steven Englander said a failure to include more explicit support for fiscal stimulus in the closing statement from policy makers would be taken badly by investors. ...

"Keeping the previous language would be very disappointing and would be viewed as either complacent or reflecting policy paralysis," Englander, Citigroup's head of currency strategy for major developed economies, said in a February 25 report. He urged the G-20 to "man up and tell member countries that monetary policy should be accompanied by fiscal expansion"....

As crude oil's drop to a more than 12-year low led a slump in commodities, more than $US6 trillion has been wiped off the value of global equities this year. Share gauges in Europe, Japan and China have lost more than 9 per cent since December 31 and US indexes retreated at least 4 per cent.

10---G-20 Wants Governments Doing More, and Central Banks Less; Cheap money is not doing the trick

Reaching Limit

An increasing sense monetary policy is reaching its limit permeated officials’ briefings during the meetings that ended Saturday. While central banks proved critical in avoiding a global slide into depression last decade, there is now no consensus among the world’s top economic guardians backing stepped-up monetary stimulus. That leaves focus on fiscal polices that are subject to domestic political constraints, and a structural-reform agenda the G-20 said will be gauged through a new indicator system.

"Central bankers have done their bit in recent years to stabilize the world economy," said Frederic Neumann, co-head of Asian economic research at HSBC Holdings Plc in Hong Kong. "But as their tools are losing their effectiveness, only more aggressive fiscal policy and structural reforms will help to lift growth."

Among those publicly indicating a potentially reduced role for central banks was Lagarde, who said Friday the effects of monetary policies, even innovative ones, are diminishing. Bank of England Governor Mark Carney used a Shanghai speech ahead of the G-20 to voice skepticism over negative interest rates -- now in place in continental Europe and Japan -- and their ability to boost domestic demand.

Bare Minimum’

"There is no positive surprise" from the G-20 commitments, said Mitsumaru Kumagai, chief economist at Daiwa Institute of Research in Tokyo. "There are no detailed plans in this agreement, so generally you can say they just achieved the bare minimum," he said. "Stocks may sell off a bit."

11--Negative rates: The results are in


This survey makes sobering reading for both banks and central banks. For the banks, the results suggest that they might be right to be reluctant to cut rates below zero. Only 23% of savers would not react, and a smaller proportion still would save more. Four-fifths would move at least some of their money out of their savings accounts. Some of this might find its way into other bank products, but more than a third say that they would take some of their money out and hoard it.

Banks would be faced with an uncomfortable choice between not cutting retail rates below zero, and so seeing their profit margins squeezed, and doing so and risking a substantial deposit outflow.1 They might perhaps mitigate a profit squeeze by raising fees, or increasing the cost of mortgages, as some banks in Switzerland have done. However, these would undoubtedly also meet with customer resistance and official consternation.

Moreover, even if the banks dare to pass on negative rates to retail savers, the stimulus to spending would be far less than the rate cuts so far. Indeed, in the total sample, marginally more (11% versus 10%) of respondents said that they would save more, not less, in the event of negative rates....

the results strongly suggest that the cuts in interest rates below zero are likely to give a smaller boost to consumer spending than cuts in rates above it. Moreover, they also highlight the unpredictability of pursuing NIRP. With the credit channel weak or blocked, central banks have been relying largely on rising asset values and weaker exchange rates to provide the needed stimulus. But the BOJ’s recent adoption of NIRP has had the opposite effect. Evidently, the initial market reaction has been to see it as an act of desperation. The risk is that this negative sentiment will infect the real economy, serving to depress spending. If so, the danger is that NIRP will have an impact on economic growth that is not merely non-linear, but perversely negative.

12--The "Deep State" - How Much Does It Explain?

13--Is The U.S. Preparing A "Color Revolution" In Russia?, MoA

Friday, February 26, 2016

Today's Links

1---Gloomy predictions overshadow G 20 meetings

There is now a growing realisation that these massive money-printing operations have done nothing to boost global growth but have only fuelled the growth of socially-destructive parasitism and speculation, creating the conditions for another financial crisis, the consequences of which would be even more serious than that of 2008–2009.

Reflecting the growing perplexity in ruling circles over economic policy, Wolf commented: “No simple solution for the global economic imbalances of today exist, only palliatives.” Given that “palliative” care is most often associated with someone suffering from a terminal disease, placed in a hospice with no prospect for a cure, this is a revealing assessment of the state of global capitalism....

In its summary of the overall situation, the IMF said “the global recovery has weakened further amid increasing financial turbulence and falling asset prices”. Economic activity slowed towards the end of 2015, and the valuation of risky assets dropped sharply, increasing the likelihood of a further weakening of the outlook. The IMF did not revise down its estimates for global growth, but it indicated this was likely at its April meeting....

The austerity program is not a product of defective thinking on the part of the ruling elites as all the would-be reformers of global capitalism claim. It is a class policy imposed in the interests of definite social forces. Directed by the ruling corporate and financial elites, it is aimed at weakening the position of the working class, through unemployment, wage cuts and attacks on social conditions as one of the central mechanisms for increasing profits.

“These developments,” it said, “point to higher risks of a derailed recovery, at a moment when the global economy is highly vulnerable to adverse shocks.” To counter these dangers, it said the G-20 had to “act now” to implement growth strategies and plan for coordinated demand programs to boost public investment...

Wolf cited the OECD report, which pointed out that the global economy was growing at the lowest pace in five years. “Behind this is a simple reality: the global savings glut—the tendency for desired savings to rise more than desired investment—is growing and so the ‘chronic demand deficiency syndrome’ is worsening.” In other words, no amount of financial stimulus is going to boost investment in the real economy.

2--Laid Bare in Shanghai: G-20 Tensions Over How to Spur Growth

It’s critical for the G-20 to use all policy levers available, U.S. Treasury Secretary Jacob J. Lew told reporters in Shanghai.

America’s Call

"There’s a shortfall in global demand -- it’s something we think does require focus," Lew said. "It’s a period when it’s increasingly important to use all the levers of policy that are available. And that means fiscal levers as well as monetary policy and structural reforms."

Lew also said that the G-20 should address "the need to avoid competitive devaluation. That’s competing in a beggar-thy-neighbor way to share a pie that’s either frozen or shrinking, and it doesn’t lead anywhere good."

As for pro-growth measures, "the most likely outcome could be commitment by some governments to prop up faltering private capital spending, especially in commodity and manufacturing exporters," strategists led by Valentin Marinov, head of Group-of-10 currency strategy at Credit Agricole SA’s corporate and investment-banking unit in London, wrote in a note.

Angel Gurria, secretary general of the Organization for Economic Cooperation and Development, said in an interview that “we are advocating the possibility of using fiscal space to go for selective infrastructure projects” that can strengthen growth. “We need bolder initiatives now, because of how sluggish, how mediocre the performance has been."

3--OECD's William White: In Terms of Debt, the Situation Is Way Worse than 2007

William White, chairman of the Economic and Development Review Committee at the OECD and former chief economist at the Bank for International Settlements (BIS), says the risks posed by global debt levels are greater today than they were in 2007 and that central banking monetary policy has lost its effectiveness....

"If you think about a crisis period as a period of deleveraging, in fact this has not happened and we've gone in the very opposite direction. Now, on the household side, clearly there have been some improvements made but on the corporate side in the US, things have gotten significantly worse—the debt ratios for corporations have gone up very substantially as has government debt......

well, in the end monetary easing is not going to work at all and...that's where I am today... Unfortunately, we are still, as far as I can tell, both the BIS and myself are still talking to a brick wall...

Lesson number two is that you can't predict when the system will break down precisely or where it will break down precisely but in a sense it doesn't matter because it's the system you want to focus on. And it is possible to get some sense of this system is getting stretched beyond its capacity to recover. And I think this is one of the central lessons of the BIS, which is the levels of credit—the stock of credit—and sometimes the rate of growth of that credit is of such a magnitude that it is clear that there's going to be some bad things that come out of it

3--Don't call it a ceasefire

4--Hillary's support for regime change and jihadi occupation

Joseph Massad, Associate Professor of Modern Arab Politics and Intellectual History at Columbia University, wrote to Al-Jazeera “it was the United States that destroyed Syrian democracy in 1949 when the CIA sponsored the first coup d’état in the country ending democratic rule. It is again the United States that has destroyed the possibility of a democratic outcome of the current popular uprising. My deep condolences to the Syrian people.”

There have also been many events that nearly lead to a full-scale invasion of Syria by western coalitions, including the 2013 East Ghouta chemical weapons attack. President Barack Obama along with the media did have some basis because they accurately mention that the Syrian government had possession and the capability to launch chemical weapons. However, the diplomatic community pointed out discrepancies in the President’s statement. Pulitzer Prize-winner, Seymour Hersh, called it “presenting assumptions as facts.” It was within our understanding at the time that Jabhat Al-Nusra had the capability to produce sarin in large quantities and also use it. Clinton, as a former head diplomat, knows these facts but has instead used this incident to further commit herself to regime change. What about U.S. allies supported by the Clinton dynasty? In a Freudian slip- the Vice President, Joe Biden, stated that the Turks, Saudis, and Emiratis funded and armed Jabhat Al-Nusra.

 Today, this association is unquestionable. The famed Professor Noam Chomsky told me an in an interview in December: “[Turkey] is playing a very dangerous game in Syria, tacitly supporting ISIS by allowing the borders to stay open, openly supporting Al-Nursa, attacking the Kurds who are the main ground force combating ISIS and defending their own territories and more. Not a pretty picture.”....

Hillary Clinton is not a diplomat; she is a bloodthirsty and deranged woman with no respect for human rights and a true exemplar of corruption.

5---Kerry reveals "Plan B"

6---Shamir: Israel wins when Arabs lose

Israel has been pleased with Arabs killing each other. Now, as the end of war is seen on the horizon, Israel spoke up. Amos Harel, a leading Israeli military observer with high-grade access, made it clear: “the war in Syria has largely served Israel’s interests. The ongoing fighting has worn down the Syrian army to a shadow of its former capabilities. ...


Israel’s main adversary in the north, is losing dozens of fighters every month in battle. Israel has been quietly wishing success to both sides and would not have been against the bloodletting continuing for a few more years without a clear victor” Now, after successful Russian intervention, Israel states openly that “an Assad victory would be bad for Israel” and it calls upon the West “to send real military aid to the less extreme Sunni rebels”.
Thus, the will of Israel, and of Israel Lobby in the US, directly contradicts the will of people as it was lucidly expressed by Stephen Kinzer. You can follow the lead of your Israeli Lobby, or you can have peace and security, but you can’t have both, it is that simple.

7---Dirty deeds done dirt cheap: Washington teams up with al Qaida to topple Assad

US intelligence analysts have warned that al-Nusra and the so-called “moderate” terrorists promoted by Washington are “intermingled.” Brett McGurk, the Obama administration’s envoy to the “coalition” participating in the US-led war in Iraq and Syria, told a White House press briefing Tuesday that the supposed moderates and the Al Qaeda group “are marbled together.”

Behind such awkward formulations, the reality is that Al Qaeda and related groups have long constituted the principal proxy ground forces utilized by US imperialism and its allies in the brutal war to topple the government of President Bashar al-Assad. They have served as a mercenary army, which has been massively funded and has received an avalanche of arms from the US and its principal regional allies, Saudi Arabia, Turkey and Qatar. What is commonly referred to as the Syrian civil war is nothing less than a massive CIA regime-change operation.

This bloody intervention in Syria exposes as a fraud the entire “war on terror,” which has served as the linchpin for the conduct of war abroad and the buildup of state repression at home for nearly 15 years, under both the Bush and Obama administrations. The US is not involved in some existential struggle against terrorism in general and Al Qaeda in particular. Rather, it is employing Al Qaeda killers to do its dirty work in the struggle to establish US hegemony in the Middle East....

The article suggests that there are differences within the US state apparatus over whether to supply these same “rebels” with Manpads, advanced portable antiaircraft weapons, that could bring down Russian jets, potentially triggering a wider war pitting the US against Russia. The CIA, at the same time, is warning that if action isn’t taken to defend the Islamist militias, Saudi Arabia or Turkey could “decide to break ranks with Washington and send large numbers of Manpads into northern Syria to shoot down Russian bombers.” In other words, the incredibly reckless policy pursued by Washington may yet unleash a conflict that could end in a nuclear exchange....

in virtually every terrorist incident, from 9/11 to the Boston Marathon bombing and beyond, the perpetrators were well known to US agencies and allowed to travel freely in and out of the country with no questions asked.

Today, US imperialism is more heavily invested than ever in these forces, and not only in the Middle East, where they have been employed to bring down the government of Muammar Gaddafi in Libya and in the attempt to do the same to Assad in Syria....

There is an obvious danger that the Islamist outfits will devise their own “Plan B” involving retribution against their imperialist patrons for what they see as a betrayal. This is a familiar pattern, seen in the evolution of those around Osama bin Laden who were abandoned after the Soviets withdrew their troops from Afghanistan. The ultimate result was the deaths of nearly 3,000 Americans on September 11, 2001.

8--Why the Arabs don’t want us in Syria

They don’t hate ‘our freedoms.’ They hate that we’ve betrayed our ideals in their own countries — for oil....

we must recognize the Syrian conflict is a war over control of resources indistinguishable from the myriad clandestine and undeclared oil wars we have been fighting in the Mideast for 65 years. And only when we see this conflict as a proxy war over a pipeline do events become comprehensible. It’s the only paradigm that explains why the GOP on Capitol Hill and the Obama administration are still fixated on regime change rather than regional stability, why the Obama administration can find no Syrian moderates to fight the war, why ISIL blew up a Russian passenger plane, why the Saudis just executed a powerful Shiite cleric only to have their embassy burned in Tehran, why Russia is bombing non-ISIL fighters and why Turkey went out of its way to shoot down a Russian jet. The million refugees now flooding into Europe are refugees of a pipeline war and CIA blundering....

Let’s face it; what we call the “war on terror” is really just another oil war. We’ve squandered $6 trillion on three wars abroad and on constructing a national security warfare state at home since oilman Dick Cheney declared the “Long War” in 2001. The only winners have been the military contractors and oil companies that have pocketed historic profits, the intelligence agencies that have grown exponentially in power and influence to the detriment of our freedoms and the jihadists who invariably used our interventions as their most effective recruiting tool. We have compromised our values, butchered our own youth, killed hundreds of thousands of innocent people, subverted our idealism and squandered our national treasures in fruitless and costly adventures abroad. In the process, we have helped our worst enemies and turned America, once the world’s beacon of freedom, into a national security surveillance state and an international moral pariah

In their view, our war against Bashar Assad did not begin with the peaceful civil protests of the Arab Spring in 2011. Instead it began in 2000, when Qatar proposed to construct a $10 billion, 1,500 kilometer pipeline through Saudi Arabia, Jordan, Syria and Turkey. Qatar shares with Iran the South Pars/North Dome gas field, the world’s richest natural gas repository. The international trade embargo until recently prohibited Iran from selling gas abroad. Meanwhile, Qatar’s gas can reach European markets only if it is liquefied and shipped by sea, a route that restricts volume and dramatically raises costs. The proposed pipeline would have linked Qatar directly to European energy markets via distribution terminals in Turkey, which would pocket rich transit fees. The Qatar/Turkey pipeline would give the Sunni kingdoms of the Persian Gulf decisive domination of world natural gas markets and strengthen Qatar, America’s closest ally in the Arab world. Qatar hosts two massive American military bases and the U.S. Central Command’s Mideast headquarters...

Of course, the Russians, who sell 70 percent of their gas exports to Europe, viewed the Qatar/Turkey pipeline as an existential threat. In Putin’s view, the Qatar pipeline is a NATO plot to change the status quo, deprive Russia of its only foothold in the Middle East, strangle the Russian economy and end Russian leverage in the European energy market. In 2009, Assad announced that he would refuse to sign the agreement to allow the pipeline to run through Syria “to protect the interests of our Russian ally.”
Assad further enraged the Gulf’s Sunni monarchs by endorsing a Russian-approved “Islamic pipeline” running from Iran’s side of the gas field through Syria and to the ports of Lebanon. The Islamic pipeline would make Shiite Iran, not Sunni Qatar, the principal supplier to the European energy market and dramatically increase Tehran’s influence in the Middke East and the world. Israel also was understandably determined to derail the Islamic pipeline, which would enrich Iran and Syria and presumably strengthen their proxies, Hezbollah and Hamas.
Secret cables and reports by the U.S., Saudi and Israeli intelligence agencies indicate that the moment Assad rejected the Qatari pipeline, military and intelligence planners quickly arrived at the consensus that fomenting a Sunni uprising in Syria to overthrow the uncooperative Bashar Assad was a feasible path to achieving the shared objective of completing the Qatar/Turkey gas link. In 2009, according to WikiLeaks, soon after Bashar Assad rejected the Qatar pipeline, the CIA began funding opposition groups in Syria. It is important to note that this was well before the Arab Spring-engendered uprising against Assad.
teran journalist, Bob Parry, echoes that assessment. “No one in the region has clean hands, but in the realms of torture, mass killings, [suppressing] civil liberties and supporting terrorism, Assad is much better than the Saudis.”...

Despite pressure from Republicans, Barack Obama balked at hiring out young Americans to die as mercenaries for a pipeline conglomerate. Obama wisely ignored Republican clamoring to put ground troops in Syria or to funnel more funding to “moderate insurgents.” But by late 2011, Republican pressure and our Sunni allies had pushed the American government into the fray.....

audi intelligence documents, published by WikiLeaks, show that by 2012, Turkey, Qatar and Saudi Arabia were arming, training and funding radical jihadist Sunni fighters from Syria, Iraq and elsewhere to overthrow the Assad’s Shiite-allied regime. Qatar, which had the most to gain, invested $3 billion in building the insurgency and invited the Pentagon to train insurgents at U.S. bases in Qatar. According to an April 2014 article by Seymour Hersh, the CIA weapons ratlines were financed by Turkey, Saudi Arabia and Qatar.
The idea of fomenting a Sunni-Shiite civil war to weaken the Syrian and Iranian regimes in order to maintain control of the region’s petrochemical supplies was not a novel notion in the Pentagon’s lexicon. A damning 2008 Pentagon-funded Rand report proposed a precise blueprint for what was about to happen. That report observes that control of the Persian Gulf oil and gas deposits will remain, for the U.S., “a strategic priority” that “will interact strongly with that of prosecuting the long war.” Rand recommended using “covert action, information operations, unconventional warfare” to enforce a “divide and rule” strategy. “The United States and its local allies could use the nationalist jihadists to launch a proxy campaign” and “U.S. leaders could also choose to capitalize on the sustained Shia-Sunni conflict trajectory by taking the side of the conservative Sunni regimes against Shiite empowerment movements in the Muslim world … possibly supporting authoritative Sunni governments against a continuingly hostile Iran.”

The press portrait of the Free Syrian Army as cohesive battalions of Syrian moderates was delusional. The dissolved units regrouped in hundreds of independent militias most of which were commanded by, or allied with, jihadi militants who were the most committed and effective fighters. By then, the Sunni armies of Al Qaeda in Iraq were crossing the border from Iraq into Syria and joining forces with the squadrons of deserters from the Free Syrian Army, many of them trained and armed by the U.S.
Despite the prevailing media portrait of a moderate Arab uprising against the tyrant Assad, U.S. intelligence planners knew from the outset that their pipeline proxies were radical jihadists who would probably carve themselves a brand new Islamic caliphate from the Sunni regions of Syria and Iraq. Two years before ISIL throat cutters stepped on the world stage, a seven-page August 12, 2012, study by the U.S. Defense Intelligence Agency, obtained by the right-wing group Judicial Watch, warned that thanks to the ongoing support by U.S./Sunni Coalition for radical Sunni Jihadists, “the Salafist, the Muslim Brotherhood and AQI (now ISIS), are the major forces driving the insurgency in Syria.”

The Pentagon authors of the seven-page report appear to endorse the predicted advent of the ISIS caliphate: “If the situation unravels, there is the possibility of establishing a declared or undeclared Salafist principality in eastern Syria (Hasaka and Der Zor) and this is exactly what the supporting powers to the opposition want in order to isolate the Syrian regime.” The Pentagon report warns that this new principality could move across the Iraqi border to Mosul and Ramadi and “declare an Islamic state through its union with other terrorist organizations in Iraq and Syria.”
Of course, this is precisely what has happened. Not coincidentally, the regions of Syria occupied by the Islamic State exactly encompass the proposed route of the Qatari pipeline
many of the Islamic State fighters and their commanders are ideological and organizational successors to the jihadists that the CIA has been nurturing for more than 30 years from Syria and Egypt to Afghanistan and Iraq...

Prior to the American invasion, there was no Al Qaeda in Saddam Hussein’s Iraq. President George W. Bush destroyed Saddam’s secularist government, and his viceroy, Paul Bremer, in a monumental act of mismanagement, effectively created the Sunni Army, now named the Islamic State. Bremer elevated the Shiites to power and banned Saddam’s ruling Ba’ath Party, laying off some 700,000 mostly Sunni, government and party officials from ministers to schoolteachers. He then disbanded the 380,000-man army, which was 80 percent Sunni. Bremer’s actions stripped a million of Iraq’s Sunnis of rank, property, wealth and power; leaving a desperate underclass of angry, educated, capable, trained and heavily armed Sunnis with little left to lose. The Sunni insurgency named itself Al Qaeda in Iraq. Beginning in 2011, our allies funded the invasion by AQI fighters into Syria. In April 2013, having entered Syria, AQI changed its name to ISIL. According to Dexter Filkins of the New Yorker, “ISIS is run by a council of former Iraqi generals. … Many are members of Saddam Hussein’s secular Ba’ath Party who converted to radical Islam in American prisons.”

Thursday, February 25, 2016

Today's Links

1--NIRP Was a Dud, Are Central Banks Out of Options?

2--“Secular stagnation” and the contradictions of capitalism, wsws

3--Recession sign is in play and has 81% accuracy, CNBC

Recessions have followed consecutive quarters of earnings declines 81 percent of the time, according to an analysis from JPMorgan Chase strategists, who said they combed through 115 years of records for their findings.

The news gets worse: Of the remaining 19 percent of the time, recession was only avoided through either monetary or fiscal stimulus. With the Federal Reserve holding limited easing options and a deeply dysfunctional Washington thwarting a fiscal boost, the prospects for help are not good.

The warning comes amid a stock market hovering around correction territory and a mixed economic picture. Citigroup this week warned of escalating risks for a global recession, though data Thursday on durable goods orders suggested the manufacturing sector may be shaking off a contraction phase. Fed officials in recent days have been talking down recession risks.

"Absent a pickup in consumption and further weakening in the U.S. dollar, we continue to see rising risk of earnings recession in the U.S." JPMorgan's equity strategy team said in a note to clients

4--Biggest Wave Yet of U.S. Oil Defaults Looms as Bust Intensifies

5--The problem is "contained"??

6--IMF warns the global economy is 'highly vulnerable'

7--Oil Slump May Hit U.S. Investment Banks' Capital Market Revenue

8--Fleecing the sheeple, FP

9--North Dakota’s Largest Oil Producer Suspends All Fracking (Reuters)

10--IMF calls on G20 to take ‘bold’ action

11--Sticking point in Syria truce: Washington’s support for Al Qaeda

12--G-20 Summit 2016: US, IMF Push For Fiscal Stimulus Likely To Fall Flat At China Meeting

Tuesday, February 23, 2016

More Links

1--DPRK Promises Preemptive Strike If South Korea, US Hold Massive War Games
2--“Secular stagnation” and the contradictions of capitalism, WSWS

3--US blocked talks with North Korea before nuclear test, WSWS

North Korea has twice signed agreements with the US and frozen its nuclear facilities, only to find that Washington has not lived up to its end of the deal.

In 1994, the Clinton administration pulled back from the brink of war with North Korea and signed an Agreed Framework with Pyongyang that opened up the prospect of the resumption of diplomatic relations. In return for promises of supplies of fuel oil and the construction of two light water power reactors, the North Korean regime shut down its nuclear facilities and placed them under international inspection.

Six years later, work on the power reactors had barely begun and the only step toward formal relations was a visit to Pyongyang by US Secretary of State Madeleine Albright on the eve of the US presidential election in 2000. After assuming office in 2001, President George W. Bush quickly wrecked the Agreed Framework and branded North Korea part of an “axis of evil” along with Iraq and Iran, leading to a rapid escalation of tensions. Pyongyang pulled out of the Nuclear Non-Proliferation Treaty, expelled the international inspectors and resumed its nuclear programs.

In early 2007, following North Korea’s first nuclear test, the Bush administration used the six-party talks to strike a second nuclear deal with Pyongyang. The agreement committed Washington to nothing other than to provide a limited amount of fuel oil and “move towards” full diplomatic relations. In return, Pyongyang had to freeze its nuclear facilities, allow the return of inspectors, and carry out the step-by step dismantling of all its nuclear programs.

4--Turkish Government is Turkish branch of ISIS

Peoples’ Democratic Party (HDP) co-chair Sehalattin Demirtaş has called the ruling Justice and Development Party (AKP) an “extension of the Islamic State of Iraq and the Levant (ISIL),” while ruling out that the Syrian Kurdish Democratic Union Party (PYD) in northern Syria was attacking Turkey.

“What kind of an enmity against Kurds is this that they [the AKP] await a bombing in some part of the country just to accuse the PYD?” he asked during his address to the party deputies on Feb. 23.

“Did the PYD throw a single stone at you from [Syria]? I am not talking about bullets but stones,” he said.

“And then, they are calling us [the HDP] the terror extensions, etc. Is there any better terror extension than you [the AKP]? You are the extension of ISIL. And this is your hypocrisy. Our party keeps calling for peace as yours is doing all this and you expect us to remain silent. The AKP is a political extension of ISIL,” he said

5--Pot calls kettle black: Syria ‘exporter of terrorism,’ Turkey’s president says

6--Syrian impasse and Russian siege

The Turkish government’s Syria policy was based on the assumption that the U.S. and the West would put their weight behind toppling the Bashar al-Assad regime in the fall of 2011, as in Libya earlier in the same year.

Ankara thought it would take a maximum six months for al-Assad to fall. Then there would be elections in Syria, which the Justice and Development Party (AK Parti) government was almost sure the Muslim Brotherhood would win, as was the case in Egypt after the fall of Hosni Mubarak. The belief was that the AK Parti had set an excellent example for the Muslim world by coming to power through non-violent, democratic means.

That was the core of the speech U.S. President Barack Obama delivered at the Turkish Parliament in April 2009 during his first visit overseas as president. There were even parties in the Arab world with names that duplicated or resembled the name “AK Parti,” with the Arab Spring seen as an excellent opportunity for the democratic rise of Islamic politics throughout the region.

Nothing went according to the AK Parti’s design of the Syria situation. First of all, the U.S. and the West suggested a Libya-like operation in the spring months of 2011 when they had the backing of Russia. But then President Erdoğan (then prime minister) and Prime Minister Ahmet Davutoğlu (then foreign minister) also asked the West to give them a chance to convince al-Assad to treat protesters fairly and allow elections in Syria (after all, Erdoğan and al-Assad had been calling each other “brother” for some time and even enjoying holidays together). When those efforts failed, Ankara made a U-turn and began asking for a military operation. But by then the mood in the West had changed. 

7--Ankara’s Syrian debacle deepens

Azaz is particularly strategic because it is a key supply route for the opposition groups that Turkey and some other states support and Turkey does not want the Kurds to take it. The Syrian Kurds want to merge the two cantons that they currently rule (Kobani and Jazeera), with a third canton called Afrin. However, to do this they need to take over the territory in between which is currently shared by the Islamic State of Iraq and the Levant (ISIL) and some of the rebel forces which Ankara supports. Turkey wants to stop this takeover as it does not want the Syrian Kurds controlling such a huge swathe of territory so close to its border.

Today's Links

1--Moody's warns credit market signaling recession, cnbc

2--US Treasury Will Ask Governments to Use Fiscal Policy not FX Manipulation at G20

3--The Trickle of U.S. Oil Exports Is Already Shifting Global Power

4--The Fatal Flaw That Has Doomed Our Economy , Bill Bonner

Honest money?

5--That's not a housing Bubble. This is a housing bubble

6--Central bankers on the defensive as weird policy becomes even weirder

7--The Four Economists' Big Letter

8--More Subprime Borrowers Are Falling Behind on Their Auto Loans

9--The New York Times wants to get rid of the $100 bill

10--No production cuts, Saudi Arabia

Oil prices have cratered more than 70 percent since mid-2014 as near-record global oil production created a massive crude glut

11--Assad is staying. Deal with it.

Erdogan and Davutoglu have damaged relations with all countries that really matter for Turkey: Iran, Iraq, Russia, China, the US, the EU, Syria and Mideast Kurdish communities, the former CIA official points out.

"Instead Ankara has opened a dubious, dangerous and futureless coalition with Saudi Arabia," he stresses.

In light of this the question arises: what should Turkey do to mend the deplorable situation?

According to Fuller, firstly, Erdogan should reconcile himself to the idea that the "Assad must go" plan has ultimately failed.

12--Government supply line to Aleppo utterly cut due to blitz offensive by ISIS – Map update

13---Aleppo Advance: How to Defeat Daesh and Avoid New World War

14--Hillary Clinton Is Backed by Major Republican Donors

An analysis of Federal Election Commission records, by TIME, which was published on 23 October 2015, showed that the 2012 donors to Romney’s campaign were already donating more to Hillary Clinton’s 2016 campaign than they had been donating to any one of the 2016 campaigns of — listed here in declining order below  Clinton — Lindsey Graham, Rand Paul, Carly Fiorina, Chris Christie, Rick Perry, Mike Huckabee, Donald Trump, Bobby Jindal, Rick Santorum, George Pataki, or Jim Gilmore. Those major Romney donors also gave a little to two Democrats (other than to Hillary — who, as mentioned, received a lot of donations from these Republican donors): Martin O’Malley, Jim Web, and Lawrence Lessig. (Romney’s donors gave nothing to Bernie Sanders, and nothing to Elizabeth Warren. They don’t want either of those people to become President.)

15--FSA Partly Refuses to Participate in Ceasefire Deal Without al-Nusra Front

Monday, February 22, 2016

Today's links

1--The Boneheaded Logic of Negative Interest Rates, Bill Bonner

About $7 trillion of sovereign bonds now yield less than nothing. Lenders give their money to governments… who swear up and down, no fingers crossed, that they’ll give them back less money sometime in the future. Is that weird or what?...

Economic growth rates are falling toward zero. And at zero, it normally doesn’t make sense for the business community – as a whole – to borrow. The growth it expects will be less than the interest it will have to pay.

That’s a big problem… Because the Fed only has direct control over the roughly 20% of the overall money supply. This takes the form of cash in circulation and bank reserves. The other roughly 80% of the money supply comes from bank lending.

If people don’t borrow, money doesn’t appear. And if money doesn’t appear – or worse, if it disappears – people have less of it. They stop spending… the slowdown gets worse… prices fall… and pretty soon, you have a depression on your hands.

How to prevent it? If you believe the myth that the feds can create real demand for bank lending by dropping interest rates below zero, then you, too, might believe in NIRP.

It’s all relative, you see. It’s like standing on a train platform. The train next to you backs up… and you feel you’re moving ahead. Negative interest rates are like backing up. They give borrowers the illusion of forward motion… even if the economy is standing still. Or something like that

2--Japan Signals That the End Game Has Begun

3--They'd Rather Get Nothing in Bonds Than Buy Europe Stocks

4--Krugman and His Gang’s Libeling of Economist Gerald Friedman for Finding That Conventional Models Show That Sanders Plan Could Work

5--Market Calm May Be Short-Lived, el erian

First, corporate earnings....

Second, the continued ability of central banks to repress financial volatility is increasingly in doubt...

Third, although a few days of market gains can force traders to cover their shorts

6---Cash Crunch??

It’s all going the wrong way now, with fewer proactively spending more than their incomes to ‘offset’ those desiring to spend less than their incomes. That is, as previously discussed, the private sector tends to be highly pro cyclical

Online lenders see cash crunch

By Jon Marino

Feb 19 (CNBC) — A cash crunch is impeding the online lending industry’s growth as the cost of borrowing grows, funds become increasingly scarce and ratings agencies maintain a cautious outlook toward the space.

Next, start-ups that have grown into unicorns originating billions of dollars’ worth of loans may find themselves doing less lending or, conversely, putting more of their loans onto their own books.

The asset-backed securities market is slowing and issued a meager $40 billion in January — the lowest total since at least 2012, according to Dealogic data — and generated a paltry $10 billion in ABS loans in February. In terms of deal volume, ABS deals in 2016 have also dropped to lows the market has not seen for years.

7--NYT Invents Left-Leaning Economists to Attack Bernie Sanders

Friday, February 19, 2016

1---The Real Economy Is Talking, but Treasuries Aren't Listening , Bloomberg

2--OECD Calls for Urgent Increase in Government Spending

Governments in the U.S., Europe and elsewhere should take "urgent" and "collective" steps to raise their investment spending and deliver a fresh boost to flagging economic growth, the Organization for Economic Growth and Development said on Thursday.

...Releasing its first economic forecasts of 2016, it urged governments that can borrow at very low interest rates to boost their spending on infrastructure. The OECD said that if governments work together, fresh borrowing could have such a positive impact on growth that it would reduce rather than increase their debts relative to economic output.

Speaking to The Wall Street Journal, OECD Chief Economist Catherine Mann said that without such action, governments will be unable to honor their pledges to deliver a "better life" for young people, adequate pensions and health care for old people, and the returns anticipated by investors.

"The economic performance generated by today's set of policies is insufficient to make good on these commitments," said Ms. Mann, who has worked at the U.S. Federal Reserve and the Council of Economic Advisers. "Those commitments will not be met unless there is a change in policy stance."...

Governments in many countries are currently able to borrow for long periods at very low interest rates, increasing fiscal space," the OECD said. "Many countries have room for fiscal expansion to strengthen demand. This should focus on policies with strong short-run benefits and that also contribute to long-term growth. A commitment to raising public investment collectively would boost demand while remaining on a fiscally sustainable path."  

3---Negative interest rates set stage for next crisis, Stephen Roach says, MW

The adoption of negative interest rates — initially launched in Europe in 2014 and now embraced in Japan — represents a major turning point for central banking. Previously, emphasis had been placed on boosting aggregate demand — primarily by lowering the cost of borrowing, but also by spurring wealth effects from appreciating financial assets.

But now, by imposing penalties on excess reserves left on deposit with central banks, negative interest rates drive stimulus through the supply side of the credit equation — in effect, urging banks to make new loans regardless of the demand for such funds.

This misses the essence of what is ailing a post-crisis world. As Nomura economist Richard Koo has argued about Japan, the focus should be on the demand side of crisis-battered economies, where growth is impaired by a debt-rejection syndrome that invariably takes hold in the aftermath of a “balance sheet recession.”...

It’s also the U.S., where consumer demand — the epicenter of America’s Great Recession — remains stuck in an eight-year quagmire of just 1.5% average real growth. Even worse is the eurozone, where real GDP growth has averaged just 0.1% over the 2008-2015 period....

The shift to negative interest rates is all the more problematic. Given persistent sluggish aggregate demand worldwide, a new set of risks is introduced by penalizing banks for not making new loans. This is the functional equivalent of promoting another surge of “zombie lending” — the uneconomic loans made to insolvent Japanese borrowers in the 1990s.

Central banking, having lost its way, is in crisis. Can the world economy be far behind?

4--Why negative interest rates spell doom for capitalism

Interest rates in Switzerland, Denmark, Sweden, the European Central Bank and now the Bank Japan have now plunged into negative territory, starting a new phase in the era of central banking that is very much uncharted.

Time will tell if it leaves the global economy lost at sea....

Can you imagine a world where commercial banks pay their customers to borrow money?

5--Central Banks: Out of ammo?

6--Haruhiko Kuroda: The dumbest motherfu**er of all time, Bloomberg

Despite all Prime Minister Shinzo Abe has done, Japan’s economy contracted an annualized 1.4 percent in the final three months of 2015, the government announced on Feb. 15. Consumer prices rose just 0.2 percent year to year, perilously close to deflation. Japanese consumers, hurt by tepid growth in wages and bonuses and a 3 percentage point rise in the consumption tax in 2014, are holding on to their wallets, with private consumption dropping 0.8 percent in the quarter.

The yen has gained 5.6 percent against the dollar since the start of the year, eroding profits for exporters such as Toyota Motor and Panasonic. These companies have benefited from the yen’s weakness since the prime minister came to office in late 2012 and began the policy changes known as Abenomics.

“There’s no clear driver to support Japan’s economy,” says Yuichi Kodama, chief economist at Meiji Yasuda Life Insurance in Tokyo. Yet on the same day the government announced the economy’s contraction, the benchmark Nikkei stock index rose more than 7 percent.

7--Negative interest rates are a ‘dangerous experiment’, warns Morgan Stanley, MW

8--Negative interest rates are a calamitous misadventure, AEP

9--Are We Doomed to Slow Growth?

10--Russia to initiate UN Security Council meeting over Turkey’s plans to send troops to northern Syria

11---The media are misleading the public on Syria, BG

Washington-based reporters tell us that one potent force in Syria, al-Nusra, is made up of “rebels” or “moderates,” not that it is the local al-Qaeda franchise. Saudi Arabia is portrayed as aiding freedom fighters when in fact it is a prime sponsor of ISIS. Turkey has for years been running a “rat line” for foreign fighters wanting to join terror groups in Syria, but because the United States wants to stay on Turkey’s good side, we hear little about it. Nor are we often reminded that although we want to support the secular and battle-hardened Kurds, Turkey wants to kill them. Everything Russia and Iran do in Syria is described as negative and destabilizing, simply because it is they who are doing it — and because that is the official line in Washington.

Inevitably, this kind of disinformation has bled into the American presidential campaign. At the recent debate in Milwaukee, Hillary Clinton claimed that United Nations peace efforts in Syria were based on “an agreement I negotiated in June of 2012 in Geneva.” The precise opposite is true. In 2012 Secretary of State Clinton joined Turkey, Saudi Arabia, and Israel in a successful effort to kill Kofi Annan’s UN peace plan because it would have accommodated Iran and kept Assad in power, at least temporarily. No one on the Milwaukee stage knew enough to challenge her.

12--Turkey escalates war threats after terror attacks

Thursday, February 18, 2016

Today's Links

1--Why this correction is different from others

U.S. equities began the year on the wrong foot by entering in correction territory, but Jason Pride of Glenmede said Thursday this one is different from others.

"We believe that the Fed, with the backoff in quantitative easing, has been tightening for quite some time, growth has been slowing, and now we have this pickup of possible credit risk on the energy equation seeping over into the rest of the market, and also the difficulties structurally with China and emerging markets gradually slowing down," the firm's director of investment strategy told CNBC's "Squawk Box."...

the Dow Jones industrial average and the Nasdaq composite were respectively down 10.34 percent and 13.34 percent from their 52-week peaks, while the S&P 500 exited correction territory on Wednesday.

2--The Re-Emergence of the Deficit Hawks, Dean Baker

3--Negative interest rates are a ‘dangerous experiment’, warns Morgan Stanley

Policy exhaustion?  "“Some potential scenarios are U.S. deflation or major declines in global financial assets as implicit global central bank puts disappear,” they said"...

Calling negative interest rates a “dangerous experiment’, the economists argued such policy would erode bank profits 5%-10% and risk curbing lending across eurozone borders. European banks FX7, -0.29%  have already been off to a rough start to the year, down 20% on concerns about the fallout from negative rates, lackluster profits, tougher regulation and a slowdown in global growth.

“The credit impulse has turned negative, new loan origination has slowed, and systemic stress in the financial system has risen,” the Morgan Stanley analysts said.

4---Negative interest rates are a calamitous misadventure, AEP

When the debt-laden world faces the next global downturn, it will need the full power of helicopter money, not interest rate gimmicks

The market verdict on the Bank of Japan and the European Central Bank speaks for itself. Bank equities have crashed by 32pc in Japan and by 26pc in the eurozone since early December.

"Financial markets increasingly view these experimental moves as desperate," said Scott Mather, from the giant bond fund Pimco.

The policy blunder is creating a false fear that central banks have run out ammunition. It is distracting attention from the real failings of the global policy regime: lack of willingness to launch a New Deal and inject money directly into the veins of the real economy through fiscal stimulus when needed, and arguably to do so with turbo-charged effect through central bank transfers rather than debt issuance


Worse yet, negative rates are a creeping threat to civil liberties since the only way to enforce such a regime over time is to abolish cash, for otherwise people will move their savings beyond reach. Mao Zedong briefly flirted with the idea during the Cultural Revolution in his bid to destroy every vestige of China's ancient culture, but even he recoiled

5----500 extremists cross into Aleppo under Turkish supervision: report

Wednesday’s crossing marks the second time a large group of militants have crossed the Turkish border and entered Syria in less than a week. On Sunday, 350 heavily armed terrorists entered Syrian soil via the Atme border-crossing with Turkey.

6--Erdogan’s aims in Syria curtailed by army

“We will defend Aleppo: all of Turkey stands behind its defenders” – Turkish Prime Minister Ahmet Davutoglu, Wednesday, February 10.

“Turkey and Saudi Arabia may launch an operation (into Syria) by land” – Turkish Foreign Minister Mehmed Cavusoglu, Saturday, February 13.

“There is no thought of Turkish soldiers entering Syria” – Turkish Defence Minister Ismet Yilmaz, Sunday, February 14.

Between Wednesday of last week and Sunday night, the Turkish government, in league with Saudi Arabia, made a tentative decision to enter the war on the ground in Syria – and then got cold feet about it. Or more likely, the Turkish army simply told the government that it would not invade Syria and risk the possibility of a shooting war with the Russians.

7--Syrian Kurdish PYD’s head denies Ankara attack responsibility

We deny any involvement in this attack,” Salih Muslim told AFP, after Turkey’s prime minister Ahmet Davutoglu accused his party’s armed wing of carrying out the attack in coordination with the Kurdistan Workers’ Party, an outlawed Kurdish group in Turkey.

Davutoglu told reporters in Ankara that the bombing was carried out by a Syrian national named Salih Necar, adding that nine people had been detained in connection with the attack.

We have never heard of this person Salih Necar,” said Muslim.

“These accusations are clearly related to Turkish attempts to intervene in Syria,” he added.

The Wednesday night bombing targeted military vehicles in the Turkish capital.

It comes as Turkey shells Kurdish militants in Syrian Kurdistan who have seized territory in recent days from rebel groups backed by Ankara in Aleppo province.

Turkey fears the creation of an autonomous Kurdish region in Syria — similar to the Kurdish region in northern Iraq — would spur the separatist ambitions of Turkey’s own Kurds.

Ankara considers Muslim’s PYD party and its armed wing, the People’s Protection Units (YPG) of Syrian Kurdistan, to be affiliates of the Kurdistan Workers’ Party, which has waged a decades-long insurgency against the Turkish state.

The powerful Kurdish People’s Protection Units YPG forces which the U.S. and Russia consider an ally in the fight against IS, is the most effective group fighting Islamic State (IS) in Syria, as the Kurdish militia has seized swathes of Syria from IS.

Turkish President Recep Tayyip Erdogan on Wednesday vowed Turkey would not allow the creation of a Kurdish stronghold in Syrian Kurdistan, saying there was no question of Turkish forces stopping their bombardment of Syrian Kurdish fighters.

8---Turkey PM says PKK and Syrian Kurdish militia responsible for Ankara attack

Turkey on Thursday blamed Kurdish militants for a car bombing targeting a military convoy in Ankara that left 28 people dead, in an attack likely to further increase tensions in neighbouring Syria.

The massive car bomb struck five buses carrying Turkish military service personnel when it stopped at a red traffic light in the centre of the capital on Wednesday evening. Sixty-one people were wounded

“It has with certainty been revealed that this attack was carried out by members of the terrorist organisation in Turkey in cooperation with a YPG member who infiltrated from Syria,” Davutoglu told reporters.

“The attack has direct links with YPG.”...

Turkey which still denies the constitutional existence of its own Kurds fears the creation of an autonomous Kurdish region in Syrian Kurdistan — similar to the Kurdistan region in northern Iraq — would spur the separatist ambitions of Turkey’s own Kurds numbering to 22.5 million of the country’s 78-million population.

Ankara is concerned the Kurds will now take a “corridor” east of the flashpoint border town of Azaz — currently still in control of rebels — to link up two Kurdish-held areas.

9--White House: “We stand together with Turkey

NATO Secretary-General Jens Stoltenberg also strongly condemned the terrorist attack and offered his “deepest condolences to the families of those killed and to the Turkish people.”

He said there could be no justification “for such horrific acts” and that “NATO allies stand shoulder to shoulder in the fight against terrorism.”...

Meanwhile, the White House said it condemned the attack in Ankara and that stands in solidarity with Turkey.

“We stand together with Turkey, a NATO ally, a strong partner, and a valued member of the counter-Islamic State of Iraq and the Levant coalition in the face of this attack,” said Ned Price, a spokesman for the White House National Security Council.

10---Erdogan "proves" US ally in Syria (PYD) is terrorist organization--Erdoğan: 14 detained for Ankara attack, int’l community must understand PKK-PYD ties

Fourteen suspects in seven provinces were detained for links to a car bomb attack in Ankara on Feb. 18 that claimed at least 28 lives, including 20 high ranking soldiers and eight citizens, and wounded 61 people, Turkish President Rececp Tayyip Erdoğan has said.

“Although the PKK and the PYD are denying it, the information from the Interior Ministry and intelligence show that they are behind [the attack],” said Erdoğan, referring to the Kurdistan Workers’ Party (PKK) and the Democratic Union Party (PYD)....

I guess that the detentions will not be limited to 14,” Erdoğan said, adding that the domestic and foreign connections behind the attack had been discovered.

“This process will conduce our friends in the international community to understand how tight the PYD and YPG’s connection to the PKK is,” Erdoğan said, repeating that Turkey had insisted on the link, submitting documents.

The People’s Protection Units (YPG) is the armed wing of the PYD.

The U.S. has refused to name the PYD a terrorist group as it is cooperating with the group in fighting the Islamic State of Iraq and the Levant (ISIL) in Syria. The stance against the PYD has become a major bone of contention between allies U.S. and Turkey. 

11--Turkey to inform P5 countries on PYD’s link in Ankara bombing

Both President Recep Tayyip Erdoğan and Prime Minister Ahmet Davutoğlu announced that the attack was conducted by a Syrian national believed to be a member of the People’s Protection Units (YPG), the armed wing of the PYD. Turkey recognizes the PYD as an offshoot of the outlawed Kurdistan Workers’ Party (PKK) and therefore has called on allies not to lend support to the group just because it is fighting the Islamic State of Iraq and the Levant (ISIL). 

12---Syrian regime responsible for Ankara bomb attack: PM

Turkish Prime Minister Ahmet Davutoğlu said Feb. 18 that the Syrian regime was directly responsible for the Ankara bomb attack, which killed at least 28 and injured 61.

“The YPG [People’s Protection Units] is a tool of the Syrian regime and the regime is directly responsible for this attack. The right to take all kinds of measures against the Syrian regime is reserved for us,” Davutoğlu said speaking at a press conference after his visit to the General Staff.

Bashar Jaafari, the Permanent Representative of Syria to the United Nations, said on Feb. 17 that the Syria regime was giving support the Democratic Union Party (PYD) and its military wing, the YPG, along with the United States and Russia.

13---Syrian national of YPG-links behind Ankara blast, says Turkish PM

A Syrian national, identified as 1992-born Salih Necer, was behind the car bomb attack in Ankara on Feb. 17 that killed 28 people and wounded 61 others, Davutoğlu said with “certainty.”

Necer was born in the Amuda province of northern Syria in 1992 and had links to the YPG, Davutoğlu informed reporters.

“A direct link between the attack and the YPG has been established,” he said, adding that nine suspects were detained while the investigation continues.

Davutoğlu also explained that new detentions would take place, but declined to provide details regarding the upcoming operations.

Meanwhile, Turkish Interior Minister Efkan Ala said on Feb. 18 that a total of 14 people had been detained in seven provinces over the attack and brought to the capital, adding that operations were ongoing.....

The Turkish PM also warned against supporting “an enemy of Turkey” directly or indirectly, underlining this would risk those countries’ status as friendly nations.

“It is out of the question for us to excuse tolerance toward a terrorist organization that targets our people in our capital,” Davutoğlu said.

"Just like al-Qaeda or Daesh do not have seats at the table, the YPG, which is a terrorist organization, cannot have one,” he said, using an Arabic acronym for the Islamic State of Iraq and the Levant (ISIL) and reiterating his previous position at refusing to permit the YPG’s participation at U.N.-brokered Syria peace talks in Geneva.

Turkey has recently severed ties with its Western allies over the latter’s refusal to recognize the Syrian Kurdish Democratic Union (PYD) and its armed wing, the YPG, as a terrorist organization. Ankara considers the PYD a terrorist organization and an extension of the PKK.

Turkey has been shelling YPG targets in the Azez town of northern Syria since Feb. 13, after the group seized the Menagh air base north of Aleppo.

14--Syrian rebels say reinforcements get free passage via Turkey

At least 2,000 Syrian rebel fighters have re-entered the country from Turkey over the last week to reinforce insurgents fending off an assault by Syrian Kurdish militias, rebel sources said on Thursday.

The rebel fighters, with weapons and vehicles, have been covertly escorted across the border by Turkish forces over several nights before heading into the embattled rebel stronghold of Azaz, the sources said.

"We have been allowed to move everything from light weapons to heavy equipment mortars and missiles and our tanks," Abu Issa, a commander in the Levant Front, the rebel group that runs the border crossing of Bab al-Salam, told Reuters, giving his alias and talking on condition of anonymity....

A Turkish security source confirmed fighters had crossed the border but put the numbers at 400-500 and the British-based Syrian Observatory for Human Rights, which tracks violence across the war torn-country, also said hundreds had crossed....

Another rebel source said the Turkish military have stepped up delivery of munitions and heavy military hardware in the last two days to bolster rebels facing the major offensive launched by the Syrian army and its allies.

Russian bombing has transformed the almost five-year-old civil war in recent weeks, turning the momentum decisively in favor of Moscow's ally President Bashar al-Assad. But the rapid advance of US-backed Kurdish fighters in northern Syria, taking advantage of Russian air strikes to seize territory near the Turkish border, has infuriated Ankara and threatened to drive a wedge between NATO allies.

Turkey sees the militia as an extension of the outlawed Kurdistan Workers' Party (PKK), which has fought a three-decade fight for autonomy in Turkey's mainly Kurdish Southeast. Determined to prevent the YPG from gaining a foothold on its border, Turkey has shelled its positions in response to what it says is fire coming across the border.

Turkey has also stepped up deliveries of military hardware to the rebels, another rebel source said. "We are getting fresh supplies of everything from missiles to mortars to armored vehicles. Almost everything is now being delivered to us," said the rebel source.

Turkish army vehicles were offloading the munitions and equipment onto Syrian rebel armored vehicles and trucks, said the rebel, who was present during a handover of weapons. New supplies of ground-to-ground missiles with a range of 20 kilometers (12 miles) had been provided to bolster the response to the Russian-backed attack, two rebel commanders said.

Facing one of the biggest defeats of the five-year-long war, rebels have been complaining that foreign states such as Saudi Arabia and Turkey have let them down by not providing them with more powerful weapons, including anti-aircraft missiles. The rebels and the Turkish government accuse the Kurdish militias of a campaign of ethnic cleansing of Arab-inhabited villages in a bid to carve a fiefdom in Syria's north.

The YPG has exploited the Russian-backed offensive, seizing ground from other opposition groups. After taking a string of towns, in what the rebels say is an advance coordinated with Russia, the YPG is now seeking to take Marea, the last town before Azaz.

15--Syria for Dummies

Since 2013 Turkey has also been accused of supporting ISIL either directly or indirectly because its failure is equal to the victory of the Kurds in northern Syria. Turkey is also suspected of supporting indirectly the ISIL regime because it is transferring oil exploited by ISIL, to sell it to Israel and/or Western countries. Moscow insists on the fact that it bombed Turkish trucks transporting this oil. The immediate aim of the “Islamic State” is to establish a so-called Islamic regime in the Middle East, from Iraq to Libya, and to dominate oil fields. The final objective seems to be world domination!

The al-Nusra Front: The Jabhat al-Nusra is the Syrian branch of al-Qaeda. It is also a Sunni Islamist militia fighting against Syrian government forces in Syria, but since late 2015 it has been a rival force to ISIL. Ironically, al-Nusra (also supported by Turkey at the beginning)