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Venezuelan President Nicolas Maduro has been working on some “measures.”

“Now that the economic emergency decree has validity, in the next few days I will activate a series of measures I had been working on,” he said Thursday, in a televised statement meant to address a “food emergency” declared by Congress.

The “validity” Maduro references comes from a high court ruling that gives the President expanded powers to tackle a deepening economic crisis that’s left hospitals without medicine and grocery stores bereft of food.

“The controversial move by the Supreme Court, which critics say is packed with supporters of Mr Maduro’s socialist government, potentially sets the scene for a bitter institutional crisis amid claims that the national assembly is being undermined,” FT notes, underscoring the extent to which opposition lawmakers – who in December won 99 of 167 seats that were up for grabs in what amounted to the worst defeat in history for Hugo Chavez’s leftist movement – feel as though last year’s election victory may have been a ruse designed to lend legitimacy to a system that is, and likely always will be, deeply undemocratic.

“This is a tyranny, which has been very successful in disguising as a democracy, and has even allowed itself to lose an election,” Moisés Naím, a former Venezuelan minister and fellow at the Carnegie Endowment for International Peace said.

Thanks to the Supreme Court decision, Maduro doesn’t need the assembly’s permission to intervene further in business, to allocate funds for imports, and to introduce new capital controls. The opposition is furious and says it will speed up efforts to usurp Maduro once and for all. “In the next few days we will have to present a concrete proposal for the departure of that national disgrace that is the government,” opposition leader Henry Ramos told reporters on Friday.

“The Supreme Court of Justice has spoken, its word is holy and must be respected by all parts of society and all institutions,” Maduro declared.

With inflation set to soar to over 700% this year, Venezuelans are struggling to persist in the world’s worst performing economy. “I hoped to buy toilet paper, rice, pasta,” 74-year-old Rosalba Castellano, told WSJ. “But you can’t find them.”

“The government is putting us through savage suffering,” she laments.

Of course Maduro blames this “savage suffering” on evil capitalists and the US, which he says is waging an economic war on the country.

In reality, mismanagement on an absurd scale including a rash of nationalizations, out of control spending, and price controls have shrunk the private sector and plunged the economy into outright chaos.

“It goes beyond the crime and economic deterioration,” Leonardo Briceno who spoke to WSJ and runs a Caracas public-relations company said. “It’s imagining a scenario where my daughter needs a medication and we can’t find it. That scares me the most.”

(Venezuelans wait in line to buy food in Caracas)

“The crisis is especially acute in what was once a centerpiece for the socialist country, its health-care system,” WSJ goes on to note. “The country’s leading trade group for drugstores says 90% of medicines are scarce,” and preventable deaths are on the rise. Here’s more:

On a recent day at the University Hospital of Maracaibo, in Venezuela’s second-largest city, patients lay on bare beds in rooms with dirty floors. There was no running water, medicine, cleaning supplies or food. Feces floated in the toilets. Medical staffers there said gang members roam the halls, forcing underpaid and harassed doctors to lock themselves in the offices to avoid assaults.

 

Venezuela used to export rice, coffee and meat. It now imports all three. It even imports its own bank notes, ordered from European firms and flown in on 747 jets.

 

The number of private companies in the country shrank by 20% between 2006 and 2014, according to Datanalisis. Multinationals such as Clorox Co. have simply left. Others including Ford Motor Co. and Oreo-maker Mondelez have written down the value of their local businesses to zero.

 

The crisis is felt not just in Venezuela’s teeming cities but in places like Toas, a tiny island of palm trees and crystalline waters in far western Venezuela, home to just 8,000 people.

 

Last December, thieves stole 15 miles of underwater power cable connecting the island to the mainland. The theft severed the island’s telephone connections and idled its water pumps.

 

Fisherman Genebraldo Chacin said his children haven’t bathed or gone to school since then, and they have been eating only one meal a day. His neighbors say the island is close to starvation.

 

“Our food rots without electricity, and it’s sad because it’s so difficult to find food here,” said Mr. Chacin’s neighbor, Sasha Almarza. “When we are able to find any in the store, we eat it all the same day.”

And so on.

As we’ve documented extensively, Venezuela is staring down an imminent default, despite the fact that the country does in fact try to service its debt. As Barclays noted last month, the country will need to spend 90% of its oil revenue on debt payments assuming $32 crude. Obviously, that’s not a tenable proposition. 

(note that the headline inflation figure in the right pane is horribly understated)

Thanks to rising imports (as mentioned above) and falling oil sales, the CA deficit has worsened, forcing Caracas to liquidate assets to fund a budget deficit that’s projected to hover near 20% of GDP for the foreseeable future.

“Such high inflation has a strong detrimental effect not only on real salaries, but also on income distribution, as the lowest income part of the population tends to have fewer alternatives to protect against inflation,” Barclays warns. “This could increase social and political risks, making the current equilibrium increasingly unstable.”

Of course there is no “current equilibrium.” The opposition was already bound and determined to oust Maduro within six months and now, following the Supreme Court decision to grant him 60 days of emergency economic powers, Ramos says the timeframe for drawing up plans for the President’s exit is now “days.” Meanwhile, the public may have been unwilling to stage an outright rebellion with inflation at 200%, but at 720% it’s difficult to see how things won’t careen into outright social upheaval in the not so distant future. Especially once the country defaults and the public comes to realize just how wasteful the government is with what should be a vast store of national oil wealth.

As for what “measures” Maduro is considering to counter the officially declared “food emergency,” we’ll have to wait and see, but WSJ did give us a hint: 

“In response to growing food shortages, Mr. Maduro last month created a Ministry for Urban Farming. He noted that he has 50 chickens in his own home.” 

via Zero Hedge http://ift.tt/1Tf5ClV Tyler Durden

There are market crashes and then there are market crashes: by contrast to August 24, when the S&P500 melted down before our eyes in a sharp, violent plunge as something clearly broke in the link between ETF and vol models and the VIX itself did not report updates for nearly an hour for reasons that have still not been clearly explained, the recent global market crash has been far more contained, if not outright orderly. Or rather, orderly except for certain products like swap spreads and bank CDS which have seen a selloff which is on par, if not worse, than the 2008 financial crisis.

This, according to Citi’s Matt King, is the biggest surprise about the recent global market crash: how orderly it has been in some products, and how volatile, chaotic, and acute in others. 

As King writes, “as relentless and unpleasant as the YTD moves in markets have been, they have also been remarkably orderly. Banks’ share prices may have dropped, but this seems more a response to fears of generalized pressure on net interest margins than of any concern about trading losses. Hedge funds’ returns have mostly varied between lacklustre and dismal, yet there has been remarkably little sign of outright distress or forced selling. And implied volatility across markets, while it has picked up, has been lower than would normally be associated with sell-offs of this magnitude (Figure 1 and Figure 2).”

 

King’s explanation for this is that “those suffering in the current environment are not so much our immediate clients – institutional investors running positions tactically against some benchmark and then being caught offside – as their clients, namely end investors, be they institutional or retail, managing strategic positions against long-term liabilities, who are much less likely to use vol or other short-term hedges and are more likely simply to sell.”

That covers the orderly part of the selloff; here is King on the disorderly:

Coming apart at the seams

 

Yet for all its apparent orderliness, a number of metrics have been showing signs of stress – and severe stress at that. The most widely reported is the move negative in $ government-swap spreads. But it coincided in credit with a sharp move negative in the cash-CDS basis (i.e. underperformance of cash bonds vs  derivatives), and another move negative in the index skew to intrinsics (i.e. underperformance of single-name CDS relative to traded indices, Figure 3). As with government-swap spreads, both moves have been global, but more pronounced in $ than € or £.

To King what is “striking” is that in many respects these are the opposite of the moves which might normally be associated with market turmoil. Here’s why:

In a straight flight to liquidity or quality, government bonds are usually thought to outperform swaps, not underperform them. This is what happened in October 1998, or in 2007 to early 2008 (Figure 4). Similarly in credit, if there is a scramble to reduce long risk positions you might have anticipated the traded indices would underperform versus their constituents, as was the case in the sovereign debt crisis in 2011. These sorts of capitulatory moves have been visible over the past week, but only as a reversal of previous tendencies.

Superficially, there is no simple explanation:

Nor is an explanation obvious on fundamental grounds. Indeed, some have quipped that negative swap spreads – in which long-dated Treasuries trade wide to longdated swaps – imply that the US government’s credit quality is deemed by the market to be lower than that of a panel of banks. We have never liked that explanation: swaps involve no exchange of principal, a daily collateralized mark-tomarket, and hence greatly reduced credit risk relative to a bond purchase, for a start. But even the conventional view of swap spreads as a reflection of the cost of funding a long Treasury position on repo leads to the counterintuitive conclusion that it seemingly costs more to borrow cash for 30 years in $ secured against Treasuries than it does to borrow for 30 years unsecured.

Here is what King thinks is happening:

This does, though, point to what we think is the common explanation. The cost of funding, or more specifically of leverage, has everywhere gone up, as a direct consequence of leverage ratios and other constraints on bank balance sheet size. This has interacted with mutual fund outflows and fears about cash market illiquidity, producing a premium on liquid derivative instruments relative to their supposedly more plain vanilla cash cousins.

 

As such, the government-swap spread move is not really a reflection of either government or of bank credit quality, but rather of banks’ aversion to providing any financing which would clog up their balance sheet for long periods of time, and of providing financing against something as low-margin as US Treasuries in  particular.

 

Just as the drop in market turnover has been more pronounced in govies than in credit, so it is actually the safer products (which employed more leverage, and where margins were lower) which in a balance-sheet constrained environment are most susceptible to seeing their previous liquidity premium turn into a liquidity  (or balance-sheet) discount.

 

Likewise in credit, although negative bases in theory represent a potential arbitrage, where cash bonds can be bought and then the credit risk hedged with CDS, in practice most investors like to do such trades with leverage, ideally financed to term. It is exactly this sort of term financing of leverage on “safe” positions  which leverage ratio and repo constraints (such as LCR and NSFR) have now made so difficult.

 

In principle the level of the basis has recently been so extreme that even unlevered positions would make sense. But so large have been the inflows to credit mutual funds in recent years – and so large is now the fear of illiquidity as such inflows turn to outflows – that investors seem (finally) to have been adopting a stance we have recommended for years, namely holding large cash buffers against potential redemptions and then selling index protection so as to try to neutralize their market risk.

Which in turn brings us to what DB’s Dominic Konstam wrote a week ago, when he summarized the global risk off catalyst as simply as the following: “it is a run on central bank liquidity, especially dollar based and there needs to be much more ($) liquidity.”

Which, as we also wrote recently, translates into something very simple: in their attempt to “fix” the market, central banks broke it, and the more they try to “fix” it, the worse it gets.

In a follow up article, we will look into the answers to the two key follow up questions: “why now” and “where next.”

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

It was just two days ago when Russian PM Dmitry Medvedev warned that if Saudi Arabia, the UAE, and Qatar invade Syria in a transparent attempt to shore up their Sunni proxy armies currently under siege by Moscow’s warplanes and Hezbollah, a “new world war” would be inevitable.

He also indicated that such a conflict would likely drag on for “decades.”

“Do they really think they would win such a war very quickly? That’s impossible, especially in the Arabic world,” Medvedev said. “There everyone is fighting against everyone… everything is far more complicated. It could take years or decades.”

On Saturday, Medvedev was back at it with the hyperbole (or at least we hope it’s hyperbole) in Munich where more than 60 foreign and defense ministers are gathered for the 52nd Munich Security Conference. In his speech, the PM challenged NATO’s military maneuvers in the Baltics as well as the alliance’s general approach towards relations with The Kremlin.

“The political line of NATO toward Russia remains unfriendly and closed,” he said in a speech to the conference. “It can be said more sharply: We have slid into a time of a new cold war.”

“NATO on Wednesday approved new reinforcements for eastern Europe, including stepped-up troop rotations on its eastern flanks and more naval patrols in the Baltic Sea,” Bloomberg notes. “In response, the Kremlin dismissed the alliance’s argument that the move was merely defensive.”

“Russia’s rhetoric, posture and exercises of its nuclear forces are aimed at intimidating its neighbors, undermining trust and stability in Europe,” NATO secretary general Jens Stoltenberg told the conference earlier. “We strive for a more constructive and more cooperative relationship with Russia.”

All of this comes on the heels of a year in which NATO made a concerted push to place new weapons and troops near Russia’s borders and prepare allies for a rapid deployment in the event Moscow invaded a neighboring state. The Kremlin says those fears are unwarranted, but the West points to Crimea and Ukraine as examples of “Russian aggression.”

“Russia has a simple choice: fully implement Minsk or continue to experience economically damaging sanctions,” Kerry said in Munich on Saturday, referencing the fragile ceasefire agreement that has at various times fallen apart in Ukraine. “Russia can prove by its actions that it will respect Ukraine’s sovereignty just as it insists for respect for its own.”

Kerry also lambasted Russia for what he calls “repeated aggression” in Ukraine and Syria.

“Kerry said Russia is defying the will of the international community with its support for separatists in eastern Ukraine and its military intervention in Syria on behalf of President Bashar Assad,” AP wrote earlier this morning, adding that “He [also] repeated allegations that Russian airstrikes in Syria have not been directed at terrorists but rather at moderate opposition groups supported by the U.S. and its European and Arab partners.”

Good to be back at @MunSecConf. Transatlantic relationship critical because it is focused not just on regional challenges but on global ones

— John Kerry (@JohnKerry) February 13, 2016

US & Europe at forefront of fight against violent extremism. Recent terrible attacks have only reinforced our determination to defeat Daesh.

— John Kerry (@JohnKerry) February 13, 2016

With @poroshenko, urged unity, stability, reform, faster progress against corruption; reaffirmed US support for full Minsk implementation.

— John Kerry (@JohnKerry) February 13, 2016

“To date, the vast majority, in our opinion, of Russia’s attacks have been against legitimate opposition groups and to adhere to the agreement it made, we think it is critical that Russia’s targeting change,” Kerry said. “If people who want to be part of the conversation are being bombed, we’re not going to have much of a process.”

“The opposition may be pushed back here and there but they are not going to surrender,” he added.

We would beg to differ. They may wage a protracted war of attrition once the dust settles but in the short-term they’re almost surely going to surrender. They have no choice. “Russia said on Saturday a ceasefire deal for Syria agreed by major powers was more likely to fail than succeed, as Syrian government forces backed by further Russian air strikes gained more ground against rebels near Aleppo,” Reuters writes. And it’s not just Aleppo, some reports now indicate government forces are moving into Raqqa, in what may be the first sign that Russia and Iran are setting their sights on the ISIS capital, a move that could preempt a Gulf state military intervention by effectively removing the excuse for the Saudis to be in Syria, forcing Riyadh to either admit it’s going to war to oust Assad or stay at home. 

Speaking of the Saudis and their thinly-veiled excuse for sending ground troops to Syria, here’s what foreign minister Adel bin Ahmed Al-Jubeir had to say at the conference:

Obviously that’s absurd. There’s no reason whatsoever to suppose that an Assad-less Syria would cease to be a “fertile environment” for ISIS. In fact, it’s easy to imagine ISIS rolling right over the other armed militants in the country were Russia, Iran, Hezbollah, and the SAA not fighting to restore the government in the west.

For his part, Sergei Lavrov told the conference that all sides are in the wrong in Syria. “Human rights groups and the U.N. recognize that everyone on the ground is doing something which is wrong from the point of view of humanitarian law,” he said. “My point,” he added, “is you should not demonize Assad. You shouldn’t demonize anyone except terrorism in Syria.”

That echoes statements made by Bashar al-Assad himself in an interview out Friday with AFP. 

Although the conference is meant to promote international cooperation on pressing matters of security, the tension was palpable. Perhaps Medvedev summed things up best: “Sometimes I wonder if it’s 2016 or if we live in 1962.”

via Zero Hedge http://ift.tt/1KN0nsj Tyler Durden

Submitted by Salil Mehta of Statistical Ideas

Flipping volatility regimes

Now we have a new year, with a carryover of the same volatility pick-up that started in August 2015.  For several years prior to August, it was the calamitous VXX ETF that was doing poorly; now it is the opposite-flavored XIV ETF that is being ravaged.  We’ll show how in just a couple August weeks, the recent long-term low-volatility regime (which hedge funds carp about for their horrific performance) had suddenly switched to a high-volatility regime. 

While this Black Swan turn-around was dramatic (see before and after discussions here, and here), we see on the other side more difficulties with these volatility products.  Before August we saw a brutal evisceration in VXX (a geometric collapse of -0.3% daily) with 6-month lows (and even all-time lows) happening weekly.  The XIV on the other hand gently rose 0.1% daily and achieved 6-month highs (and even all-time highs) semi-monthly, and in a fascinating Zero Hedge article, they shrewdly showed that shorting volatility yielded a >50% return.  And they also noted that the musical game of this strategy would end disastrously.  This reversal has now come in full exorbitance, as the four volatility regimes of the past >5 years are shown below.

We had noted earlier that August 2015 represented a couple weeks of unexpected fury from a market that had grown negligent, and a month where a lot of record-setting destruction took place (including August 24: China’s Black Monday).  In those 16 days, the VXX doubled as a multi-year short-squeeze jerked open like a overwound Jack in the Box, while the XIV was more than halved.  Years of gains on the XIV gone in days!  Then during the 2-week intense market bounceback in mid-September, through to today, the VXX has essentially remained the same while the XIV continues to crater an additional ¼!

To understand the bounceback in September, followed by five months of volatility pick-up again, we should study our previous pairs of articles on this topic (here, here).  The summary is that these volatility products decay faster than you would have the opportunity to profit from them.  And these volatility regimes recently, being so brief, provide only a small fraction of all traders a chance to profit (and only ½ of those through skill).  The distribution of VXX and XIV are more symmetrical now given the recent regime flips, except the distributions are even more firmly centered below 0%, making profiting from them nearly impossible even for finance immortals. 

The links in this paragraph show that reasonable strategies see these products losing value, even when the underlying VIX curve moves in a correctly predicted direction.  To put these losses in perspective, the all-time low in the VXX was in August 2015 (it hasn’t made a 6-month low since then!)  Meanwhile the XIV peaked twice at a price above $49 (the more recent also being August), and it has never made a 6-month high since then.  Though XIV now makes 6-month lows, 2-3 times a month.  More on these statistics later.

If one had simply held a 50/50 portfolio of VXX/XIV (without rebalancing) for the several years shown -that is prior to the August crash- then their returns would have been >150%.  And instead if one were long VXX and short XIV in just the past six months (mostly due to the August tumult but even including the subsequent temporary rally as well), their returns would be >450%.  Both of these results are exceptional, and regrettably couldn’t hope for either one going forward.

The final high-volatility regime (high-vol2) that we are now in covers five full months.  It’s not simply a just-happened phenomenon.  Never mind that the major Wall Street strategists again predicted that 2016 will see markets rise 8%, and now already have retreated on this with new bullish forecasts from these depressed levels.  A recent 5-day down market streak has caused markets instead to be showing a possible bear market instead.  And their fortune cookie resemblance can not think of anything negative to say.  Meanwhile the XIV has been crumbling at -0.6% daily (twice the noted implosion rate of the VXX during the multi-year bull-market ending August 2015!)  With the 4% rally in the XIV today, it’s right to ask if perhaps traders are suddenly crowding into a short trade with this fund, which uncoiled in a anomalous way!  If so, then don’t count on many more of them in the near future.

In summary, these volatility product decays occur continuously and quickly, even during brief slides (as opposed to outright nosedives where obviously one can make a profit killing).  Even with a prolonged high-volatility regime that we’re in now, it’s just as treacherous to employ either product for the long run.  They will continue to always make new lows, and never new highs.  Over the course of just a year, both the XIV and VXX will break your portfolio and your heart, if regulators do not act in time. 

There are of course myriad other foolish decisions that you or your Wall Street wealth manager can make instead.  It’s worth noting that since September 1, neither product has made an all-time high (let alone 6-month high).  It’s also very likely that such a high may not come at all, this year.

via Zero Hedge http://ift.tt/242qvWG Tyler Durden

Authored by Paul Craig Roberts,

When one looks at the deplorable state of the world, one cannot help but wonder at the insouciance of the American people. Where are they? Do they exist or are they a myth? Have they been put to sleep by an evil demon? Are they so lost in The Matrix that they cannot get out?

Ever since Clinton’s second term the US has been consistently acting internationally and domestically as a criminal, disregarding its own laws, international laws, the sovereignty of other countries, and the US Constitution. A worse criminal government has never existed. Yet, Americans remain subservient to the criminals that they have placed in power over themselves.

According to polls, Hillary Clinton and Senator Bernie Sanders are splitting the Democratic vote 50-50 as preferred Democratic presidential candidate. This is extraordinary.

Hillary Clinton represents the interests of Wall Street and the mega-banks, the Israel Lobby, and the interests of the military/security complex. These interests are totally opposed to the interests of the American people.

In his book, What’s the Matter with Kansas, Thomas Frank raised the question of why Americans vote against their own interests? Why do Americans go to the voting both and do themselves in?

Whether you agree with Thomas Frank’s answer or not, Americans do, on a regular basis, harm themselves by voting for people who are agents of vested interests diametrically opposed to the interests of American citizens.

How is it possible, if Democrats are informed people, that half of them prefer Hillary Clinton? Between February 2001 and May 2015 Bill and Hillary collected $153 million in speaking fees. The fees averaged $210,795 per speech.

I can remember when Bill and Hillary were in public office when their speeches were free. No one wanted to listen to them when the speeches were free. Clearly, Bill is being paid off for his past services to the powerful interest groups that control the United States, and Hillary is being paid off for her future service to the same groups.

How then is it possible that half of Democrats would prefer Hillary? Is it because she is a woman and women want a woman president more than they want their civil liberties, peace, and employment for themselves, their spouses and their children?

Or is it because, given the presstitute character of the American media, the people haven’t a clue?

If you vote for Hillary, you are voting for someone who has been paid off to the tune of $153 million by powerful vested interests who have no concern whatsoever for your interests. In addition, Hillary has the necessary campaign funds from the powerful interest groups for her presidential nomination campaign. As if this isn’t damning enough, Hugh Wharton writes that the National Democratic Committee is in league with Hillary to steal, if necessary, the nomination from Sanders and the voters.

In contrast, the interest groups who rule America are not contributing to Sanders.

Therefore, the choice of Sanders is obvious, but 50% of Democrats are too braindead to see it.

Although Hillary is a substantial threat to America, the threat of nuclear war is much greater, and the Democratic Obama regime in the hands of neoconservatives has just greatly amplified the threat of nuclear war.

The United States government, or perhaps we should say the exploiter and deceiver of the American people, has announced a three-fold increase in its military presence on Russia’s borders. The excuse for this great boost in the profits and power of the US military-security complex is “Russian aggression.”

But there is no sign of this aggression. So Washington and its servile presstitutes in the Western media make it up. They proclaim a lie.

“Russia invaded Ukraine” proclaims the propaganda. No mention is made of Washington’s coup in Ukraine that overthrew a democratically elected government and began a war against the Russian populations of eastern and southern Ukraine, former provinces of Russia added to the Ukrainian Soviet Republic by Soviet leaders. In the presstitute media, no mention is made of Washington’s intention of seizing Russia’s only warm water port in Crimea on the Black Sea. http://ift.tt/1L0hj9r

Having created a nonexistant Russian invasion in place of the real US coup in Ukraine in the minds of the indoctrinated Americans, Washington now claims that Russia is going to invade the Baltics and Poland. Nothing could be further from the truth, but this lie from the Obama regime now determines that the US military presence on Russia’s borders will increase three-fold.

The escalation of the US/NATO threat on Russia’s borders forces a Russian response. Considering that the Russophobic governments in Poland and the Baltic States have unstable judgement, military buildups bring risks of miscalculations.

There is a limit to the level of threat that the Russian government can tolerate. The impotent Obama is in the firm grip of the neoconservatives and the military-security complex. The neoconservatives are motivated by their ideology of American world hegemony. The military-security complex is motivated by power and profit. These motives bring the United States and its vassals into conflict with Russia’s (and China’s) sovereign existence.

Within the councils of American foreign policy there is not sufficient weight to counter the neoconservative drive to war with Russia and China. In conventional war, the US is not a military match for the Russian/Chinese strategic alliance. Therefore, the war would be nuclear. The power of hydrogen bombs is immensely more powerful that the atomic bombs that the US dropped on Japan. Nuclear war means the end of life on earth.

Americans can know that democracy has failed them, because there is no check on the neoconservatives’ ability to foment war with Russia and China.

The neocons control the press, and the press portrays Russia as “an existential threat to the United States.” Once this fiction is drilled into the brains of Americans, it is child’s play for propagandists to create endless fears that deplete taxpayers of income in order to create profits for the military-security complex by relaunching the Cold War and an armaments race.

That is what is currently going on. The inability of Americans to realize that they are being taken into a conflict that benefits only the profits and power of the military-security complex and the ideology of a small group of crazies demonstrates the impotence of American democracy.

Universities and think tanks are replete with ambitious people who, chasing grants and influence, fuel the Russophobic hysteria. For example, on February 9 the Washington Post published an article by Michael Ignatieff, the Edward R. Murrow professor at Harvard University’s Kennedy School, and Leon Wieseltier, the Isaiah Berlin Senior Fellow at the Brookings Institution in Washington. The article is a complete misrepresentation of the facts in Syria and called for US measures that would result in military conflict with Russia. It was irresponsible for the Washington Post to publish the article, but the decision is consistent with the Post’s presstitute nature.

The propaganda line maintained by the US government, the neoconservatives, the military/security complex, the presstitutes, and fiction-writers such as Ignatieff and Wieseltier is that Russia is not bombing the Islamic State jihadists who are attempting to overthrow the Syrian government in order to establish a jihadish state that would threaten the Middle East, Iran, and Russia herself. The official line is that the Russians are bombing the democratic “rebels” who are trying to overthrow an alleged “brutal Syrian dictator.” The conflict that the US government started by sending ISIS to Syria to overthrow the Syrian government is blamed on the Russian and Syrian governments.

Ignatieff and Wieseltier say that the US has put its “moral standing” at risk by permitting the Russians to bomb and to starve innocent women and children, as if the US had any moral standing after destroying seven countries so far in the 21st century, producing millions of dead and displaced persons, many of whom are now overrunning Europe as refugees from Washington’s wars.

The recently retired head of the Defense Intelligence Agency, Michael Flynn, has said that the Obama regime made a “willful decision” to support ISIS and use ISIS against the Assad government in Syria. That the violence in Syria originated in a US/ISIS conspiracy against Syria is ignored by Ignatieff and Wieseltier. Instead, they blame Russia despite the fact that it is Russia’s air support for the Syrian Army that has rolled back ISIS.

Where were Ignatieff and Wieseltier when Washington and its vassals destroyed Iraq, Libya, Somalia, Afghanistan, Yemen, much of Pakistan, overthrew the first democratically elected government in Egypt, overthrew the government in Ukraine and started a war against the Russian population, and supplied Israel with the weapons and money to steal Palestine from the Palestinians? Where were they when Clinton destroyed Yugoslavia and Serbia? Where are they when ISIS murders Syrians and eats the livers of its executed victims?

It would be interesting to know who financed the professorship in Edward R. Murrow’s name and the fellowship in Isiah Berlin’s name and how these positions came to be staffed with their current occupants.

Reagan and Gorbachev brought the Cold War to an end. The George H.W. Bush administration supported the end of the Cold War and gave further guarantees to Russia. But Clinton attacked Serbia, a Russian ally and broke the agreement that NATO would not expand into Eastern Europe to Russia’s border. When the neoconservatives’ plans to invade Syria and to attack Iran were frustrated by Russian diplomacy, the neocons turned on Russia with fury.

In 1961 President Eisenhower warned the American people of the threat posed by the military-security complex. That was 55 years ago. This complex is so strong today that it is able to divert massive taxpayer resources to its coffers while the living standard and economic prospects of the American people decline.

The military/security complex requires an enemy. When the Cold War ended, the “Muslim Threat” was created. This “threat” has now been superceded by the “Russian Threat,” which is much more useful in keeping Europe in line and in scaring people with prospective invasions and nuclear attacks that are far beyond the power and reach of jihadists.

Superpower America required a more dangerous enemy than a few lightly armed jihadists, so the “Russian threat” was created. To drive home the threat, Russia and her president are constantly demonized. The conclusion is unavoidable that the insouciant American people are being prepared for war.

via Zero Hedge http://ift.tt/1PIy7Uo Tyler Durden