Arrested Mohamed Abrini Confesses To Being Third Man At Airport Bombing

Ever since explosions ripped through the Brussels airport on the morning of March 22, which together with a separate bomb attack at the Maelbeek metro station killed 32 and wounded dozens, in a terrorist attack which took the lives of two of the perpetrators Brahim El Bakraoui, 30, and his brother Khalid, 27, shown in the left and center on the airport photo below…


… local authorities had been on the hunt for the third bomber, the one also known as “the man in the hat.”


As of moments ago, he has been officially found.

According to local authorities, Mohamed Abrini – who was arrested on Friday in the Anderlecht district of Brussels  has confessed to being the third attacker at the Brussels national airport, Belgium’s federal prosecutors said on Saturday in a news release.


“After being confronted with the results of the different expert examinations, he confessed his presence at the crime scene. He explained having thrown away his vest in a garbage bin and having sold his hat afterwards,” the prosecutors said as the WSJ reported moments ago

The prosecutors said Abrini told them he threw away his vest in a garbage bin and later sold his hat.

Abrini, a 31-year-old Belgian-Moroccan, had been among Europe’s most wanted and was considered “armed and dangerous.” His arrest means that Belgian authorities now have at least two people, along with Salah Abdeslam, who have been directly tied to the attacks in Paris.

Abrini was seen with Abdeslam at a gas station between Brussels and Paris two nights before the Paris massacre. His DNA and fingerprints were lifted from a vehicle used in the Paris attacks, spokesmen for the Belgian federal prosecutor said.

On Thursday, Belgian police released a series of surveillance images showing the third man leaving the airport in Zaventem, then heading west into the Brussels district of Schaerbeek, over the course of two hours following the bombings.  Last month, two friends told CNN that Abrini was a regular customer at a cafe in Brussels called Les Beguines. They said he used to visit in the evenings for a drink, and described him as a tall, slim, quiet man who would keep to himself.

“For French investigators, this can be very big,” said CNN’s Nic Robertson. “This gives you a much stronger position to be in to get to the truth … to (track) other terrorists on the run down,” Robertson said. “And also to understand precisely what happened in Paris.”

But according to Peter Bergen, a leading terrorism expert and CNN analyst, Abrini’s arrest puts pressure on Belgian authorities to find out information quickly.

Days after Abdeslam was arrested, terrorists carried out twin attacks in Brussels. A senior counterterrorism official has said the 26-year-old was probably going to be part of an attack planned by the same ISIS cell. “Hopefully, Belgian counterterrorism officials won’t make the same mistake they made last time with Abdeslam,” said Bergen, vice president of the New America public policy institute. “They didn’t ask him about what else was in the pipeline.”

As CNN adds, according to a European police cooperative known as ENFAST, video showed Abrini with Abdeslam on November 11, two days before the massacre in the French capital. The same Renault Clio that Abrini drove was used in those attacks, ENFAST reports. Abdeslam told authorities he drove a car of that same make and model to the Stade de France — where suicide bombers detonated explosives outside a soccer game — and abandoned it. He then wandered into the subway and allegedly “contacted one person,” that being Abrini, CNN’s French affiliate BFMTV reported.

Abrini has a criminal record of violent theft. He also had a younger brother killed while fighting for ISIS in 2014, and he was in Istanbul, Turkey, briefly last summer and possibly in Syria. Relatives have insisted Abrini was in Brussels the night of the Paris attacks.

More than four months later, Belgian state broadcaster VRT reports Abrini was still in the Belgian capital — playing a hands-on role in the terror attacks there.

Investigators also are trying to determine whether a man arrested in a separate operation Friday was part of the second attack – at a Brussels metro station – an hour later. Osama Krayem – also known as Naim al Hamed – might be the second person “present at the time of the attack at the Maelbeek subway station,” Belgian federal prosecutor’s spokesman Eric Van der Sypt said.

Krayem, has been described as “very dangerous and probably armed” in a bulletin circulated by French investigators to European security services hours after the Brussels attacks. A French source close to the investigation into ISIS’ terror network in France and Belgium told CNN that European security agencies believe Hamed, or Krayem, had an operational role in the Brussels attack.

Krayem was a resident of Malmo, Sweden, and was known to Swedish counterterrorism services and suspected to have joined ISIS in Syria, Magnus Ranstorp, a Swedish counterterrorism expert at the Swedish National Defense College, told CNN.

Krayem posted images of himself from Syria with automatic weapons and the ISIS flag, Ranstorp said. The final post he made on Facebook from Syria was in January 2015, Ranstorp said.

It remains to be seen if the capture of Abrini and Krayem, who some believe may be last surviving members of the Brussels cells, will lead to an end of terrorism in the hear of Europe or if it will merely provoke even more attacks now that any remaining cell members scramble to inflict as much damage before local authorities are successful in fully dismantling the deadliest terrorist cell in European history.

Meanwhile, police operations continue: the prosecutor’s office revealed Saturday that a sixth person. identified as Bilal Al Makhoukhi, had also been arrested Friday, though it wasn’t clear exactly where.

Officials said there were ongoing police operations into the night. The street where Abrini was arrested was cordoned off early Saturday. Forensic teams were still at work, according to a CNN crew at the scene. CNN’s Frederik Pleitgen reported that authorities had removed bags of evidence from a residence.

via Zero Hedge Tyler Durden

Janet’s Jabbering Leaves Investors “On The Edge Of A Live Volcano”

Submitted by David Stockman via Contra Corner blog,

You have to wonder whether there are any carbon units left in the casino. The robo traders and HFTs, of course, have an attention span of 10 milliseconds. So their utter lack of concern about context, fundamentals and history is readily explainable. They never get around to it.

But somebody besides the machines is getting paid the big bucks on Wall Street. Do they really think that dancing on a live volcano, as the estimable Ambrose Evans-Pritchard put it recently, is not semi-suicidal?

Yet for the last 18 months that is exactly what they have been doing. The S&P 500 closed today exactly where it first crossed in November 2014. In the interim, it’s been a roller-coaster of rips, dips, spills and thrills.
^SPX Chart

^SPX data by YCharts

The thing is, however, this extended period of sideways churning has not materialized under a constant economic backdrop; it does not reflect a mere steady-state of dare-doing at the gaming tables.

Actually, earnings have been falling sharply and macroeconomic headwinds have been intensifying dramatically. So the level of risk in the financial system has been rocketing higher even as the stock averages have oscillated around the flat-line.

Thus, GAAP earnings of the S&P 500 in November 2014 were $106 per share on an LTM basis compared to $86.44 today. So earnings are down by 18.5%, meaning that the broad market PE multiple has escalated from an already sporty 19.3X back then to an outlandish 23.7X today.

And the latter is by no means reflective of an expected stick save turnaround in earnings. Analysts have been furiously marking down their estimates for Q1 for weeks now. At the latest reading profits are projected to fall by 10%, marking the fifth straight quarter of decline.

-1x-1 (8)

Always and everywhere, such persistent profit collapses have signaled recession just around the corner. And there are plenty of macro-economic data points signaling just that.

For instance, total US business sales have fallen by 5.1% since mid-2014—-even as inventories have soared. This means that while Wall Street speculators have been dancing on the edge of the volcano for 18 months, the US economy’s tepid rebound has been petering out.

Indeed, there has never been an inventory ratio surge of the magnitude shown in the chart below—-from 1.29X to 1.40X in 18 months—- that did not signal a recession dead ahead.

During the stock market’s most recent dead-cat bounce, the signals that the US economy is drifting into a downturn have only grown more frequent and intense. For instance, class 8 truck orders—-a classic leading indicator—–are now plunging.  At the same time, inventories haven’t been this high since early 2007.



Likewise, rail car loadings were down 13.7% year-to-date compared to 2015. As is evident in the chart below, the plunge in shipments is now approaching the depths of 2008-2009. Perhaps that is why some market technicians are fretting about the non-confirmation of the rally by the transports.

Then there is the latest reading on GDP by the unusually accurate running gauge published by the Atlanta Fed. As of this morning, there isn’t any. Q1 GDP is now forecast to come in at stall speed or just 0.1%. Not even the Chinese can measure things that finely!

Evolution of Atlanta Fed GDPNow real GDP forecast

In light of these fundamentally negative trends it might be wondered why in the world every attempt at correction in the casino gets short-circuited in another dead-cat bounce. Presumably, the remaining carbon units would recognize the danger at some point, thereby precipitating a sell-off that would eventually trigger a spasm of liquidation by the machines.

Needless to say, the latter will happen. It’s only a matter of time and the right catalyst.

But in the interim, there can be no doubt as to what explains the stock market’s treacherous dance on the crater’s edge. To wit, honest price discovery in the financial markets was destroyed by heavy-handed central bank intrusion long ago. So what remains is simply episodic spasms of stock buying in response to open mouth actions emanating from the Eccles Building.

In that context, Janet Yellen’s risible proclamations and recurrent bouts of incoherence play a major role. She let loose of a patented barrage of Keynesian jabberwocky at the Fed heads soirée yesterday.

In fact, her response to a question about whether the Fed is stimulating a dangerous bubble was so unattached from reality that it deserves to be quoted in full. If there were a modicum of honesty left in the casino they would be stampeding for the exists on the basis of this gem alone:

So I would say the US economy has made tremendous progress in recovering from the damage from the financial crisis. Uh, slowly but surely the labor market is healing. Um, for well over a year we’ve averaged about  225,000 jobs a month. The unemployment rate now stands at 5%.


So, we’re coming close to our assigned congressional goal of maximum employment. Um, inflation which, um, my colleagues here Paul and Allen um, spent much of their time as chair um, bringing inflation down from unacceptably high levels. For a number of years now inflation has been running under our 2% goal and we’re focused on moving it up to 2%. Um, but we think that it’s partly transitory influences, namely declining oil prices, and uh, the strong dollar that are responsible for pulling inflation below the 2% level we think is most desirable. So, I think we’re making progress there as well, and this is an economy on a solid course, um, not a bubble economy. Um, we tried carefully to look at evidence of potential financial instability that might be brewing and some of the hallmarks of that, clearly overvalued asset prices, high leverage, rising leverage, and rapid credit growth. We certainly don’t see those imbalances. And so although interest rates are low, and that is something that could encourage reach for yield behavior, I wouldn’t describe this as a bubble economy.”

With 102 million adult Americans not employed and only 48 million of them retirees and spouses, it is amazing that Yellen still has the audacity to cite the U-3 unemployment rate as indicative of anything meaningful about the state of the economy; and let alone to say that it is indicative of “tremendous progress” and that the US economy is now “close to our assigned congressional goal of maximum employment”.

That’s just paint-by-the-numbers ritual incantation. If the Fed weren’t ensnared in a Keynesian time-warp the completely specious U-3 metric would never even be mentioned. What might be mentioned, instead, is that employment in the core sectors of productivity and wealth creation—–mining, energy, manufacturing and construction—-has been declining since the turn of the century.

Goods Producing Economy Jobs- Click to enlarge

Nor would they babble endlessly about inflation being possibly not what it seems and less than they want. It is self-evident that the price of goods is been repressed by massive excess capacity and cheap labor in the world market and that the Fed has no power or reason to fight it.

At the same time, the US economy has plenty of inflation—well more than 2% per annum—for items like shelter, health care, education and other services. These are the items which are eroding middle class living standards—-even as the ship of fools in the Eccles Building keeps gumming about undershooting their inflation target.

In fact, during the last 15 years, the CPI for durable goods has declined at a 1.0% annual rate. By contrast, the index for shelter rose by 2.6% annually, while medical costs increased by 3.8% per year and education prices by just under 6.0%. In today’s open world economy, the Fed’s capacity to guide the blended average consumer inflation rate precisely to 2.00% is somewhere between zero and none.

Or as Yellen said yesterday “for a number of years now inflation has been running under our 2% goal and we’re focused on moving it up to 2%.”

Please don’t!

But what takes the cake is her risible insistence that there are no signs of financial instability, over-valued assets or “high leverage, rising leverage and rapid credit growth”.

Let’s see. US corporate debt as a percent of GDP is at an all-time high, and nearly one-third above where it stood on the eve of the Great Financial Crisis. This is not “rising leverage”?

And on the matter of reaching for yield, just exactly who has been buying trillions of corporate debt that now reflects the highest leverage ratios ever?

In fact, central bank interest rate repression has elicited a tsunami of corporate debt that will now come washing back to shore in a high tide of redemptions during the balance of this decade. To wit, in 2006 there was $4.6 trillion of US corporate bonds outstanding (IG and HY combined) compared to $8.2 trillion at present. Not only has the total soared by 77% during the last decade, but during the next five years $4.1 trillion of these bonds will mature.

In short, unless the Fed has miraculously outlawed the business cycle, a historically unprecedented level of maturing debt will rollover right into the next recession. And under conditions of swooning corporate sales and cash flow, a lot of the current HY portion of  this $4 trillion mountain will carry a triple hook at the time, while a not inconsiderable portion of the marginally investment grade bonds (BBB) will tumble into the HY ratings categories.

Needless to say, refinancing this mountain of deteriorating debt in the midst of a cyclical downturn will bestow on the concept of “tightening credit conditions” a whole new definition.

So there is a colossal problem with corporate leverage. But when it comes to assessing financial risk, our Keynesian school marm is apparently blind as a bat.

Likewise, on the alleged absence of “high debt”, presumably total US credit outstanding at $62 trillion and counting isn’t it.

Why in the world is Yellen so complacent? The Great financial crisis was widely blamed on too much debt, but there has not been a wit of deleveraging in the US economy as a whole since then.

The aggregate US leverage ratio still stands at 3.4X or roughly two turns higher than its pre-1980 average of 1.5X. Stated differently, the US economy is now carrying an implied $35 trillion of extra debt compared to the historic norm that prevailed during the century prior to 1980. During that bygone era, the US economy grew on average at nearly twice the anemic 1.6% rate that has materialized since the turn of the century.

Yet Simple Janet sees no signs of excess or bubbles. For crying out loud, the $62 trillion of debt reported in the Fed’s own flow-of-funds data is the very embodiment of a debt bubble. And one that is as alien to the free market as are unicorns to the animal kingdom.

The evidence that Yellen is clueless or a blatant liar is endless. Junk bonds outstanding currently total $1.8 trillion and are nearly double where they stood on the eve of the 2008 meltdown. Is Yellen unaware that junk bonds are used almost entirely to fund speculations like LBOs, leveraged recaps, stock buybacks and ultra risky investments in cyclical industries like the oil and gas shale patch?

In short, the casino gamblers keep dancing on the edge of a live volcano in the belief that Yellen has their back. In fact, her statements this week prove once again that she is right there on the edge with them – jabbering incoherently.

One of these days, even the silicon units in the casino will take notice. The dancing will then turn into diving for the doors.

via Zero Hedge Tyler Durden

Stunning Clip Reveals Why You Shouldn’t Trust Anything You See On Television

In recent years, many have voiced increasing concerns with their ability to place trust in official data, and have faith in conventional narratives.

And for good reason: just yesterday a University of Chicago finance professor, while being interviewed at the Ambrosetti Forum, said that it is all about preserving confidence and trust in a “rigged game”: “if people are told enough by smart people on television that the economy has been fixed, and the market is a reflection of the fundamentals, then they’ll blindly support anything the Fed does.”

“I think that people are willing to support capitalism if capitalism is providing growth, providing better income for everybody, and also if it has some at least appearance of being fair. Unfortunately, none of these conditions are in place today in the United States. I think that growth is limited, and disproportionately goes to a small fraction of the population. And there is a sense that the game is rigged.”

But while the saying “don’t believe anything you read” and “trust but verify” may be more appropriate now than ever, the following video is an absolute stunner in its revelation of just how deep “real-time” media deception can truly go.

In a recently published paper by the Stanford lab of Matthias Niessner titled “Face2Face: Real-time Face Capture and Reenactment of RGB Videos“, the authors show how disturbingly easy it is to take a surrogate actor and, in real time using everyday available tools, reenact their face and create the illusion that someone else, notably someone famous or important, is speaking. Even more disturbing: one doesn’t need sophisticated equipment to create a “talking” clone – a commodity webcam and some software is all one needs to create the greatest of sensory manipulations.

From the paper abstract:

We present a novel approach for real-time facial reenactment of a monocular target video sequence (e.g., Youtube video). The source sequence is also a monocular video stream, captured live with a commodity webcam. Our goal is to animate the facial expressions of the target video by a source actor and re-render the manipulated output video in a photo-realistic fashion. To this end, we first address the under-constrained problem of facial identity recovery from monocular video by non-rigid model-based bundling. At run time, we track facial expressions of both source and target video using a dense photometric consistency measure. Reenactment is then achieved by fast and efficient deformation transfer between source and target. The mouth interior that best matches the re-targeted expression is retrieved from the target sequence and warped to produce an accurate fit. Finally, we convincingly re-render the synthesized target face on top of the corresponding video stream such that it seamlessly blends with the real-world illumination. We demonstrate our method in a live setup, where Youtube videos are reenacted in real time.

In simple English: famous “talking heads” speaking, chatting, interacting on TV can be practically anyone masquerading as said celebrity, and due to the real time conversion, they can talk, react, answer questions and generally emote so that the deception is flawless and totally convincing.

So striking is the real time effect of the conversion, the creators of this algorithm felt the need to clarify their intentions:

This demo video is purely research-focused and we would like to clarify the goals and intent of our work. Our aim is to demonstrate the capabilities of modern computer vision and graphics technology, and convey it in an approachable and fun way. We want to emphasize that computer-generated videos have been part in feature-film movies for over 30 years. Virtually every high-end movie production contains a significant percentage of synthetically-generated content (from Lord of the Rings to Benjamin Button). These results are hard to distinguish from reality and it often goes unnoticed that the content is not real. The novelty and contribution of our work is that we can edit pre-recorded videos in real-time on a commodity PC. Please also note that our efforts include the detection of edits in video footage in order to verify a clip’s authenticity. For additional information, we refer to our project website (see above). Hopefully, you enjoyed watching our video, and we hope to provide a positive takeaway 🙂

Sadly, while the creators of this stunning technology are forthcoming about their intentions, we doubt many others, those who seek to manipulate and deceive the mass population by ways of the one medium everyone can relate to, namely TV, will be.


And to appreciate just how profoundly deceptive this technology can (and will) be for mass media manipulative purposes, watch the shocking 6 minute clip below.

via Zero Hedge Tyler Durden

Currency Analysis – New Zealand Dollar versus US Dollar (Video)

By EconMatters

We look at the “Kiwi”/USD Currency Cross in this video. We delve into the history of the New Zealand currency, with a look at the technical support and resistance levels throughout the last 20 years.

© EconMatters All Rights Reserved | Facebook | Twitter | YouTube | Email Digest | Kindle 

via Zero Hedge EconMatters

The Global Bubble Has Burst – “Will Tear At The Threads Of Society”

Excerpted from Doug Noland's Credit Bubble Bulletin blog,

Bubble Economy or Not?

"The US economy has made tremendous progress in recovering from the damage from the financial crisis. Slowly but surely the labor market is healing. For well over a year, we have averaged about 225,000 jobs (gains) a month. The unemployment rate now stands at 5%. So, we’re coming close to our assigned congressional goal of maximum employment. Inflation which my colleagues here, Paul (Volcker) and Alan (Greenspan), spent much of their time as chairmen bringing inflation down from unacceptably high levels. For a number of years now, inflation has been running under our 2% goal, and we are focused on moving it up to 2%. But we think that it’s partly transitory influences, namely declining oil prices and the strong dollar that are responsible for pulling inflation below the 2% level we think is most desirable. So, I think we’re making progress there as well. This is an economy on a solid course – not a bubble economy. We tried carefully to look at evidence of potential financial instability that might be brewing and some of the hallmarks of that – clearly overvalued asset prices, high leverage, rising leverage, and rapid credit growth. We certainly don’t see those imbalances. And so although interest rates are low, and that is something that can encourage reach for yield behavior, I certainly wouldn’t describe this as a bubble economy.”


-Janet Yellen, April 7, 2016, International House: “A Conversation with Janet Yellen, Ben Bernanke, Alan Greenspan and Paul Volcker”

From my analytical perspective, unsustainability is a fundamental feature of “Bubble Economies.” They are sustained only so long as sufficient monetary fuel is forthcoming. Over time, such economies are characterized by deep structural maladjustment, the consequence of years of underlying monetary inflation. Excessive issuance of money and Credit are always at the root of distortions in investment and spending patterns. Asset inflation and price Bubbles invariably play central roles in latent fragility. Risk intermediation is instrumental, especially late in the cycle as the quantity of Credit expands and quality deteriorates. Prolonged Credit booms – the type associated with Bubble Economies – invariably have a major government component.

Japanese officials in the late-eighties recognized the risks associated with their Bubble economy and moved courageously to pierce the Bubble. Outside of that, few policymakers have been even willing to admit that Bubble Dynamics have taken hold in their systems. Apparently, only in hindsight did U.S. monetary authorities recognize the Bubble component that came to exert pernicious effects on the U.S. economy in the late-eighties, later in the nineties and again in the 2002-2007 mortgage finance Bubble period. I would strongly argue that the U.S. has been in a “Bubble Economy” progression for the better part of thirty years, interrupted by financial crises relatively quickly resolved by aggressive governmental reflationary measures. And each reflation has been more egregious than the previous, with resulting booms exacerbating underlying financial and economic maladjustment.

Chair Yellen stated that the U.S. “is an economy on a solid course – not a bubble economy” – “we tried carefully to look at evidence of potential financial instability that might be brewing.” That the Fed has for seven post-crisis years clung to near zero rates and a $4.5 TN balance sheet (with reassurances that it can grow larger) argues against such claims. That the Fed rather abruptly backed away from its 2011 “exit strategy” and repeatedly postponed “lift off” due to market instability rather clearly demonstrates the Fed’s underlying lack of confidence in the soundness of the markets and real economy.

I have argued that the more systemic a Bubble the less obvious it becomes to casual observers. By the late-nineties, the “tech” Bubble had turned rather conspicuous (although the Fed and the bulls still rationalized with claims of New Eras and New Paradigms). While having quite an impact on the technology, telecom and media sectors, these relatively narrow Bubble distortions had yet to cultivate more general structural impairment throughout the economy.

The mortgage finance Bubble was a much more powerful Bubble Dynamic, clearly in terms of Credit expansion, economic imbalances and systemic impairment. Alan Greenspan nonetheless argued that since real estate was driven by local factors, a national housing Bubble was implausible. Only in hindsight was the degree of systemic “Bubble Economy” maladjustment recognized.

It’s now been seven years since my initial warning of an inflating “global government finance Bubble” – the “Granddaddy of All of Bubbles.” This Bubble did become systemic on a globalized basis, ensuring the strange dynamic of a somewhat less than conspicuous global Bubble of historic proportions. Over the past eight years, global Credit growth has been unprecedented – driven by an extraordinary expansion of government borrowings. The inflation of central bank Credit has been simply unimaginable. Global asset inflation has been extraordinary – especially in securities markets and real estate.

The expansion of Chinese Credit has been greater than I previously imagined possible. Hundreds of billions – perhaps Trillions – have flowed out of China, with untold amounts flowing into the U.S. (real estate, securities and M&A). For that matter, I believe huge inbound flows have been inflating U.S. securities and some real estate markets, especially “money” fleeing bursting EM Bubbles.

Indeed, extraordinary international financial flows are fundamental to the global government finance Bubble thesis, flows that I believe are increasingly at risk. Along with Bubble flows from China and out of faltering EM, I believe speculative flows grew to immense proportions. And, importantly, the massive global pool of destabilizing speculative finance has been inflated by the proliferation of leveraged strategies. Chair Yellen may not see “high leverage,” yet on a globalized basis I strongly believe speculative leverage reached new heights over recent years. “Carry trade” speculation – borrowing in low-yielding currencies (yen, swissy, euro, etc.) – has proliferated over recent years, especially after the 2012 “whatever it takes” devaluations orchestrated by the European Central Bank and Bank of Japan.

How much of the resulting speculation-related liquidity ended up flowing into U.S. markets and the American economy? What are the consequences – to the markets and overall economy – if these flows stop – or even reverse? Moreover, I suspect unprecedented amounts of leverage have accumulated throughout the U.S. Credit market – Treasuries, corporates and munis. And Wall Street has definitely been hard at work in recent years creating all varieties of instruments, products and strategies that benefit from the combination of ultra-low rates and leverage (certainly including higher-yielding equities).

Over time, Bubble Economies become increasingly vulnerable to economic stagnation, Credit degradation and asset price busts. Bubbles are fueled by Credit excesses that distort risk perceptions and resource allocation. Credit and asset price inflation will incentivize speculation, another key dynamic ensuring misallocation and malinvestment. In the end, Bubbles redistribute and destroy wealth. Major Bubbles will tear at the threads of society.

It remains my view that the global Bubble has burst. The recent rally in global risk markets restored hope that things remain central bank-induced business as usual. This week provided support for the view that the respite from heightened volatility and vulnerability has likely run its course.

Global equities were under pressure this week, while safe haven bonds and gold rallied. Japan’s Nikkei dropped 2.1%, increasing 2016 losses to 16.9%. The German DAX fell 1.8%, boosting y-t-d declines to 10.4%. Spanish stocks were down 2.0% (down 11.7%), and Italian shares fell 1.5% (down 18.3%). Ten-year German bund yields dropped to nine basis points.

Ominously, global financial stocks continue to trade poorly. After the recent notably unimpressive rally, selling of global bank and financial shares has resumed. The STOXX Europe 600 Bank index sank 3.5% this week, pushing 2016 losses to 24.7%. This week’s 3.1% decline boosted Italian bank stock y-t-d losses to 35.4%. Deutsche Bank has returned to February lows (down 34%). European bank stocks generally are quickly approaching February lows. Italian bank stocks traded this week slightly below lows from the February tumult period. Hong Kong’s Hang Seng Financial index was down 2.0% this week (down 12.6%). Here at home, U.S. bank stocks (BKX) dropped 3.6%, increasing y-t-d declines to 14.7%. The security broker/dealers (XBD) sank 6.2%, increasing 2016 losses to 13.7%. Goldman Sachs closed Friday at about $150, after trading as high as $200 this past November.

I would argue that currency market instability has negative portents as well. The Japanese yen surged 3.2% this week to a 17-month high. The yen gained about 5% versus the Australian dollar, New Zealand dollar and Mexican peso. It's worth noting that the Chilean peso, Colombian peso, Turkish lira and Brazilian real were all under pressure, as the recent EM rally appears increasingly vulnerable.

A few headlines were telling: “Japanese Yen Trade Mystifies and Could Penalize” (CNBC); “Stunning Rally in Japanese Yen Risks Too Little Faith in BoJ Policy Genius” (Australian Financial Review); and “Japan Faces Trouble Controlling Yen Rise” (Reuters).

It is no coincidence that the yen is rising as global financial stocks are sinking. Both are indicative of market fears that global policymakers are losing control. The yen has rallied significantly in the face of the BOJ imposing punitive negative interest rates. The euro has also risen to a six-month high in spite of the ECB’s surprise one-third increase in its QE program.

Keep in mind that both the BOJ and ECB boosted stimulus, as the Fed assumed a more dovish posture, in a concerted response to heightened global market instability. These measure did incite a robust short squeeze, an unwind of bearish hedges and a general rally in global risk markets. Yet markets are already again indicating waning confidence that policymakers actually have things under control.

The Japanese have lost control of the yen, which has hurt prospects for Japan’s equities and overall economy. It has also turned various leveraged strategies on their heads, portending pressure on the global leveraged speculating community more generally. Meanwhile, the half life of Draghi’s latest “shock and awe” has proved alarmingly short. Boosting the ECB’s QE program reversed what had been a significant widening of Credit spreads throughout Europe. It’s worth noting that European periphery spreads (to German bunds) widened meaningfully this week. Portuguese spreads surged 48 bps and Greek spreads widened 41 bps. Italian spreads widened 13 bps and Spanish spreads increased 12 bps.

The U.S. economy has all the characteristics of a Bubble economy – one increasingly vulnerable on myriad fronts.


via Zero Hedge Tyler Durden

U.S. Government Reveals 3,000 Ton Delivery Of Weapons And Ammo To Al-Qaeda-Linked Syrian Rebels

By Moon of Alabama

U.S. Delivers 3,000 Tons Of Weapons And Ammo To Al-Qaeda & Co in Syria

The United States via its Central Intelligence Agency is still delivering thousands of tons of additional weapons to al-Qaeda and others in Syria.

The British military information service Janes found the transport solicitation for the shipment on the U.S. government website Janes writes:

The FBO has released two solicitations in recent months looking for shipping companies to transport explosive material from Eastern Europe to the Jordanian port of Aqaba on behalf of the US Navy’s Military Sealift Command.

Released on 3 November 2015, the first solicitation sought a contractor to ship 81 containers of cargo that included explosive material from Constanta in Bulgaria to Aqaba.

The cargo listed in the document included AK-47 rifles, PKM general-purpose machine guns, DShK heavy machine guns, RPG-7  rocket launchers, and 9K111M Faktoria anti-tank guided weapon (ATGW) systems. The Faktoria is an improved version of the 9K111 Fagot ATGW, the primary difference being that its missile has a tandem warhead for defeating explosive reactive armour (ERA) fitted to some tanks.

The Janes author tweeted the full article (copy here).

One ship with nearly one thousand tons of weapons and ammo left Constanta in Romania on December 5. The weapons are from Bulgaria, Croatia and Romania. It sailed to Agalar in Turkey which is a military pier and then to Aqaba in Jordan. Another ship with more than two-thousand tons of weapons and ammo left in late March, followed the same route and was last recorded on its way to Aqaba on April 4.

We already knew that the “rebels” in Syria received plenty of weapons during the official ceasefire. We also know that these “rebels” regularly deliver half of their weapon hauls from Turkey and Jordan to al-Qaeda in Syria (aka Jabhat al-Nusra):

Hard-core Islamists in the Nusra Front have long outgunned the more secular, nationalist, Western-supported rebels. According to FSA officers, Nusra routinely harvests up to half the weapons supplied by the Friends of Syria, a collection of countries opposed to Assad, ..

U.S. and Turkey supported “rebels” took part in the recent attack on Tal al-Eis against Syrian government forces which was launched with three suicide bombs by al-Qaeda in Syria. This was an indisputable breaking of the ceasefire agreement negotiated between Russia and the U.S. It is very likely that some of the weapons and ammunition the U.S. delivered in December were used in this attack.

Millions of rifle, machine-gun and mortar shots, thousands of new light and heavy weapons and hundreds of new anti-tank missiles were delivered by the U.S.. Neither Turkey nor Jordan use such weapons of Soviet provenience. These weapons are going to Syria where, as has been reported for years by multiple independent sources, half of them go directly to al-Qaeda.

From historic experience we can be sure that the consequence of this weaponizing of takfiris will be not only be the death of “brown people” in the Middle East, but also attacks on “western” people and interests.

Skyscrapers falling in New York and hundreds of random people getting killed in Paris, Brussels, London and (likely soon) Berlin seem not enough to deter the politicians and “experts” that actively support this criminal war on Syria and its people.

* * *

via Zero Hedge Tyler Durden

Obama Administration Doesn’t Care Anymore, Releases Fast And Furious Documents

After four long years of ensuring the detail behind the US Government’s role in running guns to Mexico (aka “Fast and Furious”) never saw the light of day, the “most transparent administration in history” has finally released the requested documents to the House Oversight Committee. It is not lost on anyone that this is taking place well after it could do any significant damage to the Obama administration.

The release of the documents was ordered by a US District Court Judge Amy Berman Jackson on January 19th, ending a long saga that actually saw the House vote then Attorney General Eric Holder in contempt of congress for withholding requested information. Of course the DOJ decided not to prosecute itself on that matter.

As Politico reports, Justice Department spokesman Patrick Rodenbush confirmed that the administration does not plan to appeal. He argued that Jackson’s ruling validated Obama’s initial claim of privilege. As a reminder, Obama’s privilege claim was broad-ranging, seeking to cover not only internal deliberations about how to respond to congressional inquiries but also discussions about media strategy related to the congressional probes.

“The Department of Justice is pleased that the district court … continued to recognize that the deliberative process component of the executive privilege exists and was a valid basis for the Department to withhold certain documents when requested by the House in 2011. Although the Department disagrees with the district court’s conclusion that the privilege was overcome in this particular case by disclosures and statements made in other contexts, the Department has decided not to appeal the court’s judgment and has provided a production of documents to the House Committee on Oversight and Government Reform,” Rodenbush said in a statement.

Speaking of not prosecuting, while nothing will come of this as relates to criminal charges, it remains to be seen what other information the people will allow the government to completely sweep under the rug as if it never happened. 

So far, we know that in 2010 a US Border Patrol Agent was killed using a gun supplied by US as part of the program. We also know, as was more recently revealed, that a weapon owned by none other than “El-Chapo” was traced back to the program as well.

Republicans who had fought to get the upcoming disclosure for years, were delighted by the White House’s long overdue retreat. Darrell Issa (R-Calif.), who chaired the oversight panel when the dispute arose, called on Obama to explain his actions.

“After 4 years of objection and delay, President Obama has finally been forced to give up additional documents related to why senior Justice Department officials in his administration lied to Congress,” Issa said in a statement. “What we need from the President is an explanation of why he felt these documents couldn’t been seen by the American people and why there has been no real accountability for the officials involved. Was he protecting the failed gun-walking operation or the cover-up?”

As for Eric Holder who was US Attorney General from 2009 until 2015, when he quit to rejoin Covington & Burling, the law firm at which he worked before becoming Attorney General and whose clients have included many of the large banks Holder declined to prosecute for being “Too Big To Prosecute”, we doubt he will i) make a statement or ii) be in any way implicated once the full severity of the Fast and Furious docs is made public.

And finally, in yet another direct insult to the intelligence of Americans everywhere, the letter sent by the DOJ to Chairman of the House Oversight Committee Jason Chaffetz notifying him that the documents had been turned over, nearly four years after the Obama administration invoked Executive Privilege (said otherwise, we don’t care if we’re supposed to answer to you or not, we’re not telling you anything), ended the following way:

“Please do not hesitate to contact this office if we may provide additional assistance regarding this or any other matter”

Or visually:

via Zero Hedge Tyler Durden

French Riot Police In Tense Standoff Against Massive Labor Reform Protest: Live Webcast

Last week, when reporting on the first violent clashes between French police and protesters in the ongoing labor reform saga, we said that “police used tear gas to disperse thousands of angry activists across the nation, who are protesting new labor reforms.” According to the proposed reform states, employers would pay only 10% of overtime bonus, instead of the current 25%, and the local workers are angry.

In Paris the protest started in Place de la Nation, the same place where previous anti-labor rallies took place. The demonstrators threw bottles with flammable liquid and stones at police officers.  Video footage relayed on social media showed some hooded youths jumping on cars and taunting police. CGT chief Martinez played down reports of a dozen arrests, saying there was often a bit of trouble caused by “some people who have nothing to do with the issue”.

Last Thursday’s day of protest, the fourth in a month, “has been billed by local media as a make-or-break test of strength for President Francois Hollande, plagued by low popularity and a jobless rate stuck stubbornly above 10 percent as mid-2017 elections loom” and where anti-Euro frontrunner Marine Le Pen looms large. 

At issue is a proposed overhaul of France’s labor code, a set of regulations bosses claim deters recruitment. Critics say the reforms will lead to worse working conditions and more sackings. The reforms, due to be debated in parliament next week, would give employers more flexibility to agree in-house deals with employees on working time.

Today, the protest picks up where it left off last week, and as AFP reports, from 2,000 to 8,000 people took to the streets of the French capital. Students have been repeatedly rallying against labor law reforms recently proposed by Labor Minister Myriam El Khomri. The French authorities are desperately trying to battle high unemployment in the country, and have suggested cutting overtime pay for work beyond 35 hours.

As RT reports, more tear gas has been deployed by riot police against a massive rally in Paris denouncing recently proposed labor reforms. Protests have recently swept the whole of France, with a Saturday rally in Rennes also taking a violent turn.

Hundreds of protesters were seen marching through the streets of Paris, some of them setting off firecrackers.

Later, a stand-off between rows of riot police hooded youngsters took place in central Paris, with each side taking turn to advance on the other. The hooded protesters were throwing stones at the police who responded with more tear gas.

The protest in the French capital started on Place de la Nation, the same spot where previous anti-labor rallies took place. A heavy police presence has been reported in the area. “Still no fear” and  “Democracy, where are you?” were written on demonstrators’ banners.

It wasn’t just Paris: about 15,000 people took to the streets of Toulouse, according to local press. In Nantes demonstrators broke windows of a local shop and set it on fire; tear gas was also deployed. About 15,000 people took to the streets of Toulouse, according to local press. In Nantes demonstrators broke windows of a local shop and set it on fire; tear gas was also deployed.

But back to Paris, where the situation is tense as can be seen on the following live feed showing the ongoing standoff between riot police and protesters.

via Zero Hedge Tyler Durden

Indiana Is Latest State to Pass Restrictive Abortion Bill Claiming Safety

The American Civil Liberties Union and Planned Parenthood filled suit against the state of Indiana over the recently passed law that bans abortions sought for genetic disorders, such as Down syndrome.

Republican Governor Mike Pence’s office believes the bill works as a safety measure and “enhances protection for the unborn.

But denying a woman’s access to an abortion, the lawsuit counters, counts as an “undue burden” against her fundamental rights.

Indiana is the latest state to have conservatives legislators pass restrictive abortion laws under the pretense of safety. Former Reason TV producer Amanda Winkler covered a similar situation in Virginia when the Board of Health approved facilities regulations to close abortion clinics in the state.

from Hit & Run