Month: June 2014

In a surprise announcement, several hours ago Spain’s Prime Minister Rajoy declared that Spain’s King Juan Carlos is abdicating after almost 40 years on the throne and his son Prince Felipe will succeed him. “His majesty, King Juan Carlos, has just communicated to me his will to give up the throne,” Rajoy said. “I’m convinced this is the best moment for change.”

In retrospect, the move is perhaps not all that surprising: as Reuters recalls, once popular Juan Carlos, who helped smooth Spain’s transition to democracy in the 1970s after the Francisco Franco dictatorship, has lost public support in recent years due to corruption scandals and gaffes. His daughter, Princess Cristina, and her husband, Inaki Urdangarin, are under investigation in a corruption case. Both deny any wrongdoing. A judge in Palma de Mallorca is expected to decide soon whether to put Urdangarin on trial on charges of embezzling 6 million euros in public funds through his charity.

Based on a January poll by Sigma Dos, 62% of Spaniards were in favor of the king stepping down, compared with “only” 45% a year earlier. They just got their wish.

The 76-year-old king, whose health is failing and has had five operations in two years, including hip replacement surgery, is stepping down for personal reasons, Rajoy said.

Since Spain does not have a precise law regulating abdication and succession, Rajoy also said that his cabinet would meet very soon to set out the steps for Prince Felipe to take over as Felipe VI.

While we await for details from Carlos’ full statement which has just begun, one headline that has flowed through is that “Spain has been scarred by economic crisis.”

Luckily for the King, he has not. Indeed, as Reuters adds “the country is just pulling out of a difficult and long recession that has seen faith in politicians, the royal family and other institutions all dwindle.

Felipe, 46, has had an increasingly important role in ceremonial events in the past year and has not been stained by the corruption case involving his sister and her husband.

 

Juan Carlos was once beloved for his common touch and was seen as much more accessible than the British royals.

 

In 2012, at the height of Spain’s financial crisis, the king fell and broke his hip during an elephant-hunting trip in Botswana. The lavish privately funded safari was secret until his accident and came at a time of particularly harsh public spending cuts.

And on to the hope and change: Prince Felipe has a positive rating of 66 percent and most Spaniards believe the monarchy could recover its prestige if he took the throne, according to the poll. Felipe married divorced journalist Leticia Ortiz in 2004 and they have two daughters.

via Zero Hedge http://ift.tt/1pzoAWI Tyler Durden

It took a precisely 0.1 beat in the Chinese Manufacturing PMI over the weekend (50.8 vs Exp. 50.7) for the USDJPY and the Nikkei to forget all about last week’s abysmal Japanese economic data and to send the Nikkei soaring by 2.1% to its highest print in 5 months. Subsequent overnight weakness from Europe, where the Eurozone Final May Manufacturing PMI dropped again from 52.5 to 52.2, below the 52.5 expected, served simply to push bunds higher back over 147.00, if not do much to US equities which as usual continue their low volume “the music is still playing” melt-up completely dislocated from all newsflow and fundamentals (because just like over the past 5 years, “there is hope”).

Looking at Asia, late on Friday, the State Council delivered one-half of that, with an announcement that it will expand its targeted RRR cuts to those financial institutions who have met certain lending ratios to the agricultural and small business sectors. This is the second tweak to reserve ratios since the PBOC cut the RRR for rural lenders in April. DB’s Chinese economist thinks that the expansion of this ‘targeted’ RRR cut should not be read as a prelude to a system-wide RRR cut, nor a drastic change in the stance of monetary policy. Li believes it simply reflects the government’s intention to encourage more resources to be made available for areas which have difficulty accessing capital and facing a high cost of funding.

There has been some consternation after over the weekend the Telegraph’s AEP noticed a hint in the CSJ that the PBOC may monetize debt, but there has really been no word yet on bond purchases following the China Securities Journal article last week suggesting that China Development Bank could issue below-market rate bonds which would be purchased by state-affiliated institutions.

Moving on to this Thursday’s ECB meeting, expectations appear to have been raised to very elevated levels. For credibility purposes the ECB would need to backstop SME lending for more than one year, but the bottom line is the size of what the ECB need to backstop to hit its objective of boosting lending to businesses and in particular SMEs is not that large. So we’ll have to see whether they deliver enough to help sentiment. The reality is that the market now expects QE at some point and the success of the meeting might depend on whether Draghi leaves the door open for it in his press conference.

In terms of the wider market’s expectations, of the 50 economists surveyed by Bloomberg, 44 expect the ECB to become the first major central bank to  take interest rates into negative territory by cutting its deposit rate. All but 2 of 58 respondents said the benchmark rate would also be reduced. Germany’s Spiegel suggested that the ECB is considering new longer-term LTROs although the type of rate and a number of variables are still being debated internally. The FT reported late on Friday that the Bundesbank’s Weidmann is planning to support the ECB’s proposals to ease lending constraints on smaller businesses but his vote for rate cuts is thought to be more finely balanced.

Since today’s market volumes are lower than usual with China and Hong Kong closed, expect the equity levitation to proceed according to the central plan, even with the US Mfg ISM and construction spending on the table, which will serve to boost stocks whether it beats or misses.

Bulletin headline summary from RanSquawk and Bloomberg

• A low inflation reading out of Germany and mixed Eurozone PMIs saw European equities reverse opening gains and send Bunds back above 147.00.
• Treasuries ease in overnight trading after last week’s rally that pushed 7Y, 10Y and 30Y yields to new YTD lows; markets waiting for ECB Thursday amid expectations of additional accommodation, U.S. payrolls report Friday.
• From negative interest rates to conditional liquidity for banks, Draghi and colleagues have signaled all options are up for discussion when they meet on June 5
• Data tomorrow may reinforce the view that action is needed, with economists predicting a grim mixture of too-low inflation and unemployment near a record
• Obama will propose cutting greenhouse-gas emissions from the nation’s power plants by an average of 30% from 2005 levels; in a conference call yesterday, Obama dismissed complaints that the rule will drive up electricity prices, and told the Democrats listening: “Please go on offense”
• Obama’s administration defended itself against accusations that it made dangerous concessions to terrorists and failed to give Congress adequate notice of its initiative to secure the release of Army Sergeant Bowe Bergdahl from the Taliban
• Russia gave Ukraine an extra week to pay in advance for this month’s gas supplies or risk a cutoff, at the start of a week of international talks on the crisis in the former Soviet republic
• U.K. mortgage approvals fell more than economists forecast in April, dropping to the lowest in nine months as banks tightened lending rules
• In May 1646, King Charles I admitted defeat in the English Civil War and surrendered to Parliamentarian forces besieging Newark-on-Trent. This week, as the town prepares to elect a member of Parliament, a new insurgent force led by UKIP leader Nigel Farage is on the march
• Sovereign yields mixed. Nikkei +2.1%, leading Asia equity markets higher. European equity markets mostly higher. U.S. stock futures gain. WTI crude and copper higher, gold falls

US Event Calendar

• 9:45am: Markit US Manufacturing PMI, May final, est. 56.2 (prior 56.2)
• 10:00am: ISM Manufacturing, May, est. 55.5 (prior 54.9); ISM Prices Paid, May, est. 57 (prior 56.5)
• 10:00am: Construction Spending, April, est. 0.7% (prior 0.2%)
• 11:00am: Fed to purchase $350 MM – $600 MM in 2024-2031 sector

EU & UK HEADLINES

A lower inflation release from Germany (Saxony (Y/Y 0.8% vs. Prev. 1.3%) and mixed Eurozone PMIs have underpinned calls for further easing by the ECB at this week’s ECB rate decision. This follows weekend reports in Spiegel that said the ECB are to offer a new LTRO with a term of 4 years is being considered and to focus on lending more directly and not the bank buying government bonds. This morning also saw ECB sources say negative rate issues have been settled and are likely to be accompanied by liquidity measures.

US HEADLINES

Fed-Watcher Hilsenrath said mix of views among hawks suggests pressure is not building at the Fed for rate increases before next year. (WSJ)

Fed’s Plosser (voter, hawk) has called on the Fed to adjust its forward guidance by providing more information on the likely future path of interest rates and explain its policy decisions in the context of those forecasts. (RTRS/BBG) Over the weekend, Fed’s Williams and Lacker (both non-voters) spoke at the same conference but said nothing of great importance.

EQUITIES

European equities initially opened higher following the positive Asia-Pacific session, however, the German Saxony CPI release (Y/Y 0.8% vs. Prev. 1.3%) reversed these opening gains and sent equities lower (Euro Stoxx 50 +0.1%) as Eurozone inflation concerns continue to be a key topic. In stock specific news, the CAC is the sessions underperformer with Alcatel-Lucent who are trading ex-div and BNP Paribas are seen lower amid continued litigation concerns, while basic materials outperform following the Chinese data.

FX

EUR/USD has ebbed lower and moved back below the 1.3600 handle following the weak inflation data, while AUD is also seen lower after Australian Building Approvals failed to meet expectations. Elsewhere, GBP is stronger following broad-based EUR weakness and encouraging M4 data (3 months annualised showed – fastest rate of growth since November last year)

SNB’s Jordan says the SNB is unwavering in its stance of defending its currency cap against EUR, with SNB Jordan suggesting that any further monetary easing by the ECB would not force the SNB to alter its policy. (RTRS)

COMMODITIES

In the metals complex, spot gold continues to weaken and trades at its lowest level since Feb. 3rd with Chinese buyers away from market. WTI and Brent crude futures trade positively after China’s Manufacturing PMI exceeded expectations to mark the highest reading since January. Nonetheless, the energy complex has come off the best levels ahead of the NYMEX open as the USD-index gained 0.2% on a weaker EUR as markets continue to price in easing from the central bank.

* * *

DB’s Jim Reid concludes the overnight market recap

Over the weekend, China’s latest official manufacturing PMI was released, with the index rising to a five month high of 50.8. This is slightly higher than the 50.7 consensus expectation and is the third straight month of increase since the index bottomed at 50.2 in Q1. Looking into the sub-indexes, improvement was seen in production (+0.3ppts), new orders (+1.1ppts), purchases (+1.7ppts), purchasing price index (+1.7ppts) and new export orders (+0.2ppts) in May. Probably a more important story from a macro perspective is the small tweaks being made to China’s monetary policy. Last week we pointed out that domestic media were expecting more targeted RRR cuts and potentially a Chinese-style QE/bond purchase program. Late on Friday, the State Council delivered one-half of that, with an announcement that it will expand its targeted RRR cuts to those financial institutions who have met certain lending ratios to the agricultural and small business sectors. This is the second tweak to reserve ratios since the PBOC cut the RRR for rural lenders in April. DB’s Chinese economist thinks that the expansion of this ‘targeted’ RRR cut should not be read as a prelude to a system-wide RRR cut, nor a drastic change in the stance of monetary policy. Li believes it simply reflects the government’s intention to encourage more resources to be made available for areas which have difficulty accessing capital and facing a high cost of funding.

No word yet on bond purchases following the China Securities Journal article last week suggesting that China Development Bank could issue below-market  rate bonds which would be purchased by state-affiliated institutions.

Overall it’s been a positive start to the week and month, with Asian markets trading with a solid tone following the China data. Volumes are generally on the low side with Hong Kong, China and Taiwan closed for public holidays. The Nikkei is once again leading the region’s gains (+2.1%), hitting two month highs, partly in response to the Chinese data and a 0.3% rise in dollar-yen. The Japanese equity index is still one of the worst performing in the region though (-5.4% YTD), and holds the rank of the second worst performing bourse in Asia after the Shanghai Composite (-6.5% YTD), despite the Nikkei’s strong catchup performance over the past couple of weeks. The sentiment is more subdued in Australia (ASX200 +0.2%) where mining stocks (-0.9%) are struggling following a 4% drop to Chinese import iron ore prices on Friday. The AUD is down 0.5% against the greenback following sharply lower than expected building approvals data.

Moving on to this Thursday’s ECB meeting, expectations appear to have been raised to very elevated levels. DB’s Wall and Moec expect a package of policy easing to be announced. They argue that the easier options for the ECB are extending full allotment, cutting the refi rate and ending SMP sterilization. Given Draghi & Co’s recent tone, they think the Council will go further and in addition implement a negative deposit rate and a targeted LTRO. The policy they expect the ECB to most pin its hopes on to impress the markets is the targeted LTRO. They expect a modest, SME loan-oriented LTRO. The worry is that the design could be complex and the market might feel underwhelmed. Indeed, Wall and Moec do not expect the targeted LTRO to be large. They estimate the non-financial corporate sector net borrowing requirement in 2015 to be cE70bn, of which a portion relates to SMEs. For credibility purposes the ECB would need to backstop SME lending for more than one year, but the bottom line is the size of what the ECB need to backstop to hit its objective of boosting lending to businesses and in particular SMEs is not that large. So we’ll have to see whether they deliver enough to help sentiment. The reality is that the market now expects QE at some point and the success of the meeting might depend on whether Draghi leaves the door open for it in his press conference. Our economists continue to expect private debt QE later this year.

In terms of the wider market’s expectations, of the 50 economists surveyed by Bloomberg, 44 expect the ECB to become the first major central bank to  take interest rates into negative territory by cutting its deposit rate. All but 2 of 58 respondents said the benchmark rate would also be reduced. Germany’s Spiegel suggested that the ECB is considering new longer-term LTROs although the type of rate and a number of variables are still being debated internally. The FT reported late on Friday that the Bundesbank’s Weidmann is planning to support the ECB’s proposals to ease lending constraints on smaller businesses but his vote for rate cuts is thought to be more finely balanced.

Turning to the week ahead, a busy calendar starts off with today’s global PMIs and ISMs. On Tuesday, President Obama begins a four day European trip ahead of the G7 meeting which starts on Wednesday. This G7 meeting is replacing the G8 meeting that was originally scheduled in Sochi but was cancelled after Russia’s annexation of Crimea. Tuesday’s data docket is important with Euroarea data releases including inflation and unemployment expected to further cement the ECB’s resolve in easing policy come Thursday. The Reserve Bank of India meets on Tuesday where rates are expected to remain on hold in the first RBI meeting since the new government took office.

Wednesday features the global services ISMs and PMIs. Other data releases scheduled for that day includes the ADP employment report, which will provide an important preview to Friday’s NFP, and US trade. The Fed releases its Beige Book on Wednesday too and the second estimates of Euroarea GDP will be published on Wednesday as well.

Apart from the ECB on Thursday, we also have the BoE policy meeting. Elsewhere in the UK there will be a by-election held in the seat of Newark, central England – this will be interesting to see whether the recent successes of the UK Independence Party can translate to the party winning its first ever House of Commons seat. The Conservatives currently hold that seat. Datawise, we have US jobless claims, Euroarea retail sales and German factory orders. Friday sees the release of US payrolls where consensus is expecting gains of around +200k in the headline. The unemployment rate is expected to pick up 0.1ppt to 6.4% due to rising participation. Moody’s updates sovereign ratings for the EFSF and ESM while S&P will update its rating view on Italy.

Reviewing some headlines before we take a look at the May performance review, the Spanish PM announced over the weekend that his government will be looking to boost the country’s tentative economic recovery with a EUR6.3bn stimulus package which includes a lowering of the highest corporate tax rate to 25% from 30%. He said the details would be revealed at a cabinet meeting on Friday (FT). Elsewhere in the periphery, Portgual’s constitutional court said that government cuts to public sector pay were in contravention of the rights of citizens as outlined in the country’s constitution. The court’s ruling apparently creates a fiscal gap of EUR700m for the rest of the year, and also rules out cuts to pensions and unemployment benefits. The court’s ruling will not be retroactive, and would come into effect in June. There was also further chatter over the weekend regarding the political pressure on the central bank of Turkey from various corners of the Turkish government. The government has been criticising the central bank recently, whose main mandate has been price stability, saying that economic growth targets should also be considered. Turkey reports its May inflation numbers tomorrow, and consensus is expecting CPI to accelerate to a fresh two year highs of 9.9%.

via Zero Hedge http://ift.tt/1pzmZ36 Tyler Durden

As Senator Ron Johnson so appropriately blasted, “I’m not sure sanctions had any effect whatsoever other than, you know, the Russians have mocked them,” and so it is that the Treasury’s (little heard of) “Terrorism and Financial Intelligence” division is preparing to unleash its most deadly weapons yet – an arsenal of financial weaponry aimed at hitting foreign adversaries with limited cost to allies. It appears clear that while the US dropped speech-bombs and sanction-mines, proclaiming the disastrous economic significance of these efforts, Russian stocks soared (vastly outperforming the US) and the Ruble strengthened… and so – as undersecretary David Cohen tells the WSJ, “What we’ve done over the past 10 years is to create a new method of projecting U.S. power…” e.g. sell non-US stocks (thus buy US stocks).

 

While the US equity market has already become a monetary policy tool, it appears now it is a global geopolitical force for good too…

As The Wall Street Journal reports,

the Obama administration is trying to shore up international support for a growing arsenal of financial weaponry aimed at hitting foreign adversaries with limited cost to allies.

 

As the administration prepares for a possible next round of sanctions against Russia, it is increasingly relying on an obscure unit inside the Treasury Department—a group of sanctions architects and financial sleuths in the Office of Terrorism and Financial Intelligence—to play a leading role in U.S. foreign policy.

 

…

 

Founded to disrupt terrorist financing after the attacks of Sept. 11, 2001, the Treasury office now plays a central role in exerting pressure overseas as the American public has little appetite for military intervention.

“What we’ve done over the past 10 years is to create a new method of projecting U.S. power,” Mr. Cohen said in an interview. “We do that in a way that is unique in the world.”

His office includes an intelligence shop that scours bank reports and spy agencies’ gleanings for financial patterns that could threaten U.S. security, making Treasury “the only finance ministry in the world with an in-house intelligence unit,” Mr. Cohen said.

…

“We have become proficient at reducing collateral damage,” Treasury Secretary Jacob Lew said in remarks to be delivered Monday at a conference hosted by the Center for Strategic and International Studies that is looking at the office’s work in its first decade. “But we cannot escape the fact that when we deploy these methods, there will be those who will unintentionally pay a price.”

 

But it seems not everyone is so excited about the threat of this obscure war-mongering from the US Treasury…

Some of the resistance Treasury faces comes from U.S. businesses that worry about the fallout. Meddling with an economy as big as Russia’s, for instance, could trigger significant losses for U.S. businesses if their work is affected by the sanctions, or if Moscow decided to retaliate.

 

…

 

Leaders of several European countries, including Hungary, have opposed tough sanctions on Russia, a major energy supplier on the continent, and their reluctance weighs on the sanctions policy of the EU, which makes such decisions by consensus. German firms have complained openly about the prospect of losing business in Russia.

Still, despite the massive outperformance of Russian stocks (and the Ruble) since sanctions began, Obama is proclaiming his actions as a major factor in Putin’s retreat…

Still, Mr. Obama last week credited the sanctions and other measures the international community took against Russia with serving as a key “counterweight” to Russian troops on the border with Ukraine, most of which are now believed to have moved away.

So perhaps that explains the shocking decoupling surge in US equities this week as bonds rallied , volatility rose, and Russia stocks leaked lower…

 

Welcome to the new order… where elites wage wars on the stock exchanges… while real blood flows on the streets

via Zero Hedge http://ift.tt/1m4s7Gd Tyler Durden

.

 

Michael Bloomdouche is obviously set for offshore Bermuda life.

But there is no shortage of retired statist $hitheads who are less fortunate, such as war criminal collaborator Condoleeza Rice Pudding and former NYPD Oberstrumbanfuhrer Raymond Krony. For those who are not in the $250,0000 dinner racket, a critical source of sustenance until the next official appointment or crony homeland consultancy, or University of California Chancellory, or private equity firm Presidency (yadda yadda)  is cushy University honorariums. That’s the ticket!

That is why alarm bells went off this spring when Rice Pudding and Herr Oberstrumbanfuhrer were forced to withdraw from spewing commencement addresses.

And this is what prompted the Bloomfascist,  with all due unmitigated royal statist fascismo, to speak his mind late last week at the commencement of that highly exalted Eastern bastion of Modern Klepto Tony Baloneyness: The Harvard Soviet…where, it should be no surprise, he received a resounding set of applause.

Go fuck and yourself in a Park Avenue dog elevator your Royal Bermudan Douchefascistness…

Via CNN

“This spring, it has been disturbing to see a number of college commencement speakers withdraw — or have their invitations rescinded — after protests from students and — to me, shockingly — from senior faculty and administrators who should know better,” Bloomberg said.

The billionaire former mayor cited an October speech during which his ex-police commissioner, Ray Kelly, was shouted down by students at Brown University. The university canceled Kelly’s speech when protesters opposed to the police department’s stop-and-frisk policy shouted down and interrupted Kelly.

Bloomberg noted other universities have had speakers back out. He pointed to Rutgers, where former U.S. Secretary of State Condoleezza Rice withdrew amid protests, and Smith College, where International Monetary Fund chief Christine Lagarde withdrew after a student petition.”

 

WB7

I of course have the greatest respect for the principles embodied in the First Amendment and the least bit of respect for this two fascist Wall Street info-harlot…

A wide Banzai7 hat tip to the faculty and students of Rutgers, Brown and Smith…

And no, we don’t fucking forget: #OWS #MyNYPD 

 

 

via Zero Hedge http://ift.tt/1n24fX2 williambanzai7

Submitted by Dingding Chen via The Diplomat,

 

via Zero Hedge http://ift.tt/1rAgVJS Tyler Durden

US Treasury yields are on the verge of basing and resuming their long term bear trends, warns BofAML’s MacNeil Curry, as Treasury volatility (MOVE Index) appears poised for a reversal higher…

 

Via BofAML’s MacNeil Curry,

Treasury yields poised to base 

US Treasury yields are on the verge of basing and resuming their long term bear trends. While we need to see a 10yr yield close above 2.568% to confirm, we reiterate our comment: THE LONG-TERM BEAR TREND IS POISED TO EMERGE FROM HIBERNATION. While such a turn would be supportive of our bullish US $ view against the likes of € and CHF (we are long the US $ against both) , it should also help push many $/EMFX pairs higher as well. The reason being is that Treasury volatility is also poised for a significant turn to the topside. Indeed, a turn higher in US yields should be the catalyst for such a turn in vol. In such an environment, $/ZAR is particularly well placed to benefit as it has just resumed its long term bull trend. 

Chart of the week: 10yr Treasury yields at the basing zone

US 10yr Treasury yields have reached the 2.420%/2.346% basing zone. From this zone we look for a base and resumption of the long term bear trend, which should ultimately take yields to new 2014 highs. A break of the 2.568% old Feb-4 lows confirms the turn in trend. Also, keep an eye on 5yr yields. They are closest to basing, with a closing break of 1.556% confirming. 

Treasury volatility is set to turn 

Not only are Treasury yields set to turn higher, but so is Treasury volatility. Indeed, a turn in yields could prove to be the catalyst for a higher in Treasury volatility. Looking at the MOVE Index, a closing break above 60bps (Ending Diagonal Triangle resistance) would confirm a turn higher, targeting 80bps and likely beyond…

 

[ZH: Of course – we have one question… when does the US investing public (and its propagandizing media channels) start to call the US Treasury the “widow-maker” trade? Just like being short Japanese bonds has been a loser for 2 decades…? We presume “it’s different this time”…]

via Zero Hedge http://ift.tt/1pKtZaF Tyler Durden

    “We don’t negotiate with terrorists”

    – Every US president in history

It was a good weekend for the friends and family of Army Sergeant Bowe Bergdahl: after five years of being held captive by the Taliban in Afghanistan, on Saturday morning it was reported that the 28-year-old native of Hailey, Idaho was finally freed. In exchange for his freedom, the US agreed to also set free five Taliban militants – among which the Afghanistan deputy defense minister under Taliban rule and others who was said to be involved in the September 11 attack – held at Guantanamo. In other words, this was a pre-negotiated settlement or, stated otherwise, a negotiation.

Adding fuel to the fire is the realization that Obama was transacting largely alone: instead of abiding by a legal requirement to give Congress advance notice when prisoners are released from the detainee facility at Guantanamo Bay, Obama once again took unilateral action. Actually it wasn’t completely unilateral: it was revealed that the deal was bartered by America’s new middle east BFFs (courtesy of the false flagged Syria conflict): officials from Qatar who agreed to keep the detainees in their country for a year.

And then the media circus took over.

On one hand, it was Republicans bashing Obama for keeping the prisoner swap secret and also for negotiating with terrorists. From the WSJ:

Sen. John McCain (R., Ariz.), himself a former prisoner of war in Vietnam, voiced fears that the five prisoners sent to Qatar in exchange for Sgt. Bergdahl could rejoin terrorist networks. “It is disturbing that these individuals would have the ability to reenter the fight,” Mr. McCain said on CBS’s “Face the Nation.” “And they are big, high-level people, possibly responsible for the deaths of thousands.”

 

Sen. Marco Rubio (R., Fla.), a potential presidential candidate in 2016, released a statement Sunday saying, “The release of five senior Taliban commanders to Qatar under unspecified conditions is very troubling and may endanger American lives. In the coming days the Congress must examine the circumstances under which Sgt. Bergdahl’s release was achieved, and what conditions, if any, the administration secured to ensure these enemy combatants do not return to the battlefield.”

 

Fellow Republican Sen. Ted Cruz of Texas, also a possible GOP presidential candidate, suggested in an appearance on ABC’s “This Week” that there were better ways to free Sgt. Bergdahl.

 

“How many soldiers lost their lives to capture those five Taliban terrorists that we just released?” Mr. Cruz said. “What does this tell terrorists, that if you capture a U.S. soldier, you can trade that soldier for five terrorists we’ve gone after.”

 

* * *

 

Rep. Mike Rogers (R., Mich.), chairman of the House Intelligence Committee, said administration officials indeed told Congress about a year ago that such prisoner negotiations were a possibility. “They didn’t get a very warm reception from either party in the national security committees,” Mr. Rogers said.

 

Mr. Rogers added that the administration was required “to keep Congress currently informed.”… “Some notion that this was so secret and so sensitive that that couldn’t happen is just wrong.”

On the other hand, democrats scrambled to defend Obama’s actions.

First and foremost, it was Defense Secretary Chuck Hagel, who on NBC’s “Meet the Press” in a live feed from Afghanistan where he had made a surprise visit, said prisoner exchanges are a standard practice of warfare and added that “We didn’t negotiate with terrorists.” He added that “America’s record is pretty clear on going after terrorists, especially those who take hostages, and I don’t think what we did in getting our prisoner of war released in any way would somehow encourage terrorists to take our American servicemen prisoner or hostage.”

The excuse: the swap had been worked out by the government of Qatar (to whose Amir, none other than the president gave his thanks yesterday).

Another person defending Obama was White House National Security Adviser Susan Rice who appeared earlier on CNN and said the Obama administration informed Congress after Sgt. Bergdahl was in U.S. hands. She said the urgency of the mission, coupled with concerns about Sgt. Bergdahl’s health, made it necessary to rescue him without giving the required 30 days advance notice.

Wait, he was in captivity for 5 years, but suddenly 30 days was a matter of urgency?

Ms. Rice said that defense officials, however, consulted with the Justice Department before the operation. “It was determined that it was necessary and appropriate not to adhere to the 30-day notification requirement because it would have potentially meant that the opportunity to get Sgt. Bergdahl would have been lost,” she said.

One wonders what other decisions are made in the secrecy of bilateral talks between Obama and the DOJ, which skip America’s elected legislative body entirely.

And then the excuses branch out in the outright surreal: “The Taliban prisoners released weren’t mere bargaining chips: It’s quite possible that, as influential figures, they’ll facilitate a broader negotiated settlement,” in Afghanistan, said Blank, a former staff member of the Senate Foreign Relations Committee. Hagel said today it’s possible the agreement could lead to a new round of negotiations between the U.S. and the Taliban about the organization’s rule in Afghanistan. “We have strongly supported an Afghan-led effort to come to an agreement with the Taliban,” Hagel said on NBC. “Maybe this will be an opening that can produce an agreement.”

Indeed: now that America is said to be departing Afghanistan (we will believe it when we see it), someone who is friendly to the US should maintain the record opium production: after all the poppy seed, and heroin, must flow and keep western populations drugged up and happy.

Recall the following charts: first, the surge in Heroin use in the US:

 

And then the following chart which shows opium cultivation in Afghanistan:

Surely there is no relation between soaring US heroin use, soaring Afghanistan opium production (under US supervision) and recent developments in Afghanistan.

But even more perplexing than the simple question of whether Obama negotiates with terrorists – he clearly does – is another question: are we now rerunning an episode of Homeland.

Recall the back in August 2010 when the news of Bergdahl’s capture were first making the rounds, that the Sunday Times reported “a captured American soldier is training Taliban fighters bomb-making and ambush skills, according to one of his captors and Afghan intelligence officials. Private Bowe Bergdahl disappeared in June 2009 while based in eastern Afghanistan and is thought to be the only U.S. serviceman in captivity. The 24-year-old has converted to Islam and now has the Muslim name Abdullah, one of his captors told The Sunday Times.”

The rabbit hole gets deeper:

A Taliban deputy district commander in Paktika, who called himself Haji Nadeem, told the newspaper that Bergdahl taught him how to dismantle a mobile phone and turn it into a remote control for a roadside bomb.

 

Nadeem claimed he also received basic ambush training from the U.S. soldier. ‘Most of the skills he taught us we already knew,’ he said. ‘Some of my comrades think he’s pretending to be a Muslim to save himself so they wouldn’t behead him.’

 

Afghan intelligence officials also believe that Bergdahl is ‘cooperating with the Taliban’ and is acting as adviser to fighters at a base in the tribal area of Pakistan.

And then there was Bergdahl’s video:

The seven-minute video of Bergdahl shows him sporting a beard and doing a few press-ups to demonstrate he’s in good physical condition.

 

There was no way to verify when the footage was taken or if he is still alive.

 

In the sometimes choppy video, Bergdahl talked about his love for his family, his friends, motorcycles and sailing.

 

‘I’m a prisoner. I want to go home,’ he said. ‘This war isn’t worth the waste of human life that has cost both Afghanistan and the U.S. It’s not worth the amount of lives that have been wasted in prisons, Guantanamo Bay, Bagram, all those places where we are keeping prisoners.’

 

At times speaking haltingly, as if holding back emotions, Bergdahl – clad in what appeared to be an Army shirt and fatigues – clasped his hands together and pleaded: ‘The pain in my heart to see my family again doesn’t get any smaller.

 

‘Release me. Please, I’m begging you, bring me home.’

The good news is that four years later he is finally home. The questions remain.

via Zero Hedge http://ift.tt/1okl4M4 Tyler Durden