Tag: finance

Hussman On “The Greatest Risk That Investors Face Here”

Excerpted from John Hussman’s Weekly Market Comment,

My impression is that today’s near-absence of risk premiums is both unintentional and poorly appreciated. That is, investors have pushed up prices, but they still expect future returns on risky assets to be positive. Indeed, because all of this yield seeking has driven a persistent uptrend in speculative assets in recent years, investors seem to believe that “QE just makes prices go up” in a way that ensures a permanent future of diagonally escalating prices. Meanwhile, though QE has fostered an enormous speculative misallocation of capital, a recent Fed survey finds that the majority of Americans feel no better off compared with 5 years ago.

We increasingly see carry being confused with expected return. Carry is the difference between the annual yield of a security and money market interest rates. For example, Wall Street acts as if a 2% dividend yield on equities, or a 5% junk bond yield is enough to make these securities appropriate even for investors with short horizons, not factoring in any compensation for risk or likely capital losses. This is the same thinking that contributed to the housing bubble and subsequent collapse. Banks, hedge funds, and other financial players borrowed massively to accumulate subprime mortgage-backed securities, attempting to “leverage the spread” between the higher yielding and increasingly risky mortgage debt and the lower yield that they paid to depositors and other funding sources.

We shudder at how much risk is being delivered – knowingly or not – to investors who plan to retire even a year from now. Barron’s published an article on target-term funds last month with this gem (italics mine): “JPMorgan’s 2015 target-term fund has a 42% equity allocation, below that of its peers. Its fund holds emerging-market equity and debt, junk bonds, and commodities.”

…it’s helpful to be aware of how compressed risk premiums unwind. They rarely do so in one fell swoop, but they also rarely do so gradually and diagonally. Compressed risk premiums normalize in spikes.

…when risk premiums are historically compressed and showing early signs of normalizing even moderately, a great deal of downside damage is likely to follow. Some of it will be on virtually no news at all, because that normalization is baked in the cake, and is independent of interest rates. All that’s required is for investors to begin to remember that risky securities actually involve risk. In that environment, selling begets selling.

 

 

Remember: this outcome is baked in the cake because prices are already elevated and risk premiums are already compressed. Every episode of compressed risk premiums in history has been followed by a series of spikes that restore them to normal levels. It may be possible for monetary policy to drag the process out by helping to punctuate the selloffs with renewed speculation, but there’s no way to defer this process permanently. Nor would the effort be constructive, because the only thing that compressed risk premiums do is to misallocate scarce savings to unproductive uses, allowing weak borrowers to harness strong demand. We don’t believe that risk has been permanently removed from risky assets. The belief that it has is itself the greatest risk that investors face here.

Read more here…




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Hussman On "The Greatest Risk That Investors Face Here"

Excerpted from John Hussman’s Weekly Market Comment,

My impression is that today’s near-absence of risk premiums is both unintentional and poorly appreciated. That is, investors have pushed up prices, but they still expect future returns on risky assets to be positive. Indeed, because all of this yield seeking has driven a persistent uptrend in speculative assets in recent years, investors seem to believe that “QE just makes prices go up” in a way that ensures a permanent future of diagonally escalating prices. Meanwhile, though QE has fostered an enormous speculative misallocation of capital, a recent Fed survey finds that the majority of Americans feel no better off compared with 5 years ago.

We increasingly see carry being confused with expected return. Carry is the difference between the annual yield of a security and money market interest rates. For example, Wall Street acts as if a 2% dividend yield on equities, or a 5% junk bond yield is enough to make these securities appropriate even for investors with short horizons, not factoring in any compensation for risk or likely capital losses. This is the same thinking that contributed to the housing bubble and subsequent collapse. Banks, hedge funds, and other financial players borrowed massively to accumulate subprime mortgage-backed securities, attempting to “leverage the spread” between the higher yielding and increasingly risky mortgage debt and the lower yield that they paid to depositors and other funding sources.

We shudder at how much risk is being delivered – knowingly or not – to investors who plan to retire even a year from now. Barron’s published an article on target-term funds last month with this gem (italics mine): “JPMorgan’s 2015 target-term fund has a 42% equity allocation, below that of its peers. Its fund holds emerging-market equity and debt, junk bonds, and commodities.”

…it’s helpful to be aware of how compressed risk premiums unwind. They rarely do so in one fell swoop, but they also rarely do so gradually and diagonally. Compressed risk premiums normalize in spikes.

…when risk premiums are historically compressed and showing early signs of normalizing even moderately, a great deal of downside damage is likely to follow. Some of it will be on virtually no news at all, because that normalization is baked in the cake, and is independent of interest rates. All that’s required is for investors to begin to remember that risky securities actually involve risk. In that environment, selling begets selling.

 

 

Remember: this outcome is baked in the cake because prices are already elevated and risk premiums are already compressed. Every episode of compressed risk premiums in history has been followed by a series of spikes that restore them to normal levels. It may be possible for monetary policy to drag the process out by helping to punctuate the selloffs with renewed speculation, but there’s no way to defer this process permanently. Nor would the effort be constructive, because the only thing that compressed risk premiums do is to misallocate scarce savings to unproductive uses, allowing weak borrowers to harness strong demand. We don’t believe that risk has been permanently removed from risky assets. The belief that it has is itself the greatest risk that investors face here.

Read more here…




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Ukraine Fighting Rages On As Russia Calls For Another Ceasefire: Ukraine Demands Total Surrender

With Ukraine shelling having killed 52 civilians in the city of Horlikva (Donetsk region) over the last two weeks alone, Russia is growing increasingly vocal of the need for a humanitarian cease-fire (notably with Germany also “concerned about the humanitarian situation” in Ukraine). However, as AP reports, fighting raged once again today as Ukrainian forces killed 1 and injured 10 in Donetsk, ignoring calls for a cease-fire. Andriy Lysenko, a spokesman for Ukraine’s National Security and Defense Council, said the only way for the rebels in Donetsk to save their lives would be to “lay down their arms and give up.” Meanwhile, just as we warned, the mainstream media is starting to pick up on the ‘other’ border dispute that Russia is involved in as Putin mediates talks between Armenia and Azerbaijan.

 

*UKRAINE SHELLING KILLS 52 CIVILIANS IN HORLIVKA OVER 2 WKS: RIA

Death toll include 9 children in city in Donetsk region, state-run Russian news service RIA Novosti reports, citing Horlivka’s health department.

 

71 people hospitalized between July 27 and Aug. 10, according to RIA

As Russian concerns about the humanitarian crisis grow…

Russia is in talks with Ukraine, UN humanitarian organizations and the International Committee of the Red Cross on urgent relief supplies to the Luhansk and Donetsk regions, said Russian Foreign Minister Sergei Lavrov.

 

“We have given priority in our talks with Ukraine, with the International Committee for the Red Cross and with UN humanitarian organizations to the necessity to dispatch relief aid to the Luhansk and Donetsk regions without delay,” Lavrov told reporters in Sochi on Sunday.

 

There is neither power, nor water in Luhansk, where hospitals have no essential medicines at their disposal, Lavrov said.

 

“All this is a sign of the most acute humanitarian situation. I discussed it over the past two days with the Ukrainian foreign minister, the U.S. secretary of state, the British secretary of state for foreign affairs, the leader of the International Committee of the Red Cross and with other colleagues,” the Russian foreign minister said.

 

“This issue is urgent and cannot be delayed, and it is under the Russian president’s control. I am convinced we will manage to reach agreement on relief supplies shortly,” Lavrov said.

Ukraine ‘agreed’ on their terms…

Poroshenko issued a statement late Saturday saying that Ukraine was prepared to accept humanitarian assistance in eastern Ukraine. But he said the aid must come in without military assistance, pass through border checkpoints under Ukrainian control and be an international mission.

 

Poroshenko said he and German Chancellor Angela Merkel discussed German participation in such a mission.

But fighting continues and the chance of agreement seems slim…

Fighting raged Sunday in the eastern Ukrainian city of Donetsk despite a request from the pro-Russian rebels for a cease-fire to prevent a “humanitarian catastrophe.” Ukrainian officials demanded that the insurgents surrender instead.

 

In a press conference in Kiev, Andriy Lysenko, a spokesman for Ukraine’s National Security and Defense Council, said the only way for the rebels in Donetsk to save their lives would be to “lay down their arms and give up.” He said the Ukrainian side hadn’t seen the rebels show any real willingness to cooperate.

 

“If white flags come up and they lay down their arms, nobody is going to shoot at them,” he said. “(But) we have not seen any practical steps yet, just a statement.”

The situation is deteriorating and doubts are rising…

“This is a real war! It’s impossible to live in this city, I’ve been sleeping in the basement for the past week,” said Inna Drobyshevskaya, a 48-year-old lawyer in Donetsk.

 

“We don’t want Novorossiya (New Russia) for this price,” she added, referring to a term used by rebels to describe the parts of eastern Ukraine seeking independence from the government in Kiev.

*  *  *
Does any of this really sound like de-escalation? It hardly seems like Putin will just bow out and let this happen to ‘his’ people…

 

Source: AP




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Coup In Iraq? Prime Minister Maliki Refuses To Step Down; Security Forces On Alert, Encircle Presidential Palace

Just days after the US launched a campaign that implicitly aides the current regime headed by the supposedly outgoing PM, al-Maliki, it appears that latest US intervention has already led to “unexpected” consequences, this time with the prime minister appearing to have just staged a coup moments ago.

Reuters reports that the prime minister “indicated that he will not drop his bid for a third term and accused the president of violating the constitution in a tough televised speech likely to deepen political tensions as a Sunni insurgency rages. Maliki, seen as an authoritarian and sectarian leader, has defied calls by Sunnis, Kurds, some fellow Shi’ites and regional power broker Iran to step aside for a less polarising figure who can unite Iraqis against Islamic State militants.

The days of Iraq’s president appear numbered:

The news has promptly led the WaPo Beirut chief correspondent Liz Sly to ask the question: did Baghdad just have a coup 3 days after the US conducted its fourth military intervention under as many US presidents?

Others are inclined to agree:

And according to less credible sources, the army is already in play:

 

Odd timing indeed. One thing is certain: the US will not let this crisis go to waste either.

However, what makes this particular development especially interesting is that a very organized ISIS is already doing its best to conquer the Iraq capital. A very disorganized army coup may be all that was needed to facilitate this goal, and to put the Iraq oil trade “in play” once again.

And the worst news of all: Obama two-week vacation on Martha’s Vineyard is ruined one day after it started.




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What We Will Likely Learn in the Coming Days

The most important economic events of August are behind us.  The ECB meeting and the US employment data are have taken place.   The purchasing managers surveys for July have already been reported.  

 

Much of the data due out in the coming days will  flesh out details of what is generally understood in broad strokes.  This is especially true of Japan and euro zone’s first estimates of Q2 GDP.

 

The available data indicates that the euro zone economy enjoys no momentum, and questions have been raised whether the growth is has reported (0.2% in Q1) is sufficient to signal that the recession truly ended.  Draghi’s formulation of the recovery being weak, fragile and uneven is not inconsistent with this view. 

 

The consensus expects the most meager of growth in Q2 (0.1%) and the risks are on the downside. The Bundesbank warned that the Germany economy may have stalled in Q2, and investors have already been told the Italian economy contracted by 0.2%.  The Italian economy grew in one-quarter (0.1% in Q4 13) since Q3 11, and some clever pundits want to call this a triple dip.  Surely it is more compelling and accurate to recognize that the Italian economy never emerged from the recession that began in Q4 11.  

 

Already reported data points to a steep contraction in Japan’s Q2 GDP under the weight of the retail sales tax increase on April 1.  The consensus calls for a contraction of around 7.5% at an annualized pace.  Much of the key economic data, like household consumption and industrial production, were weaker than economists had expected.

 

This warns of potential downside risks to the GDP estimate, as if the consensus has yet to fully appreciate the fullimpact of the sales tax increase.  A consensus report would erase in full the 6.7% expansion in Q1 (annualized pace), and mean that the world’s third largest economy contracted in H1.  Both the government and the central bank have cut their economic assessments but are reluctant to indicate the need for new stimulative measures.  

 

With the euro zone and Japan’s GDP figures, the second quarter is statistically over and June data, barring a significant surprise will lose its potential to impact the market.  Third quarter data is considerably more important for investors and policy makers.   This is true of several pieces of economic data to be released in the coming day, including the US JOLTS data. 

 

With the Fed broadening its focus from simply the unemployment rate to several other measures, the June JOLTS data may of interest.  However, it is unlikely to alter the general perception that, even if not healthy yet, the US labor market is healing.  An increase in job openings and not just a decline in layoffs have become evident over the last couple of months.  

 

The euro area industrial output for June is unlikely to provide new information. Many large countries have already reported their figures, and they point to a small increase on the aggregate level.  On the other hand, the June core machinery orders may be of interest as an indicator of future capex.  A rise that recoups a third to half of what was lost in April and May seems reasonable.

 

July data can be expected to confirm what we already know.  More people working in the US, stronger confidence, the already reported chain store results, and the surge in the service sector ISM points to a robust retail sales report, when adjusted for autos, gasoline and building materials, a measure used for GDP calculations.  Even though July industrial output may be kept in check by the decline in manufacturing hours, and a possible decline in utility output, auto output appears robust.  On balance, it appears the US economic momentum of Q2 has carried into the start of Q3.  

 

The final euro area July CPI is expected to confirm the preliminary down tick to 0.4% year-over-year.  The ECB staff’s latest (June) forecast is for a 0.7% this year.  This implies the harmonized measure is bottoming. The risk is that the staff is once again forced by circumstances to revise it lower as early as next month.  While the ECB needs to wait for the effect of the recent rates cuts and TLTROs, an ABS purchase program looks increasingly likely.  We would pencil it in for Q1 15.  

 

The UK July employment figures likely point to a continued absorption of slack.  Yet, the risk as seen in most of the high income countries, wage growth remains anemic. Indeed, the risk in the UK is still on the downside, despite the continued fall in the claimant count and the likely decline in the unemployment rate.  

 

The Bank of England’s inflation report the same day (August 13) is the venue for forward guidance.  While keeping its growth forecast unchanged, it might lower its unemployment estimate. However, the key in preparing the market for a rate hike (we think Q1 2015) is forecasting inflation to reach its 2% inflation target.  

 

China’s July data has already begun being reported.  The CPI and PPI were released on August 9. The former was unchanged at 2.3%, while the latter fell for the 29th consecutive month.  The pace of decline, -0.9%, is the least since April 2012.  Food inflation eased 0.1% on the month for a 3.6% year-over-year pace.  The Food and Agriculture Organization (part of the United Nations) estimates that worldwide, food prices fell in July for the fourth consecutive month.  In China, non-food prices edged higher by 0.1% for a year-over-year rate of 1.6%.   

 

Industrial production, retail sales and fixed asset investments are all expected to remain near June levels. Separately, aggregate financing is expected to have slowed in July, but this is most a reflection of pullback in loans from the formal banking system rather than from shadow banking.  We note that with its pre-weekend gains, the yuan itself has recouped half of the ground it lows earlier in the year. 

 

To note, among the other emerging markets, India’s July CPI and June industrial production figures standout, as do a possible rate cut by the South Korean central bank and a hike by the Chilean central bank. 

 

Lastly,  geopolitical anxiety continues to run high.  The disturbing and tragic events in Gaza have little market impact.  The US airstrikes on insurgent forces in Iraq also have little immediate market impact.  The territorial disputes dominated the weekend ASEAN meeting, according to press reports, but there is unlikely to be immediate market impact.  In this context, we note reports that India and Vietnam will conduct joint exercises. 

 

The situation in Ukraine is reaching a climax.   With the insurgency in east Ukraine facing defeat, Russia is faced with difficult choices.  The risk, as we have argued, is that Putin doubles down by sending “humanitarian “ support with the assistance its 20-40k troops (according differing accounts) that have been amassed on the Ukrainian border.  This would be viewed as an escalation by officials in Washington and Brussels, which in turn would trigger further sanctions.   This only adds to the euro area’s economic challenges.   

 

 

Although some observers have argued to the contrary, we do not see the international role of the dollar in jeopardy by the confrontation over Ukraine or the Russia-China energy deal.  We see much irony in the BRICS’ decision to capitalize its new development bank only with US dollars, which not even the World Bank does. 




via Zero Hedge http://ift.tt/1sDgXwQ Marc To Market

Common Sense Likely To Silence The Drums Of War

Submitted by Ben Tanosborn

Common Sense Likely to Silence the Drums of War

Empire-hawks have had the upper hand in American politics for several decades and, given the shifting economic power taking place in the world, they are now seemingly suicidal, ready to lead us into nuclear holocaust.  Just like Jim Jones did with his followers 36 years ago in Jonestown.  This time, however, the kool-aid is being dispensed by the US mainstream media laced with a different poison: raw propaganda against the Russian Federation and its malefic leader, Vladimir Putin.

The White House, acceding to the war-mongering influence that radiates from the Pentagon, the State Department and Congress, is performing a poorly-written morality play for the world to see, absurdly levying sanctions which will likely affect the leviers (US and EU) as much or more than the intended sanctioned, as Russia answers with quid pro quo economic counter-sanctions. 

Washington may wish to be seen as a white knight defending Ukraine’s territorial integrity; a farce, when in the last year and a half the US has been instrumental in destabilizing that nation with regime change intended to bring the former Soviet republic to the bosom of the West.  The strategy appears motivated not so much by magnanimity, to afford a greater future for a nation which is a true economic basket-case, but to close in to the borders of Russia, economically and militarily.

In a nutshell: keep the Russian bear caged and Putin’s dream of a strong and economically integrated Eurasia unrealized!

Common economic sense, however, is likely to silence the loud drums of war.

Angus Maddison, the late British macro-economist who studied/researched the history of World GDP, claimed that India and China were the biggest economies in the world for almost all of the past 2000 years.  Then the industrial revolution, colonialism and the information revolution entered and changed the mix.

I am well aware of the danger in extrapolating data compiled by the World Bank for a period extending all of a decade, but my curiosity in economics and statistics has won the day.  After some minor subjective geo-political considerations which I anticipate might take place in the next 5 to 10 years, I see the future composition of the World GDP by 2024 as 12 nations claiming 82 percent of the pie and the rest of the world combined accounting for the other 18 percent.  The dozen major economies, with their respective rounded-off share (to the nearest half percent), would line up in this decreasing order: China, 20%; US, 15%; Russia and Brazil, each 7.5%; Japan, 6%; Germany and India, each 5%; Australia and France, each 3.5%; and Canada, Italy and Indonesia, each 3%.  The United Kingdom is likely to submerge into oblivion, no matter how the Scots decide to vote, its two of-age daughters, Australia and Canada, surpassing the mother country’s GDP… in the case of Australia by as much as 25 percent.

Tempted to play with projected GDP figures, for after all it is a nation’s aggregate output that counts – and not the touted per capita figures, one might come up with an Iberian-American economic super-power (a confederation of Spanish- and Portuguese-speaking nations in both the Iberian Peninsula and the Americas) that overall would be second only to China, with approximately 18 percent of the pie.

And, of course, we could also create in the same fashion a Eurasian economic block that would add Turkey, Ukraine and a few other former Soviet republics to the Russian Federation that would make geopolitical sense and combine to over 10 percent of the World GDP.  Those who cannot see Turkey in league with Russia should be reminded of the great Turkish reformer, Mustafa Kemal Atatürk, who if alive today might find favor in allying with Putin rather than begging second rate treatment if joining the European Union, while also continuing as a member of an aggressive US-lackey NATO.  An unlikely event, I know… yet, who would have said a century ago that such great statesman and secularist, Atatürk, would come out of Salonika to remake the soul of the Ottoman Empire?

Although the US seems intent in playing the drums of war, perhaps realizing that its economic power is slowly headed for oblivion, to join the likes of Japan and the UK, American firms waving international flags don’t have the appetite for war that neocon elitists in the State Department or star-studded bellicosarians in the halls of the Pentagon have.  Not at all!  And here is where the feared industrial-military complex hopefully falls apart as globalist firms give their overall support to peace as a preferred alternative to the specter of a nuclear holocaust.  Russia doesn’t want any military confrontation, nor does China, nor do American and European corporate entities that see no future in suicide.

Americans need not drink the kool-aid offered by John McCain and his ilk in the Pentagon, Congress or the State Department; nor should they listen to the sad sack windmill-mouthpiece they have enlisted in the White House: Barack Obama.




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Muddled Messaging Ripe For Opposition

Submitted by Mark St.Cyr,

One can’t help when looking at all the geopolitical as well as threats of non-containment of the deadly Ebola virus and wonder: Who’s in control here?

Here’s a hint – it’s not the people lining up to give the message via oratory salvos. In fact, the clearest of messages coming out of the geopolitical realm are happening rapidly, methodically, and very much with blinding clarity allowing deeds to speak rather than words.

Just one example of this can be shown when the more one looks only for the outbreak of war, the more one misses other acts which can have just as dire consequences down the road. i.e., Developing friendships of rivals where the focus of that relationship is to oppose – you.

And as for the Ebola virus? It seems the message for now is just as clear: The more they talk of containment, and not to worry, the more light gets shown there is still need for concern.

The muddled messaging on the Ebola virus alone coming from political leaders and agencies is breath-taking. As of this writing we’re still wondering why it takes 24 to 48 hours for test results to be known for a patient in New York when in Columbus Ohio the all clear came in a matter of hours. With no clear report or clarification as to why.

And now just days later we wake to hear one of the most densely populated places on the planet (Hong Kong) just detained a person for you guessed it – Ebola.

If it’s found this deadly virus has reared its ugly head there, then once again all bets are off: for the messaging of late has been paradoxical to say the least.

The only clear thing will be is that people will begin acting in their own self-interest in ways no one yet knows let alone predict. These are the instances where the phrase, “A person is smart, but people are stupid” comes to mind.

As if something such as this would be enough to worry about, we also have what again seems to be more in line with the Keystone Cops of messaging in regards to the Middle East.

We’ve had messaging which seems so utterly convoluted, trying to diagram a flow chart of just recent events is more like trying to paint a picture Jackson Pollack could appreciate rather than framing anything of clarity.

What has been made abundantly clear is that through all this hand wringing and muddled messages of: “These are the people to support. No wait these are. Oops sorry no these are. Wait….” has allowed those with visions of opposition as to cause harm the room to both inflict that harm along with doing it in the very places we just left. And with our own equipment!

What has been the response to this? After the relentless, incessant media campaigning and messaging of we’re pulling out, guess what? We’re going back in.

Albeit it’s now said or stated emphatically “No boots on the ground.” Yet, I thought the previous message told was we were all done? So what does all this now mean or what message are we to take away? Yes, just not done yet?, Or this time? Or ________ ? (you fill in the blank for I can’t keep up.)

But wait you say: “This re-engagement was for a limited strike as to help prevent a genocidal act.” Fair enough, but I’ll point you to the messaging that came out just hours later. “Bombing in Iraq could take weeks.” And, “Bombing is no quick fix.” Just what form or type of clarity does one think it gives the opposition, let alone us?

If you don’t think they’re watching, listening and thinking along the lines of “Maybe we can wait them out again?” Or, “Maybe they’ll drop even more equipment that we’ll commandeer and fight even harder!” You’re not thinking clearly yourself.

They are clear on one thing – destroying you, me, us, and everything we represent. Our response of clarity? Muddled messages followed by the score keeping of Mulligans on some course following near every speech: Rather than some coherent resolute statement defining clear objectives that people can rally around.

So far the only thing of concern is whether or not there’s still time to play another round. And I haven’t even touched on Syria, Ukraine, Israel, the South China Sea and more.

What has also been absolutely clear is when it comes to the strength of our financial markets, the strength or value in nations continuing to use the U.S. Dollar as the reserve currency, the messaging there has been the message of – dead silence.

One would think it would be in the interest of a nation to at least once in a while give a some form of a pep rally in this arena. Yet, there’s a silence so deafening it would make a pin drop envious. No messaging, no rally cries, no nothing. So what you say? I’ll say nothing and just point.

In the vacuum of any clear messaging about a nation’s currency (especially the world’s reserve currency,) and the abandonment of attention by political leaders in its defense, as well as the obligation to speak, define, and lay out clear visions for why trading partners, as well as other nations, should feel confident in using the U.S. Dollar as the currency of choice – we hear absolutely nothing. Zip. Zero. Nada.

This is one of the first times in history I can remember where political leaders seemingly don’t even acknowledge there may be any form of issues even facing the dollar. Yet…

China who by all accounts both the political as well as business class keep pointing to as “a nation on the rise” lines up and strikes a deal with none other than Vladimir Putin as to trade and settle in (wait for it…) non U.S. Dollar settlements. Then Mr. Putin seemingly expanded that coalition to encompass even more countries into this fold.

I thought from all the messaging we had isolated Russian interests and made him a world pariah? At least that’s what the lines recited have told. Looks like someone’s not following the script. And with chilling clarity of their intentions.

One thing has now been shown in vivid detail: The more messaging put out along these same lines will only make it abundantly clear to any and all opposition that those in charge haven’t a clue.

If how the opposition responds going forward is anything like the way they have been, might I suggest getting off the course, and getting a clear coherent message back on one.




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Hundreds Of Yazidis Found In ISIS Mass Grave, Many Buried Alive

If the stated purpose of US intervention in the “country formerly known as Iraq“, which saw the fourth consecutive US president launching military strikes in a nation now absolutely destroyed thanks to US involvement, was humanitarian (it isn’t) and allegedly to “protect” the Yazidi ethnic minority members stuck on a mountain near Sinjar, then it needs some fine-tuning. The reason: as Reuters reports, Islamic State militants have slaughtered at least 500 Yazidis during their latest offensive in the north, with Iraq’s human rights minister Mohammed Shia al-Sudani adding that the ISIS jihadists also buried alive some of their victims, including women and children. Some 300 women were kidnapped as slaves, he added.

As a reminder, ISIS atrocities against Yazidis was the primary (if thoroughly fabricated) reason why according to the Obama, he promptly agreed to launch airstrikes against ISIS on Thursday night, leading to numerous bombing sorties in the following days.

Fast forward to today to find the following, from Reuters:

“We have striking evidence obtained from Yazidis fleeing Sinjar and some who escaped death, and also crime scene images that show indisputably that the gangs of the Islamic States have executed at least 500 Yazidis after seizing Sinjar,” Sudani said in a telephone interview, in his first remarks to the media on the issue.

 

Sinjar is the ancient home of the Yazidis, one of the towns captured by the Sunni militants who view the community as “devil worshipers” and tell them to convert to Islam or face death.

 

A deadline passed at midday on Sunday for 300 Yazidi families to convert to Islam or face death at the hands of the militants. It was not immediately clear whether the Iraqi minister was talking about the fate of those families or others in the conflict.

 

“Some of the victims, including women and children were buried alive in scattered mass graves in and around Sinjar,” Sudani said.

 

The minister’s comments could pile pressure on the United States – which has carried out air strikes on Islamic State targets in response to the group’s latest push through the north – to provide more extensive support.

 

“In some of the images we have obtained there are lines of dead Yazidis who have been shot in the head while the Islamic State fighters cheer and wave their weapons over the corpses,” said Sudani. “This is a vicious atrocity.”

The Iraq government, which had been begging for US intervention for months (if only to see Putin promptly step up while Obama dithered waiting to see who would replace current PM al-Maliki), is finally content that the US has stepped up: “The terrorist Islamic State has also taken at least 300 Yazidi women as slaves and locked some of them inside a police station in Sinjar and transferred others to the town of Tal Afar. We are afraid they will take them outside the country. The international community should submit to the fact that the atrocities of the Islamic State will not stop in Iraq and could be repeated somewhere else if no urgent measures were taken to neutralize this terrorist group,” Sudani said.

“It’s now the responsibility of the international community to take a firm stand against the Islamic State to reach a consensus on a legitimate decision to start the war on Islamic State to stop genocides and atrocities against civilians.”

The reason: the Iraq state has clearly shown it is incapable of stopping the (US-funded) ISIS advance, either to the north, or, increasingly, to the south where both Baghdad is located, as well as Iraq’s critical oil fields. Which is why now that the US is involved, the Iraq regime is certainly relieved if only for the time being: it remains to be seen just what the real US-motive behind backing the same ISIS it is ostensibly “fighting”, is.

In the meantime, the ISIS persecution of the Yazidis, followers of an ancient religion derived from Zoroastrianism and who are spread over northern Iraq as part of the Kurdish minority, continues. 

The irony: many of their villages were destroyed when Saddam Hussein’s troops tried to crush the Kurds during his iron-fisted rule. Some were taken away by the executed former leader’s intelligence agents.  Now they are on the defensive again. Tens of thousands of Yazidis fled for their lives after Kurdish fighters abandoned them in the face of Islamic State militants, and are trapped on a mountain near Sinjar at risk of starvation.

It is they who will first and foremost realize just what it means when the US pursue “humanitarian” intervention when its motives are entirely ulterior. Because as AFP adds, the US mission is well-short of achieving success:

“The Kurdish peshmerga forces have succeeded in making 30,000 Yazidis who fled Mount Sinjar, most of them women and children, cross into Syria and return to Kurdistan,” said Barbahari, who is in charge of the Fishkhabur crossing with Syria. “Most of them crossed yesterday and today, this operation is ongoing and we really don’t know how many are still up there on the mountain,” he told AFP.

 

Lawmaker Vian Dakhil, who is from the Yazidi minority most of the Mount Sinjar displaced belong to, said 20,000 to 30,000 had managed to flee and were now in Iraqi Kurdistan. “20,000 to 30,000 have managed to flee Mount Sinjar but there are still thousands on the mountain,” she told AFP. “They have arrived in Kurdistan.”

 

“The passage isn’t 100 percent safe. There is still a risk,” she added, as the international community ramped up efforts to provide food and water by air drops to those still stranded.

And speaking of ulterior motives, even the liberal New Republic finally figured out that “The U.S. Airstrikes in Northern Iraq Are All About Oil.” But… that would mean that the difference between Obama and Dubya is… if you haven’t figured it out by now, you never will.




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