Tag: finance

Qatar, the world’s richest nation per capita (and awkward home of US central command in The Middle East), has used its wealth to fund Hamas in the Gaza Strip, bankrolls (as we detailed here) Islamists fighting Syrian President Bashar Assad, and backed the Muslim Brotherhood and President Mohamed Morsi in Egypt – before he was deposed. As Bloomberg reports, they have additionally let other extremist groups raise money in Qatar, according to the U.S. Treasury Department – all in an effort to ‘support’ the gas pipelines that the tiny nation needs to maintain its uber-wealth. Qatar’s support for militants has angered its neighboring conservative monarchies… so, it is an intriguing shift that now, as Bloomberg reports, finds the terrorist-funding-nation mediating between Israel and Hamas to end the Gaza conflict.

As we detailed previously, Qatar is all about the gas…

Sadly, when it comes to the US (and of course Israel), it does have a very hidden agenda: one that involves lying to its people about what any future intervention is all about, and the fabrication of narrative about chemical weapons and a bloody regime hell bent on massacring every man, woman and child from the “brave resistance.” What they all fail to mention is that all such “rebels” are merely paid for mercenaries of the Qatari emir, whose sole interest is to accrue even more wealth even if it means the deaths of thousands of Syrians in the process.

 

A bigger read through of the events in Syria reveals an even more complicated web: one that has Qatar facing off against Syria, with both using Syria as a pawn in a great natural resource chess game, and with Israel and the US both on the side of the petrodollars, while Russia and to a lesser extent China, form the counterbalancing axis and refuse to permit a wholesale overthrow of the local government which would unlock even more geopolitical leverage for the gulf states.

So flip-slopping from recent terrorist-funding…

Qatar funds and arms Islamists fighting Syrian President Bashar Assad and bankrolls Hamas in the Gaza Strip.

 

It let other extremist groups raise money in Qatar, according to the U.S. Treasury Department.

 

Qatar backed the Muslim Brotherhood and President Mohamed Morsi in Egypt, before the Egyptian military deposed that nation’s first democratically elected leader and declared the Muslim Brotherhood illegal.

To mediation…

Qatar, which backed rebels in Libya and Syria and supported an Islamist government in Egypt, is now mediating between Israel and Hamas to end the Gaza conflict.

 

Its role may signal a foreign policy shift as Emir Sheikh Tamim bin Hamad Al Thani grapples with controversy over his country’s hosting of the 2022 World Cup. Seeking an agreement in Gaza, where more than 1,900 Palestinians and 67 Israelis have died, returns Qatar to its historically neutral role in conflicts from Darfur to Lebanon.

 

Foreign Minister Khalid bin Mohamed al-Attiyah this month joined Turkey in helping U.S. Secretary of State John Kerry negotiate a cease-fire between Hamas, the Palestinian group that governs the Gaza Strip, and Israel. With that truce extended yesterday, Qatar is using its links to Hamas to be a crucial go-between in talks over a longer term accord, said Andreas Krieg, a lecturer at King’s College London in Qatar.

Is an interesting development.

Just last month, when Qatar tried to broker a ceasefire in Gaza, the effort was angrily slapped down by Egypt and Israel, who thought the Qataris were trying to help Hamas win concessions through violence.

 

“Hamas has established an intimate relationship with Qatar,” Krieg said in an e-mail. “Qatar remains the informal channel of communication between the Hamas leadership and the U.S. and Israel.”

 

…

 

“Qatar has taken advantage of the political vacuum in Mideast peacemaking to take an important and much-needed role,” Jim Krane, a Gulf and energy research fellow at Rice University’s Baker Institute, said in an Aug. 5 e-mail. “There are plenty of folks clamoring for the parties to stop fighting, but few willing to mediate.”

As Bloomberg concludes,

But has it now bitten off more than it can chew?

 

“Today Qatar is on the defensive. They made a huge gamble and lost with the Muslim Brotherhood in Egypt,” says Emile Hokayem, a senior fellow at the Bahrain center of the International Institute for Strategic Studies, the London think tank. “Perhaps Islam will shape the region some day, and the bet will pay off. But in the short and medium term, the powerful state actors don’t see it that way and are ready to counter Qatar.”

Petrodollar politics are never simple.

“We feel we have been on the right side of history,” Foreign Minister al-Attiyah said in his opinion piece. “History will judge our actions.”

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

Authored by Benjamin Weingarten, originally posted at The Blaze,

Warren Buffett has famously supported the Obama administration and other Democrats, even lending his name to the so-called “Buffett Rule,” which calls for raising income taxes on high earners. As such, it may surprise you to learn that a key person in Warren Buffett’s life was an ardent proponent of political views diametrically opposed to those of the “Oracle of Omaha.”

111 years ago today, Warren’s father Howard Homan Buffett was born in Omaha, Nebraska. Buffett, like his son Warren, worked in the investment business, but also served four terms in the U.S. House of Representatives from 1943-1949 and then again from 1951-1953, as an anti-New Dealer, anti-Fair Dealer and overall anti-interventionist of the Republican “Old Right.” Politically, it could be said that Buffett was the Ron Paul of his day.

Buffett even corresponded with leading libertarian Murray Rothbard, asking Rothbard in one letter where he might be able to procure a copy of his “The Panic of 1819,” so that he could pass it along to his son.

Unlike his son who has lauded the Federal Reserve and in particular its former chairman Ben Bernanke, along with others who intervened during and after the financial crisis of 2008, Howard Buffett was an outspoken proponent of laissez-faire economics and sound money. In a 1948 article he wrote:

Is there a connection between Human Freedom and A Gold Redeemable Money? At first glance it would seem that money belongs to the world of economics and human freedom to the political sphere.

 

But when you recall that one of the first moves by Lenin, Mussolini and Hitler was to outlaw individual ownership of gold, you begin to sense that there may be some connection between money, redeemable in gold, and the rare prize known as human liberty.

 

Also, when you find that Lenin declared and demonstrated that a sure way to overturn the existing social order and bring about communism was by printing press paper money, then again you are impressed with the possibility of a relationship between a gold-backed money and human freedom…

 

The subject of a Hitler or a Stalin is a serf by the mere fact that his money can be called in and depreciated at the whim of his rulers…

 

Under such conditions [of depreciating currency] the individual citizen is deprived of freedom of movement. He is prevented from laying away purchasing power for the future. He becomes dependent upon the goodwill of the politicians for his daily bread. Unless he lives on land that will sustain him, freedom for him does not exist…

Buffett argues that the lack of a gold standard meant that Congress was unrestrained in spending money to cater to various interest groups, stating “With no bad immediate consequence it becomes expedient to accede to a spending demand. The Treasury is seemingly inexhaustible. Besides the unorganized taxpayers back home may not notice this particular expenditure — and so it goes.” Further:

Far away from Congress is the real forgotten man, the taxpayer who foots the bill. He is in a different spot from the tax-eater or the business that makes millions from spending schemes. He cannot afford to spend his time trying to oppose Federal expenditures. He has to earn his own living and carry the burden of taxes as well.

 

But for most beneficiaries a Federal paycheck soon becomes vital in his life. He usually will spend his full energies if necessary to hang onto this income.

 

The taxpayer is completely outmatched in such an unequal contest. Always heretofore he possessed an equalizer. If government finances weren’t run according to his idea of soundness he had an individual right to protect himself by obtaining gold.

 

With a restoration of the gold standard, Congress would have to again resist handouts. That would work this way. If Congress seemed receptive to reckless spending schemes, depositors’ demands over the country for gold would soon become serious. That alarm in turn would quickly be reflected in the halls of Congress. The legislators would learn from the banks back home and from the Treasury officials that confidence in the Treasury was endangered.

 

Congress would be forced to confront spending demands with firmness. The gold standard acted as a silent watchdog to prevent unlimited public spending.

Buffett ends his column with this warning:

Because of our economic strength the paper money disease here may take many years to run its course.

 

But we can be approaching the critical stage. When that day arrives, our political rulers will probably find that foreign war and ruthless regimentation is the cunning alternative to domestic strife. That was the way out for the paper-money economy of Hitler and others. In these remarks I have only touched the high points of this problem. I hope that I have given you enough information to challenge you to make a serious study of it.

 

I warn you that politicians of both parties will oppose the restoration of gold, although they may outwardly seemingly favor it. Also those elements here and abroad who are getting rich from the continued American inflation will oppose a return to sound money. You must be prepared to meet their opposition intelligently and vigorously. They have had 15 years of unbroken victory.

 

But, unless you are willing to surrender your children and your country to galloping inflation, war and slavery, then this cause demands your support. For if human liberty is to survive in America, we must win the battle to restore honest money.

 

There is no more important challenge facing us than this issue — the restoration of your freedom to secure gold in exchange for the fruits of your labors.

We’ll leave it to you to judge the merits of Buffett’s words.

via Zero Hedge http://ift.tt/1kF8dqL Tyler Durden

By EconMatters

 

Antiquated Retail Sales Reports

 

Wall Street needs to move into this Century with Data Analytics

 

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As Russia’s 300-strong ‘humanitarian’ convoy of white trucks slithered towards the Ukraine border, it appears, according to The Guardian, that, in spite of the market’s exuberance at this morning’s comments of “avoiding conflict,” Vladimir Putin sent a real ‘green’ military Russian convoy across the Ukraine border late Thursday evening.

 

So @RolandOliphant and I just saw a column of APCs and vehicles with official Russian military plates cross border into Ukraine.

— Shaun Walker (@shaunwalker7) August 14, 2014

.@shaunwalker7 and I just witnessed a not insubstantial column of APCs and trucks slipping across the border into Ukraine.

— Roland Oliphant (@RolandOliphant) August 14, 2014

Didn’t even turn off their headlights. Saw Russian military plates on support vehicles, but no markings I could make out on APCs.

— Roland Oliphant (@RolandOliphant) August 14, 2014

 

As The Guardian reports,

While the white trucks came to a halt well short of Ukraine’s border, a different Russian convoy did cross into Ukrainian territory late on Thursday evening.

 

The Guardian saw a column of 23 armoured personnel carriers, supported by fuel trucks and other logistics vehicles with official Russian military plates, travelling towards the border near the Russian town of Donetsk.

 

 

After pausing by the side of the road until nightfall, the convoy crossed into Ukrainian territory, using a rough dirt track and clearly crossing through a gap in a barbed wire fence that demarcates the border. Armed men were visible in the gloom by the border fence as the column moved into Ukraine.

 

Kiev has lost control of its side of the border in this area.

 

The trucks are unlikely to represent a full-scale official Russian invasion, and it was unclear how far they planned to travel inside Ukrainian territory and how long they would stay. But it was incontrovertible evidence of what Ukraine has long claimed – that Russian troops are active inside its borders.

 

…

 

The armoured column seen by the Guardian appeared to be further evidence of Russia’s incursions, which the Kremlin has repeatedly denied.

 

Read more here…

As The Telegraph confirms,

A column of armoured vehicles and military trucks crossed the border from Russia into Ukraine on Thursday night, in the first confirmed sighting of such an incident by Western journalists.

 

The Telegraph witnessed a column of vehicles including both armoured personal carriers and soft-skinned lorries crossing into Ukraine at an obscure border crossing near the Russian town of Donetsk shortly before 10pm local time.

 

read more here…

*  *  *

We assume this means Stocks will give back all their gains? lol…

 

*  *  *

Of course, we suspect if one were to ask Putin, this is merely an entry into an independent sovereign republic… not Ukraine per se… although we are sure he knows full well how the West will interpret this action.

via Zero Hedge http://ift.tt/1BhQ5IL Tyler Durden

For everyone curious how the market’s favorite “balls to the wall” barometer did in the second quarter (which ended 45 days ago), here is the full breakdown.

First the notable liquidations: in the three months ended June 30, Tepper closed his SPY and QQQ Call positions, which had a total notional equivalent of over $1.5 billion, as well as liquidating his stakes in QCOM, JPM, Metlife, Trinity, Delphi, Hess, Valmont, Ingersoll-Rand, Omincom and Beazer.

Tepper entered new positions in Mohawk, Weatherford and Ryland Group.

He added to his existing stakes in AAL, GM, PCLN which are three of his top 5 positions, while reducing his position in Citi (3rd largest position) and adding to a consolidated GOOG position (post split), which if combined between the A and C classes represents over $600 million in AUM and is his largest position as of the end of Q2.

He reduced his SPY and QQQ ETF exposure significantly, by $640 million and $514 million, respectively, while allocating to single names.

It appears that indeed Tepper indeed was undergoing some “nervous time” when it comes to the market, and going single names, which ironically has been the wrong trade in a market where the indices are near all time highs, while individuals stocks mysteriously continue to decline.

In total, Tepper represented a long-only AUM of $7.1 billion at the end of Q2, compared to $9.1 billion three months earlier, however as noted above, the bulk of this unwinds is due to the closing of his S&P and QQQ calls.

The full brekadown of Tepper’s Q2 13F and its change vs Q1 is shown below.

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

Submitted by Lance Roberts of STA Wealth Management,

The first half of this week has been very interesting from an economic, financial and geopolitical viewpoint. Despite what appears to be globally increasing risks, the financial markets have seemed relatively unfazed. Historically, such calm has always existed prior to the eventual storm. This week’s “3 Things” takes a look at some of the “rising risks” that I believe are being ignored which could potentially be harmful to individual's portfolios.

(Note: Identifying risks does not mean to “sell everything and run to cash.” As noted in this past weekend’s newsletter that discussed the markets recent “sell signal”:

'The current 'sell' signal does not mean 'panic sell' everything you own in your portfolio and run to cash. Initial sell signals can be short lived particularly when the Federal Reserve is still intervening in the markets.

Furthermore, by the time a WEEKLY sell signal is issued the markets are already OVERSOLD on a short term basis. It is very likely, that a rally will ensue in the markets over the next week back to resistance that could be used to rebalance portfolios and reduce the risk more prudently.”

By being aware of “risks,” we can make better portfolio allocation decisions in order to preserve capital and produce better-long term returns.

 

Oxymoron

There is an interesting phenomenon occurring in the financial markets that absolutely, positively, will not last indefinitely – the “Giant Shrinking Correction.” The chart below shows the S&P 500 (weekly closing data) since the beginning of 2009, with all relevant corrections identified in terms of percentage.

There are two important points to note. First, each correction since the end of QE2 has been increasingly smaller. This is very much in line with a prediction made in November, 2013 by John Hussman when he stated:

“A discussion of bubble risk would be incomplete without defining the term itself. From an economist’s point of view, a bubble is defined in terms of differential equations and a violation of ‘transversality.’ In simpler language, a bubble is a speculative advance where prices rise on the expectation of future advances and become largely detached from properly discounted fundamentals. A bubble reflects a widening gap between the increasingly extrapolative expectations of market participants and the prospective returns that can be estimated through present-value relationships linking prices and likely cash flows.

 

As economist Didier Sornette observed in Why Markets Crash, numerous bubbles in securities and other asset markets can be shown to follow a ‘log periodic’ pattern where the general advance becomes increasingly steep, while corrections become both increasingly frequent and gradually shallower. I’ve described this dynamic in terms of investor behavior that reflects increasingly immediate impulses to buy the dip.”

Secondly, I have noted in the chart above (red vertical dashed line) the onset of the most recent QE program. As noted, corrections since December of 2012 have never taken the markets back to extremely oversold levels as had occurred previously. With the Federal Reserve now reducing monetary interventions, it is likely that volatility will increase and corrections will once again become deeper.

The issue, as discussed by Hussman, is the current “risk on” environment will most assuredly swing to “risk off.” It is at this point that most investors are paralyzed into inaction as the realization of what was said “could not happen,” does.

 

Stanley Fischer And The Structural Shift

This past Monday, Stanley Fischer, the official who took over as Vice Chairman of the Federal Reserve in June, commented that the weak economic recovery might simply be continued fallout from the financial crisis and subsequent recession. However, “it is also possible that the underperformance reflects a more structural, longer-term shift in the global economy.”

I spilled some digital ink on his comments yesterday discussing the impact of debt and consumption on the “structural shift” in economic growth. However, my good friend Doug Short really hit home with his destruction of the “labor force is a function of retiree’s” meme.

“[The following chart]…essentially demolishes Fischer's view of our aging population as a demographic drag on labor supply. Here is the ratio of the 65-and-over cohort as a percent of the employed civilian population all the way back to 1948, the earliest year of BLS employment data. Mind you … these people are not only in the workforce, but also actually employed.”

 

“The percentage of elderly employment is at its historic high — now double its low in the mid-1980s. This is a trend with multiple root causes, most notably longer lifespans, the decline in private sector pensions and frequent cases of insufficient financial planning.

 

I would dismiss Vice Chairman Fischer's reference to ‘considerable uncertainty’ in the interpretation of labor supply weakness as routine Fedspeak. We are most certainly experiencing a structural change in employment, one that is a major drag on the overall economy. The fact this change was (not surprisingly) exacerbated by a business cycle downturn should not blind us to its structural nature. While this change will not be permanent, it will be a burden on economic growth for many years to come.”

READ ALSO: Don’t Blame Baby “Boomers” For Not Retiring

 

Can The U.S. Economy Really Stand Alone

The following chart is food for thought. There are extremely high expectations that the U.S. economy will achieve “lift off” in terms of economic growth eventually achieving 3-4% annualized growth rates. The chart below shows the nominal GDP of the Eurozone and U.S.

Is it possible, that in globally interconnected economy, the U.S. can stand alone?

While there are many prognostications that a recession is “nowhere in sight,” it is important to remember that recessions are a function of REVISED economic data. In other words, the reason that the National Bureau of Economic Research has never predicted a recession is because they must wait for the revisions to past data to determine the start and end dates of recessions.

However, it is also important to remember that as shown in the table below, it is often quite common to see strong economic data just before the onset of a recession.

While the Q2-2014 GDP print of 3.9% was certainly welcome following a dismal Q1, with Japan and the Eurozone economies slowing markedly, the spillover into the U.S. will likely be seen in Q3. As noted in the NYT, by David Jolly,

“Economic growth in the Eurozone sputtered to a halt in the second quarter as Germany contracted, and France stagnated again.

 

The gross domestic product of the 18 nations that share the euro did not expand at all from the first quarter of this year, when it grew 0.2 percent, according to Eurostat, the European Union’s statistics agency in Luxembourg.

 

The performance in the Eurozone bodes poorly for the already shaky global economic outlook. It comes a day after Japan reported that its G.D.P. shrank at an annual rate of 6.8 percent in the second quarter, and after the United States reported a rebound to 4 percent annualized growth following a dismal start to the year.”

As shown in the chart above, it is not uncommon to see a spurt of economic growth prior to the onset of a recession. Just as important is that recessions tend not to be a gradual thing, but rather a sharp plunge in activity caused by some exogenous event (oil prices, terrorism, war, etc.)

It will be worth watching the income data closely in the months ahead. Sluggish retail sales, very weak imports, and the drag on exports due to our trading partners economic drags (which makes up about 40% of corporate profits) suggest that Q2 may be the best we see this year.

via Zero Hedge http://ift.tt/Vqbrmb Tyler Durden

Embattled Iraqi Prime Minister Nouri al-Maliki has agreed to step aside and support his nominated replacement in the post, according to Shiite lawmakers via AP. In an statement on state-run TV, Maliki declared support for al-Abadi, leaving his post “to not let one Iraqi blood drop be shed because of me.” 

 

Maliki says universities were empty due to violence, #Iraq was isolated in 2006 when he took office. http://ift.tt/VqaOc4

— Zaid Benjamin (@zaidbenjamin) August 14, 2014

 

Perhaps most notably, Maliki stated “Intelligence apparatuses behind the sectarian strife in the region.” – CIA?

Via AP,

The Iraqi government says embattled Prime Minister Nouri al-Maliki is to address the nation, as Shiite lawmakers say he has agreed to step aside and support his nominated replacement in the post.

 

Four senior Shiite lawmakers tell The Associated Press that al-Maliki has agreed to endorse Haider al-Abadi as the next prime minister following a meeting of Dawa party members in Baghdad late Thursday, ending the deadlock that has plunged Baghdad into a political uncertainty.

 

Hussein al-Maliki and Khalaf Abdul-Samad, lawmakers with al-Maliki and al-Abadi’s State of Law parliamentary bloc, say al-Maliki will support al-Abadi’s nomination in his speech Thursday night. Two other lawmakers, speaking to AP on condition of anonymity to discuss the closed-door meeting, also say al-Maliki will do so.

 

The government announced al-Maliki will speak Thursday evening.

 

#Breaking: I’m leaving my post to not let one Iraqi blood drop be shed because of me – Nuri al-Maliki

— Zaid Benjamin (@zaidbenjamin) August 14, 2014

#Iraq | Maliki joins up with the greats of history by leaving all his positions – His TV Station

— Zaid Benjamin (@zaidbenjamin) August 14, 2014

* * *

As NYTimes notes,

While the country is not at peace, Mr. Maliki’s decision, nonetheless, appeared to pave the way for the first truly peaceful transition of power, based on democratic elections and without the guiding hand of American military forces, in modern Iraq’s history.

 

In stepping aside Mr. Maliki agreed to end his legal challenge to the nomination of his replacement, which was made on Monday when Iraq’s president nominated Haider al-Abadi, a member of Mr. Maliki’s own Shiite Islamist Dawa Party.

 

…

 

Mr. Abadi, according to the constitution, has 30 days from the time of his appointment – which was Monday – to form a new government. During that time, Mr. Maliki remains the caretaker prime minister, and the commander-in-chief of the military.

*  *  *

Who Is Haider al-Abadi?

Haider al-Abadi, a Shiite who was nominated Monday to be Iraq’s new prime minister, has 30 days to form a government with Sunni and Kurdish factions.

 

Mr. Abadi was named a deputy speaker of Iraq’s Parliament last month in a step toward ending a political deadlock.

 

He is a Shiite from Prime Minister Nuri Kamal al-Maliki’s Dawa Party, and lived in exile in London during part of Saddam Hussein’s rule, returning to Iraq in 2003.

 

As an adviser to Mr. Maliki, he was instrumental in expelling former Prime Minister Ibrahim al-Jaafari from the Dawa Party in 2008.

 

In 2007 when President George W. Bush committed more American troops to Iraq, Mr. Abadi said, “The government believes there is no need for extra troops from the American side.”

 

He was worried in 2006 about the stockpiling of weapons by Iraqis, aided by the American military presence, exacerbating sectarian tensions.

*  *  *

Of course, what really matters is what concessions were offered.

via Zero Hedge http://ift.tt/VqbsX0 Tyler Durden

Overnight weakness in Japan and Europe was no big catalysts for markets either way, but the moment Vladimir Putin uttered the words "avoid conflict" (as ooposed to saying 'destroy all of you'?), stocks took off. Weak jobless claims data sparked a dump but once cash markets opened, it was on like donkey kong as the worst volume day of a terrible volume week took stocks higher on the back of USDJPY. For the technically-minded, the S&P is testing up to its 50-day moving-average (DMA), Russell finding resistance at 100/200DMA, Trannies broke back above the 50DMA, and Nasdaq is on course for new highs. All this exuberance in stocks was shared by bonds as buyers bid 30Y yields to a 3.18% handle – lowest in 15 months (gaping divergence to stocks this week). USD oscillated but ended unch. Gold and silver limped higher as copper and crude were monkey-hammered. VIX ended at 3-week lows (after an opening slam lower) for day 15 of inversion. S&P futures volume 55% below average.

 

Putin started it today…

 

Lifting stocks to new highs on the week…

 

Thanks to USDJPY… (though into the close things started to break)…

 

VIX was slammed lower at the open but diverged slightly for rest of the day…then melted up into the close…

 

As bonds and stocks continue to diverge from retail sales…

 

Treasury yields were slammed (and heavby auction demasnd) sending 30Y bond yields to fresh 15-month lows…

 

FX markets were noisy once again around geopolitics and US macro but USD ended unch on the day…

 

Gold and silver limped higher but as US data hit Crude and copper were whacked lower…

 

Gold had quite a volatile day…

 

Brent and WTI fell generally in line as the spread stayeds steady around $6.50

 

Charts: Bloomberg

via Zero Hedge http://ift.tt/Vqbr5y Tyler Durden

In a few moments, Missouri Gov. Jay Nixon will speak at 4:00 p.m. ET. about the turmoil in Ferguson. As NBC reports, Nixon canceled a planned visit to the state fair and said he would visit the St. Louis suburbs Thursday after a fourth night of civil unrest over the police killing of Michael Brown, an unarmed black teenager. Nixon said in an earlier statement that the worsening situation in Ferguson was “deeply troubling.”

via Zero Hedge http://ift.tt/Vqbqi1 Tyler Durden

Escalation over the Ukraine conflict, a/k/a Cold War 2.0, just took another major step forward. Because here comes the cavalry… literally.

While the world is focused on the first deployment of US marines in Iraq in nearly a decade, as “humanitarian advisors” of course so as not to destroy the Nobel peace prize-winning aura of the US president who is rapidly becoming a warmonger on par with his predecessor, a far more dangerous development took place overnight with nobody noticing, when the Pentagon announced that approximately 600 soldiers from the Army’s 1st Brigade, 1st Cavalry Division will deploy to Poland and the Baltic states to help reassure European allies who feel threatened by Russian military moves. And while most Americans may be geographically challenged, Russians know very well that all of these countries border on Russia. As such this very demonstrative military expansion by NATO powers to “pre-contain” Russian military agression will only lead to one thing: even more “defensive” escalation.

Some more detail on the latest US dispatch of troops in the area now defined by the second coming of the Cold War from Stripes.com:

The troops and their equipment — which include M-1 Abrams tanks, infantry fighting vehicles, and armored personnel carriers — will go to Europe in October for a three-month series of training exercises.

The troops will originate out of Fort Hood, Texas (keep this in mind for a post later today) and will replace 600 paratroopers from the Army’s 173rd Airborne Brigade. “These land training exercises … help foster interoperability through small unit and leader training,” Pentagon spokesman Col. Steve Warren said.

In addition to ground forces, the U.S. has also sent F-16 combat aircraft to Poland and participated in NATO air policing missions over the Baltics.

So why is the US sending military reinforcements at a time when every troop movement is scrutinized with a microscope around the globe:

The exercises came at the request of host nations that fear a resurgent Russia, which annexed the Crimea region of Ukraine earlier this year and continues to support a pro-Russia separatist movement in eastern Ukraine.

So to summarize: the countries that are most worried about Russian military aggression, those which by definition border on Russia, have decided to preempt Russia and demand additional US military presence on their territory, believing that the Kremlin will not see this US military build up as one which threatens Russia with even further NATO expansion on its borders. .

Brilliant. Why? Because recall what happened in December 2013 long before the Ukraine semi-hot proxy civil war was raging:

It seems [Putin] had a Plan B in case things escalated out of control, one that fits with what we wrote a few days ago when we reported that “Russia casually announces it will use nukes if attacked.” Namely, as Bloomberg reports citing Bild, Russia quietly stationed a double-digit number of SS-26 Stone, aka Iskander, tactical, nuclear-capable short-range missiles near the Polish border in a dramatic escalation to merely verbal threats issued as recently as a year ago.

This comes from an article titled “Russia Stations Tactical, Nuclear-Capable Missiles Along Polish Border“, in which we explained how Russia has done precisely this when it stationed a “double-digit” of SS-26 nuclear missiles in Kaliningrad on the border with Poland, over “concerns” what NATO encorachment close to its territory could imply.

And now, NATO appears to have decided to find out just what Russia’s response to such an incremental tactical arms build up will be.

One thing is certain: the US response to a fresh contingent of this…

 

… with a range of this:

Will hardly be wrapped in the tidy, media-friendly package of on ICBM build-up for “humanitarian advisory” purposes…

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