It was not long after last week’s horrifying bombings in Brussels that the so-called security experts were out warning that Europeans must give up more of their liberty so government can keep them secure from terrorism. I guess people are not supposed to notice that every terrorist attack represents a major government failure and that rewarding failure with more of the same policies only invites more failure.
I am sure a frightened population will find government promises of perfect security attractive and may be willing to allow more surveillance of their personal lives. They should pause a little beforehand and consider what their governments have done so far to keep them “safe.”
The government of France, for example, has been particularly aggressive in its Middle East policy. Then-French President Sarkozy was among the most determined proponents of “regime change” in Libya. That operation has left the country in chaos, with much of the territory controlled by an ISIS and al-Qaeda that were not there before the “liberation.” As we learned last week from Hillary Clinton’s emails, Sarkozy and British Prime Minister David Cameron were much more concerned with getting their hands on Libya’s oil after the overthrow of Gaddafi. The creation of a hotbed of terrorism that could easily make its way to Europe was not important. They wanted to secure enormously profitable deals for well-connected French and English energy companies.
Likewise, European governments have been very active in the five-year, US-led effort to overthrow the Assad government in Syria. This foolish move has boosted both ISIS and al-Qaeda in Syria to the point where they nearly over-ran the country late last year. It has also led millions to flee their war-torn country for a Europe that has opened its doors with the promise of generous benefits to anyone who can make it there. Is it any surprise that so many hundreds of thousands took them up on the offer? Is it any surprise that in this incredible flood of people there may be more than a few who are interested in more than just free housing and a welfare check?
Europeans should be demanding to know why their governments provoke people in the Middle East with aggressive foreign policies, and then open the door to millions of them. Do their leaders just lack basic common sense?
Usually the so-called security experts who advise more government surveillance after a terrorist attack have a conflict of interest. They often benefit when the security state is given a bigger budget. Insecurity is the bread-and-butter of the security “experts.” But why is it that after a terrorist attack, governments are rewarded with bigger budgets and more power over people? Shouldn’t failure be punished instead of rewarded?
As in the United States, the security crisis in Europe is directly tied to bad policy. Until bad policy is changed, no amount of surveillance, racial profiling, and police harassment can make the population safer. Europeans already seem to understand this, and as we have seen in recent German elections they are abandoning the parties that promise that the same old bad policies will this time produce different results. Hopefully Americans will also stand up and demand a change in our foreign policy before bad policy leads to more terrorist violence on our shores.
Just one more cut in rates more negative and just a little more ETF buying and bond purchases and we are sure the Japanese will start spending as wages rise…
4th monthly decline in a row and absent the tsunami and tax-hike reaction, this is the worst drop since Dec 2010…
It would be difficult to find a program that better exemplifies the word “failure” than the Pentagon’s “train and equip” effort in Syria.
Last May, US Central Command issued a hilariously absurd press release outlining what was quite obviously going to be a disastrous effort to arm rebel fighters. “The US military and partner forces have begun training the initial class of appropriately vetted Syrian opposition recruits this week to support the effort to degrade and ultimately defeat ISIL in Syria,” the PR read.
The idea was to field a contingent of more than 5,000 fearsome warriors by the end of the year.
(File photo: Dec. 17, 2012 Syrian rebels attend a training session in Maaret Ikhwan near Idlib, Syria)
Long story short, the effort was a fiasco – a complete debacle – a hilarious screwup. First, Colonel Nadim al-Hassan and an unknown number of other fighters from “Division 30” were kidnapped in the Aleppo countryside in July. “A senior U.S. defense official confirmed the snatched fighters had gone through the initial vetting process to receive training in Turkey,” The Daily Beast wrote at the time. “But then, for reasons that remain unclear, they traveled to Syria before they were ready to do battle with ISIS.” Subsequently, al-Nusra simply arrested them at a checkpoint near Zahart al-Malkia.
“We warn soldiers of (Division 30) against proceeding in the American project,” the al-Qaeda affiliate said in a statement distributed online. “We, and the Sunni people in Syria, will not allow their sacrifices to be offered on a golden platter to the American side.
As humiliating as that most certainly was, it got far, far worse. In late September, rumors circulated that Division 30 commander Anas Ibrahim Obaid had defected to al-Nusra after he disappeared in Aleppo.
Apparently, Obaid entered Syria from Turkey the day before with some 70 new graduates of the US program and a dozen or so four-wheel vehicles equipped with machine guns and ammunition. Although there are competing accounts as to what exactly happened next, Division 30 ultimately handed over all of the ammunition and the pickup trucks to al-Nusra in exchange for “safe passage.”
“They handed over a very large amount of ammunition and medium weaponry and a number of pick-ups,” one Abu Fahd al-Tunisi, an al-Nusra member, said on Twitter. “A strong slap for America… the new group from Division 30 that entered yesterday hands over all of its weapons to Jabhat al-Nusra after being granted safe passage,” he added.
Yes, “a strong slap for America” that came just days after “a strong slap” for taxpayers who on September 16 learned that only “four or five” graduates of the $500 million program were still fighting in Syria.
The program was understandably mothballed a few weeks later, but that doesn’t mean US-trained forces didn’t continue to rack up embarrassing battlefield losses to al-Nusra. In fact, it was exactly two weeks ago that al-Nusra took over Maarat Numan from Division 13 (one of the first rebel groups to receive US-made TOWs), confiscating anti-tank missiles, armored vehicles, a tank, and other arms in the process. “We congratulate [al-Nusra chief Mohammad] al-Jolani on this conquest!” Division 13’s leadership exclaimed, sarcastically on Twitter.
Throw in the fact that the FSA – not to mention all the other “moderate” rebels fighting in and around Aleppo – just got finished having their proverbial asses handed to them by Russia and Hezbollah and you’d think things couldn’t get much sillier for the Pentagon.
But you’d be wrong.
As The LA Times reports, Pentagon-armed Kurdish units (so these are different fighters from those involved in “train and equip”) are now engaging in firefights with CIA-armed forces in what is surely the most ridiculous example of US strategy gone horriby (and hilariously) awry to date.
“Syrian militias armed by different parts of the U.S. war machine have begun to fight each other on the plains between the besieged city of Aleppo and the Turkish border, highlighting how little control U.S. intelligence officers and military planners have over the groups they have financed and trained in the bitter five-year-old civil war,” the Times writes. “The fighting has intensified over the last two months, asCIA-armed units and Pentagon-armed ones have repeatedly shot at each other while maneuvering through contested territory on the northern outskirts of Aleppo, U.S. officials and rebel leaders have confirmed.” Here’s more:
In mid-February, a CIA-armed militia called Fursan al Haq, or Knights of Righteousness, was run out of the town of Marea, about 20 miles north of Aleppo, by Pentagon-backed Syrian Democratic Forces moving in from Kurdish-controlled areas to the east.
“Any faction that attacks us, regardless from where it gets its support, we will fight it,” Maj. Fares Bayoush, a leader of Fursan al Haq, said in an interview.
Rebel fighters described similar clashes in the town of Azaz, a key transit point for fighters and supplies between Aleppo and the Turkish border, and on March 3 in the Aleppo neighborhood of Sheikh Maqsud.
The attacks by one U.S.-backed group against another come amid continued heavy fighting in Syria and illustrate the difficulty facing U.S. efforts to coordinate among dozens of armed groups that are trying to overthrow the government of PresidentBashar Assad, fight theIslamic Statemilitant group and battle one another all at the same time.
At first, the two different sets of fighters were primarily operating in widely separated areas of Syria — the Pentagon-backed Syrian Democratic Forces in the northeastern part of the country and the CIA-backed groups farther west. But over the last several months, Russian airstrikes against anti-Assad fighters in northwestern Syria have weakened them. That created an opening which allowed the Kurdish-led groups to expand their zone of control to the outskirts of Aleppo, bringing them into more frequent conflict with the CIA-backed outfits.
The reference to “Kurdish-led” groups is a nod to the Syrian Democratic Forces (SDF), a make-believe alliance between the YPG and “Syrian Arabs.” As we noted last autumn in our classic post “Full Metal Retard: US Launches ‘Performance-Based’ Ammo Paradrop Program For Make-Believe ‘Syrian Arabs’“, there is no such thing as the SDF. The US was looking for a way to arm the YPG without enraging Erdogan, and so Washington tried to say that the Kurds had in fact joined forces with moderate Arabs in an ad hoc anti-Assad coalition. The Pentagon then promptly dropped 50 tons of ammo into the middle of the desert on pallets for the Kurds to retrieve (Erdogan saw right through the ruse, but that’s another story). “The group is dominated by Kurdish outfits known as People’s Protection Units or YPG,” the Times goes on to note. “A few Arab units have joined the force in order to prevent it from looking like an invading Kurdish army, and it has received air-drops of weapons and supplies and assistance from U.S. Special Forces.”
Of course none of this should surprise anyone. The Kurds are looking to bridge the territory they control east of the Euphrates along the Syrian-Turkish border with that which they control in Aleppo and that means moving into the Azaz corridor (i.e. the grey area between the purple areas on the map below).
The Kurd’s recent move to declare federalism will only make the push to unite their territory in northern Syria more urgent.
What makes this especially absurd is that Erdogan is firing on the YPG in and around Azaz. And by “YPG” we mean the Pentagon-backed “SDF.” So summing up, you have the Pentagon-backed Kurds fighting CIA-backed Islamists in an area where US-ally Erdogan is firing on the same Pentagon-backed Kurds.
And believe it or not, that’s not the punchline. The punchline is that Obama is considering restarting the train and equip program which would mean that in addition to the Pentagon-backed Kurds fighting in close proximity to and sometimes against CIA-backed rebels, you’d have a separate group of Pentagon-backed fighters operating in the very same area and everyone would be dodging artillery fire from the Turkish army.
Perhaps an unnamed US official who spoke to the LA Times summed it up best: “This is complicated.”
Several European countries have erected fences to keep migrants out, and, according to the numbers, every case appears to have a large impact.
Hungary was a popular pathway for refugees on their way to Germany during the fall. When the daily illegal border crossings were at 7,000 per day, Prime Minister Viktor Orban decided to erect a fence along the border to Serbia and Croatia.
Illegal border crossings in Hungary in October, 2015. (Hungarian Police/The Daily Caller News Foundation)
When the fence went up Oct. 17, the influx went down to 870 from 6,353 only a day earlier. Illegal border crossing were steadily below 40 per day throughout the rest of the month. The number picked up slightly in February, after migrants destroyed part of the fence, but it remains in the low hundreds.
Another successful example is Macedonia — the first step on the Balkan route, which separates Greece from the rest of the EU. Macedonia had more than 60,000 migrants enter the country in January. The migrant influx was cut significantly, leaving tens of thousands stranded in Greece. The desperation among refugees led to clashes with Macedonian military in late February.
Germany’s rising anti-immigration party, Alternative fur Deutschland (AfD), proposed a fence along its border in March.
AfD leader Joerg Meuthen mentioned several examples where fences work, particularly in Spain, where it forces North African migrants to take a long detour to get to Europe.
“They have to go around the Mediterranean” to find a way in, Meuthen said at a rally, according to news agency AFP. “Yes, fences have an impact.”
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Of course, as we previously noted that it wasn't just the fence that kept them out of Hungary… it was the tear gas, water cannons, and baton beatings AT the fence.
Dear Tim Cook, the DoJ and FBI will no longer require your assistance in unlocking the iPhone of Syed Farook who, along with his wife Tashfeen Malik, murdered more than a dozen people at an employee holiday party in San Bernardino last December.
U.S. DROPS APPLE CASE AFTER SUCCESSFULLY ACCESSING IPHONE DATA
As we outlined last week, Israel’s Cellebrite, a provider of mobile forensic software, was set to assist the Feds in their attempt to unlock the iPhone. “The government has now successfully accessed the data stored on Farook’s iPhone and therefore no longer requires the assistance from Apple,” the Justice Department said in a filing (embedded below). Here’s the mainstream media line from The New York Times:
Yet law enforcement’s ability to unlock an iPhone through an alternative method raises new uncertainties, including questions about the strength of Apple’s security on its devices. The development also creates potential for new conflicts between the government and Apple. Lawyers for Apple have previously said that the company would want to know the method used to crack open the device. The government may make that method classified.
“From a legal standpoint, what happened in the San Bernardino case doesn’t mean the fight is over,” said Esha Bhandari, a staff attorney at the American Civil Liberties Union. She noted that the government generally goes through a process whereby it decides whether to disclose information about certain vulnerabilities so that manufacturers can patch them.
“I would hope they would give that information to Apple so that it can patch any weaknesses,” she said, “but if the government classifies the tool, that suggests it may not.”
Right. Or this could all be nonsense. That is, Apple may have just made America an unwitting participant in an iPublicity stunt, as it were. As we suggested just five days ago, “the entire Apple ‘stand’ for privacy and consumer rights might be one big theatrical spectacle as both parties involved clearly were aware the iPhone can be penetrated with the right tools.” Here’s AP:
The FBI says it successfully used a mysterious technique without Apple’s help to break into an iPhone linked to the gunman in a California mass shooting.
The surprise development effectively ends a pitched court battle between Apple and the Obama administration.
The government told a federal court Monday without any details that it accessed data on gunman Syed Farook’s iPhone and no longer requires Apple’s assistance. Farook and his wife died in a gun battle with police after killing 14 people in San Bernardino, California, in December.
Apple did not immediately comment on the development.
A U.S. magistrate last month ordered Apple to provide the FBI with software to help it hack into Farook’s work-issued iPhone. The order touched off a debate pitting digital privacy rights against national security concerns.
So just like that, it’s all over. No hard feelings. And all of this on the heels of what is almost sure to go down as one of the biggest product launch flops in company history. The timing of it all certainly leaves us with more questions than answers.
Deutsche Bank may have gotten the corporate bond QE from the ECB that it so desired (even if it means another drop in negative rates) even if that did not help its stock rebound anywhere near to pre-crash levels, and its economist department may be gripped by a bout of raging schizhophrenia as erstwile permabull Joa LaVorgna is now one of the market’s bigger bears contrasted with super optimistic DB strategist Torsten Slok (who is seemingly unaware of what his year end bonus was) but that doesn’t prevent the bank from having a very outlook of where the market will be come the November general election, namely “range bound between 1925 to 2100.”
Here is the latest outlook from DB’s strategist David Bianco
We expect the S&P 500 to be range bound between 1925 to 2100 until after the US general election. We do not expect the S&P to fall back into correction territory as a double-dip correction already happened and it would likely take clear signs of an impending US recession or a new global shock to cause renewed investor panic.
While April into May is usually a strong period for S&P 500 performance, we think upside is capped given that 1Q S&P EPS will be down y/y and likely sequentially, Fed speak is likely to be more hawkish especially upon further market gains, Brexit vote risk, and the usual summer softness especially given Presidential campaign headline and geopolitical risks.
We are more comfortable that the dollar will not surge nea -term given the Fed lowered its 2016-2017 rate forecasts and the ECB and others acknowledge the limited benefits of negative interest rates and currency devaluation. However, we do not expect the dollar to fall as nothing like the Plaza Accord of 1985 has occurred. Moreover, we doubt a strong rebound in commodity prices.
If the S&P 500 doesn’t reach a new low, then Feb 11 2016 marks the trough of this market correction. During this double dip correction, S&P was sold off -14.2% from May 21 2015 to Feb 11 2016 (183 trading days). It has been 28 trading days since the market trough, this compares to 119 average trading days between 5%+ S&P dips since 1960. This is supportive, but summer and fall are often weaker than usual in election years.
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What is unsaid is that if DB’s forecast is just a little too optimistic, and if stocks indeed proceed to tumble, guess which European bank will be scrambling to get a bailout by a very unhappy German taxpayer…
Each of those countries was rocked by at least one horrific suicide blast last week. In Belgium, it was a crowded airport and metro. In Iraq, a soccer field. In Pakistan, a park popular with women and children.
The combined death toll from those attacks alone: more than 130.
Terrorism, by its very nature, is meant to instill fear. That means terrorists must be unpredictable, and to a certain extent indiscriminate in who and what they target. But today’s terror is in some ways fundamentally different in character than that which the world has witnessed in the past. Al-Qaeda, for instance, did not target the World Trade Center because they hated tall buildings and if their sole purpose was to kill 4,000 people, they could have figured out a far simpler way to do it.
In Bin Laden’s eyes, the towers were an ostentatious symbol of capitalism – a monument to everything the “infidels” stood for, cherished, and sought to force upon the Muslim world. For him, more important than the number of people killed were the indelible images that will forever remain seared in America’s collective consciousness. Although civilized society likes to pretend that the victims will remain in the public’s thoughts and prayers for all eternity, Bin Laden knew that wasn’t true. Rather, he wanted to make sure that the phrase which is so often repeated after a tragedy – i.e. “we will never forget” – actually meant something when it came to his legacy. That necessitated the destruction of symbols, not people. Sure, you can’t make an omelette without breaking a few eggs so “some” (maybe even several thousand) people would have to die, but the final number didn’t matter. It could have been 30, 300, 3,000, or 30,000. The point was to send a message. Does that make it any less horrific or in any way excuse it? Obviously not, but that isn’t the point.
Many of the attacks we see today cannot be justified by an appeal to the kind of perverse, psychopathic logic that Bin Laden and his ilk so often employed. Bombing women and children at a crowded park in Lahore, killing fans at a soccer match, and targeting civilians standing in line at an airport Starbucks are senseless acts of violence – meaningless even in the minds of the murderous. Consider for instance that before his death, Bin Laden himself derided the brutal, indiscriminate violence employed by Abu Musab al-Zarqawi, the leader of al-Qaeda in Iraq which was the precursor to ISIS.
None of this is to say that one terrorist is “better” than another, or that the world should long for the days when terrorism “made sense.” Rather, it’s simply to say that now more than ever, tragedy can strike anytime, anywhere. The term “targets” is now meaningless. The question isn’t “who or what should we hit?”, it is “who or what can we hit?”
With that as the backdrop, consider the following collection of visuals from artist Simon Menner who, after combing through hours of footage from suicide bombs, car bombs and attacks, captured the following images of the very last frame before tragedy struck.
“It is very absurd, but apparently the war needs a PR department to function,” artist Simon Menner said. Many new battlefields and weapons of war — drones, surveillance, snipers, cyberterrorism — are invisible and rely even more on media to affirm their existence and threat.
Menner’s ongoing project, “Last Frame Before Blast,” dwells in invisible warfare. In combing through hours of found footage from suicide bombs, car bombs and attacks around the world, what he found most striking was the moment before a blast. A Russian street scene–the white car is about to blow up. A government office in Sri Lanka–a woman reaches into her sari to detonate her explosive vest.
A photograph takes a split second in time, and stretches it into eternity. For those caught in Tuesday’s horrific attacks in Belgium, many would probably like nothing more than to return to that last moment of normalcy before the bombs shredded the Brussels airport.
Menner’s frames captures a bit of this wistfulness. But they are also heavily pregnant with anxiety about where the blast will come from, and the knowledge that everything is about to change. “Once you perceive the threat it is almost indistinguishable from the real threat,” Menner said via email.
Just over three months after the authorities lifted the four-decade ban on crude oil exports, the U.S. has actually exported less this year than it did over the same period the year before, when the ban was still in place.
According to Clipper Data market intelligence cited by the Financial Times, we’ve seen a 5 percent decline in U.S. crude oil export volumes since the beginning of this year. The data suggests that on average we are exporting (waterborne) 325,000 barrels per day now, compared to 342,000 barrels per day during the first months of 2015.
And there’s no official data yet—not since the beginning of this year, when the U.S. Energy Information Administration (EIA) noted that during the week ending 22 January, the U.S. had exported just shy of 400,000 barrels of oil, which again was 25 percent less than what was exported for the same week in 2014.
An oil tanker that reached a French port in January was the first post-ban delivery of U.S. crude oil, but things haven’t really picked up pace since then.
January’s cargoes, totaling about 11.3 million barrels, marked a 7 percent decline from U.S. crude exports in December, according to data by the U.S. Census Bureau. Shipments during January went to Curacao and France, in addition to Canada, the primary destination. The total number of tankers that have set sail with U.S. crude oil will not be known until comprehensive data on February’s shipments is released by the U.S. Census Bureau.
The immediate beneficiaries of the ban suspension are gas and oil companies such as Chevron and Exxon Mobil—among the most tireless lobbyers against the ban—and oil trading giants such as Vitol Group BV and Trafigura Ltd Pet.
Europe and Asia are flooded with oil from Russia and the Middle East, though the first two shipments to leave the U.S. post-export ban went to Europe: one to Germany and the other to France, to be used in a refinery in Switzerland. Dutch media outlets reported in January that a tanker from Houston had reached Rotterdam port, but this remains just a drop in the global export bucket.
In Asia, even China’s state-run Sinopec—the world’s second-largest refiner—has imported a consignment of U.S. oil, according to a Reuters source. Japan's Cosmo Oil was the first Asian buyer of U.S. oil, purchasing some 300,000 barrels of U.S. crude in mid-January, which will be delivered to its refineries in mid-April.
The very first South American country that will import U.S. crude oil is Venezuela. In early February, Venezuela’s state-run oil company PDVSA imported a 550,000-barrel cargo of West Texas Intermediate (WTI) through its U.S.-based Citgo Petroleum affiliate. Venezuela started importing foreign crudes in 2014 amid a fall in its own production – buying mostly Angolan and Nigerian light grades.
WTI is also expected to be exported to Israel, where Swiss commodities house Trafigura will ship some 700,000 barrels. Atlantic Trading & Marketing, the U.S. trading unit of French Total SA, has been planning an export cargo of U.S. crude from Cushing.
Also, earlier this month, Exxon became the first U.S. oil company to export U.S. crude, sending a tanker from Texas to a refinery it owns in Italy.
However, storage is now at the highest level in at least a decade.U.S., crude storage levels hit 487 million barrels in early November, closing in on the 80-year high of 518 million barrels in the last week of February. According to the EIA, about 60 percent of the U.S. working storage capacity is filled.
Globally, the picture isn’t much better, with the International Energy Agency (IEA) saying that 1 billion barrels were added to storage in 2015 alone. OPEC has reported that crude oil stockpiles in OECD countries currently exceed the running five-year average by 210 million barrels.
The Q4 earnings season is over and the numbers are in the bag. The GAAP numbers that is, not the non-GAAP garbage that lately everyone from Warren Buffett, to Factset, even to the SEC (and of course this site since 2013) has been bashing.
We wonder if they will continue bashing the GAAP numbers once they learn what they are, because as the charts below show, the earnings carnage on a real, unadjusted is simply unprecedented. Case in point: Q4 GAAP EPS just dropped even more from our previous estimate, and using IBES data, it is now down from 21 to 19.7, the lowest quarterly print since Q1 2010 when GAAP earnings were just 19.4 (and when the S&P was roughly half where it is now).
What about on an LTM and full year basis? As the chart below shows, the growing trailing 12 month divergence in the past few quarters between GAAP and non-GAAP has grown to proportions not seen since the financial crisis. What one can say with absolute certainty is that unless oil rebounds, and does so fast, all those “one-time, non-recurring” pro forma addbacks which have kept the non-GAAP EPS of the S&P500 flat while GAAP has plunged, will very soon be revised sharply lower.
Which brings us to the full year snapshot: what if Buffett, and Factset, and the SEC (and of course this website) are right and GAAP is the proper way of looking at earnings? Then we have a big problem, because instead of the 118.0 in 2015 non-GAAP S&P earnings, which translate into a P/E multiple of 17.3x as of today’s 2037 market close, the real, GAAP EPS of just 88.9 for the full year 2015 means the P/E multiple is now a gargantuan 22.9x!
It also means that GAAP earnings for the broader market are at a level last seen in 2010 when, as noted earlier, the S&P 500 was trading at about half where it closed today.
in this day-and-age of infinitesimally short attention spans, we thought the following flowchart would provide today’s Millennial voter a quick-and-dirty solution for making their decision come November…