All of the Countries which the U.S. “Regime Changed” – Iraq, Afghanistan and Libya – Have Descended into Brutal Chaos

Quantifying the Effects of Regime Change

Since 2001, the U.S. has undertaken regime change in Iraq, Afghanistan and Libya.

All 3 countries are now in chaos … and extremists are more in control than ever.

Iraq

In Iraq, hardcore Islamic jihadis known as ISIS have taken over much of the country – shown in red as the new “Islamic State” or self-described caliphate – using captured American weapons:

http://ift.tt/1lhyPaV

USA Today notes: “Iraq is already splitting into three states“.

Christians are being rounded up and killed, and Christian leaders in Iraq say the end of Christianity in Iraq is “very near”. But as we documented in 2012, Saddam Hussein – for all his faults – was a secular leader who tolerated Christians.

Libya

Libya has also descended into absolute chaos.   We reported in 2012:

Al Qaeda is now largely in control of Libya.  Indeed, Al Qaeda flags were flown over the Benghazi courthouse once Gaddafi was toppled.

(This is – again – in contrast to toleration of Christians under Gadaffi.)

The Guardian noted in March:

According to Amnesty International, the “mounting curbs on freedom of expression are threatening the rights Libyans sought to gain“. A repressive Gaddafi-era law has been amended to criminalise any insults to officials or the general national congress (the interim parliament). One journalist, Amara al-Khattabi, was put on trial for alleging corruption among judges. Satellite television stations deemed critical of the authorities have been banned, one station has been attacked with rocket-propelled grenades, and journalists have been assassinated.

 

***

 

Ever since the fall of [Gadaffi's] dictatorship, there have been stories of black Libyans being treated en masse as Gaddafi loyalists and attacked. In a savage act of collective punishment, 35,000 people were driven out of Tawergha in retaliation for the brutal siege of the anti-Gaddafi stronghold of Misrata. The town was trashed and its inhabitants have been left in what human rights organisations are calling “deplorable conditions” in a Tripoli refugee camp. Such forced removals continue elsewhere. Thousands have been arbitrarily detained without any pretence of due process; and judges, prosecutors, lawyers and witnesses have been attacked or even killed. Libya’s first post-Gaddafi prosecutor general, Abdulaziz Al-Hassadi, was assassinated in the town of Derna last month.

 

***

 

When residents of Benghazi – the heartland of the revolution – protested against militia rule in June last year, 32 people were killed in what became known as “Black Saturday”. In another protest in Tripoli last November, 46 died and 500 were injured.

Under militia rule, Libya is beginning to disintegrate. Last summer forces under the command of the warlord Ibrahim Jadran took control of eastern oil terminals …. These forces which hijacked a oil tanker this month, prompting threats from Libya’s prime minister that it would be bombed until US forces captured it this weekend. Clashes have broken out in Jadran’s home town of Ajdabiya. In painful echoes of Iraq’s nightmare, a car bomb exploded at a Benghazi military base last week and killed at least eight soldiers, and Libya’s main airport was shut on Friday after a bomb exploded on its runway.

 

One of the great perversities of the so-called war on terror is that fundamentalist Islamist forces have flourished as a direct consequence of it. Libya is no exception, even though such movements often have little popular support. The Muslim Brotherhood and other elements are better organised than many of their rivals, helping to remove the prime minister, push through legislation, and establish alliances with opportunistic militias.

 

Ominously, Libya’s chaos is spilling across the region. The country is awash with up to 15 million rifles and other weapons, and a report by the UN panel of experts this month found that “Libya has become a primary source of illicit weapons“. These arms are fuelling chaos in 14 countries, including Somalia, the Central African Republic, Nigeria and Niger.

 

***

 

There is a real prospect of the country collapsing into civil war or even breaking up. Unless there are negotiated settlements to its multiple problems, Libya will surely continue its descent into mayhem, and the region could be dragged into the mire with it.

 

No wonder western governments and journalists who hailed the success of this intervention are so silent. But here are the consequences of their war, and they must take responsibility for them.

28-year CIA veteran Paul Pillar – who rose to be one of the agency’s top analysts – wrote in May:

Just when one might have thought the mess in Libya could not have gotten worse, it has.

 

***

 

Saudi Arabia and several other Arab states have evacuated their diplomats from Libya, the United States is preparing for possible evacuation of U.S. personnel, and the country appears on the brink of a larger civil war.

 

***

 

Those in Libya closest to being called secular liberals seem to be associated with military officers of the old regime.

 

***

 

The intervention already has negatively affected U.S. interests, particularly in providing a disincentive to other regimes to do what Gaddafi did in negotiating an end to involvement in terrorism and an end to production of unconventional weapons.

And things have only gotten worse since then.

(It should be remembered that the U.S. helped sew the seeds of chaos in several ways.  Not only did we engage in direct military intervention against Gadafi, but also – as confirmed by a group of CIA officers – armed Al Qaeda so that they would help topple Gaddafi.)

Afghanistan

Opium production is at an all-time high under the American occupation of Afghanistan.

And the New York Times reports this week that the Taliban are currently making huge gains in Afghanistan … in some cases expanding even beyond their traditional areas of influence prior to 2001:

The Taliban have found success beyond their traditional strongholds in the rural south and are now dominating territory near crucial highways and cities that surround Kabul, the capital, in strategic provinces like Kapisa and Nangarhar.

U.S. troops are just now leaving, and so the worst may be still to come.  In addition – as we discuss below – the U.S. previously imposed regime change on Afghanistan … and the results were bad.

History Repeats

The U.S. carried out regime change in Iran in 1953 … which led to radicalization in the country. Specifically, the CIA admits that the U.S. overthrew the moderate, suit-and-tie-wearing, Democratically-elected prime minister of Iran in 1953. (He was overthrown because he had nationalized Iran’s oil, which had previously been controlled by BP and other Western oil companies). As part of that action, the CIA admits that it hired Iranians to pose as Communists and stage bombings in Iran in order to turn the country against its prime minister.

If the U.S. hadn’t overthrown the moderate Iranian government, the fundamentalist Mullahs would have never taken over. Iran has been known for thousands of years for tolerating Christians and other religious minorities.

Hawks in the U.S. government been pushing for another round of regime change in Iran for decades.

Hillary Clinton and then-president Jimmy Carter’s National Security Adviser have both admitted on the record that the U.S. previously carried out regime change in Afghanistan in the 1970s by backing Bin Laden and the Mujahadin … the precursor to Al Qaeda.

And look how that turned out.

Syria

The U.S. has heavily backed the Islamic rebels in Syria in an attempt to implement regime change in that country.  The result?

As shown by the map above, they’ve taken a third of the country as part of their “caliphate”

And the jihadis are now busily crucifying, beheading and slitting the throats of Christians. (Yup, Syria was previously known for tolerating Christians.)

Haven’t These Wars Made It Safer at Home?

But haven’t all of these wars made it safer here at home?   Nope … a top Pentagon officials says we’re no safer – and perhaps less safe – after 13 years of war.

As we’ve pointed out for almost a decade, security experts – conservative hawks and liberal doves alike – agree that waging war in the Middle East weakens national security and increases terrorism. See this, this, this, this, this, this and this.

Regime Support

But the U.S. doesn’t always back regime change. Sometimes we work to support regimes …

… Unfortunately, they tend to be some of the most brutal tyrannies on the planet.

Postscript:  We can probably add Ukraine to the list of regime changed countries falling into chaos and murderous extremism, given that:




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Tumble Tuesday: Stocks Slide On Sanctions Blowback Fears, Dollar Jumps

Equity markets were lifted on a sea of USDJPY stops this morning to open higher and press to the week's highs. Once 102.00 was achieved and Europe closed, headlines started to stall stock exuberance. The  initial downturn was when BES cancelled its shareholder meeting, the dip was bought, then Europe unveiled its sanctions started to take stocks down and then the US unleashed a further round of sanctions targeted at banks and that dragged stocks to the lows of the day. Trannies were worst down 4 days in a row. This move merely caught stocks down to bond's less-than-exuberant day. Treasuries rallied with yields dropping 2-3bps on the day. The USD surged to 6-month highs, ending up 0.2% from Friday. Credit markets continue to sell off notably. VIX closed back above 13 (highest in 2 weeks). The Russell is -1.65% YTD and 4.5% in July (on course for worse month in over 2 years). It appears sanctions fears trumped turbo Tuesday and the pre-FOMC pump.

 

NOT OFF THE LOWS

 

USDJPY lifted to 102 and dragged stocks into the open… then when Europe closed, AUDJPY took over BUT when US sanctions hit, stocks dislocated…

 

Bonds were not buying the USDJPY ramp…

 

The Nasdaq remains green post MH17 headlines but the rest are fading fast…

 

Trannies have been the hardest hit off the highs last week, down over 3.4% since Thursday highs…

 

The Russell 2000 is the only red index for July (so far)…

 

Credit continues to selloff…

 

Notable demand for USDs today… against all majors…

 

The USD hit 6-month highs…

 

as bonds were bid aross the curve…

 

 

Charts: Bloomberg




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The New York Times’ Revenue Since Hiring Paul Krugman

Things at the NYT are not going quite as planned. From the FT:

A fall in advertising sales and stepped-up investment in digital products sapped second-quarter profit at the New York Times as the publisher forecast flat circulation revenue and further declines in advertising in the coming months.

 

Net income of $9.2m, or 6 cents a share, was down 54 per cent from $20.1m, or 13 cents a share, a year ago. Adjusted operating profit, which strips out some one-time items including retirement costs and depreciation, fell 21 per cent to $55.7m.

 

A trio of digital offerings – the NYT Now app, targeted at mobile users, a standalone opinion app and a higher-priced premium subscription service – helped lift circulation revenues in the quarter. But the company said subscriber growth for its website and core mobile app had flagged, and said it needed to do a better job of marketing its offerings to the right audiences.

Or another way of showing it, here are the NYT’s revenues since hiring Paul Krugman as an Op-Ed columnist. Correlation or causation?




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The New York Times' Revenue Since Hiring Paul Krugman

Things at the NYT are not going quite as planned. From the FT:

A fall in advertising sales and stepped-up investment in digital products sapped second-quarter profit at the New York Times as the publisher forecast flat circulation revenue and further declines in advertising in the coming months.

 

Net income of $9.2m, or 6 cents a share, was down 54 per cent from $20.1m, or 13 cents a share, a year ago. Adjusted operating profit, which strips out some one-time items including retirement costs and depreciation, fell 21 per cent to $55.7m.

 

A trio of digital offerings – the NYT Now app, targeted at mobile users, a standalone opinion app and a higher-priced premium subscription service – helped lift circulation revenues in the quarter. But the company said subscriber growth for its website and core mobile app had flagged, and said it needed to do a better job of marketing its offerings to the right audiences.

Or another way of showing it, here are the NYT’s revenues since hiring Paul Krugman as an Op-Ed columnist. Correlation or causation?




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Silicon Valley Artist Strikes at the Heart of Obama’s Oligarch Infatuation – “A Feast in Time of Plague”

Screen Shot 2014-07-29 at 1.57.24 PMLast week, I highlighted a series of billboards and painted benches that sprung up overnight in Hollywood as Obama prepared to host a $32,000 a plate fundraiser at the home of Scandal creator Shonda Rhimes.  Naturally, this was merely stop number one on Obama’s oligarch groveling circus.  The next stop on the crony train is another $32,000 a plate fundraiser. This time with none other than Nancy Pelosi.

Fortunately for us, California’s ever creative street artists were right there waiting for him. This is what they delivered:

Screen Shot 2014-07-29 at 1.57.43 PM

continue reading

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China’s Billionaire Ex-National Security Chief Investigated For “Serious Disciplinary Violation”

With an estimated net worth of $14 Billion, Zhou Yongkang, the man formerly in charge of China’s vast security apparatus, was one of the nine most senior politicians in China until 2012. But now, as The BBC reports, state media have announced he is being investigated for “serious disciplinary violation”, a term usually used to refer to corruption. The news ended months of speculation about his fate as numerous people in his sphere of influence are either under investigation or have been sentenced to death. This move confirms Xi Jinping’s determination to root out corruption but could also be seen, given Zhou’s influence, as an effort to eliminate a center of power in China’s factional political system.

  • *CHINA STARTS PROBE OF EX-SECURITY CHIEF ZHOU YONGKANG: XINHUA

As Bloomberg reports,

Today’s move represents a tightening grip on power by China’s President Xi Jinping, following his appointment as military chief and head of national security and economic-reform panels. It may also represent an effort to eliminate a center of power in China’s factional political system, according to Dali Yang, a professor of political science at the University of Chicago.

 

…

 

“Zhou was a very influential figure who built up a powerful empire, and Xi wants to ensure that the power of the center should not be under threat,” Yang said by phone before the announcement. “By cracking down on corruption and abuse of power, Xi plays to the base in the party.”

 

Investigating Zhou, the nation’s former security chief, sends the signal that even the highest political elite aren’t immune from a campaign to root out the corruption that Xi says threatens the party’s hold on power. Party leaders have promised to target both “tigers and flies” in the power hierarchy.

The BBC profiles the Billionaire…

Zhou Yongkang was one of the nine most senior politicians in China until 2012, but has now fallen from grace.

 

State media have announced he is being investigated for “serious disciplinary violation”, a term usually used to refer to corruption. The news ended months of speculation about his fate.

 

Many of his aides and close associates have already been sacked or investigated for allegedly breaching party discipline and other misdemeanours in recent months.

 

 

 

 

Zhou Yongkang also enjoyed a very close working relationship with another very senior fallen politician Bo Xilai, who is now in jail.

 

When Mr Bo was the party boss of Chongqing and launched the “singing red songs and hard crackdown on criminals” campaign to boost his credentials, Mr Zhou showed up in the city in 2010 to sing its leader’s praises.

 

Zhou Yongkang married twice, and one of his sons with his first wife is Zhou Bin, born in 1972 and a high-profile oil and gas executive. According to Hong Kong press, Zhou Bin was arrested in December 2013 on corruption charges.

*  *  *

Of course, Xi needs some promise to hold on to as he folded on economic reform by unleashing QE.




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China's Billionaire Ex-National Security Chief Investigated For "Serious Disciplinary Violation"

With an estimated net worth of $14 Billion, Zhou Yongkang, the man formerly in charge of China’s vast security apparatus, was one of the nine most senior politicians in China until 2012. But now, as The BBC reports, state media have announced he is being investigated for “serious disciplinary violation”, a term usually used to refer to corruption. The news ended months of speculation about his fate as numerous people in his sphere of influence are either under investigation or have been sentenced to death. This move confirms Xi Jinping’s determination to root out corruption but could also be seen, given Zhou’s influence, as an effort to eliminate a center of power in China’s factional political system.

  • *CHINA STARTS PROBE OF EX-SECURITY CHIEF ZHOU YONGKANG: XINHUA

As Bloomberg reports,

Today’s move represents a tightening grip on power by China’s President Xi Jinping, following his appointment as military chief and head of national security and economic-reform panels. It may also represent an effort to eliminate a center of power in China’s factional political system, according to Dali Yang, a professor of political science at the University of Chicago.

 

…

 

“Zhou was a very influential figure who built up a powerful empire, and Xi wants to ensure that the power of the center should not be under threat,” Yang said by phone before the announcement. “By cracking down on corruption and abuse of power, Xi plays to the base in the party.”

 

Investigating Zhou, the nation’s former security chief, sends the signal that even the highest political elite aren’t immune from a campaign to root out the corruption that Xi says threatens the party’s hold on power. Party leaders have promised to target both “tigers and flies” in the power hierarchy.

The BBC profiles the Billionaire…

Zhou Yongkang was one of the nine most senior politicians in China until 2012, but has now fallen from grace.

 

State media have announced he is being investigated for “serious disciplinary violation”, a term usually used to refer to corruption. The news ended months of speculation about his fate.

 

Many of his aides and close associates have already been sacked or investigated for allegedly breaching party discipline and other misdemeanours in recent months.

 

 

 

 

Zhou Yongkang also enjoyed a very close working relationship with another very senior fallen politician Bo Xilai, who is now in jail.

 

When Mr Bo was the party boss of Chongqing and launched the “singing red songs and hard crackdown on criminals” campaign to boost his credentials, Mr Zhou showed up in the city in 2010 to sing its leader’s praises.

 

Zhou Yongkang married twice, and one of his sons with his first wife is Zhou Bin, born in 1972 and a high-profile oil and gas executive. According to Hong Kong press, Zhou Bin was arrested in December 2013 on corruption charges.

*  *  *

Of course, Xi needs some promise to hold on to as he folded on economic reform by unleashing QE.




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President Obama To Explain How These New-New Sanctions Will Really Make Putin Mad – Live Feed

We are sure President Obama must be happy that the European leaders finally stepped in line behind him and layered new goldilocks sanctions on Russia. With business leaders on both sides of the Atlantic urging him not to, for fear of the dreaded ‘boomerang’ from Putin (which has already been targeted at MSFT, IBM, MCD, INTC, AMD, and car manufacturers), President Obama is set to explain how his new-new sanctions (which include several Russian banks including VTB, Russia’s second largest ) and will be the message that Putin needs to leave, fold to NATO, handover everything, and retire to the Gulag. Yet, oddly enough, Gazprom is once again missing from the sanctions list. The whole market is sliding heading into his speech (including the Russian ETF). We await the retaliation.

Treasury announces new sanctions…

  • *LEW SAYS VERY IMPORTANT EUROPE IS TAKING ACTION ON SANCTIONS
  • *LEW: SANCTIONS SEND RUSSIA MESSAGE THAT BEHAVIOR `UNACCEPTABLE’
  • *LEW: WITH SANCTIONS RUSSIA WILL HAVE FLAT OR NEGATIVE GROWTH
  • *U.S. SANCTIONS VTB BANK, BANK OF MOSCOW
  • *U.S. SANCTIONS RUSSIAN AGRICULTURAL BANK
  • *U.S. SANCTIONS UNITED SHIPBUILDING CORPORATION (UKRAINE)

VTB Bank is Russia’s largest bank

The sanctions list includes 4 Chinese nationals and 16 Iranian shipping companies.

But don’t worry:

  • *LEW: SANCTIONS WILL HAVE MINIMAL IMPACT ON U.S. ECONOMY

Live Feed (Obama due to speak at 1510ET)

 

 

We can’t help but sense the Europeans are back-peddling a little…

  • *EU RUSSIA SANCTIONS DON’T COVER SYNDICATED LOANS, OFFICIAL SAYS
  • *EU SANCTIONS COVER LIMITED NO. OF RUSSIAN BANKS, OFFICIAL SAYS

Then there’s this…

  • *NEW EU SANCTIONS TO LAST FOR INITIAL PERIOD OF 12 MONTHS

Quickly followed by this…

  • *EU TO ASSESS IMPACT ON EU ECONOMY IN SANCTIONS REVIEW: OFFICIAL
  • *EU TO WEIGH RUSSIA’S BEHAVIOR IN REVIEWING SANCTIONS: OFFICIAL

So if Putin goes crazy with retaliation, we’ll fold?




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The One Rate That Is Not Only Not Going Down, But Is At A 13-Year High

With 77 million Americans having debt past due and the average household owing more than $15,000 in credit card debt, it appears the Fed’s supposed plan to ‘help Main Street’ is not working so well. As the following chart from NewEdge’s Brad Wishak shows, despite Fed Funds at practically zero, US credit card variable interest rates continue to rise – now at their highest since July 2001.

 

 

h/t Brad Wishak at NewEdge




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Bonds & Peso Slide As Fernandez Slams Holdouts For “True Aggression Against Argentina”

With hours to go until Argentina's grace period runs out and default occurs, investors are less than frantically selling Argentine bonds and pesos. They are lower but do not appear in full panic mode as we presume investors cling to hope that Argentina folds and pays off the holdouts (though there has been no sign of that so far). ARG 2033 bonds are down 3 points to 81 and the black-market peso is modestly weaker at 13.0 (near its record lows). Argentine CDS tightened modestly (as BofA warns the facts surrounding Argentina’s bond payments continue to be unique and deciding if CDS are triggered could take longer than expected) but 1Y CDS are holding at 4600bps (equivalent) – a 52% probability of default. Paul singer continues to defend himself (and the holdouts) from claims they are "dangerous fundamentalists" hell-bent on making it impossible for foreign sovereigns to restructure their debts.

Bonds are dropping but not in panic mode yet as CDS are priced for around a 52% probability of default.

 

Argentine President Cristine Fernandez speaks:

  • *ARGENTINA HAS PAID DEBT ON TIME WITHOUT MARKET ACCESS:FERNANDEZ
  • *ARGENTINE DEBT-TO-GDP RATIO AMONG LOWEST IN WORLD: FERNANDEZ
  • *HOLDOUTS UNDERTAKING TRUE AGRESSION AGAINST ARGENTINA:FERNANDEZ
  • *FERNANDEZ SAYS JUDGE GRIESA HASN'T BEEN NEUTRAL IN BOND CASE
  • *ARGENTINA REITERATES WILL TO PAY 100% OF CREDITORS: FERNANDEZ
  • *FERNANDEZ SAYS HOLDOUTS SHOULD ACCEPT PREVIOUS SWAP TERMS

But Elliott's Paul Singer defends himself and the holdouts…

As of this writing, the U.S. Supreme Court’s final rulings on two cases pitting our subsidiary, NML Capital, against Argentina have generated more than 500 news articles. In addition to provoking an endless array of bad plays on the phrase, “Don’t cry for me, Argentina,” the flood of coverage has occasioned quite a bit of commentary about Elliott. According to some, we are a positive force in the markets, because “credit markets function better when the rule of law is upheld” (New York Times, June 26). According to others, we are “dangerous fundamentalists” hell-bent on making it impossible for foreign sovereigns to restructure their debts (Foreign Affairs, June 24).

 

Elliott does not seek such publicity. Obviously, our lives would be easier if the press cared less about this particular position and/or similar positions that attract attention. The Economist ran a piece rebutting the silly and hyperbolic claim that our case will encourage lots of other investors to follow our lead, dryly noting that “There are easier ways to make money.” We think most other investors would certainly agree. As we have noted, one of the reasons that we continue to see attractive opportunities, even in the current yield-hungry environment, is that complex, labor-intensive situations are not everyone’s cup of tea.

 

While many journalists and commentators often badly misunderstand what Elliott is all about, we understand that this publicity is occasionally the cost of adhering to our philosophy, which is to seek truly uncorrelated positions in which the key determinants of unlocking value are our own creativity and hard work. Once we are in these positions, we see them through and try to achieve the best return possible. That commitment is especially strong when we indisputably have the rule of law on our side.

 

More than once during the Argentina saga, we have been erroneously described as a fund that goes out of its way to seek out litigation. That description is false – litigation is uncertain, expensive, difficult and time-consuming. It is a last resort to which we only turn when a dispute becomes impossible to resolve through negotiations, as has been the case for many years with respect to Argentina due to the Argentine government’s refusal to negotiate with us. However, if we must litigate in the course of enforcing our contractual rights, then we will not shy away from it. And if publicity is also a part of that equation, then so be it.

The IMF just gave Argentina the kiss of death…

  • *IMF SEES NO BROAD CONSEQUENCES OF ARGENTINA POTENTIAL DEFAULT

As BofA warns this may not be simple

  • *DETERMINING ARGENTINE CDS CREDIT EVENT WOULD BE LENGTHY: BOFA
  • *DEFINING EVENT OF A DEFAULT FOR ARGENTINA NOT CLEAR-CUT: BOFA

Determining whether Argentina’s failure to reach a settlement with holdout creditors tomorrow will trigger a default on bonds and credit-default swaps isn’t clear cut, according to Bank of America Corp.

“To make the determination on whether a default had occurred, a process that would normally take around a day, could take much longer,” Jane Brauer, a New York-based strategist at the bank, wrote. “We expect that Argentina will continue to claim that it paid in full and on time, even though it was fully aware, at the time of deposit, that the recipient trustee would likely hold the funds.”




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