Sunday, February 7, 2016

Today's links

1--Investors are shying away from margin debt. Why that may not be a good thing.

Post-crisis, the Fed's highly accommodating monetary policy, which included quantitative easing, spurred investors to take on even more debt than before — pushing margin levels to record highs. Last April, that debt reached $507 billion (a month later S&P 500 hit an all-time) before dropping 9 percent to its current level of $461 billion...

Could decreasing margin debt and money flowing from former high-flyers and riskier small caps indicate a potential slowdown ahead? That is a likely scenario, given that gains this year in defensive utilities and telecommunications — where investors frequently park cash during times of market stress — further confirms that traders are taking risk off the table for now.

2---Iran wants euro payment for new, outstanding oil sales

Iran wants to recover tens of billions of dollars it is owed by India and other buyers of its oil in euros and is billing new crude sales in euros, too, looking to reduce its dependence on the U.S. dollar following last month's sanctions relief.

3--Recession risk on the rise, wsws

Writing in the Financial Times this week, market columnist John Authers noted that the “greatest concerns [over recession in the US] surround industrial production and manufacturing.” He continued, “Industrial production fell in 10 months out of 12 last yeara figure that has always, since 1919, been associated with a recession.”...

But even as he spoke, those “headwinds” were getting stronger. In US financial markets, the yield on ten-year Treasury bonds has fallen back below 2 percent, generally an indication of coming recession. The fall in yields has been particularly marked. In early December, Bloomberg reported that only two of the 73 analysts it polled predicted that the 10-year rate would go back below 2 percent.

4---Jim Hightower: What Really Poisoned the Water in Flint, Michigan

5--Exxon Ends Share Buybacks -- It Must Be Acquisition Time

6--Saudi March pricing, Consumer credit

7--Debt, defaults, and devaluations: why this market crash is like nothing we've seen before

A pernicious cycle of collapsing commodities, corporate defaults, and currency wars loom over the global economy. Can anything stop it from unraveling?

8--Will The Saudis And Turks Really Invade Syria?

The Azaz-Jarabulus Corridor:

While it may figuratively be a pipedream for Turkey and Saudi Arabia to alter the Syrian battlespace to the point of enforcing their preferred post-conflict “solution” on the country, it doesn’t remove the actual pipeline motivations for why they would both want to do so in the first place.

Using Ralph Peter’s 2006 “Blood Borders” article as a strategic foundation, the author and his colleagues published a mid-October analytical forecast entitled “The Race For Raqqa And America’s Geopolitical Revenge In ‘Syraq’”, where it’s argued that Riyadh and Ankara would like to create a transnational sub-state “Sunnistan” along the Syrian and Iraqi frontier in order to facilitate the construction of a Qatari gas pipeline to Europe (which was one of the original causes for the War on Syria).

In terms of the scheme’s overall feasibility, Saudi Arabia and Turkey would have to change the battlefield conditions to the point where they and/or their proxies are in control of the broad diagonal swath of territory all the way from Iraq’s Anbar Province to Syria’s Azaz-Jarabulus Corridor, hence the talk of a conventional military invasion aimed at critically securing the latter.

Without the Corridor under their control, it’s impossible for the pipeline to be built because Ankara would never trust for it to be built in the Kurdish areas of Iraq, Syria, and especially the revolting southeastern part of its own territory....

The US, for its part, wants to build a bastion of influence in the central geostrategic space between Turkey, Syria, Iraq, and Saudi Arabia, but in order for its power-hungry plans to spring into action, Erdogan first needs to invade the Azaz-Jarabulus Corridor and succeed in his near-impossible and likely suicidal task of stopping the Syrian-Russian liberation counter-offensive in Aleppo.

9--Al-Nusra Front Confirms Deaths of 300 Terrorists in Syria's Aleppo

10--A Turkish-Friendly Zone Inside Syria

11---Saudi Arabia, Turkey Pushed Syrian Opposition to Leave Talks, wsj

The Syrian opposition abruptly withdrew from peace talks in Geneva this week under pressure from Saudi Arabia and Turkey, two of the main backers of the rebels, according to diplomats and at least a half-dozen opposition figures....

About a half-dozen cities and towns targeted in the new regime offensives have one thing in common: All were held by a mix of Islamist and moderate rebel groups funded and armed by Saudi Arabia and Turkey. Complicating the picture is that some, but not all, of these groups collaborate with the al Qaeda-linked Nusra Front. That gives the regime and its allies fodder for their claim that they are fighting terrorism....

The focus of all parties is shifting to Munich, where a meeting this coming week will bring together international powers involved in the five-year conflict, including the U.S., Russia, Saudi Arabia and Turkey. They are expected to focus first on forging a cease-fire, albeit a partial one, in the hope that this would enable the parties to restart the talks in Geneva on a political transition.
But ahead of those talks, events on the ground are moving quickly as both sides try to position themselves for a possible return to the negotiating table. Syrian regime and Iran-backed forces encircled the country's biggest city, Aleppo, threatening to cut off a major rebel supply route to Turkey, as thousands of civilians fled Russian airstrikes....

In the south, regime forces aided by Russian warplanes and Iran-backed militias captured the strategic town of Ataman, considered the gateway to the city of Daraa, according to the Syrian military and opposition activists. It was the second strategic town rebels lost in the south within 10 days.
All of these places were held by a mix of Sunni Islamist and moderate rebel groups funded and armed by Sunni-led Saudi Arabia and Turkey and in some cases in coordination with the U.S.

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