With global trigger-finger tensions still running on full blast following the recent Syrian near-war episode, the last thing the jittery world needed is yet another "test fire" of a very lethal weapon, yet that is precisely what it got just after 8:40 am on Sunday when India test fired a nuclear-capable missile, with a range of 5,000 km, capable of reaching Beijing and Europe, bringing it a step closer to production of a nuclear deterrence agent. Why is India doing this now is unclear, although it has been suggested that India is merely trying to keep up with China's growth military strength and "wants to have a viable deterrent against its larger nuclear-armed neighbor." It is also a move targeting the rapidly growing nuclear arsenal of Pakistan, which has been increasing its inventory of nuclear warheads and developing short-range, tactical nuclear weapons, raising concern about an escalating South Asian arms race, the International Institute for Strategic Studies said on Thursday. The think-tank said in a report the race with Pakistan was increasing the risk of a nuclear exchange during a conventional conflict, perhaps sparked by an act of terrorism. Or a false flag act perhaps?
With major (red)deadlines now pushed off until next year and Assad appearing to come out smelling of (slightly tarnished) roses with his 'compromise' agreement with Russia (and the US) to join the chemical weapons treaty, not only is Israel now a major focus but the Syrian rebels - as one might expect - are not happy. As Reuters reports, the head of the opposition Syrian Supreme Military Council said on Saturday a U.S.-Russian agreement to eliminate Syria's chemical weapons was a blow to the two-and-a-half-year uprising to remove President Bashar al-Assad from power. Crucially, General Salim Idris notes that this allows Assad "to escape being held accountable," and, while unverified for now, Idris added, "we have told our friends that the regime has begun moving a part of its chemical weapons arsenal to Lebanon and Iraq. We told them do not be fooled." But another military council official, Qassim Saadeddine, was a little more aggressive: "Let the Kerry-Lavrov plan go to hell. We reject it and we will not protect the inspectors or let them enter Syria."
Following two days of negotiations in Geneva, this morning John Kerry and his Russian counterpart Sergey Lavrov announced they have reached an agreement for a framework on how Syria would destroy its chemical weapons, and would also seek a UN Security Council resolution that would authorize sanctions, but not military action as per Russia's demand, if Assad failed to comply. The diplomats announced on the third day of intense negotiations in Geneva that some elements of the deal include a timetable and how Syria must comply. At a news conference at the Intercontinental Hotel in Geneva, Kerry said the inspectors must be on the ground by November and destruction or removal of the chemical weapons must be completed by mid-2014.
Why Are We Supporting Guys Who Want to Blow Us Up?
Overnight asset classes got a jolt following a report by Nikkei that Obama was moving toward naming Summers the next Fed chairman, citing “several close US sources,” pushing stocks modestly lower in Europe, with bond yields higher. According to the report, Obama is to name Summers as next Fed chairman as early as late next week, after the Federal Open Market Committee meeting. Otherwise, risk is still digesting the news of the confidential Twitter IPO, as it is becoming quite clear that some of the largest names (Hilton also announced yesterday) are seeking to cash out in the public markets. Is this the top?
In the summer of 1956, Egyptian president Gamal Abdel Nasser nationalized the Suez Canal, sparking a worldwide crisis. Britain was a major stakeholder in the canal, and almost immediately, the British government put together a small coalition consisting of the UK, France, and Israel to regain Western control. Their subsequent military action, however, greatly displeased the US government. And Uncle Sam quickly asserted its new role as the world’s superpower. But to anyone paying attention, this status has waned. Asia is rising. Major centers of wealth and power have grown around the world. US finances are desolate. And its currency is now widely reviled by foreign governments. But US politicians have completely ignored this trend over the last decade. They spend and act as if US global dominance is an endless river. With Syria, though, the US may have finally reached its Suez moment.
Assad Lays Down His Conditions: "US Must Stop Aiding Terrorists", Israel Disposing Of WMDs; Accuses Saudi, Qatar And TurkeySubmitted by Tyler Durden on 09/12/2013 11:13 -0400
It was only a matter of time before Syria's Assad, emboldened by Obama's recent backtracking and confident he has all the leverage and momentum, started laying down his own conditions. And here they are, as per RIA and Interfax citing an interview with Assad to air in its entirety later today on Rossia 24 TV:
- ASSAD CALLS FOR ISRAEL TO DISPOSE OF WMD (!)
- ASSAD: 'REBELS MAY USE CHEMICAL WEAPONS AGAINST ISRAEL AS PROVOCATION'
- ASSAD SAYS CHEMCIAL ARMS DEAL DEPENDS ON US STOPPING AID TO TERRORISTS
- ASSAD ACCUSES TURKEY, SAUDI ARABIA, QATAR OF SUPPORTING TERRORISTS IN SYRIA
- ASSAD: 'REBELS MAY USE CHEMICAL WEAPONS AGAINST ISRAEL AS PROVOCATION - ASSAD'
- ASSAD SAYS WILL COMPLETE DEAL ONLY IF US STOPS "POLICY OF THREATS"
- ASSAD SAYS IMPLEMENTATION OF DEAL MAY TAKE A MONTH OR MORE
If at all. And now, his bluff called, we go back to Barack Obama penning his Pravda Op-Ed.
Speaking on Russian TV, President Bashar al-Assad has - perhaps unsurprisingly - proclaimed that his decision to place Syria's chemical weapons arsenal under international control was the result of Russia's proposal... and not US military threats. As Russia Today reports, Assad stated
"Syria is handing over its chemical weapons under international supervision because of Russia, the US threats did not influence the decision."
Rossiya 24 is also reporting that Syria is to send documents to the UN for the Chemical Arms Pact. We are sure Israel will be pleased.
- Syrian Rebels Hurt by Delay (WSJ), U.S. seeks quick proof Syria ready to abandon chemical weapons (Reuters)
- Lavrov Brings Acerbic Pragmatism to Syria Meet With Kerry (BBG)
- Five years after Lehman, risk moves into the shadows (Reuters)
- U.S. shares raw intelligence data with Israel, leaked document shows (LA Times)
- Japan to raise sales tax, launch $50 bln stimulus (AFP) - so 1) lower debt by sales tax, then 2) raise debt through stimulus.
- Blackstone’s Hilton Files for $1.25 Billion U.S. Initial Offer (BBG)
- Second Life Bankers Thrive in Dubai as Boutiques Boost Fees (BBG)
- Brussels probes multinationals’ tax deals (FT)
- Wall Street's Top Cop: SEC Tries to Rebuild Its Reputation (WSJ) ... and fails
- Tablet sales set to overtake PCs (FT)
- The end of angst? Prosperous Germans in no mood for change (Reuters)
Jitters from Syria still abound, as confirmed by reports from the Israeli army that two shells had hit the Southern Golan region. Despite the reports that the shelling appeared to be errant, WTI remains near session highs as markets remain sensitive ahead of the meeting between US Secretary of State Kerry and Russian Foreign Minister Lavrov in Geneva over the next two days. Buying of the 10Y is also prevalent and the yield on the benchmark bond was has dropped below 2.90%, or at 2.88% at last check. Today's key economic news in the US session will be the weekly claims report, the Fed buying 10 Year bonds at 11 am followed by the Treasury selling 30 Year bonds at 1 pm (this follows the Fed buying 30 Year bond yesterday: yes ironic).
Vladimir Putin Addresses America In NYT Op-Ed; Calls For Caution In Syria, Denounces "American Exceptionalism"Submitted by Tyler Durden on 09/11/2013 20:45 -0400
"If we can avoid force against Syria, this will improve the atmosphere in international affairs and strengthen mutual trust. It will be our shared success and open the door to cooperation on other critical issues.... No one doubts that poison gas was used in Syria. But there is every reason to believe it was used not by the Syrian Army, but by opposition forces, to provoke intervention by their powerful foreign patrons, who would be siding with the fundamentalists. Reports that militants are preparing another attack — this time against Israel — cannot be ignored... The potential strike by the United States against Syria, despite strong opposition from many countries and major political and religious leaders, including the pope, will result in more innocent victims and escalation, potentially spreading the conflict far beyond Syria’s borders.... It is alarming that military intervention in internal conflicts in foreign countries has become commonplace for the United States. Is it in America’s long-term interest? I doubt it. Millions around the world increasingly see America not as a model of democracy but as relying solely on brute force, cobbling coalitions together under the slogan “you’re either with us or against us.”
I’ll scratch your back and you can scratch mine is the motto of the National Security Agency according to the latest revelations made about the data stored by the immense surveillance program of the NSA, which routinely provides intelligence data with Israel.
Israel's richest person Beny Steinmetz, who amassed his $7.4 billion net worth beginning in the diamond trade, has seen his Geneva home raided by Swiss police following a request from the Government of Guinea. The West African country, as Bloomberg reports, approached Swiss prosecutors following an investigation into claims that bribes (shock, horror) were paid for mining licenses by Steinmetz's mining company BSG Resources. This follows raids of London-based Onyx Financial (run by a director of BSG) and the arrest of a BSG employee on charges he interfered with the U.S. grand jury probe (witness tampering, obstructing a criminal investigation and destruction of evidence in a federal investigation). He has pleaded not guilty. All sounds above board we are sure... just ask Eike Batista...
The definition of what makes an “enemy” may vary from person to person. But we would say that, generally, an enemy is one who has an active ability to do irreparable harm to you or your essential values. He is motivated by destruction, the destruction of all that you hold dear. He is capable and unrelenting. He is a legitimate threat. He will not compromise. He will not waver. He will do anything to wound you. He will not stop. He is possessed. Americans have spent the better part of a century being told who their enemies are with very little explanation or substantiation. We have blindly rallied around our patriotic prerogative without knowing the root cause of the conflict or the nature of the target we are told to annihilate. We have been suckered into war after war, conjured by international interests in order to lure us into accepting greater centralization and concentrated globalism. As a culture, we're sorry to say, we have been used. We are a tool of unmitigated doom. We are the loaded gun in the hand of the devil. When one applies the above definition of “the enemy” to Syria, one comes away with very little satisfaction. So, the question arises: If Syria is not the real enemy, who is?
"I estimate the US fiscal gap at US$200 tn, 17 times the reported US$12 tn in official debt in the hands of the public.... Our country is broke. It’s not broke in 50 years or 30 years or 10 years. It’s broke today. Six decades of take as you go has led us to a precipice. That’s why almost the entire economics profession is talking as one at www.theinformact.org. Economists from all political persuasions are collectively sending our government a warning about what is, effectively, a nuclear economic bomb. I’ve been around economics for a long time. I’ve never seen such a strong response to a proposed Congressional bill. This is the profession sending a statement to the President and Congress that’s not unlike the warning physicists sent via Einstein to Roosevelt about the bomb." Larry Kotlikoff