- WoRLD TuRTLe DaY 2015
- Never Forget The Price Of Freedom
- The Original Chechnya Bombers – The CIA, The Saudis And Bin Laden
Authored by F. William Engdahl via New Eastern Outlook,
What if Putin is Telling The Truth?
On April 26 Russia’s main national TV station, Rossiya 1, featured President Vladimir Putin in a documentary to the Russian people on the events of the recent period including the annexation of Crimea, the US coup d’etat in Ukraine, and the general state of relations with the United States and the EU. His words were frank. And in the middle of his remarks the Russian former KGB chief dropped a political bombshell that was known by Russian intelligence two decades ago.
Putin stated bluntly that in his view the West would only be content in having a Russia weak, suffering and begging from the West, something clearly the Russian character is not disposed to. Then a short way into his remarks, the Russian President stated for the first time publicly something that Russian intelligence has known for almost two decades but kept silent until now, most probably in hopes of an era of better normalized Russia-US relations.
Putin stated that the terror in Chechnya and in the Russian Caucasus in the early 1990’s was actively backed by the CIA and western Intelligence services to deliberately weaken Russia. He noted that the Russian FSB foreign intelligence had documentation of the US covert role without giving details.
What Putin, an intelligence professional of the highest order, only hinted at in his remarks, I have documented in detail from non-Russian sources. The report has enormous implications to reveal to the world the long-standing hidden agenda of influential circles in Washington to destroy Russia as a functioning sovereign state, an agenda which includes the neo-nazi coup d’etat in Ukraine and severe financial sanction warfare against Moscow. The following is drawn on my book, “The Lost Hegemon” to be published soon…
CIA’s Chechen Wars
Not long after the CIA and Saudi Intelligence-financed Mujahideen had devastated Afghanistan at the end of the 1980’s, forcing the exit of the Soviet Army in 1989, and the dissolution of the Soviet Union itself some months later, the CIA began to look at possible places in the collapsing Soviet Union where their trained “Afghan Arabs” could be redeployed to further destabilize Russian influence over the post-Soviet Eurasian space.
They were called Afghan Arabs because they had been recruited from ultraconservative Wahhabite Sunni Muslims from Saudi Arabia, the Arab Emirates, Kuwait, and elsewhere in the Arab world where the ultra-strict Wahhabite Islam was practiced. They were brought to Afghanistan in the early 1980’s by a Saudi CIA recruit who had been sent to Afghanistan named Osama bin Laden.
With the former Soviet Union in total chaos and disarray, George H.W. Bush’s Administration decided to “kick ‘em when they’re down,” a sad error. Washington redeployed their Afghan veteran terrorists to bring chaos and destabilize all of Central Asia, even into the Russian Federation itself, then in a deep and traumatic crisis during the economic collapse of the Yeltsin era.
In the early 1990s, Dick Cheney’s company, Halliburton, had surveyed the offshore oil potentials of Azerbaijan, Kazakhstan, and the entire Caspian Sea Basin. They estimated the region to be “another Saudi Arabia” worth several trillion dollars on today’s market. The US and UK were determined to keep that oil bonanza from Russian control by all means. The first target of Washington was to stage a coup in Azerbaijan against elected president Abulfaz Elchibey to install a President more friendly to a US-controlled Baku–Tbilisi–Ceyhan (BTC) oil pipeline, “the world’s most political pipeline,” bringing Baku oil from Azerbaijan through Georgia to Turkey and the Mediterranean.
At that time, the only existing oil pipeline from Baku was a Soviet era Russian pipeline that ran through the Chechen capital, Grozny, taking Baku oil north via Russia’s Dagestan province, and across Chechenya to the Black Sea Russian port of Novorossiysk. The pipeline was the only competition and major obstacle to the very costly alternative route of Washington and the British and US oil majors.
President Bush Sr. gave his old friends at CIA the mandate to destroy that Russian Chechen pipeline and create such chaos in the Caucasus that no Western or Russian company would consider using the Grozny Russian oil pipeline.
Graham E. Fuller, an old colleague of Bush and former Deputy Director of the CIA National Council on Intelligence had been a key architect of the CIA Mujahideen strategy. Fuller described the CIA strategy in the Caucasus in the early 1990s: “The policy of guiding the evolution of Islam and of helping them against our adversaries worked marvelously well in Afghanistan against the Red Army. The same doctrines can still be used to destabilize what remains of Russian power.”6
The CIA used a dirty tricks veteran, General Richard Secord, for the operation. Secord created a CIA front company, MEGA Oil. Secord had been convicted in the 1980s for his central role in the CIA’s Iran-Contra illegal arms and drugs operations.
In 1991 Secord, former Deputy Assistant Secretary of Defense, landed in Baku and set up the CIA front company, MEGA Oil. He was a veteran of the CIA covert opium operations in Laos during the Vietnam War. In Azerbaijan, he setup an airline to secretly fly hundreds of bin Laden’s al-Qaeda Mujahideen from Afghanistan into Azerbaijan. By 1993, MEGA Oil had recruited and armed 2,000 Mujahideen, converting Baku into a base for Caucasus-wide Mujahideen terrorist operations.
General Secord’s covert Mujahideen operation in the Caucasus initiated the military coup that toppled elected president Abulfaz Elchibey that year and installed Heydar Aliyev, a more pliable US puppet. A secret Turkish intelligence report leaked to the Sunday Times of London confirmed that “two petrol giants, BP and Amoco, British and American respectively, which together form the AIOC (Azerbaijan International Oil Consortium), are behind the coup d’état.”
Saudi Intelligence head, Turki al-Faisal, arranged that his agent, Osama bin Laden, whom he had sent to Afghanistan at the start of the Afghan war in the early 1980s, would use his Afghan organization Maktab al-Khidamat (MAK) to recruit “Afghan Arabs” for what was rapidly becoming a global Jihad. Bin Laden’s mercenaries were used as shock troops by the Pentagon and CIA to coordinate and support Muslim offensives not only Azerbaijan but also in Chechnya and, later, Bosnia.
Bin Laden brought in another Saudi, Ibn al-Khattab, to become Commander, or Emir of Jihadist Mujahideen in Chechnya (sic!) together with Chechen warlord Shamil Basayev. No matter that Ibn al-Khattab was a Saudi Arab who spoke barely a word of Chechen, let alone, Russian. He knew what Russian soldiers looked like and how to kill them.
Chechnya then was traditionally a predominantly Sufi society, a mild apolitical branch of Islam. Yet the increasing infiltration of the well-financed and well-trained US-sponsored Mujahideen terrorists preaching Jihad or Holy War against Russians transformed the initially reformist Chechen resistance movement. They spread al-Qaeda’s hardline Islamist ideology across the Caucasus. Under Secord’s guidance, Mujahideen terrorist operations had also quickly extended into neighboring Dagestan and Chechnya, turning Baku into a shipping point for Afghan heroin to the Chechen mafia.
From the mid-1990s, bin Laden paid Chechen guerrilla leaders Shamil Basayev and Omar ibn al-Khattab the handsome sum of several million dollars per month, a King’s fortune in economically desolate Chechnya in the 1990s, enabling them to sideline the moderate Chechen majority.21 US intelligence remained deeply involved in the Chechen conflict until the end of the 1990s. According to Yossef Bodansky, then Director of the US Congressional Task Force on Terrorism and Unconventional Warfare, Washington was actively involved in “yet another anti-Russian jihad, seeking to support and empower the most virulent anti-Western Islamist forces.”
Bodansky revealed the entire CIA Caucasus strategy in detail in his report, stating that US Government officials participated in,
“a formal meeting in Azerbaijan in December 1999 in which specific programs for the training and equipping of Mujahideen from the Caucasus, Central/South Asia and the Arab world were discussed and agreed upon, culminating in Washington’s tacit encouragement of both Muslim allies (mainly Turkey, Jordan and Saudi Arabia) and US ‘private security companies’. . . to assist the Chechens and their Islamist allies to surge in the spring of 2000 and sustain the ensuing Jihad for a long time…Islamist Jihad in the Caucasus as a way to deprive Russia of a viable pipeline route through spiraling violence and terrorism.”
The most intense phase of the Chechen wars wound down in 2000 only after heavy Russian military action defeated the Islamists. It was a pyrrhic victory, costing a massive toll in human life and destruction of entire cities. The exact death toll from the CIA-instigated Chechen conflict is unknown. Unofficial estimates ranged from 25,000 to 50,000 dead or missing, mostly civilians. Russian casualties were near 11,000 according to the Committee of Soldiers’ Mothers.
The Anglo-American oil majors and the CIA’s operatives were happy. They had what they wanted: their Baku–Tbilisi–Ceyhan oil pipeline, bypassing Russia’s Grozny pipeline.
The Chechen Jihadists, under the Islamic command of Shamil Basayev, continued guerrilla attacks in and outside Chechnya. The CIA had refocused into the Caucasus.
Basayev’s Saudi Connection
Basayev was a key part of the CIA’s Global Jihad. In 1992, he met Saudi terrorist Ibn al-Khattag in Azerbaijan. From Azerbaijan, Ibn al-Khattab brought Basayev to Afghanistan to meet al-Khattab’s ally, fellow-Saudi Osama bin Laden. Ibn al-Khattab’s role was to recruit Chechen Muslims willing to wage Jihad against Russian forces in Chechnya on behalf of the covert CIA strategy of destabilizing post-Soviet Russia and securing British-US control over Caspian energy.
Once back in Chechnya, Basayev and al-Khattab created the International Islamic Brigade (IIB) with Saudi Intelligence money, approved by the CIA and coordinated through the liaison of Saudi Washington Ambassador and Bush family intimate Prince Bandar bin Sultan. Bandar, Saudi Washington Ambassador for more than two decades, was so intimate with the Bush family that George W. Bush referred to the playboy Saudi Ambassador as “Bandar Bush,” a kind of honorary family member.
Basayev and al-Khattab imported fighters from the Saudi fanatical Wahhabite strain of Sunni Islam into Chechnya. Ibn al-Khattab commanded what were called the “Arab Mujahideen in Chechnya,” his own private army of Arabs, Turks, and other foreign fighters. He was also commissioned to set up paramilitary training camps in the Caucasus Mountains of Chechnya that trained Chechens and Muslims from the North Caucasian Russian republics and from Central Asia.
The Saudi and CIA-financed Islamic International Brigade was responsible not only for terror in Chechnya. They carried out the October 2002 Moscow Dubrovka Theatre hostage seizure and the gruesome September 2004 Beslan school massacre. In 2010, the UN Security Council published the following report on al-Khattab and Basayev’s International Islamic Brigade:
Islamic International Brigade (IIB) was listed on 4 March 2003. . . as being associated with Al-Qaida, Usama bin Laden or the Taliban for “participating in the financing, planning, facilitating, preparing or perpetrating of acts or activities by, in conjunction with, under the name of, on behalf or in support of” Al-Qaida. . . The Islamic International Brigade (IIB) was founded and led by Shamil Salmanovich Basayev (deceased) and is linked to the Riyadus-Salikhin Reconnaissance and Sabotage Battalion of Chechen Martyrs (RSRSBCM). . . and the Special Purpose Islamic Regiment (SPIR). . .
On the evening of 23 October 2002, members of IIB, RSRSBCM and SPIR operated jointly to seize over 800 hostages at Moscow’s Podshipnikov Zavod (Dubrovka) Theater.
In October 1999, emissaries of Basayev and Al-Khattab traveled to Usama bin Laden’s home base in the Afghan province of Kandahar, where Bin Laden agreed to provide substantial military assistance and financial aid, including by making arrangements to send to Chechnya several hundred fighters to fight against Russian troops and perpetrate acts of terrorism. Later that year, Bin Laden sent substantial amounts of money to Basayev, Movsar Barayev (leader of SPIR) and Al-Khattab, which was to be used exclusively for training gunmen, recruiting mercenaries and buying ammunition.
The Afghan-Caucasus Al Qaeda “terrorist railway,” financed by Saudi intelligence, had two goals. One was a Saudi goal to spread fanatical Wahhabite Jihad into the Central Asian region of the former Soviet Union. The second was the CIA’s agenda of destabilizing a then-collapsing post-Soviet Russian Federation.
Beslan
On September 1, 2004, armed terrorists from Basayev and al-Khattab’s IIB took more than 1,100 people as hostages in a siege that included 777 children, and forced them into School Number One (SNO) in Beslan in North Ossetia, the autonomous republic in the North Caucasus of the Russian Federation near to the Georgia border.
On the third day of the hostage crisis, as explosions were heard inside the school, FSB and other elite Russian troops stormed the building. In the end, at least 334 hostages were killed, including 186 children, with a significant number of people injured and reported missing. It became clear afterward that the Russian forces had handled the intervention poorly.
The Washington propaganda machine, from Radio Free Europe to The New York Times and CNN, wasted no time demonizing Putin and Russia for their bad handling of the Beslan crisis rather than focus on the links of Basayev to Al Qaeda and Saudi intelligence. That would have brought the world’s attention to the intimate relations between the family of then US President George W. Bush and the Saudi billionaire bin Laden family.
On September 1, 2001, just ten days before the day of the World Trade Center and Pentagon attacks, Saudi Intelligence head US-educated Prince Turki bin Faisal Al Saud, who had directed Saudi Intelligence since 1977, including through the entire Osama bin Laden Mujahideen operation in Afghanistan and into the Caucasus, abruptly and inexplicably resigned, just days after having accepted a new term as intelligence head from his King. He gave no explanation. He was quickly reposted to London, away from Washington.
The record of the bin Laden-Bush family intimate ties was buried, in fact entirely deleted on “national security” (sic!) grounds in the official US Commission Report on 911. The Saudi background of fourteen of the nineteen alleged 911 terrorists in New York and Washington was also deleted from the US Government’s final 911 Commission report, released only in July 2004 by the Bush Administration, almost three years after the events.
Basayev claimed credit for having sent the terrorists to Beslan. His demands had included the complete independence of Chechnya from Russia, something that would have given Washington and the Pentagon an enormous strategic dagger in the southern underbelly of the Russian Federation.
By late 2004, in the aftermath of the tragic Beslan drama, President Vladimir Putin reportedly ordered a secret search and destroy mission by Russian intelligence to hunt and kill key leaders of the Caucasus Mujahideen of Basayev. Al-Khattab had been killed in 2002. The Russian security forces soon discovered that most of the Chechen Afghan Arab terrorists had fled. They had gotten safe haven in Turkey, a NATO member; in Azerbaijan, by then almost a NATO Member; or in Germany, a NATO Member; or in Dubai–one of the closest US Allies in the Arab States, and Qatar-another very close US ally. In other words, the Chechen terrorists were given NATO safe haven.
- Mongolia – Finding its Feet Again
By Chris at www.CapitalistExploits.at
Frontier markets and volatility go together like bacon and eggs. Bursting with energy, chaotic and often smelly they lurch about like a young calf finding its legs.
Mongolia could quite aptly be seen to be such a calf. Sometimes the calf lurches about and remains standing. Sometimes it falls over. Two years ago Mongolia fell over.
To understand what originally drove Mongolia’s economy to post a blistering 17.3% growth rate in 2011 we need only look at the $6.6 billion investment into stage one of the enormous Oyu Tolgoi copper-gold project. OT, as it’s known, is owned 34% by the Mongolian Government with Turquoise Hill (TRQ) owning 66% of the project. Rio Tinto in turn controls TRQ by way of their 51% stake in TRQ.
In February of 2011 Turquoise Hill Resources hit $21.75, valuing the company at $43.8 billion.
What happens to Oyu Tolgoi has such a dramatic effect on the country as when in full operation the mine is expected to account for a third of the country’s GDP. This is truly unique. I don’t know of any other country in the world where a single project has such a dramatic impact on the economy.
To understand why TRQ came to be valued like Uber we need to understand that the Oyu Tolgoi mine is expected to produce as much as 195,000 tons of copper and up to 700,000 ounces of gold in concentrates next year. At current prices this equates to $846M of gold and $1.2B of copper.
In 2011, however, gold was trading at $1,800 and copper as high as $9,555 per tonne while today gold trades at $1,200 an ounce and copper $6,200 per tonne, so we can see that with those numbers another $1B would have been added back in 2011. You can see the graphical representation of TRQ’s share price together with the price of copper during this time frame.
Now, anyone paying even a modicum of attention will see that TRQ has been oversold based only on the metrics of the copper and gold price. To understand why today TRQ is valued at just $9B and why the Mongolian economy has suffered while such riches sit on their doorstep we need only turn to – you guessed it – the government.
The Government of Mongolia managed to grind the project to a halt for 2 years as disputes raged. I won’t go into all the details, as there is ample commentary on the internet about the dispute. Suffice to say that government by their very nature are parasitic entities, most of whom are about as practical as a curly ruler. In this respect the Mongolian government did not disappoint, holding dear to some of the central tenets of the state everywhere, namely economic ignorance and plain stupidity.
What followed was a deafening roar as you could literally hear the money packing up and leaving on flights out of Chinggis Khaan airport. FDI collapsed to just $400 million last year, down from $4.5 billion in 2012, and the local currency, the tugrik, got body-slammed, falling from 1,200 to 1,900 against the dollar.
Fast forward to present day and the new president has just signed a landmark deal finally resolving all issues with Rio Tinto.
We have deep connections in the country and have a constant feed of information, and just over a month ago we received advance notification that things were turning around in Mongolia. I also hopped on the phone with our friend Harris Kupperman, the CEO of Mongolia Growth Group, to get his take on things. I recorded the call which you can listen to here.
When I wrote my last post on the topic I mentioned that we were picking up some TRQ which was then trading at $3.73. Today at $4.50 a few weeks later we have to ask ourselves the obvious question: Are we on the brink of another run? While I’m not going to scoff at over 20% in just over a month the truth is we don’t invest in frontier markets for 20% gains. We invest for thousands of percent gains.
Even though Mongolia fell over, like most calves, it is likely it will get back up again. Right now the odds seem to be decent that it is indeed doing so. It may be time to take a deeper look.
Assets are dirt cheap, the currency has been crushed and it looks like we’re about to have the $5.4 billion underground expansion of the OT project finally proceed.
We’re currently holding onto a small illiquid but traded company which has been growing 40% YoY in a really tough market for the last 2 years. They’ve been hit by the foreign exchange collapse but when, or indeed if capital begins coming back into the country then it’s companies such as this one which have the potential to really fly.
We’ll have more on this topic and what we’re looking at there in the future.
– Chris
“In value investing, money is made after the crash, not before.” – Mark Mobius
- Guest Post: Unprecedented 'Mass Die Offs' As Pacific Ocean "Turning Into a Desert" Off California Coast
Submiutted by Mac Slavo via SHTFPlan.com,
“Ocean’s dying, plankton’s dying… it’s people. Soylent Green is made out of people. They’re making our food out of people. Next thing they’ll be breeding us like cattle for food. You’ve gotta tell them. You’ve gotta tell them!”
It was the dying cry of Charlton Heston in the creepy 1973 film Soylent Green… and it could resemble our desperate near future.
The ocean is dying, by all accounts – and if so, the food supply along with it. The causes are numerous, and overlapping. And massive numbers of wild animal populations are dying as a result of it.
Natural causes in the environment are partly to blame; so too are the corporations of man; the effects of Fukushima, unleashing untold levels of radiation into the ocean and onto Pacific shores; the cumulative effect of modern chemicals and agricultural waste tainting the water and disrupting reproduction.
A startling new report says in no uncertain terms that the Pacific Ocean off the California coast is turning into a desert. Once full of life, it is now becoming barren, and marine mammals, seabirds and fish are starving as a result. According to Ocean Health:
The waters of the Pacific off the coast of California are a clear, shimmering blue today, so transparent it’s possible to see the sandy bottom below […] clear water is a sign that the ocean is turning into a desert, and the chain reaction that causes that bitter clarity is perhaps most obvious on the beaches of the Golden State, where thousands of emaciated sea lion pups are stranded.
[…]
Over the last three years, the National Oceanic and Atmospheric Administration (NOAA) has noticed a growing number of strandings on the beaches of California and up into the Pacific north-west. In 2013, 1,171 sea lions were stranded, and 2,700 have already stranded in 2015 – a sign that something is seriously wrong, as pups don’t normally wind up on their own until later in the spring and early summer.
“[An unusually large number of sea lions stranding in 2013 was a red flag] there was a food availability problem even before the ocean got warm.” Johnson: This has never happened before… It’s incredible. It’s so unusual, and there’s no really good explanation for it. There’s also a good chance that the problem will continue, said a NOAA research scientist in climatology, Nate Mantua.
Experts blame a lack of food due to unusually warm ocean waters. NOAA declared an El Nino, the weather pattern that warms the Pacific, a few weeks ago. The water is three and a half to six degrees warmer than the average, according to Mantua, because of a lack of north wind on the West Coast. Ordinarily, the north wind drives the current, creating upwelling that brings forth the nutrients that feed the sardines, anchovies and other fish that adult sea lions feed on.
Fox News added:
The warm water is likely pushing prime sea lion foods — market squid, sardines and anchovies — further north, forcing the mothers to abandon their pups for up to eight days at a time in search of sustenance.
The pups, scientists believe, are weaning themselves early out of desperation and setting out on their own despite being underweight and ill-prepared to hunt.
[…]
“These animals are coming in really desperate. They’re at the end of life. They’re in a crisis … and not all animals are going to make it,” said Keith A. Matassa, executive director at the Pacific Marine Mammal Center, which is currently rehabilitating 115 sea lion pups.
The same is true of seabirds on the Washington State coast:
In the storm debris littering a Washington State shoreline, Bonnie Wood saw something grisly: the mangled bodies of dozens of scraggly young seabirds. Walking half a mile along the beach at Twin Harbors State Park on Wednesday, Wood spotted more than 130 carcasses of juvenile Cassin’s auklets—the blue-footed, palm-size victims of what is becoming one of the largest mass die-offs of seabirds ever recorded. “It was so distressing,” recalled Wood, a volunteer who patrols Pacific Northwest beaches looking for dead or stranded birds. “They were just everywhere. Every ten yards we’d find another ten bodies of these sweet little things.”
“This is just massive, massive, unprecedented,” said Julia Parrish, a University of Washington seabird ecologist who oversees the Coastal Observation and Seabird Survey Team (COASST), a program that has tracked West Coast seabird deaths for almost 20 years. “We may be talking about 50,000 to 100,000 deaths. So far.” (source)
100,000 doesn’t necessarily sound large, statistically speaking, but precedent in the history of recorded animal deaths suggests that it is, in fact massive. Even National Geographic is noting that these die off events are “unprecedented.” Warmer water is indicated for much of the starvation faced by many of the dead animals.
Last year, scientists sounded the alarm over the death of millions of star fish, blamed on warmer waters and ‘mystery virus':
Starfish are dying by the millions up and down the West Coast, leading scientists to warn of the possibility of localized extinction of some species. As the disease spreads, researchers may be zeroing in on a link between warming waters and the rising starfish body count. (source)
[…]
The epidemic, which threatens to reshape the coastal food web and change the makeup of tide pools for years to come, appears to be driven by a previously unidentified virus, a team of more than a dozen researchers from Cornell University, UC Santa Cruz, the Monterey Bay Aquarium and other institutions reported Monday. (source)
Changing temperatures in the Pacific Ocean, driven by the natural cycle of gyres over decades, shifts wildlife populations, decimating the populations of species throughout the food chain, proving how fragile the balance of life in the ocean really is.
Recently, the collapse of the sardine population has created a crisis for fisheries and marine wildlife alike on the West Coast:
Commercial fishing for sardines off of Canada’s West Coast is worth an estimated $32 million – but now they are suddenly gone. Back in October, fisherman reported that they came back empty-handed without a single fish after 12 hours of trolling and some $1000 spent on fuel.
Sandy Mazza, for the Daily Breeze, reported a similar phenomenon in central California: “[T]he fickle sardines have been so abundant for so many years – sometimes holding court as the most plentiful fish in coastal waters – that it was a shock when he couldn’t find one of the shiny silver-blue coastal fish all summer, even though this isn’t the first time they’ve vanished.” [emphasis added]
[…]
“Is it El Nino? Pacific Decadal Oscillation? [La] Nina? Long-term climate change? More marine mammals eating sardines? Did they all go to Mexico or farther offshore? We don’t know. We’re pretty sure the overall population has declined. We manage them pretty conservatively because we don’t want to end up with another Cannery Row so, as the population declines, we curb fishing.” said National Oceanic and Atmospheric Administration (NOAA) official Kerry Griffin. (source)
According to a report in the Daily Mail, the worst events have wiped out 90% of animal populations, falling short of extinction, but creating a rupture in food chains and ecosystems.
And environmental factors are known to be a factor, with pollution from chemicals dumped by factories clearly tied to at least 20% of the mass die off events of wildlife populations that have been investigated, and many die offs implicated by a number of overlapping factors. The Daily Mail reported:
Mass die-offs of certain animals has increased in frequency every year for seven decades, according to a new study.
Researchers found that such events, which can kill more than 90 per cent of a population, are increasing among birds, fish and marine invertebrates.
The reasons for the die-offs are diverse, with effects tied to humans such as environmental contamination accounting for about a fifth of them.
Farm runoff from Big Agra introduces high levels of fertilizers and pesticides which create oxygen-starved dead zones which fish and aquatic live is killed off. Also preset in agriculture waste are gender bending chemicals like those found in Atrazine, used in staple crop production, and antibiotics and hormones, used in livestock production, which creates hazardous runoff for fish populations:
Livestock excrete natural hormones – estrogens and testosterones – as well as synthetic ones used to bolster their growth. Depending on concentrations and fish sensitivity, these hormones and hormone mimics might impair wild fish reproduction or skew their sex ratios. (source)
Pharmaceutical contaminants are also to blame for changing the sex of fish and disrupting population numbers, while a study found that the chemicals in Prozac changed the behavior of marine life, and made shrimp many times more likely to “commit suicide” and swim towards the light where they became easy prey.
Fish farms also introduce a large volume of antibiotic and chemical pollution into oceans and waterways:
The close quarters where farmed fish are raised (combined with their unnatural diets) means disease occurs often and can spread quickly. On fish farms, which are basically “CAFOs of the sea,” antibiotics are dispersed into the water, and sometimes injected directly into the fish.
Unfortunately, farmed fish are often raised in pens in the ocean, which means not only that pathogens can spread like wildfire and contaminate any wild fish swimming past – but the antibiotics can also spread to wild fish (via aquaculture and wastewater runoff) – and that’s exactly what recent research revealed. (source)
Mass die offs of fish on the Brazilian coastline have linked to pollution from the dumping of raw sewage and garbage.
In the last few days it was reported that a massive die off of bottlenose dolphins in the Gulf of Mexico was connected by researchers to BP’s Deep Water Horizon oil spill. Evidence was found in a third of the cases of lesions in the adrenal gland, an otherwise rare condition linked with petroleum exposure. More than a fifth of the dolphins also suffered bacterial pneumonia, causing deadly lung infection that is likewise rarely seen in dolphin populations.
- Secret Pentagon Report Reveals US "Created" ISIS As A "Tool" To Overthrow Syria's President Assad
From the first sudden, and quite dramatic, appearance of the fanatical Islamic group known as ISIS which was largely unheard of until a year ago, on the world’s stage and which promptly replaced the worn out and tired al Qaeda as the world’s terrorist bogeyman, we suggested that the “straight to beheading YouTube clip” purpose behind the Saudi Arabia-funded Islamic State was a simple one: use the Jihadists as the vehicle of choice to achieve a political goal: depose of Syria’s president Assad, who for years has stood in the way of a critical Qatari natural gas pipeline, one which could dethrone Russia as Europe’s dominant – and belligerent – source of energy, reaching an interim climax with the unsuccessful Mediterranean Sea military build up of 2013, which nearly resulted in quasi-world war.
The narrative and the plotline were so transparent, even Russia saw right through them. Recall from September of last year:
If the West bombs Islamic State militants in Syria without consulting Damascus, LiveLeak reports that the anti-ISIS alliance may use the occasion to launch airstrikes against President Bashar Assad’s forces, according to Russian Foreign Minister Sergey Lavrov. Clearly comprehending that Obama’s new strategy against ISIS in Syria is all about pushing the Qatar pipeline through (as was the impetus behind the 2013 intervention push), Russia is pushing back noting that the it is using ISIS as a pretext for bombing Syrian government forces and warning that “such a development would lead to a huge escalation of conflict in the Middle East and North Africa.”
But it’s one thing to speculate; it’s something entirely different to have hard proof.
And while speculation was rife that just like the CIA-funded al Qaeda had been used as a facade by the US to achieve its own geopolitical and national interests over the past two decades, so ISIS was nothing more than al Qaeda 2.0, there was no actual evidence of just this.
That may all have changed now when a declassified secret US government document obtained by the public interest law firm, Judicial Watch, shows that Western governments deliberately allied with al-Qaeda and other Islamist extremist groups to topple Syrian dictator Bashir al-Assad.
According to investigative reporter Nafeez Ahmed in Medium, the “leaked document reveals that in coordination with the Gulf states and Turkey, the West intentionally sponsored violent Islamist groups to destabilize Assad, despite anticipating that doing so could lead to the emergence of an ‘Islamic State’ in Iraq and Syria (ISIS).
According to the newly declassified US document, the Pentagon foresaw the likely rise of the ‘Islamic State’ as a direct consequence of the strategy, but described this outcome as a strategic opportunity to “isolate the Syrian regime.”
And not just that: as we reported last week, now that ISIS is running around the middle east, cutting people’s heads of in 1080p quality and Hollywood-quality (perhaps literally) video, the US has a credible justification to sell billions worth of modern, sophisticated weapons in the region in order to “modernize” and “replenish” the weapons of such US allies as Saudi Arabia, Israel and Iraq.
But that the US military-industrial complex is a winner every time war breaks out anywhere in the world (usually with the assistance of the CIA) is clear to everyone by now. What wasn’t clear is just how the US predetermined the current course of events in the middle east.
Now, thanks to the following declassified report, we have a far better understanding of not only how current events in the middle east came to be, but what America’s puppermaster role leading up to it all, was.
From Nafeez Ahmed: Secret Pentagon report reveals West saw ISIS as strategic asset Anti-ISIS coalition knowingly sponsored violent extremists to ‘isolate’ Assad, rollback ‘Shia expansion’, originally posted in Medium.
Hypocrisy
The revelations contradict the official line of Western government on their policies in Syria, and raise disturbing questions about secret Western support for violent extremists abroad, while using the burgeoning threat of terror to justify excessive mass surveillance and crackdowns on civil liberties at home.
Among the batch of documents obtained by Judicial Watch through a federal lawsuit, released earlier this week, is a US Defense Intelligence Agency (DIA) document then classified as “secret,” dated 12th August 2012.
The DIA provides military intelligence in support of planners, policymakers and operations for the US Department of Defense and intelligence community.
So far, media reporting has focused on the evidence that the Obama administration knew of arms supplies from a Libyan terrorist stronghold to rebels in Syria.
Some outlets have reported the US intelligence community’s internal prediction of the rise of ISIS. Yet none have accurately acknowledged the disturbing details exposing how the West knowingly fostered a sectarian, al-Qaeda-driven rebellion in Syria.
Charles Shoebridge, a former British Army and Metropolitan Police counter-terrorism intelligence officer, said:
“Given the political leanings of the organisation that obtained these documents, it’s unsurprising that the main emphasis given to them thus far has been an attempt to embarrass Hilary Clinton regarding what was known about the attack on the US consulate in Benghazi in 2012. However, the documents also contain far less publicized revelations that raise vitally important questions of the West’s governments and media in their support of Syria’s rebellion.”
The West’s Islamists
The newly declassified DIA document from 2012 confirms that the main component of the anti-Assad rebel forces by this time comprised Islamist insurgents affiliated to groups that would lead to the emergence of ISIS. Despite this, these groups were to continue receiving support from Western militaries and their regional allies.
Noting that “the Salafist [sic], the Muslim Brotherhood, and AQI [al-Qaeda in Iraq] are the major forces driving the insurgency in Syria,” the document states that “the West, Gulf countries, and Turkey support the opposition,” while Russia, China and Iran “support the [Assad] regime.”
The 7-page DIA document states that al-Qaeda in Iraq (AQI), the precursor to the ‘Islamic State in Iraq,’ (ISI) which became the ‘Islamic State in Iraq and Syria,’ “supported the Syrian opposition from the beginning, both ideologically and through the media.”
The formerly secret Pentagon report notes that the “rise of the insurgency in Syria” has increasingly taken a “sectarian direction,” attracting diverse support from Sunni “religious and tribal powers” across the region.
In a section titled ‘The Future Assumptions of the Crisis,’ the DIA report predicts that while Assad’s regime will survive, retaining control over Syrian territory, the crisis will continue to escalate “into proxy war.”
The document also recommends the creation of “safe havens under international sheltering, similar to what transpired in Libya when Benghazi was chosen as the command centre for the temporary government.”
In Libya, anti-Gaddafi rebels, most of whom were al-Qaeda affiliated militias, were protected by NATO ‘safe havens’ (aka ‘no fly zones’).
‘Supporting powers want’ ISIS entity
In a strikingly prescient prediction, the Pentagon document explicitly forecasts the probable declaration of “an Islamic State through its union with other terrorist organizations in Iraq and Syria.”
Nevertheless, “Western countries, the Gulf states and Turkey are supporting these efforts” by Syrian “opposition forces” fighting to “control the eastern areas (Hasaka and Der Zor), adjacent to Western Iraqi provinces (Mosul and Anbar)”:
“… there is the possibility of establishing a declared or undeclared Salafist Principality in eastern Syria (Hasaka and Der Zor), and this is exactly what the supporting powers to the opposition want, in order to isolate the Syrian regime, which is considered the strategic depth of the Shia expansion (Iraq and Iran).”
The secret Pentagon document thus provides extraordinary confirmation that the US-led coalition currently fighting ISIS, had three years ago welcomed the emergence of an extremist “Salafist Principality” in the region as a way to undermine Assad, and block off the strategic expansion of Iran. Crucially, Iraq is labeled as an integral part of this “Shia expansion.”
The establishment of such a “Salafist Principality” in eastern Syria, the DIA document asserts, is “exactly” what the “supporting powers to the [Syrian] opposition want.” Earlier on, the document repeatedly describes those “supporting powers” as “the West, Gulf countries, and Turkey.”
Further on, the document reveals that Pentagon analysts were acutely aware of the dire risks of this strategy, yet ploughed ahead anyway.
The establishment of such a “Salafist Principality” in eastern Syria, it says, would create “the ideal atmosphere for AQI to return to its old pockets in Mosul and Ramadi.” Last summer, ISIS conquered Mosul in Iraq, and just this month has also taken control of Ramadi.
Such a quasi-state entity will provide:
“… a renewed momentum under the presumption of unifying the jihad among Sunni Iraq and Syria, and the rest of the Sunnis in the Arab world against what it considers one enemy. ISI could also declare an Islamic State through its union with other terrorist organizations in Iraq and Syria, which will create grave danger in regards to unifying Iraq and the protection of territory.”
The 2012 DIA document is an Intelligence Information Report (IIR), not a “finally evaluated intelligence” assessment, but its contents are vetted before distribution. The report was circulated throughout the US intelligence community, including to the State Department, Central Command, the Department of Homeland Security, the CIA, FBI, among other agencies.
In response to my questions about the strategy, the British government simply denied the Pentagon report’s startling revelations of deliberate Western sponsorship of violent extremists in Syria. A British Foreign Office spokesperson said:
“AQ and ISIL are proscribed terrorist organisations. The UK opposes all forms of terrorism. AQ, ISIL, and their affiliates pose a direct threat to the UK’s national security. We are part of a military and political coalition to defeat ISIL in Iraq and Syria, and are working with international partners to counter the threat from AQ and other terrorist groups in that region. In Syria we have always supported those moderate opposition groups who oppose the tyranny of Assad and the brutality of the extremists.”
The DIA did not respond to request for comment.
Strategic asset for regime-change
Security analyst Shoebridge, however, who has tracked Western support for Islamist terrorists in Syria since the beginning of the war, pointed out that the secret Pentagon intelligence report exposes fatal contradictions at the heart of official pronunciations:
“Throughout the early years of the Syria crisis, the US and UK governments, and almost universally the West’s mainstream media, promoted Syria’s rebels as moderate, liberal, secular, democratic, and therefore deserving of the West’s support. Given that these documents wholly undermine this assessment, it’s significant that the West’s media has now, despite their immense significance, almost entirely ignored them.”
According to Brad Hoff, a former US Marine who served during the early years of the Iraq War and as a 9/11 first responder at the Marine Corps Headquarters in Battalion Quantico from 2000 to 2004, the just released Pentagon report for the first time provides stunning affirmation that:
“US intelligence predicted the rise of the Islamic State in Iraq and the Levant (ISIL or ISIS), but instead of clearly delineating the group as an enemy, the report envisions the terror group as a US strategic asset.”
Hoff, who is managing editor of Levant Report — ?an online publication run by Texas-based educators who have direct experience of the Middle East?—?points out that the DIA document “matter-of-factly” states that the rise of such an extremist Salafist political entity in the region offers a “tool for regime change in Syria.”
The DIA intelligence report shows, he said, that the rise of ISIS only became possible in the context of the Syrian insurgency?—?“there is no mention of US troop withdrawal from Iraq as a catalyst for Islamic State’s rise, which is the contention of innumerable politicians and pundits.” The report demonstrates that:
“The establishment of a ‘Salafist Principality’ in Eastern Syria is ‘exactly’ what the external powers supporting the opposition want (identified as ‘the West, Gulf Countries, and Turkey’) in order to weaken the Assad government.”
The rise of a Salafist quasi-state entity that might expand into Iraq, and fracture that country, was therefore clearly foreseen by US intelligence as likely?—?but nevertheless strategically useful?—?blowback from the West’s commitment to “isolating Syria.”
Complicity
Critics of the US-led strategy in the region have repeatedly raised questions about the role of coalition allies in intentionally providing extensive support to Islamist terrorist groups in the drive to destabilize the Assad regime in Syria.
The conventional wisdom is that the US government did not retain sufficient oversight on the funding to anti-Assad rebel groups, which was supposed to be monitored and vetted to ensure that only ‘moderate’ groups were supported.
However, the newly declassified Pentagon report proves unambiguously that years before ISIS launched its concerted offensive against Iraq, the US intelligence community was fully aware that Islamist militants constituted the core of Syria’s sectarian insurgency.
Despite that, the Pentagon continued to support the Islamist insurgency, even while anticipating the probability that doing so would establish an extremist Salafi stronghold in Syria and Iraq.
As Shoebridge told me, “The documents show that not only did the US government at the latest by August 2012 know the true extremist nature and likely outcome of Syria’s rebellion”?—?namely, the emergence of ISIS?—?“but that this was considered an advantage for US foreign policy. This also suggests a decision to spend years in an effort to deliberately mislead the West’s public, via a compliant media, into believing that Syria’s rebellion was overwhelmingly ‘moderate.’”
Annie Machon, a former MI5 intelligence officer who blew the whistle in the 1990s on MI6 funding of al-Qaeda to assassinate Libya’s former leader Colonel Gaddafi, similarly said of the revelations:
“This is no surprise to me. Within individual countries there are always multiple intelligence agencies with competing agendas.”
She explained that MI6’s Libya operation in 1996, which resulted in the deaths of innocent people, “happened at precisely the time when MI5 was setting up a new section to investigate al-Qaeda.”
This strategy was repeated on a grand scale in the 2011 NATO intervention in Libya, said Machon, where the CIA and MI6 were:
“… supporting the very same Libyan groups, resulting in a failed state, mass murder, displacement and anarchy. So the idea that elements of the American military-security complex have enabled the development of ISIS after their failed attempt to get NATO to once again ‘intervene’ is part of an established pattern. And they remain indifferent to the sheer scale of human suffering that is unleashed as a result of such game-playing.”
Divide and rule
Several US government officials have conceded that their closest allies in the anti-ISIS coalition were funding violent extremist Islamist groups that became integral to ISIS.
US Vice President Joe Biden, for instance, admitted last year that Saudi Arabia, the UAE, Qatar and Turkey had funneled hundreds of millions of dollars to Islamist rebels in Syria that metamorphosed into ISIS.
But he did not admit what this internal Pentagon document demonstrates?—?that the entire covert strategy was sanctioned and supervised by the US, Britain, France, Israel and other Western powers.
The strategy appears to fit a policy scenario identified by a recent US Army-commissioned RAND Corp report.
The report, published four years before the DIA document, called for the US “to capitalise on the Shia-Sunni conflict by taking the side of the conservative Sunni regimes in a decisive fashion and working with them against all Shiite empowerment movements in the Muslim world.”
The US would need to contain “Iranian power and influence” in the Gulf by “shoring up the traditional Sunni regimes in Saudi Arabia, Egypt, and Pakistan.” Simultaneously, the US must maintain “a strong strategic relationship with the Iraqi Shiite government” despite its Iran alliance.
The RAND report confirmed that the “divide and rule” strategy was already being deployed “to create divisions in the jihadist camp. Today in Iraq such a strategy is being used at the tactical level.”
The report observed that the US was forming “temporary alliances” with al-Qaeda affiliated “nationalist insurgent groups” that have fought the US for four years in the form of “weapons and cash.” Although these nationalists “have cooperated with al-Qaeda against US forces,” they are now being supported to exploit “the common threat that al-Qaeda now poses to both parties.”
The 2012 DIA document, however, further shows that while sponsoring purportedly former al-Qaeda insurgents in Iraq to counter al-Qaeda, Western governments were simultaneously arming al-Qaeda insurgents in Syria.
The revelation from an internal US intelligence document that the very US-led coalition supposedly fighting ‘Islamic State’ today, knowingly created ISIS in the first place, raises troubling questions about recent government efforts to justify the expansion of state anti-terror powers.
In the wake of the rise of ISIS, intrusive new measures to combat extremism including mass surveillance, the Orwellian ‘prevent duty’ and even plans to enable government censorship of broadcasters, are being pursued on both sides of the Atlantic, much of which disproportionately targets activists, journalists and ethnic minorities, especially Muslims.
Yet the new Pentagon report reveals that, contrary to Western government claims, the primary cause of the threat comes from their own deeply misguided policies of secretly sponsoring Islamist terrorism for dubious geopolitical purposes.
Dr Nafeez Ahmed is an investigative journalist, bestselling author and international security scholar. A former Guardian writer, he writes the ‘System Shift’ column for VICE’s Motherboard, and is also a columnist for Middle East Eye. He is the winner of a 2015 Project Censored Award, known as the ‘Alternative Pulitzer Prize’, for Outstanding Investigative Journalism for his Guardian work, and was selected in the Evening Standard’s ‘Power 1,000’ most globally influential Londoners.
Nafeez has also written for The Independent, Sydney Morning Herald, The Age, The Scotsman, Foreign Policy, The Atlantic, Quartz, Prospect, New Statesman, Le Monde diplomatique, New Internationalist, Counterpunch, Truthout, among others. He is the author of A User’s Guide to the Crisis of Civilization: And How to Save It (2010), and the scifi thriller novel ZERO POINT, among other books. His work on the root causes and covert operations linked to international terrorism officially contributed to the 9/11 Commission and the 7/7 Coroner’s Inquest.
- Hillary Clinton's Speech Requirements: Private Jets, Presidential Suites And Lots Of Cash
Late last month we highlighted an IB Times report which showed that Goldman Sachs paid Bill Clinton some $200,000 for a speech ahead of an effort to lobby The State Department (then led by Hillary Clinton) on Export-Import Bank legislation tied to a $75 million purchase order from a Chinese company to a Goldman-owned aircraft manufacturer.
The idea that the paid speech and the authorization of an Export-Import Bank loan to the Chinese firm were related was of course dismissed as “preposterous” by Goldman (draw your own conclusions) but what certainly isn’t preposterous is the fact that the Clintons reap millions for speaking engagements and as you can see from the following, if you want a Clinton, a quarter-million in cash isn’t all you’ll need to budget for.
Here is the rest:
As a reminder, Hillary is running for “everyday Americans.” Full requirement list:
- FBI Confirms No Major Terrorism Cases Cracked Via Unconstitutional Patriot Act Phone Spying
Submitted by Mike Krieger via Liberty Blitzkrieg blog,
FBI agents can’t point to any major terrorism cases they’ve cracked thanks to the key snooping powers in the Patriot Act, the Justice Department’s inspector general said in a report Thursday that could complicate efforts to keep key parts of the law operating.
Inspector General Michael E. Horowitz said that between 2004 and 2009, the FBI tripled its use of bulk collection under Section 215 of the Patriot Act, which allows government agents to compel businesses to turn over records and documents, and increasingly scooped up records of Americans who had no ties to official terrorism investigations.
– From the Washington Times article: FBI Admits No Major Cases Cracked with Patriot Act Snooping Powers
Back in 2013, as debate about the Snowden revelations was at its zenith, I published a post titled NSA Chief Admits “Only One or Perhaps Two” Terror Plots Stopped by Spy Program. Here’s an excerpt:
The Obama administration’s credibility on intelligence suffered another blow Wednesday as the chief of the National Security Agency admitted that officials put out numbers that vastly overstated the counterterrorism successes of the government’s warrantless bulk collection of all Americans’ phone records.
Pressed by the Democratic chairman of the Senate Judiciary Committee at an oversight hearing, Gen. Keith B. Alexander admitted that the number of terrorist plots foiled by the NSA’s huge database of every phone call made in or to America was only one or perhaps two — far smaller than the 54 originally claimed by the administration.
“One or perhaps two.” Or perhaps zero. The guy has the nerve to say “perhaps.” How do you not know? What a bunch of lying assholes. How the heck does 54 turn into “one or two,” and I’ll tell you something else, I don’t believe the one or two figure for a minute. I mean there’s no way he would say “zero” when he is fighting to keep his petty little Stasi state intact. Furthermore, how about some details here. What was the one plot the NSA foiled? Some teenager throwing firecrackers on the White House lawn? These guys need to get lost already. From the Washington Times:
As time has passed and the years have gone by, it has become increasingly clear that the phone records collection program hasn’t stopped a single terror attack. In fact, a recently published report by the Justice Department’s inspector general admitted as much. This takes on increased significance with parts of the Patriot Act set to automatically sunset on June 1st.
FBI agents can’t point to any major terrorism cases they’ve cracked thanks to the key snooping powers in the Patriot Act, the Justice Department’s inspector general said in a report Thursday that could complicate efforts to keep key parts of the law operating.
Inspector General Michael E. Horowitz said that between 2004 and 2009, the FBI tripled its use of bulk collection under Section 215 of the Patriot Act, which allows government agents to compel businesses to turn over records and documents, and increasingly scooped up records of Americans who had no ties to official terrorism investigations.
Backers say the Patriot Act powers are critical and must be kept intact, particularly with the spread of the threat from terrorists. But opponents have doubted the efficacy of Section 215, particularly when it’s used to justify bulk data collection such as in the case of the National Security Agency’s phone metadata program, revealed in leaks from former government contractor Edward Snowden.
“The agents we interviewed did not identify any major case developments that resulted from use of the records obtained in response to Section 215 orders,” the inspector general concluded — though he said agents did view the material they gathered as “valuable” in developing other leads or corroborating information.
The report was heavily redacted, and key details were deleted. The entire chart showing the number of Section 215 requests made from 2007 through 2009 was blacked out, as was the breakdown of what types of investigations they stemmed from: counterintelligence, counterterrorism, cyber or foreign intelligence investigations.
Redacted indeed. This is what pages 16-20 look like, and the pages immediately after these are just as bad.
Most transparent administration ever.
Moving along, the conclusion that Section 215 of the Patriot Act hasn’t stopped any terror attacks naturally won’t stop FBI director James Comey (and others) from fear-mongering. A favorite pastime of government officials and their lapdogs. As Politico reports:
Speaking at an American Law Institute event this week, FBI Director James Comey warned that a PATRIOT Act sunset would “severely” affect his agency. The FBI relies heavily on the soon-to-expire provisions of the law to obtain specific business records — from library records to gun ownership data — and wiretaps for multiple devices, he said.
“If I lose these tools, it’s a huge, huge problem,” Comey said. “We use [Section 215 to obtain specific records] fewer than 200 times per year, but when we use it, it matters tremendously.”
But not for terrorism, and the Patriot Act was specifically passed to deal with terrorism.
“ISIS is singing a siren song, calling people to their death to crash on the rocks — and it’s the rocks that ISIS will take credit for,” said Ron Hosko, president of Law Enforcement Legal Defense Fund and former assistant director of the FBI. “They’re looking for those who are disaffected, disconnected and willing to commit murder. So if we’re willing to take away tools, OK, congressman, stand behind it [and] take the credit for putting the FBI in the dark.”
Can you believe people like this exist, and that their insane rhetoric actually speaks to some people? Scary.
While the current debate about Section 215 of the Patriot Act is encouraging and necessary, it is extremely important to understand that this is just a tiny, potentially meaningless tip of the iceberg when it comes to unconstitutional government surveillance. As The ACLU’s Chris Soghoian explains courtesy of Schneier.com:
There were 180 orders authorized last year by the FISA Court under Section 215 — 180 orders issued by this court. Only five of those orders relate to the telephony metadata program. There are 175 orders about completely separate things. In six weeks, Congress will either reauthorize this statute or let it expire, and we’re having a debate — to the extent we’re even having a debate — but the debate that’s taking place is focused on five of the 180, and there’s no debate at all about the other 175 orders.
Now, Senator Wyden has said there are other bulk collection programs targeted at Americans that the public would be shocked to learn about. We don’t know, for example, how the government collects records from Internet providers. We don’t know how they get bulk metadata from tech companies about Americans. We don’t know how the American government gets calling card records.
So the 215 program that has been disclosed publicly, the 215 program that is being debated publicly, is about records to major carriers like AT&T and Verizon. We have not had a debate about surveillance requests, bulk orders to calling card companies, to Skype, to voice over Internet protocol companies. Now, if NSA isn’t collecting those records, they’re not doing their job. I actually think that that’s where the most useful data is. But why are we having this debate about these records that don’t contain a lot of calls to Somalia when we should be having a debate about the records that do contain calls to Somalia and do contain records of e-mails and instant messages and searches and people posting inflammatory videos to YouTube?
Certainly the government is collecting that data, but we don’t know how they’re doing it, we don’t know at what scale they’re doing it, and we don’t know with which authority they’re doing it. And I think it is a farce to say that we’re having a debate about the surveillance authority when really, we’re just debating this very narrow usage of the statute.
The battle to push back the American Stasi is just beginning.
- The Bloodied Idealogues vs. The Bloodthirsty Technocrats
On the grave Greek question, it appears that the moment of truth is finally upon us. After nearly four months of frenetic, fruitless and often feckless high level deliberations and negotiations, both sides remain essentially at an impasse, right where they started. The technocrats in Brussels want to see their austerity driven reform program carried forward and implemented unconditionally. As for the idealogues in Athens, they have pledged to put forth there own enlightened approach to rescue their sinking society.
The Technocrats hold the purse strings, but the Ideologues hold the heart strings. For what it’s worth, that is typically a highly combustible combination, tick tock. With their recent cocksure bravado are the Technocrats entirely misreading the desperate determination of the Idealogues? Get ready for yet another Euro Summer swoon………..
Everyone agrees that Greece, under a corrupt political oligarchy, grossly abused its privileges as a Eurozone member. In fact, with the help of a few sleazy sophisticated Goldman Sachs financiers, they actually cheated on their application forms in order to join the exclusive club to begin with. The illegitimate Ionian books were cooked from the get go, and it only got worse and worse over time. The crafty self serving political elites and their self-seeking sponsors at multinational banks and corporations ran up a massive tab, while their ill-fated nation never had the fiscal wherewithal to pay the astronomical bills.
That is essentially what happened here. Oh, and the parties specifically involved all happened to get personally rather wealthy themselves along the way.
Check out the mess they left:
Along with the privilege of leadership comes responsibility. That clearly seems to have gone out the window here.
There can be little doubt that the predatory international banking institutions was clearly complicit, along with the disgracefully corrupt Greek politicians and high ranking government officials, as well as most of the Ionian elites at the highest levels of society in the near total abrogation of their financial responsibilities to their country. They completely failed the common man in this regard, who naturally assumed their leaders knew what the hell they were doing, and quite understandably counted on them for proper sustainable fiscal governance.
So, I have a simple question. Why should the brunt of the demanded reforms fall on those least responsible for the mess, and most vulnerable? Surely, the provincial woman on the streets of Athens pushing her Gyro cart up the steep hills of Kolonaki is far less at fault for the lamentable state of affairs her beloved country finds itself in, then those in the positions of leadership whom should have clearly known better. Yet, today she is the one being asked to bear the burden of the terribly onerous predicament her Nation is suffering through. Meanwhile, the bankers want more Euros, and no one is buying her Gyros.
Seems to me the wealthy Greek political class, the int’l financial establishment and the EU political leadership bear the lion share of the responsibility here. Yet, instead of facing up to the mess they presided over and largely created, by putting forth workable resolutions to the debt death spiral effectively consuming Greece, what I have mostly witnessed over the past four months is that same establishment circling the wagons, doing everything in their power to delegitimize the SYRIZA leadership and further cripple their already stressed banking system. I guess the best defense is a flat out offensive. Is this what passes for inspired leadership in this day and age?
Moreover, do we really need to hear these fabulous “free market” frauds opine from the peanut gallery on the difficult matter:
A Greek exit from the euro is just a matter of time and wouldn’t lead to the breakup of monetary union, former Federal Reserve Chairman Alan Greenspan told Het Financieele Dagblad in an interview published Saturday. An exit could make the euro stronger, billionaire investor Warren Buffett said in an interview in the Euro-am-Sonntag newspaper.
I’m certainly no socialist, but if this is what today’s crony capitalism continues to spawn, I’m definitely no longer taking part. A romantic quote from Jimi Hendrix’s comes to mind…….
“When the power of love overcomes the love for power, only then will the world change.”
When are we going to wake up? It’s high time for honest enlightened free market capitalism! Enough of this crony capitalism crap already! The entire financialized abominNation is a national disgrace.
As for me, I would be more than happy to see the cradle of democracy put the imperial autocrats and financial kleptocrats in their place, teaching them a thing or two about enlightened self governance. Perhaps the ascent of Alexis Tsipras simply reflects the frustration of the everyday Greek citizen, completely fed up with their notoriously corrupt self serving political class oligarchy, the self seeking autocrats in Brussels and self interested banking elites that keep offering up the same poison pill to cure a lethal debt epidemic that they themselves were central to spreading around the globe in the first place.
- Traders Are Buying Gold & Silver At Fastest Pace In Over A Decade
The last time large speculators were as aggressively buying silver as last week was September 1997. The net long non-commercial positioning in Silver futures, according to the CFTC rose almost 22,000 contracts last week to a 3-month high (which is closing in on the 'longest' since 2005). Gold, not be out-precious'd also saw major buying. Net speculative longs in gold added over 45,000 contracts – the most since July 2005 – lifting net long positions to their highest in 3 months. Perhaps, just perhaps, as Alhambra's Jeffrey Snider notes, this is due to Yellen putting the 'dollar' back on suicide watch.
Large speculators increased Silver net long position to $4.4bn from $2.4bn notional.
Large speculators increased their net long gold exposure to $14.8bn from $9.2bn notional.
Charts: Bloomberg
Contrarian or not, perhaps Alhambra's Jeffrey Snider's view that Janet Yellen's contortions have put the dollar back on suicide watch are creeping into the market…
Volatility in UST trading declined a bit in the past few days, as treasury yields became far more settled intraday. While that breaks the exact duplication Monday and Tuesday this week traced from Monday and Tuesday last week, the past two weeks overall remain remarkably similar. And for all the noise, the ups and downs along the way, treasury yields haven’t much changed. That observation applies as far back as May 6, which means that for all the mess there isn’t any more clarity.
Far be it for UST’s to be trading sideways alone, it seems as if oil prices (front end) have fallen into the same. Adding oil to the discussion immediately frames this as relating to the state of the “dollar” in more recent weeks, which looks to be in sharp contrast to the period between March 18 (FOMC) and May 6. Nominal rates were rising rather steadily in those nearly two months right alongside oil prices.
The eurodollar curve has also gone limp, as eurodollar futures trading has found an extremely narrow range also since May 6. This, too, marks a defined shift from the March 18 to May 6 period, meaning that UST credit, oil prices and eurodollar futures all likely share the same inflection.
We can also add “inflation” breakevens, at least as far as a potential change dating to May 6. Breakevens had been rising rather steadily since January 15, which I still think was an indication of hedging for (against?) the next QE.
These rates and prices are a broad enough survey, especially as unified by May 6, to at least entertain the suggestion about whether the “dollar” pause that began on March 18 has ended. That may be taking it too far at this moment, since there aren’t any actual and sustained moves in a countertrend, so it may be more reasonable to instead assume a at the very least a pause to the pause.
I think that notion is given further credibility by UST trading Wednesday in response to the FOMC statement; there really wasn’t any response. The same goes for eurodollars which seemed unperturbed by the almost dispirited desperation that the FOMC was trying to forward as a reasoned basis for whatever they might do. That, then, places far more emphasis on what might have occurred on May 6 to make such a unified impact in global money and credit markets.
That was the day that Janet Yellen made her belated wish that stock prices weren’t so winsome. She referred specifically to “potential dangers” due to “quite high” equity valuations, as well as reminding everyone of 2013’s “reach for yield” critique; i.e., asset bubbles. In terms of the idea that the FOMC may have changed its mind about ending ZIRP this is another factor that may have been missing to that point. I believe it was taken on March 18 that the FOMC then was projecting a change of heart based on “shocking” and “unexpected” economic weakness. Therefore, it was some initial hope that the economy alone would dispel the nervous urgency of Yellen et al to just get it over with.
However, Yellen’s curiously rather direct focus on the asset bubbles alters that dynamic, maybe significantly. There was always background noise in Bernanke’s last year (reach for yield) that the largest dangers were getting to be financial imbalances. The worry was that at some point it may not matter so much the economy as the Fed might find itself in the Chinese position where bubbles became the larger priority (by far) regardless of economic weakness. So Yellen’s May 6 monkey wrench might have brought that possibility back to the forefront, at least as far as some initial consideration.
Obviously, it hasn’t been taken as fixed income gospel yet, thus the sideways action lasting now a little over two weeks. This week’s FOMC statement did nothing at all to clear up any perceivable favor one way or the other. The utter mess of rationalizations could actually be taken as supporting both versions, hawkish and dovish; the continued allusion and even “official” recognition of some stark economic weakness and very little of organic trends to offset it, but also that the Fed may be excusing all that as still consistent in their view with the ending of ZIRP.
It isn’t completely clear either from other “dollar” proxies as to where bank balance sheets globally might be progressing. Again, there isn’t any sustained trend here to offer a more compelling interpretation, but enough of a muddle in which to accommodate the possibility of resumption toward tightening. Gold, for example, has been trading mostly sideways dating all the way back to late March. The Brazilian real devalued starting on April 28, and the Swiss franc at least stopped its ascendant run on May 6.
So these “dollar” and credit markets may not yet know what to do regarding Yellen’s version of “conundrum”, but it seems as if her introduction of complications has led to at least contemplation about it, tipping the scales, ever so slightly, back toward financial suicide.
- In Unprecedented Move, California Farmers With Guaranteed Rights Cut Water Use By 25%
In an attempt to frontrun even more draconian measures resulting from California’s record drought, farmers in the state’s Sacramento-San Joaquin River Delta who have California’s oldest water rights proposed to voluntarily cut their water use by 25% to avoid the risk of even harsher restrictions by the state later this summer should the water situation deteriorate further. State officials promptly accepted the offer, even if it is ultimately moot since there is no way to enforce it.
California had not restricted water use for growers with the oldest, most established water rights since the 1970s, and the first in memory for the San Joaquin, which runs from the Sierra Nevada to San Francisco Bay. For many farmers, a fear that the worst is yet to come convinced them that they would be better off giving up water before they began planting for the season.
The Sacramento-San Joaquin River Delta
Gino Celli took a water sample to check the salinity in an irrigation canal that runs through his fields near Stockton, Calif., this week. Mr. Celli has senior water rights and draws his irrigation water from the Sacramento-San Joaquin River Delta.
The proposal was made by the so-called riparian water rights holders, who have the oldest and most secure access to California rivers. They proposed the unprecedented voluntary curtailment for one simple reason: “There is a threat that the state might try the unthinkable and tell us that we cannot use any of the water,” said Dennis Gardemeyer, a delta farmer who helped spur the deal. “I and almost everyone in the delta think that will result in all manner of lawsuits and they will not prevail, but there’s always that threat.”
As AP reports, this is the latest water emergency conservation step undertaken by the state: previously Governor Jerry Brown has ordered communities throughout the state to reduce water use by 25 percent. State water officials have encouraged water users to propose conservation measures, drawing the proposal from farmers.
California’s governor has been criticized for leaving farmers out of tightening regulations that force communities throughout the state to cut back on their water use. But this is the second consecutive year that junior water-rights holders have received orders to stop pumping river water to irrigate their crops.
The escalation is likely to have a substantial impact on US food prices over the summer: farmers would either take less river water for irrigation or leave a quarter of their crops unplanted. If the state accepts the deal, Delta water managers say it may become a model for farmers throughout California, who also are facing curtailments.
And since it is unclear where local farmers can find substitute water, it is likely that suddenly the supply of California plantings is about to decline by at least a quarter, leading to a dramatic spike in foor prices heading into the second half of the year.
One concern is that it is impossible to predict how many farmers will participate, said attorney Jennifer Spaletta, who represents several Delta growers, but those who do would be able to plan their crops earlier in the season with more certainty.
In any event, on Friday state officials accepted the offer. Cited by the NYT, Felicia Marcus, the chairwoman of the State Water Resources Control Board, said: “We’re in an unprecedented drought, and we have to exercise the state’s water rights in an unprecedented way. This is a breakthrough in what has long been a rhetorical battle. It’s a significant turning point to have people say, ‘We know this is complicated. We want to do something early in good faith that is a pragmatic solution for everyone.’”
The biggest problem is that just like European reforms where everyone promises much and delivers nothing, so there is absolutely no way to enforce the California proposal: regulators lack enough sensors, meters and other technology to make sure water isn’t illegally diverted. Water rights curtailments are instead enforced by an honor system, complaints and field investigations.
And since to many farmers a drop in production may well mean a fast track into insolvency, one can anticipate just how efficient a system based on self-regulation will be. For a quick answer look at the recidivist criminal banks on Wall Street which are also “self regulated.”
In other words, this “historic” announcement is very much moot, especially when one considers that less than 30% of the junior rights farmers, those who have already been ordered to cut water use for the second year in a row, have told the board they are complying.
A brief Q&A on how this historic move came about courtesy of AP:
WHY IS THIS HAPPENING?
California is in its driest four-year stretch on record. Winter provided little rain and snow to replenish rivers and streams, meaning there is not enough water to meet the demands of farms, communities and wildlife. The State Water Resources Control Board is monitoring conditions in rivers and streams across the parched state and deciding who gets to divert water. Even those with long-standing legal rights to water are under scrutiny.
WHAT ARE WATER RIGHTS?
The rights allow holders such as cities, irrigation districts serving farms, and corporations to take water directly from rivers and streams. The first to claim the water are the last to have supplies curtailed. Users who obtained rights to divert water after 1914 are the first to be cut off to ensure there is water for senior water rights holders with claims dating to the Gold Rush. Landowners with property that touches waterways have riparian rights — the strongest of the senior water rights.
WHAT’S ALREADY HAPPENED?
Thousands of farmers and others with more recent, junior water rights in the Sacramento and San Joaquin River watersheds have been ordered to stop diverting water for the second consecutive year. Less than 30 percent have told the board they are complying.
WHAT’S NEXT?
The board in the coming weeks plans to order those with claims to water in the San Joaquin River watershed dating before 1914 to stop pumping from rivers and streams. Riparian rights holders were scheduled to be curtailed by mid-June. Friday’s order would be the first restriction on senior water rights holders since severe drought the late 1970s, and the first in memory for the San Joaquin, which runs from the Sierra Nevada to San Francisco Bay.
HOW IS THIS ENFORCED?
That’s the challenge. Regulators lack enough sensors, meters and other technology to make sure water isn’t illegally diverted. Water rights curtailments are instead enforced by an honor system, complaints and field investigations. Some curtailment orders are easily followed because there’s no water to take from streams.
WHAT ARE RIGHTS HOLDERS DOING ABOUT THIS?
Senior water rights holders see their claims to water as ironclad after they paid top price for land with nearly guaranteed water in dry California. Some of their attorneys have threatened litigation, saying the water board has no authority over them. Other farmers with water rights in the Sacramento-San Joaquin River Delta are offering to voluntarily conserve 25 percent of their water in exchange for assurances that they won’t face additional cuts in the middle of their growing season.
HOW IS THE STATE RESPONDING?
Thomas Howard, executive director of the State Water Board, says he’ll announce by Friday whether to let riparian water rights holders take voluntary cuts to avoid curtailments. He says his decision hinges on whether the voluntary conservation would save enough water to reduce the strain on rivers and streams that are drying up. His decision would extend to waterfront property owners in the entire basin of the Sacramento River.
- Is Greece Still A Country If Someone Else Owns Its Assets?
Submitted by John Rubino via DollarCollapse.com,
This story isn’t actually about Greece, but it begins there.
After the country went functionally bankrupt a few years ago, the solutions proposed by its creditors (mostly European banks and governments) included the impoverishment of its current citizens through cutbacks in wages and pensions, the impoverishment of its future citizens through the borrowing of even more money from the IMF and European Central Bank, and the sale of major state-owned assets to foreign companies to raise cash with which to make upcoming loan payments.
Greek voters, not surprisingly, responded by electing socialists who promised not to do any of those things. But apparently this didn’t work. Newsweek reports that the privatization program, after a brief pause, is back in high gear:
German, Russian and Chinese companies race to buy up Greek infrastructure
Foreign corporations from countries including Germany, China and Russia are lining up to buy Greek state assets as the country struggles to pay its European creditors.
The sell-off includes major parts of Greece’s infrastructure such as airports, ports, motorways and utilities., The website of the agency leading the government’s privatisation drive details a host of real estate ready to be sold off, with deals listed as either ‘in progress’, ‘rolling ahead’ or ‘completed’.
The move marks a U-turn from the ruling Left-wing Syriza party, who had previously resisted the privatisation programme imposed as part of the conditions attached to Greece’s €245bn bailout from the so-called troika of the IMF, European Central Bank (ECB) and European Commission.
Notable deals on the table as part of the privatisation drive include the purchase of 51% of Greece’s largest port to the China Ocean Shipping Company (COSCO) and a slew of airports popular with tourists to German transport company Fraport AG.
Other assets listed include the 670km Egnatia Motorway which crosses over Northern Greece, million dollar properties in New York, Washington and Belgrade, thermal springs, and and a former US Air Force base in Heraklion, Crete.
Another major sale which is pushing ahead is that 14 of Greece’s 37 regional airports which include those on popular holiday islands Kos, Mykonos and Corfu. Fraport AG, a German transport company have offered €1.2 billion for the airports’ lease and a sale is expected to go through by the end of this month. Fraport made the offer with Greek energy firm Copelouzos owned by entrepreneur Christos Copelouzos.
Another German company, Deutsche Invest Equity Partners, is in the final eight companies who have qualified for the next phase of the tender process for the acquisition of a 67% stake of Thessaloniki Port, the second largest in Greece. Taiped says that Germany, who are currently leading discussions with Greece for a new deal, are key investors. “With the airports, the most important thing after the price was having experience and Fraport had it,” she said.
Among the other seven companies also bidding for the Thessaloniki Port is the billion-dollar British P&O Steam Navigation Company, Russian train operator Russian Railways, and International Container Terminal Services, a port management company established by Filipino businessman Enrique K Razon who has a personal wealth of $5.2 billion.
Foreign investment is of course common around the world and is generally seen as a good thing. Americans mostly like it, for instance, when Japanese investors bid up shares of US companies or Chinese expats pay above asking price for Manhattan apartments. With only a few exceptions we take the money and don’t look back.
But there must be a limit, a point where foreign interests own so much of a country that they call the shots and the locals become in effect their serfs. Greece might be the test case that shows us where that point is, while helping to answer three other questions:
- How much of what’s happening today is part of a larger process in which less-developed countries are in effect tricked into borrowing unmanageable amounts of money and then looted by their creditors?
- Will Italy, Spain and Portugal suffer the same fate after Greece is fully looted?
- Are middle-class US families becoming Greece in microcosm, tricked into borrowing for college tuition, cars and houses and then forever obligated to send huge chunks of future earnings to their creditors? That the same dynamic is operating on both national and individual scales — and that the beneficiaries in each case are the same big banks — is curious indeed.
- Behind The Scenes In FX Trading: What Is Really Going On
Earlier this month we got confirmation of something we postulated back in April: that the primary source of revenue for Virtu (which, as a reminder, has had only one losing trading day in six years) is no longer equities but FX. Here’s what we said:
Today, Virtu released its first public financials since going public, and our speculation has been proven correct: FX is now the largest revenue generator for VIRT, amounting to 28.4% of revenues in the quarter ended March 31, at $42.2 million, well above the $29.1 million generated from trading America Equities and the $34.7 million from global commodities.
In fact, as the chart below shows, on an LTM basis, FX is now not only the biggest revenue item for the world’s dominant HFT firm at $131.1 million, but is also the fastest growing source of profit, rising 103% on a year over year basis!
Why the shift? Simple:
…with retail now forever done with rigged, manipulated capital markets (at least they get a free drink losing money in a casino) and even banks scrambling to find any volume be it in flow or prop, there is just one remaining “whale” source of dumb money to be front run: central banks. And as everyone knows, central banks trade mostly in the FX arena.
What are the implications? Again, simple:
…with Virtu, whose business model is geared to frontrunning whale orders in any market, irrelevant of their nature, now solely focused on clipping pennies ahead of central bank FX orders, it means that there is no longer any space for retail investors in yet one more market, where market wide stop hunts, squeezes and momentum ignition have become the norm, as the only “traders” left are a few central banks and every single algo that hasn’t cannibalized itself yet.
And so, with the machines having firmly entrenched themselves in FX, and with the world’s central banks engaged in an epic global currency war in an increasingly futile and self-defeating attempt to create demand by printing fiat money, we can expect a wild ride in currency markets going forward or, as we put it more than a year ago, “the next time you feel like the USDJPY is trading as if it is in need of a software update, you will be right.”
Sure enough, we’re now seeing the same dearth of liquidity in FX that we would expect from a market that’s been cornered by central banks and manipulating algos, as liquidity dries up, bid-asks blow out, and volatility spikes. Here’s JP Morgan with more:
What about FX market liquidity? We can also construct a HH ratio for FX markets using FX futures. With the caveat that much of the volume in FX markets goes through OTC spot and forward markets, where volumes and turnover are less transparent, we construct a HH ratio for DM markets as a DXY-weighted ratio of FX futures for the euro, yen, sterling, Canadian dollar, Swiss franc and Swedish krona vs. US dollar, shown in Figure 10.
By “HH”, JP Morgan means a Hui and Heubel Liquidity ratio which, put simply, tries to measure how much trading is going on behind observable price moves. Unsurprisingly given everything we’ve said above, liquidity as measured by JPM’s FX HH ratio is declining fast:
And as for bid-asks… you guessed it:
This ratio has been declining from the second half of last year, driven mainly by EURUSD and GBPUSD futures which have the highest weights, and also to a lesser extent SEK which has seen more recent declines in the HH liquidity ratio. Do other measures of FX liquidity confirm this trend? We look at the 3-month moving average of the bid-ask spread for these currency crosses, also weighted by their weights in the DXY index (Figure 11). Indeed, the rise in the average bidask spreads appear to coincide with the decline in the HH ratio for DM FX in Figure 11. In addition, FX volatility, proxied in Figure 11 by the JPM VXY index of 3-month implied volatility on basket of G7 currencies, rose over the same period.
Rising volatility, wider bid-asks, and no liquidity.
Sounds a lot like the JGB, UST, and Bund markets to us and indeed every other ‘market’, which is why you can expect things like last October’s algo-driven, Fed-assisted Treasury flash crash to become par for the course in FX markets as well, with harrowing USD, EUR, JPY, [fill in the blank] ramps and flash crashs becoming the norm and leaving panicked central bankers desperately trying to figure out what happened after the fact.
And remember, the is all perfectly legal which is why when enough gut-wrenching examples of what happens when the markets are completely broken have unfolded for all to see, some inept regulatory agency will trot out a carbon-based fall guy or, as we put it three weeks ago, “oh, and when the USD flash crashes again, expect some trader in Thailand operating out of his parents’ basement to once again be scapegoated for disrupting yet another market that now has zero liquidity thanks to HFTs.”
- "New Silk Road" Could Change Global Economics Forever, Part 1
Submitted by Robert Berke via OilPrice.com,
Part 1: The New Silk Road
Beginning with the marvelous tales of Marco Polo’s travels across Eurasia to China, the Silk Road has never ceased to entrance the world. Now, the ancient cities of Samarkand, Baku, Tashkent, and Bukhara are once again firing the world’s imagination.
China is building the world’s greatest economic development and construction project ever undertaken: The New Silk Road. The project aims at no less than a revolutionary change in the economic map of the world. It is also seen by many as the first shot in a battle between east and west for dominance in Eurasia.
The ambitious vision is to resurrect the ancient Silk Road as a modern transit, trade, and economic corridor that runs from Shanghai to Berlin. The 'Road' will traverse China, Mongolia, Russia, Belarus, Poland, and Germany, extending more than 8,000 miles, creating an economic zone that extends over one third the circumference of the earth.
The plan envisions building high-speed railroads, roads and highways, energy transmission and distributions networks, and fiber optic networks. Cities and ports along the route will be targeted for economic development.
An equally essential part of the plan is a sea-based “Maritime Silk Road” (MSR) component, as ambitious as its land-based project, linking China with the Persian Gulf and the Mediterranean Sea through Central Asia and the Indian Ocean.
When completed, like the ancient Silk Road, it will connect three continents: Asia, Europe, and Africa. The chain of infrastructure projects will create the world's largest economic corridor, covering a population of 4.4 billion and an economic output of $21 trillion.
Politics and Finance:
The idea for reviving the New Silk Road was first announced in 2013 by the Chinese President, Xi Jinping. As part of the financing of the plan, in 2014, the Chinese leader also announced the launch of an Asian International Infrastructure Bank (AIIB), providing seed funding for the project, with an initial Chinese contribution of $47 billion.
China has invited the international community of nations to take a major role as bank charter members and partners in the project. Members will be expected to contribute, with additional funding by international funds, including the World Bank, investments from private and public companies, and local governments.
Some 58 nations have signed on to become charter bank members, including most of Western Europe, along with many Silk Road and Asian countries. There are 12 NATO countries among AIIB´s founding member states (UK, France, Netherlands, Germany, Italy, Luxembourg, Denmark, Iceland, Spain, Portugal, Poland and Norway), along with three of the main US military allies in Asia (Australia, S. Korea and New Zealand).
After failed attempts by the US to persuade allies against joining the bank, the US reversed course, and now says that it has always supported the project, a disingenuous position considering the fact that US opposition was hardly a secret. The Wall Street Journal reported in November 2014 that “the U.S. has also lobbied hard against Chinese plans for a new infrastructure development bank…including during teleconferences of the Group of Seven major industrial powers.
The Huffington Post’s Alastair Crooke had this to say on the matter: “For very different motives, the key pillars of the region (Iran, Turkey, Egypt and Pakistan) are re-orienting eastwards. It is not fully appreciated in the West how important China's "Belt and Road" initiative is to this move (and Russia, of course is fully integrated into the project). Regional states can see that China is very serious indeed about creating huge infrastructure projects from Asia to Europe. They can also see what occurred with the Asia Infrastructure Investment Bank (AIIB), as the world piled in (to America's very evident dismay). These states intend to be a part of it.”
Buttressing this effort, China plans on injecting at least $62 billion into three banks to support the New Silk Road. The China Development Bank (CDB) will receive $32 billion, the Export Import Bank of China (EXIM) will take on $30 billion, and the Chinese government will also pump additional capital into the Agricultural Development Bank of China (ADBC).
The US: Unlikely Partner on the Silk Road:
Will the US join the effort? If the new Trans-Pacific Partnership (that pointedly leaves out both Russia and China, two Pacific powers) is any indication, US participation seems unlikely and opposition all but certain.
But there's no good reason that America should sacrifice its own leadership role in the region to China. A project as vast and complicated as the Silk Road will need US technology, experience, and resources to lower risk, removing political barriers for other allied countries like Japan to join in, while maintaining US influence in Eurasia. The Silk Road could enhance US objectives, and US support could improve the outcome of the project.
An editorial in the Wall St. Journal argues that the US proposed trade agreement and China's sponsored Silk Road project are complimentary, with the trade agreement aimed at writing rules for international trade, while the Chinese aim at developing infrastructure is necessary for increased trade.
Initial Project:
A look at the first project, currently under development, provides a good example of how China plans to proceed.
The first major economic development project will take place in Pakistan, where the Chinese have been working for years, building and financing a strategic deepwater port at Gwadar, on the Arabian Sea, that will be managed by China as the long-term leaseholder.
Gwadar will become the launching point for the much delayed Iran-Pakistan natural gas pipeline, which will ultimately be extended to China, with the Persian section already built and the Pakistan-Chinese section largely financed and constructed by the Chinese.
The pipeline is also set to traverse the country, following the Karakoram Mountain Highway towards Tibet, and cross the Chinese western border to Xinjang. The highway will also be widened and modernized, and a railroad built, connecting the highway to Gwadar.
Originally, the plan was to extend the pipeline to India, with Qatar joining Iran as natural gas suppliers, forging what some considered a “peace pipeline” between India and Pakistan, but India withdrew, under pressure from the US along with its own concerns over having its energy supplies dependent upon its adversary, Pakistan.
India's Counter:
Not surprisingly, India, a US ally, countered China's initiative with one of its own, announcing a new agreement to build a port in Iran on the Arabian Sea, only a few hundred miles from Gwadar, bringing Iranian energy to India via Afghanistan, bypassing Pakistan.
Although it would offer an alternative to the Chinese-backed Gwadar initiative, the US warned India not to move ahead with the port project before a final nuclear agreement between Iran and the West is actually signed.
Both the Chinese and Indian projects are clearly in defiance of international sanctions on Iran, but both countries appear unconcerned. The Chinese could also be accused of a ‘double dip’ sanctions violation, given the immense and continuing trade deals it negotiated with Russia.
The rest of the business world is sure to follow, or risk losing out in what is certain to be a new “gold rush” towards Asia in a world still struggling with the lingering effects of the great recession. And New Delhi pointed out the harsh truth: American energy companies are also trying to negotiate deals with Iran. Following on the heels of the US visit, the German mission is due in Tehran soon, with the French beating everyone to the punch in an earlier visit.
What then of sanctions? Sanctions only work in a world united behind them. If a large part of the world chooses to ignore sanctions, they become unenforceable.
Conclusions:
China and much of the world is intent on developing the largest economic development project in history, one that could have dramatic ripple effects throughout the world economy.
The project is expected to take decades, with costs running into the hundreds of billions of dollars, if not trillions. What that will mean for the world economy and trade is almost inconceivable. Is it any wonder then, that the world’s largest hedge funds, like Goldman Sachs and Blackstone, are rushing to market new multi-billion dollar international infrastructure investment funds?
No doubt a project as large and complex as this is likely to have failures, and is certain to face many western geopolitical obstructions. Assuredly, the “great game” will continue. Look no further than US President Barack Obama, who also senses the urgency. “If we don’t write the rules, China will write the rules out in that region,” he said in defense of the Trans-Pacific Partnership.
In a world where economic growth is tepid, with Europe still struggling with the aftermath of the global recession, along with China's growth slowdown, where else could a project that promises so much opportunity be found?
It's a good bet that giant iron mining companies like Vale, that have seen their business fall to a thirteen-year low, are currently busy figuring how much steel goes into construction of a new, high speed 8,000 mile railroad. If the project is successful, it could very well spark a boom across the entire depressed international mining, commodities, and construction sectors.
Consider how many jobs could be created in a decades-long construction project that spans a huge region of the world. In practically every sector, the prospects are enormous for a revival of trade and commerce.
The ancient Silk Road increased trade across the known world, but the Road also offered far more than trade. One of its least anticipated benefits was the widespread exchange of knowledge, learning, discovery, and culture.
Beyond the riches of silks, spices, and jewelry, it could be argued that the most important thing that Marco Polo brought back from China was a famous nautical and world map that was the basis for one of the most famous maps published in Europe, one that helped spark the Age of Discovery. Christopher Columbus was guided by that map and was known to have a well-annotated copy of Marco Polo's travel tales with him on his voyage of discovery of a new route to India.
For the world at large, its decisions about the Road are nothing less than momentous. The massive project holds the potential for a new renaissance in commerce, industry, discovery, thought, invention, and culture that could well rival the original Silk Road. It is also becoming clearer by the day that geopolitical conflicts over the project could lead to a new cold war between East and West for dominance in Eurasia.
The outcome is far from certain.
Coming soon, Part 2: Cold War or Competition on the New Silk Road.
- These Are The 50 Top Hedge Fund Long And Short Positions
Nobody has “suffered” more under central planning than billionaire hedge fund managers.
As we have shown year after year, the centrally-planned “New Paranormal” has been a total disaster for traditional alpha generation, since with all traditional fundamental relationships flipped upside down thanks to the Fed, the only way to generate outsized returns for one’s investors (and one’s offshore bank account) is to be massively levered beta, or merely wrong (for a great example of how the bigger the fraud, the higher the stock price goes before it crashes one last time read the case study of Hanergy).
Recall that it was in 2012 when we first showed that the best strategy in this so-called market is to be long the most hated/shorted stocks in hopes of generating a short squeeze among the hedge funds who still expect rationality and fundamentals to eventually prevail over zero-cost money. That “strategy” has outperformed materially since 2012.
To be sure, some hedge fund managers such as Icahn and Ackman have become experts at black (or green) mailing management teams to issue massive amounts of debt and using the proceeds to buy back stock or engage in long-term value destroying roll ups, an extortion strategy known in polite circles as “activism.” But the vast majority of hedge fund managers continue to underperform.
And, with over a third of 2015 already in the history books, Goldman reports that “the low dispersion market continues to challenge stock-pickers as the average hedge fund lags the S&P 500 for the seventh straight year (2% vs. 4% YTD).” Cue countless insulted paper traders screaming how the S&P is never the benchmark for any one hedge fund. Which in theory is correct. In practice, however, any hedge fund which has underperformed the S&P for 7 years even if beating some arbitrarily chosen benchmark has likely been redeemed into oblivion long ago.
There is some good news for hedgies: their Sharpe ratio is better than the S&P500, which however is hardly a consideration for anyone who would rather avoid paying 2 and 20 and just buy the SPY: after all in this rigged market, any time even a hint of a correction appears, some Fed president jawbones stocks right up. From Goldman:
The average hedge fund returned 2% YTD through mid-May. The average equity long/short hedge fund has returned 2.8%, lagging the S&P 500 (+3.9%) modestly in absolute return, but with a much higher Sharpe ratio (1.2 vs. 0.5) due to volatility of fund portfolios less than half that of the broad market index. Global macro funds are the exception, posting a poor -0.5% YTD return as the cross-asset trend reversal in interest rates, FX, and equity markets that began in mid-April unwound what had been a strong start to the year for fund performance.
Ironically, in 2015 even barbaric relics are generating a better return than the smartest money in the room.. with a higher Sharpe.
And yet, despite their now chronic underperformance, for some increasingly inexplicable reason, everyone still obssesses with hedge fund holdings, even though on average the universe of smart money has shown beyond a doubt it is unable to outperform the market, or rather “market.”
So for all those who still care what hedge funds are buying, here from Goldman, is a list of the 50 most widely held hedge fund stocks. No surprise, for the 4th year in a row, AAPL is on top. And yes, despite what pundits say, with 191 holders, there is little “smart money on the sidelines” that isn’t already fully allocated to AAPL. Which is also why the Carl Icahns of the world are desperate for AAPL management to buy back as much (and as fast) of these hedge funds’ shares as possible. Because without management backstopping the market bid, the Hanergy sub-second collapse case study may quickly come to the US.
As usual the most valuable information comes not form the most popular stocks, but the most shorted. Because it is here that as is now usual under the New Paranormal – which won’t change as long as the Fed and its money distorting peers are around – that the biggest outperformance will come from: by being long the most shorted stocks, stocks which will be squeezed until the max pain threshold for most is reached and breached, sending the underlying stock soaring. In fact, the more worthless, fraudulent or corrupt the stock, the higher its price will likely shoot up (once again, see Hanergy).
So without further ado, here is Goldman’s list of the 50 stocks that represent the largest hedge fund short positions.
- Constitution 1 – 0 Government: NSA Starts Winding Down Bulk Data Collection
As we detailed earlier, in a chaotic scene during the wee hours of Saturday, Senate Republicans blocked a bill known as the USA Freedom Act – backed by President Barack Obama, House Republicans and the nation's top law enforcement and intelligence officials – which would have preserved the government's ability to search phone company records for suspected spies and terrorists. As AP reports, the failure to act means the NSA will immediately begin curtailing its previously-secret bulk data collection progreams with The DoJ noting that while it will take time to taper off the collection process, that process began Friday (according to an administration official). Sen. Rand Paul called the Senate's failure to allow an extension of the surveillance programs a victory for privacy rights, adding "we should never give up our rights for a false sense of security."
We explained Rand Paul's refusal to play by the Washington script earlier and how the Senate failure to extend the Patriot Act leaves the future of America's "war against terrorists" – but really against "enemies domestic", i.e., anyone who uses email, has a cell phone or in any other electronic way communicates with others – in limbo.
Now, it appears, as AP reports, the de-esclation of The NSA is escalating rather faster than many had dared to hope for…
The National Security Agency has begun winding down its collection and storage of American phone records after the Senate failed to agree on a path forward to change or extend the once-secret program ahead of its expiration at the end of the month.
Barring an 11th hour compromise when the Senate returns to session May 31, a much-debated provision of the Patriot Act – and some other lesser known surveillance tools – will sunset at midnight that day. The change also would have a major impact on the FBI, which uses the Patriot Act and the other provisions to gather records in investigations of suspected spies and terrorists.
In a chaotic scene during the wee hours of Saturday, Senate Republicans blocked a bill known as the USA Freedom Act, which would have ended the NSA's bulk collection but preserved its ability to search the records held by the phone companies on a case-by-case basis. The bill was backed by President Barack Obama, House Republicans and the nation's top law enforcement and intelligence officials.
…
The failure to act means the NSA will immediately begin curtailing its searches of domestic phone records for connections to international terrorists. The Justice Department said in a statement that it will take time to taper off the collection process from the phone companies. That process began Friday, said an administration official who would not be identified because he was not authorized to discuss the matter publicly.
As a reminder, Section 215 of the Patriot Act is used by the government to justify collecting the "to and from" information about nearly every American landline telephone call.
When former NSA contractor Edward Snowden revealed the program in 2013, many Americans were outraged that NSA had their calling records. Obama ultimately announced a plan similar to the USA Freedom Act and asked Congress to pass it. He said the plan would preserve the NSA's ability to hunt for domestic connections to international plots without having an intelligence agency hold millions of Americans' private records.
Since it gave the government extraordinary powers, Section 215 of the Patriot Act was designed to expire at midnight on May 31 unless Congress renews it. An appeals court has ruled that the phone collection does not comply with the law, but stayed the ruling while Congress debated.
And so it's end is not just legally 'correct' but ethically so too…
Sen. Rand Paul, Kentucky's other senator and a Republican presidential candidate, called the Senate's failure to allow an extension of the surveillance programs a victory for privacy rights.
"We should never give up our rights for a false sense of security," Paul said in a statement.
Some civil liberties groups joined Paul in praising the result, saying they would rather see the Patriot Act provision authorizing NSA phone collection expire altogether.
"For the first time, a majority of senators took a stand against simply rubber-stamping provisions of the Patriot Act that have been used to spy on Americans," said Michael Macleod-Ball, acting director of the ACLU Washington Legislative Office.
…and here are 10 reasons, thanks to Rand Paul, why this should never have happened in the first place…
10 Great Points From Rand Paul's Personal Patriot Act Attack
(via Matt Welch of Reason.com)
1) Warrants need to be "individualized," because collective law enforcement is the root of much evil.
Paul's root opposition to the Patriot Act is that it is being used as the legal justification for the collection of bulk data against unsuspecting U.S. citizens who no one believes have committed a crime. His opposition to the reforming USA Freedom Act is that it still allows the government to compel third-party companies like Verizon to cough up 100 percent of its customer metadata.
Either way, Paul has stressed all day, this is antithetical to both the Fourth Amendment and the American tradition of individual rights. Collective guilt is what underpinned the segregationist horrors of the Jim Crow south, and of the indefensible internment of Japanese-Americans during World War II. The people who really need the Bill of Rights, he has said, are not the prom queens and homecoming kings, but people who are in a disfavored minority, whether ideological, religious, or racial.
2) Internet/telephone/data companies should put up "unified resistance" to federal compulsion to turn over user data.
It’s not every day that you see a sitting U.S. senator calling for straight-up civil disobedience. But in an era where the Supreme Court has yet to definitively rule on the third-party doctrine governing what intermediaries have to do when requested by the government to cough up all user data, building up a bigger cultural expectation of privacy is crucial if our credit-card data and cloud storage is going to be proferred traditional 4th Amendment protection.
3) "We're using the Patriot Act to put [drug offenders] in prison."
One of the least remembered scandals in the Summer of Snowden is that the Drug Enforcement Agency has been collecting bulk metadata with all the same gusto as the National Security Agency, even though the DEA is supposed to enforce the law on U.S. citizens who are afforded protections from the Constitution. In fact, the DEA has been using the NSA's data. Patriot Act mission creep might not be news to Reason readers, but that makes it no less indefensible.
4) "Government by cliff is a recipe for disaster."
That's a quote from Sen. Mike Lee (R-Utah), not Rand Paul, though the two have long agreed about this principle. The Patriot Act expires at the end of May. "It's been three years since we've known this date is coming," Paul said. Why in hell hasn’t there been a debate, with amendments, in the Senate? Why does Capitol Hill lurch from cliff to cliff, instead of actually do the job of governing? I suppose this bad habit of mind is good for certain opportunistic politicians with a sense of theater, but it's just lousy for the country. The Republicans run the joint; the dysfunction is now squarely on them.
5) "It was done by executive decree, it can be undone by executive decree."
Paul has continuously bemoaned President Barack Obama's civil-liberties switcheroo when in office, a topic he talked with me about in a September 2013 (bottom of the post). As he rightly points out, most of the actions civil libertarians are complaining about are pure inventions and executions by the executive branch. If the president cares about this stuff as much as he occasionally pretends to be, he can actually stop collecting the metadata.
6) The government is "using records to gain entrance to people, and then tak[ing] their stuff without conviction."
The connection between civil asset forfeiture and NSA surveillance might not be immediately obvious, but Paul has done a bravura job in making the link. A government that can take your money—even if you are never charged with a crime—because it doesn't like the way you deposit it in your bank, is a government that should not be trusted with holding all your seemingly innocuous third-party information.
7) "The Constitution is an end to itself."
That's another one from Mike Lee (who, it should be stressed, is wholly in favor of the USA Freedom Act, which Paul opposes on grounds that it still allows for bulk collection of metadata). Too often people try to locate their defense of the founding document on utilitarian grounds; actually, it's a noble blueprint all on its own.
8) We shoulda listened to William Binney.
William Binney was a crucial, pre-Snowden NSA whistleblower. Don't know who he is, what he saw, how he was threatened, and why he's worried about America’s "totalitarian" turn? Read this Nick Gillespie interview with the guy.
9) "The director of national intelligence…wasn't telling the truth."
Director of National Intelligence James Clapper famously lied to Congress under oath about the collection of bulk metadata on millions of Americans. All afternoon, Rand Paul has used the word "lied" to describe what Clapper did. It is bracing to watch government misbehavior called by its proper name.
10) "The presumption of innocence is an incredibly important doctrine that we shouldn't so casually dismiss."
The fact that this has to be said on the floor of the U.S. Senate is appalling. The fact that it is being said at least offers a little hope.
* * *
It appears he – and the many others fighting for liberty and privacy and the constitution – may have actually won one here… or is bulk data collection about to go deep, very deep under cover.
- ‘Titanic’ Global Economy May “Collapse” Warn HSBC – Gold Is Lifeboat
‘Titanic’ Global Economy May “Collapse” Warn HSBC – Gold Is Lifeboat
-“The world economy is like an ocean liner without lifeboats …” – HSBC
– Four areas of high risk identified by HSBC
– Risk of stock market crash
– Pension funds and insurers may not meet obligations
– Chinese recession may drag U.S. into recession or depression
– Premature rate rise would expose very fragile global economy
– “There aren’t enough lifeboats to go round”
– Gold vital lifeboat when global ship strikes iceberg
The chief economist of the world’s third largest bank, HSBC’s Stephen King, has compared the global economy to the Titanic.In a note to clients on Wednesday he wrote “We may not know what will cause the next downswing but, at this stage, we can categorically state that, in the event we hit an iceberg, there aren’t enough lifeboats to go round.”
“The world economy is like an ocean liner without lifeboats.” As we have been warning in recent months, when another recession arrives, governments do not have the ability or the reserves to prop up the economy like they did in 2008.
Global debt has soared by 40 percent since the Great Recession. We now have a staggering $200 trillion of debt globally, or almost three times the size of the global economy. It would be a “truly titanic struggle” for policymakers to right the economy, King said.
He believes that we are now nearer to the next global recession than we are to the last one which ended six years ago. In that time, however, the world has amassed mountains of new unpayable debt – expanding 25% in the last six years – and the U.S. economy has been sluggish despite an unprecedented wave of money printing which was intended to boost the economy. Indeed, post recession growth has never been so anaemic in recent history.
This weakness has left policy makers ill-equipped to deal with the next crisis,
“Whereas previous recoveries have enabled monetary and fiscal policymakers to replenish their ammunition, this recovery – both in the US and elsewhere – has been distinguished by a persistent munitions shortage. This is a major problem. In all recessions since the 1970s, the US Fed funds rate has fallen by a minimum of 5 percentage points. That kind of traditional stimulus is now completely ruled out.”
Elsewhere in the note he describes the problem facing policy makers as “titanic”. He identifies four areas as being of particularly high risk,
– The equity bubble may burst as increasing wages impair corporate profits. This would lead consumers to lose confidence triggering another an economic contraction.
– Pension funds and insurers may not have cash to meet future obligations causing them liquidate assets. This may cause a scramble for liquid assets and mass panic-selling in an environment of low demand causing a collapse in asset prices.
– A recession in China would likely force the PBOC to weaken the Yuan. This would cause a consequent rise in the dollar further undermining the ability of the U.S. to export. In such an environment the Fed has typically dropped rates by around 5%. As the Fed’s base rate is currently at 0.25% it has absolutely no policy tools left to deal with such an event. King concludes “The U.S. is eventually dragged into a recession through forces beyond its control.”
– If the Fed were to raise rates too soon it could expose the very fragile nature of the “recovery”. Neither governments, nor corporations nor households would have the strength to absorb the costs of servicing their debts should the Fed begin raising rates.King is extremely doubtful that policy makers will be able to cope with the next crisis:
“The world economy is like an ocean liner without lifeboats. If another recession hits, it could be a truly titanic struggle for policymakers.” Reports do not indicate if King speculates on what the next crisis would look like in the absence of adequate policy tools.We do not know how it will unfold either. But we suspect that after more that twenty years of Fed intervention to protect too-big-to-fails and a gargantuan build up of debt a monumental day of reckoning may then be at hand. In such an environment we would once again understand the true value of gold as a currency which is finite and which has no counter-party risk.
HSBC’s chief economist does not mention gold as a potential life boat to protect from a titanic economic collapse. However, HSBC’s precious metals team are currently very constructive on the long term outlook for gold prices.
In reaction to their chief economist’s warning, their precious metals analysts said, that any of the scenarios outlined by Stephen King would be positive for gold bullion.
Given the significant and growing economic risks of today, it is prudent to have an allocation to physical bullion stored in reliable vaults in the safest jurisdictions around the world.Have you got your lifeboat ready?
Must-read bullion guides below:
Essential Guide to Bullion Storage in Switzerland
Essential Guide to Bullion Storage in Singapore
- Cold War 2.0: Visualizing All Recent "Close Encounters" Between Russian And NATO Warplanes
Lately, not a day seems to pass without news of NATO jets being scrambled to intercept/reroute a Russian warplane or reconnaisance jet. As a result, David Cenciotti’s The Aviationist blog has compiled the recent history of all the “close encounters” between Russian and NATO warplanes since 2013. In a 69-page e-book he has summarized “all the most significant close encounters” to show “how routine interceptions have become recurrent, tenser and more dangerous; the proof that we live in a new Cold War, or a “Cold War 2.0?, as we dubbed it.”
The full e-book can be found below (link), while a quick summary showing just how provocative the two sides have become toward one another, can be seen on the infographic below.
Presenting David Cenciotti’s, COLD WAR 2.0: All the most significant close encounters between NATO and Russian warplanes since 2013
- ISIS: Mapping A Militant Expansion
To let the media tell it, ISIS has launched a successful “offensive” of late, taking control of Palmyra, a Syrian city that’s home to ‘treasures of antiquity’, as well as Ramadi, which gives the group control of “strategic highway linking Iraq and Syria.”
ISIS has also claimed responsibility for a mosque bombing that claimed the lives of 21 Saudis on Friday.
As the US moves closer to putting boots on the ground, The New York Times is out with a series of graphics which document the group’s spread.
Note that the last graphic — which depicts a giant globe with highlights on “countries with groups that have pledged allegiance to ISIS” — makes it look like ISIS has launched a Naziesque blitzkrieg on the way to invading multiple countries. This, of course, is completely absurd. There are a lot of groups who can claim membership in a lot of countries meaning that we could produce a lot of these maps if we wanted to, but it wouldn’t mean that any of said groups were on the verge of a Napoleonic global conquest.
But reality never got in the way of a good story.
Digest powered by RSS Digest
Saving...