iftttwall

Early last month, we outlined the rapidly deteriorating security situation in Libya, which was transformed into a lawless wasteland in the wake of NATO-backed efforts to topple Muammar Gaddafi in 2011.

The story is hopelessly convoluted but generally speaking, there are two governments. One in Tripoli and one internationally recognized body operating out of Tobruk, where the House of Representatives remains in exile after efforts to form a unity government in the capital fell apart.

The fractured government makes protecting the state’s oil infrastructure virtually impossible in the face of an increasingly aggressive ISIS assault. Fighters loyal to Ibrahim Jadhran – the shady militia leader who effectively controls Libya’s oil exports – are fighting to secure the country’s crude, but ISIS is set to overrun them and even if they weren’t there are very real questions about where Jadhran’s loyalties lie.

(Ibrahim Jadhran)

Russian airstrikes in Syria and an increasingly capable Iraqi military have made Libya look more attractive to ISIS. There’s little in the way of airstrikes, the government is completely incapable of defending itself, and vast stores of oil are there for the taking. It’s against this backdrop that the US and Britain are considering a ground operation as part of an effort to “stabilize” the country, which is ironic because it was NATO that destabilized the country in the first place.

(an oil storage tank burns after an ISIS attack in Es Sider)

While it will likely be impossible for Libya to combat ISIS on its own, things would be helped immeasurably if the two competing governments could unite. UN-brokered negotiations produced a breakthrough last month, but on January 25, Parliament rejected a proposed 32-member cabinet out of concern that it was too large. That piece of bad news came just six days after representatives negotiating in Tunis announced they had formed a unity government.

Fast forward to Monday and we’re going to try this all over again apparently. On Sunday night, Libya’s Presidential Council named a revised lineup of ministers in another effort to form a unity government.

“In a sign of continuing divisions over how to bring together Libya’s warring factions, two of the council’s nine members refused for a second time to put their signatures to the proposed government,” Reuters reports, referencing the internationally-recognized governing body in Tobruk.

Mabrook to the Presidency Council for nominating Govt on Natl Unity. The journey to Peace and Unity of the Libyan people has finally started

— Martin Kobler (@KoblerSRSG) February 14, 2016

“We hope that this will be the beginning of the end of the conflict in Libya,” council member Fathi al-Majbari said from Skhirat, Morocco where both sides were negotiating. “Many of the names on Sunday’s list were different from last month’s proposal, though the nominee for the key post of defence minister, Mahdi al-Barghathi, was unchanged,” Al Jazeera says.

Trust us, this will not mark a new dawn for Libya. First, it’s not even clear the new list of ministers will be approved. Even if it is, and some kind of loosely assembled government is formed, both sides are backed by a hodgepodge of militias and former rebels. Uninting them around a common cause won’t be easy, especially in the midst of the ISIS assault.

For his part, Anas El Gomati, a political analyst and founder of the Tripoli-based Sadeq Institute isn’t holding his breath for peace.

“I’m quiet pessimistic about this new development. The majority of what’s fueling the civil war in Libya has been hidden behind the rhetoric around the ‘war on terror’, about saving the revolution but in fact most of the strategic fighting on the ground has been about resources: financial, military and other infrastructural resources around the country,” he told Al Jazeera. “The discussions have not focused anything more than bringing people to the table. So, we have got a peace government but we haven’t got a peace deal.”

Right. In other words, it’s a veritable free-for-all as everyone involved (including ISIS) scambles to get a piece of what was thrown up for grabs when Gaddafi fell. “The war on terror” may have been a good enough excuse to get everyone to the table but once the government is formed and it’s time to put aside differences, it’s unlikely things will go smoothy.

That means less of this…

And more of this…

On the “bright” side, once the unity government is formed and recognized it will be able to officially invite the US to intervene militarily against “the terrorists” which means that just as soon as Libya picks up the pieces from the last time the US broke the country, Washington will be waiting to come back in and break it all over again.

“Miss me yet?”

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

By EconMatters

The Euro weakened on Mario Draghi speaking regarding Monetary policy for the European Union today. Gold saw some profit taking as a result with the boost to the U.S. Dollar.

© EconMatters All Rights Reserved | Facebook | Twitter | YouTube | Email Digest | Kindle  

via Zero Hedge http://ift.tt/1Qh7prE EconMatters

Submitted by Howard Kunstler via Kunstler.com,

It ought to be a foregone conclusion that Mr. Obama’s replacement starting January 20, 2017 will preside over conditions of disorder in everyday life and economy never seen before. For the supposedly thinking class in America, the end of reality-optional politics will come as the surprise of their lives.

Where has that hypothetical thinking class been, by the way, the past eight years? Don’t look for it in what used to be called “the newspapers.” The New York Times has become so reality-averse that the editors traded in their blue pencils for Federal Reserve cheerleader pompoms after the Lehman incident of 2008. Every information-dispensing organ has followed their lede: The Recovery Continues! It’s a sturdy plank for promoting the impaired asset known as Hillary.

Don’t look for the thinking class in the universities. They’ve surrendered their traditional duties to a new hybrid persecution campaign that is equal parts Mao Zedong, the Witches of Loudon, and the Asylum at Charenton. For instance the President of Princeton, Mr. Eisgruber, was confronted with a list of demands that included 1) erasure of arch-segregationist Woodrow Wilson’s name from everything on campus, and 2) creation of a new all-black (i.e. segregated) student center. He didn’t blink. Note: nobody in the media asked him about this apparent contradiction. That’s how we roll these days.

Don’t look for the thinking class in business. The C-suites are jammed with people still busy buying back stock in their own companies at outlandish prices with borrowed money. Why? To artificially boost share price and thus their salaries and bonuses. Does it do anything for the fitness of enterprise? No, in fact it makes future failure more likely. Why is their no governance of their insane behavior? Because they’ve also bought and paid for boards of directors composed of a rotating cast of praetorian shills, with fresh recruits entering the scene weekly through the fabled “revolving door” between business and government regulators.

Oh, and then there’s government. Anyone viewing the boasting-and-defamation contests that the cable TV networks call “debates” knows that these spectacles are based on the opposite of thinking. They are not only reality-optional, they’re thought-optional. Hence, it appears for now that America is fixing to elect either a primal screamer or a road-tested grifter to preside over the epochal collapse of our hobbled, exhausted, way of life.

The recent carnage in the stock markets will probably see a retracement after the President’s Day hiatus. They’re bouncing up in other parts of the world today, the triumph of hope over all the available evidence that something fatal has happened out there in Tom Friedman’s supposedly permanent global economy. Some observers suspect that it has something to do with the price of oil, because the oil futures market and the stock indexes seem to go up and down in tandem. But they don’t really get it.

How hard is it to understand that A) that something adverse happens to oil companies when it costs them $70-a-barrel to hoist the product out of the ground and then sell it for $30-a-barrel? And B) that all of the infrastructure of techno-industrial civilization was designed to run on oil under $30-a-barrel and founders when the price goes higher? That’s how it is. That’s your basic reality.

We’ve been trying to work around this vexing problem — the non-linear manifestation of the supposedly bygone predicament called “peak oil” — since the early part of this century. Mainly, we worked around it by borrowing money that wasn’t there. Having created this matrix of borrowed money, we’ve also created an expectation in market obligations that it must be paid back. In fact, the process of paying back money owed is the only thing that supports confidence in a system based on that essential trust — even if that expectation was unreal to begin with. When it is violated, terrible things happen in markets and economies.

Those terrible things are underway. We’re going to be a much-distressed and poorer so-called republic when this year is done with us. The markets will crack and the trade relations that comprise globalism will fall apart as nations and regions of nations struggle to survive. We’ll move inexorably to a very possibly disastrous election. We’ll face the basic choices, as distressed societies always do, of freaking-and-acting-out (usually in the form of war), or opting for a reunion with reality and its mandates. So far, it’s not looking good for the better option.

If you are a thinking person, the months ahead might be your last chance to protect whatever wealth you have and to move to some part of the country where, at least, you can grow some of your own food and become a useful part of a social and economic network that might be called a community.

via Zero Hedge http://ift.tt/1PzQ1eh Tyler Durden

Having bounced 22% off Thursday’s lows, amid endless confidence-inspiring chatter (of buybacks, bailouts, bank CEO buys, and SWFs saving the day), Deutsche Bank closed lower on the day, tumbling over 6% from its opening highs as the reality of the credit markets continues to sink in.

 

So, no, Deutsche Bank (and its $64 trilion derivatives book) is not “fixed” – far from it…

 

You Are Here…

via Zero Hedge http://ift.tt/1PzQ1e4 Tyler Durden

Over the weekend, the biggest story in the geopolitical world was Turkey’s escalation in Syria.

With the Sunni-backed opposition on its last legs in Aleppo and under near constant bombardment by Russia from the air and Hezbollah on the ground, Ankara and Riyadh have a decision to make: intervene or allow the rebellion to be crushed.

We’ve spilled quite a bit of digital ink explaining why allowing the rebels to be routed really isn’t an option. It would represent a key victory for Iran at a time when the country is already on a roll. International sanctions have been lifted, oil revenue is set to quintuple by year end, and Tehran’s grip on Iraqis military and politicians is stronger than ever. A victory in Syria would be an embarrassment for the Saudis who have funded and armed the opposition and a win at Aleppo would give the Iranians sectarian bragging rights at a time when tensions between Riyadh and Tehran are already running high thanks to the execution of prominent Shiite cleric Nimr al-Nimr.

And so, with the stakes high, the Saudis sent warplanes to Turkey’s Incirlik air base and Turkey promised an imminent “escalation.” The problem, we said, is this: somehow, Turkey and Saudi Arabia need to figure out how to spin an attack on the YPG and an effort to rescue the opposition at Aleppo as an anti-ISIS operation even though ISIS doesn’t have a large presence in the area.

Well that problem hasn’t been solved, but Turkey doesn’t seem to care. Ankara began shelling YPG positions over the weekend at Menagh air base, which the Kurds seized from Turkey-backed rebels just days ago.

Turkey claims this is about self defense. Erdogan equates the YPG (which is supported overtly by the US) with the PKK, Ankara’s arch enemy that’s recognized by Washington as a “terrorist” group.

The YPG have consolidated gains in northern Syria and are essentially trying to bridge the territory they hold east of the Euphrates with their territory in the west. That, Turkey says, isn’t going to happen. “YPG elements were forced away from around Azaz. If they approach again they will see the harshest reaction,” Turkish PM Ahmet Davutoglu said on Monday. “We will not allow Azaz to fall.”

Of course Azaz already “fell” – to Islamist rebels backed by the Turks who are aiming to usurp the government of a sovereign state.

In any event, more than a dozen civilians were killed in Azaz on Monday when missiles hit a children’s hospital. “At least 14 civilians were killed when missiles hit a children’s hospital, a school and other locations in the rebel-held Syrian town of Azaz near the Turkish border,” Reuters reports. “At least five missiles hit the hospital in the town center and a nearby school, where refugees fleeing a major Syrian army offensive were sheltering [and] another refugee shelter south of the town was also hit by bombs dropped by jets believed to be Russian.”

Yes, the jets are “believed to be Russian,” although Davutoglu just finished explaining how the YPG will face “the harshest reaction” if it advances on the town.

We suppose it’s not at all possible that the Turkish army made a little targeting “mistake” with some mortars.

Also on Monday, another MSF affiliated hospital was destroyed in Idlib. “This appears to be a deliberate attack on a health structure,” Massimiliano Rebaudengo, the Doctors Without Borders head of mission in Syria said. “The destruction of the hospital leaves the local population of around 40,000 people without access to medical services in an active zone of conflict.” Here’s what was left of the building after the strike:

As Reuters goes on to note, “tens of thousands of people have fled to Azaz, the last rebel stronghold before the border with Turkey.”

“We have been moving scores of screaming children from the hospital,” one medic said.

According to Davutoglu, the school and the hospital were hit by “a Russian ballistic missile.” The PM also said Russia and the YPG have closed the “humanitarian border” north of Aleppo. In reality, Russia and Iran have closed Turkey’s supply line to the rebels. It has nothing to do with “humanitarian aid.” Moscow and Tehran have no interest in starving the people of Aleppo. They do, however, have an interest in starving the rebels of guns.

That’s what the weekend’s hostilities were all about. Turkey hasn’t figured out exactly how to intervene at Aleppo without getting into an open confrontation with Russia, but everyone knows Erdogan hates the YPG, so Ankara figured shelling the Syrian Kurds advancing on Azaz from the west would effectively kill two birds with one stone: it would help keep supply lines to the rebels open, and some Kurds would be killed in the process. And no one, Turkey figures, is going to get too bent out of shape about it because let’s face it, Turkey has been shelling the Kurds in Syria for months anyway.

Whoever was responsible for the multiple civilian casualties that unfolded across the country on Monday, it’s not going to deter the Russians from routing the opposition… er… “the terrorists.” “We are fighting with the terrorist groups (Islamic State), Nusra Front, and others linked to al Qaeda,” Russian Deputy Foreign Minister Gennady Gatilov said in an interview with Der Spiegel. “Strikes on terrorist groups will continue in any case, even if a cease-fire is agreed upon in Syria.”

“Moscow’s aim is to leave the international community with just two options in Syria: President Bashar al-Assad or Islamic State,” Davutoglu said on Monday. 

Why, one might fairly ask, does the “international community” have a say in this at all? Had Syria been left to handle its own affairs five years ago, we wouldn’t be in this mess and the world wouldn’t be teetering on the edge of a global conflict. Well, at least not over Syria.

via Zero Hedge http://ift.tt/214LJAP Tyler Durden

Submitted by Bill Bonner of Bonner & Partners (annotated by Acting-Man.com's Pater Tenebrarum),

“Massive Deterioration” – Worse Than 2008

The Dow is down by almost 9% since the start of the year.

“These developments, if they prove persistent, could weigh on the outlook for economic activity…” proffered a nervous-looking Janet Yellen in her testimony on Capitol Hill. She was signaling to investors.

Smoke signals…

“Don’t worry about us,” she may as well have said. “If we can get away with a big U-turn, we’re not going to raise rates anymore.”

On Tuesday, Maersk Group, the world’s largest container shipping company, said it was suffering a “massive deterioration” in its business.

“It is worse than 2008,” its CEO, Nils Andersen, told the Financial Times. But this is not even near the bottom for the world economy. Hedge fund manager Kyle Bass warns that the other shoe is a big one… and it hasn’t dropped yet.

 

A Maersk container ship…the line is feeling the pinch – the Baltic Dry Index has collapsed to just 291 points (from approx. 11,800 at the 2008 peak) and container shipping rates have declined sharply as well.

 

China’s economy is heavily dependent on capital investment. It puts its money into building factories, highways, offices, apartment blocks, railroads, ports, and airports. What do all these projects require? Rebar!

Concrete is reinforced with steel bars. As the pace of building slows, the price of rebar goes down. In 2008, a ton of rebar cost about 5,500 renminbi ($836). Now, it costs barely 2,000 renminbi ($304) – the lowest price in at least 15 years.

 

Shanghai steel rebar futures, weekly in RMB – click to enlarge.

 

Compared to the size of its economy, China has two to three times the debt the U.S. had in 2008 – a total of $34 trillion, said Bass. As the Chinese economy slows, more steel mills, real estate developers, and manufacturers can’t pay their debts.

Total losses from debt defaults could be four times U.S. losses in the 2008 crisis. And that is just the beginning. Next week, we’ll explain why… and why Trump and Sanders are getting so much of the millennial vote. In the meantime, here’s an essay from the archives…

 

Convenient Beliefs

[Ed. note: Originally published August 2, 2005]

People come to believe whatever they need to believe when they need to believe it. Recent studies of voting patterns confirm the obvious. Zombies vote for higher taxes. Cronies vote for lower taxes. All believe they are voting for matters of principle.

Alan Greenspan believed strongly in gold – until he became a central banker.  Then he believed he could do a better job than gold. Or at least he pretended to.  It was a job requirement.  A priest who didn’t believe in the resurrection would be useless. So would a plumber who didn’t believe in using a wrench.

 

Things Alan Greenspan said before he became master of the fiat mint…

 

$19 Trillion and Counting…

In public life, people generally believe the dominant myth of the system in which they live. We are all democrats in the U.S. We believe in electing our leaders.  But there is no particular reason why this method should be superior to choosing our leaders by lottery or hand-to-hand combat.

Throughout most of history, people believed in other systems.  If we lived in a kingdom, we would probably believe strongly in monarchy. If we had a dictator, we’d probably have his name on our bumpers. And if we lived in a theocracy, we would kneel for prayer at the appointed hour.

 

As libertarian philosopher Stefan Molineux argues, there has always been only one purpose to having rulers, whether they are elected or not: the (tax)-farming of other humans.

 

Are we so much smarter now?  Maybe not.  Circumstances change. Ideas change with them.  The U.S. became an empire without anyone noticing. But now, Americans believe in empire… So much so that they are willing to spend trillions of dollars to maintain it.

The national debt of the U.S. is $19 trillion. At least $5 trillion of that can be traced to the costs of empire.  We have military bases all over the world. We believe we must meet challenges in Iraq, Syria, North Korea – all around the periphery of the empire.

We may just as well leave the poor Iraqis, Syrians, and North Koreans to take care of their own problems… But the thought wouldn’t be compatible with the imperial purple.  An empire acts like an empire.

 

Parasites of the Affluent Class

 And a rich person acts like a rich person. He cannot get richer and richer forever. So he must find ways to get rid of his money. Trees do not grow to the sky. There is no yin without a yang… no day without night… no boom without bust.

Everything regresses to the mean – including the wealth of an individual or a group. Even our own lives regress. No one was ever born who was not destined to die. The mean is the grave – for which we are all bound.

When a man gets a certain amount of money, he takes up the beliefs of a man who needs to spend it. He believes he needs a bigger house. He believes that more expensive wine is better than the cheap stuff. He may even take a course on wine… and bore his friends and neighbors with his sophisticated palette.

 

From “tastes like vinegar past its due date”: beverages designed to liberate the wealthy of some of their loot.

 

He believes a Mercedes-Maybach is superior to a Chevy. He believes he needs a mistress. Or a yacht. Wealth brings duties, as well as advantages. When a man makes some money, he finds himself the subject of attention of what Gloom, Boom & Doom Report publisher Marc Faber calls “the immediate parasites of the affluent class.”

As Faber puts it, these are the “real estate agents, stockbrokers, financial planners, investment bankers, fund managers… economists, derivative traders, salesmen of high-end cars, pleasure boats, and private jets, art dealers, diamond merchants, mistresses, second, third and fourth trophy wives, spoiled children, estate and tax planners, and lawyers.”

Then there are the “secondary parasites.”  Faber again… “They include life coaches, cosmetic surgeons, personal trainers, dog walkers and pet sitters, personal assistants, beauty consultants, massage therapists, and wedding planners.”

 

Too Many Zombies

A rich man’s duty is to believe these people give him some advantage. But all these things come at a price. They are handicaps.  When he is engaged in a quarrelsome divorce, a rich man has less time to devote to his business.

He forgets to study his sales figures when he is at wine school. And much of his fortune could be easily separated from him by clever financial planners. He gives himself these handicaps until he is able to get his wealth down to more reasonable levels – closer to the mean, that is.

If he dies before his work is done – while he still has some change in his pockets – he can be sure that the next generation will finish what he began. In a few years, the family will have average wealth rather than extraordinary wealth.

So, too, does a rich society need to give itself handicaps – so that its wealth and power can come back to a meaner level.  The U.S. surpassed Britain as the world’s leading economy in the 1890s when Queen Victoria was on the throne and Benjamin Harrison was American president.

 

Billy’s offers a theory of government

 

America’s lead gained over the next five decades – greatly aided by two devastating European wars… one of which it helped prolong and make far more disastrous for Europe than it otherwise would have been.

But along with its wealth, America’s handicaps increased. It now spends about as much on its military as the rest of the world combined.  After 9/11, it might have put a few more cops on the case… instead, it launched a “War on Terror” – another costly, distracting handicap.

Over the years, the U.S. has also increased its expensive social welfare programs, and the economic freedom that made its economy the leader of the world has given way to a rigged and heavily regulated economy.

GM – once the largest and most profitable business in the world – now has the handicap of having to spend thousands of dollars in health and retirement costs for every car it builds. Its competitors in China have almost none. Eventually, convenient beliefs become inconvenient. Handicaps take too much time and too much money.

Too many zombies. Too many cronies. Too many pointless wars and futile government spending programs. Too many hobbies. Too many trophy wives. Then the rich man, GM, and the empire – all take up more modest roles and more modest beliefs.

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