Nuclear Weapon Summit Is Probably Pointless, Mississippi Passes Broad Religious Freedom Bill, State Department Was Mean on Twitter: P.M. Links

  • BombWorld leaders have gathered in D.C. to discuss curbing the threat of nuclear weapons. Russian President Vladimir Putin is not there, so not much is expected to happen.
  • Mississippi’s legislature has passed a new religious freedom law that would forbid the state from punishing some conduct and discrimination in opposition to same-sex marriage and some other LGBT situations. The law protects businesses who provide wedding-related goods and services, but also permits therapists and doctors to refuse to assist transgender people with their issues (but only related to transitioning), prohibits clerks from being punished for refusing to license same-sex marriages, and a host of other things. Rather than declaring this law is “better” or “worse” than what has been going on in other states, here’s a link to the text for you to read yourself.
  • Serbian politician Vojislav Seselj has been acquitted of playing any role in the murders, persecutions and atrocities against thousands of Muslims that took place in Eastern Europe in the 1990s.
  • Hundreds of thousands of people in France are protesting labor reforms that would give employers more power to negotiate work hours. Mind you, France’s unemployment rate is still in double digits.
  • Sen. Ted Cruz’s campaign is trying to get Gov. John Kasich dumped from the Montana primary ballot by questioning the validity of signatures.
  • The State Department has apologized for a tweet that suggested that not everybody is supermodel gorgeous as part of an effort to warn folks overseas from being lured into scams or robberies. So this is where we are.
  • The California Assembly has approved the proposed $15 minimum wage plan, 48-26.

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Liberty Links 3/31/16

25 links today. Enjoy!

In Syria, Militias Armed by the Pentagon Fight Those Armed by the CIA (This is a real headline, LA Times)

“We Are the Death Merchant of the World”: Ex-Bush Official Lawrence Wilkerson Condemns Military-Industrial Complex (Must read, Salon)

Financial-Crisis Panel Suggested Criminal Cases Against Stan O’Neal, Charles Prince, AIG Bosses (Yet nothing happened, Wall Street Journal)

Paul Ryan Sorry for Calling Americans “Takers.” Let’s Talk About the Real Takers (Excellent, Naked Capitalism)

Most Americans Support Torture Against Terror Suspects (Thanks to you U.S. media, Reuters)

New Analysis Shows ‘Frivolous’ Corporate Sovereignty Suits Increasingly Used To Deter Regulation Rather Than Win Compensation (Key information, TechDirt)

See More Links »

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Q1 2016: Gold Glows Amid The Greatest Stock Market Comeback In The History Of Investing

The market ended red today…

 

But The Dow and The S&P ended Q1 in the green after a yuuge drop…

 

In fact this was the greatest comeback in the history of stocks… (Q1 2016's 11.3% drawdown is the biggest on record for a quarter that ended green)

 

While US stocks managed to scramble back into the green for Q1, European stocks (and especially banks) ended down hard despite Draghi's unleashing more buying…

 

But the Aug-Dec analog remains in place as we just dipped and ripped…

 

And breadth is playing the same unimpressed game as it did in Oct 2015…

 

This looks familiar…

 

But Gold (and Silver) are the biggest winners in Q1…

While stocks had a huge bounce their Q1 performance was meh, except Trannies

  • Dow Transports +5.9% – Best quarter since Q4 2014
  • HYG (High Yield bonds) +1.4% – Best Quarter since Q1 2014
  • Energy Sector +2.7% – Best quarter since Q2 2014
  • Treaasury Bond Index +2.95% – Best quarter since Q2 2012
  • Gold +16.1% – Best quarter since Q3 1986
  • USD Index -4.1% – Worst quarter since Q3 2010
  • Copper +2.4% – Best quarter since Q2 2014

Utes were the best sector in Q1 but Financials and Healthcare (biotechs) were battered…

 

Treasury yields end the quarter lower with the belly down a stunning 55bps and 30Y -40bps… not exactly what The Fed had in mind in Dec…

 

Having held steady for January, The USD Index tumbled in feb and further in march led by JPY strength, Cable was weakest in Q1 of the majors…

 

Crude remains red for the year in Q1 despite the USD plunge but copper managed to creep into the green. Gold and Silver soared…

 

*  *  *  *  *

March was an epic month of extremes…

  • S&P +6.99% in March – 2nd best month since Oct 2011
  • Financial Stocks +6.6% – Best month since March 2012
  • USD Index -3.7% in March – 2nd worst month since Sept 2010
  • WTI +14.1% in March – 2nd best month since Oct 2011
  • Treasury Index -0.1% in March – worst month since Nov 2015
  • Gold -0.4% in March – worst month since Nov 2015
  • HYG +2.2% in March – 2nd best month since June 2012

March equity performance is stunningly similar across all indices, with Trannies fading off their highs…

 

With Energy and Financials soaring…

 

Treasury yields end the month on a tear with 2Y lower and the rest of the curve modestly higher (despite the soaring stock market)…

 

The USDollar Index had a tough time in March. led by AUD strength (and JPY ended flat)..

 

Crude was the biggest winner in March (but fading as the short-squeeze ended) with gold unchanged…

 

*  *  *

On the week so far…

 

Post-Yellen, Stocks standalone as Crude, Gold and Bonds are practically unchanged…

 

VIX had its biggest monthly drop since Oct 2015…

 

While on the topic of VIX, we note that VXX shares outstanding has been soaring (since TVIX stalled amid 6 month highs NAV premiums)…

 

Treasury yields are collapsing into month-end…

 

The US Dollar index continued its slide today…

 

Copper and Crude slid today despite weaker USD but PMs were bid into month-end…

 

 

Crude soared 60% off its mid-Feb lows and is back in the green for the quarter. This was driven by the biggest surge in net spec longs (as shorts covered) since 2011. The last time this happened… oil fell 35% in the following 4 months…

 

 

Charts: Bloomberg

Bonus Chart: S&P is over 70 points rich to The Fed balance sheet currently…


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One Muslim Explains What Is More Offensive To Him “Than A Stupid Prophet Mohammad Cartoon”

Having read the Telegraph’s piece “Saudi tourist brings four gold cars worth more than £1m to London“, exiled UAE expat Iyad El-Baghdadi sent out a simple tweet which we are confident not only Muslims around the world, but everyone else, can agree with.

And while we agree with Iyad wholeheartedly, as long as owners of such gold cars such (and their peers) know they can easily distract the vast majority with “stupid Prophet Mohammad” cartoons, nothing will ever change.


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“There Are No More Hotel Beds At All”: Sweden’s Tourism Industry Collapses As Resorts Become Refugee Centers

“Whichever way we slice the data, the growth in working age population stands out as a key driver of economic growth for most countries. A healthy dependency ratio, a skilled workforce, together with strong institutions and an absence of major resource imbalances is usually the formula for country-level success. But with most DMs weighed down by ageing populations, a key question is this – can people inflows counter challenging demographics? The short answer is yes.”

That’s what Goldman said last autumn as Europe’s refugee crisis began to spiral out of control. We’re not sure if it had occurred to the bank just how large the people flows into Western Europe would end up being because the implication in the excerpted passage above is that the influx of people may actually be a good thing economically speaking if it ameliorates negative demographic shifts.

Of course Goldman may be proven right in the long-run, but in the short-term the mass migration is straining Western Europe’s resources and now looks set to drive up the unemployment rate in Germany.

“German joblessness was unchanged in March, snapping a run of five consecutive declines, in a sign that Europe’s largest economy may be struggling to absorb a wave of refugees,” Bloomberg wrote, earlier today, adding  that “Germany admitted more than 1 million migrants in 2015 alone [which] increased the pool of potential workers.”

A new report from Berlin’s labor agency suggests that it will likely be years before the country experiences any benefit from the migration wave. “It can be expected that the labor supply will expand because of migration and the number of unemployed refugees will rise,” as it will take time for migrants to master the language and obtain the qualifications they’ll need to join the labor force.

Meanwhile, in Sweden, the toursim industry is being choked off by the migrant flows. According to SvD Naringsliv, the Swedish Migration Board’s move to transform tourist facilities into asylum centers means they’ll be no more room for vacationers – literally.

(Astrid Lindgren is running short on accommodations – its guest house and hostel will house refugees this summer)

In some municipalities, there will be no hotel beds at all,” Lena Larsson, CEO at Smaland Tourism said. Here’s more (Google translated): 

For example, expected the large visiting goal Astrid Lindgren stand without quality accommodation when both the guest house and hostel continues to be asylum facilities in the summer.

 

The players in the tourism industry looks understood the seriousness of the background of the war in Syria, but several highlights that the consequences of the Migration Board’s procurement for the tourism industry in Sweden “must be clarified.”

 

It is so big changes to Visit Småland now has to scan the entire range. It is very uncertain how it will be this summer, says Lena Karlsson.

 

Another example can be found on the west coast. There, says Lars-Eric Fields, president of Södra Bohuslän tourism, the impact on summer tourism is likely to be so big that you have to take stock of the range of partners throughout western Sweden. According Fields also affected touristic prime locations, which Socialite House “Batellet” on the island of Marstrand and city hotel in Lysekil which are both refugee accommodations in the summer.

 

Another sample can be collected by Vänern. Where does the Migration Board’s shops to tourist nights in the spa town Lundsbrunn replaced by 870 asylum places, which admittedly can quickly raise the plant’s own turnover to about SEK 100 million per year, but which also affects the district’s normal tourism. Clearly, fewer tourist beds provide less surface for ancillary tourism – for example from Tarnaby mountain village reported that the chairlift can no longer be operated for lack of tourist beds.

 

The situation is thus similar in many areas. Oland Tourism says, however, that all cabin accommodation falls away in the summer, as Boda Baden, Mölltorp and Littorinabyn.

 

Uncertainty about the summer tourism is also noticeable in the Swedish Tourist Association where 15 hostels during the winter has served as places of asylum, including Farosund. Now in the end requires the STF decision from the franchisees if they remain in the tourism or remain

 

Immigration Service asylum accommodation. One who decided Maria Karlsson, who owns the hostel in Skåne Hammenhög where the resort now count to five asylum accommodation.

So there you have it, folks. An industry that brings in around $32 billion per year (and that doesn’t count the $12 billion tourists spend on food, entertainment, and transportation) is about to disappear entirely thanks to the housing needs of Mid-East migrants. 

If you want to get a good idea of just how important tourism is to Sweden’s economy, have a look at the following graph which shows employment growth in tourism versus the overall labor market trend:

And here is the final insult: Sweden’s toursim industry employs around 160,000 people. The number of refugees Sweden took in from the Mid-East in 2015 was… drumroll… 160,000. 


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Why America Would Be Richer and Safer If Europe Paid For Its Own Defense: New at Reason

Earlier this year, at the South Carolina Republican debate, Sen. Marco Rubio rattled off a list of the three top threats he’d want to address as president.

First: North Korea. Second: ISIS. “And the third is rebuilding and reinvigorating NATO in the European theater,” he said, “particularly in Central Europe and in Eastern Europe” as a counterbalance to Russian power.

The moderator didn’t allow any of Rubio’s competitors to respond to this trio, but had he been permitted to speak, Donald Trump may well have raised an objection to that third point. “Pulling back from Europe would save this country millions of dollars annually,”he recently said. “The cost of stationing NATO troops in Europe is enormous. And these are clearly funds that can be put to better use.”

Trump is hardly a foreign policy maven—ricocheting as he does between calls for restraint and open planning of war crimes—but on this point he gets it right: What Rubio is advocating is not so much defense as it is expanded subsidy of the European welfare state.

Indeed, writes American Security Initiative Foundation Fellow Bonnie Kristian, NATO’s European wing is notorious for its freeloading on American military might, a longstanding habit of bilking U.S. taxpayers for defense while throwing good money after bad on expansive social engineering projects.

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Something Did Break After All: Repo Rate Soars Most Since September 2008

Back on December 31, the day which was the first quarter and year-end after the Fed’s first rate hike cycle in nearly a decade, we pointed out something unexpected – the Fed’s rate hike corridor had just been broken when the Fed Funds rate traded as low as 0.12%, far below the mandated minimum of 0.25%.

 

SMRA confirmed as much, and added that “the fed funds rate has dropped to 0.12% this morning, down from 0.47% yesterday. The fed funds rate has dropped at month-end for all of 2015, with some of the larger of these moves occurring at quarter end, like today.  It appears that these drops will still occur even after the fed rate hike, and possibly that the will be even more extreme, since today’s drop was about 23 basis points, as opposed to previous declines this year, which were usually between 5 and 10 basis points.”

It was unclear what had caused this dramatic breach of the Fed’s corridor, but we had some ideas:

the fact that there is this kind of major discontinuity in the Fed’s rate hike process, throws a huge wrench in the credibilty of the Fed tightening effort.

 

After all, if banks can steamroll with impunity the Reverse Repo 0.25% floor to park hundreds of billions, or trillions, in liquidity, then the Fed’s entire [liquidity soaking] experiment will be worth nothing. Keep in mind, the rate hike process only works if banks don’t get a chance to revert to an old standby liquidity regime on the last day of any quarter, in the process getting all the benefits of ZIRP even as the Fed parades just how tight financial conditions are getting.

 

Just imagine what would happen on December 31, 2016 if the Fed Funds rate plunged from 1.25% to 0.12% overnight? That would suggest that while the Fed may have drained liquidity for 99% of the quarter, on the one day it matters – the day when the bank’s balance sheet snapshot is formalized for 10-Q and 10-K purposes, ZIRP regime has returned.

Which is why today, March 31, another quarter and (and the Japanese fiscal year end) we were paying particular close attention to the funding markets, both on the fed funds and the general collateral repo side.

On the fed funds, and reverse repo, side, things we relatively normal: the Fed’s reverse repo spiked from $127.1 billion (from 59 counterparties) to $303.8 billion (from 99) overnight. A lot, but we’ve seen more (and certainly below the expanded ceiling of $2 trillion) and largely to be expected as banks rush to make their balance sheets appear pretty for the regulators, with lots and lots of securities rented from the Fed for 1 day. Fed Funds dipped to 0.25% and briefly slid below it but nothing worth writing home about.

But while FF was “fine”, something did break in the general collateral repo market.

Here is Wedbush’ Scott Skyrm with a rather scary chart and an attempt at an explanation:

Highest Repo Rate Since The Financial Crisis

An afternoon sell-off in GC pushed overnight rates (on quarter-end) as high as 1.75% and the market ended closed at 1.75%. Drumroll please! The 1.75% rate was the highest GC Repo trade since September, 2008. Naturally, there’s was a tightening December which moved rates higher overall. But today, are higher rates a function of the Repo market returing to normal? Or is it a sign of declining liquidity on quarter-end?

And the chart:

What is causing this liquidity scramble we don’t know, but such a historic move is most certainly worrying, especially for a Fed that wants to telegraph that all is well with its rate hiking process, and there are no structural liquidity issues with the banks.

Alas, as the chart above clearly shows, not only are there issues, but something clearly has broken in the US market’s repo funding plumbing.


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“Ted Cruz Won’t Protect My Family”: Super PAC Releases New Pro-Trump Ad After Abortion Fiasco

Thursday was a rough day for GOP frontrunner Donald Trump.

At a pre-recorded town hall meeting hosted by MSNBC and Chris Matthews, Trump got tripped up over a question about illegal abortion.

“Should [illegal] abortion be punished?,” Matthews quizzed. “This is not something you can dodge,” he added.

There has to be some form of punishment,” Trump responded, when pressed.

“For the woman?” Matthews asked, just so there would be no ambiguity.

“Yeah,” Trump responded.

Wrong. Answer.

Anyone watching the clip can clearly see that Matthews was playing “gotcha” (once he established that he was referring to illegal abortions he knew he could pin Trump between having to either say women should be punished or that women could break the law with impunity), but it didn’t matter.

Everyone piled on. Republicans, Democrats, pro-lifers, the pro-choice crowd – everyone.

The kerfuffle came just days after several polls suggested Trump’s favorability among female voters is languishing somewhere in the neighborhood of 25%.

If accurate – and we’re not necessarily saying that it is – Trump may have what we called “a women problem.”

On Thursday, Trump got a little help from the Great America PAC which has released a new 30 second pro-Trump ad in an apparent effort to appeal to suburban female voters. Here’s the clip:

“Sure, I get some grief when I say I’m voting for Donald Trump. But you know what? I want to protect my family,” a terrible actress tells the camera. “We need to control our borders and stop letting in dangerous people. Trump will do that. And Ted Cruz? He wanted to let in more Syrian refuges and give amnesty to illegal immigrants. That won’t protect my family. Donald Trump will.”

There you go. A dangerous man for a “dangerous” world. 

In any event, it’s somewhat ironic that the ad comes from a PAC which is part of the very same corrupt campaign finance system that Trump has repeatedly called disgusting. Great America is spending “seven-figures” ahead of the Wisconsin primary in an effort to push Trump over the top. 

“We have seen such a huge groundswell of Americans that want to help grow the movement around the Trump campaign that we felt compelled to lay the groundwork for the outside effort Republicans will need to win the White House and lengthen Mr. Trump’s coattails to protect our majorities in Congress,” Jesse Benton, a spokesman for the group said in a statement.

And while Trump may say he has no interest in support from super PACs, something tells us he’s ok with anything that makes his “coattails” longer.


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Europe Continues To Court “Prince In Brussels” Erdogan

Submitted by Judith Bergman via The Gatestone Institute,

  • Erdogan has boasted that he is proud of boldly blackmailing EU leaders into paying him protection money.

  • Erdogan's threats were almost criminally sinister: "… the EU will be confronted with more than a dead boy on the shores of Turkey. There will be 10,000 or 15,000. How will you deal with that?"

  • According to the agreement, 80 million Turkish citizens will have visa-free access to the European Union.

  • The nightmare scenario for a desperate EU is that no matter how much it bows to extortionist demands from Turkey, the migrant crisis will continue to grow. Even if Turkey closes down all migrant routes from Turkey into Europe, refugees could take new routes through North Africa or the Caucasus.

  • Meanwhile, 800,000 migrants are currently on Libyan territory waiting to cross the Mediterranean, according to French Defense Minister Jean-Yves le Drian.

"We can open the doors to Greece and Bulgaria anytime and we can put the refugees on buses … So how will you deal with refugees if you don't get a deal? Kill the refugees?" This was the question Turkish President Recep Tayyip Erdogan, in true mafia style, asked European Council President Donald Tusk and European Commission President Jean-Claude Juncker on November 16, 2015 in a closed meeting in Antalya, Turkey, where the three met after the G20 summit.

While Tusk and Juncker have both declined to comment on whether the meeting took place, Erdogan has since then boasted that he is proud of the leaked minutes of the meeting, where he boldly blackmails EU leaders into paying him protection money.

Erdogan's threats were almost criminally sinister: "… the EU will be confronted with more than a dead boy on the shores of Turkey. There will be 10,000 or 15,000. How will you deal with that?"


Turkish President Recep Tayyip Erdogan (left) has boasted that he is proud of blackmailing EU leaders, including European Commission President Jean-Claude Juncker (right), into paying him protection money.

Finally, feeding into the denial/ignorance of the European elites, who were at that time reeling from the Paris terror attacks that had occurred just three days earlier, Erdogan — who himself has hosted and supported terrorist groups from Hamas to Hezbollah to ISIS — told his European colleagues, "The attacks in Paris is [sic] all about poverty and exclusion. These people… will continue to be terrorists in Europe".

The leaked minutes furthermore showed Tusk and Juncker pleading with Erdogan, almost begging him to see reason, pathetically telling him that the EU has been treating him "as a prince in Brussels."

"Like a prince?" Erdogan retorted, "Of course. I'm not representing a third world country." He also told Juncker, who is the former prime minister of Luxembourg, not to compare Luxembourg to Turkey: "Luxembourg is just like a town in Turkey."

In a speech in Ankara on February 7, 2016, referring to the meeting with Juncker and Tusk, Erdogan boasted: "I am proud of what I said. We have defended the rights of Turkey and the refugees. And we told them: 'Sorry, we will open the doors and say goodbye to the migrants.'" He then proceeded to repeat that very threat:

"In the past we have stopped people at the gates to Europe, in Edirne we stopped their buses. This happens once or twice, and then we'll open the gates and wish them a safe journey, that's what I said. … We do not have the word 'idiot' written on our foreheads. Don't think that the planes and the buses are there for nothing. We will show patience up to a point and then we'll do what's necessary."

A little over a month after Erdogan's latest threats, in February 2016, it all paid off. Erdogan received the European Union's assurance that his wishes had been granted in the form of the March 18 "EU-Turkey Statement." According to this agreement, the EU will pay Ankara €6bn over the next two years to be spent on Syrian refugees already in Turkey. Furthermore, by June 2016, at the latest, 80 million Turkish citizens will have visa-free access to the European Union, tempered by the EU requirement that Turkey has met "all benchmarks" by then. The promise to lift the visa requirements for Turkish citizens should be seen as real, however, and unlikely to be turned down because of "benchmarks" not being met — especially as another part of the agreement clearly constitutes lip service, namely the commitment to "re-energize" Turkey's accession process to the European Union.

What has Turkey promised to do in return for these very tangible benefits? It has agreed that all new "irregular migrants" crossing from Turkey into Greek islands as of 20 March 2016 will be returned to Turkey. The agreement stipulates that this will take place

"in full accordance with EU and international law, thus excluding any kind of collective expulsion. Migrants arriving in the Greek islands will be duly registered and any application for asylum will be processed individually by the Greek authorities in accordance with the Asylum Procedures Directive, in cooperation with UNHCR [United Nations High Commissioner for Refugees]. Migrants not applying for asylum or whose application has been found unfounded or inadmissible in accordance with the said directive will be returned to Turkey."

For every Syrian being returned to Turkey from Greek islands, another Syrian will be resettled from Turkey to the EU – up to 72,000 Syrians. Priority will be given to migrants who have not previously entered the EU and to those who have not tried to enter the EU illegally. Furthermore, Turkey will take any necessary measures to prevent the opening of new sea or land routes for illegal migration from Turkey to the EU.

By succumbing to what amounts to Turkey's blackmail, the EU hopes to stop the people-smugglers who operate out of Turkey, and end the stream of migration between Turkey and the EU — or as the agreement says, "substantially and sustainably reduce it." They are also hoping that the agreement in itself will stem the flow by discouraging migrants from attempting the dangerous route, when they know that chances are that they will be returned to Turkey.

Seen from Europe's own, hallowed, self-declared humanitarian principles, the deal represents not only a cop-out to Erdogan's thuggish blackmail, but a complete sell-out: not even European leaders can pretend that Erdogan's Turkey represents a "safe third country." What will happen with the migrants, once they are returned to Turkey, no one knows. That much is clear from the EU's own answer to the question of how it can be sure that returned refugees or migrants will be given protection in Turkey. The EU's circular non-answer went: "Only asylum seekers that will be protected in accordance with the relevant international standards and in respect of the principle of non-refoulement will be returned to Turkey." As if Turkey under Erdogan has become world famous for respecting "international standards."

As late as March 18, on the day that the EU-Turkey Statement became official, Erdogan stated, "Democracy, freedom and the rule of law… For us, these words have absolutely no value any longer." The words "any longer" were only put there for show — as any observer of Erdogan's Turkey will tell you, democracy, freedom and the rule of law, have never held any value for Erdogan.

Contrary to the views of the EU and the Obama Administration, Erdogan is not a democrat, and never has been. He has dedicated his career to transforming secular, ‎European-oriented Turkey into an Islamist state, and has repeatedly rejected Western attempts to portray his rule as an example of "moderate Islam." He ‎says that such a concept is "ugly and offensive; there is no moderate Islam. Islam is Islam."

As a young man, Erdogan embarked upon a career in Islamist movements and parties, in direct opposition ‎to the secular Kemalists, whose goal it was to keep Turkey a secular democracy with religion a wholly ‎private matter. One of the parties in which Erdogan was active, the Refah Party, was described by the Turkish historian Soner Cagaptay as "an explicitly Islamist party, which featured strong anti-‎Western, anti-Semitic, anti-democratic and anti-secular elements." ‎Erdogan was arrested and convicted for religious incitement in 1998 after Refah was banned by Turkey's constitutional court.‎

When Erdogan returned to the scene in 2002 with the so-called Justice and Development Party (AKP), his Islamist credentials could hardly be swept ‎under the carpet in a Turkey that was still committed to a secular state.

So what do you do if you want to ‎appear palatable to the secularists and the West? You introduce Islamic sharia law slowly ‎and cautiously, in a piecemeal fashion. That is what Erdogan has done: gradually bringing all the former secular ‎bulwarks against Islamists under his own Islamist sphere of influence — the educational system, the courts ‎and even the military.

The agreement with Turkey should not be cause for celebration in Europe. Erdogan's threats shaped the deal in a way that casts doubt on any hope of him actually abiding by the vain European dream of ending the flow of migrants from Turkey and Europe. The question, though, is not just a matter of his willingness, which is open to dispute. It is as much a question of whether Turkey is even capable of stopping the people-smugglers. The latter would appear open to doubt. "Ankara is likely to have made promises in Brussels that it can't and won't deliver,' said Aykan Erdemir, a former opposition politician, now a senior fellow at the Foundation for Defense of Democracies in Washington. "Human smugglers will outsmart the Turkish authorities just as they have outsmarted EU authorities."

Even if one assumes that Turkey is both willing and able to close down the migration routes between Turkey and Greece, it is inconceivable that the Turkish people-smugglers will simply give up their blockbuster business. It is far more likely that they will open up even longer and more dangerous routes from Turkey to Italy. And if this contravenes the agreement with the EU, there is no mechanism to stop Turkey from turning a blind eye to them.

"Everybody knows that nobody can stop a smuggler — they'll always find a way," Ahmad, a Syrian who was smuggled into the UK, told the Spectator; "It will simply become more expensive."

That is of course the nightmare scenario for a desperate EU: No matter how hard it tries, or how much it bows to extortionist demands from Turkey, the migrant crisis will continue to grow. Even if Turkey closes down all routes from Turkey into Europe, refugees could take new routes through North Africa or the Caucasus. The deal with Turkey, in other words, is a far cry from being a cure.

A German think tank has simulated expected migrant flows through Europe this year, and has come up with an estimated range of 1.8 to 6.4 million people — the latter being a worst-case scenario that would include large numbers from North Africa. According to French Defense Minister Jean-Yves le Drian, quoted on March 24, 800,000 migrants are currently in Libyan territory waiting to cross the Mediterranean.

This is what Angela Merkel arguably started with her promise to receive every refugee in Germany, and this is what her EU colleagues are now desperately trying to stop. Perhaps they are not trying hard enough. In the leaked minutes from the meeting with Erdogan, Tusk told Erdogan, "…the EU can make itself less attractive to refugees, but that is not the solution we want." Many Europeans might not agree with him.


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Donald Trump is No Non-Interventionist

NATO is obsolete, Donald Trump explained at a CNN town hall earlier this week, saying the military alliance, formed as a defense against the Soviet Union, was out of date.

Trump is right. NATO is an artifact of the Cold War, which ended a quarter of a century ago. Rather than dismantling the alliance once it had outlived its usefulness, American and other Western leaders instead looked to refocus and expand NATO. NATO spread eastward toward the Russian frontier while finding other ways to flex its muscle, most notably the Kosovo campaign in 1999 and the NATO-led intervention in Libya in 2011.

Despite broad bipartisan support for NATO, there’s little in the way of justification for the military alliance. Serbia (the aggressor in Kosovo) never presented a national security threat to the United States, while those terrorist groups the U.S. considers a threat to its national security today (like ISIS and Al-Qaeda) were absent in pre-2011 Libya but have found safe spaces there since then.

But Donald Trump’s critique of NATO wouldn’t see the U.S. disengage from what’s become an entangling alliance. (The U.S., for example, is obligated to defend Turkey in case that country is attacked—Turkey is focusing its counterterrorism efforts in the Middle East more on Kurdish separatists than on ISIS, while the U.S. is working with the Kurds in the campaign against ISIS).

But despite his position being characterized by some as being in favor of “abolishing” NATO, Trump has repeateldy stated he would like to see the alliance continue.

“I don’t mind NATO per se,” Trump told Fox & Friends last week, for example. “It has to be reconstituted, it has to be modernized,” he said. “We need to either transition into terror or we need something else, because we have to get countries together.”

He repeated the same critique at this week’s town hall, calling for NATO to refocus on terrorism and for other member countries to pay more into the alliance, following a broad Trump theme that the U.S. pays too much and other countries pay too little for America’s military presence and actions abroad.

In an interview with the Washington Post‘s editorial board earlier this month, Trump also questioned the useful of NATO, laying out what the Post described as an “unabashedly non-interventionist approach to foreign policy.” Interpreting Donald Trump’s often chaotic and even self-contradictory pronouncements on foreign policy as some kind of commitment to non-interventionism is a serious mistake.

What was so “non-interventionist” about Trump’s comments to the Post?

Trump left the door open to withdrawing troops from places like Japan and South Korea (though he’d prefer to keep them stationed there and have the hosting countries pay more for that), re-iterated his skepticism about the war in Iraq, and stressed that other NATO countries should be doing more of the heavy-lifting, especially when it comes to situations like Ukraine, which are far more relevant to those countries than to the U.S.

And at another town hall this week, Trump identified the Geneva conventions, which define a range of war crimes, was a problem that made soldiers “afraid to fight.” He lamented that U.S. forces could not waterboard people or chop heads off. Not exactly concerns shared by, uh, actual non-interventionists.

Trump’s primary critique of NATO, the war in Iraq, and American intervention in other countries isn’t the unintended consequences or actual counter-productivity of the specific interventions, but that the United States is not reimbursed properly for it.

As far back as 1987, the first time Donald Trump flirted with a presidential run, Trump has expressed the idea that America’s allies should be paying more its support. That year, in a speech in New Hampshire, Trump said he was tired of the U.S. “being kicked around” by its allies, who had become “the world’s greatest money machines” because the U.S. was funding their defense. “We should have these countries that are ripping us off pay off the $200 billion deficit,” Trump said, according to a contemporaneous New York Times report.

Then, as now, Trump insisted the “right person” could negotiate better deals for the U.S. with its allies. Restructuring American hegemony to formalize the payment of tribute is hardly a non-interventionist stance. Perhaps more importantly, it’s impossible for Donald Trump to be a non-interventionist and anti-trade at the same time. Sound non-intervention requires free trade, which liberates and liberalizes countries far more effectively than military action.

The U.S. lost tens of thousands of troops in Vietnam, with millions of Vietnamese casualties, and lost Vietnam to communists. A decade-plus of free trade brought more prosperity to Vietnam than U.S. war ever could. For Donald Trump and his zero-sum world view, a prosperous, liberalizing Vietnam is bad for America. Trump would work toward wiping out more than half a century of unprecedented global economic growth and poverty eradication in sacrifice of some misguided notion that what’s wrong with America is that not enough of its young people are employed in factories like they once were.

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