Month: August 2016

Following last Friday’s shocking weak US GDP print, Asian stocks jumped to an 11 month high on reduced prospects of a near-term rate hike, while the region also digested mostly encouraging in conflicting Chinese PMI data. European bank stocks initially rose following the release of the 2016 stress test then declined, tempering gains in global equity indexes, amid investor skepticism over the usefulness of stress-test results and weaker oil prices. Shares and currencies in emerging markets rallied to the highest in about a year, while miners and industrial metals jumped.

Declines in European banks put a dent in global equities, which rallied in July to their best month since March on prospects central banks will add to stimulus or refrain from reducing it. Traders peeled back bets on a U.S. rate hike this year after data Friday showed annualized gross domestic product rose 1.2 percent last quarter, less than half the 2.5 percent projected by economists. The Bank of Japan added to its easing last week and economists forecast policy makers in Australia and England will cut their benchmark interest rates from record lows this week.

As Bloomberg reports, lenders in peripheral nations weighed heaviest on an index of lenders, which sank as much as 1.9 percent after opening higher. The MSCI Emerging Markets Index jumped to the highest since last August and the equivalent currency index to the highest since July 2015, with Malaysia’s ringgit and South Korea’s won gaining the most. Zinc headed for the highest close in a year. The pound weakened against all of its 16 major counterparts.

Best summarizing trader mood as we start off another week, and month, was Saxo’s Peter Garnry who told Bloomberg that “Investors are skeptical about everything these days. The problem with the stress tests is that they were too soft, only assuming a mild to moderate recession. This means that the data doesn’t tell us much, and it’s not too surprising that most banks passed.”

The Stoxx Europe 600 Index fell 0.4% as of 11:33 a.m. in London, erasing earlier gains of as much as 0.6 percent. European equities had their biggest monthly advance since October last month, with lenders jumping the most in more than a year. Yet July was marked by record outflows from European stock funds and thin volume, indicating a lack of conviction in the rally. Spain’s Banco Santander SA fell 2.9%, Banco Bilbao Vizcaya Argentaria SA lost 4%, and UniCredit SpA sank more than 7%. Banks had initially risen at the open after stress tests showed most of them would keep an adequate level of capital in a crisis. BHP Billiton Ltd. and Rio Tinto Group led miners to the biggest gain of the 19 industry groups on the Stoxx 600 as commodity prices advanced.

Futures on the S&P 500 were little changed after the benchmark index capped its longest streak of monthly gains since 2014. The MSCI Emerging Markets Index jumped 1.2 percent, the most in three weeks on a closing basis. Equity benchmarks in Taiwan, Turkey and the Philippines advance more than 1 percent while Indonesian stocks rallied 2.8 percent, rebounding from the steepest drop in five months on Friday. The Hang Seng China Enterprises Index of mainland companies listed in Hong Kong climbed 1.9 percent, the most since July 11. A private manufacturing index unexpectedly rose to the highest since February 2015, while the reading on the official government’s gauge slipped.

* * *

WTI continued to disconnect from overall risk, falling back toward $41, extending its biggest monthly decline in year as U.S. producers increased drilling, crude and fuel stockpiles remained bloated. Brent near $43. “The hope for a clear rebalancing may have to wait a couple more months, since oil’s drain is clogged in the meantime,” Barclays says in report. “Demand growth remains lackluster and has not made significant inroads into the inventory overhang.”

“There is a clear downward momentum to the market at the moment,” says Michael McCarthy, a chief strategist at CMC Markets in Sydney. “There are concerns about the oversupply situation continuing.  Clearly $40 a barrel is a key point for West Texas and I’d expect to see support there given the bounces we’ve seen previously at that level.”

Drillers boosted active rigs for 5th week, longest run of gains since August. Hedge funds expanded WTI short positions in futures, options combined, by most in data back to 2006

* * *

The 10-year Treasury note yield climbed three basis points to 1.48 percent, Bloomberg Bond Trader data show. Fed Bank of New York President William Dudley said investors are underestimating how many times policy makers in the world’s largest economy will raise interest rates. “The movement in investor expectations towards a flatter path for U.S. short-term interest rates seems broadly appropriate,” Dudley said in remarks prepared for a speech Monday at a conference in Bali. However, “it is premature to rule out further monetary policy tightening this year,” he said. The yield on Japan’s 10-year bonds climbed five basis points to minus 0.145 percent, after jumping eight basis points at the end of last week.

This morning’s top news stories include: Dudley Says He Won’t Rule Out More Fed Tightening This Year; Carney Nears Rate Cut After BOE Detour on Road to Stimulus; Steady Euro-Area Factory Output Masks Worries in Periphery; Uber China to Merge With Didi to Create $35 Billion Company; China Factory Gauges Splinter for July, While Services Advance.

Market Snapshot

• S&P 500 futures up 0.2% to 2173
• Stoxx 600 down 0.1% to 342
• FTSE 100 up 0.1% to 6734
• DAX up 0.5% to 10392
• German 10Yr yield up 1bp to -0.11%
• Italian 10Yr yield up less than 1bp to 1.17%
• Spanish 10Yr yield up less than 1bp to 1.03%
• S&P GSCI Index down 0.6% to 337.5
• MSCI Asia Pacific up 0.8% to 138
• US 10-yr yield up 2bps to 1.48%
• Dollar Index up 0.17% to 95.7
• WTI Crude futures down 1% to $41.18
• Brent Futures down 1% to $43.09
• Gold spot down 0.1% to $1,349
• Silver spot up 0.9% to $20.51

Global Headline News

• Apple Stock Drop Fails to Deter Magellan From Technology Spree
• Didi Chuxing to Buy Uber China; Uber China Said to Merge With Didi to Create $35 Billion Company
• China Factory Gauges Splinter for July, While Services Advance
• Carney Nears Rate Cut After BOE Detour on Road to Stimulus
• Dudley Says He Won’t Rule Out More Fed Tightening This Year
• Steady Euro-Area Factory Output Masks Worries in Periphery
• Global Earnings Tumble as Companies Dig Deeper for Cost Savings
• Backlash Grows Over Trump’s Comments on Dead Muslim Soldier’s Parents

Looking at regional markets, Asia began the month mostly positive as weak Q2 US GDP figures further reduced prospects of a near-term rate hike, while the region also digested mostly encouraging Chinese PMI data. Nikkei 225 (+0.4%) shrugged off losses of over 1% as JPY pared some of the strength seen from the post-BoJ and US GDP disappointment. ASX 200 (+0.5%) ascended past 5,600 to print fresh YTD highs, as the commodities complex led the advances. Chinese markets were mixed which reflected the divergence in PMI numbers with Hang Seng (+1.1%) outperforming after Chinese Caixin Manufacturing PMI printed its first expansion in 17 months and Non-Manufacturing printed a 7-month high, while Shanghai Comp (-1.4%) failed to take heed as Official Manufacturing PMI, which reflects larger companies including SOEs, recorded its first contraction in 5 months.

Key Asian Data:

• Chinese Official Manufacturing PMI (Jul) M/M 49.9 vs. Exp. 50.0 (Prey. 50.0); 1st contraction in 5 months. – Non-Manufacturing PMI (Jul) 53.9 (Prey. 53.7); 7-month high. (Newswires)
• Chinese Caixin Manufacturing PMI (Jul) 50.6 vs. Exp. 48.8 (Prey. 48.6); 1st expansion in 17 months. (Newswires)
• Japan July Nikkei PMI Mfg 49.3 no est. (prior 49.0)
• Taiwan July Nikkei PMI Mfg 51.0 no est. (prior 50.5)
• Indonesia July Nikkei PMI Mfg 48.4 no est. (prior 51.9)
• India July Nikkei PMI Mfg 51.8 no est. (prior 51.7)
• Thailand July CPI y/y 0.10% est. 0.50%
• Indonesia July CPI y/y 3.21% est. 3.37%

Top Asian News

• Didi Chuxing to Buy Uber China

• Fosun Plans Asset Sales in Reversal of $15 Billion M&A Spree
• MUFG Profit Falls More Than Expected as Negative Rates Bite
• China Said to Mull Mergers to Create Two State Steel Giants
• BOJ Confusion on Nomura Floor Shows Conundrum for Stock Traders
• Sakakibara Says Yen Will Slowly Appreciate to 100 per Dollar
• Japan Tobacco Net Forecast, Undermined by Yen, Misses Estimates
• Macau July Gaming Beats Estimates as Resorts Draw Tourists
• Japan Pension Whale’s $52 Billion Loss Tied to Passive Ways
• India IPO Returns Beat U.S. as Funds Chase High-Growth Companies
• Hong Kong Move to Bar Pro-Independence Candidates Jolts Election

European equities initially kick off the week on the front foot underpinned by the results of the EU stress test in which bank are seen to be at a better position and more resilient. The biggest gainer of the morning has been Monte Paschi (+5.8%) whereby the banks board agreed to unload NPLs and raise EUR 5bIn worth of capital. However, since the open, European bourses have pared their opening gains (Eurostoxx flat) with sentiment by the plethora of soft Mfg. PMI figures. While from an equity perspective UniCredit (-6%) has seen an 8% turnaround, with attention being given to comments from Credit Suisse stating that the Italian bank needs recapitalisation of EUR 4-9bIn while their CETI ratio had only just reached the 7% benchmark. In credit markets, the initial upside in equities saw fixed income assets gap lower with Bunds firmly below 168.00, however Italian credit has outperformed this morning in the wake of reports that 11th hour rescue deal for Monte Paschi staved off the immediate prospect of a government bailout.

European PMI Data:

• Euro-zone Final Manufacturing PMI Revised to 52.0 vs Preliminary 51.9
• Germany Final Manufacturing PMI Revised to 53.8 vs 53.7
• France Final Manufacturing PMI Unrevised at 48.6
• Netherlands Manufacturing PMI Rises to 53.2 vs 52.0
• Spain Manufacturing PMI Drops to 51.0 vs 52.2
• Italy Manufacturing PMI Drops to 51.2 vs 53.5
• UK Manufacturing PMI Drops to 48.2 vs 49.1

Top European News

• European Stocks Advance as Banks Rise After Stress-Test Results
• Lufthansa Extends Pilot Union Negotiations Deadline Until Aug. 5
• Vodafone Uses Voiceless Africa Plans to Get Tech-Savvy Youth
• U.K. Business Lending Forecast to Shrink Until 2019, EY Says
• Air Liquide Engineering Drop Leads to First-Half Profit Miss

In FX, sterling fell 0.5 percent to $1.3170 as a report showed U.K. manufacturing shrank more than initially forecast in July. The pound has fallen more than 11 percent against the dollar since Britain voted on June 23 to leave the European Union and posted its third consecutive monthly drop against the greenback last month. Hedge funds and other large speculators are the most bearish on the pound in almost 25 years amid speculation the Bank of England will cut interest rates for the first time in more than seven years this week. The yen retreated 0.2 percent to 102.28 per dollar after soaring 4 percent last week. BOJ Governor Haruhiko Kuroda’s decision to aim low at last week’s meeting raises the stakes for Prime Minister Shinzo Abe to deliver on a pledge for “bold” fiscal stimulus on Tuesday, when the government is due to announce details of a more than 28 trillion yen spending package. Former Japanese vice finance minister Eisuke Sakakibara said in an interview with Bloomberg Television that Abe’s fiscal stimulus package is unlikely to halt the rally that is taking the yen toward 100 per dollar. The won increased 1.1 percent, touching its strongest level since June 2015, while the ringgit gained 1.2 percent, after weakening 1 percent last month.

In commodities, Crude oil retreated 1.1 percent to $41.15 a barrel in New York, after slumping 14 percent in July. U.S. producers increased drilling for a fifth week amid a glut of crude and fuel supplies that are at the highest seasonal level in at least two decades. Most metals advanced, with nickel rising 1.2 percent and zinc climbing 1.3 percent on the London Metal Exchange after China’s official factory gauge unexpectedly fell below the dividing line between improvement and deterioration, leaving room for stimulus. China is considering a sweeping overhaul of its steel industry that would consolidate major steel producers into two giants, with one located in the north and the other in the south, according to people familiar with the plan. Iron ore futures on the Dalian Commodity Exchange climbed to a three-month high after gaining 7.6 percent last week.

On today’s calendar, the early focus is on the final revisions to the July manufacturing PMI’s, which came in mostly in line if a little weaker than expected for peripheral nations. The UK number post Brexit will also be closely watched given the dive in the flash number: it showed an even steeper decline into contraction and pushed sterling the session lows. We’ll also get the manufacturing PMI in the US which is then closely followed by the ISM manufacturing for July, along with construction spending data.

* * *

Bulletin Headline Summary from RanSquawk and Bloomberg

• European
  equities enter the North American crossover higher (albeit off best
  levels) in the wake of the latest ECB Stress test results and upbeat
  data from China
• ECB stress test results showed an
  improvement in the resilience of banks although the likes of Barclays,
  RBS and Banca Monte dei Paschi di Siena’s fared poorly
• Looking ahead, highlights include US Manufacturing PMI, ISM Manufacturing and US Construction Spending
• Treasuries lower in overnight trading, global equities mixed as emerging markets rally on reduced forecasts for Fed rate hikes.
• Federal Reserve Bank of Dallas President Robert Kaplan said a rate increase at the next policy meeting in September is still possible even after a report last week showed second- quarter growth was a sluggish 1.2%
• Investors are underestimating how many times the U.S. central bank will raise interest rates this year and next, but they are probably right about the pace being slower than previously thought, said Federal Reserve’s William Dudley
• The key takeaway from the 2016 EU bank stress tests will be the message that regulators are relatively comfortable with bank solvency
• European bank stocks declined, tempering gains in global equity indexes, amid investor skepticism over the usefulness of stress-test results and weaker oil prices
• Corporate earnings are heading for a fifth straight quarter of declines, dragged down mostly by energy companies’ struggles with low oil prices and a tepid global economy that threatens to throttle sales growth in many industries
• After shocking traders by leaving the key rate on hold last month, BOE Governor Mark Carney and the Monetary Policy Committee signaled that loosening would probably come this month
• U.K. manufacturing shrank more than initially forecast in July, suffering its biggest drop in more than three years. A Purchasing Managers’ Index slumped to 48.2, below the one- off flash reading of 49.1, Markit Economics said Monday in London
• A rule to prevent a run on the money-market industry will take effect this October and force funds to abandon a fixed $1-a-share price and float their NAV, causing a big shift into money-market funds that buy only government debt
• Friday was a big day for Japan’s $1.3 trillion Government Pension Investment Fund which posted its worst annual loss since the financial crisis and disclosed individual equity holdings for the first time
• Saudi Aramco lowered the pricing terms for Arab Light crude sold to Asia by the most in 10 months, signaling Saudi Arabia has no plans to back down while OPEC rival Iran tries to regain market share amid a global oversupply
• Money managers increased bets on falling crude by the most ever as stockpiles climbed to the highest seasonal levels in at least two decades, nudging prices toward a bear market

US Event Calendar

• 9:45am: Markit US Mfg PMI, Jul F, est. 52.9 (prior 52.9)
• 10am: Construction Spending, June, est. 0.5% (prior -0.8%)
• 10am: ISM Manufacturing, July, est. 53 (prior 53.2)

DB’s Jim Reid concludes the overnight wrap

Although the dog days of summer are upon us, if you’d gone on holidays at 5pm Friday night only to return a week later you would have missed the results of the Euro bank stress tests, the announced proposed recap of Monte Paschi, this week’s PMIs (including the most up to date post Brexit sentiment gauge of business confidence in the UK), confirmation of the latest Japanese fiscal package tomorrow, a likely first interest rate cut in the UK since March 2009 on Thursday (and to the lowest in the bank’s 322 year history), and last but not least a crucial (ok we always seem to say that) US payroll report on Friday which after two volatile months will give us a better guide to the trend. You may even miss the opening ceremony of the Olympics in Rio if you’re delayed on your return. I can’t believe it’s 4 years since the London Olympics enthralled us here. Then again I can’t believe it was 50 years ago this past weekend that England won their only football World Cup. I wonder if it will ever happen in my lifetime? Please don’t answer!!

I’m also not sure it feels like nearly 2 years since we saw the last European bank stress tests. The results of the latest EBA tests were out late Friday night and showed only one bank out of the 51 covered with a negative fully loaded CET1 capital at YE 2018 under the adverse scenario. 49 out of 51 were above 6% on this measure.

The overall results will probably be seen as a bit of a relief as there were no nasty surprises. Most banks were in the region of where analysts had expected them with maybe a few micro surprises. However a couple of the macro issues with the test are that a) it didn’t model for a prolonged period of low or negative rates/yields or it didn’t model any Brexit type scenarios. One could argue that medium to long-term profitability issues are one of the main issues at the moment (over and above capital for now) and low/negative yields are causing big problems with this. It’ll be interesting to see whether equity investors are impressed with the relatively sanguine results when any short-term sighs of relief fade. European bank shares are down around 35% since the stress tests in 2014. The recent accelerated concerns over Italian banks came after Brexit flattened curves and were perceived to cement lower rates/yields for longer. This hasn’t changed and worries will persist but the results will probably mean that a wider Italian rescue may not be absolutely essential immediately. This means that we may not get anything before the constitutional referendum so this could linger on for a while without coming to a head. On credit a reminder that my team published a note last week on bank capital with a relative constructive view on bonds further down the capital structure. It’s likely that bank capital will respond well to these results which follows the recent trend of bank capital decoupling from bank equities.

The other big news on Friday was the US GDP report (Q2 1.2% vs 2.5% expected earlier last week) which was disappointing whichever way you look at it. The bulls might point to the decent household consumption numbers (4.2% vs 4.4% expected but improved from 1.6% in Q1) and the run down in inventories as cause for optimism but it’s worth looking at the YoY numbers to illustrate a lacklustre economy that at the moment is continuing to exhibit secular stagnation tendencies.

Real GDP was a lowly 1.2% over the past year and YoY nominal GDP fell to just 2.4%, the lowest since Q1 2010 (2.1%) a year that included a quarter from the post GFC recession. In this debt overloaded world, it’s always going to be tough to get very far with nominal GDP at these lowly levels – and this is the strongest major DM economy. As DB’s Joe LaVorgna pointed out on Friday this is also ominous for corporate profits. It’s also not great for employment prospects and we certainly think we’ve shifted into a new lower payroll regime. Joe expects 150k (consensus 175k) for this Friday which is in line with the 3-month average. The average monthly payroll in 2014 and 2015 was 251k and 229k respectively. Both employment and profits continue to look late cycle to us.

Over to Asia so far this morning and the highlight so far has been the latest PMIs from China. It’s quite difficult to decipher too much from it with the official July manufacturing number at 49.9 (vs 50 in June) and inline with consensus. However the equivalent from Caixin/Markit climbed 2 points from last month to 50.6 – the highest since February 2015. The official non-manufacturing release was 53.9 (53.7 last month). Markets are mixed with the Shanghai Comp -1.25% but with the Hang Seng +1.31%. The Nikkei has edged into positive territory (+0.3%) and the Yen is slightly weaker (-0.4%) having rallied 4% last week as the BoJ eased less than expected, thus passing the reins to Abe who we’ll hear from tomorrow.

European equities saw a small rebound on Friday following some positive surprises in Eurozone growth and inflation data. The STOXX 600 index ended the day up +0.71%, ending the week (month) marginally higher by +0.46% (+3.64%). However the market has still not managed to completely recoup its losses since the UK referendum, cumulatively down -1.28% since the day of the vote. US equities shrugged off the weak GDP numbers (probably focusing on its impact on the Fed) to also rise marginally by +0.16% on Friday but ending the week broadly flat.

Staying with equities, our European Equity strategists have published their latest update this morning and the highlight is that the FTSE 250, filled with UK domestic stocks, is now impressively within a whisker of its pre-referendum level. In the report, they argue that the rebound (up 15% from the trough) is driven by three factors: (a) the strong performance of global risk assets (the FTSE 250 tends to outperform when cyclicals do well); (b) the stabilization in the GBP and (c) the hope that the UK macro fall-out from the referendum might be limited. With our FX strategists still very bearish on the GBP, they cautious on risk assets overall and with the post-referendum UK macro indicators looking atrocious across the board (PMIs, CBI business optimism, GfK consumer confidence), they see around 10% downside for FTSE 250 relative to the more export-focused FTSE 100 by year-end. For European equities they remain cautious with the YE target 4% below current levels. Email Sebastian.Raedler@db.com for the full report.

Back to Friday, credit outperformed in Europe. iTraxx IG and Crossover tightened by -2.7bps and -6.6bps respectively to end the week flat. Over in the US CDX IG (-0.4bps) and HY (-1.3bps) also tightened marginally but ended the week wider by +3.3bps and +15.6bps respectively. The recent drop in Oil into bear market territory is starting to impact US credit again.

At the other end of the risk spectrum, we saw US and German 10Y yields drop by -3bps and -2.9bps respectively on Friday, falling by -9.1bps and -8.9bps over the course of the week. Gold was up +0.9% and gained +1.7% on the week. The US dollar index declined by -1.1% on Friday as the probability of a rate hike by December was further reduced to 34.4% (from 44.9% on Thursday). The drop capped off a week of losses (-1.9%) that erased all prior gains on the month so far.

Looking more closely now at the other main data out on Friday. In Europe we saw Euro Area GDP growth momentum slow but still come in marginally above expectations (1.6% YoY vs. 1.5% expected; 1.7% previous). French Q2 GDP numbers disappointed (1.4% YoY vs. 1.6% expected) while Spain beat expectations but saw growth slow from the quarter before (3.2% YoY vs. 3.1% expected; 3.4% previous). We also saw initial July CPI estimates for the Eurozone clocking in marginally above consensus (0.2% vs. 0.1% expected; 0.1% previous). Preliminary inflation numbers for France came in as expected (0.4% YoY; 0.3% previous) while Spain (-0.6% YoY vs. -0.8% expected) and Italy (-0.1% YoY vs. -0.2% expected) beat estimates but remained in deflationary territory. We also saw retail sales in Germany fall in June (-0.1% mom vs. 0.1% expected; 0.7% previous) but surprise on the upside on an annual basis (2.7% YoY vs. 1.5% expected; 2.8% previous). We also saw the Eurozone unemployment rate for June hold steady at 10.1% as expected.

Taking a look over at the US outside of the disappointing GDP print survey data was somewhat more positive as we saw the Chicago PMI number (MNI Business Barometer) for July decline less than expected (55.8 vs. 54 expected; 56.8 previous) from its 17-month high in June. The U.Michigan Sentiment indicator for July clocked in marginally below expectations at 90.0 (vs. 90.2 expected) but improved from the previous month’s reading (89.5).

This morning in Europe the early focus is on the final revisions to those July manufacturing PMI’s, along with a first look at the data for the periphery. The UK number post Brexit will also be closely watched given the dive in the flash number. We’ll also get the manufacturing PMI in the US which is then closely followed by the ISM manufacturing for July, along with construction spending data.

Away from the data, the only central bank speak of note comes from Kaplan when he is due to speak on Tuesday and Thursday. Earnings will continue to be a huge focus and we’ve got 115 S&P 500 companies due to report (14% of the market cap) including Proctor & Gamble (Tuesday), Pfizer (Tuesday), AIG (Tuesday), Time Warner (Wednesday) and Kraft Heinz (Thursday). In Europe we’ll also get reports from 91 Euro Stoxx companies (16% of market cap) including HSBC, Siemens, Allianz, Rio Tinto and BMW.

via http://ift.tt/2apzz3a Tyler Durden

Nine months after a Russian Su-24 fighter jet was downed over Syria by Turkey for allegedly violating the country’s airspace, a Russian Mi-8 helicopter has been shot down by ground fire in Syria following delivery of humanitarian supplies to Aleppo, the Defense Ministry said in a statement. The three crew and two officers from Russia’s reconciliation center were returning to base. The condition of those on board has yet to be established, the ministry said.

“On August 1, an Mi-8 transport helicopter has been shot down by ground fire in Idlib province after a delivery of humanitarian aid to the city of Aleppo. Three crew members and two officers from the Russian Reconciliation Center in Syria were on board,” the Defense Ministry said in a statement.

The attack takes place one day after Al Nusra launched an offensive campaign to break through the Syrian government siege, assisted by Russians, of the rebel-held city of Aleppo.

The helicopter was returning to the Russian air base at Khmeimim, the statement added.

PHOTO: Closer view of the downed Russian helicopter in S. #Aleppo #Syria http://pic.twitter.com/3tjubYzSrm

— Conflict News (@Conflicts) August 1, 2016

PHOTO: Image of what looks to be a dead Russian pilot in S. #Aleppo after helicopter shot down. http://pic.twitter.com/mgnafux9Y5

— Conflict News (@Conflicts) August 1, 2016

BREAKING: Rebels say a helicopter has been downed in S. #Aleppo. Unclear if shot down or crashed. http://pic.twitter.com/UMEfxVRfP0

— Conflict News (@Conflicts) August 1, 2016

Warning: graphic footage of what appear to be the dead pilots. Viewer discretion advised

??????? ???!
21+!!! ??????? ????? ???-????? ?????????? ??? ?????? ????? ???????. http://pic.twitter.com/58DN8rpiUH

— ???? ??????????? (@dolg132004) August 1, 2016

It is the third Russian helicopter lost in action in Syria this year. In July, an Mi-25 attack chopper was shot down near Palmyra, killing two Russian pilots. The aircraft had been engaging the advancing Islamic State militants at the Syrian Army’s request when it was taken down, according to the Russian Defense Ministry. In April, an Mi-28N attack helicopter crashed while performing a flight near the city of Homs, with the Defense Ministry stressing it was not shot down. The crash left both pilots dead, with technical failure cited by Moscow as the likely cause of the accident.

Last October, another Mi-8 helicopter was badly damaged and then destroyed by IS fighters after an emergency landing in the middle of search and rescue operation to extract a surviving co-pilot of a Su-24M bomber jet shot which was down by a Turkish Air Force F-16.

Developing story.

via http://ift.tt/2atibsu Tyler Durden

Authored by Paul Joseph Watson, originally posted at InfoWars.com,

Twitter is provably censoring Donald Trump in order to prevent him raising money for his presidential campaign.

A tweet sent out by Trump yesterday to promote his #MillionDollarMatch donation drive does not appear on Trump’s profile page nor did it appear on the feed of anyone following him.

You can check for yourself. Here is the tweet sent out by Trump yesterday and here is his main profile page – which doesn’t show the tweet. The tweet has been buried as if it never existed.

This is yet another example of Twitter shadow banning – where people on a designated ‘blacklist’ have their tweets relegated on search results and hidden from users’ timelines, while leftist politicians and commentators on a ‘whitelist’ have their tweets promoted.

A Twitter insider admitted to Breitbart back in February that Twitter had indeed begun shadow banning politically incorrect users, a claim verified by a senior editor at a major digital publisher.

Twitter is interfering with the election. Suppressing tweets like this from appearing in feed or search@iloveluluco http://pic.twitter.com/kMpfiEvrVH

— Pooka's B?ck (@TheQuQu) July 29, 2016

A Trump tweet in which he declared that “the establishment and special interests are absolutely killing our country” was also shadow banned by Twitter back in April.

While Twitter is censoring Trump, it has repeatedly been accused of gaming its algorithms in support of Hillary. Back in February, users were irate after the social media giant appeared to censor the anti-Hillary hashtag #WhichHillary after it started trending.

The revelation that Twitter is shadow banning Trump comes on the heels of Google claiming that a ‘technical bug’ was to blame for Donald Trump not appearing when users searched for “presidential candidates”.

Twitter’s shadow banning of Trump also follows its controversial decision to slap conservative commentator Milo Yiannopoulos with a lifetime ban.

via http://ift.tt/2aVDPpR Tyler Durden

After the close on Friday, the European Banking Authority did what it does every other year: it released the results of what it calls a “stress test” which is simply an annual exercise in boosting confidence. Case in point, the 2016 edition did not even “test” for Europe’s two biggest threats, namely negative interest rates or “Brexit.” It also did not test any banks from Greece or Portugal, knowing well what the results would have been. However, in order to retain some credibility, the same test which in previous years passed such failed institution as Dexia, Bankia and Novo Banco, had to fail one bank, and this year the honors fell to Italy’s Monte Paschi.

However, as we reported earlier on Friday, the EBA only failed Monte Paschi after the bank announced it had obtained a private bailout from a consortium of banks. The Monte Paschi bailout, a €5 billion capital increase, was unique in several ways, not least representing 5.6x BMPS’s market cap.

In a nutshell, the plan can be summarized in the following three steps:

1. Increase the coverage ratio for Bad debt
2. Transfer all the existing stock of Bad debt (sofferenze) into a securitization vehicle. The senior tranche will be covered by government guarantees, Mezzanine will be bought by Atlante fund and the equity tranche will be transferred to existing shareholders and deconsolidated.
3. A €5bn capital increase to remove the negative capital impact from the operation and maintain capital level at the current level of 11.8%.

So far so good, but as Barclays’ Marta Bastoni puts it: “one problem is fixed but not easily repeatable.”

As Bastoni further writes in a July 31 note, “while the announced capital plan has the advantage of removing risks connected to the transferred NPLs from the balance sheet, and is a private solution, the €5bn capital increase represents 5.6x MPS’s market cap. We see this plan as a small positive for the sector as it reduces the total amount of provisions needed to write-down NPLs to a “market level”. However, we believe that it will be difficult to replicate the MPS plan on a large scale, and with ongoing lack of clarity on an ECB target outcome, we believe that uncertainty over the capital position of the  sector as a whole remains.”

A key role in the securitization-driven bailout will be played by Italy’s paltry, €5 billion bank bailout fund, Atlante, first introduced in April, which will be the buyer of the risky €1.6 billion “mezz” tranche. However, with that particular investment, Atlante will be effectively drained, left with just about €1 billion in “dry powder,” not nearly enough to prevent or even materially delay the ongoing Italian bank crisis.

Barclays agrees, saying that the Atlante Fund is unlikely to provide systemic solution.

Atlante is set to buy the full €1.6bn mezzanine tranche of the securitization vehicle. In addition the fund will be granted warrants on issued shares, which gives it additional upside on the operation should MPS shares recover in the next five years. We estimate that the fund has €0.9- €1.35bn of additional resources for the rest of the Italian  banking system, which would imply between €13-€19bn of NPLs that can be bought.

The problem is that even with the dramatic leverage extension granted by the chosen securitization pathway, Italy’s banks will still need vast amount of fresh capital to offset the deterioration of the biggest risk within Italy’s banking system: the hundreds of billions in non-performing loans.

* * *

And while we have covering Italy’s NPL crisis since 2011 and have little to add at this moment, let’s take a closer look at just how the Renzi government bailed out Monte Paschi… for the third time in the past two years, only this time without direct injection of public sector funds, something which Europe has officially forbidden as of this year, forcing banks to be restructured using bail-ins instead.

In answering the question whether this is a real solution, Barclays believes that “the structure of the deal works well for Monte Paschi because we understand it is designed to remove completely any risk connected to the NPLs from MPS’s balance sheet, and is a private solution.” That’s the good news.

The bad news: “while the solution is reducing some of the uncertainty around the total amount of provisions needed to write-down NPLs at a “market level”, we believe that it will be difficult to replicate the MPS plan on a large scale and with ongoing lack of clarity on ECB target outcomes, we believe that uncertainty over the capital position of the sector as a whole remains.”

Setting aside the question of whether Italian bank risk is contained, we focus on the proposed 3-step plan to de-risk Month Paschi.

Here is the big picture: once the plan is implemented, the company states Monte Paschi would have an NPL ratio of 18% vs. current 34%, no Bad debt on the balance sheet and 40% coverage ratio on the remaining NPLs. Shareholder share value however will be diluted by at least 81%.

The plan will first increase the coverage ratio for Bad debt, second, transfer all the existing stock of Bad debt (sofferenze) into a securitization vehicle. Third, a €5bn capital increase, which will essentially make this operation “capital neutral”. The details as broken down by Barclays:

First step: Coverage increase, also for the NPLs that will remain on the balance sheet.

The first step is to increase the NPL Coverage ratio: For the €27bn Bad debts (sofferenze) category, the company states the coverage should increase from 61% in 2Q16 to 67%. This level of coverage means that the transfer price used for the securitisation will be 33c. In addition, the group will also raise the coverage for NPLs that remain on the balance sheet, that is €18.1bn of ‘Unlikely to pay’ and ‘past due’ loans. The coverage ratio will be increased from 29% to 40% according to the company.

Second step: Securitization structure.

The €27bn of gross Bad debt will be transferred to the MPS special vehicle. The vehicle will have to issue funding on a net basis, so on the €9.2bn of Net NPLs. As a result of the securitization there will be no part of the structure that remains on MPS’s balance sheet. The securitization vehicle will be composed of three tranches:

• Senior tranche : €6bn of investment grade notes that in the plan will be covered by government guarantees (GACS). The group has already arranged a €6bn bridge loan facility to ensure the deconsolidation of the NPLs, and at the same time gives them the flexibility of time to arrange longer term-issuance.
• €1.6bn Mezzanine tranche: to be bought by the Atlante fund
• €1.6bn Junior tranche: will be entirely assigned to current shareholders, who will see the share premium being erased, and replaced by the note.

Third step: the €5bn capital increase

The size of the capital increase is 5.6x the current market cap. The capital injection will be used to cover the capital needs arising from each step of the plan:

• €2.2bn to increase the coverage ratio on the NPL that will remain on the Bank balance sheet up to 40%
• €1bn to increase the coverage ratio for bad debt (sofferenze) to 67%.
• €1.6bn to deconsolidate the equity tranche of the vehicle.

Existing shareholders

The existing shareholders will see the equity premium on their share replaced by the equity instrument of the SPV. According to MPS the equity tranche should eventually be listed, to facilitate liquidation.

Timeline

September 2016: Extraordinary Shareholders Meeting and Business plan presented

October / November 2016: Extraordinary Shareholders meeting for the approval of the transaction. We do not expect much resistance from shareholders, as the alternative for the group should the plan not been passed would be bankruptcy and bail-in.

By year end 2016: Capital increase and de-recognition of the NPLs.

* * *

Finally, when looking at the future and whether the existing Atlante bailout structure is repeatable, Barclays conclusion is: yes, but only for small banks.

Atlante is set to buy the full €1.6bn mezzanine tranche of the securitization vehicle. In addition the fund will be granted warrants, on underlying newly issued shares, for an amount of up to 7% of the capital post money, and an exercise price in line with the rights issue. The warrants will have a 5 year maturity. Atlante therefore retains additional upside potential, should the price of the shares recover in the next five years.

 

Between the equity available for NPL acquisition and the amounts that have been subsequently pledged to the fund, we estimate that today the Fund has at least €2.5- €2.95bn of equity available to buy the junior Mezzanine tranches of the NPL SPVs, which means €0.9-€1.35bn of additional resources for the rest of the system, which using the sector level coverage and the SPV structure for MPS would imply  between €13-€19bn of NPL that can be bought. We believe that the Atlante solution could be repeatable for smaller banks, as market capacity may not be able to absorb larger scale increases at the moment.

So to summarize all of the above: Monte Paschi got a private bail-out from fellow distressed banks (to whom the cost of contagion would have been far greater than funding BMPS’ bailout) that spared the bank, but wiped out the equity in the form of massive, 80%+ dilution. The problem is that this was a one-off solution – certainly not for other large banks – one which can not be repeated unless further billions are invested in Italy’s Atlante bailout fund to capitalize future securitization-mediated rescues.

As to whether other bailouts will be needed, the question then boils down to how credible the EBA’s stress test is, and how much faith in the ECB’s calculations investors place. Considering that Deutsche Bank has passed every single stress test with flying colors only to plunge in recent weeks to new all time lows, due to both balance sheet fears as well as Europe’s NIRP, it is not very likely that investors give too much credibility to what the “stress test” has concluded.

Which then begs the question: how long until the next cycle in Europe’s banking crisis – which will likely again be centered on Italy – because while the stress test has come and gone, the biggest secular problem of all, Europe’s negative rates and hundreds of billions in bad loans, which are crushing bank revenue and profitability, are here to stay.

via http://ift.tt/2ap6BR4 Tyler Durden

Authored by Paul Craig Roberts,

“One Ring to rule them all . . . and in the darkness bind them.”
J.R.R. Tolkien, The Lord of the Rings

World War II resulted in Europe being conquered, not by Berlin but by Washington.

The conquest was certain but not all at once. Washington’s conquest of Europe resulted from the Marshall Plan, from fears of Stalin’s Red Army that caused Europe to rely on Washington’s protection and to subordinate Europe’s militaries to Washington in NATO, from the replacement of the British pound as world reserve currency with the US dollar, and from the long process of the subordination of the sovereignty of individual European countries to the European Union, a CIA initiative implemented by Washington in order to control all of Europe by controlling only one unaccountable government.

With few exceptions, principally the UK, membership in the EU also meant loss of financial independence. As only the European Central Bank, an EU institution, can create euros, those countries so foolish as to accept the euro as their currency no longer have the power to create their own money in order to finance budget deficits.

The countries that joined the euro must rely on private banks to finance their deficits. The result of this is that over-indebted countries can no longer pay their debts by creating money or expect their debts to be written down to levels that they can service. Instead, Greece, Portugal, Latvia, and Ireland were looted by the private banks.

The EU forced the pseudo-governments of these countries to pay the northern European private banks by suppressing the living standards of their populations and by privatizing public assets at pennies on the dollar. Thus retirement pensions, public employment, education and health services have been cut and the money redirected to private banks. Municipal water companies have been privatized with the result being higher water bills. And so on.

As there is no reward, only punishment, for being a member of the EU, why did governments, despite the expressed wishes of their peoples, join?

The answer is that Washington would have it no other way. The European founders of the EU are mythical creatures. Washington used politicians that Washington controlled to create the EU.

Some years ago CIA documents proving that the EU was a CIA initiative were released. See: http://ift.tt/2aI6TEG… and http://ift.tt/2ahE0tu

In the 1970s my Ph.D. dissertation chairman, then a very high-ranking official in Washington with control over international security affairs, asked me to undertake a sensitive mission abroad. I refused. Nevertheless, he answered my question: “How does Washington get foreign countries to do what Washington wants?”

“Money,” he said. “We give their leaders bagfuls of money. They belong to us.”

The record is clear that the EU serves the interests of Washington, not the interests of Europe. For example, the French people and government are opposed to GMOs, but the EU permits a “precautionary market authorization” of GMO introduction, relying perhaps on the “scientific findings” of the scientists on Monsanto’s payroll. When the US state of Vermont passed a law requiring labeling of GMO foods, Monsanto sued the state of Vermont. Once the paid-off EU officials sign the TTIP agreement written by US global corporations, Monsanto will take over European agriculture.

But the danger to Europe goes far beyond the health of European peoples who will be forced to dine on poisonous foods. Washington is using the EU to force Europeans into conflict with Russia, a powerful nuclear power capable of destroying all of Europe and all of the United States in a few minutes.

This is happening because the paid-off with “bagfuls of money” European “leaders” had rather have Washington’s money in the short-run than for Europeans to live in the long-run.

It is not possible that any European politician is sufficiently moronic to believe that Russia invaded Ukraine, that Russia any moment will invade Poland and the Baltic states, or that Putin is a “new Hitler” scheming to reconstruct the Soviet Empire. These absurd allegations are nothing but Washington propaganda devoid entirely of truth. Washington’s propaganda is completely transparent. Not even an idiot could believe it.

Yet the EU goes along with the propaganda, as does NATO.

Why? The answer is Washington’s money. The EU and NATO are utterly corrupt. They are Washington’s well paid whores.

The only way Europeans can prevent a nuclear World War III and continue to live and to enjoy what remains of their culture that the Americans have not destroyed with America’s culture of sex and violence and greed, is for the European governments to follow the lead of the English and exit the CIA-created European Union. And exit NATO, the purpose of which evaporated with the collapse of the Soviet Union, and which is now being used as an instrument of Washington’s World Hegemony.

Why do Europeans want to die for Washington’s world hegemony? That means Europeans are dying for Washington’s hegemony over Europe as well.

Why do Europeans want to support Washington when Washington’s high officials, such as Victoria Nuland, say “Fuck the EU.”

Europeans are already suffering from the economic sanctions that their overlord in Washington forced them to apply to Russia and Iran. Why do Europeans want to be destroyed by war with Russia? Do Europeans have a death wish? Have Europeans been Americanized and no longer appreciate the historic accumulation of artistic and architectural beauty, literature and music achievements of which their countries are custodians?

The answer is that it makes no difference whatsoever what Europeans think, because Washington has set up a government for them that is totally independent of their wishes. The EU government is accountable only to Washington’s money. A few people capable of issuing edicts are on Washington’s payroll. The entire peoples of Europe are Washington’s serfs.

Therefore, if Europeans remain the gullible, insouciant, and stupid peoples that they currently are, they are doomed, along with the rest of us.

On the other hand, if the European peoples can come to their senses, free themselves from The Matrix that Washington has imposed on them, and revolt against Washington’s agents who control them, the European peoples can save their own lives and the lives of the rest of us.

via http://ift.tt/2akNQx4 Tyler Durden

Authored by Pepe Escobar, originally posted Op-Ed via RT.com,

It was a graphic demonstration of how “win-win” business is done in Asia. At least in theory.

In the end, at a summit in Vientiane, Laos, the 10-nation Association of Southeast Asian Nations (ASEAN) and China finally settled for that household mantra – “defusing tensions”.

They agreed to stop sending people to currently uninhabited “islands, reefs, shoals, cays, and other features” after ASEAN declared itself worried about land reclamation and “escalations of activities in the area”.

And all this without even naming China – or referring to the ruling in The Hague.

China and ASEAN also pledged to respect freedom of navigation in the South China Sea (which Washington insists is in danger); solve territorial disputes peacefully, through negotiations (that happens to be the official Chinese position), also taking into consideration the UN Convention on the Law of the Sea (UNCLOS); and work hard to come up with a Code of Conduct in the South China Sea (that’s been going on for years; optimistically, a binding text will be ready by the first half of 2017).

So, problem solved? Not really. At first, it was Deadlock City. Things only started moving when the Philippines desisted to mention The Hague in the final statement; Cambodia – allied with China – had prevented it from the start.

And that’s the heart of the matter when it comes to ASEAN negotiating with China. It’s a Sisyphean task to reach consensus among the 10 members – even as ASEAN spins its role as the perfect negotiation conduit. China for its part prefers bilaterals – and has applied Divide and Rule to get what it wants, seducing mostly Laos and Cambodia as allies.

That threat by a peer competitor

The strategic geopolitical centrality of the South China Sea is well known: A naval crossroads of roughly $5 trillion in annual trade; transit sea lanes to roughly half of global daily merchant shipping, a third of global oil trade and two-thirds of all liquid natural gas (LNG) trade.

It’s also the key hub of China’s global supply chain. The South China Sea protects China’s access to the India Ocean, which happens to be Beijing’s crucial energy lifeline. Woody Island in the Paracels, southeast of Hainan island, also happens to be a key bridgehead in One Belt, One Road (OBOR) – the New Silk Roads. The South China Sea is strictly linked to the Maritime Silk Road.

The arbitration panel in The Hague (composed of four Europeans, one American of Ghanaian descent and, significantly, no Asians) issued a ruling that is non-binding; moreover, it was not exactly neutral, as China, one the conflicting parties, simply refused to take part.

Beyond these expressions of mutual ASEAN-China understanding, hardcore action will keep everyone’s juices flowing. The Pentagon, predictably, won’t refrain from its FON (Freedom of Navigation) program, which has recently featured several B-52 overflights in the South China Sea along with the usual US Navy patrols.

But now Beijing is counter punching in style – showing off one of its H-6K long-range nuclear-capable bombers overflying Scarborough Shoal, near the Philippines. That only increased Pentagon paranoia, because the real game in the South China Sea revolves to a large extent over China’s aerial and underwater military strategy.

To understand the progression, we need to go back to the early 1980s, when the Little Helmsman Deng Xiaoping set up China’s first Special Economic Zone (SEZ) in Shenzhen. From the start, the whole Chinese miracle always depended upon China’s eastern seaboard’s fabulous capacity to engage in global trade. More than half of China’s GDP depends on global trade.

But, strategically, China has no direct access to the open seas. Geophysics is implacable: there are islands all around. And geopolitics followed; many of these are and can become a problem.

Wu Shicun, the president of China’s National Institute for South China Sea Studies, has been constant over the years; all of Beijing’s actions boil down to securing strategic access to the opens seas. This may be construed in the West as aiming for a “Chinese lake”. But it’s in fact about securing its own naval backyard. And that implies, predictably, deep suspicion about what the US Navy may come up with. The Defense Ministry loses sleep about it 24/7.

For Beijing, it’s crystal clear; the eastern seaboard must be protected at all costs – because they are the entry and exit point of China’s global supply chains. Yet as Beijing improves its military sophistication, the hegemon – or exceptionalist – machine gets itchier and itchier. Because the whole ingrained exceptionalist worldview can only conceive it as a “threat” by a peer competitor.

The larger-than-life “access” drama

From Exceptionalistan’s point of view, it’s all about the myth of “access”. The US must have full, unrestricted “access” to the seven seas, the base of its Empire of Bases, post-Rule Britannia system: the “indispensable nation” ruling the waves.

But now Beijing has reached a new threshold. It’s already in the position to successfully defend the strategic southern island of Hainan. The Yulin naval base in Hainan is the site of China’s expanded submarine fleet, which not only features stalwarts such as the 094A Jin-class submarine, but the capability to deliver China’s new generation ICBM, the JL-3, with an estimated range of 12,000km.

Closed Off: China to hold S. China Sea drills, warns against ‘freedom of navigation’ patrols https://t.co/iLVBWsXDKh http://pic.twitter.com/vzFM8Brvno

— RT (@RT_com) July 18, 2016

Translation: China now can not only protect, but also project power, aiming ultimately at unrestricted access to the Pacific.

The US counter punch to all this is “Anti-Access”, or A2, plus Area Denial, which in Pentagonese turns out as A2/AD. Yet China has evolved very sophisticated A2/AD tactics, which include cyber warfare; submarines equipped with cruise missiles; and most of all anti-ship ballistic missiles such as the Dongfeng 21-D, an absolute nightmare for those sitting duck billion-dollar US aircraft carriers.

A program called Pacific Vision, funded by the Pentagon’s Office of Net Assessments, eventually came up with the Air-Sea Battle concept. Virtually everything about Air-Sea Battle is classified. As the concept was being elaborated, China has mastered the art of very long range ballistic missiles – a lethal threat to the Empire of Bases, fixed and/or floating.

What is known is that the core Air-Sea Battle concept, known in Orwellian Pentagonese as “NIA/D3”,“networked, integrated forces capable of attack-in-depth to disrupt, destroy and defeat adversary forces”. To break through the fog, this is how the Pentagon would trample over Chinese A2/AD. The Pentagon wants to be able to attack all sorts of Chinese command and control centers in a swarm of “surgical operations”. And all this without ever mentioning the word “China”.

So these are the stakes. The indispensable nation’s military hegemony over the whole South China Sea must always be undisputed. Always. But already it is not. China is positioning itself as a cunning, asymmetrical aspirant to “peer competitor”. For the moment Beijing ranks second in the Pentagon’s list of “existential threats” to the US. Were not for Russia’s formidable nuclear power, China would already be number one.

At the same time China does not need to launch any military offensive against an ASEAN member; it’s bad for business. The environment after The Hague’s ruling – as the Laos summit proved – points toward long-term diplomatic solutions. But make no mistake; at some point in the future, there will be a serious confrontation between the US and China over “access" to the South China Sea.

via http://ift.tt/2arGt5W Tyler Durden

In a miracle of modern goal-seeking, China's Manufacturing PMI clung to within an inch of 'stable' 50 level for the 20th month (actually missing expectations of 50.0, printing 49.9) But while manufacturing is its lowest since Feb, the non-manufacturing PMI jumped to 53.9 – its highest since Dec 15. Following the notable USD weakness on Friday (thanks to BoJ disappointment), and the apparent recovery of the Chinese economy (just need another trillion or two of credit to keep the dream alive), PBOC strengthened the Yuan fix by 0.35% – the most since mid-June… extending the 9-day gain to the most since Sept 2010.

Manufacturing slipped to a 5-month low…

Services hits 7-month (2016) highs…

Evercore ISI notes the following a China's most crucial recent developments… 

• “Severe challenges” in the China economy says Beijing, worse than “persistent downward pressure” – their characterization of the last several months. 
• Two components to this change.  One, managing expectations down. Two, showing the upcoming G20 (Sep 4-5) attendees that the officials are on the case. 
• Conflicting Beijing comments.  Saying ‘foundation of stable economic development not solid’ – bad.   Then saying the ‘long-term positive trend in fundamentals has not changed’ – good.   
• China budget deficit now 4.2% of GDP, vs. 2.2% in worst of 2008-09 global crisis amid a big stimulus program.  More stimulus coming.   
• CBRC (banking authority) tightening regulations to contain growing risks from sketchy practices in the ‘Wealth Mgmt Products’ arena.  NPL fears also.   
• Media control even tighter by Beijing.  All original ‘current affairs news’ is now banned by internet portals.  Managing what people see – not the path of modern market economies.    
• Yuan strengthened this last week, mostly on Friday.  Think of this as more USD weakness than Yuan strength.

And that Yuan strength continues as PBOC fixes the currency stronger by the most since mid June…

• *CHINA STRENGTHENS YUAN FIXING BY 0.35%, MOST SINCE JUNE 23

This is the 8th Yuan strengthening in 9 days… the biggest strengthening since Sept 2010…

Is this the post G-20 agreement? Fed promises not rose rates, China allows Yuan to rise.. world remains stable into the election to try to ensure HRC wins?

Charts: Bloomberg

via http://ift.tt/2aowErp Tyler Durden

Presented with no comment…

Source: Townhall.com

via http://ift.tt/2aowHUe Tyler Durden

Authored by Eric Zuesse,

Here are before-and-after pictures of what the U.S. government has achieved, in the Middle East:

What’s especially interesting there, is that in all of these missions, except for Iraq, the U.S. was doing it with the key participation of the Saud family, the royals who own Saudi Arabia, and who are the world’s largest buyers of American weaponry. Since Barack Obama came into the White House, the operations — Libya, Yemen, and Syria — have been, to a large extent, joint operations with the Sauds. ‘We’ are now working more closely with ‘our’ ‘friends’, even than ‘we’ were under George W. Bush.

As President Obama instructed his military, on 28 May 2014:

When issues of global concern do not pose a direct threat to the United States, when such issues are at stake — when crises arise that stir our conscience or push the world in a more dangerous direction but do not directly threaten us — then the threshold for military action must be higher. In such circumstances, we should not go it alone. Instead, we must mobilize allies and partners to take collective action. We have to broaden our tools to include diplomacy and development; sanctions and isolation; appeals to international law; and, if just, necessary and effective, multilateral military action. In such circumstances, we have to work with others because collective action in these circumstances is more likely to succeed.

So: ’we’ didn’t achieve these things only on our own, but instead in alliance with the royals of Saudi Arabia, Qatar, UAE, Kuwait, and other friendly countries, which finance jihadists everywhere but in their own country. And, of course, all of ‘us’ are allied against Russia, so we’re now surrounding that country with ‘our’ NATO partners before we do to it what we’ve previously done to Iraq, Libya, Yemen, and Syria. America is becoming even more ambitious, because of ‘successes’ like these in Iraq, Libya, Syria, Yemen, and Ukraine.

The United States has been the great champion of ‘democracy’ throughout the world. And these are are some of the results of that ‘democracy’. ‘We’ are spreading it abroad.

‘Our’ latest victory has been ‘our’ spreading it to Ukraine. No country is closer to Russia than that.

Inside America, the term that’s used for referring to anyone who opposes this spreading of ‘democracy’, is ‘isolationist’, and this term is imported from the meaning that it had just prior to America’s joining World War II against Hitler and other fascists. Back in that time, an “isolationist” meant someone who didn’t want to defeat the fascists. The implication in the usage of this term now, is that the person who is an ‘isolationist’ is a ‘fascist’, just as was the case then. It’s someone who doesn’t want to spread ‘democracy’. To oppose American foreign policy is thus said to be not only ‘right wing’, but the extremist version of that: far right-wing — fascist, perhaps even nazi, or racist-fascist. (Donald Trump is rejected by many Republicans who say that he’s ‘not conservative enough’. Democrats consider him to be far too ‘conservative’. The neoconservative Democrat Isaac Chotiner, whom the Democratic neoconservative Slate hired away from the Democratic neoconservative The New Republic, has headlined at Slate, “Is Donald Trump a Fascist?” and he answered that question in the affirmative.) George Orwell dubbed this type of terminological usage “Newspeak.” It’s very effective.

Studies in America show that the people who are the most supportive of spreading ‘democracy’ are individuals with masters and doctoral degrees (“postgraduate degrees”). Those are the Americans who vote for these policies, to spread American ‘democracy’, to foreign lands. They want more of this — more of these achievements. (Hillary Clinton beat Bernie Sanders nationwide among the “postgraduate” group.) Some of these people pride themselves on being “technocrats.” They claim that the world needs more of their ‘expertise’. Lots of them come forth on the ‘news’ media to validate such invasions as Iraq in 2003, Libya in 2011, Syria after 2011, etc. Almost all of them possess doctoral degrees. This shows what they have learned. They are the most employable, the highest paid, the most successful, in their respective fields.

After all: ‘democracy’ is not for amateurs. It’s only for people who take instruction, and who do what they are told. But, told by whom? Whom are they obeying? Do they even know? In any organization, when an instruction is issued, is it always easy to know who issued it? And what happens to a person who doesn’t carry it out? There is a winnowing process. The constant survivors are the ones who rise from that process, and who ultimately win the opportunity to issue some of the instructions themselves. These people are the wheat; everybody else is chaff, which gets discarded, in a ‘democracy’.

*  *  *

Investigative historian Eric Zuesse is the author, most recently, of  They’re Not Even Close: The Democratic vs. Republican Economic Records, 1910-2010, and of  CHRIST’S VENTRILOQUISTS: The Event that Created Christianity.

via http://ift.tt/2an7ywf Tyler Durden