Iraq

Now that Obama is "debating" handing over the mess he created in Syria to Putin who in less than two years will have successfully expanded the Russian sphere of influence in both east Ukraine (and certainly the Crimea) and Syria - two nations where Samantha Power's plans for a CIA-led government overthrow have gone spectacularly bad - it means one thing: ISIS, as a pretext for US "humanitarian intervention" in the region, a CIA-created terrorist organization that must be wiped out, no longer needs to exist. Which is why it was hardly surprising to read moments ago an Iraq military statement alleging that the country's air force has hit a convoy of Islamic State leader Abu Bakr al-Baghdadi.

Israel lacks a national motto. If its leaders are looking for a Latin one, “carpe chaos” would be an apt and honest choice. “Seize the chaos” is half of Israeli foreign policy in a nutshell (the other half being the instigation of that chaos in the first place). But “Seize the chaos” is not a new doctrine: neither is it limited to Israeli halls of power. A veritable “carpe chaos” manifesto was written in 1996 for a Washington think tank by David Wurmser, an Israel-first neocon who would later play a key role in the Bush administration’s drive to the Iraq War. And now that Russia has been drawn into the Syrian war, where its bombers and troops operate at cross purposes with American bombers and proxy fighters, the chaotic sea threatens to become a thermonuclear lake of fire engulfing the whole world.

The Islamic State group is little more than the proxy bastard child of a New Cold War that looks set to escalate...

Last weekend we called Obama's latest failed attempt to replace Syria's president for what it is: "this is shaping up to be the most spectacular US foreign policy debacle since Vietnam." Today, less than a week later, we have confirmation that this was correct after first Bloomberg reported that "some top White House advisers and National Security Council staffers are trying to persuade President Barack Obama to scale back U.S. engagement" in Syria, and then a report from the NYT that "the Obama administration has ended the Pentagon’s $500 million program to train and equip Syrian rebels." And just like that Obama folds, again.

"No matter how unpleasant and unexpected for our colleagues in the Pentagon and Langley was yesterday's high-precision strike on Islamic State infrastructure in Syria, the fact remains that all missiles launched from our ships have found their targets."

If Western governments didn’t want a refugee crisis, they shouldn’t have been so eager to topple those governments and destabilize those countries. The refugees should camp out in the backyards of the individuals who run those governments.

The Saudis Hate Iran Because It’s NOT a Monarchy

"The force that they have deployed down there is actually quite impressive for a rapid deployment of a week or so. It is all arms, combined arms, attack aircraft, it is the attack helicopters and artillery, rocket artillery. NATO is ready and able to defend all allies, including Turkey against any threats."

To combat Islamic militants the White House says threaten national interests, the U.S. has spent nearly $100 billion to arm and train foreign militaries across the Middle East, North Africa and South Asia, an analysis by Vocativ shows. And nearly all of them are reeling from setbacks that threaten to undermine what’s become a core component of American foreign policy in these regions. As a former military commander and United States ambassador in Afghanistan recently noted, "our track record at building security forces over the past 15 years is miserable."

The urgency of the moment favors cooperation, while geography gives Russia major advantages in leading the fight. The highly charged political atmosphere in the U.S., in the midst of a Presidential election, only adds to the fog of war in Syria, forcing public denials and secret agreements where there needs to be utmost clarity, making military cooperation in Syria almost impossible, while raising the risks of accidental conflicts between so-called partners. Adding to the confusion is the increasingly cordial meetings between Russian and Saudi leaders.

Just a day after no lesser world-renowned newsletter writer than Dennis Gartman went full bull-tard of crude oil (in $29.95 terms), Goldman Sachs has come out with a "lower for longer" warning about the crude complex noting that the gains have been exacerbated by still large short positioning and the break of key technical levels. Despite the magnitude of this rally, Goldman does not believe that data releases over the past week suggest a change in oil fundamentals. In fact, high frequency data continue to point to an oversupplied market despite a gradual decline in US production.

The question today is merely one of timing. How long before a negative trigger is introduced? How long before Israeli planes come into contact with Russian or Iranian fighters? How long before U.S. troops come into contact with Russian troops? How long before Israel or Saudi Arabia strike Iran? And if the U.S. backs out completely, how long before the entire dynamic of the Middle East is flipped and America loses petro-status for the dollar? With the speed of events forming a fiscal-political riptide, it is hard to imagine we will be waiting very long to find out.

"The Saudi population, especially the younger people, are growing restless because they see what is happening in the world through social media of which they are among the highest users - that’s the only means they have to communicate. So the situation inside the country is also very fragile and the foreign policy conducted by the current regime is very perilous. It is only a matter of time because the Gulf States are ruled by oligarchies who maintain control through bribery and the sword. So this is a challenging time for the Gulf States despite all the public commentary suggesting they are immune to the uprisings."

The Western hypocrisy and outright panic is accelerating, as Washington is simply bewildered about what to do next in Syria. Meanwhile, the Russian military has, in the space of a week, cleared the way for an Iranian gound invasion on behalf of Assad. Once that's finished, the entire campaign will shift to Iraq, where the US will either need to confront Russia or simply pack up and leave.

• How Iranian general plotted out Syrian assault in Moscow (Reuters)
• China FX reserves post record quarterly fall as cenbank steps up yuan support (Reuters)
• MSF calls for independent inquiry into U.S. attack on Afghan hospital (Reuters)
• Yen Advances as Bank of Japan Refrains From Adding to Stimulus (Reuters)
• Abu Dhabi Said to Explore Asset Sales After Slump in Oil Price (BBG)
• U.S. Oil Approaching $50 Boosts Stocks as Emerging Markets Surge (BBG)