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)

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