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Following ISIS blitzkrieg in which it took over nearly half of Iraq and a third of Syria in the blink of an eye, at which point it created its own Islamic State Caliphate resulting in Obama’s own personal war against the jihadists, some have wondered what is ISIS’ next step: surely its leadership will not merely stagnatte as one after another US predator drone bomb away the capital Reqqa until ISIS figurehead leader al-Baghdadi is killed or gravely wounded. To be sure, the one thing ISIS, which stunned the world with the speed of its ascent, can not afford is to stand still.

So what is next on the strategic timeline for the Islamic State?

According to one source, Al Arabiya, which cites Egyptian experts, the answer is none other than the Suez Canal, and the country it is located in: Egypt.

“There is definitely a threat from ISIS to Egypt,” Mohammed Badr, a professor of political science at the University of Germany told Al Arabiya News, adding that the group has the country in its “line of sight.”

“All extremist groups represent a danger for Egypt,” Badr said, adding that “ISIS, the Muslim Brotherhood, Ansar Bayt al-Maqdis [an Islamist militant group] are all dangerous for Egypt but the level of their threat is different.”

More details from Al-Arabiya:

One alleged ISIS militant took to social media to warn Egypt that it should be expecting a “surprise” soon. “Except a surprise in Egypt within days,” alleged ISIS member Abu Siyaf al-Masry wrote on his personal Twitter account, according to the Cairo-based daily al-Masry al-Youm.

 

These online threats are seen by some analysts as a means to mark their presence in Egypt, despite their absence on the ground. “They don’t have any presence in Egypt until now, which is why they use the internet and social media platforms to interact with Egyptians and spread their influence,” Mohssen al-Faham, a political analyst and commentator for Cairo-based daily al-Gomhuria, told Al Arabiya News.

 

In recent weeks, the Islamist group started showing notable signs that it might be interested in expanding its influence in Egypt.

ISIS’ strategy on how to infiltrate Egypt, if indeed that is the case, is simple: ISIS has started to communicate with and coach Ansar Bayt al-Maqdis, Egypt’s deadliest militant group, and share advice with it on how to create secret cells.

“ISIS and Ansar Bayt al-Maqdis are linked on an ideological level even though the group is not believed to be officially linked to ISIS insurgents,” Badr said.

“Their exchange is another sign that shows a clear threat to Egypt from ISIS,” he added.

While the west is traumatized by three beheadings of western journalists in the past month, in Egypt this is almost a daily occurrence, especially if the word “Israel” is uttered. Last week, Ansar Bayt al-Maqdis, which is based in the Sinai Peninsula claimed to have beheaded four men accused of being Israeli Mossad spies in a video that seemed to have been inspired by the methods of ISIS.

Meanwhile Egypt, already deep in political turmoil with the military regime doing its best to cleanse all representatives of the US-backed Muslim Brotherhood (remember them?), appears to not be too concerned about the ISIS threat. Specifically, the possibility of an ISIS offensive was downplayed by an Egyptian Interior Ministry spokesman, who told Al Arabiya News that al-Qaeda and the Muslim Brotherhood were “the two main terrorist organizations” that threatened Egypt.

“ISIS cannot reach a country like Egypt given the cohesion between people and the unity of the nation,” Interior Ministry spokesman Hany Abdellatif told Al Arabiya News, adding that the group targets weak, failed states.

 

“But we [the Interior Ministry] are still getting threats of terrorism and must remain vigilant as the region is ablaze,” Abdellatif said.

And while Egypt may or may not be the next territorial expansion for ISIS, a new threat is emerging in the Middle East/North Africa region.

According to Reuters, a new armed group calling itself the Caliphate Soldiers in Algeria has split from al Qaeda’s North African branch and sworn loyalty to the radical breakaway group Islamic State fighting in Syria and Iraq. A breakaway of key Algerian commanders from Al Qaeda in the Islamic Maghreb, known as AQIM, would show deepening rivalry between al Qaeda’s core command and the Islamic State over leadership of the transnational Islamist militancy. As we expected several months ago, as Al Qaeda’s reputation in the terrorist world plummets and is replaced by the “bloodthirsty” ISISites, more and more splinter terrorist groups will gravitate to the “cool, new” clique.

In a communique, AQIM central region commander Khaled Abu Suleimane, whose real name is Gouri Abdelmalek, claimed leadership of the new group, joined by an AQIM commander of an eastern region in Algeria, where the al Qaeda wing has its base. “You have in the Islamic Maghreb men if you order them they will obey you,” Suleimane said in reference to Abu Bakr al-Baghdadi, the leader of the Islamic State. “The Maghreb has deviated from the true path.”

 

The communique was posted on jihadi websites. Algerian officials did not immediately comment on the statement.

 

The Algeria splinter group is the latest to side with Baghdadi over al Qaeda’s aging chieftain Ayman al-Zawahri, as the Islamic State appeals to younger militants with successes in gaining territory in Iraq and Syria.

Finally, to cement the fact that Al Qaeda is no longer even remotely relevant to anyone, and certainly not the CIA, Site Intelligence reported earlier that Al-Qaeda released its annual video for the anniversary of the 9/11 attacks, and in this installment, placed group official Hossam Abdul Raouf in the prominent role of lead speaker, and denied reports of its waning influence and strength. Translated: Al Qaeda is dead, replaced by its even more ferocious, if mostly for populist purposes, spin offs, ISIS and now, the Caliphate Soldiers.

And if and when the Islamic State and its Caliphate Soldiers take over the Suez Canal, watch as all those Brent shorts, many of which are rumored to be originating at Liberty 33 itself, suddenly get a margin call.

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

Authored by Robert Shiller, originally posted Op-Ed at The Guardian,

The depression that followed the stock-market crash of 1929 took a turn for the worse eight years later, and recovery came only with the enormous economic stimulus provided by the second world war, a conflict that cost more than 60 million lives. By the time recovery finally arrived, much of Europe and Asia lay in ruins.

The current world situation is not nearly so dire, but there are parallels, particularly to 1937. Now, as then, people have been disappointed for a long time, and many are despairing.

They are becoming more fearful for their long-term economic future. And such fears can have severe consequences.

For example, the impact of the 2008 financial crisis on the Ukrainian and Russian economies might ultimately be behind the recent war there.

According to the International Monetary Fund, both Ukraine and Russia experienced spectacular growth from 2002 to 2007: over those five years, real per capita GDP rose 52% in Ukraine and 46% in Russia.

That is history now: real per capita GDP growth was only 0.2% last year in Ukraine, and only 1.3% in Russia. The discontent generated by such disappointment may help to explain Ukrainian separatists’ anger, Russians’ discontent, and the Russian president Vladimir Putin’s decision to annex Crimea and to support the separatists.

There is a name for the despair that has been driving discontent – and not only in Russia and Ukraine – since the financial crisis.

That name is the “new normal,” referring to long-term diminished prospects for economic growth, a term popularized by Bill Gross, a founder of bond giant PIMCO.

The despair felt after 1937 led to the emergence of similar new terms then, too. “Secular stagnation”, referring to long-term economic malaise, is one example. The word secular comes from the Latin saeculum, meaning a generation or a century.

The word stagnation suggests a swamp, implying a breeding ground for virulent dangers. In the late 1930s, people were also worrying about discontent in Europe, which had already powered the rise of Adolf Hitler and Benito Mussolini.

The other term that suddenly became prominent around 1937 was “underconsumptionism” – the theory that fearful people may want to save too much for difficult times ahead.

Moreover, the amount of saving that people desire exceeds the available investment opportunities. As a result, the desire to save will not add to aggregate saving to start new businesses, construct and sell new buildings, and so forth.

Though investors may bid up prices of existing capital assets, their attempts to save only slow down the economy.

Secular stagnation and underconsumptionism are terms that betray an underlying pessimism, which, by discouraging spending, not only reinforces a weak economy, but also generates anger, intolerance, and a potential for violence.

In his magnum opus The Moral Consequences of Economic Growth, Benjamin M Friedman showed many examples of declining economic growth giving rise – with variable and sometimes long lags – to intolerance, aggressive nationalism, and war.

He concluded:

“The value of a rising standard of living lies not just in the concrete improvements it brings to how individuals live but in how it shapes the social, political, and ultimately the moral character of a people.”

Some will doubt the importance of economic growth. Maybe, many say, we are too ambitious and ought to enjoy a higher quality of life with more leisure. Maybe they are right.

But the real issue is self-esteem and the social-comparison processes that the psychologist Leon Festinger observed as a universal human trait.

Though many will deny it, we are always comparing ourselves with others, and hoping to climb the social ladder. People will never be happy with newfound opportunities for leisure if it seems to signal their failure relative to others.

The hope that economic growth promotes peace and tolerance is based on people’s tendency to compare themselves not just to others in the present, but also to the what they remember of people – including themselves – in the past.

According to Friedman:

“Obviously nothing can enable the majority of the population to be better off than everyone else. But not only is it possible for most people to be better off than they used to be, that is precisely what economic growth means.”

The downside of the sanctions imposed against Russia for its behaviour in eastern Ukraine is that they may produce a recession throughout Europe and beyond.

That will leave the world with unhappy Russians, unhappy Ukrainians, and unhappy Europeans whose sense of confidence and support for peaceful democratic institutions will weaken.

While some kinds of sanctions against international aggression appear to be necessary, we must remain mindful of the risks associated with extreme or punishing measures. It would be highly desirable to come to an agreement to end the sanctions; to integrate Russia (and Ukraine) more fully into the world economy; and to couple these steps with expansionary economic policies.

A satisfactory resolution of the current conflict requires nothing less.

via Zero Hedge http://ift.tt/1pfPTA9 Tyler Durden

Authored by Robert Shiller, originally posted Op-Ed at The Guardian,

The depression that followed the stock-market crash of 1929 took a turn for the worse eight years later, and recovery came only with the enormous economic stimulus provided by the second world war, a conflict that cost more than 60 million lives. By the time recovery finally arrived, much of Europe and Asia lay in ruins.

The current world situation is not nearly so dire, but there are parallels, particularly to 1937. Now, as then, people have been disappointed for a long time, and many are despairing.

They are becoming more fearful for their long-term economic future. And such fears can have severe consequences.

For example, the impact of the 2008 financial crisis on the Ukrainian and Russian economies might ultimately be behind the recent war there.

According to the International Monetary Fund, both Ukraine and Russia experienced spectacular growth from 2002 to 2007: over those five years, real per capita GDP rose 52% in Ukraine and 46% in Russia.

That is history now: real per capita GDP growth was only 0.2% last year in Ukraine, and only 1.3% in Russia. The discontent generated by such disappointment may help to explain Ukrainian separatists’ anger, Russians’ discontent, and the Russian president Vladimir Putin’s decision to annex Crimea and to support the separatists.

There is a name for the despair that has been driving discontent – and not only in Russia and Ukraine – since the financial crisis.

That name is the “new normal,” referring to long-term diminished prospects for economic growth, a term popularized by Bill Gross, a founder of bond giant PIMCO.

The despair felt after 1937 led to the emergence of similar new terms then, too. “Secular stagnation”, referring to long-term economic malaise, is one example. The word secular comes from the Latin saeculum, meaning a generation or a century.

The word stagnation suggests a swamp, implying a breeding ground for virulent dangers. In the late 1930s, people were also worrying about discontent in Europe, which had already powered the rise of Adolf Hitler and Benito Mussolini.

The other term that suddenly became prominent around 1937 was “underconsumptionism” – the theory that fearful people may want to save too much for difficult times ahead.

Moreover, the amount of saving that people desire exceeds the available investment opportunities. As a result, the desire to save will not add to aggregate saving to start new businesses, construct and sell new buildings, and so forth.

Though investors may bid up prices of existing capital assets, their attempts to save only slow down the economy.

Secular stagnation and underconsumptionism are terms that betray an underlying pessimism, which, by discouraging spending, not only reinforces a weak economy, but also generates anger, intolerance, and a potential for violence.

In his magnum opus The Moral Consequences of Economic Growth, Benjamin M Friedman showed many examples of declining economic growth giving rise – with variable and sometimes long lags – to intolerance, aggressive nationalism, and war.

He concluded:

“The value of a rising standard of living lies not just in the concrete improvements it brings to how individuals live but in how it shapes the social, political, and ultimately the moral character of a people.”

Some will doubt the importance of economic growth. Maybe, many say, we are too ambitious and ought to enjoy a higher quality of life with more leisure. Maybe they are right.

But the real issue is self-esteem and the social-comparison processes that the psychologist Leon Festinger observed as a universal human trait.

Though many will deny it, we are always comparing ourselves with others, and hoping to climb the social ladder. People will never be happy with newfound opportunities for leisure if it seems to signal their failure relative to others.

The hope that economic growth promotes peace and tolerance is based on people’s tendency to compare themselves not just to others in the present, but also to the what they remember of people – including themselves – in the past.

According to Friedman:

“Obviously nothing can enable the majority of the population to be better off than everyone else. But not only is it possible for most people to be better off than they used to be, that is precisely what economic growth means.”

The downside of the sanctions imposed against Russia for its behaviour in eastern Ukraine is that they may produce a recession throughout Europe and beyond.

That will leave the world with unhappy Russians, unhappy Ukrainians, and unhappy Europeans whose sense of confidence and support for peaceful democratic institutions will weaken.

While some kinds of sanctions against international aggression appear to be necessary, we must remain mindful of the risks associated with extreme or punishing measures. It would be highly desirable to come to an agreement to end the sanctions; to integrate Russia (and Ukraine) more fully into the world economy; and to couple these steps with expansionary economic policies.

A satisfactory resolution of the current conflict requires nothing less.

via Zero Hedge http://ift.tt/1pfPTA9 Tyler Durden

Strategy – check. Coalition – check. Blowback – check.

 

 

Source: Cagle via Sunday Funnies

via Zero Hedge http://ift.tt/1tSM3kk Tyler Durden

Strategy – check. Coalition – check. Blowback – check.

 

 

Source: Cagle via Sunday Funnies

via Zero Hedge http://ift.tt/1tSM3kk Tyler Durden

For the past six months, even as Obama and the EU were laying harsher sanctions on the Kremlin, one group of companies had managed to sneak by unscathed and largely avoided being impacted by Russia’s isolation by the West: the world’s biggest E&P companies, as explained in detail over a month ago in “Exxon Drilling Russian Arctic Shows Sanction Lack Bite.”

All that is about to change, because while sanctions until this moment had been largely intended to specifically allow energy companies to continue their status quo in Russia, as of this Friday, it is precisely the E&Ps that are being targeted, as we noted on Friday, and as Reuters follows up today, reporting that some of the world’s largest companies, namely Exxon, Anglo-Dutch Royal Dutch Shell, Norway’s Statoil and Italian ENI, will have to be put their Russian projects on hold:  to wit, the companies will have 14 days to wind-down activities.

From Reuters:

Projects now in jeopardy include a landmark drilling program by U.S. giant Exxon Mobil in the Russian Arctic that started in August as part of a joint venture with the Kremlin’s oil champion Rosneft.

 

Now this and dozens of other projects that Rosneft and Gazprom Neft agreed with Exxon, Anglo-Dutch Royal Dutch Shell, Norway’s Statoil and Italian ENI will have to be put on hold.

 

“Cutting off U.S. and E.U. sources of technology and services and goods for those projects makes it impossible, or at least extraordinarily difficult for these projects to continue…There are not ready substitutes elsewhere,” a senior U.S. administration official told a briefing on Friday.

 

The companies will have 14 days to wind-down activities.

And just to make sure that there is once again major Obama administration-induced chaos, and thus yet another collapse in global trade, when it comes to the core covenant of capitalism, namely the sanctity of contracts from government intervention, Reuters cites a US official who said that “there is no contract sanctity.”

Valery Nesterov from Russian state bank Sberbank, which was also sanctioned by the EU and the United States, foresaw serious complications. “What is really worrying are sanctions on tight oil. Russian companies haven’t invested enough in research and technology. They were heavily relying on Western technologies and now it is simply too late,” he said.

That may well be, but at the end of the day, Russia still has all the leverage in the long-run: “key among Russian tight oil reserves are the Bazhenov formations, which are located beneath existing mature west Siberian fields. They are estimated to contain as much as a trillion barrels of oil – four times the reserves of Saudi Arabia. Rosneft and Gazprom Neft are working on Bazhenov with Exxon and Shell.

“When we learnt about the first sanctions we decided to speed up work on all fronts to minimize the damage to the company,” said a Rosneft source. Rosneft’s chief Igor Sechin, a close ally of Putin, said earlier this month the company had approved a program to replace all Western technology in the medium-term.

But while expansion may or may not be hindered, and China certainly will have something to say about the expansion of Russian oil fields in the coming months – and bring its checkbook and smartest heads when it does – one thing that will certainly happen is that once again the West will prove too smart for its own good. 

Enter Tony Hayward, the infamous former CEO of BP (and current Chairman of Glencore) who may have been disgraced by his handling of the Macondo spill but his comments on how the Russian sanctions will play out, are spot on.

As the FT reported moments ago, “US and EU sanctions against Moscow are in danger of turning round and biting the west by constraining global oil supply and pushing up prices in coming years, the former chief executive of BP has warned.”

Tony Hayward said that cutting off capital markets from Russia’s energy groups, which would eventually lead to less investment in Russian oil production, was likely to damage long-term supply. He said the US shale boom had obscured the growing risks to the world’s supply picture, but its effect would wear off, leaving the global economy dangerously exposed to potential disruptions in the flow of oil.

 

“The world has been lulled into a false sense of security because of what’s going on in the US,” Mr Hayward said in an interview with the Financial Times, referring to the shale boom that has driven a 60 per cent increase in US crude output since 2008. But he asked: “When US supply peaks, where will the new supply come from?”

But why worry: after all surely nobody in the Obama administration can possibly conceive that the 8000+ producing wells in the Bakken shale alone, up from 1000 in 2008, could possibly go dry at some/any point in the future…

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