Monday, October 31, 2016

Today's extra links

1--How much $$ has Wall Street given Hillary?

2--FBI has intensive ongoing investigation into Clinton Foundation

3--Nobody uses a private email server for official business. Period. Full stop.

Classified and unclassified information do not mix. They don’t travel in the same streams through the same pipes. They move in clearly well defined channels so that never the twain shall meet. Mixing them together is unheard of and a major criminal offense.
If you end up with classified information in an unclassified channel, you have done something very wrong and very serious.
Accidentally removing a single classified message from controlled spaces, without any evidence of intent or exposure to hostile forces, can get you fired and cost you your clearance. Repeated instances will land you in prison.
Every hostile intelligence agency on the planet targets senior American officials for collection. The Secretary of State tops the list. Almost anything the Secretary of State had to say about her official duties, her schedule, her mood, her plans for the weekend, would be prized information to adversaries.

The policy doesn't work, so Japan decides to continue the same policy. Got that?

Japan’s consumer prices fell for a seventh straight month and household spending slumped again in September, underscoring the challenges Prime Minister Shinzo Abe and Bank of Japan Governor Haruhiko Kuroda face in trying to revive the world’s third-largest economy.
The downbeat inflation and spending data came despite an increasingly tight labor market. The unemployment rate slipped to 3 percent in September, equal to the lowest since 1995. The low jobless figure hasn’t yet resulted in significant wage gains, a key element of efforts to reflate Japan’s economy.

Key Points

  • Consumer prices excluding fresh food, the BOJ’s primary gauge of inflation, dropped 0.5 percent in September from a year earlier (forecast -0.5 percent).
  • Household spending fell 2.1 percent from a year earlier (forecast -2.7 percent). It has fallen in 11 of the past 12 months.
  • The unemployment rate fell to 3.0 percent (forecast 3.1 percent).
BOJ’s policy board may revise its inflation outlook and projected time frame for hitting its 2 percent target when it meets on Oct. 31-Nov. 1. It has been trying for more than three years to reach that goal with extraordinary monetary easing.
Few economists think the BOJ’s current projection of reaching the goal sometime in the fiscal year ending March 2018 is realistic. A stronger yen this year has pushed down import prices, and households faced with weak wage gains have restrained spending.
Yet a strong majority of economists surveyed by Bloomberg News expect the BOJ to keep its easing program unchanged next week, after it shifted the focus of its policy framework in September from expanding the monetary base to controlling interest rates

5--BOJ loses bark and bite under humbled Kuroda

1--$1.3 Trln in Bad Loans Jeopardise European Banks' Profits

Since 2008, the total volume of NPLs has risen from roughly 1.5pc of all loans issued to over 5pc in 2013, and that figure is growing, KPMG’s report said. Meanwhile, the regulatory pressure, which has been on the rise since the implementation of Basel II rules and continues amid the release of Basel IV, will add some 0.5pc to European banking costs in the near-term...

as traditional lenders are exiting the financing of many projects in the real economy, growth prospects look feeble. Non-traditional lenders are occupying the niches abandoned by banks, offering flexible financing options to the economy at higher interest rates, resulting in shaky growth and mounting risks.

The nascent trend is disrupting the transmission of central bank policy to the economy – amid negative rates, a property developer or a founder of a business start-up can only count on non-bank loans at rates of 6-8pc. Meanwhile a traditional bank, which would be willing and able to issue a loan at 3pc interest under normal circumstances, is kept from engaging in such activity due to tougher regulations and NPL concerns

The attack on Yugoslavia was, of course, an aggression. By the way, this was the first armed assault in Europe on a sovereign state since 1945… Looking at what is happening around Syria, our western partners, mainly the US and the UK ones, go in their hysterics to the point of using public insults, including using such words as 'barbarism,' 'war crime.' I remind you that the aggression against… Yugoslavia was associated with a huge number of attacks on civilian objects, including Serbia's television broadcasting facilities, bridges, which were used by civilian passenger trains and many other things," Lavrov told Russia's channel Rossiya 1 in an interview on Sunday.

In 1999, NATO led by the United States engaged in a 78-day military campaign against what was then Yugoslavia, which consisted of Serbia and Montenegro, over alleged repressions of Albanians in Kosovo. Previously, Albanians were engaged in killing Serbian police and civilians in a push for independence from the historically-Serbian province....

According to the Serbian government, most main bridges, 190 schools, 16 hospitals and the main RTS media outlet were damaged or destroyed during the NATO campaign

The choice facing the Syrian people is both simple and stark: either a government led by Bashar al-Assad, under which the right of the country’s aforementioned minorities are protected and upheld, or a government led by Nusra Front, under which they are not, sits in power in Damascus. In other words, there is no choice at all....

In 2015 German Vice Chancellor, Sigmar Gabriel, publicly accused the Saudis of funding Islamist extremism. In an interview with a German magazine, the Vice Chancellor said, “Wahhabi mosques are financed all over the world by Saudi Arabia. In Germany, many dangerous Islamists come from these communities.”

RT: Today there was a chemical gas attack in western Aleppo. Will the West reassess its support for these so called moderate groups if it is confirmed the rebels conducted it?

SS: We have to understand that for six years, the Western countries and the Gulf States invested in those moderate radical groups and so they cannot abandon them. They are like the Trojan Horse that they had put inside the Syrian domestic situation. They cannot pull out now and say: “Okay, we discovered that we were wrong, let’s get out and leave them.” They have invested in them and they will still use them in bargaining in the future of Syria. So, if there are any future negotiations on the fate of Syria, those people, these cards of radicals and moderates will be used on the negotiating table. I don’t think that they will get rid of them soon

5--Next Step in “Irreversible Decline”? Exxon Books 38% Lower Earnings, Blames Refining Margins

The report’s author, IEEFA’s director of finance, Tom Sanzillo, notes that Exxon has seen a 45-percent drop in its revenues over the past five years, accompanied by cuts on capex, declines in cash balances at the end of each year, and shrinking cash flows

6--Jihadist attacks against civilians in Aleppo could amount to war crimes: UN Envoy

De Mistura's statement came just hours before the jihadist rebels fired chemical weapons at the government-controlled Al-Hamdaniyah District in southwest Aleppo

7--The Chinese Century

The Chinese leaders slowly but methodically move towards a grandiose infrastructure project of the new Silk Road. ... The ambitious idea is focused on building a large-scale transport infrastructure: highways, pipelines to transport energy, airports, ports, high-speed rail infrastructure and telecommunications networks to enhance trade, as well as economic, financial and cultural cooperation between the Eurasian countries. This project promises to end the centuries-long domination of the periphery’s naval forces to Eurasia over the supercontinent.

8--Political warfare explodes in Washington

Twenty-five years of unending war and fifteen years of the “war on terror” have failed to secure US hegemony in the Middle East and only heightened fears within the ruling elite that US imperialism is losing ground to rivals such as Russia and China. The disarray of US policy in Syria, in particular, has led to bitter conflicts and recriminations over US policy, and demands for a major escalation of military violence, not only in Syria, but throughout the Middle East. These are combined with calls for a more aggressive confrontation with Russia and China.....

More than eight months ago, FBI agents presented plans for a more aggressive investigation of the foundation to career prosecutors in the Justice Department, only to have the proposal blocked on the grounds that there was insufficient evidence. The FBI offices nonetheless continued their investigations, which were intensified after the Clinton email investigation was wound up in July.

The Journal report suggests that a substantial faction within the FBI was either convinced that top FBI officials were covering up criminal activities on the part of Hillary and Bill Clinton, or that the FBI dissidents were politically motivated to use agency resources to undermine Hillary Clinton’s presidential campaign, or both.

When top officials in the FBI and Justice Department opposed these efforts, open rebellion followed, expressed in leaks to the Wall Street Journal centrally targeting FBI Deputy Director Andrew McCabe, whose wife was an unsuccessful Democratic candidate for state senate in Virginia last year. According to some press reports, Comey sent his letter to Congress last week because he was convinced the information would become public anyway through further leaks by FBI subordinates

9--US-backed jihadists use chemical weapons on civilians in aleppo

The Al Qaeda-affiliated militias have used the suspension of air strikes to mount their own offensive, which has been directed in large measure against the civilian population of government-controlled western Aleppo, where the vast majority of the city’s population lives.

The Britain-based Syrian Observatory for Human Rights, a monitoring group hostile to the Syrian government, reported Sunday that “rebel” shelling of western Aleppo had killed at least 41 civilians over a three-day period, at least 16 of them children. The Islamist militias have also used suicide car bombs in an attempt to breach government positions, also claiming civilian victims.

Among the “rebel” attacks Sunday was a barrage of shells containing toxic gases that struck the al-Hamadaniyeh area and the al-Assad residential suburb of Aleppo. According to reports, one person died from gas poisoning, while at least 35 people were sent to the hospital from the effects of chlorine gas.

In 2013, the Obama administration came to the brink of launching a direct military attack on Syria over allegations that the government of President Bashar al-Assad was responsible for a gas attack on the Damascus suburb of Ghouta, which supposedly violated a “red line” set by Obama over the use of poison gas.
The Syrian government denied its responsibility for the attack, which coincided with the arrival of United Nations weapons inspectors in Damascus to investigate previous gas attacks and provided a convenient pretext for US military intervention against the Assad regime.

In the end, Washington accepted a face-saving deal brokered by Russian President Vladimir Putin providing for the UN-supervised destruction of all of Syria’s chemical weapons stockpiles

Subsequent reports, including by the US investigative journalist Seymour Hersh, pointed to the Ghouta attack having been organized by the Turkish government working in league with the Al Qaeda-affiliated Al Nusra Front in order to blame it on Assad and provide a means for the Obama administration to override popular opposition to another US war in the Middle East and launch military action in Syria.
There is, needless to say, no sign within the US and other western media of the kind of moral outrage and “humanitarian concern” evinced over the Russian bombing of Aleppo or the fabricated charges of Syrian government gas attacks over the recent crimes carried out against the people of western Aleppo. Rather, the New York Times Saturday wrote approvingly that “A coalition of Syrian insurgent groups said it had begun a major offensive on Friday to break the months-long siege of eastern parts of Aleppo.”

The Times went on to advance an alibi for the fact that the forces backed by the US against the Assad government are led by Al Qaeda. “The rebels argue that they cannot afford to shun any potential allies while they are under fire, including well-armed and motivated jihadists, without more robust aid from their international backers,” the report stated, providing an argument for the CIA and the Pentagon pouring more heavy weaponry and anti-aircraft missiles into the hands of Al Qaeda

10--Selloff in global bond markets

There are two main reasons for the bond sell-off. The first is the expectation of a December interest rise by the US Federal Reserve, coupled with uncertainty over the future of the European Central Bank’s (ECB) quantitative easing (QE) program of bond purchases. The second is signs that inflation may be moving upward, which tends to depress bond prices. This is because bonds pay a fixed income and rising prices reduce the income stream and lower the value of the principal in real terms in the future.

Peter Chatwell, head of rates strategy at Mizuho International in London, told Bloomberg: “The premise of the selloff so far was higher inflation and uncertainty on what the ECB is going to do next and particularly about how the next leg of quantitative easing would look.”

(a weaker dollar after EU QE ends?) The ECB has said it will announce the future of its QE program, under which it purchases €80 billion worth of bonds per month, at the next meeting of its governing council in December. At present the program is due to end in March 2017. While an immediate cut-off appears unlikely, the ECB may decide to “taper” its purchases in the same way that the Fed did when it withdrew from bond purchases. Any move to extend the program without any indication of when it would start to be wound back would increase opposition from German financial authorities, who have been critical of the policy from the outset...

As the Wall Street Journal noted, the “weak point” for bonds is that their “previous superstrong performance … makes them unusually vulnerable.”

This means that relatively small movements can have a large effect. A rise in the rate of inflation, for example, from 1 percent to 2 percent would not have major consequences in the real economy. But it would have a significant impact on financial markets if it were matched by the same rise in yields.

According to an article published by Dow Jones, it has been estimated that such an increase would reduce the value of Bank of America Merrill Lynch’s Global Broad Market Index, which measures global bond prices, by 6.9 percent, that is, a loss of about $3.36 trillion.

Such calculations throw a spotlight on the explosive contradictions at the very centre of the monetary policies pursued by the major central banks in the eight years since the financial crisis.

The stated aim of their agenda has been to lift the real economy. However, rather than produce any tangible boost—investment, for example, remains well below pre-2008 trends in all the major economies—the most significant effect has been to create a bubble in both equity and bond markets. Consequently, if interest rates do start to rise, either because of an increase in inflation or an uptick in economic growth—the stated aim of QE measures—there is the risk of a major crisis as a result of massive losses incurred in finance markets.

Moreover, there is a significant difference between the situation today and that of eight years ago. In 2008 the central banks stood outside the financial markets. Today they are major players and would therefore be directly involved in any market meltdown

11--Hillary's number one contributor? Wall Street

12--Hillary Clinton is Wall Street’s preferred candidate: Financial execs pouring millions into her campaign to defeat Trump

Wall Street has raised $23 million for Clinton, reports the WSJ. Many who backed Rubio and Bush now support Hillary

It’s official: Hillary Clinton is the preferred presidential candidate of Wall Street.

As it looks more and more like the 2016 presidential election will be between Hillary Clinton and Donald Trump, Wall Street is making it clear which side it’s on.
Wall Street has raised nearly $23 million for Clinton this election. At least $4.2 million from Wall Street has gone into Clinton’s presidential campaign, and another $18.7 million has gone to the super PAC backing her, The Wall Street Journal reported Sunday

Sunday, October 30, 2016

Today's links

1--Inflation, Long Quiescent, Begins to Stir --Fed’s preferred measure reached a two-year high in the third quarter

Nonetheless, it could portend a significant repricing in financial markets, which had come to assume inflation would be too low forever. Since early July the U.S. 10-year Treasury yield (which moves in the opposite direction to price) has climbed half a percentage point to 1.85%. Yields in other countries have risen somewhat less. ...

Wage growth is still weak, but less weak than it was. The employment cost index released by the Labor Department Friday showed that excluding jobs paid via incentives, such as sales commissions, wages were up 2.4% in the third quarter from a year earlier, the fastest since 2009. Though well below the 3% to 3.5% that prevailed before the crisis, current wage growth is roughly in line with the sluggish pace of productivity growth.

Another potential worry is inflation expectations. On Friday, the University of Michigan said consumers’ long-term expectations had slipped to 2.4%, the lowest on record. However, this measure has been sliding for a while and this is because a minority of people who had expected runaway inflation have thrown in the towel. A growing share now expect inflation of exactly 2%. That leads Goldman to believe the public’s views on inflation really haven’t changed much in the past decade, a view top Fed officials share....

That same week, Fed Chairwoman Janet Yellen spoke approvingly of allowing unemployment to fall to levels typically associated with accelerating inflation. to undo some of the damage that years of joblessness have done. And in September, the Bank of Japan committed to not just meeting but exceeding its 2% target.
Of course, aiming for higher inflation is one thing; achieving it another. The Bank of Japan and the European Central Bank both pushed short-term interest rates below zero and bought large quantities of bonds in an effort to spur lending, growth and prices, but the costs of those policies are rising. 
Zero to negative rates are crushing banks’ lending margins, which could undermine their ability to lend. One reason bond yields now are rising is a belief that the ECB and BOJ want to protect their banks from further pressure.

Even as central banks lose their appetite for stimulus, elected governments are rediscovering theirs. Governments in Britain and Japan have relaxed their budgets, and many think the U.S. is likely to as well, regardless of who wins the presidential election. Morgan Stanley predicts fiscal policy will add to growth in the developed economies next year, for the first time since 2010...

While higher inflation and more fiscal stimulus portend more upward pressure on interest rates, there still seems little chance they will get to the 4% or above that investors once took for granted.
The U.S. grew just 1.5% in the year through the third quarter, the Commerce Department reported Friday, which may be the new trend given the drag from an aging population and lackluster productivity. Sluggish growth saps investment and borrowing and limits how high interest rates can go.
The expansion is also getting old, suggesting odds of a recession are also rising. The Fed may be on the verge of getting inflation back to normal, but getting growth back to normal remains as elusive as ever.

2--Sorry, but the economy's growth spurt isn't going to last--excluding "transitory" effects, the actual growth rate would have been closer to the 1.5 percent rate of the past four quarters.

The U.S. economy grew in the third quarter at its fastest pace in two years, due largely to factors that are unlikely to last.
Gross domestic product increased at a 2.9 percent rate, above expectations and at the best rate since the 5 percent posted in the third quarter of 2014. The positive surprise comes as the Fed contemplates its second interest rate hike in more than 10 years, and Americans are set to elect a new president in less than two weeks.
However, a look under the hood shows that the U.S. is likely stuck in the same growth trap in which it has found itself since the Great Recession ended in mid-2009.
Many of the gains came due to a surge in soybean exports.
Soybeans? Yes, there has been a record bumper crop this year in the U.S., and strong demand from China helped fuel an export bonanza. However, that's not expected to last, and the U.S. also is likely to face competition in the market.
But there were other factors besides soybeans not to like in this report.

'Nothing here to write home about'

Consumer spending cooled to 2.1 percent from 4.3 percent in the previous quarter, residential investment tumbled by 6.2 percent, equipment purchases declined by 2.7 percent and the growth rate of final sales to domestic purchasers increased by just 1.4 percent.
"Accordingly, a reasonable case could be made that this is actually a disappointing GDP report," Paul Ashworth, chief U.S. economist at Capital Economics, said in a client note.
In addition to the soybean-led export growth, the GDP report also was aided by a 0.6 percentage point gain in inventories.

Excluding "transitory" effects, the actual growth rate would have been closer to the 1.5 percent rate of the past four quarters, even including Friday's reading, according to David Rosenberg, chief economist and strategist at Gluskin Sheff.
"In other words, nothing here to write home about," he said in his morning note.

Regardless of the outcome of the election, the environment for investment remains weak due to a combination of higher wages and weak pricing power for firms, which have caused profits to decline during the past two years."
A separate report from the Labor Department showed compensation costs for the quarter rose 2.3 percent from the year-ago rate, compared with a 2 percent gain registered in September 2015

3--Year over year growth consumer credit

4--Labor force growth has slowed appreciably in the 21st century and particularly after the crisis. The slowdown is a chief factor explaining a slowdown in GDP. Since 2009, the labor force has grown at just a 0.5% pace


Demographics pay a large role in potential GDP growth and additionally on the supply/demand for savings/investment. Having a simple demographic measure such as that has historically had a degree of accuracy, which offers a neat tool for gaining insight. The aging US population and the slowdown in immigration are captured indirectly in the labor force statistic.

We concluded at the time:
"If indeed Japan fails to encourage "wage growth" in what seems to be a "tighter labor" market, given the demographic headwinds the country faces, we think Japan might indeed be on the "Road to Nowhere. Unless the Japanese government "tries harder" in stimulating "wage growth", no matter how nice it is for Japan to reach "full-employment", the "deflationary" forces the country faces thanks to its very weak demographic prospects could become rapidly "insurmountable". - source Macronomics, June 2016
Either you focus on labor or on capital, end of the day, Japan has to decide whether it wants to favor "wall street" or "main street".

Our final chart displays US debt growth relative to EBITDA and comes from JP Morgan's Credit and Market Outlook and Strategy note from the 20th of October:
"The ongoing deterioration of credit fundamentals remains the key market risk, however. Debt issuance continues to grow much faster than EBITDA, even if the expected uptick in revenue growth this quarter materializes. Investors are aware of this, but are focused on the strong technicals outweighing these risks. This has been the right view since 1Q of this year. However, our sense is that some investors are uncomfortable with market valuation given these technicals, and if there is a catalyst for a risk off market, this concern about fundamentals would reassert itself.

5--Wall Street banks look for fiscal stimulus in 2017

6--The Five Lamest Excuses for Hillary Clinton’s Vote to Invade Iraq

7--Big Central Bank Assets Jump Fastest in 5 Years to $21 Trillion 

Today's Links

Today's Quote: “Information from a wide range of sources... makes it clear that every armed anti-Assad organization unit in those provinces [of Idlib and Aleppo] is engaged in a military structure controlled by [Al Qaeda’s] Nusra militants. All of these rebel groups fight alongside the Nusra Front and coordinate their military activities with it. …At least since 2014 the Obama administration has armed a number of Syrian rebel groups even though it knew the groups were coordinating closely with the Nusra Front, which was simultaneously getting arms from Turkey and Qatar.” Gareth Porter explains that the US supports al Qaida

“The greatest danger to Israel is by the strategic arc that extends from Tehran, to Damascus to Beirut. And we saw the Assad regime as the keystone in that arc...We always wanted Bashar Assad to go, we always preferred the bad guys who weren’t backed by Iran to the bad guys who were backed by Iran.” He said this was the case even if the “bad guys” were with Al Qaeda...Oren said. Israel’s Ambassador to the United States Michael Oren,

"Even many months after the Bush administration itself acknowledged that Iraq had neither WMDs nor ties to Al-Qaeda, Clinton declared in a speech at George Washington University that her support for the authorization was still “the right vote” and one that “I stand by.” Similarly, in an interview on Larry King Live in April 2004, when asked about her vote despite the absence of WMDs or al-Qaeda ties, she acknowledged, “I don’t regret giving the president authority.”...

If Clinton were elected president despite having voted to give President Bush the authority, based on false pretenses, to launch a war of aggression — in violation of the UN Charter, the Nuremberg Principles, and common sense — what would stop her from demanding that Congress give her the same authority? Stephen Zunes

1--Putin imposes Russian no-fly zone in Syria

I don’t believe that the USN or the USAF will risk flying into Russian controlled airspace or, if it does, this will be a short-lived experiment. I believe that the Russian presence in Syria will make any attack on Syria a “missile only” attack. Unless the Americans take down the Russian air defenses, which they could only if they want to start WWIII, US aircraft will have to stay outside the Syrian skies. And that means that the Russians have basically created their own no-fly zone over Syria and a US no-fly zone is now impossible to achieve

2--Eric Margolis: What is ISIS?

Islamic State(IS), the defender of Mosul, is a paper tiger, blown out of all proportion by western media. IS is, as this writer has been saying for years, an armed mob made up of 20-something malcontents, religious fanatics, and modern-day anarchists. At its top is a cadre of former Iraqi Army officers with military experience.

These former officers of Saddam Hussain are bent on revenge for the US destruction of their nation and the lynching of its late leader. But IS rank and file has no military training, little discipline, degraded communications, and ragged logistics.

In fact, today’s Islamic State is what the Ottoman Empire used to term, ‘bashi-bazouks,” a collection of irregular cut-throats and scum of the gutter sent to punish and terrorize enemies by means of torture, rapine, looting and arson.
...ISIS was mostly created by the US and its allies as a weapon to be used against Syria’s government – just as the Afghan mujahadin were used by the US and the Saudis to overthrow the Soviet-backed Afghan government. Israel tried the same tactics by helping create Hamas in Palestine and Hezbullah in Lebanon. Both were cultivated to split the PLO.
ISIS is an ad hoc movement that wants to punish the West and the Saudis for the gross carnage they have inflicted on the Arab world.

3--Whither Mosul? Cockburn

The current multi-pronged offensive aimed at taking Mosul is producing a similar situation as different countries, parties and communities vie to fill the vacuum they expect to be created by the fall of Isis, just as in 2003 the vacuum was the result of the fall of Saddam Hussein.

The different segments of the anti-Isis forces potentially involved in seizing Mosul – the Iraqi army, Kurds, Shia and Sunni paramilitaries, Turks – may be temporary allies, but they are also rivals. They all have their own very different and conflicting agendas. Presiding over this ramshackle and disputatious alliance is the US, which is orchestrating the Mosul offensive and without whose air power and Special Forces there would be no attack

4--"You're not going anywhere: Iraqi forces block ISIL’s escape route to Syria

5--The militants’ attempt to break the Aleppo siege can be described as failed. The government forces have an upper hand in the ongoing trench warfare in non-populated areas of western Aleppo due to the advantage in air power and artillery

6--The Kurds will fight our wars for us, says US General  -- “The US commander of the campaign against Islamic State says the only group capable and ready for such a battle is the Syrian Democratic Forces, made up largely of Kurdish fighters.” Uh, huh

ith the battle for the Iraqi city of Mosul barely begun, the US and its allies say they need to move within weeks on the other remaining Islamic State stronghold, Raqqa in Syria. The trouble is that no one can agree on who should do the actual fighting.

Did you catch that “who should do the actual fighting” line? Washington, of course, is not asking any real question, only using its media echo-chambers to make it seem as though there is an actual, genuine debate over the issue.

It only takes a few lines for Bloomberg to sell its little piece of propaganda: “The US commander of the campaign against Islamic State says the only group capable and ready for such a battle is the Syrian Democratic Forces, made up largely of Kurdish fighters.”...

Empowering the Kurds at this moment in both Syria and Iraq’s history equates to a de facto Balkanization of the Levant. Beyond that, such a move represents a direct attack against Turkey’s territorial integrity. Something tells me Ankara will have a problem with that..

The Kurds were always Washington’s wild card should radicals... sorry – moderates, fail to depose Syrian President Bashar Assad. Incidentally, the Kurds could also carry enough of a blow to Ankara that one pesky Turkish President Recep Erdogan could be deposed. It’s not like the US tried to stage a coup, right?
America’s sudden Kurdish epiphany is really not – rather, it is a last ditch attempt to manifest and project a very US-driven political reality onto the Middle East at a time when resistance has become a palpable geopolitical movement.
Neither Syria nor Iraq need the United States to fight Islamic radicalism. I would personally argue that both nations were reborn in their resistance against this abominable form of theo-fascist imperialism which is Wahhabi-extremism.
And so, what is a desperate neocon to do but to further fan unrest?
Svetlana Kalmykova, a columnist for Sputnik news, put it beautifully when she wrote: “The United States is trying to secure a firmer footing in Syria at a time when Al-Nusra Front and similar organizations are under threat of being destroyed. They are desperately fighting against the advancing Syrian Arab Army in Aleppo."
So next time you hear a US official mention Raqqa, Mosul, and Kurds in the same sentence, hear it as: imperial desperation.

7--‘Saudi Arabia one of top repressive countries’: What’s behind US special ties with Riyadh?

Saudi Arabia has become by far the number one purchaser of US weapons, with $115 billion deals under the Obama administration alone. Congress has just rubber-stamped every single one, says author and activist Medea Benjamin. ..

Saudi Arabia carried out 158 executions, 63 for non-violent drug crimes last year, often through public beheadings. Early this year, it executed 47 men for terrorism-related offenses, including the prominent Shia cleric Sheikh Nimr al-Nimr. It practices gender apartheid against women, who are not allowed to drive, are banned from most jobs, and are controlled by male guardians. It prohibits freedom of expression, including freedom of religion. Homosexuals can be put to death....

One of the most repressive countries in the world, where there is no freedom of assembly, freedom of speech, no political parties, no unions allowed, where dissent  is treated as treason. You can be beheaded for insulting Islam, for insulting the King, for spreading atheism, for being convicted of being a homosexual, for sorcery. There is discrimination against entire groups of people like women who are not only forced to fully cover in public, it is the only country where women aren't allowed to drive. A guardianship system where women have to have a male legal guardian from the day they're born to the day they die. It is the most sex-segregated society in the world. Immigrant population, which is huge – of a 30 million population, 10 million are migrant workers, many of whom are coming from some of the poorest countries in the world and are treated like indentured servants

8--Human Rights Council Elections Bring UN Into Disrepute

9--Washington plans to use Kurds to secure parts of E Syria

The United States said that Kurds are now the only force capable of launching an offensive on the Syrian city of Raqqa, the de-facto capital of the Daesh caliphate. At the same time, the involvement of Kurdish forces in the operation could also indicate Washington’s support for the federalization of Syria.
The Pentagon’s reliance on Kurds to liberate Raqqa may indicate that the US is actually ready to support the federalization of Syria, said Alexander Babakov, a member of the Foreign Affairs Committee at the upper house of the Russian parliament.

"It would be hard to imagine that American plans on Raqqa are aimed only to bring peace to Syria. It cannot be ruled out by using Kurds to liberate the city from Daesh the US wants to support the federalization of Syria, including establishing an autonomous Kurdish region," Babakov told the Russian newspaper Izvestia. Earlier, Stephen Townsend, commander of US forces in Iraq and Syria, said that the Kurdish Syrian Democratic Forces (SDF) would be the backbone of the Raqqa offensive

The Americans have been trying for a long time to persuade Turkey to work with Kurdish forces in the operation to liberate Raqqa. However, it's impossible. Turkey won't agree to that, given that Ankara regularly calls the Syrian Kurdish PYD 'an offshoot of the PKK,'" political analyst Serhat Erkmen, director of the Center of Middle Eastern Strategic Studies (ORSAM) at Istanbul-based 21st Century Turkey Institute, told Sputnik Turkiye.

Co-chair of the Democratic Union Party (PYD) Salih Muslim stressed that the liberations of Raqqa was the priority goal for Kurds.

In an exclusive interview with Sputnik Turkiye in May, Muslim emphasized that the city was not only Daesh's political capital, but also a critically important military and logistical center for the terrorists. "This is a constant threat to all of Rojava [a Kurdish region in northern Syria]. Therefore, the decisive liberation of Raqqa from the jihadists is vitally important for the Rojava. The goal of this operation is to eliminate the threat emanating from the area. The operation had been planned for long time," he said. By placing bets on the Kurds in this war, Washington has several goals at the same time, Syrian political analyst Taleb Zayfa told Izvestia. "First of all, the US is mounting pressure on Turkey, thus trying to prevent further rapprochement between Ankara and Moscow. At the same time, Washington understands that sooner or later the Syrian Army will liberate Aleppo. So, the US and its allies want to take control over a different region in Syria. The US wants to have leverage on Damascus and Moscow over a Kurdish autonomy which would also include Raqqa," the expert suggested
Recently, Turkey announced it would expand its military operation in northern Syria to take control over Al-Bab and Manbij.

Moscow said it would not oppose Ankara’s counterterrorism efforts in Syria but stressed that Syrian’s territorial integrity should be observed, according to Izvestia. However, the move has faced fierce opposition from the Syrian government as well as Syrian Kurds

Grudgingly, The New York Times, deep inside Saturday’s newspaper, acknowledged at least part of the troubling reality, that the U.S. government has, in effect, allied itself with Al Qaeda terrorists.....

Occasionally, the reality of Al Qaeda’s importance in the rebellion breaks through, even in the mainstream U.S. media, although usually downplayed and deep inside the news pages, such as the A9 article in Saturday’s New York Times by Hwaida Saad and Anne Barnard describing a rebel offensive in Aleppo. It acknowledges:

“The new offensive was a strong sign that rebel groups vetted by the United States were continuing their tactical alliances with groups linked to Al Qaeda, rather than distancing themselves as Russia has demanded and the Americans have urged. … The rebels argue that they cannot afford to shun any potential allies while they are under fire, including well-armed and motivated jihadists, without more robust aid from their international backers.” (You might note how the article subtly blames the rebel dependence on Al Qaeda on the lack of “robust aid” from the Obama administration and other outside countries – even though such arms shipments violate international law.)

The U.S./Al Qaeda Alliance
In other words, the U.S. government and its allies have smuggled sophisticated weapons into Syria to arm rebels who are operating in support of Al Qaeda’s new military offensive against Syrian government forces in Aleppo. By any logical analysis, that makes the United States an ally of Al Qaeda.
The Times article also includes a quote from Genevieve Casagrande, a Syria research analyst from the Institute for the Study of War, a neoconservative “think tank” that has supported more aggressive U.S. military involvement in Syria and the Middle East.

“The unfortunate truth, however, is that these U.S.-backed groups remain somewhat dependent upon the Al Qaeda linked groups for organization and firepower in these operations,” Casagrande said.

The other unfortunate truth is that the U.S.-supplied rebels have served, either directly or indirectly, as conduits to funnel U.S. military equipment and ordnance to Al Qaeda.
One might think that the editors of The New York Times – if they were operating with old-fashioned news judgment rather than with propagandistic blinders on – would have recast the article to highlight the tacit U.S. alliance with Al Qaeda and put that at the top of the front page.

Still, the admissions are significant, confirming what we have reported at for many months, including Gareth Porter’s article last February saying: “Information from a wide range of sources, including some of those the United States has been explicitly supporting, makes it clear that every armed anti-Assad organization unit in those provinces [of Idlib and Aleppo] is engaged in a military structure controlled by [Al Qaeda’s] Nusra militants. All of these rebel groups fight alongside the Nusra Front and coordinate their military activities with it. …

“At least since 2014 the Obama administration has armed a number of Syrian rebel groups even though it knew the groups were coordinating closely with the Nusra Front, which was simultaneously getting arms from Turkey and Qatar.”

What the article also makes clear in a hazy kind of way is that Al Qaeda’s affiliate, the recently renamed Nusra Front, and its jihadist allies, such as Ahrar al-Sham, are waging the brunt of the fighting while the CIA-vetted “moderates” are serving in mostly support roles. The Times reported:

“The insurgents have a diverse range of objectives and backers, but they issued statements of unity on Friday. Those taking part in the offensive include the Levant Conquest Front, a militant group formerly known as the Nusra Front that grew out of Al Qaeda; another hard-line Islamist faction, Ahrar al-Sham; and other rebel factions fighting Mr. Assad that have been vetted by the United States and its allies.”

The article cites Charles Lister, a senior fellow and Syria specialist at the Middle East Institute in Washington, and other analysts noting that “the vast majority of the American-vetted rebel factions in Aleppo were fighting inside the city itself and conducting significant bombardments against Syrian government troops in support of the Qaeda-affiliated fighters carrying out the brunt of front-line fighting.”

Lister noted that 11 of the 20 or so rebel groups conducting the Aleppo “offensive have been vetted by the C.I.A. and have received arms from the agency, including anti-tank missiles. …

“In addition to arms provided by the United States, much of the rebels’ weaponry comes from regional states, like Turkey, Qatar and Saudi Arabia, Mr. Lister said, including truck-borne multiple-rocket launcher systems and Czech-made Grad rockets with extended ranges.”

11--Hillary justifies Iraq War invoking all the lies created by neocons to support invasion and regime change -- 1 minute "shocking" video

In the four years since the inspectors left, intelligence reports show that Saddam Hussein has worked to rebuild his chemical and biological weapons stock, his missile delivery capability, and his nuclear program. He has also given aid, comfort and sanctuary to terrorists including al Qaida members. it is clear however, that if left unchecked, Saddam Hussein will continue to increase his capacity to wage biological and chemical warfare and will keep trying to develop nuclear weapons. Should he succeed in that endeavor he could alter the political and security landscape of the Middle East which as we know all too well, effects American security. This is a very difficult vote. This is probably the hardest decision I've ever had to make. Any vote that could lead to war, should be hard. But I cast it with conviction."

12--"Iraq doesn’t exist anymore" Nir Rosen

Iraq doesn’t exist anymore. That’s the most important thing to remember. There is no Iraq. There is no Iraqi government and none of the underlying causes for the violence have been addressed, such as the mutually exclusive aspirations of the rival factions and communities in Iraq.....The smartest Iraqis-the best educated, the professionals, the middle and upper classes-have all left or been killed. So the society is destroyed. So there is no hope for a non-sectarian Iraq now....

There are no good options for Iraq; no solutions. The best we can hope for is that the conflict won’t spread. ...

there was a incident, in Falluja in April 2003, where US troops fired on a peaceful demonstration and killed over a dozen unarmed civilians. This, more than anything else, radicalized the people and turned them against the Americans.
In the spring of 2004, four (Blackwater) American security contractors were killed in Falluja. Their bodies were burned and dismembered by an angry crowd. It was an insult to America’s pride. In retaliation, the military launched a massive attack which destroyed much of the city and killed hundreds of civilians. The US justified the siege by saying that it was an attack on foreign fighters that (they claimed) were hiding out in terrorist strongholds. In truth, the townspeople were just fighting to defend their homes, their city, their country and their religion against a foreign occupier....

In late 2004, the Americans completely destroyed Falluja forcing tens of thousands of Sunnis to seek refuge in western Baghdad. This is when the sectarian clashes between the Sunnis and Shiites actually began. The hostilities between the two groups escalated into civil war. Falluja has now become a symbol throughout the Muslim world of the growing resistance to American oppression....

To many people it seems like the US is at war with Muslims. This is just radicalizing more people and eroding America’s power and influence in the world. But, then, maybe that’s not such a bad thing.

13--“There is no solution. We’ve destroyed Iraq and we’ve destroyed the region, and Americans need to know this.”
Nir Rosen; interview with Amy Goodman, “Democracy Now”

Sidney Blumenthal offered these sobering observations in his article, “Washington’s Political Cleansing”:
“Bush’s surge, is a military plan that cannot produce its stated political outcome and will instead further unleash the forces he claims will be controlled. His offensive to subdue the Sunni insurgents is already accelerating the ethnic cleansing of Baghdad by the Shia militias, which, rather than being contained, are further empowered.”...

Dahr Jamail has drawn the same conclusion in his latest article, “Southern Tribes are joining the Armed Resistance”:
“A political analyst in Baghdad told IPS that he believes occupation forces have been working in tandem with death squads. We have been observing American and British occupation forces supporting those death squads all over Iraq, but we are still hoping for reconciliation.'

Nir Rosen makes this point out in a recent interview with Amy Goodman on Democracy Now:
“For Sunnis to ever imagine that the Ba’athists could be restored to power, or that the Americans really matter in Iraq anymore is na├»ve in the extreme The Shias own Iraq now. Sunnis can never get it back. There’s nothing Americans can do about this.”
Rosen’s dark-forecast for Iraq is even grimmer than Blumenthal’s or Jamail’s. He says:
“What you’re going to see in Iraq I think, in Baghdad especially, is a virtual genocide of the Sunnis. And the Americans are not going to be able to stop it.You’ll find a day when there are no Sunnis left in Baghdad.”

Nir Rosen said it best:
“There is no solution. We’ve destroyed Iraq and we’ve destroyed the region, and Americans need to know this. This isn’t Rwanda where we can just sit back and watch the Hutus and Tutsies kill each other, and be like wow, this is terrible should we do something?’ We destroyed Iraq. There was no civil war in Iraq until we got there. And there was no civil war until we took certain steps to pit Sunnis against Shias. And now, it is just too late. But, we need to know that we are responsible for what is happening in Iraq today. I don’t think Americans are aware of this. We’ve managed to make Saddam Hussein look good even to Shias at this point. And what we’ve managed to do is not only destabilize Iraq, but Jordan, Saudi Arabia, Iran. This is going to spread for decades, the region won’t recover from this, I think, for decades. And Americans are responsible.”

CLINTON: Look, I think that the decision to go to war in Iraq was a mistake. And I have said that my voting to give President Bush that authority was, from my perspective, my mistake. I also believe that it is imperative that we learn from the mistakes, like after- action reports are supposed to do, and so we must learn what led us down that path so that it never happens again. I think I'm in the best possible position to be able to understand that and prevent it.

Hillary Clinton: No regret on Iraq vote 2004

Sen. Hillary Rodham Clinton said she is not sorry she voted for a resolution authorizing President Bush to take military action in Iraq despite the recent problems there but she does regret "the way the president used the authority."
"How could they have been so poorly prepared for the aftermath of the toppling of Saddam Hussein?" the New York Democrat asked Tuesday night on CNN's "Larry King Live."..

No, I don't regret giving the president authority because at the time it was in the context of weapons of mass destruction, grave threats to the United States, and clearly, Saddam Hussein had been a real problem for the international community for more than a decade

---The Five Lamest Excuses for Hillary Clinton’s Vote to Invade Iraq

unfettered large-scale weapons inspections had been going on in Iraq for nearly four months at the time the Bush administration launched the March 2003 invasion. Despite the UN weapons inspectors having not found any evidence of WMDs or active WMD programs after months of searching, Clinton made clear that the United States should invade Iraq anyway. Indeed, she asserted that even though Saddam was in full compliance with the UN Security Council, he nevertheless needed to resign as president, leave the country, and allow U.S. troops to occupy the country. “The president gave Saddam Hussein one last chance to avoid war,” Clinton said in a statement, “and the world hopes that Saddam Hussein will finally hear this ultimatum, understand the severity of those words, and act accordingly.”

When Saddam refused to resign and the Bush administration launched the invasion, Clinton went on record calling for “unequivocal support” for Bush’s “firm leadership and decisive action” as “part of the ongoing Global War on Terrorism.” She insisted that Iraq was somehow still “in material breach of the relevant United Nations resolutions” and, despite the fact that weapons inspectors had produced evidence to the contrary, claimed the invasion was necessary to “neutralize Iraq’s weapons of mass destruction.”...

Hillary Clinton, on the other hand, stood among the right-wing minority of Democrats in Washington.
The Democrats controlled the Senate at the time of the war authorization. Had they closed ranks and voted in opposition, the Bush administration would have been unable to launch the tragic invasion — at least not legally. Instead, Clinton and other pro-war Democrats chose to cross the aisle to side with the Republicans...

But she decided to support going to war anyway. She even rejected the advice of fellow Democratic senator Bob Graham that she read the full National Intelligence Estimate, which would have further challenged some of the Bush administration’s claims justifying the war.
It was not, therefore, simply a “mistake,” or a momentary lapse of judgment. Indeed, in her own words, she cast her vote “with conviction.”...

Nor was pressure likely coming from Clinton’s own constituents. Only a minority of Democrats nationwide supported the invasion, and given that New York Democrats are more liberal than the national average, opposition was possibly even stronger in the state she purported to represent. Additionally, a majority of Americans polled said they would oppose going to war if Saddam allowed for “full and complete” weapons inspectors, which he in fact did....

She thought Iraq had ‘weapons of mass destruction’ and was supporting Al-Qaeda.”
This is excuse is problematic on a number levels.
Before the vote, UN inspectors, independent strategic analysts, and reputable arms control journals all challenged the Bush administration’s claims that Iraq had somehow rebuilt its chemical and biological weapons programs, had a nuclear weapons program, or was supporting al-Qaeda terrorists.

Virtually all of Iraq’s known stockpiles of chemical and biological agents had been accounted for, and the shelf life of the small amount of materiel that hadn’t been accounted for had long since expired. (Some discarded canisters from the 1980s were eventually found, but these weren’t operational.) There was no evidence that Iraq had any delivery systems for such weapons either, or could build them without being detected. In addition, a strict embargo against imports of any additional materials needed for the manufacture of WMDs — which had been in effect since 1990 — made any claims that Iraq had offensive capability transparently false to anyone who cared to investigate the matter at that time.
Most of the alleged intelligence data made available to Congress prior to the war authorization vote has since been declassified. Most strategic analysts have found it transparently weak, based primarily on hearsay by Iraqi exiles of dubious credibility and conjecture by ideologically driven Bush administration officials....

Similarly, a detailed 1998 report by the International Atomic Energy Agency indicated that Iraq’s nuclear program appeared to have been completely dismantled by the mid-1990s, and a 2002 U.S. National Intelligence Estimate made no mention of any reconstituted nuclear development effort. So it’s doubtful Clinton actually had reason to believe her own claims that Iraq had a nuclear weapons program.

Additionally, there was no credible evidence whatsoever that the secular Baathist Iraqi regime had any ties to the hardline Islamist group al-Qaeda, yet Clinton distinguished herself as the only Senate Democrat to make such a claim. Indeed, a definitive report by the Department of Defense noted that not only did no such link exist, but that none could have even been reasonably suggested based on the evidence available at that time.

Moreover, even if Iraq really did have “weapons of mass destruction,” the war would have still been illegal, unnecessary, and catastrophic.
Roughly 30 countries (including the United States) have chemical, biological, or nuclear programs with weapons potential. The mere possession of these programs is not legitimate grounds for invasion, unless one is authorized by the United Nations Security Council — which the invasion of Iraq, pointedly, was not. If Clinton really thought Iraq’s alleged possession of those weapons justified her support for invading the country, then she was effectively saying the United States somehow has the right to invade dozens of other countries as well....

But here’s the kicker: Clinton stood by the war even after these claims were definitively debunked.
Even many months after the Bush administration itself acknowledged that Iraq had neither WMDs nor ties to Al-Qaeda, Clinton declared in a speech at George Washington University that her support for the authorization was still “the right vote” and one that “I stand by.” Similarly, in an interview on Larry King Live in April 2004, when asked about her vote despite the absence of WMDs or al-Qaeda ties, she acknowledged, “I don’t regret giving the president authority.”
No Excuses...

If Clinton were elected president despite having voted to give President Bush the authority, based on false pretenses, to launch a war of aggression — in violation of the UN Charter, the Nuremberg Principles, and common sense — what would stop her from demanding that Congress give her the same authority?

Friday, October 28, 2016

Today's links

Today's quote:  "If the American people are really so unbelievably stupid that they think lewd remarks about women are more important than avoiding nuclear war, the American people are too stupid to exist. They will deserve the mushroom clouds that will wipe them and everyone else off the face of the earth." Paul Craig Roberts

"The Predatory State is an economic system where entire sectors have been built up to feast upon public systems built originally for public purposes and largely serving the middle class. The corporate republic simply administers the spoils system. On a day-to-day basis, the business of its leadership is to deliver favors to their clients. These range from coal companies to sweatshop operators to military contractors."  James Kenneth Galbraith, The Predatory State, (2008), Free Press Publishers, p. 146-7

1--Syria, Iraq are Turkey’s responsibility,’ exclaims Erdogan, demands Mosul, parts of Asia, Balkans and Middle East

2--Investors’ New Message to Global Governments: Spend More---Fiscal stimulus gains backers as central-bank policies fail to ignite growth; ‘we are moving into a new world’

U.S. Treasury Secretary Jacob Lew said in September that policy makers are “no longer debating growth versus austerity, but rather how to best employ fiscal policy to support our economies.” The IMF has also moved beyond the “expansionary austerity” it championed in 2010...

People have gone from believing stimulus is evil and you should balance your books to the realization that nothing is working,” said Mike Riddell, London-based fund manager at Allianz Global Investors....

On top of skepticism about its power to steer output and inflation, monetary policy is shouldering blame for its effect on banks. By pulling interest rates into negative territory and pushing down long-term yields, central banks have torpedoed the profitability of private lenders.
“It’s not really a win-win situation to keep doing this,” said James Athey, portfolio manager at Aberdeen Asset Management.
In the eurozone and Japan, bank shares have dropped roughly 20% and 29%, respectively, since the start of the year. Fiscal stimulus could change that.

there is growing evidence that central-bank policy is underwhelming: Households and businesses haven’t gone on a spending binge. What’s more, the policy has come at a cost to commercial banks, which have seen their profits compressed at a time when many are already weak.

So policy makers are toying with the old idea of having the government do the spending. Such a change, were it to come to fruition, isn’t likely to have the same salutary effect on stocks and bonds as central-bank stimulus, which relies on pushing up the value of financial assets.

“We are leaving this very certain, very comfortable investment environment,” said Guy Monson, chief investor for almost 20 years at London-based Sarasin & Partners LLP. “We are moving into a new world.”...

bonds have been the main beneficiaries of monetary stimulus. Since the start of the year, they are up 6.5% globally, figures by Bank of America Merrill Lynch show. They have even outperformed equities, traditionally riskier and higher-returning investments, which have gone up only 4.5%, according to MSCI....

Loose fiscal policy could mean higher bond yields, because central banks are expected to offset the inflationary effect of government spending by raising rates, or at least lowering them by less. Yields on bonds tend to follow interest rates.
Stronger global demand because of fiscal stimulus would help commodities, exporters and builders. Stocks more broadly might be mixed, because higher rates would weigh on them.
“If you had lots of fiscal expansion you could change the growth dynamics globally quite dramatically,” said Geoff Kendrick, economist at British bank Standard Chartered. “It would be a step back to somewhere normal.”

3--Surprise! US Intel Chief Confirms: Russia Not Behind Massive Online Attack

4--Turkey vows to press Syria offensive despite warning from pro-Assad forces

President Tayyip Erdogan said. "Let's make a joint fight against terrorist organizations. But Aleppo belongs to the people of Aleppo ... making calculations over Aleppo would not be right," he said in a speech in Ankara.

5--Hillary speaks:

“I’m going to continue to push for a no-fly zone and safe havens within Syria,” she vowed during last week’s debate with Donald Trump, “not only to help protect the Syrians and prevent the constant outflow of refugees, but to frankly gain some leverage on both the Syrian government and the Russians.”


Cooler heads may well prevail by the time she gets into office, not only because of the 70,000-plus military personnel who would be needed to institute such a “no-fly” policy, but because the advanced anti-aircraft systems that Russia has recently installed in Syria would raise the stakes immeasurably....

6--James K. Galbraith (2012), Inequality and Instability: A Study of the World Economy. p. 148; Cite in: "Muddling Towards the Next Crisis: James Kenneth Galbraith in conversation with The Straddler" at, Winter 2013 

  • Since the 1980s, the American business cycle has been based on financial and credit bubbles, and therefore on the enrichment, through the capital markets, of a very small number of people in a very few places. Truly we have become a 'trickle-down economy' — as we were not before. A rising tide may lift all boats, but recent business cycles have been more like waves, whereby certain sectors and areas ride the peaks before crashing to the shore. This is a sign, surely, not of the social evil of inequality per se but of the instability of bubble economies, closely associated with inequality of income, wealth, and power, for which we now pay a fearsome price.

  • 7--Brzezinski:   "In brief, for the United States, Eurasian geostrategy involves the purposeful management of geostrategically dynamic states and the careful handling of geopolitically catalytic states, in keeping with the twin interests of America in the short-term: preservation of its unique global power and in the long-run transformation of it into increasingly institutionalized global cooperation. To put it in a terminology that hearkens back to the more brutal age of ancient empires, the three grand imperatives of imperial geostrategy are to prevent collusion and maintain security dependence among the vassals, to keep tributaries pliant and protected, and to keep the barbarians from coming together."

    • Chapter 2, The Eurasian Chessboard, p. 40.
    The most immediate task is to make certain that no state or combination of states gains the capacity to expel the United States from Eurasia or even to diminish significantly its decisive arbitration role

    8--The Mosul Conundrum: Militants leave, but remain

    The idea of pushing out the militants with their families from the city is the right one, but the majority of them will not go anywhere. They are natives of Mosul or melt into the streets of the city. Having in their reserves capable IS fighters able to quickly mobilise, the Sunni leadership of Iraq is planning to begin their incorporation into its governing structure. The Islamic State (IS) is the result of Sunni discontent from its removal from economic levers of the administration, which happened as a result of the collapse of the Saddam Hussein regime and the usurpation of power in Iraq of Shiites and Kurds. All the while giving the process an appropriate religious-ideological form.

    The “movement” of 9000 fighters to Syria is doubtful

    9--Putin warns on Nukes, you tube

    10--US “pivot to Asia” in disarray

    11--Fed Inclined to Lift Rates If New President Adds Budget Bump

    12--Social inequality and the fight against capitalism

    13--Big Central Bank Assets Jump Fastest in 5 Years to $21 Trillion

    14--Plans to send heavier weapons to CIA-backed rebels in Syria stall amid White House skepticism

    Wednesday, October 26, 2016

    Today's Quote:   "The illusion of freedom will continue as long as it’s profitable to continue the illusion. At the point where the illusion becomes too expensive to maintain, they will just take down the scenery, they will pull back the curtains, they will move the tables and chairs out of the way and you will see the brick wall at the back of the theater.”  Frank Zappa

    "Trumps principle, and I think personal position, is leaning towards peaceful resolution of conflicts. Clinton's preference is clearly, as her history shows, escalation and general belligerence. It is too risky to vote for her.", Moon of Alabama

    "Obama did not acknowledge that the ACA imposes no serious restraints on the insurance companies, pharmaceutical firms or hospital chains, and uses financial coercion to drive people to buy bare-bones plans with high out-of-pocket costs. Nor did he take note of the intensified assault on health benefits by employers, both private and public, across the US.

    Obama boasted, “All told, about another 10 percent of the country now have coverage.” He was silent on the national scandal of 29 million Americans remaining uninsured." WSWS

    1--Are today’s homebuyers considering the impact of rising mortgage rates?

    Mortgage interest rates averaged less than 4% over the last 5 years, and many people believe this aberration is normal. Most people assume that either mortgage interest rates will remain low forever, or if rates rise, it won’t impact housing. While I agree that mortgage interest rates will likely remain very low for a very long time, I believe this because the impact of rising rates on housing would be huge, so it simply won’t be allowed to occur.

    Belief in permanent, rapid home price appreciation

    Homebuyers place too much faith in boundless home price appreciation. In my opinion, this creates four main problems:
    • buyers fail to recognize how much past appreciation was manufactured,
    • buyers neglect to consider their take-out buyer will not be as highly leveraged,
    • buyers underestimate the risk of future downturns, and
    • buyers distort their expectation of future appreciation...
    The graph above illustrates the impact of 25 years of falling interest rates. Look carefully at the cost of ownership line. Notice that in 1989-1991, the monthly cost of ownership was about $1,900 per month at the peak of that housing bubble. In 2012, the cost of ownership was less than $1,900 per month. Twenty-four years apart, the cost of ownership on a monthly basis was lower, yet house prices were nearly double. Why is that? Because in 1989, mortgage interest rates were north of 10%, and in 2012, they were 3.5%.
    All the appreciation from 1989 to 2012 was a direct result of declining interest rates. All of it....

    By lowering mortgage rates, the federal reserve pulled-forward seven to ten years of appreciation. The market must endure seven to ten years of below average appreciation to balance the equation, or as a statistician would say, we must revert to the mean

    2---Russia-Turkey Intelligence Sharing in Syria Signifies Major Changes in Relations

    3--EU ratifies increased Gazprom use of key gas pipeline - WSJ

    Victory for Gazprom

    4--US-led offensive to defeat ISIS at Raqqa to ‘begin within

    5--Fiction & Propaganda: US Announces (Again) Plans to Liberate Raqqa

    It is enough strange that the US and its allies did not plan such large-scale operations until the strategic initiative in Syria has been on the side of terrorists and ‘moderate’ militants. Now the US imitates frenzied activity in order to add political points to the candidate from the Democratic Party before the elections. We can assume that in the near future the world will see footage, showing American and Iraqi soldiers, installing flags in Mosul… For this, it will be enough to take a video of some ‘liberated’ hut somewhere on the outskirts of Mosul, and then the ‘most honest’ Western media will start their work.

    6--According to the pro-Western and pro-‘opposition’ monitor, the Syrian Observatory For Human Rights...the monitor says that 57% of the “rebel” victims were  foreigners. ...

    Even according to the pro-‘opposition’ monitor, over a half of the ‘rebels’ are foreign mercenaries. Are these guys the same ‘locals opposing Assad’ that the West supports in Syria?

    7--"Too risky" to vote for Clinton

    U.S. Republican presidential nominee Donald Trump said on Tuesday that Democrat Hillary Clinton's plan for Syria would "lead to World War Three," because of the potential for conflict with military forces from nuclear-armed Russia.

    In an interview focused largely on foreign policy, Trump said defeating Islamic State is a higher priority than persuading Syrian President Bashar al-Assad to step down,..
    Trump questioned how Clinton would negotiate with Russian President Vladimir Putin after demonizing him; blamed President Barack Obama for a downturn in U.S. relations with the Philippines under its new president, Rodrigo Duterte;...

    8--Clinton's plan to face Trump-- WikiLeaks Reveals DNC Elevated Trump to Help Clinton

    According to an email from Marissa Astor, Clinton campaign manager Robby Mook’s assistant, to Clinton campaign chair John Podesta, the campaign knew Trump was going to run, and pushed his legitimacy as a candidate. WikiLeaks’ release shows that it was seen as in Clinton’s best interest to run against Trump in the general election. The memo, sent to the Democratic National Committee (DNC) also reveals the DNC and Clinton campaign were strategizing on behalf of their candidate at the very beginning of the primaries. “We think our goals mirror those of the DNC,” stated the memo, attached to the email under the title “muddying the waters.”

    The memo named Trump, Sen. Ted Cruz, and Ben Carson as wanted candidates. “We need to be elevating the Pied Piper candidates so that they are leaders of the pack and tell the press to them seriously,” the memo noted.

    Clinton was widely presumed to be the Democratic presidential nominee long before the primaries began. This assumption was held by the mainstream media and the Democratic Party leadership. Expecting Clinton to be the nominee, the DNC and Clinton campaign developed strategies for the general election

    9--The Most Dangerous Place in the World: US Pours in Money, as Blood Flows in Honduras

    10--Khadaffi's Murder, Margolis

    11--Mosul offensive enters second week --objectives become clearer

    CNN cited Sheikh Abdullah Alyawer, a tribal leader in the town of Rabia, on Iraq’s border with Syria, as saying that hundreds of ISIS fighters and their families have been pouring across the border at an ISIS-controlled crossing point at Ba’aaj, south of Sinjar.
    The report appeared to confirm earlier charges from both the Syrian government and Moscow that the US and its allies had intentionally left open a corridor to the west of Mosul, a rat line to facilitate the transfer of the Islamist fighters into Syria in order to strengthen the flagging war for “regime change” initiated by Washington over five years ago....

    Speaking to a meeting of defense ministers from 13 countries in Paris, French President Francois Hollande warned of the transfer of ISIS fighters from besieged Mosul to Raqqa in Syria. “In these columns of people leaving Mosul will be hiding terrorists who will try to go further, to Raqqa in particular,” he said.
    Russia’s military command issued a statement on Tuesday that it was monitoring the Iraqi-Syrian border and had warplanes prepared to carry out airstrikes against ISIS forces attempting to escape. Such an intervention would cut across US objectives and again heighten the danger of a military confrontation between the two major nuclear powers.
    In an editorial on the Mosul offensive, the Wall Street Journal Tuesday pointed to one of the principal objectives Washington is pursuing with its deployment of thousands of US troops in support of the campaign.

    “Defeating Islamic State in Mosul is a vital U.S. interest, but the only way the next Administration will be able to prevent an Islamic State resurgence or Iranian domination of the region is a long-term U.S. deployment in Iraq of several thousand troops, both for political leverage with Iraq and other regional players and as a regional rapid-reaction force,” the editorial states. In other words, the battle for Mosul is only part of the preparations for far wider US wars in the Middle East and beyond....

    In earlier offensives to drive ISIS out of the cities of Fallujah and Ramadi in Anbar province, hundreds of Sunni men were massacred and many faced torture at the hands of Iraqi government troops and Shia militias.
    Meanwhile, in Kirkuk, the oil-rich city to the south of Mosul, efforts by the Kurdish Peshmerga militia to defeat ISIS fighters who launched attacks there last week to draw forces away from Mosul have reportedly led to acts of collective punishment against Kirkuk’s large Sunni Arab population.
    The New York Times cited UN officials and local residents as reporting that Kurdish officials in Kirkuk “responded by forcing out hundreds of Arab families who had sought safety there.”

    “Arab residents of Kirkuk who were interviewed on Tuesday reported that armed Kurdish security agents had removed families from homes and forced them to move to camps,” the Times reported. “They said several homes were also destroyed, in what appeared to be a methodical attempt to force out as many Arabs as possible.”
    In Kirkuk, as in Mosul itself, the US-backed offensive is sowing the seeds for subsequent sectarian warfare with the potential of drawing in regional powers, including Turkey and Iran.

    12--Government-enforced extortion--Government announces huge Obamacare premium rises for 2017

    In a call with reporters on Monday, the Department of Health and Human Services (HHS) confirmed the 25 percent average price hike for the second cheapest (“silver”) plans, which are used as the benchmark to determine government subsidies. The dramatic increase compares to an average 7.5 percent premium hike in 2016 and a 2 percent rise in 2015. Average monthly increases are estimated at anywhere from $50 to $300.

    In addition to the ACA premium hikes, HHS announced that more than one in five consumers using the site would have only one insurer to choose from in 2017. This is mainly the result of the pullout of insurance giants UnitedHealthcare, Humana and Aetna from the ACA marketplace over the past year. ...

    The failure of Obamacare to attract a sufficient number of younger, healthier customers has resulted in a pool of less healthy enrollees who are more costly to insure....

    Obamacare—with its soaring premiums, high out-of-pocket costs and dwindling networks and services—is serving as the model for employers across the country as they seek to shift more health care costs onto their workers.
    Attacks on health care benefits have featured prominently in a series of recent contract disputes, including strikes by 4,800 nurses at Allina Health in Minnesota, a strike by 5,500 faculty and coaches at Pennsylvania’s 14 state-run universities, a strike at Harvard University by 700 dining service workers, and a walkout of Libbey Glass workers in Toledo, Ohio. In each case, employers have sought to drastically reduce health benefits and shift workers to inferior plans with burdensome out-of-pocket costs.
    Obamacare is also the spearhead of a gathering attack on Medicare, the government health insurance program for 53 million American seniors and disabled people. Last year, President Obama signed into law a bipartisan bill revising the payment system for Medicare providers to reward doctors for cutting costs and penalize them if the volume and frequency of the health services they provide are deemed too high. Doctors will have a financial incentive to withhold more extensive tests and services from Medicare recipients....

    He did not acknowledge that the ACA imposes no serious restraints on the insurance companies, pharmaceutical firms or hospital chains, and uses financial coercion to drive people to buy bare-bones plans with high out-of-pocket costs. Nor did he take note of the intensified assault on health benefits by employers, both private and public, across the US.
    Obama boasted, “All told, about another 10 percent of the country now have coverage.” He was silent on the national scandal of 29 million Americans remaining uninsured...

    Neither the Democrats nor the Republicans have any intention of challenging the for-profit health care industry. The deepening attack on health care, exemplified by the projected 25 percent hike in Obamacare premiums, serves as a warning of the austerity agenda of the next administration, whichever party occupies the White House in January.

    13--Hillary's "pivot to Asia" in trouble

    As secretary of state, Clinton was the chief architect of the “pivot” and the proponent of a more militarist strategy against China. Among her speeches to Wall Street released by WikiLeaks was one in 2013 in which she declared: “We’re going to ring China with missile defence. We’re going to put more of our fleet in the area.”

    Trump’s policy towards Asia is far from clear, but his “Make America Great” sloganeering suggests an even more aggressive stance towards China. Moreover, it is one in which Washington would insist that allies such as Japan and South Korea bear a heavier burden.
    The uncertainties generated by the US election along with heightened geo-political tensions and a worsening global economic outlook are encouraging the ruling classes of the Asia Pacific to hedge their bets. The two central pillars of the US “pivot”—Japan and Australia—are both pursuing policies that are at odds with the US.

    14--It's Still The Media, Stupid!

    The major media outlets are controlled by five corporate giants – Time Warner, Disney, Rupert Murdoch’s News Corp., Bertelsmann of Germany, and Viacom – the largest purveyors of crony capitalism and cultural Marxism the world has ever witnessed.  No dissent is allowed to be heard on these outlets nor is there any hope of career advancement for journalists or writers if the Leftist paradigm is not trumpeted.

    15--3 million less people employed today than 2007

    16--The deficit is too small not too big

    17--Japan’s Exports Drop for 12th Month in Dismal Year for Trade

    The yen has gained 16 percent since the start of the year, and soft global demand has made matters worse. This environment has made companies more reluctant to invest in domestic production, compounding the difficulty of creating economic growth.

    18--Why Corporate America’s Debt Is a ‘Major Risk’

    Asset valuations are extreme; returns are poor, the probability of losses is high and the ability to recover any losses quickly is low,” he writes.
    In particular, the strategist sounded an alarm over the state of corporate America’s balance sheet. Company spending exceeds cash flow by a near-record amount—a fundamentally unsustainable situation—as net debt continues to increase at a rapid pace.

    In many cases, companies have used debt to repurchase their own stock, flattering their bottom-line financial performance. While not all buybacks are financed by debt, Lapthorne did note a correlation between net repurchases and the change in corporate indebtedness.
    ­“U.S. corporate balance sheets are a major risk going forward,” he says. “U.S. corporates are massively overspending.”

    For corporate credit, there’s very little concern about short-term coverage from the market,” write analysts at Bespoke Investment Group. “We note that maturities continue to creep up slowly; despite higher spread costs, corporates are generally borrowing further out the curve and ‘locking’ low rates.”
    But over the long haul, the performance of stock markets will be primarily driven by earnings increases—and the level of corporate indebtedness implies that any latitude to boost earnings per share by shrinking the denominator is limited.
    Corporate profits in the U.S., meanwhile, have declined for five consecutive quarters. As Bloomberg’s Matthew Boesler reminds us, the combination of near-record corporate debt-to-GDP, record low return on equity, ever-higher labor costs, and subdued pricing power doesn’t paint an inspiring picture for growth.

    U.S. profitability is on a “cyclical downtrend,” Lapthorne concludes.

    19--Obama beats Bush on deportations