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Earlier today, following significant delays, the Senate released its bipartisan report on the deadly Benghazi US embassy attack from September 11, 2012, which faulted both the State Department and the intelligence community for not preventing attacks on two outposts in Benghazi, Libya, that killed four Americans, including a U.S. ambassador. For those who are short on time and would rather get the cliff notes on the 85 page report (link here), the following summary from AP should suffice.

• Ambassador Chris Stevens, who was among those killed that night, had twice in the weeks before the attacks declined the U.S. military’s offer of a team of special operations forces that had been available to bolster security and provide other help. The State Department had decided not to request an extension of the team’s presence, about a month before the attacks, because officials thought the job could be done by local or department security.
• The report recommends that only in rare cases should a diplomatic facility continue to operate if it falls short of the State Department’s security standards — and in such cases the facility should have the personnel, weapons and fire safety equipment needed to address the threat. The State Department should be ready to evacuate or close diplomatic missions facing the highest threat, the report says.
• The report recommends that the intelligence community expand its work to analyze social media used by extremists, noting that little of that was done before the attacks and it’s possible there were hints in web postings of trouble ahead.
• Operations in Benghazi continued with little change even though the mission crossed some “tripwires” that should have led to reduction in personnel or the suspension of operations. Some nations closed their diplomatic facilities because of worsening security conditions in the summer of 2012. But others stayed, contrary to reports the U.S. was the last country represented there.
• An unarmed U.S. military drone was not delayed when responding to the attack, and it provided important information during the attacks.
• Based on limited intelligence, analysts inaccurately referred to the presence of a protest at the mission before the attack, and they didn’t corroborate the information. The intelligence community took too long to correct the erroneous reports, causing confusion and leading government officials to make incorrect public statements.
• The U.S. government must not rely on local security in areas where its facilities are under high threat or where the host nation is not capable of providing adequate security. The report said the committee supports the State Department’s initiative to work with the Pentagon to expand the Marine Security Guard Program to increase protection at high-risk facilities beyond just the protection of classified information.

Finally for those curious how the original explanation of the Benghazi attack is discussed, namely that it was in retaliation to an inflamatory video clip, here is what the report has to say:

… the report does not go far enough to address the Administration’s failure to correctly label the incident as a deliberate and organized terrorist attack in the days following the attack. As our “Flashing Red” report found, there was never any doubt among key officials, including officials in the IC and the Department of State, that the attack in Benghazi was an act of terrorism. Yet, high-ranking Administration officials, including the President himself, repeatedly cast doubt on the nature of the attack, at times attributing it to the reaction to an anti-Islamic video and to a spontaneous demonstration that escalated into violence.

 

Despite the fact that the September J 1, 2012 attacks in Benghazi were recognized as terrorist attacks by the Intelligence Community and personnel at the Department of State from the beginning, Administration officials were inconsistent and at times misleading in their public statements and failed for days to make  cleat to the American people that the deaths in Benghazi were the result of a terrorist attack. It took eight days before the Administration communicated clearly and unequivocally to the American people and to Congress regarding this fact through testimony by NCTC Director Matthew Olsen before the Senate Homeland Security and Governmental Affairs Committee on September 19,2012.

 

Even after the Administration finally published the complete time line of the changes made to the talking points, it is baffling how a fundamental, unclassified fact that was known to the IC from the beginning was only communicated clearly to the American people by the Administration after the issue had already been sufficiently muddled to result in confusion.

 

While I support the SSCI report and appreciate its thorough analysis of much of what went wrong, I believe that more emphasis should have been placed on the three issues I have discussed: (1) the Administration’s initial misleading of the American people about the terrorist nature of the attack, (2) the failure of the Administration to hold anyone at the State Department, particularly Under Secretary Kennedy, fully accountable for the security lapses, and (3) the unfulfilled promises of President Obama that he would bring the terrorists to justice.

via Zero Hedge http://ift.tt/1cqP6Gr Tyler Durden

Earlier today, following significant delays, the Senate released its bipartisan report on the deadly Benghazi US embassy attack from September 11, 2012, which faulted both the State Department and the intelligence community for not preventing attacks on two outposts in Benghazi, Libya, that killed four Americans, including a U.S. ambassador. For those who are short on time and would rather get the cliff notes on the 85 page report (link here), the following summary from AP should suffice.

• Ambassador Chris Stevens, who was among those killed that night, had twice in the weeks before the attacks declined the U.S. military’s offer of a team of special operations forces that had been available to bolster security and provide other help. The State Department had decided not to request an extension of the team’s presence, about a month before the attacks, because officials thought the job could be done by local or department security.
• The report recommends that only in rare cases should a diplomatic facility continue to operate if it falls short of the State Department’s security standards — and in such cases the facility should have the personnel, weapons and fire safety equipment needed to address the threat. The State Department should be ready to evacuate or close diplomatic missions facing the highest threat, the report says.
• The report recommends that the intelligence community expand its work to analyze social media used by extremists, noting that little of that was done before the attacks and it’s possible there were hints in web postings of trouble ahead.
• Operations in Benghazi continued with little change even though the mission crossed some “tripwires” that should have led to reduction in personnel or the suspension of operations. Some nations closed their diplomatic facilities because of worsening security conditions in the summer of 2012. But others stayed, contrary to reports the U.S. was the last country represented there.
• An unarmed U.S. military drone was not delayed when responding to the attack, and it provided important information during the attacks.
• Based on limited intelligence, analysts inaccurately referred to the presence of a protest at the mission before the attack, and they didn’t corroborate the information. The intelligence community took too long to correct the erroneous reports, causing confusion and leading government officials to make incorrect public statements.
• The U.S. government must not rely on local security in areas where its facilities are under high threat or where the host nation is not capable of providing adequate security. The report said the committee supports the State Department’s initiative to work with the Pentagon to expand the Marine Security Guard Program to increase protection at high-risk facilities beyond just the protection of classified information.

Finally for those curious how the original explanation of the Benghazi attack is discussed, namely that it was in retaliation to an inflamatory video clip, here is what the report has to say:

… the report does not go far enough to address the Administration’s failure to correctly label the incident as a deliberate and organized terrorist attack in the days following the attack. As our “Flashing Red” report found, there was never any doubt among key officials, including officials in the IC and the Department of State, that the attack in Benghazi was an act of terrorism. Yet, high-ranking Administration officials, including the President himself, repeatedly cast doubt on the nature of the attack, at times attributing it to the reaction to an anti-Islamic video and to a spontaneous demonstration that escalated into violence.

 

Despite the fact that the September J 1, 2012 attacks in Benghazi were recognized as terrorist attacks by the Intelligence Community and personnel at the Department of State from the beginning, Administration officials were inconsistent and at times misleading in their public statements and failed for days to make  cleat to the American people that the deaths in Benghazi were the result of a terrorist attack. It took eight days before the Administration communicated clearly and unequivocally to the American people and to Congress regarding this fact through testimony by NCTC Director Matthew Olsen before the Senate Homeland Security and Governmental Affairs Committee on September 19,2012.

 

Even after the Administration finally published the complete time line of the changes made to the talking points, it is baffling how a fundamental, unclassified fact that was known to the IC from the beginning was only communicated clearly to the American people by the Administration after the issue had already been sufficiently muddled to result in confusion.

 

While I support the SSCI report and appreciate its thorough analysis of much of what went wrong, I believe that more emphasis should have been placed on the three issues I have discussed: (1) the Administration’s initial misleading of the American people about the terrorist nature of the attack, (2) the failure of the Administration to hold anyone at the State Department, particularly Under Secretary Kennedy, fully accountable for the security lapses, and (3) the unfulfilled promises of President Obama that he would bring the terrorists to justice.

via Zero Hedge http://ift.tt/1cqP6Gr Tyler Durden

While the market seems to have rapidly given up worrying about the piss-poor jobs data from last week, the fact of the matter is the longer-term trend of ’employment’ in America is anything but questionable. As we pointed out, and was so broadly understood, the number of people in the labor force in American is fading fast. In fact, as the chart below shows, the last 2 times the civilian labor force fell on an annual basis like this, the US economy was already in recession…

 

 

 

(H/t @Not_Jim_Cramer)

via Zero Hedge http://ift.tt/1eKIx6p Tyler Durden

The rest of the world may be stuck importing Japan’s deflation (and Europe may be even contemplating launching a Fed type QE as BNP suggested first some time ago), but one country is doing all in its power, and more, to slow down hot money and the resulting inflation – Brazil. Moments ago the Central Bank of Brazil raised the Benchmark Selic interest rate by 50 bps points more than the 25 bps expected, to 10.50%.

From the press release:

Brasília – Continuing the adjustment of the basic interest rate process, initiated in April 2013 meeting, the Committee decided unanimously, at this time, to raise the Selic rate by 0.50 percentage points to 10.50%, with no bias.

While this decision will catch most forecasters by surprise, and will hardly please Bovespa investors, this is what Goldman had to say about the decision earlier today:

Recent Dovish Remarks Suggest a +25bp Selic Hike Today but Sticky Inflation Increases Probability of a Deeper and Longer Hiking Cycle

The Monetary Policy Committee (MPC; Copom) meeting will take place later today. Given the dovish central bank undertones contained in both the minutes of the Nov 27 Copom meeting and the subsequent Quarterly Inflation Report (QIR), we expect the Copom to moderate the magnitude of rate hikes to +25bp (following five consecutive 50bp hikes). However, given the pressure on the BRL, the December IPCA inflation surprise (which frustrated the central bank’s public commitment to deliver inflation in 2013 below the 5.84% level of 2012), and the stickiness of headline, core and inflation expectations, we assess at least a 40% probability of another +50bp hike tonight. Furthermore, we do not rule out that, consistent with the recent more dovish remarks, the Copom does indeed moderate the pace of hikes to just 25bp but hints (likely indirectly) that the tightening cycle will continue at least until the February 26 meeting.

The outlook for inflation remains challenging. Inflation dynamics seem to have deteriorated towards the end of 2013. Altogether, very little progress, if any, was recorded during 2013 to re-anchor inflation to the admittedly generous but still elusive 4.50% inflation target. Overall, headline IPCA inflation ended 2013 at a high 5.9% (5.91% for two-decimal precision), exceeding the already high 5.84% 2012 print, despite having benefitted from: (1) the mean-reversion throughout 2013 of the large 2012 food supply shock; and (2) a very significant positive administered-price supply shock (see below for a more detailed discussion). In all, ultimately the monetary authority was not able to deliver even on the admittedly undemanding commitment to have headline inflation ending 2013 below the 2012 level.

In short, inflation remained high and generalized over the past year. Furthermore, key inflation measures ended 2013 at a higher level than in 2012. For instance, the average of the three main core inflation measures—smoothed trimmed means, double weight, and ex-food and regulated prices—accelerated to 6.1% yoy at year-end 2013 from 5.8% in 2012. In addition, services inflation remained high: 8.7% (unchanged from 2012; a reflection of, among other factors, inertia and unanchored inflation expectations). Furthermore, tradable inflation accelerated to 6.0% in 2013 (from 4.5% yoy a year ago, driven in part by a weaker BRL) and non-tradable inflation ended 2013 at a high 8.45% yoy; down from 9%-plus at mid-year but higher than the 8.38% print at year-end 2012. Finally, year-end 2014 inflation expectations have deteriorated steadily since March 2013 and are significantly misaligned from the target.

Not only did headline/core inflation end the year at unacceptably high above-target levels, but there is now also a high level of repressed inflation in the system (via regulated prices/tariffs) that will render the task of disinflating the economy harder in the years ahead. For instance, inflation among the items whose prices are freely determined/set by the market (prices determined by supply and demand in the market; 75% weight in the IPCA) ended 2013 at a high 7.3% yoy (up from 6.5% in 2012), while inflation in prices that are regulated by the government (25% weight in the IPCA) ended the year at a low and unsustainable 1.5% yoy (down from 3.7% in 2012 and the lowest level since at least 2004). That is, had regulated price inflation ended 2013 at the same already relatively low 2012 level, headline inflation would have ended 2013 at or above 6.5% upper limit of the IT band.

In our assessment, the wide 578bp gap between inflation in freely determined and administered/regulated prices will have to normalize in 2014-15 to avoid further micro and macro distortions in the economy (e.g., misallocation of resources and weakening balance sheets of the companies operating in regulated sectors). Overall, we believe the government strategy of fighting inflation by managing regulated prices and the exchange rate rather than by addressing its underlying root causes has proven ineffective and no substitute for conventional demand management policies (fiscal and monetary). In fact, this strategy may have contributed to delaying a timely and decisive monetary policy response to the rising inflationary pressures. This contributed to the significant generalization of inflationary pressures and strengthening of inertial forces, which will ultimately increase the output cost (sacrifice ratio) and length of time required to disinflate the economy.

The estimated density function of freely determined prices has moved to the right compared with a year ago. The center of the headline IPCA inflation distribution does not appear to have shifted much from a year ago, but by year-end 2013 the density function (1) developed a fatter right-tail (i.e., skewed to higher inflation outcomes); and (2) seems to have turned bi-modal, possibly a reflection of the widening gap between freely determined and administered prices. Replicating the same exercise with just the subset of freely determined prices shows a clearer rightward shift of the inflation density function from year-end 2012 to year-end 2013 with the distribution now centered outside the 6.50% upper limit of the inflation target band. Furthermore, the bi-modal characteristic of the headline IPCA density function disappears when we exclude regulated prices.

via Zero Hedge http://ift.tt/1d6FCUa Tyler Durden