Category: zerohedge

First US Military Planes Land Near Venezuela Border With Aid In Defiance Of Maduro

The Pentagon is now publicizing its first military airlift of Venezuelan aid delivered to the Colombian town of Cucuta on Saturday, which sits on the border shared by the two countries, despite embattled President Nicolas Maduro vowing to keep such “unauthorized” aid out by stationing troops along the border.

Washington is using aid delivery to undermine the socialist Maduro government in Caracas, which has blasted US-led attempts to foment coup and fuel unrest.

AP photograph of C-17 landing in Colombia on Saturday, Feb. 16

AP photographs and video confirmed that two of three scheduled Air Force C-17 cargo planes that left Homestead Air Reserve Base in Florida landed at the border city on Saturday. The town has become a staging ground of sorts for aid that supporters of US-backed opposition head Juan Guaido say they intend to distribute. 

“This wasn’t the first, and it won’t be the last,” USAID Administrator Mark Green told the AP while on the tarmac in Cucuta receiving the aid. “More is on the way,” he promised. 

According to the AP it’s certainly not the first shipment of official US humanitarian aid; however, it is the first highly significant and symbolic moment it was brought in on massive US Air Force cargo planes. 

The AP noted: 

Commercial planes had been used for earlier shipments of aid, which is aimed at dramatizing the economic crisis — including hyperinflation and shortages of food and medicine — gripping Venezuela. Critics say last year’s re-election was fraudulent, making Maduro’s second term illegal.

“We are saving lives with these airplanes,” an exiled politician said to be coordinating the international aid effort for Guaido, Lestor Toledo, told the AP. However, interestingly the report itself highlighted that Washington is seeking to exploit the optics of Venezuela’s economic collapse overseen by an inept regime through the humanitarian shipments. 

Maduro, meanwhile, has slammed the “political show” surrounding the issue of aid delivery. “They hang us, steal our money and then say ‘here, grab these crumbs’ and make a global show out of it,” Maduro told reporters on Thursday. “With dignity we say ‘No to the global show.’ Whoever wants to help Venezuela is welcome, but we have enough capacity to pay for everything that we need.”

Saturday’s military flights are reported have “tons” of cargo which includes high-energy food items and hygiene kits, and medical supplies — enough for 25,000 people according to the AP. 

Reuters reported earlier this week that US humanitarian supplies and cargo are currently amassing along a Colombian border town, but there doesn’t appear to be confirmation that any of it has entered Venezuela:

Senior U.S. officials last week heralded their country’s efforts to move aid to Venezuela’s doorstep, after U.S. supplies were among those delivered to the first collection point established, in the Colombian border town of Cucuta.

There has been no sign of the aid that is being stockpiled in Cucuta leaving the warehouse.

Brazil is also reportedly being used as an aid transit point, however, Brazilian authorities have yet to comment on any specific shipping points. 

Guaido has over the past week personally appealed to the military to allow the aid in, while also issuing a general amnesty order for any military officer who defects from Maduro, something which the opposition currently doesn’t have the power to enforce.

via ZeroHedge News http://bit.ly/2EfhML5 Tyler Durden

Argentina Settles Export Deal With Paraguay Using Bitcoin

Authored by Ana Berman via CoinTelegraph

Photo credit: CoinTelegraph

Argentina has settled an export deal with Paraguay in Bitcoin (BTC), Cointelegraph en Español reported on Thursday, Feb. 14.

In a reported first for both countries, Paraguay has bought pesticides and fumigation products worth $7,100 from Argentina, using cryptocurrency to settle the deal. The purchase was paid for in BTC and then converted into Argentine peso to settle accounts with the exporter of the agricultural chemicals.

To proceed with the payments, Argentina applied to Bitex — a Latin American financial services provider that supports Bitcoin payments.

According to the chief marketing office of Bitex, Manuel Beaudroit, the company is a part of the Argentine government’s program Exporta Simple, which facilitates the export of goods and services worth less than $15,000. Bitex, in its turn, aims to make cross-border payments for such deals more efficient.

As Cointelegraph reported, Bitex previously participated in a crypto project initiated by Argentine bank Masventas. In May 2018, Masventas announced it was considering creating an alternative to the SWIFT payment system used between banks globally. Bitex was appointed to provide the necessary ecosystem for supporting BTC transactions.

In other news for Argentina, this month, the country’s official state transport card SUBE (Sistema Único de Boleto Electrónico) — used by over seven million people in 37 locations — has startedaccepting BTC.

Meanwhile in Paraguay, global blockchain tech firm and Bitcoin mining manufacturer Bitfury partnered with South Korean peer-to-peer knowledge commons research firm, Commons Foundation, to launch several mining facilities in the country.

via ZeroHedge News http://bit.ly/2V2Lc4u Tyler Durden

Citi May Liquidate Over $1 Billion In Venezuela Gold Within Weeks

Back in April 2015, when Venezuela still had a somewhat functioning economy and hyperinflation was not yet rampant, the cash-strapped country quietly conducted a little-noticed gold-for-cash swap with Citigroup as part of which president Nicolas Maduro converted part of his nation’s gold reserves into at least $1 billion in cash through a swap with Citibank.

As Reuters reported then, the deal would make more foreign currency available to President Nicolas Maduro’s socialist government as the OPEC nation struggled with soaring consumer prices, chronic shortages and a shrinking economy worsened by low oil prices.

As Reuters further added: “former central bank director Jose Guerra and economist Asdrubal Oliveros of Caracas-based consultancy Ecoanalitica said in separate interviews that the operation had been carried out.  A source at the central bank told Reuters last month it would provide 1.4 million troy ounces of gold in exchange for cash. Venezuela would have to pay interest on the funds, but the bank would most likely be able to maintain the gold as part of its foreign currency reserves.”

Needless to say, the socialist country’s economic situation is orders of magnitude worse now, and in addition to a full-blown blockade of the country’s only key export, petroleum, the president has a simmering, US-backed coup to contend with as well.

Fast forward three years when Venezuela’s gold swap with Citi is about to mature, and according to lawmaker Angel Alvarado, advisor to Venezuelan opposition leader and self-proclaimed president, Juan Guaido, Citi would be entitled to keep the gold if cash-strapped Venezuela does not pay the loan when it expires in March. Considering the country’s financial dire straits, the last thing Venezuela can afford is to pay Citi to reclaim ownership of the collateral.

As a result, on Friday, Guaido’s advisors asked Citibank not to invoke the guarantee and not to claim the gold put up as collateral for the 2015 loan made to the government of President Nicolas Maduro if his administration does not make payments on time, Reuters reported, citing a Venezuela lawmaker.  Opposition leaders have claimed that Maduro usurped power last month when he was sworn in to a second term after a disputed election widely described as a sham.

“Citibank has been asked to stand by and not invoke the guarantee until the end of the usurpation,” Alvarado said in an interview. “We don’t want to lose the gold.”

Confirming what we reported back in 2016, a finance industry source told Reuters that the gold is worth $1.1 billion.

While it is unclear whether Citi will comply with the requests, there is now a non-trivial possibility that the US bank may find itself liquidating over $1 billion in Venezuela bullion in the open market, an operation which could potentially send the price of the precious metal sharply lower.

* * *

Meanwhile, far from pushing to reclaim its gold, Maduro has only been selling more of it, as Abu Dhabi investment firm Noor Capital confirmed when it said earlier this month that it bought 3 tons of gold from Venezuela’s central bank, but would halt further transactions until the country’s situation stabilizes.

Guaido has also asked British authorities to prevent Maduro from gaining access to gold reserves held in the Bank of England, which holds around $1.2 billion in bullion for Maduro’s government. So far the British central bank has refused to comply with Maduro’s demands to remit the gold back to Venezuela, although when asked for comment, the BOE said it does not comment on client operations.

Meanwhile, Hugo Chavez, who spent the last years of his life repatriating Venezuela’s gold is spinning in his grave.

via ZeroHedge News http://bit.ly/2SacfJi Tyler Durden

Nearly Three Years After Olympics, The Rio 2016 Organizing Committee’s Debt Load Has Tripled

The fallout from the Olympic Games in Rio de Janeiro has continued years after the last games have ended. The debt incurred by the local Olympic organizing committee, Rio 2016, has now increased dramatically to more than three times its original estimate, according to a new report by Deadspin.

The debt was listed at $32 million in December 2016 and now, a little more than two years later, it has more than tripled to $113 million. The Brazilian government and the IOC have both refused to help the local organizing committee dispatch of its debts.

On top of that, the Rio organizing committee – which arguably shouldn’t even be in existence more than two years after the games have ended – is facing nearly 600 lawsuits from its failure to pay suppliers and workers. Inside the Games reported that there are 258 civil lawsuits and 325 labor lawsuits ongoing. The Rio 2016 organizing committee is still made up of seven employees, even as we are less than a year away from turning the page to 2020.

Rio 2016 asked the International Olympic Committee for help in 2017 but the IOC refused. Much of the money still owed by the committee is due to suppliers like GL Events, who helped construct some of the venues used at the games. The Brazilian Olympic Committee is also among the organizing committee’s creditors.

In keeping up the global pageantry of the Olympics at any cost, Tokyo, who will be hosting the next Olympics, has also already gone far over budget in its own preparations. Some cities are reportedly refusing to host the games and some heads of sports federations have given interviews stating they’d rather work with dictators than deal with the bureaucracy of the Olympics. 

Former Rio de Janeiro mayor Eduardo Paes denied last year that there were any debts left over from the Olympics and the Rio 2016 organizing committee has stressed the supposed “legacy benefits” from hosting the games.

As a reminder, here is what Rio looked like just one year after the Olympic games:

Like the rest of the world, Olympic committees constantly spend more than they can afford. And not unlike the global economy, one can’t help but wonder if the day will come for the Olympics when the charade ends and it’s finally time for someone to foot the bill. 

via ZeroHedge News http://bit.ly/2GtlSRZ Tyler Durden

Lavrov Slams “NATO-Centric” Approach To Crises While Extending Hand To US On Nuclear Treaty

The annual Munich Security Conference, a Cold War era trans-Atlantic focused meeting to address severe military challenges, but which has over the years grown to include nations from around the world addressing pressing security issues, kicked off late this week on a pessimistic note. “The whole liberal world order appears to be falling apart,” Wolfgang Ischinger, chairman of the Munich Security Conference, wrote in an essay introducing the conference. “We are experiencing an epochal shift; an era is ending, and the rough outlines of a new political age are only beginning to emerge.” And on Saturday German Chancellor Angela Merkel warned of a “disintegration of international political structures” while stressing the importance of NATO as “an anchor of stability on a stormy sea”.

But concerning this “disintegration” the conference has already included a significant overture made by the Russian representative hoping to open the door to negotiations with the United States over the future of now shaky arms treaties between the two countries following the historic US withdrawal from the Intermediate-Range Nuclear Forces Treaty (INF) within the last month. In the tit-for-tat accusations and lashing out that followed at the beginning of February, Putin alarmingly accused Washington of also imperiling in the long term the landmark New START treaty, signed in 2010 and set to expire in 2021. It aims to reduce the total number of strategic nuclear missile launchers by half.

Munich Security Conference 2018, via MSC Media

Russian Foreign Minister Sergey Lavrov said at the Munich Security Conference on Saturday, according to TASS:

President Putin has repeatedly said that we are ready to launch the talks on extension of the New START. It only expires in 2021, though time flies fast, and we have suggested to the US that such discussions be launched, considering the necessity to clear up certain issues that we are worried about.

He explained that the Russian worries center on the US’ decision to denuclearize certain nuclear submarines and heavy bombardment aircraft. “The agreement stipulates that kind of denuclearization, though only using the means technically acknowledged as reliable by the other side of the agreement. However, no fairly meaningful consultations have been offered to us so far, though we continue our efforts,” Lavrov added.

Set to expire in two years, it stipulates that Russian and US arsenals be restricted to no more than 1,550 deployed strategic warheads and less than 700 deployed strategic missiles and bombers. Russia has previously expressed desire to extend it to 2026, though at the start of Trump’s taking the White House, he reportedly told Putin the New START was “one of several bad deals negotiated by the Obama administration” during their first official phone call. 

Indeed there’s been no response from the American side to Lavrov’s overture during his Saturday address to the Munich conference. Lavrov also lambasted the United States’ attempts to modify the international Chemical Weapons Convention after it alongside Canada and the Netherlands put forward a proposal to include certain chemical substances connected with the Skripal affair in the Chemical Weapons Convention’s Annex, which Moscow sees as motivated by political humiliation. 

Lavrov said of the issue, “They are unwilling to let the international law remain as the Chemical Weapons Convention defines it. They want to use their own rules for interpreting that convention.” Lavrov said the Trump administration has to yet agree to hold any “meaningful consultations” on New START or other weapons agreements, according to Bloomberg. 

US Vice President Mike Pence met with an icy reception during his speech to the conference on Saturday:

Other crucial comments of Lavrov included highlighting that Russia cannot be excluded from efforts to maintain stability in tense regions; simultaneously, he said there’s a current global trend for initiatives to resolve security crisis that are merely “NATO-oriented” or “NATO-centric”. He said, “We cannot strengthen one’s security at the expense of others.”

Meanwhile US President Mike Pence, fresh off the US-initiated Warsaw conference wherein he urged the world to “confront” top “terror sponsor” Iran, also addressed the Munich conference by continuing his message of demanding that the EU withdraw from the Iran deal, and that it cease attempts to financially circumvent US sanctions. 

Notably, Pence also addressed the Venezuela crisis, repeating Washington’s call for the EU to fully recognize Guaido as Venezuela’s rightful leader, though a number of individual countries and key US allies already have. 

via ZeroHedge News http://bit.ly/2SF7FrT Tyler Durden

China Plans To Build Solar Power Station In Space

Submitted by OilPrice

China is taking its renewable energy push to new heights, literally, after the country’s scientists revealed plans to build and launch in orbit a space solar station that could capture the Sun’s rays 24/7, Chinese media report.

China has already started to build an early experimental space power plant in the city of Chongqing, The Sydney Morning Herald reported, citing an article in China’s Science and Technology Daily.

The sun photographed by NASA’s Extreme Ultraviolet Imaging Telescope

The space solar station, planned to orbit the Earth at 36,000 kilometers (22,370 miles) could provide “an inexhaustible source of clean energy for humans,” according to Pang Zhihao, a researcher at the China Academy of Space Technology Corporation.

Such solar power technology could supply reliable energy 99 percent of the time and have six times the intensity of the solar farms that work on the earth, the scientist says.

China will start by launching small solar stations between 2021 and 2025, while a possible next step would be a Megawatt-level station planned to be built in 2030.

The energy from the space solar station would be converted into a microwave or laser beam that would be sent to the earth.

However, the project has two major hurdles to overcome in order to become a practical solution. One is the weight of a space solar station, expected to be more than two times the weight of the International Space Station. The other is the safety impact of laser or microwave beams sent to the earth.

China is not the only country studying the potential of harnessing the power of the Sun in space.

Caltech for example has its Space Solar Power Project, which has researched the use of ultralight, foldable, 2D integrated elements, Caltech has developed a prototype which collects sunlight, converts it to RF electrical power, then wirelessly transmit that power in a steerable beam.

According to Caltech’s research, “Collecting solar power in space and transmitting the energy wirelessly to Earth through microwaves enables terrestrial power availability unaffected by weather or time of day. Solar power could be continuously available anywhere on earth.”

via ZeroHedge News http://bit.ly/2BBGyTW Tyler Durden

After Ditching New York, Amazon Could Still Swipe A Tax Break Meant For The Poor In Virginia

Even though Amazon walked away from billions in subsidies in New York, the company may still wind up qualifying for federal tax breaks that are intended to help distressed communities by building a new data center in Virginia.

About 30 miles west of Washington, Amazon and its partners are preparing to build a facility to house infrastructure for the rapidly growing Amazon Web Services, according to Bloomberg. AWS went into contract on the property last year after executives held two meetings with Virginia’s embattled Governor Ralph Northam, who subsequently selected the area as a “qualified opportunity zone”. The property is 107 acres and the designation will entitle Amazon to claim millions of dollars in federal tax breaks.

But in yet another potential scandal, Northam claimed that he hasn’t discussed the tax break with Amazon executives and that he didn’t select that area as an opportunity zone to help attract Amazon. Amazon echoed these sentiments, saying that the opportunity zone designation was never discussed with officials in Virginia and that it played no role in the company‘s decision to build there.

The tax subsidy available to AWS, which hadn’t been previously reported, is the latest catalyst to spur questions about whether the opportunity zone program is simply a giveaway to wealthy individuals that expand in relatively affluent areas. As everybody knows by now, Amazon drew criticism for deciding to build in an opportunity zone in a gentrifying area of Queens – plans that were subsequently scrapped days ago.

Amazon didn’t comment on whether not it would forgo the opportunities from the subsidy, claiming simply that “AWS doesn’t disclose or discuss details about its data centers.”

The point of opportunity zones is to allow governors to select up to a quarter of their census tract to qualify for subsidies. Investors who help develop or fund businesses in these zones are often able to defer capital gains and profit taxes. Virginia chose a mix of poor and affluent areas, including two in Loudoun County, which had a median household income of $135,842 in 2017. This is more than double the national average and the highest of any county in the nation. In the county where Amazon is building its data center, the median income is $88,657.

A lot of the details of the negotiations haven’t been released publicly because Amazon and community officials often sign nondisclosure agreements. But public documents and interviews indicate that negotiations with Amazon about the data center and its new headquarters were closely aligned. The site that AWS chose for its data center is next to a larger tract of land that Virginia was pitching as a possible location for Amazon’s second headquarters. The economic development official in Virginia who nominated the census tract as an opportunity zone, Buddy Rizer, had been talking to Amazon executives about both properties and said he considered the matters separate because he didn’t believe Amazon would be able to use the opportunity zone credit at either location.

The overlap between these processes is drawing criticisms of the program. The main critique is simply that the law and regulations surrounding opportunity zones are very loosely written and they permit state and local officials to use federal dollars to draw the favor of large companies instead of focusing on blighted communities.

Greg Leroy, executive director of Good Jobs First, a Washington-based labor-funded organization critical of corporate subsidies told Bloomberg: “The idea that a company headed by the richest person on the planet could get a tax exemption in the richest county in the country completely summarizes the deceptive packaging of the whole program. Poor people are the bait. But the switcheroo is that the rich people get all the government handouts.”

via ZeroHedge News http://bit.ly/2IhPmnQ Tyler Durden

Buchanan: Will Diversity Be The Death Of The Democrats?

Authored by Patrick Buchanan via The Unz Review,

Both of America’s great national parties are coalitions.

But it is the Democratic Party that never ceases to celebrate diversity – racial, religious, ethnic, cultural – as its own and as America’s “greatest strength.”

Understandably so, for the party is home to a multitude of minorities.

It is the domain of the LGBTQ movement. In presidential elections, Democrats win 70 percent of Hispanics, Jews and Asian-Americans, and 90 percent of African-Americans.

Yet, lately, the party seems to be careening into a virtual war of all against all.

Democratic Governor Ralph Northam and Attorney General Mark Herring of Virginia have both admitted to using blackface.

Northam imitated Michael Jackson’s “moonwalk” in a 1984 dance contest. Herring, in 1980 at the University of Virginia, did a blackface impression of rap icon Kurtis Blow, who called it ugly and degrading.

The resignations of both have been demanded by Virginia’s black leadership. Northam and Herring, however, are defying the demands.

Meanwhile, Lt. Gov. Justin Fairfax, only the second black ever to win statewide office, has been charged by two women with rape. And the demands for his resignation are growing louder and most insistent.

Yet if Fairfax is forced out, while the white governor and white attorney general get a pass, black leaders warn, all hell is going to bust loose.

The Democratic Party of Virginia was already convulsed over all the monuments, statues, schools, parks, highways and streets that bear the names of slave owners, Confederate soldiers and 19th- and 20th-century segregationists.

Across the Potomac, Ilhan Omar, the first ever Somali-American to serve in Congress, and a Muslim, ignited a firestorm last week when she gave this as the reason Congress faithfully votes the AIPAC line on Israel: “It’s all about the Benjamins, baby.”

The reference is to $100 bills, on which Ben Franklin’s face appears. The line is a rap lyric from a 1997 song by Puff Daddy.

Omar was saying Congress has been bought.

The House Democratic leadership demanded and got an apology from Omar for her use of an “anti-Semitic trope.”

But Omar now his company in the House. Palestinian-American Rep. Rashida Tlaib, also a Muslim, shares and airs her views on Israel.

The problem for Democrats?

These provocateurs are magnets for media. They speak for a rising minority in the party that regards Israel as an apartheid state that oppresses Palestinians. And they find an echo among millennials on the party’s socialist left.

As Thursday’s Washington Post headlined, this Omar flap “could forecast a Democratic divide on Israel.”

Indeed, it may have already done so.

When Senate Republicans proposed legislation to allow states to refuse to hire individuals or contractors who support the BDS movement to boycott Israel, Senators Kamala Harris, Cory Booker, Elizabeth Warren and Bernie Sanders all voted no.

The four say they are supporting freedom of speech to condemn Israeli policy. But to others it looks like a progressive Democratic blessing for those urging that Israel be treated the same way Ian Smith’s Rhodesia and apartheid South Africa were treated.

Within the Democratic coalition, Asian-Americans are now in conflict with blacks and Hispanics over admission policies at elite schools and universities.

Asian-Americans are “overrepresented” where students are admitted based on test scores or entrance exams. Black and Hispanic leaders are demanding that student bodies, regardless of test scores, look like the community. And if this requires affirmative action based upon race and ethnicity, so be it.

The LBGTQ community is now in court demanding all the rights and protections of the civil rights laws of the ’60s. This will bring gay groups into constant collisions with religious communities that adhere to traditional moral views on homosexuality.

The minorities of color in the Democratic coalition are growing, as the base of the GOP is aging and shrinking. But these minorities are also becoming more rivalrous, competitive and demanding. And the further they move left, they more they move outside the American mainstream.

The pledge of allegiance this writer recited every day of school, reads: “I pledge allegiance to the flag of the United States of America, and to the republic for which it stands, one nation under God, indivisible, with liberty and justice for all.”

Today, the antifa left desecrates the flag, as liberals praise NFL players who “take a knee” during the national anthem. Militant migrants march under Mexican flags to protest border security policies. The “republic” has been by “our democracy.”

We are no longer “one nation … indivisible” We have almost ceased talking to one another. As for “under God,” added in 1954, Democrats at their Charlotte Convention sought to have God excised from the party platform.

“Liberty” has been supplanted by diversity, “justice” by equality.

But as Revolutionary France, Stalin’s USSR, Mao’s China, Castro’s Cuba and Hugo Chavez’s Venezuela proved, regimes that promise utopian and egalitarian societies inevitably reveal themselves to be undertakers of freedom, America’s cause.

via ZeroHedge News http://bit.ly/2trimPH Tyler Durden

IDF Conducts Massive Exercise To “Simulate Conditions Of War With Hezbollah”

Israel Defense Forces (IDF) conducted a massive military exercise last week which was designed to prepare soldiers for combat operations in “topographical conditions” comparable to those in Lebanon, The Times of Israel reported.

Carried out by the 401st Brigade of the Armored Corps, the exercise was the largest in years.

IDF forces completed the field training exercise alongside the Israeli Air Force, in addition to the engineering and intelligence corps.

According to the IDF and also seen on specific Twitter feeds, dozens of armored personnel carriers, main battle tanks, attack aircraft, and helicopters were deployed in the training zone in the Jordan Valley

One Twitter user said, “IDF temporarily evicted 291 people from 4 communities in the northern Jordan Valley, to conduct military drills on their lands.”

The brigade’s commander, Col. Dudu Sonago, said Hezbollah, the Lebanese Militant Group, has gained experience and developed sophisticated battle techniques after fighting in neighboring Syria’s civil war.

“As the situation in Syria stabilizes, Hezbollah is returning its forces to Lebanon,” Col. Dudu Sonago told Channel 12. “They are no longer a guerrilla organization, but a real army. They fought there in regiments of companies and battalions, very similar to the military.”

“They operate in civilian areas and are ready with a large quantity of anti-tank missiles,” added Sonago. “This is a challenge the IDF must train for.”

The Times of Israel says tensions between Israel and Lebanon “have heightened in recent months ” following IDF operations to “locate and destroy Hezbollah cross-border attack tunnels reaching into the country.”

Hezbollah leader Hassan Nasrallah dismissed the effectiveness of the Israeli operation, which ended in January.

Nasrallah criticized Israel earlier this month over Prime Minister Benjamin Netanyahu’s warmongering attitude against Lebanon over the “inclusion of the Iran-backed organization in the country’s new government,” said The Times of Israel.

On Tuesday, Lebanese Prime Minister Saad Hariri said the new government would allow Hezbollah to keep its weapons, which some of the military hardware was used against Israel in 2006 and are used regularly to threaten Jerusalem.

Former Defense Ministry Ombudsman Maj.-Gen. Yitzhak Brick has recently claimed that IDF forces are not ready to wage war on Hezbollah, arguing in a damning report that the military is “worse than it was at the time of the Yom Kippur War” in 1973.

With war drums beating between Israel and Hezbollah (and even maybe Iran), the IDF has completed its latest large scale war drill, simulating a fierce battle between its adversaries.

With the global economy going down the tubes, Zero Hedge readers must be on the watch for geopolitical flashpoints in the coming quarters.

via ZeroHedge News http://bit.ly/2TRacM4 Tyler Durden

Chart Of The Day: European Earnings Are Unchanged Over The Past Ten Years

Last week, Morgan Stanley’s resident bear, Mike Wilson, slashed his EPS outlook for the S&P, declaring that an earnings recession has arrived, not just for Q1 earnings, where EPS are now forecast to decline 2.2% Y/Y, the first drop in three years, and how now expects full year EPS to grow just 1%, down from 4.3%, as the kind of hockeystick rebound expected by consensus in the second half is unlikely to materialize.

Still, while Morgan Stanley revised its earnings numbers lower, surprisingly, its bull, base, and bear case year end price targets remain unchanged for one simple reason: the bank hiked its PE multiple target as “the lower rate environment provides support for higher year end target multiples”, i.e., the Fed comes to the rescue again.

Which brings up an interesting point: how much of the global, central-bank induced bear market of the past decade has been the result of earnings growth, and how much due to multiple expansion?

The answer come for a recent report by Goldman, which warns that while a market crash is unlikely, returns going forward are likely to be low from here because valuations are now unlikely to rise and the bulk of prospective returns are likely to come from earnings.

Which goes back to our point: how much of the price change since the market lows has been from earnings, and how much is PE expansion? According to Goldman, in the US, the answer is roughly half and half – valuation expansion has contributed 46% to the price increase since the financial crisis which the bank says “owes to a great extent to years of falling interest rates and QE. This is odd, because during a normal bull market, and the past decade has been anything but, P/E expansion would typically drive around 25% of bull market returns.

Yet in a truly stunning observation, while in the US earnings have been responsible for roughly half of the 303% rise in stock prices, in Europe valuation expansion has been the sole driver of the 111% growth in equity prices. In other words, Europe has seen no earnings growth over the past decade!

In other words, whereas in the US the Fed was responsible for roughly half the upside in the market in the past decade (assuming low rates did not also benefit earnings, which they did) in Europe if it weren’t for central banks, there would have been no market appreciation at all since the March 2009 lows.

Incidentally, this is not good news now that profits have peaked, and as Goldman concludes, “we see little reason for valuation expansion to be a major driver of returns from here. At the same time, our earnings forecasts remain low in every region, marking a sharp downturn from last year, particularly in the US.”

via ZeroHedge News http://bit.ly/2SahEQV Tyler Durden