Did Italy And Malta Actually Agree To Swap Oil Rights For Refugees

By James Burgess of OilPrice

Did Italy And Malta Actually Agree To Swap Oil Rights For Refugees?

As the Syrian refugee crisis reaches a critical impasse, both in terms of European security and refugee human rights, Brussels has found itself having to deny accusations of a secret pact between Malta and Italy to swap refugees for oil exploration rights.

The Maltese opposition leader has claimed that Malta and Italy cut a secret deal in which Malta would surrender oil exploration rights in an offshore area disputed with Italy, while Italy would return the favor by picking up Malta’s share of migrant rescues at sea.

In late March, the European Commission was forced to respond to the accusations as the Syrian refugee crisis has hit a fever pitch, denying the accusations; but it’s a complicated issue.

Maltese opposition leader Simon Busuttil of the Nationalist Party, and a member of the European Parliament until 2013, accused the Maltese government late last year of allowing the Italian government to drill for oil in Maltese waters in a dubious oil-for-migrants swap.

His accusations were boosted by the reporting of an Italian newspaper, Il Giornale, which claimed that Italian Prime Minister Matteo Renzi had agreed to the deal with Maltese Prime Minister Joseph Muscat.

Last September, Maltese Home Affairs Minister Carmelo Abela stated that Malta had an informal agreement with Italy take on irregular migrants from Malta, but the minister later altered that statement to a situation of “close collaboration” between Italy and Malta, according to the Italian media report.

While Malta has admitted to close collaboration, the country’s officials maintain that there is no agreement concerning migrants or linking migrants to oil exploration.

Now the European Commission has had to step up to the plate.

Malta is the European Union member country that is closest to the Libyan coast. And with that in mind, Italian centre-right lawmaker Elisabetta Gardini has recently asked the European Commission to explain why there are such low migrant arrival numbers in Malta.

Her question was poignant.

Since 2015, out of the 142,000 people who fled their homes bound for Europe, leaving from the North-African coast, only around a 100 arrived in Malta. It’s an odd situation during this heightened refugee crisis.

In 2013, Maltese officials registered 2,008 arrivals. During the same period, Italy accepted some 150,000 refugees. The argument that there was no deal would suggest that refugees simply have no desire to try for Malta.

Late last month, the European Commission finally replied to the allegations, with European Commissioner for Home Affairs and Migration Dimitris Avramopoulos saying that it was “not aware of any such bilateral agreement… between the Maltese and Italian authorities concerning Search and Rescue (SAR) operations in the Mediterranean Sea.”

“Not aware” certainly does not put this issue to rest.

That said, as reported by the Independent, the Commission noted that coincidentally the area of oil exploration in question overlaps with the migrant rescue areas.

While not being aware of any agreement, the Commission said that if there was an agreement, it would be in line with normal burden-sharing.

“When it comes to the emergency relocation mechanism, the Commission sees it as establishing concrete measures of solidarity and contributing to the fair sharing of responsibilities between member states, in line with Article 80 of the Treaty on the Functioning of the EU,” according to the Commission.

What’s at stake here in terms of the oil play? Quite a lot, potentially. According to an independent review, Malta has a potential 260 million barrels. But Malta and Italy have been locked in dispute over offshore exploration zones as well as over what their migrant rescue zones are.

The crux of the issue is a 2012 law passed by Italy that essentially doubled Italy’s continental shelf southeastwards of Sicily and towards the Libyan coast. Malta balked because this cut into maritime territory it claims. In late 2015, Malta and Italy reached an informal agreement to suspend exploratory oil drilling in this area.

Perhaps one open-ended question is this: With an EU-Turkey deal in place that will see Turkey (in return for some EU favors and a bunch of financial aid) take back refugees landing in Greece, it will essentially cut off the Aegean Sea human smuggling route. It might mean a renewed interest in the Libya route. And if Malta has traded off its rescue area, it will mean problems for Italy, which would have to intercept them all.

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Frontrunning: April 5

  • Panama Papers: Biggest Banks Are Top Users of Offshore Services (WSJ)
  • Panama Papers probes opened, China limits access to news on leaks (Reuters)
  • Credit Suisse CEO Distances Bank From ‘Panama Papers’ (WSJ)
  • Fed’s Evans says market more pessimistic on U.S. rate hikes (Reuters)
  • IMF’s Lagarde Says Risks to Weak Global Recovery Are Increasing (BBG)
  • New U.S. inversion rules threaten Pfizer-Allergan deal (Reuters)
  • Time Is Running Out (Again) for Greece (BBG)
  • The World Has Started Spending More on Weapons (BBG)
  • Ted Cruz Is Confident of Wisconsin Win Over Donald Trump on Tuesday (WSJ)
  • Trump Faces Biggest Test Yet in Tuesday’s Wisconsin Primary (BBG)
  • Another Brazil State-Run Giant Readies Its Own Graft Writedowns (BBG)
  • Afghan Spy Agency Arms Villagers to Hold Off Islamic State (WSJ)
  • Disney expands search for new CEO, COO Staggs leaving (Reuters)
  • Economic models predict GOP White House, even with Trump (Hill)
  • Oil glut up close: How Cushing copes with full crude tanks (Reuters)
  • Goldman Profit Estimates Cut Again as Analysts Project 45% Drop (BBG)
  • Former U.S. tax judge charged with cheating on her tax returns (Reuters)
  • Russia to start deliveries of S-300 missiles to Iran in coming days (Reuters)

 

Bulletin Headline Summary

WSJ

– The Treasury Department imposed new tough curbs on corporate inversions Monday, shocking Wall Street and throwing into doubt the $150-billion merger between Pfizer Inc and Allergan PLC, which was on track to be the biggest deal of its kind. (http://on.wsj.com/1W7WOzY)

– Succession planning at the world’s largest media company fell into disarray on Monday as Tom Staggs, Walt Disney Co’s chief operating officer and the heir apparent to Chief Executive Robert Iger, unexpectedly said he would step down. (http://on.wsj.com/202jgKT)

– A battle for control of the nation’s third largest home builder went public as PulteGroup Inc founder William Pulte and Chairman and Chief Executive Richard Dugas traded barbs and outlined competing visions for the company. (http://on.wsj.com/1Ty6p2x)

– TransCanada Corp said Monday that it had shut down parts of its Keystone oil pipeline for the rest of the week as the company continues to investigate a possible leak in South Dakota. (http://on.wsj.com/2289TJ7)

– United Continental Holdings Inc has reached tentative agreements with its nearly 30,000 ground workers. No details were released on the proposed labor pacts, which are subject to ratification by union members. (http://on.wsj.com/1ox3aLE)

 

FT

Airbus Group warned its UK employees that Brexit threatens the company’s investment plans in the country. (http://on.ft.com/1Sx1Xfw)

Tesla Motors blamed its “hubris” for its production shortfalls, as the carmaker revealed glitches with the ramp up of its Model X. (http://on.ft.com/1Sx22Qo)

Pimco stepped up a legal war of words with Bill Gross, saying they could have fired him for abusing his colleagues in the months before his resignation. (http://on.ft.com/1Sx2HBn)

Walt Disney’s chief operating officer, Tom Staggs, left the company. Staggs was seen as the favourite to succeed Chief Executive Bob Iger at Disney. (http://on.ft.com/1Sx2TQY)

 

NYT

– The U.S. Treasury Department took new steps on Monday to further curtail a popular type of merger in which an American company buys a foreign counterpart, then moves abroad to lower its tax bill. (http://nyti.ms/23clbP4)

– A group of hedge funds asked a federal court in San Juan to freeze the assets of Puerto Rico’s powerful Government Development Bank, claiming it was insolvent and appeared to be spending what cash it had left to prop up other parts of the island’s troubled government. (http://nyti.ms/1RB6sJm)

– Thomas Staggs, the favored contender to lead Walt Disney Co after Robert Iger’s retirement, unexpectedly announced his departure on Monday, throwing succession at the world’s largest entertainment company into disarray. (http://nyti.ms/1S4Bc1x)

– Governor Jerry Brown of California signed a bill on Monday that would raise the minimum wage to $15 an hour by 2022, placing the state at the center of a closely watched economics experiment. (http://nyti.ms/1RKoXYy)

 

Canada

THE GLOBE AND MAIL

** Canadian Labour Congress president Hassan Yussuff says Tom Mulcair does not deserve another term as NDP Leader and predicts he will win less than 60 per cent in Sunday’s leadership review vote. (http://bit.ly/1N6gHQK)

** In a decision that the B.C. New Democratic Party shared only with federal regulators and its environmental supporters, the opposition has officially rejected the proposed Pacific NorthWest LNG plant near Prince Rupert, saying plans for an $11.4-billion terminal on Lelu Island would generate significant greenhouse gas emissions and threaten the important Skeena River salmon runs. (http://bit.ly/228OAao)

** The Saskatchewan Party, under the leadership of Brad Wall, won 51 seats in Monday’s election. The NDP secured the remaining 10. The leader of the New Democratic Party lost his seat by 232 votes as the province’s right-of-centre party waltzed to its third consecutive victory. (http://bit.ly/1RVQOY5)

NATIONAL POST

** Air Canada will firm up its CSeries order within “weeks”, but some level of government funding will still be necessary to help Bombardier Inc succeed, the airline’s chief executive said Monday. (http://bit.ly/1W8XKEh)

** Canada’s largest commercial bank finds itself in the middle of a global uproar over leaked documents exposing activities in offshore tax havens. But the Royal Bank of Canada , which was among financial institutions named in the so-called “Panama Papers,” has denied any wrongdoing, saying it has “established controls, policies and procedures in place” to detect and prevent tax evasion. (http://bit.ly/1VsWcV7)

 

Britain

The Times

Marathon Oil has submitted plans to shut down its giant Brae Field 168 miles northeast of Aberdeen after suffering a series of gas leaks on ageing production platforms.(http://bit.ly/1RYmWO1)

The chief executive of William Hill James Henderson has hailed a “game-changing deal” after it invested in NYX Gaming as part of the latter’s 270 million pound acquisition of OpenBet. (http://bit.ly/1qqzvVV)

The Guardian

Airbus, which employs 15,000 people in the UK to design and manufacture aircraft wings, has told its staff that a vote to leave the EU could choke off future investment in the UK. (http://bit.ly/23b2M5c)

The new chief executive of Marks & Spencer, Steve Rowe, has signalled he is prepared to make changes to the way the retailer is run by retaining personal control of the troubled clothing division.(http://bit.ly/1Ma4qjn)

The Telegraph

The Government must step in to maintain production at Tata’s loss-making UK plants or risk customers abandoning them, signing a death warrant for the British steel industry, unions have warned as the crisis engulfing the sector intensifies. (http://bit.ly/1UR1FX7)

Jitters over the health of the Chinese economy could trigger a bloodbath on financial markets if a hard landing materialises, the International Monetary Fund has warned. (http://bit.ly/1Vro8Zv)

Sky News

InterContinental Exchange has reached agreement with Morgan Stanley, Wells Fargo and Japan’s Mitsubishi UFJ to provide part of the debt that will be required to finance an offer for the LSE Group. (http://bit.ly/1V4Gnos)

The chief executive of BT Group Gavin Patterson has accused ministers of failing to acknowledge its efforts to overhaul Britain’s broadband infrastructure as regulators mull tougher oversight of the former state monopoly.(http://bit.ly/23bFJr1)

The Independent

Chapel Down, a British leading wine producer based in Kent, has raised 1.7 million pound from new shares and a crowdfunding campaign to build a new beer and cider brewery. (http://ind.pn/1MOBLAk)

Alaska Air has reached a deal to buy Virgin America for $2.6 billion and the merger airline will become the fifth largest in the United States. (http://ind.pn/1PQoou7)

 


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Is The Allergan-Pfizer Deal Over? What Wall Street Thinks

Yesterday’s stunning announcement by the US Treasury, which released a report titled  “Treasury Announces Additional Action to Curb Inversions, Address Earnings Stripping“, and which was clearly aimed at ending not only all tax inversions, but the biggest pharma M&A deal in history, Pfizer’s tax-inverting takeover of Allergan (pardon Actavis) hit AGN like a ton of bricks, sending the stock crashing 20%. 

As we previewed last night, we expect numerous M&A arbs to be puking up blood this morning, following the biggest spread blow out in recent history in a $100+ billion deal that involved virtually everyone, from plain vanilla funds to the fastest of the fast money.

But is the deal over? Here are some Wall Street opinions (via BBG).

Citi: “Deal likely to be over”

  • U.S. ownership of combined Pfizer-Allergan will probably approach and may exceed 80% threshold under new Treasury Dept. regulation, “likely precluding” deal from taking place as an inversion, Citi analyst Liav Abraham says in note.
  • Even if domestic ownership is in 60%-80% range, Citi says PFE would probably have difficulty importing its offshore cash balances, providing sufficient cause for the deal not to move forward
  • Expects AGN will see multiple contraction over near term as deal had insulated stock from recent multiple contraction in specialty pharma; says AGN warrants premium to peer group due to earnings quality, growth profile and balance sheet,

Evercore ISI: “Pfizer-Allergan deal trading like it’s “95% dead”

  • Arbs focused on 3-year look back provision for AGN acquisitions, whether co. will be viewed as appropriately sized for a deal, Evercore ISI analyst Mark Schoenebaum says in note
  • Arbs note that the Treasury Dept. regulations released Monday are “proposals” and aren’t “implemented;” unclear whether cos. would litigate damages
  • Deal includes clause that may require only $400m breakup fee on “adverse changes in tax law,” Evercore ISI analyst Umer Raffat writes

Bernstein:  “distinct possibility” regs don’t end up jeopardizing the PFE-AGN deal

  • Bernstein analyst Tim Anderson says in note that there’s a “distinct possibility” that the new Treasury regs don’t end up jeopardizing the PFE-AGN deal
  • If AGN pact falls through, PFE could revisit AstraZeneca or Glaxo if rules don’t squash appetite for inversion deals

Jefferies: “Treasury may derail the PFE-AGN deal

  • Jefferies analysts led by Jeffrey Holford say in note that Treasury action may derail the PFE-AGN deal and could spell the end of PFE’s inversion attempts

* * *

But the best summary of what just happened comes from Goldman’s Alec Phillip, as explained in his overnight note “Treasury Releases New Inversion-Focused Tax Regulations.” The implications are substantial not only for Allergan, but the entire inversion space.

From Goldman:

BOTTOM LINE: The Treasury has released regulations that might increase the effective tax rate of foreign companies operating in the US and would put further restrictions on some pending and future corporate inversion transactions.

MAIN POINTS:

1. The Treasury released stronger-than-expected changes to tax rules related to inversion transactions. This marks the third set of inversion-focused rules changes since 2014. While the first set of changes in September 2014 was stronger than expected, the second set in October 2015 was much more incremental, creating an impression that the Treasury might not make any further significant changes. By contrast, the changes the Treasury proposed today (April 4) go beyond inversion transactions per se and focus on a practice that foreign firms—not just inverted companies—use to lower their US tax rate, as well as transactions that do not technically meet the definition of inversions but which the Treasury believes to be inversions in practice.

2. “Earnings stripping” changes are broader than expected but it is not yet clear how significant an effect on effective tax rates they will have. Under current law, foreign companies can lend to their US subsidiaries, which then pay tax-deductible interest in return. This has the effect of reducing taxable earnings in the US and increasing it in lower-tax jurisdictions. The Treasury raised the possibility of changing the rules in this area in its 2014 anti-inversion notice, but after more than a year of inaction many observers had concluded that the Treasury might not act. Ultimately, the Treasury has applied this change to all foreign-owned companies, but has not specified quantitative thresholds or ratios above which interest deductions would be disallowed (some tax experts have proposed tightening existing debt-to-equity and/or interest-to-income ratios). Instead, the Treasury is requiring greater documentation of, among other things, a reasonable expectation of repayment and a legal obligation to do so. It is not clear what effect this will ultimately have on foreign firms’ effective US tax rates, but it could result in incrementally higher tax liabilities (this does not generally affect US-based firms, because interest income earned abroad is usually taxed by the US as it is earned).

3. “Anti-stuffing” rules could change the tax treatment of pending cross-border transactions. Under the new rules, cross-border M&A transactions that involve a series of acquisitions would become more likely to be counted as inversions for tax purposes, even if under current rules they involve a large enough ownership change (greater than 40%) to avoid more restrictive treatment. Specifically, the Treasury states that it is focused on transactions, for example, where a foreign company acquires a US company, and the combined firm then acquires another US firm in a subsequent transaction. Treasury also states that how these transaction are treated “should not depend on whether there was a demonstrable plan” to undertake a series of transactions, i.e., the Treasury would consider unrelated transactions to nevertheless be related and thus subject to more restrictive treatment if the transactions occurred within three years of one another. The upshot is that pending and future transactions that would have previously avoided the more restrictive tax treatment applied to inverted companies could now be subject to them. For transactions that involve between a 20% and 40% ownership change, this can mean additional tax on inversion-related gains and greater tax consequences for accessing unrepatriated foreign earnings for ten years following the transaction; for companies with less than a 20% ownership change, this would mean continued treatment as a US-domiciled company despite the transaction. The rules will apply to transactions that close between April 4, 2016 and April 4, 2019.

4. These changes will be made unilaterally and no congressional approval is required. The Treasury is making these changes via regulation on the basis of existing laws, so the announced policies are essentially final unless the Treasury decides to revise its interpretation of the laws again in the future. That said, it is possible that some companies involved in transactions that would be restricted under the new rules could bring a legal challenge against the changes.


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“Risk Off” – Global Stocks Slide As Yen Surges To 17 Month High; Bund Yields Plunge

The market’s slumberous levitation of the past month, in which yesterday’s -0.3% drop was the second largest in 4 weeks and in which the market had gone for 15 consecutive days without a 1% S&P 500 move (in March 2015 the sasme streak ended at day 16) may be about to end, after an overnight session, the polar opposite of yesterday’s smooth sailing, which has seen a sudden return of global risk off mood.

It all started in Japan, where the yen jumped to a 17-month high and government bonds climbed as increasing concern that global economic growth is faltering stoked demand for haven assets, catalyzed perhaps by yesterday’s shocking US Treasury announcement that tax inversion deals are all but dead, in the process send Allergan stock lower by 20% and crushing countless M&A arbs. Additionally, the Yan overnight appreciated even after Bank of Japan Governor Haruhiko Kuroda said he will keep monitoring foreign-exchange markets and reiterated the potential for additional monetary stimulus.

According to FX watchers the critical USDJPY carry pair may test a break of 110 as Suga’s FX remarks are unlikely to halt FX pair’s decline at this point as market players probably don’t believe Japan can intervene in market anytime soon, says FPG Securities CEO Koji Fukaya.

The surge in the Yen pushed Japan’s closely correlated Nikkei another 2.4% lower to 15,732 as it rapidly approaches its February 12 lows of 14,952. We wonder how much longer Abe and Kuroda will be content to comply with the “Shanghai Accord” whose only purpose was to stem Yuan devaluation at the expense of a strong Yen and Euro. Another 5% drop in the Nikkei and suddenly rumors will reemerge that Abe’s career-ending bout of diarrhea may be returning; and since Japan’s QE is critical to maintaining global asset prices, the recent bout of USD weakness (and Yuan strength) may be very short-lived.

It wasn’t just Japan and the Yen: in Germany bunds climbed after an unexpected drop in factory orders (down -1.2%, exp. 0.3%), with Bund yields sliding below 0.1% (0.07% to be precise) for the first time since April 2015, when the great Bund Tantrum struck which as even Goldman has admitted, was driven by ECB intervention. Will Draghi dare to sell European TSYs even as he is now actively buying Corporate IG bonds, in the process destabilizing the even more illiquid European bond market? We may find out soon.

European sentiment has also been dampened from the lacklustre PMI readings from European nations with the French services reading slipping into contractionary territory, while the final PMI for Germany, Italy and the EU composite all missed: Europe may be rolling over again.

“There are worries about the global economy,” Christian Reicherter, an analyst at DZ Bank AG in Frankfurt told Bloomberg. “In this environment, bunds are still the place to go”, and indeed, the chart below confirms just that.

 

Other were just as pessimistic: “Across Europe, the rally from Feb’16 lows is faltering and we expect
downside risks to dominate. Europe’s underperformance vs. the SPX (in
dollar terms) also shows no signs of abating”, JPMorgan analysts led by
Sunil Garg say.

As a result, stocks fell around the world, along with emerging-market currencies.  All 30 stocks in Germany’s DAX Index fell after an unexpected drop in factory orders. The Stoxx Europe 600 Index sank to a five-week low and U.S. equity futures pointed to a second day of losses. South Africa’s rand and the South Korean won led declines for developing-nation currencies. Gold advanced the most in a week, and oil dropped for a third day before stockpiles data.

This is where markets are now:

  • S&P 500 futures down 0.9% to 2040
  • Stoxx 600 down 1.9% to 329
  • FTSE 100 down 1.4% to 6081
  • DAX down 2.4% to 9583
  • German 10Yr yield down 4bps to 0.09%
  • Italian 10Yr yield down 1bp to 1.23%
  • Spanish 10Yr yield down less than 1bp to 1.46%
  • S&P GSCI Index down 0.2% to 310.8
  • MSCI Asia Pacific down 1.6% to 124
  • Nikkei 225 down 2.4% to 15733
  • Hang Seng down 1.6% to 20177
  • Shanghai Composite up 1.4% to 3053
  • S&P/ASX 200 down 1.4% to 4924
  • US 10-yr yield down 4bps to 1.72%
  • Dollar Index up 0.11% to 94.62
  • WTI Crude futures down 0.3% to $35.59
  • Brent Futures down 0.3% to $37.59
  • Gold spot up 1.5% to $1,233
  • Silver spot up 1.6% to $15.16

Top Global News

  • Pfizer-Allergan Deal May Be Imperiled by U.S. Inversion Rules: new rules may put a planned $160 billion merger between Pfizer and Allergan in jeopardy; Allergan Falls After Treasury Rules Announced; Pfizer Gains
  • UBS, HSBC Offshore Dealings Thrust Into Panama Papers Spotlight: report describes UBS’s dealings with law firm Mossack Fonseca; both banks say they comply with laws for vetting customers; ‘Panama Papers’ Train New Spotlight on Global Elites’ Wealth
  • Tesla Deliveries Miss Forecast as ‘Hubris’ Hurts SUV Supply: automaker sold 14,820 Model S cars and Model X SUVs in 1Q, short of the 16,000 it had predicted in February; Tesla Motors CIO Vijayan Leaves to Launch Own Startup: WSJ
  • Valeant Creditors Said to Resist Proposal to Relax Loan Pact: co. facing push back from some of its lenders as it seeks to waive a default, loosen restrictions on its debt; Valeant Said to Cut Libido Pill Sales Force in Reorganization
  • Disney Says Staggs Stepping Down as Chief Operating Officer: departure complicates efforts to find heir to CEO Robert Iger; executive is said to have struggled to gain support of board
  • Pimco Says Bill Gross Was Told He’d Lose $200 Million Bonus: firm responds in suit saying CEO and counsel warned co- founder
  • Sumitomo Mitsui to Charge Fees on Accounts of Overseas Lenders: goal is to recover costs of the BOJ’s negative interest rates; Mitsubishi UFJ, Mizuho considering similar steps
  • Vale Seeking to Trim Debt Exits ThyssenKrupp Steel Venture: ThyssenKrupp to gain full control of embattled Brazilian mill; Vale free from plant’s debt obligations
  • Lagarde Cites ‘Brexit’ Among Geopolitical Risks to Global Growth: IMF Managing Director Lagarde cited the U.K.’s June referendum on exiting the EU among threats to the global economy; U.K. Growth Subdued as ‘Brexit’ Hurts Confidence, Markit Says
  • Trump Faces Biggest Test Yet in Tuesday’s Wisconsin Primary
  • Samsung Bioepis Sues AbbVie Over Humira Patent: Korea Economic Daily

Looking at regional markets, Asian stocks resided in negative territory following a similar lead from Wall St. as declines in oil weighed on risk-appetite. Nikkei 225 (-2.6%) was the underperformer and fell below 16000, pressured by a stronger JPY and losses in index giant Fast Retailing following a decline in Uniqlo sales. Weakness seen in the commodities complex dictated sentiment in the ASX 200 (-1.4%) with energy the laggard after WTI fell below USD 36/bbl, while the Shanghai Comp (+1.5%) shrugged off its initial losses amid gains in defensive stocks and after the PBoC conducted a respectable liquidity injection. 10yr JGBs traded lower despite the downbeat tone and a firm 10yr auction which drew the highest b/c since 2014, as early weakness persisted following comments
from BoJ officials including Governor Kuroda who stated they are not placing particular focus on NIRP.

BoJ Governor Kuroda said it is technically possible to cut rates further into negative territory if required, but also added they are not placing particular focus on NIRP as possible future measures. Elsewhere, BoJ is considering downgrading inflation outlook in its economic outlook report later this month amid lower expectations from households and businesses.

Top Asian News

  • Rajan Cuts India Rates to Five-Year Low, to Stay Accommodative: RBI narrows policy rate corridor to 50 bps from 100 bps
  • ‘Panama Papers’ Train New Spotlight on Global Elites’ Wealth: Leaked files draw outrage from leaders named in group’s report
  • Race Against a Weaker Yuan Spurs Chinese Overseas Acquisitions: Outbound deals top $97 billion this year, 80% of 2015’s total
  • Bond Market ‘Exhausted’ as Kuroda’s Stimulus Enters Fourth Year: Low yields accompanied by high volatility, money market stress
  • China Reserves Slide Seen Easing, Yet Dam-Bust Still a Risk: Test will come if Fed tightening expectations return
  • Yen Climbs to Strongest Since 2014 as Kuroda Monitors Market: Yen is best performer among Group of 10 currencies this year
  • China Said to Plan $155 Billion of Sour Loan-Equity Swaps: Swaps may lift banks’ net profits by 4% a year, Huatai says

In Europe, risk off sentiments dominates price action in Europe with the Eurostoxx (-2%) hit by the slump in mining and energy names. Separately, financials have also underperformed so far today in the wake of the Panama Papers scandal, with Credit Suisse lower by 3.5%. Allied to this, sentiment has also been dampened from the lacklustre PMI readings from European nations with the French services reading slipping into contractionary territory, while Germany also posted softer than expected factory orders. Subsequently, Bunds gained on the back of flight-to-quality flow to make a firm break above 164.00 with the yield curve continuing its bull-flattening bias. As such, yields broke below 0.10% having fallen to its lowest level in a year.

Top European News

  • German Factory Orders Unexpectedly Fall on Exports Slowdown: orders fall 1.2% on month vs estimate of 0.3% increase; Feb. decline led by sluggish growth in global trade; German Growth at Risk Amid Global Economic Slowdown: OECD
  • Euro Area Growth Stays ‘Sluggish’ as Markit Index Revised Lower: euro-area economy grew slower than initially anticipated at the end of 1Q, according to Markit Economics, which revised down a key index of activity
  • Thousands of Icelanders Protest as PM Ignores Calls to Quit: protests after leaked documents suggested PM Gunnlaugsson allegedly benefited from offshore investment accounts in tax havens
  • Credit Suisse CEO Says ‘Best Time’ to Grow in Asia as Rivals Cut: CEO said now is the “best time” to expand in Asia because retreats by some competitors make it easier to find top recruit
  • Peugeot Tumbles as Expansion Spending Weighs on Profit Margins: co. predicted that spending on new models and technology would weigh on profit in coming years
  • Gemalto to Propose Vallee as Successor to CEO Piou: COO Vallee to succeed CEO Olivier Piou who will retire at end of Aug.
  • Europe’s Central Banks Begin Boosting QE Price Transparency: Bank of France to follow Dutch in taking steps toward greater transparency, person familar with plan says

FX markets active this morning, but with the JPY stealing the limelight as the USD rate pushes below the March lows to take out 110.50. 110.00 holds for now, but the price action since suggests a test of this key level is imminent. Large stops reported below, but official warnings (chief government spokesman) that markets are being monitored also been fired out there, but to no effect as yet. The Yen appreciated even after Bank of Japan Governor Haruhiko Kuroda said he will keep monitoring foreign-exchange markets and reiterated the potential for additional monetary stimulus.

AUD saw a brief relief rally post RBA, as the language remained very much the same, but as with the NZD and CAD, sellers have been back in since, and we have set fresh series lows in AUD and NZD, but CAD still holding off the Friday lows just ahead of 1.3150. UK services PMI came in as expected, but EUR/GBP continues to threaten .8000+ levels. Cable has held off 1.4200 for now, but no notable recovery to the likes of that seen in recent sessions. EUR/USD still poised for a breakout either way, holding inside Friday limits for now, but with a small bias to the downside after taking out the Monday base at 1.1355. The euro slid 0.2 percent to $1.1365, while the pound dropped 0.2 percent to $1.4229.
 
In commodities, a choppy session has seen WTI and Brent futures pare back losses seen in Asian and early European trade, with comments from the Kuwaiti OPEC governor suggesting a deal is still likely in Doha helping bolster WTI prices back above USD 35.50/bbl. Elsewhere, gold has been on the march overnight, climbing by over USD 15/oz to trade above USD 1230/oz in a flight to quality amid the USD/JPY softness. The metals complex was also underpinned on the return of Chinese participants which helped copper snap a 7-day losing streak, while iron ore underperformed on increasing supply from its main exporter nations.

Copper for delivery in three months was set to end the longest losing streak in two years, advancing for the first time in eight sessions. The metal was up 0.5 percent at $4,785 a metric ton. Aluminum was little changed, while zinc fell 1.5 percent.

On the US calendar today, we get the February trade balance reading where expectations are for a modest widening in the deficit. We’ll then get confirmation of those PMI numbers before the closely watched ISM non-manufacturing print for March is due to be released (expected to tick up to 54.2 from 53.4 the prior month) where there will be a close watch on the employment component in particular. The IBD/TIPP economic optimism reading for April and February JOLTS job openings data concludes the releases. Away from the data we’re due to hear from the Fed’s Evans shortly after we go to print.

 

Bulletin Headline Summary from RanSquawk and Bloomberg

  • USD/JPY touches its lowest level for 18 months, with EUR/USD & GBP/USD heading into the North American crossover near their lows of the day
  • European equites trade firmly in the red, led lower by materials, financials and energy names
  • Looking ahead, highlights include US JOLTS, ISM Non-Manf and Services & Composite PM’s
  • Treasuries higher in overnight trading as global equity markets sell-off and WTI oil drops towards $35/barrel; economic calendar includes trade balance, JOLTS job openings.
  • The yen jumped to a 17-month high and government bonds climbed as increasing concern that global economic growth is faltering stoked demand for haven assets
  • Three months after predicting Goldman Sachs Group Inc. would put the tumultuous end of 2015 behind it and stabilize profits, analysts are reversing course and cutting projections again
  • Panama and the U.S. have at least one thing in common: Neither has agreed to new international standards to make it harder for tax evaders and money launderers to hide their money
  • UBS and HSBC — two of the banks hardest hit amid a U.S. crackdown on customers’ illicit funds in recent years — are now starring in a torrent of leaked documents detailing how they once helped clients set up thousands of offshore shell companies
  • China may approve as soon as this month a plan to make it easier for banks to convert soured debt into equity. The government may allow conversions of as much as 1 trillion yuan ($155 billion) of bad loans under the plan
  • France is planning to join the Netherlands in taking steps toward greater transparency in the European Central Bank’s €80 billion-a-month ($91 billion) QE program, according to a person with direct knowledge of the plans
  • Christine Lagarde said the International Monetary Fund will negotiate “in good faith” with the Greek government as she signaled that recent animosity over the latest review of Greece’s aid program will blow over
  • Sovereign 10Y bond yields mostly lower; European and Asian equity markets drop; U.S. equity-index futures fall. WTI crude oil drops; gold and copper move higher

US Event Calendar

  • 8:30am: Trade Balance, Feb., est -$46.2b (prior – $45.7b)
  • 9:45am: Markit US Services PMI, March F, est. 51.2 (prior 51)
    • Markit US Composite PMI, March F (prior 51.1)
  • 10:00am: ISM Non-Mfg Composite, March, est. 54.2 (prior 53.4)
  • 10:00am: IBD/TIPP Economic Optimism, April, est. 47 (prior 46.8)
  • 10:00am: JOLTS Job Openings, Feb., est. 5.49m (prior 5.541m)

DB’s Jim Reid concludes the overnight wrap

So with expectations for an output freeze from Oil producers at the Doha meeting later this month plummeting lower, away from that and the Fed/Data watch, another factor which will likely provide some near term direction for markets is Q1 earnings season in the US which is due to unofficially kick off next week when Alcoa reports on Monday. Our US equity strategists are expecting a difficult quarter for earnings and have a bottom up Q1 EPS growth decline estimate of -8% yoy, with markets exposed to banks and energy stocks in particular expected to perform poorly. Something we’ll be keeping a close eye on in coming weeks.

Switching our attention over to the latest in Asia now where this morning we’re seeing most major bourses (aside from China) follow the lead from Wall Street last night and trade lower. Japanese equity markets in particular have seen the sharpest declines with the Nikkei currently -1.92%. A stronger Yen isn’t helping matters there while the latest numbers from the March Nikkei PMI data showed the composite falling below 50 last month for the first time in a year, tumbling 1.1pts to 49.9. The services data declined 1.2pts to 50.0 which was also the lowest in a year. Meanwhile, the Hang Seng (-1.40%) has also seen a steep fall after reopening from a public holiday yesterday, although bourses in China (Shanghai Comp +0.97%) are reversing course as we type from a softish start. We’re also seeing more Bloomberg headlines of another potential corporate default in Greater China this morning, with China Green Holdings the latest in the limelight after the company advised it has insufficient funds to make its upcoming bond repayment in a week. Elsewhere the Kospi is -0.80% and ASX -1.26%. The Aussie Dollar is a touch firmer after the RBA held rates steady as expected.

Moving on. Yesterday’s batch of economic data in the US was generally a tad weaker than expected. The main focus was on the soft factory orders data for February. Headline orders were said to have declined -1.7% mom as expected however orders excluding transportation were down a heavier than expected -0.8% mom (vs. -0.5% expected). Meanwhile, core capex orders were confirmed as falling -2.5% mom in February which was slightly more than the initial flash reading had alluded to. Headline and core durable goods orders were down -3.0% mom and -1.3% mom having also been revised lower. Elsewhere we saw the labour market conditions index fall -2.1pts in March after expectations had been for a +1.5pts gain. That means the index has now put in its third consecutive monthly decline which is in contrast to the more positive picture that the headline nonfarm payrolls data is painting.

Staying with the US, yesterday we heard from the usually dovish Boston Fed’s Rosengren who became the latest in a long line of regional Fed Presidents to speak with a more optimistic tone. Rosengren noted that in his opinion the current market expectations for one rate increase this year and next ‘could prove too pessimistic’. He highlighted that ‘the US economy is continuing to improve despite the headwinds from abroad’ and that ‘if my forecast is right, it may imply more increases in short-term interest rates than are currently priced into futures markets’ and that ‘it will likely be appropriate to resume the path of gradual tightening sooner’.

There was also some Central Bank speak to note from the ECB too following comments from board member, Praet. In a speech in Rome, Praet made mention to the fact that ‘allowing inflation to re-anchor downwards comes with a high risk of credibility losses for the central bank, and especially when the objective is not being met’. Praet also noted that ‘the need for a superior policy mix is no excuse for central banks to be passive when their mandates are under threat’, before going on to state that ‘the ECB has demonstrated through its actions that it does not wait for others to move first’.

The European data added little to the debate yesterday with the Euro area unemployment rate printing as expected at 10.3% in February, while the latest Sentix investor confidence reading showed a smaller than expected 0.2pt gain this month to 5.7 (vs. 7.0 expected). The Euro chopped around in small range yesterday before ultimately closing flat although we did see further moves lower for Bund yields, with the 10y at one stage trading as low as 0.115% which is only a smidgen away from the 0.101% intraday low this year made back in late February.

Taking a look at the day ahead, we’ve got a slightly busier calendar to look forward to. This morning in Europe the early data is out of Germany where the February factory orders data is due. Shortly following this we will get the final revisions for the services and composite PMI’s in Europe (no change to the Euro area reading expected) as well as a first look for the indicators in Spain, Italy and the UK. Euro area retail sales covering the February month (0.0% mom expected) rounds off the data this morning. Over in the US this afternoon we kickstart with the February trade balance reading where expectations are for a modest widening in the deficit. We’ll then get confirmation of those PMI numbers before the closely watched ISM non-manufacturing print for March is due to be released (expected to tick up to 54.2 from 53.4 the prior month) where there will be a close watch on the employment component in particular. The IBD/TIPP economic optimism reading for April and February JOLTS job openings data concludes the releases. Away from the data we’re due to hear from the Fed’s Evans shortly after we go to print.


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2018 – SDR World Currency Backed with Gold

 

 


Jim Rickards: 2018 – SDR World Currency Backed with Gold 

Posted with permission and written by Rory Hall, The Daily Coin (CLICK FOR ORIGINAL)

 

 

 

Gold – everlasting, beautiful, money.

This video, from the Financial Times is a perfect example of the miseducation, the conditioning, I’ll even say to go so far as brainwashing about gold that has taken place. A lot of things people think they know about gold are completely wrong. The important things you should know about gold are very much unknown to most people. ~Jim Rickards

For the past 100 plus years the Federal Reserve has conducted a campaign against the virtues of gold. First, in 1933 using the Office of the President, they stole our gold through Executive Order 6102.

After this rather unsuccessful effort the real campaign began. Sometime after World War II the word “gold” was, basically, eliminated from everyday language and conversation. Yes, people in the Western world, still discuss gold when the subject of jewelry is brought up, but people don’t really understand gold and why or how it functions as money. Make no mistake about it, gold is money even today. If gold is not money then explain to me why central banks, around the world, including the United States central bank, the privately owned, Federal Reserve stores physical gold and accounts for it, as an asset, on their accounting ledger? The cost of storing gold is no small expense, especially if you are talking about a storage facility like Fort Knox. To be 100% clear, gold is money, period.

Why is gold money? There are plenty of good reasons why gold is money. One of them is: what else could be money? You’re not going to want something that’s radioactive; you’re not going to want something that dissolves in water; you’re not going to want something that’s impossibly scarce, you want it to be scarce but not too scarce. You don’t want a gas that’ll go up in the sky. ~Jim Rickards

China has been promoting the ownership of Silver and Gold to it’s Citizens since September 2009. Silver is money and has been used as money longer gold. Why would China encourage their citizens to acquire physical silver and gold? What do the Chinese know that the U.S. does not? Well, both are money and the Chinese government understands the U.S. dollar will not be used outside the United States very much longer. Therefore, the citizens of China are being taught, by their government, to protect their wealth from a currency crisis. What has the United States government taught it’s citizens about wealth, savings or a currency crisis? Anyone? Anything?

We’re Being Herded Into Digital Pens to be Slaughtered with Negative Interest Rates ~Jim Rickards’

Let’s listen to former President, George W. Bush, teach the people of the United States how to handle money and the economy –

 

Yes, that’s right, the President is teaching us about the economy and how we should “go shopping more”. Spend, spend, spend. What ever happened to save, save, save? Anyone remember “a penny saved is a penny earned“? We never hear any wisdom about the economy, money or the virtues of saving. You do remember what a virtue is, right?

When I sat down to discuss the economy, gold and global events with Jim Rickards, Agora Financial, we peered behind the curtain to see what China and Russia are doing, individually and collectively.

There is a subject that is so far off the radar by the mainstream media, independent media and, basically any media in the West that Mr. Rickards was somewhat surprised when I ask him about it. The Shanghai Cooperation Organization (SCO) is one of the most important developments in the last fifty years. This plan, which encompasses over 50% of the global population and over 70% of the natural resources on this planet, has been completely overlooked, with few exceptions, for many years.

China and Russia sit at the head of this gigantic organization and the implications for the West are many and far reaching. The monetary infrastructure, that is already in place, has the capacity to make void all Western world banking, financial and economic activity. The strategic alliance the SCO represents has the exact same implications regarding geopolitical situations and war. Look at how Russia developed a plan, executed that plan and was able to cripple “ISIS” in five months. The United States and it’s allies have been unable to accomplish this goal in fifteen years! That’s a force to be reckoned with. What makes you think the monetary infrastructure that China and Russia have in place can’t accomplish the same goal on the “monetary battle ground”? While we continue ignoring the most significant monetary and strategic developments, in our lifetime, we are only fooling ourselves that tomorrow will function the same as today. Tomorrow is already here, we just haven’t awakened to hear the news.

 

Let’s listen in and allow Mr. Rickards to give the details on gold, the SCO and what this means to all of us in the coming years.

 

 

 

Please email with any questions about this article or precious metals HERE

 

 

 

Jim Rickards: 2018 – SDR World Currency Backed with Gold 

Posted with permission and written by Rory Hall, The Daily Coin (CLICK FOR ORIGINAL)

 

 

Rory Hall, Editor-in-Chief of The Daily Coin, has written over 700 articles and produced more than 200 videos about the precious metals market, economic and monetary policies as well as geopolitical events since 1987. His articles have been published by Zerohedge, SHTFPlan, Sprott Money, GoldSilver and Silver Doctors, SGTReport, just to name a few. Rory has contributed daily to SGTReport since 2012. He has interviewed experts such as Dr. Paul Craig Roberts, Dr. Marc Faber, Eric Sprott, Gerald Celente and Peter Schiff, to name but a few. Visit The Daily Coin website and The Daily Coin YouTube channels to enjoy original and some of the best economic, precious metals, geopolitical and preparedness news from around the world.

 

 



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Turkey: The Business Of Refugee Smuggling & Sex Trafficking

Submitted by Uzay Bulut via The Gatestone Institute,

  • Professional criminals convince parents that their daughters are going to a better life in Turkey. The parents are given 2000-5000 Turkish liras ($700-$1700) as a "bride price" — an enormous sum for a poor Syrian family.

  • "Girls between the ages of twelve and sixteen are referred to as pistachios, those between seventeen and twenty are called cherries, twenty to twenty-two are apples, and anyone older is a watermelon." — From a report on Turkey, by End Child Prostitution, Child Pornography and Trafficking of Children for Sexual Purposes (ECPAT).

  • Many Muslims have difficulty with, or even an aversion to, assimilating into the Western culture. Many seem to have the aim of importing to Europe the culture of intimidation, rape and abuse from which they fled.

  • Although the desperate victims are their Muslim sisters and brothers, wealthy Arab states do not take in refugees. The people in this area know too well that asylum seekers would bring with them problems, both social and economic. For many Muslim men such as wealthy, aging Saudis, it is easier to buy Syrian children from Turkey, Syria or Jordan as cheap sex slaves.

On International Women's Day, March 8, Turkish news outlets covered the tragic life and early death of a Syrian child bride.

Last August, in Aleppo, Mafe Zafur, 15, married her cousin Ibrahim Zafur in an Islamic marriage. The couple moved to Turkey, but the marriage ended after six months, when her husband abruptly threw out of their home. With nowhere to sleep, Mafe found shelter with her brother, 19, and another cousin, 14, in an abandoned truck.

On 8 March, Mafe killed herself, reportedly with a shotgun. Her only possession, found in her pocket, was her handwritten marriage certificate.

Mafe Zafur is only one of many young Syrians who have been victims of child marriage. Human rights groups report even greater abuse that gangs are perpetrating against the approximately three million Syrians who have fled to Turkey.

A detailed report on Syrian women refugees, asylum seekers, and immigrants in Turkey, issued as far back as 2014 by the Association for Human Rights and Solidarity with the Oppressed (known in Turkish as Mazlumder), tells of early and forced marriages, polygamy, sexual harassment, human trafficking, prostitution, and rape that criminals inflicted upon Syrians in Turkey.

According to the Mazlumder report, Syrians are sexually exploited by those who take advantage of their destitution. Children, especially girls, suffer most.

Evidence, both witnessed and forensic, indicates that in every city where Syrian refugees have settled, prostitution has drastically increased. Young women between the ages of 15 and 20 are most commonly prostituted, but girls as young as thirteen are also exploited.

Secil Erpolat, a lawyer with the Women's Rights Commission of the Bar Association in the Turkish province of Batman, said that many young Syrian girls are offered between 20 and 50 Turkish liras ($7-$18). Sometimes their clients pay them with food or other goods for which they are desperate.

Women who have crossed the border illegally and arrive with no passport are at high risk of being kidnapped and sold as prostitutes or sex slaves. Criminal gangs bring refugees to towns along the border or into the local bus terminals where "refugee smuggling" has become a major source of income.

Professional criminals convince parents that their daughters are going to a better life in Turkey. The parents are given 2000-5000 Turkish liras ($700-$1700) as a "bride price" — an enormous sum for a poor Syrian family — to smuggle their daughters across the border.

"Many men in Turkey practice polygamy with Syrian girls or women, even though polygamy is illegal in Turkey," the lawyer Abdulhalim Yilmaz, head of Mazlumder's Refugee Commission, told Gatestone Institute. "Some men in Turkey take second or third Syrian wives without even officially registering them. These girls therefore have no legal status in Turkey. Economic deprivation is a major factor in this suffering, but it is also a religious and cultural phenomenon, as early marriage is allowed in the religion."

Syrian women and children in Turkey also experience sexual harassment at work. Those who are able to get jobs earn little — perhaps enough to eat, but they work long and hard for that little. They are also subjected to whatever others choose to do to them as they work those long hours.

A 16-year old Syrian girl, who lives with her sister in Izmir, told Mazlumder that "because we are Syrians who have come here to flee the war, they think of us as second-class people. My sister was in law school back in Syria, but the war forced her to leave school. Now unemployed men with children ask her to 'marry' them. They try to take advantage of our situation."

If they are Kurds, they are discriminated against twice, first as refugees, then as Kurds. "The relief agencies here help only the Arab refugees; when they hear that we are Kurds, they either walk away from us, or they give very little, and then they do not return."

The organization End Child Prostitution, Child Pornography and Trafficking of Children for Sexual Purposes (ECPAT) has produced a detailed report on the "Status of action against commercial sexual exploitation of children: Turkey." ECPAT's report cites, from the 2014 Global Slavery Index, estimates that the incidence of slavery in Turkey is the highest in Europe, due in no small measure to the prevalence of trafficking for sexual exploitation and early marriage.

The ECPAT report quotes a U.S. State Department study from 2013: "Turkey is a destination, transit, and source country for children subjected to sex trafficking."

The ECPAT report continues,

"There is a risk of young asylum seekers disappearing from accommodation centres and becoming vulnerable to traffickers.

 

"It is feared that reports from the UN-run Zaatari refugee camp for Syrians in Jordan are equally true for camps in Turkey: aging men from Saudi Arabia and other Gulf states take advantage of the Syrian crisis in order to purchase cheap teenage brides.

 

"Evidence indicates that child trafficking is also happening between Syria and Turkey by established 'matchmakers' who traffic non-refugee girls from Syria who have been pre-ordered by age. Girls between the ages of twelve and sixteen are referred to as pistachios, those between seventeen and twenty are called cherries, twenty to twenty-two are apples, and anyone older is a watermelon."

Apparently, 85% of Syrian refugees live outside refugee camps, and therefore cannot even be monitored by an international agency.

Many refugee women in Turkey, according to the lawyer and vice-president of the Human Rights Association of Turkey (IHD), Eren Keskin, are forced to engage in prostitution outside, and even in, refugee camps built by the Turkish Prime Minister's Disaster and Emergency Management Authority (AFAD).

"There are markets of prostitution in Antep. Those are all state-controlled places. Hundreds of refugees — women and children — are sold to men much older than they are," said Keskin. "We found that women are forced into prostitution because they want to buy bread for their children."

Keskin said that they have received many complaints of rape, sexual assault and physical violence from refugees in the camps in the provinces of Hatay and Antep. "Despite all our attempts to enter those camps, the officials have not allowed us to."

The Human Rights Association of Turkey has received many complaints of rape, sexual assault and physical violence from Syrian refugees in camps in Turkey. (Image source: UNHCR)

Officials at AFAD, however, have strongly denied the allegations. "We provide refugees with education and health care. It is sad that after all the devoted work that AFAD has done to take care of refugees for the last five years, such baseless and unjust accusations are directed at us," a representative of AFAD told Gatestone.

"The number of refugees in Turkey has reached to 2.8 million. Turkey has twenty-six accommodation centers in which about three hundred thousand refugees live. Those centers are regularly monitored by the UN; some UN officials are based in them."

"Many refugees could have been provided with jobs suited to their training or skills," Cansu Turan, a social worker with the Human Rights Foundation of Turkey (TIHV), told Gatestone.

"But none of them was asked about former jobs or educational background when they Turkish officials registered them. Therefore, they can work only informally and under the hardest conditions just to survive. This also paves the way for their sexual exploitation.

 

"The most important question is why the refugee camps are not open to civil monitoring. Entry to refugee camps is not allowed. The camps are not transparent. There are many allegations as to what is happening in them. We are therefore worried about what they are hiding from us."

"At our public centers where we provide support for refugees," Sema Genel Karaosmanoglu, the Executive Director of the Support to Life organization, told Gatestone.

"We have encountered persons who have been victims of trafficking, sexual, and gender-based violence.

 

"There is still no entry to the camps, and there is no transparency as entry is only possible after getting permission from relevant government institutions. But we have been able to gain access to those camps administered by municipalities in the provinces of Diyarbakir, Batman, and Suruc, Urfa."

A representative at AFAD, however, told Gatestone that "the accommodation centers are transparent. If organizations would like to enter those places, they apply to us and we evaluate their applications. Thousands of media outlets have so far entered the accommodation centers to film and explore the life in them."

"The number of current refugees is already too high," said the lawyer Abdulhalim Yilmaz, head Mazlumder's Refugee Commission. "But many Arab states, including Saudi Arabia and Bahrain, have not taken in a single Syrian refugee so far. And there are tens of thousands of refugees waiting at the borders of Turkey."

If these women and children knew what was possibly awaiting them in Turkey, they would never set foot in the country.

This is the inevitable outcome when a certain culture — the Islamic culture — does not have the least regard for women's rights. Instead, it is a culture of rape, slavery, abuse and discrimination that often exploits even the most vulnerable.

The horror is that Turkey is the country that the EU is entrusting to "solve" the serious problem of refugees and migrants.

The international community needs to protect Syrians, to cordon off parts of the country so that more people will not want to leave their homes to become refugees or asylum seekers in other countries. Perhaps many Syrians would even return to their homes.

The West has always opened its arms to many beleaguered individuals from Muslim countries — such as 25-year-old Afghan student and journalist Sayed Pervez Kambaksh, who was beaten, taken to prison, and sentenced to death in 2007 for downloading a report on women's rights from the internet and for questioning Islam.

It was Sweden and Norway that helped Kambaksh to flee Afghanistan in 2009 by helping him get access to a Swedish government plane. Kambaksh is now understood to be in the United States.

Several European countries, however, have become the victims of the rapes, murders and other crimes committed by the very people who have entered the continent as refugees, asylum seekers or migrants.

Europe is going through a security problem, as seen in the terrorist attacks in Paris and Brussels. Many Muslims have difficulty with, or even an aversion to, assimilating into the Western culture. Many seem to have the aim of importing to Europe the culture of intimidation, rape and abuse from which they fled.

It would be more just and realistic if Muslim countries that share the same linguistic and religious background as Syrian refugees — and that are preferably more civilized and humanitarian than Turkey — could take at least some responsibility for their Muslim brothers and sisters. Although the desperate victims are their Muslim sisters and brothers, wealthy Arab states do not take in refugees. We have not seen any demonstrations with signs that read "Refugees Welcome!" People know that asylum seekers would bring with them problems, both social and economic. For many Muslim men such as wealthy, aging Saudis, it is easier to buy Syrian children from Turkey, Syria or Jordan as cheap sex slaves.

Women and girls are not, to many, human beings who deserve to be treated humanely. They are only sex objects whose lives and dignity have no value. Syrians are there to abuse and exploit. The only way they can think of helping women is to "marry" them.


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CNBC’s Steve Liesman Makes A “Discovery”: Americans Are Increasingly Angry And They Want Trump

Earlier today, CNBC’s Steve Liesman made two very important, in fact “critical”, if about one year overdue, discoveries.

The first one was that Americans are angry.

According to the CNBC All-America Survey, a majority of Americans are angry about both the political and the economic system. 

Perhaps if CNBC had discovered this sooner, it would have figured out that the reason it no longer reports its ratings to Nielsen has something to do with its underlying “rosy” slant on things, one which perhaps brings out people’s, well, anger. That and the occasional informercial for Ferrari and million dollar homes.

 

The second discovery is that angry Americans largely support Trump over Hillary, something we have discussed since last summer.

As Liesman puts it, nearly three-fourths of the public is angry or dissatisfied with the political system in Washington, compared with 56 percent who are angry or dissatisfied about the economy. This group favors Trump on the economy over Clinton 28 percent to 21 percent.

 

Of those dissatisfied or angry with the economic system, Trump leads on the economy 27 percent to 19 percent for Clinton.

 

All of these “surprises” should have been obvious.  But then the survey revealed several findings which surprised even us.

First, and rather curiously, income isn’t correlated with anger, with angry respondents found both among the rich and the poor. 55% of people who earn $100,000 or more are dissatisfied or angry with the economic system, the same percentage as those who earn $30,000 or less.

Also surprising: the wealthiest Americans are more likely to be angry or dissatisfied with the political system than the lowest income Americans.

Another surprise: while conventional wisdom is that Clinton has more of a lock on the Democratic nomination than Trump has on the GOP nod, the CNBC survey shows that on key economic issues, Bernie Sanders is more of a challenge to Clinton than Kasich and Cruz are to Trump. For example, Sanders is virtually tied with Trump 25 percent to 26 percent on which candidate is judged to have the best policy for regulating Wall Street and the big banks. Clinton has the support of only 16 percent of the public on the issue. Clinton leads with support of 25 percent of the public on who has the best policies for the middle class, followed by 21 percent for Sanders and 16 percent for Trump.

And finally, since this is CNBC, the channel reported that Trump is seen as best for the stock market by a wide margin. Fully 31 percent say his policies would be best for the stock market’s performance, compared with just 17 percent for Clinton. As many Democrats as Republican’s think Trump would be best for stocks.

Which begs this question: since those who have the most invested in the stock market “run the system”, as they say, and ultimately decide who the next president is, why wouldn’t they “pick” Trump? And just how much of the most theatrical presidential election in history is, well, just theater?

* * *

Liesman’s full interview below:


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Vietnam War At 50 – Ron Pauls Asks “Have We Learned Nothing?”

Submitted by Ron Paul via The Ron Paul Institute for Peace & Prosperity,

Last week Defense Secretary Ashton Carter laid a wreath at the Vietnam Veterans Memorial in Washington in commemoration of the "50th anniversary" of that war. The date is confusing, as the war started earlier and ended far later than 1966. But the Vietnam War at 50 commemoration presents a good opportunity to reflect on the war and whether we have learned anything from it.

Some 60,000 Americans were killed fighting in that war more than 8,000 miles away. More than a million Vietnamese military and civilians also lost their lives. The US government did not accept that it had pursued a bad policy in Vietnam until the bitter end. But in the end the war was lost and we went home, leaving the destruction of the war behind. For the many who survived on both sides, the war would continue to haunt them.

It was thought at the time that we had learned something from this lost war. The War Powers Resolution was passed in 1973 to prevent future Vietnams by limiting the president’s ability to take the country to war without the Constitutionally-mandated Congressional declaration of war. But the law failed in its purpose and was actually used by the war party in Washington to make it easier to go to war without Congress.

Such legislative tricks are doomed to failure when the people still refuse to demand that elected officials follow the Constitution.

When President George HW Bush invaded Iraq in 1991, the warhawks celebrated what they considered the end of that post-Vietnam period where Americans were hesitant about being the policeman of the world. President Bush said famously at the time, “By God, we’ve kicked the Vietnam Syndrome once and for all.”

They may have beat the Vietnam Syndrome, but they learned nothing from Vietnam.

Colonel Harry Summers  returned to Vietnam in 1974 and told his Vietnamese counterpart Colonel Tsu, "You know, you never beat us on the battlefield." The Vietnamese officer responded, "That may be so, but it is also irrelevant."

He is absolutely correct: tactical victories mean nothing when pursuing a strategic mistake.

Last month was another anniversary. March 20, 2003 was the beginning of the second US war on Iraq. It was the night of “shock and awe” as bombs rained down on Iraqis. Like Vietnam, it was a war brought on by government lies and propaganda, amplified by a compliant media that repeated the lies without hesitation.

Like Vietnam, the 2003 Iraq war was a disaster. More than 5,000 Americans were killed in the war and as many as a million or more Iraqis lost their lives. There is nothing to show for the war but destruction, trillions of dollars down the drain, and the emergence of al-Qaeda and ISIS.

Sadly, unlike after the Vietnam fiasco there has been almost no backlash against the US empire. In fact, President Obama has continued the same failed policy and Congress doesn’t even attempt to reign him in. On the very anniversary of that disastrous 2003 invasion, President Obama announced that he was sending US Marines back into Iraq! And not a word from Congress.

We’ve seemingly learned nothing.

There have been too many war anniversaries! We want an end to all these pointless wars. It’s time we learn from these horrible mistakes.


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Goldman Questions Rally, Fears Looming Event Risk Amid Record VIX Longs

Volatility (VIX) is now at its lowest level since before the August sell-off last summer yet CS Fear Barometer remains elevated leaving the spread between the two options-market-based indicators is at its widest ever.

Credit Suisse sees two main reasons for the difference:

1) VIX measures just vol whereas CSFB reflects skew (i.e. Demand for puts vs. calls) The skew being elevated is a function of the upside calls being sold broadly in the market plus portfolio hedging; and

2) CSFB is a 3-month forward look — ie around time of brexit and other potential catalysts)

But as Goldman Sachs details, with the unemployment rate at 5% the ISM manufacturing index at its current level of 51.8 suggests a VIX level of 19.2. The much higher new orders index (58.3) suggests a VIX level of 16.7. So the VIX is currently pricing further economic improvement…

 

As the market itself seems to shrugg off the collapse in earnings expectations

 

However, Goldman adds, while volatility may be subdued for the next few weeks, perhaps until the next potential major catalyst, such as “Brexit”, if our economists are correct, Fed chatter may pick up again in H2… which is supported by the fact that investors are pouring money into levered long VIX ETPs.

Investors often chase strong performance but that has not been the case across the VIX ETP space. As the VIX has fallen, investors have been positioning for a rise in volatility via double levered long ETPs.

Levered VIX ETP vega exposure has doubled since the market trough, driven by longs. We monitor vega exposure for a select group of 11 VIX ETPs, with around 4 billion in total market cap. We estimate that the gross vega notional across levered VIX ETPs now stands near a record high at around 244 million vega (in absolute terms), more than doubling since the market bottom in February. The increase has mostly been driven by long and double-levered long VIX ETPs, such as the UVXY and TVIX.

Volatility investors are often interested in how much volatility exposure (vega) VIX ETPs carry and what percentage of the overall VIX futures market they account for.

How big is the VIX ETP market? We estimate that the gross vega exposure controlled by the six most active VIX ETPs (VXX, VIXY, UVXY, TVIX, XIV, SVXY) which track the front month future is currently running at 320 million vega, which accounts for about 85% of the outstanding open interest in the VIX futures market.

Simply put, as Goldman sums up, the options market seems to be questioning the quality of the rally and continues to price in more adverse outcomes.


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