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Wednesday, July 29, 2015

Total Collapse: Greece Reverts To Barter Economy For First Time Since Nazi Occupation

Months ago, when Alexis Tsipras, Yanis Varoufakis, and their Syriza compatriots had just swept to power behind an ambitious anti-austerity platform and bold promises about a brighter future for the beleaguered Greek state, we warned that Greece was one or two vacuous threats away from being "digitally bombed back to barter status."

Subsequently, the Greek economy began to deteriorate in the face of increasingly fraught negotiations between Athens and creditors, with Brussels blaming the economic slide on Syriza’s unwillingness to implement reforms, while analysts and commentators noted that relentless deposit flight and the weakened state of the Greek banking sector was contributing to a liquidity crisis and severe credit contraction.

As of May, 60 businesses were closed and 613 jobs were lost for each business day that the crisis persisted without a resolution.

On the heels of Tsipras’ referendum call and the imposition of capital controls, the bottom fell out completely as businesses found that supplier credit was increasingly difficult to come by, leaving Greeks to consider the possibility that the country would soon face a shortage of imported goods.

On Tuesday, we brought you the latest on the Greek economy when we noted that according to data presented at an extraordinary meeting of the Hellenic Confederation of Commerce and Entrepreneurship, retail sales have fallen 70%, while The Athens Medical Association recently warned that 7,500 doctors have left the country since 2010.

Now, the situation has gotten so bad that our prediction from February has come true. That is, Greece is reverting to a barter economy. Reuters has more:

Hay for cheese? Barter booms in cash-squeezed rural Greece

* Online barter platforms see business boom

* Bartering more common in rural areas, remote villages

* Prompts questions on use of receipts and tax avoidance

By Lefteris Karagiannopoulos

LAMIA, Greece, July 28 (Reuters) - Wild boar and power cuts were Greek cotton farmer Mimis Tsakanikas' biggest worries until a bank shutdown last month left him stranded without cash to pay suppliers, and his customers without money to pay him.

Squeezed on all sides, the 41-year-old farmer began informal bartering to get around the cash crunch. He now pays some of his workers in kind with his clover crop and exchanges equipment with other farmers instead of buying or renting machinery.

Tsakanikas is part of a growing barter economy that some Greeks deplore as a step backward from modernity, but others embrace as a practical means of short-term economic survival.

When he rented a field this month, he agreed to pay with part of his clover production.

DAMN....................You Fricking Socialists in Brussels have Done a REAL fine JOB Saving Greece with that last VAT Tax Increase!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 

""LAB RATS"" of Greece "IS" all of this Bullshit Really Worth the PAIN???????????????????? 
About this Time in 2014 I was Warning that 2015 was going to be a REAL Bitch so here "IS" Your 2H15 Line-Up of what YOU GOT coming at YOU to Finish OFF 2015 and Set Planet EARTH Up for the HELL that WILL Be ""2016""...................The First YEAR of the ""GREAT RESET"" as Countries around the World Begin the Worst RECESSION Ever!!!!!!!!!!!!!!!!!!!!!!!

A KEY Point I have to MAKE here because the ""PIMPS"" of Wall Street really HATE to even think about this Topic much less have to formulate an Investment Strategy toooooooooooooo ""WAR""!!!!!!!!!!!!!!!!!!!

In 2016, The Middle EAST(Iraq, Syria, Turkey,Yemen and OMG Saudi Arabia), N.Africa, Afghanistan, Pakistan, Ukraine and Venezuela and Greece  are ALL going to be hit with WAR, Civil WAR and Civil Unrest and IF you have been doing your Reading HERE You Know this already!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 

This Violence WILL Compound the Troubles the Global Economy will be Facing as Trade Activity Grinds to nearly ""ZERO Growth"" by the END of 2016 because of the Wealth Destruction of the Worst Global Market Correction EVER thanks to MARGIN DEBT and the Global Carry Trades created by the Policies of the Central Banksters!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Presenting Jeremy Grantham's "10 Topics To Ruin Your Summer"

When last we checked in with Jeremy Grantham, the GMO co-founder was still bubble watching, reiterating his outlook from November that although stocks can always go higher in the "strange, manipulated world" that we call the "new paranormal", "bubble territory" probably isn’t far off given that the Yellen Fed is "bound and determined" to facilitate the inexorable rise of asset prices.

More specifically, bubble territory for Grantham is around S&P 2250, and because "the Greenspan/ Bernanke/Yellen .. Fed historically did not stop its asset price pushing until fully- fledged bubbles had occurred, as they did in U.S. growth stocks in 2000 and in U.S. housing in 2006," there’s no good reason to think we won’t reach a bubble-defining two sigma event before all is said and done, even if that means launching QE4 in the event liftoff's first 25bps baby steps result in a 1937 redux.

Grantham also bemoaned the lack of capex spending and the myopia exhibited by corporate management teams, noting the "current extreme reluctance to make new investments in plant and equipment (how old-fashioned that sounds these days) rather than [plowing money] into stock buybacks, which may be good for corporate officers and stockholders, but bad for GDP growth and employment."

In GMO’s latest quarterly missive, Grantham is back with another dose of inconvenient truthiness, this time in the form of "ten quick topics to ruin your summer."

In short, this is a list of what Grantham - who points out how fortunate he is to "have an ideal job [with] no routine day-to-day responsibilities [which leaves him] free to obsess about anything that seems both relevant and interesting" - thinks you should worry about going forward:

The Coming CORRECTION "IS" going to be FRICKING BRUTAL!!!!!!!!!!!!!!!!!!!!!!!!!!! 

NOTHING Can STOP the 2015 ""GLOBAL RECESSION""......................NOTHING!!!!!!!!!!!!!!!!!!!!

The ""GREAT RESET""......................READ All About IT!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

""2016""...................You Heard it HEAR First!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 

Jeremy Grantham 
America, YOUR going to have a ""***Come to Jesus***"" Moment when YOU Finally find out Just how Expensive ""BIG Government"" Really IS!!!!!!!!!!!!!!!!!!!!!!!!! 

Folks the DAY "IS" Coming when the WORLD "IS" going to Stop Lending(Buying U.S. Treasuries) And THEN Watch the HELL that Will Follow!!!!!!!!!!!!!!!!!!!!!!

Russell Napier: What Happens When Markets Realize China Is A Forced Seller Of Treasuries

One week ago, our post "China's Record Dumping Of US Treasuries Leaves Goldman Speechless" which revealed an unexpected plunge in China's foreign exchange reserves or, said otherwise, a historic sale of US Treasurys held by official and unofficial Chinese accounts, was met with unprecedented public interest, having been read over 400,000 times (a record for coverage of a nuanced, technical subject) and even forced Goldman to follow up admitting its "estimation" of Chinese reserve outflows may have been too high.

U.S. National DEBT Clock!!!!!!!!!!!!!!!!!! 

Congress proposes this new law to “fix” Social Security
By Simon Black

Social Security Fund

Aritzo, Sardinia, Italy

On January 31, 1940, the very first Social Security check ever delivered went to Ms. Ida May Fuller, a former legal secretary who had recently retired.

Ms. Fuller had spent just three years paying into the system, contributing a total of $24.75 to Social Security.

Yet her first check was for nearly that entire amount. Quite a return on investment.

She went on to live past 100, collecting a total of $22,888.92, over 900 times the amount she contributed to the program. Her story is quite the metaphor.

If you’re not familiar, Social Security is comprised of two primary trust funds: Old-Age and Survivors Insurance (OASI) and Disability Insurance (DI).

Essentially, all of the taxes paid in to Social Security end up in one of these two trust funds.

The trust funds then ‘manage’ the money to generate a rate of return, and then pay out distributions to program recipients.

Now, the funds are overseen by a Board of Trustees which is obliged to submit an annual report on the fiscal condition of the program. It ain’t pretty.

The Disability Insurance (DI) fund is particularly ugly. In fact, the trustees themselves wrote in the 2015 annual report that

“[T]he DI Trust Fund fails the Trustee’s short-range test of financial adequacy. . .”


“The DI Trust Fund reserves are expected to deplete in the fourth quarter of 2016…”

Social Security at the Starting LINE of a 10 Year Sprint to Insolvency!!!!!!!!!!!!!!!!!!!!!!!! 

ROTFLMFAO in TEARS at YOU ""LIBERALS"" in Independents who bought into the White House BULLSHIT that Obamacare was going to make YOUR Healthcare Affordable!!!!!!!!!!!!!!!!!!!!!!!!!!

$1 of every $5 spent in US will be on health care
By Dan Mangan   

Nearly $1 in every $5 spent in the United States by 2024 will be on health care, according to a government projection released Tuesday, forecasting a quickening of the health inflation rate. Nonetheless, that rate still falls well short of the sharply upward trend seen prior to the Great Recession.

Annual health spending is expected to grow an average of 5.8 percent during the period of 2014 through 2024, mainly because of the expansion in the number of people with health insurance due to Obamacare, stronger economic growth and an older population transitioning into the Medicare system, the Office of the Actuary at the Centers for Medicare and Medicaid Services said.

Other factors driving the inflation include expected substantial increases in prescription drug spending, fueled primarily by new high-cost specialty drugs for hepatitis C, and new treatments for cancer and multiple sclerosis.

National Health Expenditure Projections, 2014–24: Spending Growth Faster Than Recent Trends

Health spending growth in the United States is projected to average 5.8 percent for 2014–24, reflecting the Affordable Care Act’s coverage expansions, faster economic growth, and population aging. Recent historically low growth rates in the use of medical goods and services, as well as medical prices, are expected to gradually increase. However, in part because of the impact of continued cost-sharing increases that are anticipated among health plans, the acceleration of these growth rates is expected to be modest. The health share of US gross domestic product is projected to rise from 17.4 percent in 2013 to 19.6 percent in 2024.

Obamacare........................America, YOU Can't AFFORD this ""LIBERAL"" Screw JOB!!!!!!!!!!!!!!!!!!!!!!!!
The Horseman of the Jewish Apocalypse
By Shlomo Ben-Ami

Shlomo Ben-Ami, a former Israeli foreign minister, is Vice President of the Toledo International Center for Peace. He is the author of Scars of War, Wounds of Peace: The Israeli-Arab Tragedy.

TEL AVIV – The nuclear agreement reached by Iran and the five permanent members of the United Nations Security Council (China, France, Russia, the United States, and the United Kingdom), plus Germany, is not about Iran’s capitulation, as Israeli Prime Minister Binyamin Netanyahu wished. And it is about as imperfect as any negotiated agreement between disputing parties can be. Nonetheless, it creates a solid framework to prevent Iran from producing nuclear weapons for the next 10-15 years – and that is a very positive development.

Netanyahu, if he wished, could take a lot of the credit for this achievement. Had he not fueled global hysteria over Iran’s nuclear ambitions, the crippling international sanctions regime that eventually pushed Iran to a deal might never have been implemented.

But Netanyahu has stubbornly insisted that the agreement is a strategic fiasco, citing its ambiguities in matters such as the mechanism of inspection, the number of centrifuges Iran will be allowed to maintain, and the conditions for re-imposing sanctions if Iran breaches the accord. In pursuing this course, Netanyahu has not only missed the opportunity to claim a major diplomatic victory; he has also reinforced Israel’s international isolation.

Netanyahu is now doing all he can to persuade the US Congress to pass a “resolution of disapproval.” This is highly unlikely to occur, especially in an election year, given that it would require 13 Democratic senators and 48 Democratic representatives to break with US President Barack Obama. Indeed, Netanyahu’s effort is succeeding only in turning Israel into an increasingly divisive partisan issue in US politics. That is a dangerous game: The US has broken with the international community to support Israel in the past; it is less willing to do so today.

Even if Netanyahu managed to secure such a Congressional resolution, doing so would not serve his interests. Given that the resolution would affect only US sanctions, it might not nullify the agreement, with the lifting of sanctions by all other international powers proving sufficient motivation for Iran to uphold its end of the bargain. Worse, Iran could then decide to gallop toward the bomb, now with the support of countries like China and Russia, within an increasingly fragmented international system.

Despite the obvious problems with Netanyahu’s position, dismissing it would be a mistake. Contrary to popular belief, he is not just a cynical politician in search of an agenda to deflect attention away from growing domestic problems and the conflict with Palestine. His obsessive focus on Iran – not to mention the seemingly irrational calculus that is driving him toward a politically suicidal confrontation with the US, his country’s most important benefactor – stems from deep-rooted convictions, a system of political thought, and his own perspective on Jewish history.

Netanyahu is an ideologue of Jewish catastrophe. His view of Jewish history reflects that of his father, the historian Benzion Netanyahu, who went to America in the 1940s to challenge the Allies’ failure to rescue European Jewry from the Holocaust, and thus to mobilize support for Zionism. In fact, Netanyahu remembered his father’s efforts in his address to the US Congress last March.


Iran Will Cheat. Then What?
By Dennis Ross

 The nuclear deal with Iran will certainly be debated intensely as Congress reviews the agreement over the next 60 days. It is a complex deal with many parts. For the administration, it has blocked the Iranian pathway to a bomb for at least the next fifteen years -- and that claim has a great deal of merit given the limitations on the numbers of centrifuges, the far-reaching reduction of Iran's stockpile of low enriched uranium, the removal and redesign of the core of the heavy water reactor at Arak, and Iran's forswearing of reprocessing capabilities for this period of time.

In addition, President Obama is surely right when he declares that the deal is not about trust because there will be sweeping means to verify what is going on with the Iranian nuclear program. Indeed, the monitoring of the whole supply chain from the mining of uranium to the enriching of UF6 gas in centrifuges will make it difficult for Iran to divert materials into a covert program without us knowing about it. So there are some very important achievements in the agreement.

But there are also some important weaknesses that need to be addressed. Knowing Iran has cheated is one thing; ensuring that there is a price for every transgression -- no matter how small -- is another. The agreement provides for "snap back" sanctions, which essentially lifts the suspension of sanctions in the event of an Iranian violation. Clearly, the snap-back function is designed to deal with a major breach of the deal, particularly because Iran explicitly states in the agreement that it will stop implementing its nuclear obligations if sanctions are re-imposed. So what happens if Iran cheats along the margins? For example, if they enrich uranium to 7%, not the permitted 3.67%? The snap-back function makes little sense in this circumstance, but the Joint Commission that brings together all the negotiating parties could obviously address such an issue of non-compliance. In this case, however, Iran will likely declare it made a mistake and say it will stop doing it.

Sound fine? Not really. Given Iran's track record, it will likely cheat along the margins to test the means of verification and see how it might be able to change the baseline -- and there needs to be a penalty for each such act of non-compliance, and preferably not only by the US.

I say this because deterrence is going to be even more important as a result of this deal. Indeed, for me the greatest single problem with the agreement is that Iran is going to be left as a threshold nuclear state at the end of fifteen years. The agreement requires Iran to dismantle none of its enrichment infrastructure, and starting in year 15, it can have as large a nuclear program as it wants. The gap between threshold and weapons status is small and will not take long to bridge.

As such, deterrence is what will matter. Iran must have no doubts that if we see it moving toward a weapon, that would trigger the use of force. Declaring that is a must even now. Proving that every transgression will produce a price will demonstrate that we mean what we say. If verification is necessary because the agreement is not built on trust, so too is building the credibility of our deterrence because Iran will be a threshold nuclear state -- one that has deferred but not given up the option of being a nuclear weapons state. 

If the Iran Deal Fails...
By Robert Satloff

 Let us assume that Congress overrides the president's veto of a resolution disapproving the deal. What happens the day after?

The president said that the congressional vote not only vitiates the agreement but destroys all international constraints on Iran's nuclear program, after which the Iranians will race toward a bomb. That development, so this argument goes, would launch a regional nuclear arms race and likely trigger either American or Israeli military action to stop Iran's march toward a bomb. With Iran likely to respond in either case by launching thousands of Hezbollah missiles into Israel, the result is war.

But is that really the most likely chain of events? No.

Faced with what would be a revolt in his own party, let alone near-universal Republican opposition, the president might have second thoughts about the Vienna deal. If he still wanted to salvage a nuclear agreement, this could compel him to go back to the bargaining table -- first with his P5+1 partners and then with Iran -- to secure certain improvements.

These could include, for example, less time for Iran to delay inspections; a longer period for the maintenance of the arms embargo; or clear and agreed consequences spelled out for various types of Iranian violations. In other words, a vote for disapproval may just force the president to seek the proverbial "better deal."

But let's say that the president holds firm to the current text, despite ignominious defeat on his flagship foreign policy achievement. Remember precisely what Congress will be voting on -- to constrain the president's ability to waive sanctions on Iran. That's all. He will still have the prerogatives of his office to seek execution of the deal in other ways.

In that case, I believe the likely scenario would be as follows:

The administration has said it will seek U.N. Security Council endorsement of the Vienna accord in the coming days. That means the agreement will be enshrined in international law well before Congress acts, though that Security Council resolution will be timed so as not to take effect until after Congress votes on the deal.

Then, in early September, let's say Congress votes to override the president's veto. Then, a determined president will still go to the annual convening of the U.N. General Assembly and announce that he will do everything in his power to execute the agreement. If Congress won't let him waive sanctions, then -- as he did with deportations of certain illegal aliens -- he will order the State and Treasury Departments to focus their enforcement powers elsewhere. Congress will fume; a legal battle looms.

But even at that point, the United States is still not in violation of the agreement. According to the deal, the next step is that Iran has to implement its nuclear restrictions -- mothballing centrifuges, redesigning the Arak plutonium reactor, etc. -- to the satisfaction of the International Atomic Energy Agency. Most experts estimate that will take at least six months. Only after the IAEA certifies that Iran has met its requirements are the P5+1 countries and the United Nations required to implement their commitments to terminate (or, in America's case, suspend) sanctions.

In other words, even if Congress denies the president waiver authority on Iran sanctions in September, he wouldn't begin to use that authority until next spring, at the earliest. At that point, when he tries to make an end-run around Congress, Messrs. Boehner and McConnell can be expected to take their case to court. Eventually, the Supreme Court will decide. Perhaps the president will still be in office; perhaps he won't.

What does Iran do during this domestic political contest here in the United States? Does it chuck its enormous diplomatic achievements in Vienna for a mad dash toward a bomb? Highly unlikely. My hunch is that Iran will seek to exploit our internal squabbles to isolate America from its own negotiating partners.

"We are very sorry to see small minds in Congress try to snuff out hopes for peace and mutual security," savvy Iranian diplomats will say. "But we will not let them. Therefore, we will continue to abide by the terms of the agreement." That's the best way for Iran to make sure that the European Union and the United Nations terminate their sanctions and, along the way, deepen divisions between Washington and its major allies.

So, let's put this issue into context. Congressional rejection of the Iran deal won't be pretty. While it might convince the president to seek "a better deal" to win legislative support, we shouldn't delude ourselves into thinking that we can just go back to square one with negotiations or that we can keep the current sanctions regime in place as if the past two years of diplomacy never happened. We will be in a different place, much grayer than before.

But that messiness is a far cry from war. In my view, the only war that may ensue from a congressional vote of disapproval is a war of words between our legislative and executive branches, eventually adjudicated by the Supreme Court. In other words, the worst-case scenario will be business as usual in Washington.

Can YOU Say..........""Middle East Military ARMS Race""??????????????????? 

Saudi Arabia Responds to Iran Deal: Give Us 600 Patriot Missiles
By Marcus Weisgerber

The Kingdom’s request for additional interceptors could be the first of many new Mideast arms purchases aimed at warding off Iranian missiles.

Just two weeks after Western nations and Tehran struck a deal to limit Iran’s nuclear program, the Pentagon says Saudi Arabia wants to buy 600 new Patriot missile interceptors.

The $5 billion-plus purchase is likely just the first of many more as America’s Middle Eastern allies arm themselves in response to the nuclear deal, which would lift Iran’s conventional-arms embargo sanctions in five years and sanctions on long-range missile projects in eight.

“We saw this coming,” said Thomas Karako, a missile defense expert with the Center for Strategic and International Studies. “This is the consequence of leaving the Iranian missile program intact and in fact signaling sanctions will go down on it.”

Saudi Arabia and other Gulf Cooperation Council allies have been upping their missile defenses in recent years. In April, Riyadh bought $2 billion worth of Patriots, and just last week, the Pentagon bought $1.5 billion worth of Patriots for Qatar, United Arab Emirates, Taiwan, South Korea — and Saudi Arabia again. 

'The fuse is lit for a nuclear arms race in the Middle East': Critics warn Arab rivals will not 'sit idly by' after Iran's atomic accord –as Russia strikes three power plant deals with Egypt, Jordan and Saudi Arabia

  • Arab nations doubt that accord will prevent Tehran obtaining atomic bomb
  • Saudis fear lifting of sanctions will allow Iran to 'cause turmoil' in region 
  • Syrian rebels warn that the agreement 'translates into more barrel bombs, more massacres and more blood across Syria' 

Yet Another ""WTF"" Moment from the Obama White House and these ASSHOLES Wonder WHY Americans are Buying GUNS at an ALL TIME Record PACE!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 

Kerry: We Can't Reveal Contents of Secret Side Deals to American People

Secretary of State John Kerry testified on Capitol Hill today the U.S. government will not be revealing the contents of secret side deals with Iran to the American people. Senator Tom Cotton wanted to know why it can't be made public.

Watch the exchange:

Obama Iran.....................""WTF"" America!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Israel vs. Iran..................It's going to Happen thanks to Obama!!!!!!!!!!!!!!!!!!!!!!!!!! 

European Missile Defense after Ukraine and the Iran Deal
By: Thomas Karako

With the conclusion of a joint plan of action for Iran’s nuclear program, Foreign Minister Sergei Lavrov of Russia has returned to his favorite talking point: that NATO should scale back missile defenses.

NATO should do nothing of the sort. Not only does the Iran deal not roll back the most numerous and diverse missile program in the region, it stipulates the removal of missile sanctions after eight years. U.S. administration officials have rightly opposed suggestions of curtailing missile defenses. After years of declaring NATO missile defense plans to be ironclad, such a rollback would undermine both U.S. credibility and NATO solidarity, by extending the pattern of cancellations begun in 2009 and 2013.

Indeed, Europe’s missile defense needs have arguably increased, thanks to Russia.

Since the invasion and occupation of Ukraine, NATO has urgently evaluated force realignments, forward deployments, and military exercises. In terms of missile defense plans, however, it is as if Ukraine never happened.

NATO’s 2010 Strategic Concept declared missile defense to be a core alliance mission without reference to specific countries or threats. The current U.S. contribution is the European Phased Adaptive Approach (EPAA), which has been scaled down to three phases of SM-3 interceptors deployed on Aegis ships as well as ashore in Romania and Poland.

Other components include the alliance-wide command and control network and investments by individual nations. Poland and Germany have recently announced their respective decisions to acquire PATRIOT and MEADS. The Baltics are understandably interested in similar capabilities.

Much more should be done, including for lower-tier threats like Iskanders, SS-21s, and INF Treaty–noncompliant cruise missiles. In their individual defense authorization bills, both the U.S. House and Senate called for increased NATO air defenses.

More robust and integrated air and missile defenses would not undermine Russia’s strategic deterrent. With missile defense as elsewhere, good fences make better neighbors. As Undersecretary of State Rose Gottemoeller pointed out, nobody objects to Russia’s air defenses or their 68 interceptors around Moscow.

Countering Russia’s nonstrategic missiles could instead be stabilizing by discouraging ill-conceived, Crimea-like attacks. NATO’s approach should not be to create an impenetrable shield, but to complicate Russia’s provocation calculus by the metrics of deterrence—raising the cost and uncertainty of attack, blunting conventional military forces, and buying time for NATO to react. Besides serving as a bright symbol of alliance cohesion, improving defenses would communicate to Russia that aggression is counterproductive.

Such steps would be consistent with the 2010 Ballistic Missile Defense Review, which emphasized rather than disavowed short-range defenses. They would also be a logical application of the review’s careful emphasis that future capabilities would evolve and adapt to new circumstances.

With the memory of Ukraine still fresh, the time is ripe to update NATO’s air and missile defenses to deter Russian aggression. Instead of scaling back EPAA, we should consider ways to expand it. 
I Expect this Move by Turkey to Ignite the Mother of ALL ""Holy WARS""!!!!!!!!!!!!!!!!!!!!!!! 

Democrats Own the Disaster in the Middle East
By Noah Rothman

“Secretary of State Colin Powell told this president the Pottery Barn rule,” said then-Senator John Kerry in the final months of the 2004 presidential campaign. He was referring to the dismal state of affairs in Iraq 19 months after the coalition invasion. “Now if you break it, you made a mistake. It’s the wrong thing to do. But you own it. And then you’ve got to fix it and do something with it.” 11 years later, and Kerry is the highest-ranking Cabinet official in an administration that has presided over a proliferation of conflicts in the Middle East. President Barack Obama’s attempts to radically transform regional power dynamics makes George W. Bush look like a custodian of the status quo. Today, the Middle East and North Africa are in a state of crisis. But what looks outwardly like chaos is, in fact, a predictable realignment brought about by the president’s eager and overly ambitious effort to extricate the United States from regional affairs. The results of this project have been devastating to America’s stature in the Middle East and the long-term security of the West.

The menace of the Islamic State militia movement — a proto-state that devours the corpses of Iraq and Syria from within and which threatens the viability of the very Westphalian system of nation-states with defined borders – is an immense and growing one. Only after intense external pressure did Obama agree to craft two distinct coalitions to fight the same war on either side of the functionally nonexistent Iraqi-Syrian border. Nearly one year after the commencement of initial coalition airstrikes on ISIS targets, the ragtag militia group and the territory it controls remains largely intact. More disturbingly, the strategy the president embraced to prevent American involvement in the conflict is faltering.

By this point, the administration had hoped to train a substantial number of the thousands of Syrian rebels it needed to roll back ISIS in Syria. As of July, only 60 had been trained and equipped. Similarly, the Iraqi Security Forces and the Shiite militias aligned with Baghdad that were to serve as the indigenous “boots on the ground” in Iraq have only enjoyed limited successes. The ground forces on which the West pinned its hopes have largely failed to stem the ISIS tide. The Kurdish fighters in Iraq and Syria that have made substantial gains against ISIS are the exception to this rule. It is a testament to the fecklessness of the West’s strategy to combat ISIS that its most productive ally on the ground is now being targeted from the air by another.

Turkey’s President Recep Tayyip Erdo─čan has apparently decided to use the opportunity provided by Islamic State terror attacks inside Turkey and on the Syrian border to launch a regional war on the region’s Kurdish population. While Ankara has also mounted a series of belated airstrikes on ISIS positions in Syria, Turkish warplanes are also invading Iraqi airspace and targeting Kurds linked to the banned Kurdistan Workers’ Party (PKK). The Marxist Kurdish militia, though ideologically aligned against the West and which the president called “terrorists” just two years ago, has nevertheless served as an effective partner in the war on ISIS. “Some senior U.S. and British diplomats said the time has come for the U.S. and some European states to consider a broader rapprochement with the PKK,” the Wall Street Journal reported last week. Not if Turkey has anything to say on the matter. 

Kurdish Leader Says Turkey Targeting Kurds, Not Islamic State

The Turkish government believes PKK is a threat to national unity, but a recent poll shows that Turkish citizens do not agree.

The creation of a safe “Islamic State-free zone” in Syria by Turkish and United States forces is actually Ankara's attempt to stop Kurds from forming their own territory, said the leader of Turkey's pro-Kurdish party Wednesday.

“The operation against IS is for show. Turkey's government is not conducting a serious battle against IS,” said Selahattin Demirtas, leader of the pro-Kurdish People's Democratic Party (HDP).

Turkey Seeks to Block Allies from Supporting Kurds in Syria
By Nick Ottens

Turkey denied American and other NATO aircraft use of its Incirlik base for missions that support Kurdish fighters in Syria, the country’s Foreign Ministry said on Wednesday — raising suspicion that the real motive for its involvement in the Syrian conflict is to suppress Kurdish nationalism.

Late last week, Turkey allowed the United States to fly missions out of Incirlik Air Base against militants of the radical Islamic State militant group in Syria. Its own jets started bombing both Islamic State and Kurdish insurgent targets around the same time.

Turkey previously shied away from fighting the Islamists on its border, fearing that military action against the caliphate would benefit its main rival for control of the north of Syria: Kurdish fighters who are affiliated with the militant Kurdistan Workers’ Party, or PKK.

Turkey’s Islamist government also backed like-minded opposition forces in Syria against the regime of President Bashar al-Assad. It denies ever abetting the Islamic State — a fanatical movement that controls swaths of the desert between Aleppo in northwest Syria, Mosul in northern Iraq and Ramadi to the south, near Baghdad. But Turkey did allow weapons and foreign fighters to cross its border with Syria indiscriminately from 2012 to 2014.

Western countries had long urged Turkey, which has the largest army in the region, to join the campaign against the Islamic State. 

West Selling Out Kurds for Turkish Help against ISIS?

Analysts say Turkey's allies - including NATO - are purposefully turning a blind-eye to Ankara's onslaught against Kurdish rebels.
By Arutz Sheva Staff

Turkey's allies know it is playing a double game with its twin onslaught against Kurdish rebels and the Islamic State group (ISIS or IS) but are turning a blind eye to keep NATO's only Muslim member on side, analysts said.

The very public show of solidarity for Turkey's fight against "terrorism" at an emergency NATO meeting on Tuesday hid the discomfort some allies feel about President Recep Tayyip Erdogan's strategy.

Suspicions are swirling that Erdogan's sudden embrace of the US-led campaign against IS in Syria and Iraq simply provides the cover to pound Kurdish rebels, viewed in the West as a bulwark against the jihadists.

Western capitals had "massive mistrust" in the motives of Turkey, which under the authoritarian and Islamist-rooted Erdogan has been accused of turning a blind eye of its own to ISIS, said Ege Seckin, Turkey analyst at IHS Country Risk.

"The member states are fully aware that the Turkish priority is an attack on the Kurds - to be more specific, the prevention of a contiguous Kurdish entity in northern Syria," Seckin told AFP.

"Attacking IS is more a concession given to the United States."

Michael Stephens, head of the British Royal United Services Institute's (RUSI) centre in Qatar, said the priority for Turkey's NATO allies was hitting Islamic State terrorists. 

"The key here for the allies is not to affect the operations against IS in Syria - if they are not affected then to some extent the PKK and Turkey can work their own process out," he said.

Can NATO Militaries Generate Mideast Stability?
By Rami G. Khouri

The historic developments this week along the western portion of the Turkish-Syrian border pack more drama than a hundred Turkish television soap operas — and like those dramas, we will have to wait until the end to see if this all ends in tragedy, war, and death, or peace, love, and happiness. The agreement between Turkey and the United States on a yet-to-be-defined plan to establish a sixty-mile-long zone in northern Syria adjacent to the frontier with Turkey anticipates that their troops, artillery, drones, and jet fighters, working with selected Syrian rebels on the ground inside Syria, will keep the area free of Islamic State (IS) control.

This move is at once decisive and dangerous. It positions two of the world’s and the region’s leading military powers, and NATO members, within half a dozen major local fighting forces of very different ideologies, and hundreds of smaller units with equally kaleidoscopic goals, identities, and allegiances. If you thought that NATO attacking Libya in 2011 was a risky venture, given the mess it has left behind there today, this plan for northern Syria is potentially more dangerous and destabilizing if it goes wrong. Aleppo, Damascus, and Syria are significantly more strategically important than Tripoli, Benghazi, and Libya, so the outcome of this dramatic move in northern Syria will be a game-changer—but it remains unclear if the change would be to wind down the war and chaos in Syria, or exacerbate and expand it even more.

The basic concept of keeping IS out of this stretch of northwestern Syria is a sensible one, for it would allow Syrian refugees and displaced people to find decent shelter there in their own country. It would also provide rebel groups with important safe havens for planning, training, and other purposes in their battles against both IS and the Syrian government in Damascus. That’s the easy part.

The hard part is that the political-military-demographic situation in the area in question captures the critical and often confounding complexities of the war in Syria, where many different local, regional, and global powers are involved in multiple conflicts in parallel, and also in superimposed battlefields. For starters, it is not clear if the United States and Turkey, and some of their NATO partners, plan mainly to fight to defeat IS or topple the Assad regime in Damascus, which will be further weakened psychologically by this initiative.

For another thing, as the United States and Turkey work with local Syrian rebels that they vet and approve to establish a zone free of IS control, it will be difficult to know who are the good guys and the bad guys in the eyes of Turkey, the U.S. and NATO. Some of the leading rebel groups that are fighting against both Assad and IS are Islamists that the United States and partners shun (except when the U.S. embraces them, as it did in Afghanistan, but that was a long time ago, in a far away land that the U.S. is trying to leave forever).

Equally problematic will be how the United States and Turkey look on some of the Kurdish fighters who have pushed back IS in parts of northern Syria, and who also would fight the Syrian government if need be to maintain control of their growing Kurdish region. The key Kurdish military force here is the People’s Protection Units (YPG), which has fought well against IS and also covets control of the same sixty-mile stretch that NATO armies now will patrol from the skies. The United States supports the YPG as a valuable partner whose forces on the ground have worked well in coordination with U.S. air strikes against IS. But Turkey views the YPG as bad guys associated with the Kurdistan Workers’ Party, who have had an on-and-off running war with the Turkish government for decades.

How the U.S. and Turkish militaries operate in and near the new zone, and whom they support, ignore, or attack, will determine the impact of this bold move.

A senior Obama administration official told the New York Times Monday, “The goal is to establish an [Islamic State of Iraq and the Levant]-free zone and ensure greater security and stability along Turkey’s border with Syria.”

The glaring dilemma here is that military force that the Turks have used against Kurds for decades, and the Americans against Islamists for a quarter century, has produced neither stability nor security; rather, it has contributed to making this region one of the most violent, fractured, polarized, militarized, and unstable landscapes of mass human misery in modern times.

Any move to protect civilians and assist refugees in Syria is sensible, certainly requires international assistance, and deserves widespread support. We will soon find out if this week’s Turkish-American decision falls into that category.

Turkish President Aims to Boost Ties With China

Recep Tayyip Erdogan offers to step up cooperation with Beijing in state visit
By Josh Chin

BEIJING—Turkish President Recep Tayyip Erdogan offered to step up cooperation with Beijing on everything from trade to terrorism in meetings with Chinese leaders on Wednesday.

The visit is Mr. Erdogan’s first to China since he was elected president in 2014 and comes days after Turkey entered into a tricky alliance with the U.S. in the fight against militants in Syria.

Meeting with Chinese President Xi Jinping, Mr. Erdogan reaffirmed Turkey’s support for Chinese territorial integrity and its opposition to the East Turkestan Islamic Movement, a separatist group made up of Muslim Uighurs that wants to create an independent state in the northwestern Chinese region of Xinjiang, according to state broadcaster China Central Television.

First as prime minister and now as president, Mr. Erdogan has cultivated closer economic and political ties with China, but the relationship has been strained by disagreements over the Uighurs, a minority group in China that speaks a Turkic language and considers itself part of the broad family of ethnic Turks. Turkey has been accepting Uighurs who flee China since the 1950s as part of a policy to welcome ethnic Turks from Eurasia—a policy that irks Beijing.

News earlier this month that 100 Uighurs were sent back to China after they crossed the border into Thailand set off protests in Turkey, with demonstrators smashing windows at the Thai consulate in Istanbul. Chinese authorities say the group had been planning to travel to Turkey, Syria or Iraq to join in jihad. It was unclear to what extent Mr. Erdogan discussed the issue with his hosts on Wednesday, and experts are divided on how big a role it is likely play during the trip.

“It’s quite obvious that the current Turkish government is supporting illegal immigration of Uighurs by giving them passports and working with Southeast Asian countries,” said Yin Gang an expert on the Middle East with the government-supported Chinese Academy of Social Sciences. “It would be hard for the relationship between China and Turkey to improve significantly unless Turkey makes serious promises on that issue.”

Yitzhak Shichor, a professor emeritus at the University of Haifa who studies China’s relations with the Middle East, said he believes the fight over the Uighurs is mostly for show.

“Turkey very naturally identifies with the Uighurs, but they will do nothing to provoke separatism in Xinjiang because they have their own separatist problems,” he said, referring to a Kurdish push for independence in southeastern Turkey. “I think Beijing knows that, and Ankara knows that.”

Other more pressing issues for Turkey include $22 billion trade gap with China and stalled plans to buy a missile-defense system from China Machinery Import & Export Corp., Mr. Shichor said.

Mr. Erdogan discussed increased trade and investment in areas including energy, infrastructure, finance and aerospace during a meeting with Chinese Premier Li Keqiang, according to the official Xinhua News Agency.

Inside the six routes out of China for ISIS recruits: Duowei

There are six main routes through which Chinese Islamist extremists are being smuggled out of China to join the "holy war" in the Middle East led by the Islamic State, the brutal jihadist organization also known as ISIS, reports Duowei News, a US-based Chinese political news outlet.

These six paths are said to originate either in northwest China's Xinjiang Uyghur autonomous region, southwest China's Yunnan province, southern China's Guangdong province or Guangxi Zhuang autonomous region, and involve multiple transits across several countries before reaching Turkey, the main springboard into Syria and Iraq, where Islamic State controls a large swathe of territory.

Route one begins in the south of Xinjiang and involves crossing the border directly into Pakistan, Afghanistan or the Kashmir region. This route came about because southern Xinjiang's Pishan county has been a breeding ground for religious radicals and is regarded as a major camp for indoctrinating and training new recruits. The street market bombing in the Xinjiang capital Urumqi on May 22 last year, which killed 43 people including four of the assailants, was said to have originated from Pishan.

The second route involves crossing the border to the central Asian nations of Kyrgyzstan or Uzbekistan via the Fergana Valley, which spreads across eastern Uzbekistan, southern Kyrgyzstan and northern Tajikistan. The valley is believed to be rife with terrorist activities due to the lack of government controls and management, and as a result, more and more Xinjiang recruits are reportedly using this path. Last January, Kyrgyzstan border police reportedly shot dead 20 Uyghur stowaways in the valley, just 30 kilometers from the Chinese border.

Route three entails traveling through the Wakhan Corridor, a narrow strip of territory in northeastern Afghanistan that extends to China and separates Tajikistan from Pakistan. The 400 km-long corridor, of which about 100 km lies inside Chinese territory, is not believed to be a popular path for smugglers, though a Uyghur youth reportedly used the path to get into Afghanistan and then Turkey in 2013. 

ISIS "Ally" Turkey Seeks NATO Support As Two-Front "War" Escalates

NATO representatives met in Brussels on Tuesday after Turkey made a rare Article 4 request which compels treaty parties to convene in the event a member state is of the opinion that its "territorial integrity, political independence or security" is being threatened.

That’s the case in Turkey, where the security situation has rapidly deteriorated over the past two weeks following a suicide bombing in Suruc (claimed by Islamic State) and the murder of two Turkish policemen in the town of Ceylanpinar (at the hands of the PKK, which claims the officers were cooperating with ISIS). Ankara responded by launching airstrikes against both Islamic State and PKK.

In many ways, the suicide bombing and retaliatory action by the Kurdistan Workers' Party - which both Ankara and the West have designated as a terrorist group - is representative of the complex web of alliances that makes understanding the conflict in Syria so difficult. As The Economist notes, the PKK "have been fighting an on-and-off guerrilla war against the Turkish government for decades," but the group’s Syrian Kurdish militia arm (YPG) has helped the US coordinate airstrikes against ISIS targets near the border town of Kobani.

Complicating the issue further are long standing accusations that Turkey actively cooperates with ISIS. "ISIS commanders told us to fear nothing at all because there was full cooperation with the Turks," one former ISIS commander said late last year, in an interview with Newsweek, which also noted that "Turkey had blocked Kurdish fighters from crossing the border into Syria to aid their Syrian counterparts in defending the border town of Kobani."

More recently, The Guardian reported that information obtained when a raid by US commandos killed ISIS’ purported "oil minister" in May provided "undeniable" evidence of "direct dealings between Turkish officials and ranking Isis members." And let's not forget that US Vice President Joe Biden 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.

Turkey ISIS!!!!!!!!!!!!!!!!!!!!!!! 
The Lethal Deferral of Greek Debt Restructuring
By Yanis Varoufakis

Yanis Varoufakis, a former finance minister of Greece, is a Member of Parliament for Syriza and Professor of Economics at the University of Athens.

ATHENS – The point of restructuring debt is to reduce the volume of new loans needed to salvage an insolvent entity. Creditors offer debt relief to get more value back and to extend as little new finance to the insolvent entity as possible.

Remarkably, Greece’s creditors seem unable to appreciate this sound financial principle. Where Greek debt is concerned, a clear pattern has emerged over the past five years. It remains unbroken to this day.

In 2010, Europe and the International Monetary Fund extended loans to the insolvent Greek state equal to 44% of the country’s GDP. The very mention of debt restructuring was considered inadmissible and a cause for ridiculing those of us who dared suggest its inevitability.

In 2012, as the debt-to-GDP ratio skyrocketed, Greece’s private creditors were given a significant 34% haircut. At the same time, however, new loans worth 63% of GDP were added to Greece’s national debt. A few months later, in November, the Eurogroup (comprising eurozone members’ finance ministers) indicated that debt relief would be finalized by December 2014, once the 2012 program was “successfully” completed and the Greek government’s budget had attained a primary surplus (which excludes interest payments).

In 2015, however, with the primary surplus achieved, Greece’s creditors refused even to discuss debt relief. For five months, negotiations remained at an impasse, culminating in the July 5 referendum in Greece, in which voters overwhelmingly rejected further austerity, and the Greek government’s subsequent surrender, formalized in the July 12 Euro Summit agreement. That agreement, which is now the blueprint for Greece’s relationship with the eurozone, perpetuates the five-year-long pattern of placing debt restructuring at the end of a sorry sequence of fiscal tightening, economic contraction, and program failure.

Indeed, the sequence of the new “bailout” envisaged in the July 12 agreement predictably begins with the adoption – before the end of the month – of harsh tax measures and medium-term fiscal targets equivalent to another bout of stringent austerity. Then comes a mid-summer negotiation of another large loan, equivalent to 48% of GDP (the debt-to-GDP ratio is already above 180%). Finally, in November, at the earliest, and after the first review of the new program is completed, “the Eurogroup stands ready to consider, if necessary, possible additional measures… aiming at ensuring that gross financing needs remain at a sustainable level.”

During the negotiations to which I was a party, from January 25 to July 5, I repeatedly suggested to our creditors a series of smart debt swaps. The aim was to minimize the amount of new funding required from the European Stability Mechanism and the IMF to refinance Greek debt, and to ensure that Greece would become eligible within 2015 for the European Central Bank’s asset-purchase program (quantitative easing), effectively restoring Greece’s access to capital markets. We estimated that no more than €30 billion ($33 billion, or 17% of GDP) of new, ESM-sourced financing would be required, none of which would be needed for the Greek state’s primary budget.

I'm Betting that the Socialists in Brussels and in Greece are going to SCREW UP(FUBAR) this Latest ""BIG Government"" Crisis ""***BIG TIME***"". 2016 "IS" going to be a NIGHTMARE of NEAR Biblical Proportions!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Alexis Tsipras vows not to be 'blackmailed' by Syriza rebels as threat of snap election looms

Prime minister says he is ready to dissolve his disunited government as the IMF urges him to take control of the country's controversial reforms
By Mehreen Khan

Greek prime minister Alexis Tsipras has warned his party’s rebels to support a new bail-out programme or face the prospect of early elections that could remove them from government.

Mr Tsipras has been battling with Syriza’s leftist faction – who represent a third of MPs – after signing up to punishing austerity measures to keep the country in the eurozone.

But he delivered an ultimatum to his dissenters on Wednesday, warning he would not be “blackmailed” in a bid to preserve the party’s unity.

“If I don’t have a parliamentary majority, we will be forced to head to a snap vote,” the prime minister said in an interview with Greek radio.

Syriza were elected in a landslide election win in late January, but Mr Tsipras has suffered from waning support among his grassroots members during six months of tortured negotiations with Greece's international creditors. The prime minister has been forced to rely on opposition support to pass two sets of reform bills through parliament in order to restart talks over an €86bn rescue package.

Greece’s firebrand former energy and finance ministers have both left the cabinet in the wake of a deal to impose the severest austerity measures ever seen in a eurozone debtor state.

Tsipras Takes On Party Rebels With Threat of Snap Greek Vote
By Nikos Chrysoloras, Eleni Chrepa and Christos Ziotis

Greek Prime Minister Alexis Tsipras took on dissenters within his own party, warning he’ll call an election unless backbenchers opposing a deal with creditors fall into line or quit.

“I’m the last person who would want elections,” the 41-year-old premier said in an interview Wednesday with Sto Kokkino, a radio station linked to his party. “If I don’t have a parliamentary majority, though, we will be forced to head to a snap vote.”

“The party is set to split into at least two groups -- the left platform on the one hand and a more moderate and pragmatic group led by Tsipras on the other”

The Greek debt crisis threatens 70 years of peace

We forget that wars in Europe were the norm before the EU
By Patrick Cockburn

Political crises in the Middle East and North Africa since 2011 have either produced extreme violence or caused countries to dissolve into civil war. The territorial settlement that followed the defeat of the Ottomans in 1918 is collapsing, but there is no clear sign of what will replace it, other than conflicts which nobody knows how to end.

Bad though this is, the world has got used to instability in the Middle East and North Africa, almost as if it were a natural phenomenon like earthquakes in Japan or hurricanes in the Caribbean. Seven wars are being fought in Muslim countries between Pakistan and north-east Nigeria. In Europe, on the contrary, 70 years of almost continuous peace since 1945 have convinced its people that this is the natural order of things which will continue despite hiccups in atypical places such as Greece and Ukraine.

But peace in Europe has been very much the exception over the past 1,500 years and there is no God-given guarantee it will continue. The golden age of European integration may have ended as long ago as 2008 when the financial crash began to divide eurozone members into winners and losers. In the same year, the easy dominance of the Western powers established after the collapse of the Soviet Union in 1991 began to look less absolute when Russia invaded Georgia.

Geopolitics Hot Summer of 2015 is Getting a Lot Hotter
By: Atlantic Perspective

Bill Gates says there was never a better time to be alive. Has he ever been to Syria, Iraq, Turkey, Nigeria, Ethiopia, Somalia, Burundi, Tunisia, Libya, Egypt, Mexico, Venezuela, Ukraine, Greece, Moldova and the whole of Central Asia, just to name a significantly big number of countries and regions?

Bill Gates, just like most people sitting at the top of the human pyramid, looks at the world from the perspective of indicators, totally disconnected from the real world.

Top decision makers cannot look at individual cases or exceptions to make decisions. For them, it´s all about the “big picture”, the trends and the macro indicators. This apparently logical approach to decision making, overlooks the most important element of society: people.

Politicians, economists and investors make decisions based on statistics and ratios. Basically, numbers. But behind each number, statistic or ratio, there are people. Unlike numbers, people behave in totally irrational ways, moved by dreams and aspirations, religion and political manipulation.

Economists in particular, tend to totally overlook the human factor. And more often then not, economists get surprised because the economy “didn´t behave as it should”. A 1% reduction in disposable income can have an impact from 0 to 20% in household consumption. What really matters are the expectations people have going forward. But economist have no way to measure expectations, optimism, pessimism or outright anger.

In peaceful, optimistic contexts, rational measures tend to be well accepted. But in countries, companies or situations charged with negative tension for whatever reason, “the right thing to do” may prove to be an outright disaster. Let´s take Greece as example:

Any rational person will look at Greece´s finances and conclude the obvious: the country is bankrupt, therefore public spending must be reduced. This is not an ideological point of view, it´s the obvious mathematical conclusion. But behind this obvious conclusion, there are people with expectations and dreams about their future. For these people, macro numbers count very little or nothing at all. Each individual Greek wants his/her pension to be as high as possible. Citizens want free public services and the lowest possible taxes. This is not rational at all, but this is how humans process reality: from their own personal perspective.

Any government in this context, in Greece or elsewhere, risks being overthrown by the angry populace. Or by a military commander or religious leader offering the solutions for all problems.

Economists and CEOs are not used to think about or process emotions. People good at dealing with numbers are usually very bad at dealing with people. But when the numbers affect the lives of thousands or even millions of people, economists and CEOs are actually dealing with people, wether they like it or not.

Going back to Bill Gates. By looking at health statistics and economic indicators we may indeed perceive the world from a rosy perspective. What those numbers don´t say, is that the world is currently going through one of the most tense periods in human history. Never before was immigration such a global and widespread problem. Never before religious fanatics had or could have access to weapons of mass destruction. Never before in the history of mankind so many people lived in cities, totally dependent on complex food distribution channels, that will literally collapse if the internet goes offline or fuel becomes unavailable for a few days.

Human emotions have the power to obliterate nice powerpoints in a matter of days or even hours. Europe is on collision course to a social explosion. The pressure from immigration and Islam - both seen by most Europeans as a threat – will sooner or later cause a violent response. This violent response can erupt out of chaos or be institutional, as soon as a far right party takes over power in Europe. And it will. Several countries in Northern Europe are basically waiting to be the first, not to mention France itself, who could be the first to make a swift turn to the right.

Immigration is not just a European problem. The US, Canada, Australia, Turkey, China and many others also have immigration problems. In some countries, immigrants are already treated as criminals. As the immigration pressure rises, the defensive response will become harsher and harsher. Add to that the threat of terrorism, and it is clear to see that the gates of the global world are closing.

Hot and getting hotter

As the world becomes less embracing and more divided, the chances of conflict increase. We already see widespread conflict across the world. The economic and health indicators that make Bill Gates so optimistic can become history in no time. More and more parts of the world are moving backwards, not forward. Several countries in the MENA region have already collapsed, and others like Tunisia, Jordan and Lebanon are very close to. Even the “powerful and stable” Turkey is at risk of becoming the new Syria. As chaos spreads and doors close, civilization is replaced by the law of the jungle.

Optimists might argue that war and violence are part of the human essence, and that despite that we´ve still managed to evolve and prosper. This is absolutely true. What is also true, is that between periods of growth and prosperity, entire nations and even regions were destroyed. 70 years ago Europe was a pile of ruble. Before the Renaissance, Europe lived a thousand years of darkness during the Middle Ages. In the long term, everyone will be better off. But in the long term all of us will be dead.

The hotspots for a hot summer in 2015
Political Calculations
July 29, 2015
A New Phase for the Second U.S. Housing Bubble

Based on preliminary data, it appears that the second U.S. housing bubble may have entered a new phase. If the trends we observe in the data hold, it would mark the third phase of the bubble, which originally began to inflate in July 2012.


The initial inflation phase of the second U.S. housing bubble was caused by the sudden influx of investment from a number of hedge funds and real estate investment firms, who made the strategic decision to acquire distressed properties in the U.S. residential real estate market. That first phase lasted a year until the supply of available distressed properties was reduced to the point where they found it difficult to continue their rate of acquisitions as prices rose, where they would no longer have easy returns on their investments.

Home Ownership Drops to a New Interim Low
July 28, 2015
By Doug Short

As residential real estate prices rise, home ownership continues to decline. The Census Bureau has now released its latest quarterly report with data through Q2. Here is a snapshot of the nonseasonally adjusted series with a 4-quarter moving average to highlight the trend.

Home Ownership Rate

IF You're thinking about SELLING a HOME do it NOW.......................The TOP has been Reached!!!!!!!!!!!!!!!!!!!!!!!

June Pending Home Sales Snap a Five-Month String of Increases
July 29, 2015
By Doug Short

Earlier today the National Association of Realtors released the June data for their Pending Home Sales Index. The NAR reports that "after five consecutive months of increases, pending home sales slipped in June but remained near May’s level, the highest in over nine years" (more here). The chart below gives us a snapshot of the index since 2001.

Pending home sales fell 1.8% in June
By Diana Olick   

Higher prices are beginning to take their toll on U.S. home buyers. Signed contracts to buy existing homes fell unexpectedly in June, down 1.8 percent from May, according to the pending home sales index from the National Association of Realtors. This comes after five straight months of gains; sales are still 8.2 percent higher than June of 2014.

"Competition for existing houses on the market remained stiff last month, as low inventories in many markets reduced choices and pushed prices above some buyers' comfort level," said Lawrence Yun, chief economist for the Realtors. "The demand is there for more sales, but the determining factor will be whether or not some of these buyers decide to hold off even longer until supply improves and price growth slows."

Pending Home Sales Plunge Most Since 2013, Holdout Buyers Blamed

Following new home sales disappointment, pending home sales dropped 1.8% in June (missing expectations of a 0.9% rise) for the biggest drop sicne Dec 2013. After 5 months of gains, and with median prices at record highs, it appears affordability is crushing hopes of any sustained 'recovery' once again. Modest gains in the Northeast and West were offset by larger declines in the Midwest and South, but Larry Yun has an explanation, hold-out buyers are waiting for a better entry point (in other words - pent up demand is there). 

Consumer Confidence Drops Nine Points
July 28, 2015
By Jill Mislinski

The latest Conference Board Consumer Confidence Index was released this morning based on data collected through July 16. The headline number of 90.9 was a significant drop from the June final reading of 99.8, a downward revision of June's initial 101.4. Today's number was below the forecast of 100.

Here is an excerpt from the Conference Board press release. 

U.S. Housing............................Now Comes the CORRECTION!!!!!!!!!!!!!!!!!!!!!!!!!!!!

The American MIDDLE Class has NEVER been more SCREWED than it has been since the Election of Obama and the "QE" VooDoo of the Fed's Monetary Policies over the last 6 YEARS!!!!!!!!!!!!!!!!!! 
"LAB RATS"...............Connect the DOTs!!!!!!!!!!!!!!! 

When Will We Ever Learn?
By Lance Roberts

Life is full of irony. When I was in school, I hated history. It was boring. It was pointless. How was reading about a bunch of dead people ever going to be useful in life? Today, I consume everything I can find on history. Particularly, financial history. Ironic.

Of course, it only took me 25 years in the investment world to realize that human behavior is quite fascinating. The capacity for optimism is seemingly limitless, but the "sting" of failure is quite transient.

While it is in those failures that valuable lessons are taught, studies have shown that humans tend to suppress or substitute new memories over time.

George Santayana once said: "Those who cannot remember the past are condemned to repeat it."

The phrasing itself certainly is catchy, and is often used in the financial media due to its underlying truth. If history is a guide to the results of previous actions, and those results were painful, then history should guide not only policy making (public and private) but our own behaviors as well.

It's hard to disagree with. Over the history of the financial markets (all the way back to the 1600's) speculative investing has repeatedly led to booms and busts. In 2007, as the markets were enraptured with the speculative sub-prime lending and real estate boom, I gave a presentation containing the following two slides on past history. 

Bill Gross: Global financial markets 'a shell game'
39 Mins Ago

Bill Gross, Janus Capital, explains why he views all global...

Bill Gross: Chinese market difficult to play
38 Mins Ago

Bill Gross, Janus Capital, discusses his play on the collapse in China's stock market. 

China HARD Landing..............And there Ain't anything the Central Banksters can DO to Stop IT!!!!!!!!!!!!!!!!!!!!!!!! 

Girl Talk................Christine to Janet....."Please Don't raise Interest Rates this YEAR, I'm out of Money and Mario "IS" running out of INK to print EUROs thanks to the HELL Greece has caused his "QE" Scheme".

IMF's Christine Lagarde: Global downside risks 'on the horizon'
By Everett Rosenfeld   

Global risks are on the horizon, International Monetary Fund Managing Director Christine Lagarde said in a Wednesday news conference.

"If I look at the global economy as it stands at the moment...we have a situation where growth is a little bit tepid," she said. "We have recovery, but it's fragile, it's unbalanced, and there are some downside risks on the horizon."

Lagarde highlighted some positive growth in low-income countries, but she also noted a slowdown in growth for countries like China.

Asia's largest economy, she said, has seen "a lot of noise" regarding its stock market volatility, but she said China is "resilient" and strong enough to withstand those swings. Lagarde also said that the equities variations would not affect the IMF's assessment of whether to include the yuan in its special drawing rights (SDR) basket.

"It's a relatively young market, and there is an element of a learning curve," she said of China's equities. "No one should be surprised by the fact that they want to maintain an orderly movement and try to avoid disorderly function of those markets."

Turning to the euro zone, Lagarde said the area is "beginning to turn the corner" despite Greece worries.  

MORE ""Girl Talk""!!!!!!!!!!!!!!!!! 

The IMF’s Euro Crisis
By Ngaire Woods

Ngaire Woods is Dean of the Blavatnik School of Government and Director of the Global Economic Governance Program at the University of Oxford.

OXFORD – Over the last few decades, the International Monetary Fund has learned six important lessons about how to manage government debt crises. In its response to the crisis in Greece, however, each of these lessons has been ignored.

The Fund’s participation in the effort to rescue the eurozone may have raised its profile and gained it favor in Europe. But its failure, and the failure of its European shareholders, to adhere to its own best practices may eventually prove to have been a fatal misstep.

One key lesson ignored in the Greece debacle is that when a bailout becomes necessary, it should be done once and definitively. The IMF learned this in 1997, when an inadequate bailout of South Korea forced a second round of negotiations. In Greece, the problem is even worse, as the €86 billion ($94 billion) plan now under discussion follows a €110 billion bailout in 2010 and a €130 billion rescue in 2012.

The IMF is, on its own, highly constrained. Its loans are limited to a multiple of a country’s contributions to its capital, and by this measure its loans to Greece are higher than any in its history. Eurozone governments, however, face no such constraints, and were thus free to put in place a program that would have been sustainable.

Another lesson that was ignored is not to bail out the banks. The IMF learned this the hard way in the 1980s, when it transferred bad bank loans to Latin American governments onto its own books and those of other governments. In Greece, bad loans issued by French and German banks were moved onto the public books, transferring the exposure not only to European taxpayers, but to the entire membership of the IMF.

The third lesson that the IMF was unable to apply in Greece is that austerity often leads to a vicious cycle, as spending cuts cause the economy to contract far more than it would have otherwise. Because the IMF lends money on a short-term basis, there was an incentive to ignore the effects of austerity in order to arrive at growth projections that imply an ability to repay. Meanwhile, the other eurozone members, seeking to justify less financing, also found it convenient to overlook the calamitous impact of austerity.

Fourth, the IMF has learned that reforms are most likely to be implemented when they are few in number and carefully focused. When a country requires assistance, it is tempting for lenders to insist on a long list of reforms. But a crisis-wracked government will struggle to manage multiple demands.

In Greece, the IMF, together with its European partners, required the government not just to cut expenditures, but to undertake far-reaching tax, pension, judicial, and labor-market reforms. And, although the most urgently needed measures will not have an immediate effect on Greece’s finances, the IMF has little choice but to emphasize the short-term spending cuts that boost the chances of being repaid – even when that makes longer-term reforms more difficult to enact. 


The Bull Market Is Nearing an End
By Wolf Richter

Central Banks crushed very effective hedge against rout in stocks

No one knows to what still crazier level this stock market is headed, or what kind of decline – if any ever, the bulls say – it will experience. But we all have our signs and signals that we keep our eyes on, hoping to get the drift in time.

No one wants to go through another crash like the last three (1987, 2000, and 2008 which all occurred during my investing years) with any significant amount money tied up in stocks (not to speak of bonds).

Because this could get ruinous.

And no one wants to go through what Japanese equities went through for the 23 years following the 1989 bubble peak. Sure, very lucky traders can make money riding the short-term movements of a bear market. But for investors, these things can be a nightmare. Markets can get very costly. They can change lives, one way or the other.

It used to be that bonds and stocks moved in opposite directions, that you could hedge your exposure to stocks by owning bonds, and vice versa, and you’d just tweak your allocations based on where you saw the dominant risks. But thanks to central bank machinations, as we should call their interventionist monetary policies, stocks and bonds have soared together more or less for the last seven years, and they’re now putting investors at risk with a possible joint-unraveling.

Because central banks have crushed that time-honored hedge. 

Currency Devaluation: The Crushing Vice of Price
By Charles Smith

Devaluation has a negative consequence few mention: the cost of imports skyrockets.

When stagnation grabs exporting nations by the throat, the universal solution offered is devalue your currency to boost exports. As a currency loses purchasing power relative to the currencies of trading partners, exported goods and services become cheaper to those buying the products with competing currencies.

For example, a few years ago, before Japanese authorities moved to devalue the yen, the U.S. dollar bought 78 yen. Now it buys 123 yen--an astonishing 57% increase. 

Currency Crisis....................It's Coming!!!!!!!!!!!!!!!!!!

US economy still in 'balance sheet recession,' economist Roach says
By Matthew J. Belvedere   

American consumers are still unwilling to really spend money and that's the main reason the economy has not recovered faster, influential economist Stephen Roach told CNBC on Wednesday.

"We've been in a balance sheet recession, and we're still in it. That's the bottom line," Roach said. "The big story in this recovery that's holding us back is the 1.5 percent consumption growth we've been on for seven years plus."

In a balance sheet recession, consumer spending is put on the backburner in favor of saving and paying down debt.

"Consumers were battered by a levered asset bubble, sounds like China, and they have yet to fully recover," Roach said on CNBC's "Squawk Box." If the unemployment rate really reflected the jobs situation, he said, "we'd have consumption growth tracking at 3 percent to 3.5 percent."

The government earlier this month said nonfarm payrolls increased a slightly weaker-than-expected 223,000 in June. The unemployment rate ticked lower to 5.3 percent. The July jobs report is out Aug. 7, about five weeks before the September meeting of the Federal Reserve's policymaking committee.

Stephen Roach 

Russell Napier: What Happens When Markets Realize China Is A Forced Seller Of Treasuries

One week ago, our post "China's Record Dumping Of US Treasuries Leaves Goldman Speechless" which revealed an unexpected plunge in China's foreign exchange reserves or, said otherwise, a historic sale of US Treasurys held by official and unofficial Chinese accounts, was met with unprecedented public interest, having been read over 400,000 times (a record for coverage of a nuanced, technical subject) and even forced Goldman to follow up admitting its "estimation" of Chinese reserve outflows may have been too high.

By then the cat was out of the bag, and now what is surely the biggest Chinese wildcard, not what happens to itts manipulated stock market, just how much more capital outflows will Beijing suffer before it is forced to finally end the Renminbi's peg with the dollar, is finally being appreciated by the general public.

Which leads us to today's most recent article by ERI-C's Russell Napier titled "The Great Reset - Act II", in which the former CLSA strategist, asks a simple question:

"how US Treasury bulls in the private sector would react if they knew in advance that the second largest owner of Treasuries, the PBOC, was a forced seller of Treasuries. Such compelled selling would be obvious before US markets opened each morning as downward pressure on the RMB exchange rate in Asia forced the PBOC to liquidate foreign currency assets to defend the fixed exchange rate. Would even Treasury bulls stand in the way of such a large and predictable liquidation? If they didn’t then the second phase of The Great Reset would come to pass and the decline of EM external deficits would force tighter monetary policy in both EM and DM."

For his answer, read on. Courtesy of The Electronic Research Interchange

* * *

The Great Reset - Act II

Yes Planet EARTH the ""GREAT Reset"" has BEGUN and YOU have Only YOURSELVES to BLAME because of the FOOLS(LIBERALS and Socialists) You have Elected to RUN ""BIG Government""!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Russell Napier
Co-founder at ERIC, Electronic Research Interchange

Russell Napier, ASIP, is an independent strategist at and co-founder of ERIC, an online platform for the sale of high-quality individually priced investment research. He is the author of “The Solid Ground,” a global macro report originally published by CLSA and now published independently. Mr. Napier is a director of the Mid Wynd International Investment Trust and the Scottish Investment Trust. He runs a two-day course in financial history (“A Practical History of Financial Markets”) aimed at professional investors and launched a new business and financial history library, the Library of Mistakes. Mr. Napier is also the author of Anatomy of the Bear: Lessons from Wall Street’s Four Great Bottoms.

Russell Napier 

Financial History: How to Learn from It
By Desi Allevato

What does it mean to learn from history and can it make you a better investment professional?

Economic and financial history have been experiencing a “revival” in the aftermath of the global financial crisis, and governments and central banks have been using claims and assumptions about past historical events to support and justify their policy decisions, for better or for worse. Knowledge about economic and financial history matters at a macro/systemic level and for individual investment professionals. But do we know what we’re doing?

We asked CFA Institute Financial NewsBrief readers about the importance of economic and financial history to their success as investment professionals. Of the 844 responses, an overwhelming majority (96%) answered that it was either very or somewhat important. I suspect, however, that some may not know how to use this knowledge to make better investment decisions (or, at the very least, avoid poor ones).

3. Don’t assume financial markets (past and present) are rules-based systems. Russell Napier, ASIP, an independent strategist at and co-founder of Electronic Research Interchange (ERIC), recommends approaching financial history like biology instead of physics. Markets are like organisms that are impacted by many factors, including the human beings who operate them. Jeffrey Heisler, CFA, investment strategist at Twin Focus Capital Management, added, “[Finance] is not physics, and it is not math. We are a collection of people and we do strange things.”