- They Sow The Cyclone – We Reap The Blowback
Submitted by Dan Sanchez via AntiWar.com,
“For they have sown the wind, and they shall reap the whirlwind”?—?Hosea 8:7
It may be surprising to hear, but it is a plain historical fact that modern international jihad originated as an instrument of US foreign policy. The “great menace of our era” was built up by the CIA to wage a proxy war against the Soviets.
A 1973 coup in Afghanistan installed a new secular government that, while not fully communist, was Soviet-leaning. That was a capital offense from the perspective of America’s Cold War national security state, at the time headed by Henry Kissinger.
Conveniently for Kissinger, the dirt poor country was sandwiched between two US client states: Pakistan to the east and Iran (then still ruled by the CIA-installed Shah) to the west. Immediately after the coup, the CIA and the clandestine security agencies of Pakistan (ISI) and Iran (SAVAK) began regime change operations in Afghanistan, orchestrating and sponsoring Islamic fundamentalist insurrections and coup attempts.
Due to these efforts, as well as the government’s own oppressiveness, a widespread rebellion broke out in Afghanistan in 1978. In July 1979, US President Jimmy Carter, on the advice of National Security Adviser Zbigniew Brzezinski, officially authorized aid to the puritanical Mujahideen rebels, to be delivered through the CIA’s “Operation Cyclone.” This was on top of the unofficial aid that the CIA had already been funneling to Afghan Islamist insurgents for years through Pakistan and Iran.
In a 1998 interview, Brzezinski openly admitted that he and Carter thus “knowingly increased the probability” that the Soviets would militarily intervene. And indeed Russia did invade in December 1979, beginning the decade-long Soviet-Afghan War. In the same 1998 interview, Brzezinski boasted:
“The day that the Soviets officially crossed the border, I wrote to President Carter: We now have the opportunity of giving to the USSR its Vietnam war.”
Shortly thereafter, the highest cleric of Saudi Arabia (another US client) endorsed a fatwa proclaiming jihad against the atheist Soviets in Afghanistan as an obligation for all Muslims throughout the world. It should be noted that the Saudis have a narrow definition of a true “Muslim,” as they follow Wahhabism, one of the most extreme and intolerant strands of Islam, highly similar to ISIS’s own. Throughout the 1980s, Saudi Arabia also provided the Afghan Jihad with hundreds of millions of petrodollars in aid and tens of thousands of madrassa-indoctrinated volunteer fighters.
The CIA also heavily participated in recruitment for the increasingly international jihad. And this is where Osama bin Laden enters the picture. As political scientist and terrorism expert Eqbal Ahmad said in a 1998 speech:
“Money started pouring in. CIA agents starting going all over the Muslim world recruiting people to fight in the great jihad. Bin Laden was one of the early prize recruits. He was not only an Arab. He was also a Saudi. He was not only a Saudi. He was also a multimillionaire, willing to put his own money into the matter. Bin Laden went around recruiting people for the jihad against communism.
I first met him in 1986. He was recommended to me by an American official of whom I do not know whether he was or was not an agent. I was talking to him and said, ‘Who are the Arabs here who would be very interesting?’ By here I meant in Afghanistan and Pakistan. He said, ‘You must meet Osama.’ I went to see Osama. There he was, rich, bringing in recruits from Algeria, from Sudan, from Egypt, just like Sheikh Abdul Rahman.”
The US publicly lionized the anti-Soviet jihadis. In 1983, President Ronald Reagan, who continued Carter’s Afghan policy, met with Mujahideen leaders in the Oval Office for a photo op, and released a statement which said:
“To watch the courageous Afghan freedom fighters battle modern arsenals with simple hand-held weapons is an inspiration to those who love freedom.”
The glorification even extended to popular culture. In the climactic battle scene of 1988’s Rambo III, the heroic John Rambo is about to be overrun by Soviet forces when he is saved by a Mujahideen cavalry charge. The movie closed with onscreen text that read, “THIS FILM IS DEDICATED TO THE BRAVE MUJAHIDEEN FIGHTERS OF AFGHANISTAN.” After the US went to war with the Mujahideen’s successors in 2001, the dedication was changed to, “THE GALLANT PEOPLE OF AFGHANISTAN.”
The film even has Rambo’s mentor echoing Brzezinski when he screams at his Russian captor, “We already had our Vietnam! Now you’re gonna have yours!”
After a decade of bloody war, the Soviets withdrew from Afghanistan in February 1989. Later that year, the Berlin Wall fell and Romania left the Soviet-led Warsaw Pact. The year after, Poland and East Germany followed. And in 1991, the Warsaw Pact and then the Soviet Union itself both dissolved completely.
Brzezinski arrogantly took credit for this, claiming that his strategy of giving the USSR “its own Vietnam” brought about the Soviet “collapse.”
But it was not really a collapse. The Soviet Empire did not descend into failed-state chaos, the way Afghanistan, Iraq, Libya, Syria, Yemen, and Somalia recently have thanks to the American War on Terror. That is what a true “collapse” looks like.
In contrast, what happened throughout the Soviet Empire was not a violent collapse, but a relinquishing of power and a generally peaceful dissolution. Such an outcome rarely results from war. To the contrary, war is the health of the State, as Randolph Bourne taught. War tends not to loosen, but to tighten a regime’s grip on power. It is not war, but peace and detente that can lead to peaceful dissolution. It is when people no longer feel so besieged by enemies abroad that they feel secure enough to demand greater freedom (even to the extent of full secession) from their “protectors” and rulers.
It was the Reagan-Thatcher-Gorbachev thaw of Reagan’s second term that created the necessary climate for ending the proxy war in Afghanistan. And it was the subsequent combination of far-abroad detente and near-abroad peace that created the necessary climate for the Soviet dissolution.
Brzezinski’s jihad did not win the Cold War. It only sowed the seeds for the Terror War.
In 1990, the US seized the emerging post-Berlin “unipolar moment” of peerless preeminence by launching its first globocop “police action”: the Persian Gulf War (Operation Desert Storm) against Saddam Hussein’s regime in Iraq.
Desert Storm was preceded by Operation Desert Shield, in which the US built up a military presence in Saudi Arabia (troops, arms, and bases) for use in staging attacks on Iraq in the upcoming war.
F-15Es parked during Operation Desert Shield.
Contrary to US promises, the military occupation of Saudi Arabia persisted after the war, as the bases were used to enforce a blockade on Iraq throughout the 90s (which starved over a half a million children). This had a twofold impact on Islamic radicalization.
As Lawrence Wright wrote in The New Yorker :
“The presence of American troops in Saudi Arabia was a shattering event in the country’s history, calling into question the ancient bargain between the royal family and the Wahhabi clerics, whose blessing allows the Saud family to rule. In 1992, a group of the country’s most prominent religious leaders issued the Memorandum of Advice, which implicitly threatened a clerical coup. The royal family, shaken by the threat to its rule, accommodated most of the clerics’ demands, giving them more control over Saudi society. One of their directives called for the creation of a Ministry of Islamic Affairs, which would be given offices in Saudi embassies and consulates. As the journalist Philip Shenon writes, citing John Lehman, the former Secretary of the Navy and a 9/11 commissioner, “it was well-known in intelligence circles that the Islamic affairs office functioned as the Saudis’ ‘fifth column’ in support of Muslim extremists.”
The occupation of the Arabian Peninsula also began Bin Laden’s vendetta against his former patrons. As Eqbal Ahmad told it:
“He turns at a particular moment. In 1990, the U.S. goes into Saudi Arabia with forces. Saudi Arabia is the holy place of Muslims, Mecca, and Medina. There had never been foreign troops there. In 1990, during the Gulf War, they went in, in the name of helping Saudi Arabia defeat Saddam Hussein. Osama Bin Laden remained quiet.
“Saddam was defeated, but the American troops stayed on in the land of the Ka’aba [the most sacred site of Islam, in Mecca], foreign troops. He wrote letter after letter saying, ‘Why are you here? Get out! You came to help but you have stayed on.’ Finally he started a jihad against the other occupiers. His mission is to get American troops out of Saudi Arabia. His earlier mission was to get Russian troops out of Afghanistan.”
Even after this turn, the western lionization of the the Soviet-Afghan War’s Mujahideen veterans, and of Bin Laden in particular, continued into the 90s. As late as December 1993, The Independent (a major British newspaper) even published a puff piece on Bin Laden, plastered with a huge photo of the smiling sheik, titled “ Anti-Soviet warrior puts his army on the road to peace.” The article lauded Bin Laden as a humanitarian, gushing over how the “Saudi businessman who recruited mujahedin now uses them for large-scale building projects in Sudan.”
As it turned out, his largest-scale project was to build up the international militia that the CIA helped him recruit into Al Qaeda, which he would then lead in a terror jihad against the West throughout the 90s. With that wave of attacks in mind, Brzezinski’s 1998 interviewers asked if he had any regrets over blowback from Operation Cyclone. The statesman was totally dismissive.
Q: And neither do you regret having supported the Islamic fundamentalism, having given arms and advice to future terrorists?
Brzezinski: What is most important to the history of the world? The Taliban or the collapse of the Soviet empire? Some stirred-up Moslems or the liberation of Central Europe and the end of the cold war?
Q: Some stirred-up Moslems? But it has been said and repeated: Islamic fundamentalism represents a world menace today.
Brzezinski: Nonsense!
Later in 1998, mere months after Brzezinski’s interview, Eqbal Ahmad delivered the exact opposite assessment of Bin Laden and Al Qaeda, warning his American audience:
“They’re going to go for you. They’re going to do a lot more. These are the chickens of the Afghanistan war coming home to roost.”
Three years later, Brzezinski was proven spectacularly wrong, and Ahmad tragically right, when the terror jihad of Bin Laden’s Mujahideen-descended band of “stirred-up Moslems” culminated in the attacks of September 11, 2001.
During the planning of those attacks, Bin Laden and his inner circle were hosted by the Taliban, yet another band of Mujahideen-descended “stirred-up Moslems,” then ruling Afghanistan.
As Ahmad foretold, the chickens of the CIA’s Afghan Jihad (and of the Gulf War) had indeed come home to roost.
True to their names, Operations Cyclone and Desert Storm sowed the wind. Years later, it was 3,000 American civilians who reaped the whirlwind.
Incredibly, that whirlwind harvest was then reseeded, ensuring that still more civilians would later reap an even bigger whirlwind. Apparently cultivating chaos is the only trade that empires know. The regime and its kept news media sowed the whirlwind by exploiting America’s post-9/11 fear and anger to garner acquiescence for even larger and more frequent foreign misadventures: for a globe-spanning Long War that continues to this day.
First came the Afghanistan War against the Taliban and in pursuit of Al Qaeda. Almost inexplicably, Bin Laden escaped into hiding in US-alliedPakistan after being pinned down in the caves of Tora Bora. It is somewhat less inexplicable in light of the fact that the neocon-led Bush administration was trying to fear-monger the public into countenancing another war in Iraq, and that this involved pushing bogus intelligence connecting Saddam Hussein with Al Qaeda. At least until the regime got its post-9/11 bonus war, it was convenient to still have Dread Pirate Osama at large to keep America’s war fever up. Better dread than dead.
Similarly, in 2002, the Bush administration denied the military’s request for permission to kill another figurehead terrorist: Abu Musab al-Zarqawi, who had in the 80s been yet another recruit for the CIA’s Afghan Jihad. That too was likely about the administration getting its war in Iraq. At the UN, Secretary of State Colin Powell falsely identified Zarqawi as a link between Saddam and Al Qaeda (he was allied with neither, and an enemy of the former), in order to paint the planned invasion of Iraq as a necessary front in the War on Terror.
As it turned out it was the Iraq War itself that unleashed Zarqawi in 2003, freeing him to emerge from autonomous Kurdistan, where he had been hiding from Saddam’s security forces under the protective aegis of an American no-fly zone. His formerly obscure terrorist gang rapidly ascended amid the chaos of the Iraq War, becoming Al Qaeda in Iraq or AQI (after Zarqawi swore allegiance to Bin Laden), and then the Islamic State in Iraq or ISI (after Zarqawi was finally killed).
After suffering severe setbacks in Iraq, in 2011 the Zarqawiites began infiltrating neighboring Syria to take part in the insurgency against Bashar al-Assad’s regime. Thereafter renaming itself ISIS (Islamic State in Iraq and Syria), the group, along with its offshoot the Al Nusra Front and other Mujahideen militias, came to dominate that insurgency.
The growth of ISIS and Nusra in Syria was fed by the United States (the State Department, the Pentagon, and the CIA) and its Western and regional allies (the UK, France, Turkey, Saudi Arabia, the Gulf States, etc.). By at least 2012, these powers had launched a veritable Operation Cyclone 2.0: recruiting, training, financing, and arming Mujahideen fighters for the purpose of overthrowing the secular ruler Assad (who, like the post-1973 secular Afghan regime, is an ally of Russia).
Just as in Afghanistan decades ago, young men, radicalized by the call to jihad and militarized by the promise of weapons and money, have poured in from countries throughout the Muslim world, and from Europe too. This has not only led to the death of hundreds of thousands of Syrians and the displacement of millions, but has turbo-boosted ISIS and Nusra in myriad ways.
US Senator John McCain with mujahideen from the Northern Storm Brigade.
The Syrian Jihad, like the Afghan Jihad, was preceded by less direct and lower grade subversion using militant Islamists. In the Afghan prelude, America’s dirty work was done by Pakistan and Iran. In the Syrian prelude, it was done by the Saudis and lesser Gulf Sheikdoms, who with US approval, began sponsoring anti-Assad Salafist militias in neighboring Lebanon as early as 2006.
There were voices even among the Saudis who, like Eqbal Ahmad, darkly forebode blowback from dealing with such devils. One former Saudi diplomat warned:
“Salafis are sick and hateful, and I’m very much against the idea of flirting with them. They hate the Shiites, but they hate Americans more. If you try to outsmart them, they will outsmart us. It will be ugly.”
Yet they were drowned out by voices who, like Brzezinski, shrugged off such concerns over “stirred-up Salafis.” A US government consultant related to the great journalist Seymour Hersh that:
“This time… Bandar and other Saudis have assured the White House that ‘they will keep a very close eye on the religious fundamentalists. Their message to us was ‘We’ve created this movement, and we can control it.’ It’s not that we don’t want the Salafis to throw bombs; it’s who they throw them at…”
In other words: “Thanks for paying for our jihad in the 80s. And sorry about your towers. But this time around it’ll be totally different, trust us. Sincerely, the Wahhabis.”
Yet, regarding Syria, the American deep state has been just as much sinister as it has been gullible and hubristic, if not more. As a recently disclosed Pentagon intelligence report reveals, US planners knew full well that they were once again “sowing the cyclone,” and that others would soon “reap the blowback.” The report from 2012 predicted that supporting the Syrian insurgency would create “the ideal atmosphere” for ISIS “to return to its old pockets” in Sunni Iraq and also create “the possibility of establishing a declared or undeclared Salafist Principality” in the region.
And that is precisely what happened. In 2014, strengthened by the US-backed Syrian Jihad, ISIS burst back into “its old pockets” in Iraq, conquered the northwest of the country down to the gates of Baghdad, and declared a Caliphate (a Salafist Principality).
The wind sown by Operation Cyclone took two decades to fully germinate into the blowback that blew the Twin Towers down. Yet it only took two years for us to reap the whirlwind from the Syrian Jihad. Scott Horton proposes the term “backdraft” for blowback that is so prompt and predictable: like the firestorm that immediately erupts in your face upon opening the door of a burning hot room.
The US and its allies have opened the door to Hell in Syria. And the ensuing ISIS backdraft has lately spread far beyond Syria and Iraq, consuming 44 lives in the bombing of a Beirut marketplace, 224 lives with the bombing of a Russian airliner, and 130 lives with the recent attacks in Paris.
It took longer than it did in 1979, but America’s current proxy jihad has drawn in Russia once again. The chief difference is that this time, the US and its allies are not limiting themselves to covert ops, but are involving their air forces as well. This is ostensibly to “destroy” ISIS. However, the US-led coalition also wants the Assad regime gone, while the Russian-led coalition is trying to save it and to fight the US-supported non-ISIS Mujahideen as well (including Syrian Al Qaeda). So the countless warplanes buzzing over and bombing Syria are flying at cross purposes. This has turned the Levant into a nuclear powder keg.
And now, unthinkably, a US ally may have just lit a match. Just this week, Turkey shot down a Russian warplane. Two pilots were reportedly executed by anti-Assad insurgents in mid-air. A video has emerged on the internet of insurgents standing over one of the dead Russians saying “Allahu Akbar” and apparently calling themselves “Mujahideen.”
Remember, Turkey is a NATO member, who can drag the entire West into a thermonuclear war if it picks a big enough fight. The backdraft we reap from this latest American jihad may consume us all.
Even if we survive this near-term global existential crisis, our warlords have more in store for us. The Paris attacks especially have yielded yet another crop of fear and loathing in the West, which the tillers of terror are keen to plow right back into still more proxy warfare and mayhem.
But they cannot do so if we, their tax cattle, refuse to pull the plow or let them drive us like beasts of burden that are so easily spooked and prodded. We the people must convey that if they do not stop cultivating the storms of chaos, then we will cast off their yoke once and for all.
- Government Historians Admit Statue Of Liberty Was Originally A Muslim Woman
This is likely to be a little tough to swallow for some Americans but The Statue of Liberty – symbolically welcoming the world's tired, poor, and huddled masses – was originally conceived as a Muslim peasant woman.
As The Hill reports, The Statue of Liberty was originally designed to be a Muslim woman, the Smithsonian Institution's magazine says.
An article on the government-administered museum’s blog, Smart News, claims one of the designers of Lady Liberty drew inspiration from monuments in Egypt and originally intended to construct a veiled female peasant on the Suez Canal.The Statue of Liberty was originally conceived as a Muslim peasant woman and was to have stood at the approach to the Suez Canal, a lantern in her upraised hand serving as both lighthouse and a symbol of progress.
But the sculptor, Frederic Auguste Bartholdi of France, proved unable to sell the idea to the khedive of Egypt, Ishma’il Pasha. Bartholdi remained determined to erect a colossus on the scale of the one in ancient Rhodes. He sailed to America with drawings of the Muslim woman transformed to the personification of Liberty.
At first, Bartholdi considered the tip of Manhattan and Central Park as possible sites. He was on a ferry to Staten Island when he decided that Bedloe’s Island would be just the spot.
And there she now stands, the Muslim woman turned to Lady Liberty, the light in her upraised hand symbolizing so much more than simple progress, the inscription at the base words from the poet Emma Lazarus that are familiar to us all:
“Give me your tired, your poor,
Your huddled masses yearning to breathe free,
The wretched refuse of your teeming shore.
Send these, the homeless, tempest-tossed to me,
I lift my lamp beside the golden door!”To truly be Lady Liberty, the figure built with kids’ coins and originally conceived as a Muslim must remain a Muslim as well as a Christian and a Jew and a Hindu and a Buddhist and every other faith, even no faith at all.
- Caught On Tape: China Builds A Bridge In Just 43 Hours
When you have a billion people willing to work instead of expecting free “stuff”, anything’s possible… Earlier this year, a Chinese construction company had erected a 57-story skyscraper in just 19 days. This time the Chinese have built an overpass in mere 43 hours!
Workers took apart the old structure of Beijing’s Sanyuan Bridge in a few hours. Then they brought an entire piece of concrete to bridge the gap and paved it over, reports Citylab.com.
To build the bridge, over 1300 tonnes of new surfacing material was used which save months of commotion and traffic woes. For the first time in Chinese workers tried out a new ‘integrated replacement method.’
- Russia Releases Video Of S-400 SAM Deployment In Syria, As Putin Issues Warning To Obama
As reported two days ago, one of the first decisions a very angry Russia took in the aftermath of the shooting down of its Su-24 by a Turkish F-16 was to dispatch a Moskva guided-missile cruiser off the coast of Syria to provide air cover for its jets operating near Latakia, as well as send an unknown number of ultramodern S-400 (or SA-21 Growler in NATO designation) SAM batteries to Latakia to make sure that the tragic incident from Tuesday never repeats itself by sending Turkey a very clear message that the next time a Turkish warplane engages a Russian jet, Russia will immediate retaliate using ground forces.
Earlier today, Russia made a very explicit demonstration of the deployment of at least two S-400 batteries at Syria’s Khmeimim airbase, with the Russian Ministry of Defense promptly publicizing the arrival with the following clip.
With a range of 250 miles, the S-400 could easily strike Turkish targets, and as the map below shows, Russia could even take down targets over northern Israel. As cited by the Independent, Nick de Larrinaga, Europe editor of the defense magazine IHS Jane’s Defense Weekly, said it would be “a significant increase” in the reach of Russian air-defense capacities. “The message that the Russians are trying to send is that they’re capable of defending themselves in Syria, should the situation escalate.”
Needless to say, the US was not enthused and earlier today the US embassy in Moscow said that the “Russian deployment of the S-400 air-defense system to Syria won’t aid the fight against the Islamic State, with the US diplomat adding that the US is hopeful Russia won’t use the system to target planes flown by international coalition since Islamic State doesn’t have air force.” Clearly a warning to Putin not to dare use the rockets against Turkish (or other coalition) jets.
So what is Putin’s intention by escalating the military deployment of Russian weapons in Syria? Conveniently he explained his thinking just a few hours ago during his press conference with Francois Hollande. In answering a question by a reporter from French Le Monde, Putin said the following:
“The S-400 is an air defense system. The reason we didn’t have the system in Syria is because we thought our planes were flying at high enough altitudes where a terrorist could not reach them; they don’t have weapons capable of downing our planes at the altitude of over 3 or 4 thousand meters. And We could never think that we could be stabbed in the back by a country we regarded as our ally. Our planes operated at altitudes of 5-6,000 meters and were completely unprotected against potential attacks from fighter jets – we could never imagine that that could be possible otherwise we would deploy such systems in the area protecting our bombers against possible attacks.”
…
“We never did it because we regarded Turkey as our friend, we never expected an attack from that side. This is why we regard this attack as that of a traitor. But now we that this is possible, and we have to protect our planes. This is why we deployed a modern system, the S-400, it has a pretty long range and it’s one of the most effective systems of this kind in the world. We will not stop there: if we have to we will also deploy our fighter jets in the area.”
Bottom line: another direct engagement by a Turkish fighter will be its last, and in fact now that Russia is prepared we would not be at all surprised to see Russia cross into Turkish airspace on purpose just to provoke Erdogan to repeat the events from last week, only this time with the Russian ready and prepared to retaliate to any engagement. In fact, the odds of Russia doing just that in the next few days are especially high.
But while the reason behind the S-400 deployment was largely known to most, where Putin’s press conference took an unexpected detour was what he said just around 20:30 in, when in not so many words, Putin effectively accused the US of leaking the coordinates of the Russian plane to Turkey, which was merely a hitman acting with the blessing of the Pentagon.
This is what Putin said:
“We told our US partners in advance where, when at what altitudes our pilots were going to operate. The US-led coalition, which includes Turkey, was aware of the time and place where our planes would operate. And this is exactly where and when we were attacked. Why did we share this information with the Americans? Either they don’t control their allies, or they just pass this information left and right without realizing what the consequences of such actions might be. We will have to have a serious talk with our US partners.
In other words, just like in the tragic bombing of the Kunduz hospital by US forces (which has now been attributed to human error), so this time the target was a Russian plane which the US knew about well in advance, was targeted however not by the US itself, but by a NATO and US-alliance member, Turkey.
And while the deployment of the Russian SAM missiles was already known, the real message from today’s presser, the one that will be the topic of a private and “serious talk with Russia’s US partners”, is that Putin indirectly blames Obama for what happened on Tuesday realizing that Erdogan was merely the “executor”, one who is simply motivated to protect his (and his son’s) Islamic State oil routes.
Full press conference below; the discussion of Russia’s S-400 deployment begins 17:30 in:
- Martin Shkreli Sets Out To Crush KaloBios Shorts: Will Stop Lending Out Shares
The brutal tragedy of at least one KaloBios short seller was first documented a week ago when we noted the margin call massacre that befell “novice” trader Joe Campbell, who went to bed with a $35K short on Wednesday and woke up with a $106 margin call the next morning after it was revealed that a “consortium” led by Martin Shkreli had taken an unknown stake in heretofore insolvent KBIO.
However, the story did not end there because the very next day we got new information that Shkreli had not bought just any amount of KBIO shares but a whopping 70%, which got us thinking: is the “most hated man in America” contemplating to unleash a Volkswagen scenario, in which he has acquired enough shares to leave more shorts outstanding than there is actual float, and then one day to simply pull all the borrow by no longer lending out shares to potential shorters.
This is what we said last Friday:
In other words, Shkreli’s consortium had acquired 70% of the company, and should they decide to pull the borrow, on the odd chance that the short interest had soared to above 30%, KBIO – which until a few days ago – suddenly has the potential to become the next Volkswagen: a company which has more shares short than there is float available to cover them.
We added:
What happens if Shkreli’s plan is indeed to rerun the “Volkswagen” scenario and unleash an epic short squeeze that sends the price of the company into the stratosphere, unlinked from any fundamentals, but merely soaring ever higher as desperate shorts pay any price just to get out.
We hope to find out as suddenly this until recently bankrupt company whose price has exploded in the past two days, has become not only a poster child for everything broken and manipulated with the market (think 2014’s CYNK one year forward) but has the market following with morbid fascination to find out how the tragicomedy of “Shkreli vs the Shorters” concludes.
And then two days ago, when it was still unclear just what Shkreli’s intentions are, but when the stock had already soared well into the $40-range, we again warned that “if [Shkreli and friends] pull the borrow and demand delivery, there will simply not be enough shares outstanding to satisfy all shorts, leading to, drumroll, the next Volkswagen.”
Oddly enough, there was a radio silence from Shkreli who supposedly had mentioned he had no intention of demanding share delivery, which made us wonder if he was merely waiting for the right moment to strike.
Then something caught our attention: last night Bloomberg reported that according to Markit, the short interest in KBIO had soared to 49% of the free float from just 5.6% on Nov. 16.
Surely, if there was any trigger to push Shkreli to demand delivery, this would be it.
And, not unexpectedly, this is precisely what he did earlier today.
I spoke with my counsel & advisers and decided to stop lending my $KBIO shares out until I better understand the advantages of doing so. 1/2
— Martin Shkreli (@MartinShkreli) November 26, 2015
I apologize for any inconvenience this may create in lending markets and I will probably resume lending at some point. Happy Thanksgiving!
— Martin Shkreli (@MartinShkreli) November 26, 2015
And now the squeeze really begins, as all those 49% who are short KBIO, according to Markit, rush for the nearest exit, while those who are currently long the stock refuse to sell at any price knowing they have all the leverage.
Whether this will translate into a Volkswagen circa 2008-type scenario, which incidentally looked as follows…
… and where a company which is for all intents and purposes bankrupt suddenly trades with a market cap in the hundreds of millions or even billions as desperate shorts pay any price just to get out…. tune in tomorrow to find out during tomorrow’s abbreviated session, because the KaloBios comedy is nowhere near concluded.
As for Shkreli… well he is already the “most hated man in America” – might as well double down.
- Meet The Man Who Funds ISIS: Bilal Erdogan, The Son Of Turkey's President
Russia’s Sergey Lavrov is not one foreign minister known to mince his words. Just earlier today, 24 hours after a Russian plane was brought down by the country whose president three years ago said “a short-term border violation can never be a pretext for an attack”, had this to say: “We have serious doubts this was an unintended incident and believe this is a planned provocation” by Turkey.
But even that was tame compared to what Lavrov said to his Turkish counterparty Mevlut Cavusoglu earlier today during a phone call between the two (Lavrov who was supposed to travel to Turkey has since canceled such plans).
As Sputnik transcribes, according to a press release from Russia’s Ministry of Foreign Affairs, Lavrov pointed out that, “by shooting down a Russian plane on a counter-terrorist mission of the Russian Aerospace Force in Syria, and one that did not violate Turkey’s airspace, the Turkish government has in effect sided with ISIS.“
It was in this context when Lavrov added that “Turkey’s actions appear premeditated, planned, and undertaken with a specific objective.“
More importantly, Lavrov pointed to Turkey’s role in the propping up the terror network through the oil trade. Per the Russian statement:
“The Russian Minister reminded his counterpart about Turkey’s involvement in the ISIS’ illegal trade in oil, which is transported via the area where the Russian plane was shot down, and about the terrorist infrastructure, arms and munitions depots and control centers that are also located there.”
Others reaffirmed Lavrov’s stance, such as retired French General Dominique Trinquand, who said that “Turkey is either not fighting ISIL at all or very little, and does not interfere with different types of smuggling that takes place on its border, be it oil, phosphate, cotton or people,” he said.
The reason we find this line of questioning fascinating is that just last week in the aftermath of the French terror attack but long before the Turkish downing of the Russian jet, we wrote about “The Most Important Question About ISIS That Nobody Is Asking” in which we asked who is the one “breaching every known law of funding terrorism when buying ISIS crude, almost certainly with the tacit approval by various “western alliance” governments, and why is it that these governments have allowed said middleman to continue funding ISIS for as long as it has?“
Precisely one week later, in even more tragic circumstances, suddenly everyone is asking this question.
And while we patiently dig to find who the on and offshore “commodity trading” middleman are, who cart away ISIS oil to European and other international markets in exchange for hundreds of millions of dollars, one name keeps popping up as the primary culprit of regional demand for the Islamic State’s “terrorist oil” – that of Turkish president Recep Erdogan’s son: Bilal Erdogan.
His very brief bio:
Necmettin Bilal Erdogan, commonly known as Bilal Erdogan (born 23 April 1980) is the third child of Recep Tayyip Erdo?an, the current President of Turkey.
After graduating from Kartal Imam Hatip High School in 1999, Bilal Erdogan moved to the US for undergraduate education. He also earned a Masters Degree in John F. Kennedy School of Government at Harvard University in 2004. After graduation, he served in the World Bank as intern for a while. He returned Turkey in 2006 and started to his business life. Bilal Erdogan is one of the three equal shareholders of “BMZ Group Denizcilik “, a marine transportation corporation.
Here is a recent picture of Bilal, shown in a photo from a Turkish 2014 article, which “asked why his ships are now in Syria”:
In the next few days, we will present a full breakdown of Bilal’s various business ventures, starting with his BMZ Group which is the name implicated most often in the smuggling of illegal Iraqi and Islamic State through to the western supply chain, but for now here is a brief, if very disturbing snapshot, of both father and son Erdogan by F. William Engdahl, one which should make everyone ask whether the son of Turkey’s president (and thus, the father) is the silent mastermind who has been responsible for converting millions of barrels of Syrian Oil into hundreds of millions of dollars of Islamic State revenue.
By F. William Engdahl, posted originally in New Eastern Outlook:
Erdogan’s Dirth Dangerous ISIS Games
More and more details are coming to light revealing that the Islamic State in Iraq and Syria, variously known as ISIS, IS or Daesh, is being fed and kept alive by Recep Tayyip Erdogan, the Turkish President and by his Turkish intelligence service, including MIT, the Turkish CIA. Turkey, as a result of Erdogan’s pursuit of what some call a Neo-Ottoman Empire fantasies that stretch all the way to China, Syria and Iraq, threatens not only to destroy Turkey but much of the Middle East if he continues on his present path.
In October 2014 US Vice President Joe Biden told a Harvard gathering that Erdogan’s regime was backing ISIS with “hundreds of millions of dollars and thousands of tons of weapons…” Biden later apologized clearly for tactical reasons to get Erdo?an’s permission to use Turkey’s Incirlik Air Base for airstrikes against ISIS in Syria, but the dimensions of Erdogan’s backing for ISIS since revealed is far, far more than Biden hinted.
ISIS militants were trained by US, Israeli and now it emerges, by Turkish special forces at secret bases in Konya Province inside the Turkish border to Syria, over the past three years. Erdo?an’s involvement in ISIS goes much deeper. At a time when Washington, Saudi Arabia and even Qatar appear to have cut off their support for ISIS, they remaining amazingly durable. The reason appears to be the scale of the backing from Erdo?an and his fellow neo-Ottoman Sunni Islam Prime Minister, Ahmet Davuto?lu.
Nice Family Business
The prime source of money feeding ISIS these days is sale of Iraqi oil from the Mosul region oilfields where they maintain a stronghold. The son of Erdogan it seems is the man who makes the export sales of ISIS-controlled oil possible.
Bilal Erdo?an owns several maritime companies. He has allegedly signed contracts with European operating companies to carry Iraqi stolen oil to different Asian countries. The Turkish government buys Iraqi plundered oil which is being produced from the Iraqi seized oil wells. Bilal Erdogan’s maritime companies own special wharfs in Beirut and Ceyhan ports that are transporting ISIS’ smuggled crude oil in Japan-bound oil tankers.
Gürsel Tekin vice-president of the Turkish Republican Peoples’ Party, CHP, declared in a recent Turkish media interview, “President Erdogan claims that according to international transportation conventions there is no legal infraction concerning Bilal’s illicit activities and his son is doing an ordinary business with the registered Japanese companies, but in fact Bilal Erdo?an is up to his neck in complicity with terrorism, but as long as his father holds office he will be immune from any judicial prosecution.” Tekin adds that Bilal’s maritime company doing the oil trades for ISIS, BMZ Ltd, is “a family business and president Erdogan’s close relatives hold shares in BMZ and they misused public funds and took illicit loans from Turkish banks.”
In addition to son Bilal’s illegal and lucrative oil trading for ISIS, Sümeyye Erdogan, the daughter of the Turkish President apparently runs a secret hospital camp inside Turkey just over the Syrian border where Turkish army trucks daily being in scores of wounded ISIS Jihadists to be patched up and sent back to wage the bloody Jihad in Syria, according to the testimony of a nurse who was recruited to work there until it was discovered she was a member of the Alawite branch of Islam, the same as Syrian President Bashar al-Assad who Erdogan seems hell-bent on toppling.
Turkish citizen Ramazan Bagol, captured this month by Kurdish People’s Defence Units,YPG, as he attempted to join ISIS from Konya province, told his captors that said he was sent to ISIS by the ‘Ismailia Sect,’ a strict Turkish Islam sect reported to be tied to Recep Erdogan. Baol said the sect recruits members and provides logistic support to the radical Islamist organization. He added that the Sect gives jihad training in neighborhoods of Konya and sends those trained here to join ISIS gangs in Syria.
According to French geopolitical analyst, Thierry Meyssan, Recep Erdogan “organised the pillage of Syria, dismantled all the factories in Aleppo, the economic capital, and stole the machine-tools. Similarly, he organised the theft of archeological treasures and set up an international market in Antioch…with the help of General Benoît Puga, Chief of Staff for the Elysée, he organised a false-flag operation intended to provoke the launching of a war by the Atlantic Alliance – the chemical bombing of la Ghoutta in Damascus, in August 2013. “
Meyssan claims that the Syria strategy of Erdo?an was initially secretly developed in coordination with former French Foreign Minister Alain Juppé and Erdogan’s then Foreign Minister Ahmet Davuto?lu, in 2011, after Juppe won a hesitant Erdogan to the idea of supporting the attack on traditional Turkish ally Syria in return for a promise of French support for Turkish membership in the EU. France later backed out, leaving Erdogan to continue the Syrian bloodbath largely on his own using ISIS.
Gen. John R. Allen, an opponent of Obama’s Iran peace strategy, now US diplomatic envoy coordinating the coalition against the Islamic State, exceeded his authorized role after meeting with Erdogan and “promised to create a “no-fly zone” ninety miles wide, over Syrian territory, along the whole border with Turkey, supposedly intended to help Syrian refugees fleeing from their government, but in reality to apply the “Juppé-Wright plan”. The Turkish Prime Minister, Ahmet Davutoglu, revealed US support for the project on the TV channel A Haber by launching a bombing raid against the PKK.” Meyssan adds.
There are never winners in war and Erdogan’s war against Syria’s Assad demonstrates that in bold. Turkey and the world deserve better. Ahmet Davutoglu’s famous “Zero Problems With Neighbors” foreign policy has been turned into massive problems with all neighbors due to the foolish ambitions of Erdogan and his gang.
- A Heatmap Of Global CapEx 'Shrinkage'
Hot on the heels of the biggest collapse in Australian Capex ever, and just as we predicted back in 2012, we thought it about time to once again re-visit – Godot-like – the never-ending wait for 'recovery' (or ongoing crash) in Capital Expenditure around the world.
Back in 2012 we accurately predicted that in the Brave New Normal World, where zero cost debt-issuance is used to immediately fund stock buybacks instead of being reinvested in growth and expansion, in the process boosting management pay through equity-performance linked option payout structures, that with every passing year CapEx spending would decline first in relative then in absolute terms, even as free cash flow use of funds is spent on other "here-and-now" shareholder-friendly activities such as buybacks and dividends would grow exponentially.
And yet companies which have no choice but to continue their existence, even if they are forced to pay out all incremental cash to their loud-mouthed shareholders simply because there really is no global economic growth which can soak up the incremental growth spending, they still spend money on (mostly) maintenance and (to a tiny extent) growth capital spending.
So for those curious where this spending ends up (because everyone knows where dividends and buybacks go), here is a global heatmap of all capex spending broken down by region and segment:
As Goldman so succinctly explains, this is not about to turn around anytime soon…
Our long-held bearish view on capex hinges on several overlapping factors:
- the aftermath of China’s huge investment phase and the resultant overcapacity;
- global growth becoming less capital-intensive;
- the ubiquity of technology (substituting hardware capex for software opex, digitisation of widgets, optimising utilising and rousing dormant capacity); and
- persistent uncertainty (around regulation, obsolescence risk and new competitors, both cross-border and cross-sector).
- Busted: Hillary Caught Coordinating With CNN To Smear Rand Paul
Submitted by SM Gibson via TheAntiMedia.org,
State Department emails published by Gawker on Tuesday show that a CNN journalist colluded with a top Hillary Clinton State Department aide in an attempt to smear Kentucky Senator Rand Paul during the former secretary of state’s 2013 testimony on the Benghazi attacks.
Elise Labott, a foreign affairs reporter for CNN, is now serving a two-week suspension from the Atlanta-based global news network for posting a critical tweet of Senator Paul during the hearing. She apparently did so at the directive of Clinton aide Philippe Reines. The social media post chided Senator Paul for asking Clinton difficult questions throughout the Senate Foreign Relations Committee hearing. Labott also coordinated with Reines to tweet a favorable quote from Clinton’s testimony.
In what appeared to be a follow-up question to a prior conversation, the CNN reporter asked Reines via email, “are you sure rand paul wasn’t at any hearings?”
Just minutes after hitting send, Labott fired back with another message informing the aide of what she had just posted to her official Twitter account:
Sen Paul most critical on committee of Clinton, but a little late to the #Benghazi game.Not sure he was at many of the 30 previous briefings
— Elise Labott (@eliselabottcnn) January 23, 2013
“She was great. well done. I hope you are going to have a big drink tonight,” the CNN employee wrote to Reines hours later in reference to Hillary’s performance earlier that day.
Reines responded by typing to Labott that he had “suggested a good Tweet.”
Labott messaged back that she had not received his suggestion for an additional tweet. Reines replied back with the word “Pin,” a reference to a private messaging system.
Labott responded, “will get back to you.” Less than 15 minutes later, she sent an email that read, “done.” She had just posted a Tweet that quoted Clinton:
A reporter who Tweets on request! pic.twitter.com/vdFGrYisgU
— Phil Kerpen (@kerpen) November 25, 2015
“The liberal media has taken their Clinton sycophancy to a new low. CNN needs to address this bias and lack of journalistic integrity,” Paul’s chief campaign strategist Doug Stafford, said in a statement. “This email revelation should give Republicans pause as to their coverage and possibility of fair treatment towards Sen. Paul during the next debate. All eyes will be on CNN’s response to their employee colluding with Hillary Clinton in order to attack a prominent U.S. senator on their dime.”
- Obama Put Taiwan on ISIS Radar
By EconMatters
One big news widely reported in Taiwan right now is that the national flag of the Republic of China (R.O.C. Taiwan) appears on ISIS web site video. Above is a screenshot of the video with Taiwan’s flag prominently displayed along side that of the U.S. and U.K. The flags are supposedly in alphabetical order by country name. The video was posted on ISIS web site on Wednesday, Nov. 25, 2015.
According to a partial video on a Taiwan TV news show, ISIS also sends this errie message:
Our number only increases with faith. And we are counting your banners, which our prophet says when it reaches 80, then the Blaze of War will find you.
You might wonder how ISIS came as far as seeing Taiwan as an equal threat as the U.S.? Taiwan’s news media linked ISIS’s sudden recognition of Taiwan to a statement made by U.S. President Obama at an Association of Southeast Asian Nations (ASEAN) summit in Malaysia last week. Obama said that Taiwan was one of the Asia-Pacific countries in a coalition against ISIS.
It is true that Taiwan’s military and Special Forces have heavy American military DNA. Due to the constant threat from China across a narrow strait, Taiwan has relatively heavy military defense (for a small island). A lot of Taiwan’s defense miliary technology is supplied by the U.S. companies. Taiwan regularly sends military personnel to train in the U.S. while Taiwan’s media reports U.S. Navy SEAL also sends trainers every so often to train one of the island’s elite special forces units.
In response to Obama’s latest ‘recognition’, Taiwan governmnet simply said its current focus is on providing humanitarian assistance (i.e., We are NOT involved with Obama’s ‘Coalition’). Indeed, Taiwan’s involvement with the chaos in the Middle East has been humanitarian aid to the region such as donating 300 prefabricated houses and nearly US$10 million in medical supplies to the refugees.
This stance is understandable as Taiwan had an ISIS panic attack when in February 2015, ISIS official Twitter channel twitted a picture of what looks like Taipei 101 Building (never confirmed) under atack. This out-of-nowhere recognition by ISIS has prompted the Taiwan government to step up security measures, while President Ma Ying-jeou urged the public not to panic (Good luck with that).
Ever since the Chinese Nationalists Party (KMT) retreated to Taiwan in 1949, it goes without saying that China has always viewed Taiwan as a renegade province that may be reclaimed by force if necessary. In the 60+ years since then, the tiny island country has transformed itself quite successfully thanks to a series of financial and economic reforms by the Nationalist Party (KMT), while millions were killed by Mao’s Cultural Revolution and the Great Leap Forward. (On a side note, I’m not sure how the UK shadow chancellor thought it was funny to quote Mao in the Spending Review meeting.)
On the diplomatic front, Taiwan has sufferred many losses and betrayals. Despite the fact that the Republic of China (Taiwan) was one of the the five founding and PERMANENT members of the United Nation (U.N.), Taiwan was ousted by the U.N. on Oct. 25, 1971 when U.N voted to recongnize Mainland China and to expel the R.O.C Taiwan. Today, people in Taiwan still remember it as the day when the world sold R.O.C. out. Since then, U.N. only recognizes the Communist China as the only lawful representative of China and has rejected calls to make Taiwan a member. And Taiwan has almost always been excluded in any international economic pac (such as the TPP or AIIB) due to China’s influence.
Taiwan instead strives to maintain extensive unofficial ties with countries that do not recognise it, focusing on trade, investment, culture and cooperation in non-political areas. Today, Taiwan has more than 100 representative offices in over 70 countries, including four offices in Australia (hense this detailed Taiwan brief on Australian Government site).
The sad fact remains that currently only 22 states (most of them you have never heard of) in the entire world recognize Taiwan as the Republic of China (ROC). I guess the number should be 23 now, adding ISIS?
Citizens in Taiwan actually do not appreciate Obama’s sudden ‘warm and fuzzy’ officially putting the island on ISIS radar. After all, the U.S. does not even recognize Taiwan nor has helped Taiwan in anything of real economic or polical benefits. And now Taiwan is suddenly ‘an ally’ of the U.S. in a ‘coalition’ against ISIS? But of course.
ISIS already angered China after executing a Chinese captive last week. Then, there’s rising tension between China and U.S. over disputes in the South China Sea and The East Pacific. So when Obama opens his mouth ‘recognizing’ Taiwan, ISIS jumps on it just to provoke China even more.
This is a chess match between ISIS, China and the U.S. using Taiwan as a game piece. If ISIS strikes Taiwan (think the casuaties at Paris in the much larger and stronger France), on whose hands will the blood be?
- A Look At The Coming Collapse Of The European Union
Submitted by Jeff Thomas via InternationalMan.com,
When I was a boy, a carnival would come through town annually, with a Ferris wheel, a merry-go-round and, of course, a midway: rows of makeshift stalls where fairgoers might win a prize by throwing a ball at weighted milk bottles, shooting a rifle at metal ducks, or pitching pennies at small glass bowls.
If you were to succeed in any of the above, the standard prize was a small stuffed bear (Although many large bears were displayed, generally, the few actual penny-pitch winners only succeeded in winning one of the smaller bears). Still, to a child’s mind, even this was cause for celebration, as you went home a winner.
I was one of the lucky ones. I actually did take home a prize on one occasion. I had been going to the fair faithfully every year and would save up my pennies for weeks in advance, so I’d have plenty to invest in bear futures on the midway.
It was only a day or two after I brought home my prize that I realised that I had spent several dollars in pennies winning a stuffed bear that probably (back then, in the 1950’s) only cost fifty cents to produce and, after I possessed it, actually had zero value to me…I had no use for a cheap stuffed bear.
So, here’s the penny-pitch progression:
- Promise of significant benefits for what seems a minimal initial investment.
- Excitement builds with continued investment.
- Elation when a prize is actually won.
- Realisation that the prize is of less actual value than anticipated.
- Realisation that the aggregate cost of the prize was so high that the money would have been better spent on something else.
In 1993, Europeans were invited to the new EU Carnival. In addition to the rides, there would be a midway: a variety of benefits such as open borders, a common currency and the opportunity to work in other countries more easily than before. Most European countries joined, even though, in most cases, only a minority of registered voters actually declared their desire for membership. The midway organisers (the political leaders) were all in favour and virtually everyone joined.
Like any midway game, all those who signed on were required to pony up, but the amount of money being invested seemed relatively small at the time. But like any midway game, it’s not the first pitch of the penny that gets you…it’s the subsequent, seemingly unending ones. It adds up.
Still, there have been those who have actually benefitted: those who actually moved to another EU country and got a good job; those who conduct multi-national business, etc., but, in the main, the conveniences have not been that great and the negatives, more and more, are eclipsing the benefits.
The non-elected oligarchy of the EU passes new laws at will. Moreover, at this point, so much money has been thrown at non-productive members that entire countries are, in effect, welfare states, living off the teat of the more productive countries. And feeding them has required unending and massive borrowing, which those who are pitching the pennies will, presumably, eventually have to pay. And each time it seems as though the situation couldn’t get any worse, Brussels creates a new diktat, such as the demand that all EU countries take in millions of refugees, whom they claim to be Syrians fleeing the civil war, but who are more likely to be from Afghanistan or North Africa and are people who demand benefits, but clearly have no desire to assimilate.
The people of Europe have been the patsies in this grand scheme and are, at this point, experiencing decided buyer’s remorse.
So, here’s the EU progression:
- Promise of significant benefits for what seems a minimal initial investment.
- Excitement builds with continued investment.
- Elation when a benefit is actually received.
- Realisation that the benefit is less actual value than anticipated.
- Realisation that the aggregate cost of the benefit was so high that the money would have been better spent on something else.
Returning to the penny-pitch, I recall that, by my early teens, I had realised that this was far from being a worthwhile investment. Once I realised that the prizes were of so little actual value to me and that I would have been better off spending my pennies in some other way, I ceased to enjoy the excitement of the midway and learned to invest money in a better way. I later prospered.
However, many, many people never lose the thrill of the promise of easily-won prizes. As they mature, the prizes that they seek may be more sophisticated than a stuffed bear, but the lure of easy benefits remains difficult to refuse and, in the case of governments, voters return to the polls periodically, each time believing the empty promises of politicians, saying to themselves, “This time it will be different.”
For so many people, the promise of a quick, easy solution to complex problems is impossible to resist and, more to the point, the more exaggerated the claim, the more likely that voters seem to buy into it. As Adolf Hitler said, “Make the lie big, make it simple, keep saying it, and eventually, they will believe it.”
And so we witness in virtually every “democracy” that conservatives such as David Cameron and Donald Trump offer outrageously simplified and impossible promises and otherwise-intelligent voters march off to the voting booth to vote for them. Similarly, Hillary Clinton and Justin Trudeau leave liberal voters starry-eyed with equally outrageously simplified and impossible promises. The only difference between liberal and conservative is that the rhetoric takes a slightly different slant. The method of deception is the same, and the effect on voters is the same.
And, of course, the outcome is the same. Trouble is, if we’re wise enough to figure out that the penny-pitch is a mistaken pursuit, we can simply walk away and never come back. However, if an entire country gets suckered into a construct as implausible as the EU, it’s not so easy to walk away. Brussels has no intention of folding its tent. Nor are the political leaders of Europe going to back off on the EU idea.
So, will the EU simply carry on? It’s doubtful. At some point, the debt will cripple even the net-payer countries to the degree that the people will rebel. In addition, the social dictates, such as the acceptance of refugees, have been so dramatically damaging on the street level that the people of many countries are reaching the boiling point. Eventually this will travel upward, as we see in Poland where, in an election year, the government itself is saying no to Brussels, no matter how Brussels threatens to penalise them for not doing as they are told.
The EU was never intended to serve the people of Europe, it was meant to empower the rulers of the countries of Europe and to subjugate the European people. Its days are numbered, but the cost of its demise will be borne by the people of Europe. Certainly, increasing numbers of them might wish that it could be as easy as throwing the stuffed bear in the dustbin, but it will not be so simple or so painless.
Editor’s Note: Unfortunately there’s little any individual can practically do to change the trajectory of this trend in motion. The best you can and should do is to stay informed so that you can protect yourself in the best way possible, and even profit from the situation.
We think everyone should own some physical gold. Gold is the ultimate form of wealth insurance. It’s preserved wealth through every kind of crisis imaginable. It will preserve wealth during the next crisis, too.
But if you want to truly “crisis-proof” your wealth, we recently released a video just for you…
- Oklahoma Leads The World In Seismic Activity As 2015 Quake Count Tops 5,000
With geologists having confirmed the link between fracking and earthquakes in Oklahoma (and energy executives trying to get those geologists fired), the news this week that The Sooner State leads the world in seismic activity will likely see more uproar from residents.. and more lobbying dollars spent to 'calm' the politicians. As KFOR reports, this year, more than 5,000 earthquakes have been recorded and experts say earthquakes in Oklahoma will likely increase in magnitude over time warning that it's only a matter of time before the state gets a big one that will change life for those of living there.
"It's unclear exactly how high we might go, and the predictions are upper 5-6 range for most things that I've seen," Todd Halihan, a researcher from OSU, told KFOR NewsChannel4,
Halihan studies these quakes; his expertise is hydrogeophysics.
"Underneath any of these urban areas, whether it's Stillwater, Cushing, Oklahoma City, Guthrie, these cities are not built to seismic standards. They're not in L.A." Halihan said.
"We have a lot of buildings that were built with earthquakes not even on the radar screen, so we would expect probably a fair bit of damage," Halihan said.
"We're not out ahead of it yet, we still have fires burning, and we're trying to get ahead of those fires, but we're not there yet," Matt Skinner, spokesperson for the Oklahoma Corporation Commission, said.
"The changing point I think was the Prague quake, because as a result of that, we had a hearing as to how we should proceed in the Prague area for oil and gas exploration," Skinner says.
Many people believe the commission is sitting back and watching the quakes happen, but they say that's not the case.
Before…
Last year…
And now this year…
NewsChannel cameras were given a rare look at the work of the commission.
"March of this year, we issued a directive that applied to over 300 disposal wells that dispose into the Arbuckle formation that said prove that you are not in the basement, in other words, you haven't drilled too deep," Skinner says. "So the idea was to dial back the total volume for the area that's going down to a pre-seismicity level."
We wondered why it's taken until this year to see action, OCC says they were waiting on data from oil and gas companies.
Information that by law, does not have to be shared, but now they're handing it over.
"An arrangement was eventually come to where there's a regular exchange now between the oil and gas industry,"Skinner says.
What they called a game-changer in slowing down the quakes.
"All of the sudden, for the first time, we're seeing stressed faults, where seeing where the basement faulting is" Skinner says.
In rural Oklahoma, data doesn't mean much, just simple living and a call for immediate change.
"I'm really fighting the tears because I've done a lot of crying trying to figure out, what am I going to do? What am I going to do? And if there's me, there's so many other people. It's not just me, it's not just my story, it's thousands of stories," Dill says. "It's our homes, it's where we live, it's my heart and it's ripping it apart, that's what it's doing."
The Oklahoma Corporation Commission continues shutting down wells and reducing injection amounts. They have set up a site to get more information about what is happening in Oklahoma. But, if anyone expects anything to really change, this resident summed things up perfectly…
"I've done all my crying and now I'm just angry, I'm so angry… Anything that has to do with the state we might as well forget."
And, as we detailed previously, here is the man responsible for this…
When it comes to Oklahoma's "induced seismicity" there is nobody more responsible for either Oklahoma's "shale miracle" or the resultant earthquake epidemic than David Chernicky, CEO of Tulsa-based New Dominion.
This is his story, as recounted by Bloomberg:
By the late 1960s the Oklahoma City oil field was largely spent. As crude was sucked out, it gradually flooded with vast amounts of salt water, the remnants of an ancient ocean that once covered the Midwest. The pockets of oil and gas that remained in the reservoir were trapped deep inside rocks. The only way to get at them was to “dewater” the field—which meant pumping out hundreds of millions of barrels of salty, often toxic wastewater, then disposing of it.
David Chernicky saw an opportunity. A trained geologist turned wildcatter, he’s devoted most of his 35 years in the oilpatch to perfecting the business of reviving oil fields instead of exploring for new ones. “I try to pick the ugly girl at the dance,” he says. Chernicky spent years studying the Oklahoma City field, poring through stacks of geological studies and surveys, some of which went back 65 or 70 years. He figured it still held about 50 million recoverable barrels of oil. “That 2-foot-thick file of data on Oklahoma City says there’s a ton of oil still there, but you have to think outside the box to get it,” he says.
… In 2003 New Dominion, began work on a new breed of injection well, a type that could take down tens of millions of barrels a year and bury it deep underground. Chernicky, who has a bawdy streak, named the first one Deep Throat.
Behold: Deep Throat.
According to Bloomberg, few companies have more at stake than New Dominion. "A July 2014 study published in Science found that four high-volume disposal wells owned by New Dominion on the outskirts of Oklahoma City may have accounted for 20 percent of all seismic activity in the central U.S. from 2008 to 2013. Two victims of the 5.7 quake from 2011 have sued New Dominion for damages; the state Supreme Court has agreed to hear the case of Sandra Ladra, a 64-year-old resident of Prague, who sued after her stone chimney crumbled during the quake, sending rocks crashing down on her legs. Should the court establish a precedent where New Dominion and companies like it can be held liable for earthquake damage, the fallout could be severe. “If wastewater wells come under heavy fire from lawsuits and regulations, it could change the entire economics of the oil industry in this state,” says Kim Hatfield, chairman of the regulatory committee at the Oklahoma Independent Petroleum Association.
Perhaps instead of competing with US shale on the global marketplace in a race who can cut prices the most and stay in business, the Saudis should be more interested in sponsoring Ladra's legal case against New Dominion:because as Steve Everley of Energy In Depth, an industry-backed research group, says, “If you shut down [wastewater] disposal, you’re effectively shutting down production."
You also kill the US shale miracle without selling a single barrel of oil below cost.
That, or just bribe Chernicky to admit his process will lead to ever stronger and more destructive erathquakes. For now, however, the legendary wildcatter is sticking to his guns.
The fourth of 10 children, Chernicky learned to work hard early. His father, Thomas, was a first-generation American whose parents emigrated from Ukraine. After serving in World War II, Thomas worked at Tinker Air Force Base near Oklahoma City, helping retrofit B-52s. The Chernicky children didn’t get any allowance and were all expected to earn their own keep. “Dave was probably the most industrious of the kids,” says his older brother Wayne. “Of all the 10 kids, Dave saw the opportunities to make money the earliest.” David took on four or five paper routes. When he turned 14, he realized he could make $1.10 an hour at McDonald’s, where he’d sometimes work more than 80 hours per week.
After a stint in the Air Force, Chernicky earned a degree in exploration geophysics from the University of Oklahoma. He went to work in Wyoming and the Rocky Mountains for Marathon Oil and Amoco before striking out on his own as an independent petroleum geologist. He quickly gained a reputation for his unconventional methods of finding oil. “I’ve never found an appreciable drop of oil through textbook geology,” he says. When oil prices tanked in the mid-1980s, things got tight. “At that time, working at McDonald’s probably paid better than being a self-employed geologist in Oklahoma,” says Wayne. To get by, David drove a truck for Wayne’s office supply business in Tulsa. “I’ve seen him come through good times and bad times,” says Wayne. “Each time, I see him come out stronger.”
By the mid-1990s, Chernicky had established himself as a technical master of dewatering, putting his consulting company, Chernico Exploration, in high demand. His first big success was dewatering an old oil field called the Red Fork, lowering large, submersible pumps into the wells to suck out massive quantities of water. The more water that was drained, the more oil and gas seeped out of the sandstone. A successfully dewatered field quickly shrinks the ratio of water to oil. In one of its earliest wells, New Dominion initially pulled up 160 barrels of water for each barrel of oil. Over 16 months, that improved to 7.5 to 1. “It was a very smart idea,” says Kurt Rottmann, a petroleum geologist who has worked on Oklahoma oil fields for four decades. “David Chernicky recognized the potential of this very early on.”
Chernicky, however, was growing impatient with consulting and watching other companies botch his handiwork. Dewatering was a precise science, and he felt he could make it work better by controlling every facet of the operation. “Oil companies kept f—ing up my oil fields, so I figured I was ready to try it on my own,” he says. He started New Dominion with two other partners in 1998. By the early 2000s the company was operating more than 100 wells, producing a total of 4,000 to 5,000 barrels of oil a day, plus millions of cubic feet of gas.
And so Chernicky started the trend of reinjecting wastewater right back into the ground from which oil was pumped, replacing one natural resource, oil, with the potential of a natural disaster, earthquake.
This is hardly new: Dan Boyd, a petroleum geologist at the OGS, was well aware of previous instances where injecting fluid deep underground caused earthquakes. In 1961 the U.S. Army drilled a 12,000-foot disposal well in the Rocky Mountains to get rid of millions of gallons of toxic waste from napalm production and other sources. Shortly after injection began, quakes began rattling the nearby Denver area, including a 5.3-magnitude temblor in 1967. A year after injection stopped, the seismic activity faded. Boyd believed the wastewater pouring out of Chernicky’s disposal wells might trigger similar activity in Oklahoma. “I’d never seen a well that could put away as much water as Deep Throat,” he says.
He was right:
On the night of Dec. 20, 2006, Boyd’s fears were realized. A few minutes after 8 p.m., residents on the southeast edge of Oklahoma City heard a loud boom, followed by a sharp jolt that shook people’s houses. Four hours later, just after midnight, it happened again. Calls flooded into police and fire emergency lines. The initial fear was that something had happened at nearby Tinker Air Force Base—an explosion, an attack—but by the next morning, scientists at the OGS determined the area had been struck by two earthquakes. “It was an epiphany,” says Boyd.
In January 2007, New Dominion opened a second disposal well near Oklahoma City called Sweetheart. A month later, a small swarm of quakes struck nearby. In March, Boyd and three other scientists at the OGS drove to Tulsa for a four-hour meeting with New Dominion. The meeting was hosted by Steve Chernicky, New Dominion’s director of field operations and David’s brother. David also showed up, Boyd recalls, wearing a golf shirt and Bermuda shorts. He placed three or four mobile phones in front of him on the conference room table and excused himself from the meeting each time one rang. While nobody accused New Dominion of causing the earthquakes, there was a “tacit understanding that the well had something to do with this,” says Boyd. “Everybody in the room was thinking about earthquakes. The correlation was obvious.”
But, just like Wall Street's now confirmed criminal banks, Chernicky covered up the potentially disastrous aftermath of his actions in the future by generously bribing the people here and now. Or, as it is known in financial parlance, lobbying.
As Chernicky looked for other dewatering opportunities, he found a lot of rundown communities whose oil had run out decades earlier and needed some help. In Carney, he gave $10,000 to finish a high school. In Prague, he donated $1 million for a city water expansion project and $50,000 to help build a new library. In January 2006, after a busy wildfire season, he donated $15,000 to local fire departments. He also started throwing an annual party in Prague called New Dominion Dayz to raise scholarship money for local students. Kids played on inflatable bouncing slides. Riding lawn mowers were given out as raffle prizes. A highlight was Chernicky in the dunk tank. In news articles, Prague’s city manager called Chernicky the “T. Boone Pickens of Prague.”
Chernicky’s largesse has helped to deflect attention from the role New Dominion may be playing in the crescendo of earthquakes across Oklahoma. The record 5.7 quake that hit Prague in November 2011 was the second of a trio that rumbled through over a four-day period, all measuring 5 or higher on the Richter scale. An air-conditioning duct fell through the ceiling of the Prague library Chernicky had helped build. Library Director Pam Batson got some cracks in her home, though she says she’s grateful for the donations from companies such as New Dominion. “It’s sort of like a double-edged sword,” she says
And so, as long as the bribes, pardon handouts, keep flowing (as does the oil) everyone can stick their head in the sand to what is painfully obvious. Sure enough, "for the moment, there’s little political pressure on Oklahoma’s oil and gas industry to change the way it operates. Republican Governor Mary Fallin has long claimed there isn’t enough information to determine what’s causing the quakes. She describes the OGS’s new position statement as “significant.” But when asked if the governor agrees that the industry is likely responsible for the quakes, her spokesman, Alex Weintz, didn’t respond."
Local politicians know that doing the right thing means putting their own career in jeopardy as it may lead to thousands of layoffs, not to mention an end to the bribers, pardon, lobbying:
At the Statehouse, the only two lawmakers willing to talk openly about the issue are Democrat Cory Williams and Republican Jason Murphey, who represent districts that have been shaken by quakes. Last fall they teamed up on a bill to study the quakes in greater depth, but so far nothing’s come of it. “It’s ridiculous,” says Williams, who’s pushing a moratorium on wastewater injection in 16 Oklahoma counties. “The oil industry threatens us by saying if you touch seismicity issues we’ll start laying down rigs and laying people off. This is the problem of having industry so intertwined with government. We know what’s causing it, and we are doing absolutely nothing to stop it and barely anything to regulate it.”
That may soon change however, thanks to an unexpected outside influence: the Saudi's pounce on US shale as the global "marginal" producer, which in turn is crushing the price of oil, and making shale increasingly unprofitable.
These are challenging days for New Dominion. Dewatering is among the most expensive ways to produce oil, and with crude trading at around $50 a barrel, down from $100 last summer, New Dominion’s fields likely aren’t as profitable as they once were. “This is the first time in over 20 years that I haven’t had a single drilling rig working for me,” Chernicky says. The company won’t hold its New Dominion Dayz festival this year. In January, Chernicky sued several former business partners, alleging they unduly paid themselves millions in bonuses before the partnership unraveled, a claim the former business partners dispute.
Of course, the price of oil may fall and it may rise, and if it rises enough New Dominion will be right back in the business of injecting millions of gallons of wastewater right into the same ground from whence the oil came, in the process leading to ever more and ever stronger earthquakes.
For now, however, New Dominion is adamant: "it's not our fault."
At New Dominion headquarters, the company promotes its own theories for the astronomic rise in Oklahoma quakes. Jean Antonides, the company’s craggy-faced vice president for exploration, produces a 2-inch-thick cardboard folder stuffed with maps, presentations, and papers—evidence, he says, that the quakes are the result of rapid changes in water levels of underground aquifers caused by drought and heavy rain.
Chernicky, for his part, dismisses the research linking earthquakes to wastewater disposal wells. “The meager amount of science put forward is so flawed, it can’t even be considered science,” he says. “It is emotion.” He contends that the Oklahoma quakes are “the result of tectonic activity happening all over the world.” In a year or two, he predicts, the flurry of quakes bedeviling Oklahoma will migrate north into the seismically sleepy states of Iowa and Nebraska, vindicating the oil industry. The vast majority of earthquake scientists disagree. “Pure b.s.,” says Martin Chapman, a geophysics professor at Virginia Tech University. “They just don’t want to admit they’re causing earthquakes.”
Chernicky is unswayed. He insists nature’s on his side. If humans can cause an earthquake, then they “can probably fart and shift the orbit of the planet, too.” He adds: “Man does not cause tsunamis in Japan. Man did not cause the volcanic blast at Krakatoa. And man does not cause earthquakes.”
And, as long as everyone – from bribed politicians, to poor citizens demanding the company's "largesse", to bankers funding New Dominion any time's its cash drops dangerously low – is aligned with the company and its business model, nothing will halt the trend of increasingly more frequent and stronger quakes shaking Oklahoma. Until, just like on Wall Street, one day the "big one" – the one that nobody could have possibly predicted – strikes and the sequel to the San Andreas movie is filmed among the ruins where the city of Tulsa once stood.
- 800 Shotguns Headed To Belgium From Turkey Seized In Italy
Following the ISIS assault on Paris that left 130 dead prompting Francois Hollande to declare that France is “at war,” authorities quickly established a link to the infamous Brussels suburb of Molenbeek.
The working class, immigrant neighborhood – which is separated from the historical district by a canal and is but a 20 minute subway ride from Brussels’ European Quarter – has become synonymous with radicalization and terror. As we put it last week, “what Charlestown is to bank robbers, Molenbeek is to European jihadists.”
“The assassination of the Afghan anti-Taliban commander Ahmed Shah Massoud, immediately before the Sept. 11 attacks in 2001; the train bombings in Madrid in 2004; and the killing of four people at the Brussels Jewish Museum in 2014; the foiled shooting on a high-speed train, the anti-terrorist raid in the eastern Belgian town of Verviers, the attack on a Paris kosher supermarket and, finally, the Nov. 13 attacks on the French capital — all had some connection to Molenbeek,” The New York Times wrote earlier this month.
But it’s not just Molenbeek. In January, two operatives working under the direction of Paris mastermind Abdelhamid Abaaoud were killed when Belgian police raided a safehouse in Verviers.
In short, Belgium has apparently become a kind of hub for jihadists. Not wanting to let a good crisis go to waste, the entire country – and especially Brussels – has been on high alert for nearly a week now as authorities hunt for several suspects who are purportedly planning a “serious and imminent” terrorist attack.
In what may be the latest evidence that there are indeed multiple active terror cells operating in the country (or in what may merely be evidence that some anonymous Belgian collector just really loves Winchesters), Italian police seized some 800 shotguns bound for Belgium today at the Port of Trieste.
Here’s the story from La Stampa (translated):
A load of about 800 shotguns, from Turkey to Germany, Holland and Belgium, has been discovered and seized by the Financial Police and the Customs at the Port of Trieste. The weapons of war were transported, without authorization, by a tractor-trailer driven by a Dutch citizen turkish. The cargo consisted of 781 shotguns model “Winchester SXP” from 12-51 cm, 66 shotguns “Winchester SXP” from 12-41 cm. 15 rifle and kicking.
Tir had landed in Trieste on 23 November. The weapons were contained in hundreds of cardboard boxes, each of which containing a shotgun, all directed in Belgium. Given the peculiarities of the load, its origin and destination, the Financial Police and customs officials have declined to elaborate documentation. Although there were no irregularities of customs, it had not been requested permission to the authorities of public security for the transportation.
And here’s a look at the merchandise:
Finally, a bit more from The Daily Star:
The finance police, who are often in charge of port security, said that while customs rules had not been violated, the Turkish truck driver did not have the licences needed to transport the 781 Winchester SXP shotguns.
Pump-action Winchester SXP rifles are made for hunting and are not considered assault weapons, but police said they had “substantially” increased their border inspections in the wake of the Nov. 13 Paris attacks and subsequent alert in Belgium.
“Given the delicate nature of the cargo, its origin and its destination, the documentation regarding the rifles was immediately examined,” the statement said.
What should immediately jump out at you here is that these were being sent from Turkey to Belgium. While anyone who’s followed Syria’s protracted civil war knows that Ankara has long been suspected of aiding and abetting Islamic State (just ask the PKK, or Newsweek, or even ISIS themselves), Erdogan’s role in financing the group was thrown into sharp relief this week after Vladimir Putin accused Turkey of facilitating the sale of illegal Islamic State crude (from which the group derives some half a billion dollars per year in revenue).
We’ve documented the Turkey-ISIS connection on dozens of occasions this year, but notably we revisited the link on Tuesday courtesy of Nafeez Ahmed in “NATO Is Harboring ISIS, And Here’s The Evidence” and then on Wednesday evening, we took our first peak down what is likely to be a very deep rabbit hole in “Meet The Man Who Funds ISIS: Bilal Erdogan, The Son Of Turkey’s President.”
Given all of this, one is certainly left to wonder just where in Turkey these 800 pump action shotguns came from and, more importantly, who sent them to Belgium. While we’re sure there were likely a string of intermediaries involved, we wouldn’t be surprised to learn that ultimately, there’s a connection to Ankara and from there, to ISIS.
* * *
Bonus: for those of you wondering what kind of damage you can do with a Winchester SXP, here’s an official video from the company’s website called “Everybody’s Shootin‘” – just imagine the ducks are people.
- Haidt-Speak – Coddling, Cry-Bullies, & Ending The Micro-aggression Culture
Submitted by Mike Krieger via Liberty Blitzkrieg blog,
The deplorable state of America’s college campuses, overrun by intolerant, censorship happy cry bullies, has been a key topic of discussion here as of late.
The following video is an excellent lecture on the topic by Jonathan Haidt, Professor of Ethical Leadership at New York University’s Stern School of Business.
Take the 30 minutes in between mouthfuls of turkey and share with your families.
For related articles, see:
Protesters at Smith College Demand Journalists Swear Loyalty Oath Before Reporting on Them
Not a Safe Space – Canadian University Suspends Yoga Class After Students Become Offended
From Protesting Vietnam to Demanding “Safe Spaces” – What Happened to America’s College Kids?
Speechless – UCLA Engages in Absurd, Anti-Intellectual and Dangerous Attack on Campus Free Speech
Rutgers University Warns Students – “There is No Such Thing as Free Speech”
A Professor Speaks Out – How Coddled, Hyper Sensitive Undergrads are Ruining College Learning
California Student Banned from Handing Out Constitutions on Campus
- Turkey Drops "Independence" From Central Bank Mandate As NATO's Favorite Autocrat Strikes Again
In the nearly six months since summer elections saw AKP lose its absolute parliamentary majority in Turkey after a strong showing at the ballot box by the pro-Kurdish HDP, it’s been interesting to watch how the central bank has reacted (or, more appropriately, “not” reacted) to periods of weakness in the lira.
Back in August, when things were falling apart in earnest, the cental bank attempted to explain how Turkey planned to deal with the normalization of DM monetary policy by releasing a “road map.” No one was impressed as the “plan” was decidedly short on specifics. As Citi noted at the time, “the so-called road map lacks a well-defined timetable and analytical discussion.”
Ultimately, Ankara decided to just lay it out there when, on August 19, the central bank said it would not be hiking rates until the Fed liftoff. “Now that the CBT has left rates unchanged and announced that it will largely rely on selling more FX to tame volatility in FX market while waiting Fed to hike first, TRY still remains a fair game,” BofAML said, adding that “CBT has announced its long-awaited road-map for the normalisation of the monetary policy and we believe it’s likely to disappoint the markets because it’s too gradual.”
Yes, “too gradual” which is why we said the following just two weeks ago:
One important thing to note about this particular situation, is that Turkey has been reluctant to hike in order to arrest the lira’s decline. In fact, the central bank has on any number of occasions explicitly stated that it will follow the Fed. But when, back in August, Turkey attempted to release a “roadmap” of how its central bank intended to respond to policy normalization by DM central banks, the market wasn’t buying it, suggesting that if the Fed hikes, it may not be as simple as simpy saying “oh, ok, we’ll hike too.” That is, they may find themselves unable to catch up, portending still more lira weakness.”
Now that Turkey is apparently trying to start a global conflict by becoming the first NATO member to shoot down a Russian jet since the Cold War, you can expect further lira weakness. Of course we predicted that too. From earlier this month:
And for anyone who thinks that a “strong” AKP government is going to give the lira anything that even approximates lasting relief, or that further ECB easing will give the central scope to remain on hold (or even to cut) in the face of a Fed hike, we suggest you take a hard look at exactly what’s going on politically and militarily both within Turkey and on its borders. There are huge (and likely intractable) idiosyncratic risk factors here that could send the currency plunging at any time.
We went on to list one more factor that could weigh on the lira: autocratic incompetence. By that we of course mean President Tayyip Erdogan’s contention that the lira and the country’s FX reserves be damned, rates need to be lower. Here’s what Erodgan said a few weekends ago at the G20 summit in Antalya:
“In Turkey, the interest rates are high. Our rates are not those in the West, where they are low. First you have to reduce the cost of money. As long as the cost of money is on the rise, you can neither find young businessmen nor young businesswomen.”
As Reuters noted at the time, “Erdogan has repeatedly called for lower rates to spur growth, equating higher financing costs with treason.” The G20 speech – where central bank governor Erdem Basci was forced to watch as Erdogan the rates strategist lectured everyone, including Christine Lagarde, on monetary policy – “is likely to unnerve investors already worried about central bank independence,” Reuters continued.
Indeed, and on Thursday we learn that those worries were not unfounded. Earlier today, we got a look at Turkey’s new government program (Ankara announced the new cabinet earlier this week) and conspicuously missing was the word “independent” in reference to how the central bank chooses monetary policy. As Bloomberg reported earlier, it was the first time the word was ommitted since AKP came to power thirteen years ago. Spot the moment when the market noticed:
More, from Bloomberg:
The new program says “it will continue to be fundamental that the central bank directly determine by itself the monetary policy tools it will utilize to attain price stability.” The last program, from September 2014, said the central bank “will continue to determine monetary policy and the monetary policy tools it will use to attain price stability in an independent fashion.”
Turkey’s recently appointed Deputy Prime Minister Mehmet Simsek, the $800 billion economy’s foremost chief, said “speculation over wording on central bank independence in the new government program doesn’t reflect the truth.”
Bora Tamer Yilmaz, an economist at Ziraat Yatirim in Istanbul, said the market “is trying to read too much into this.”
“We should focus on the meaning rather than individual words,” Yilmaz said by e-mail today. “Turkey has improved itself during the last decade in establishing modern institutions, and we are not expecting that process to unwind.”
Yes, we should “focus on the meaning and not the words.” Sorry Tamer, but it means exactly what everyone who knows anything about this government thinks it means: Erdogan will conduct monetary policy from now on.
So here’s a guy who in just the past six months has, i) started a civil war in order to whip the public into an anti-Kurd hysteria, ii) sabotaged the coalition building process so he could call for new elections, iii) arrested numerous members of the press, iv) held a farce of an election where his party only put up a strong showing because voters were scared to death, v) shot down a Russian warplane under suspicious circumstances, and now vi) eliminated the idea of central bank independence. And we haven’t even gotten to the part where he moves to change the constitution on the way to establishing a powerful executive presidency.
Meanwhile, the government in Ankara has been variously accused of facilitating black market crude sales for ISIS even as Erdogan uses the group as a smokescreen for his crackdown on political rivals.
Put simply: the idea that this country under the current government is a NATO member is absurd and the notion that Washington would support this type of autocratic rule is a testament to the fact that the US only cares about the proliferation of “democracy” if it means securing a foothold in a country that’s not already a strategic ally (like Syria).
- Thanks ISIS: We "Can't Keep Up With Surging Weapons Demand", Pentagon Says
Any time there is a war and countless people in one, two or more nations die for some ideological, religious, ethnic, cultural or nationalistic “reason”, two entities benefit: those who supply the weapons and those who supply the loans to buy the weapons.
And when it comes to supplying weapons to the world, in both absolute dollar and relative (as a % of GDP) terms, nobody even comes close to that paragon of democratic values, the United States of America.
To be sure, back in May we wrote “How You “Boost” GDP: US Sells Over $4 Billion In Weapons To Israel, Iran And Saudi Arabia” when, as the title suggested, we explained how the Great US “democracy” was spreading not only the greatest virtues of democracy to the middle-east, but every possible caliber of weapons to go with it. For a hefty price of course.
But not even we had any idea just how massive the “bumper” 2015 would be for the US military-industrial complex.
As it turns out, with many suggesting the world, already gripped in a global terrorism frenzy courtesy of the CIA-created “Islamic State”, is on the verge of World War III (and with a NATO power bringing down a Russian fighter jet for the first time in over 60 years one can see where they get that idea) the result has been an unprecedented surge in demand for modern weapons of all shapes and sizes… made in the US.
Demand so high, in fact, that the US simply can’t keep up.
According to Reuters, the U.S. government is working hard to ensure quicker processing of U.S. foreign arms sales, which surged 36 percent to $46.6 billion in fiscal 2015 and look set to remain strong in coming years, a top Pentagon official said.
Well of course demand will remain strong: after all that’s what the CIA is for – to destabilize the world, to install puppet governments and to assure that the shareholders of Lockheed, Raytheon, Boeing and General Dynamics have year after record year.
Here is why the US loves a “contained” world war:
“Projections are still strong,” Vice Admiral Joe Rixey, who heads the Pentagon’s Defense Security Cooperation Agency (DSCA), told Reuters in an interview late on Monday.
He said the agency was trying to sort out the impact of a much stronger-than-expected fourth quarter as it finalized its forecast for arms sales in fiscal 2016, which began Oct. 1.
The fight against Islamic State militants and other armed conflicts around the globe were fueling demand for U.S. missile defense equipment, helicopters and munitions, Rixey said, a shift from 10 years ago when the focus was on fighter jets.
Odd: it is almost as if the US would have had the greatest benefit in creating the Islamic State. Oh wait.
And before someone gets offended by the “World War” moniker, it’s not ours, it’s the Pentagons:
“It’s worldwide. The demand signal is coming in Europe, in the Pacific and in Centcom,” he said, referring to the U.S. Central Command region, which includes the Middle East and Afghanistan.
It has gotten so bad, the US is too backlogged, and isunable to deliver on time the weapons the world needs to fight the conflicts that the US stirs:
U.S. companies and some foreign countries have expressed growing frustration in recent months about delays in arms sales approvals. They argue that the U.S. government has not expanded its capacity to process arms deals despite a big spike in such transactions.
Jeff Kohler, Boeing Co’s (BA.N) vice president for international business development, said earlier this month he and his Gulf customers were “a little frustrated” with delays in getting U.S. approvals for fighter jet sales.
A $3 billion deal for 28 Boeing F/A-18E/F fighter jets for Kuwait, and a separate Qatari deal for F-15 fighters, have been delayed for some time.
What can possibly derail this war machine which literally converts deaths to profits? The answer, it appears, is budgetary cutbacks:
Rixey said DSCA was keeping up with surging arms sales requests largely through process improvements and better training, but he warned that potential cuts in Pentagon headquarters funding could pose a problem.
Clearly we can’t have less people getting killed around the globe just because Congress didn’t apportion enough blood money to the Pentagon.
Meanwhile, the world is literally arming itself at a rate suggesting world war is around the corner: “DSCA is handling a total of 13,500 cases with a total value of $461 billion. Last year’s total was the biggest yet, outside of a spike caused by Saudi fighter jet sales in 2012.”
Rixey said his agency was coordinating more closely with the U.S. State Department, the U.S. Commerce Department and other Pentagon agencies and leaders to advocate for U.S. arms sales as a key instrument of U.S. foreign policy.
He said requests from countries that were “well-behaved” and protected U.S. technology were generally processed quickly, but the U.S. government would take its time vetting sales to countries with weaker records on human rights and technology.
It would take its time, but in the end it will always say yes. Because the punchline is that “Rixey said some munitions had also been sold from U.S. military reserves to ensure that they were available to allies quicker.”
Because when profits are at stake, who cares about the safety of one’s own people? After all, one must keep the global war profit machine running at full speed at every given moment.
Confused? Then watch these two movies.
- How Much Higher Can The U.S. Dollar Go?
Submitted by Charles Hugh-Smith via PeakProsperity.com,
Let’s start our examination of the U.S. dollar (USD) by recalling the chart from my August 2014 essay, Why the Dollar Could Strengthen—A Lot. At that point, the USD had moved modestly off its lows, and had yet to challenge long-term resistance around 80.
Here’s the same chart of the Real Trade-Weighted U.S. Dollar Index now:
The USD broke out of its multi-year downtrend and soared above 100. Needless to say, the USD did in fact strengthen a lot. After that initial leg up, the dollar has remained in a consolidation range for much of 2015. Though it recently broke out of a wedge/triangle formation to the upside, it’s not yet clear if this is a definitive move higher or more consolidation.
Is the Dollar Rally Done?
So is the dollar rally done, or could it move higher?
The long-term chart above (Real Trade-Weighted U.S. Dollar Index) offers some clues.
Our first observation is that trends in the USD tend to last for some time, so if this rally follows the pattern of previous rallies, it’s unlikely to have run its course in one year.
Secondly, previous rallies paused for a multi-month consolidation period before launching upward for the second leg of the long-term rally.
Thirdly, the USD rose sharply to previous peaks and then round-tripped back to the 80 level.
This raises the question: How high could the dollar rise in this rally?
How High Could the USD Go?
How high could the USD rise before it tops out? Last November, when the dollar had just punched above 85 for the first time in years, I posted this chart that suggested 120 was “not impossible:”
The current rally has already made it halfway to this target (from sub-80 to 100+). If we look again at the FRED chart above (the current Real Trade Weighted Dollar Index), we see that the consolidation periods have occurred roughly mid-way in the rallies. This is supportive of the idea that the initial 20+ point advance could be followed (after the consolidation phase ends) by another leg higher of approximately the same size (20+ points).
That would get the dollar Index to the 120 target.
Beyond 120, there are additional “impossible” targets defined by previous rallies: depending on the chart (Real Trade Weighted Dollar Index from FRED, DXY or USD on charting services), these targets range from 130 to 165.
Who Would Suffer If the Dollar Moved Higher?
Any move higher in the dollar would encounter serious resistance from everyone whose positions, sales and profits would be negatively impacted by a soaring dollar.
Any move above current levels around 100 would cause tremendous pain for many powerful participants. U.S. global corporate profits, already under pressure from the stronger dollar, would suffer from the worsening exchange rate, and that would pressure U.S. stock markets that are at least theoretically based on profits.
Recall how FX (foreign exchange impacts U.S. corporate profits:
- Major American corporations get 40+% of sales and 50+% of profits from overseas markets denominated in other currencies.
- One euro of profit earned in the EU translated into $1.40 in profit a few years ago. Now the same 1 euro of profit converts to a mere $1.07 in profit when stated in dollars.
- That’s a 24% reduction in profit, just from the strengthening dollar.
The effects of the stronger dollar on profits is visible in this chart. Note that while pundits and apologists are quick to blame “weather” for lagging sales, corporations overwhelmingly identified the rising USD as the cause of profit warnings, not the weather or geopolitical issues.
Everyone who took out loans denominated in USD while their revenues/earnings are in a currency that’s losing value against the dollar will suffer as well.
If an enterprise earning euros borrowed in dollars when the euro was 1.40, consider what happens to their USD-denominated loan payments now that the euro is 1.07.
Where is once took only .72 euros to pay $1 in principal and interest on the dollar-based loan, now it take .94 euros to pay that same $1. That’s a 30% increase in loan payments, just from the rising dollar and the declining euro.
This dynamic is even more punishing to those who borrowed dollars to fund carry trades in other currencies.
What is a carry trade?
As my PeakProsperity.com colleague Davefairtex explained last year:
Carry Trade For Dummies:
Step 1) Borrow $1 billion US at LIBOR-1M rate; cost 0.16%.
Step 2) Trade $1 billion US for 1.075 billion AUD (Australian dollar).
Step 3) Buy 1.075 billion 2-year AUD govt bonds; yield 2.52%
Step 4) Collect $23 million USD/year for doing no work at all.
If the currency the bond is denominated in rises in value against the USD, traders get a bonus gain from the appreciation. For example, those who borrowed yen to buy U.S. Treasury bonds have reaped a nice profit as the USD has rocketed higher against the yen.
But the reverse is less pleasant. As the USD rockets higher, the profits earned in weakening currencies decline when stated in dollars, while the amount due on the dollar-denominated loan has soared when the payments are converted to the local currency.
Using our euro-USD example: the profit on the carry trade plummets (when converted to USD) while the amount of euros needed to pay the loan in USD soars.
A rising USD is a double-whammy to carry trades based on borrowed dollars.
The sums of money being gambled in carry trades are enormous. According to the Telegraph newspaper (U.K.), roughly two thirds of the $11 trillion in cross-national loans are denominated in U.S. dollars. That suggests that over $7 trillion in carry trades have turned sour.
If the dollar continues rising, those sour carry trades quickly become catastrophic for everyone who borrowed dollars to buy assets in a weakening currency.
Everyone who took loans denominated in dollars needs dollars to service the loan and pay it off. That demand is clearly one factor pushing the USD higher.
In Part 2: Why The Coming Currency Crisis Will Push The USD Higher, we detail why we can anticipate the next global financial crisis will originate in the currency market, and how this will inevitably push the USD higher, which will increase the pressure on carry trades, adding fuel to the USD fire. Perhaps ironically, a much stronger dollar will put tremendous downward pressure on U.S. stock markets in 2016.
Click here to read Part 2 of this report (free executive summary, enrollment required for full access)
- Putin, Hollande Hold Joint Press Conference Over Anti-ISIS Talks – Live Webcast
Moments ago, after nearly two hours of private talks in Moscow between Vladimir Putin and France’s Francois Hollande, a press conference started in which the two world leaders will share the conclusions of their discussions: will France gravitate closer toward Moscow after the events of the past 2 weeks or will it remain a key block in the NATO anti-Russia alliance?
Some of Hollande’s statements so far:
- Assad can not play a role in Syrian future
- France and Russia will share intelligence and exchange information
- France and Russia will coordinate their strikes on the Islamic State, as well as coordinating what should not be hit
- Putin will go to Paris on Monday to join climate change conference
Putin disagrees with Hollande and said that the future of Assad should be “entirely in the hands of the Syrian people”, and adds that Russia will not attack areas that are not controlled by terrorist groups and will share intelligence on deciding which those are.
More importantly, Putin explains the reason for the deployment of the S-400 SAM system: Russia never thought it would need to deploy this system as ISIS don’t have missiles that can reach the altitudes at which Russian airplanes fly, however it has no air defense protection against Turkish warplane attacks like the one that happened (adding he never expected a Russian jet to be attacked by someone considered an ally), essentially admitting that the S-400s deployed today are a deterrent to further Turkish activity and will be used promptly if a comparable situation to the one from Tuesday is repeated.
Perhaps most important, however, is topic #1, namely who is funding ISIS, and here Putin just said that Russia has observed industrial-scale oil supplies flowing from militant-controlled regions in Syria to Turkey. All we need now is a YouTube clip as proof.
A recording of the press conference is available below:
- US Foreign Policy Explained (In 1 Cartoon)
The definition of insanity…
h/t @Ignorant_Effigy
- Jeez! What Ever Happened To The "Free World"?
Submitted by Simon Black via SovereignMan.com,
On August 12, 1961, Walter Ulbricht, the Chairman of the State Council in East Germany, signed an order to close the border and begin building a wall around East Berlin.
It happened quickly. Soldiers began tearing up the roads leading into West Berlin almost immediately and actually stood with weapons at the border with orders to shoot anyone who tried to cross.
Before long there were barbed-wire fences. Then concrete walls. Then dogs. Guard towers. And even anti-tank obstacles.
Of course, the East German government told people that the wall was for their protection, ostensibly to keep out rapists and thieves.
They said that there were too many foreigners coming in to East Berlin who unfairly bought up state-subsidized goods.
They also warned people of the looming threat of fascist invaders, and even went as far as to call the wall an “Anti-fascist protective rampart”.
As a child of the ’80s (I was born at the tail-end of the Carter administration), I remember how the Berlin Wall was a symbol of tyranny and oppression.
And from the steps of the Brandenburg Gate in West Berlin, Ronald Reagan told the world in a now-famous speech from 1987, “The advance of human liberty can only strengthen the cause of world peace,” before demanding, “Mr. Gorbachev, tear down this wall!”
Back then if you had talked about building a wall in America, they would have called you a Commie.
But now, in the Land of the Free, it’s all the rage to build a new wall.
They’re also talking about rounding up Muslims and having ‘databases’ just in case you have the audacity to be brown.
There’s already a massive level of surveillance in the Land of the Free. Everything you do online is monitored and tracked.
The police state grows by the day. Federally-funded police forces now don combat boots, Kevlar vests, and intimidating paramilitary attire to drive around in their urban assault vehicles as if they’re in downtown Mogadishu.
Nearly every federal agency down to the Fish and Wildlife Service has its own gun-toting police force… which makes it pretty unsurprising that Civil Asset Forfeiture has risen an average of 21% per year for the past two decades.
Yet despite all of this security and surveillance, the government still doesn’t feel that it’s enough.
The US State Department released an alert this week telling American citizens to avoid travel and public places… for the next THREE MONTHS.
Apparently we should all be cowering in fear in our homes, grateful that the NSA is reading our emails.
The Department of Homeland Security is bringing back “if you see something, say something” in the hopes of having the citizens all rat each other out.
Former CIA Director Jack Devine stated “I have never felt more uncomfortable than I do today,” and that today “is the most dangerous time ever.”
Someone needs to give this man a history lesson. Human civilization has had to deal with deranged threats for thousands of years.
Yes, there are some nut jobs out there—crazed, lone wolf gunmen, angry teenagers, and even terrorists with an agenda, all of whom intend to do harm to innocents.
But having traveled to nearly 120 countries on all seven continents, I can tell you from personal experience that the world is actually a pretty safe place.
Today I can hop on a plane and be on the other side of the planet tomorrow morning, even in a country where I don’t know a soul.
You couldn’t do that 500 years ago. You couldn’t even really do it 100 years ago.
Centuries ago, even moving outside your own village was fraught with risk and peril. So the time we’re living in today is actually one of the safest in the history of the world.
The far greater danger out there, more than angry teenagers and men in caves, is the palatable, distinct decline in freedom.
I don’t know where the ‘Land of the Free’ went… or where the ‘leader of the free world’ ran off…
But this is a far cry from those days in the ’80s when Western nations stood against tyranny and fear.
If you celebrate Thanksgiving, I’d encourage you to give thanks that you can see the truth. Give thanks that you’re rational and aren’t giving in to the propaganda.
But most of all, give thanks that, even though you may not be free right now, all the solutions exist to ensure that you can be once again.
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