In yet another rather embarrassing event for The White House, just days after President Obama praised the French for helping in the fight against ISIS, and General martin Dempsey noted "the French were our very first ally and they're with us again now," French officials have, according to Reuters, ruled out participation in airstrikes against Islamic State in Syria. With the fall of France (and Germany already saying "nein"), it appears the broad coalition is now a "coalition of none," as Obama has stated the US would not go it alone...
If we want to stop radical terrorists from operating in Syria and Iraq, how about telling our ally Saudi Arabia to stop funding and training them? For that matter, how about the US government stops arming and training the various rebel groups in Syria and finally ends its 24 year US war on Iraq. Remember, they come over here because we are over there. So let’s not be over there any longer.
With the snoozer of an FOMC meeting in the rearview mirror, as well as Scotland's predetermined independence referndum, last week's key events: the BABA IPO and the iPhone 6 release, are now history, which means the near-term catalysts are gone and the coming week will be far more relaxed, if hardly boring. Here is what to expect.
Having released the Turkish hostages, because "Turkey refused to agree to the US demand for 'active support of the coalition'," ISIS have come out swinging (in its first 'official' statement since President Obama unveiled his 'strategy' for "degrading and destroying" them), with a call for all followers of Allah to make the coalition campaign the "last crusader campaign," and calls Obama "vile", more foolish than Bush, and a "mule of the Jews." Warning Americans and Europeans that "you will pay a great price, when your economies collapse," ISIS blasts Kerry, "the uncircumcised old geezer," for his "false arguments." The statement concludes by telling ISIS followers, "if you can kill a disbelieving American or European - especially the spiteful and filthy French - or an Australian, or a Canadian, or any other disbeliever from the disbelievers waging war, including the citizens of the countries that entered into a coalition against the Islamic State, then rely upon Allah, and kill him in any manner or way however it may be."
Since it is almost impossible to win against guerrillas by only attacking from the air, "boots on the ground", as The Pentagon and military have advised, are needed to effectively fight IS. Obama and the American people - as a result of the Afghanistan and Iraq debacles — vehemently veto that idea. However, inserting U.S. military personnel for fighting or training locals likely would be also be counterproductive and would once again paint a big, red bulls-eye on the United States. The best option is for the U.S. government to do nothing.
US imperialism was once a fearsome force - mainly for ill. Under the latter heading, Washington’s savage destruction of Vietnam four decades ago comes readily to mind. But now the American Imperium has become just a gong show on the Potomac - even as its weapons have gotten more lethal and its purposes more spurious and convoluted. There is no more conspicuous proof than Obama’s quixotic “war” on ISIS.
Smuggled oil could be a pivotal issue for the U.S. as it seeks to destroy IS. The militant group sells oil at a reduced price – perhaps around $25 per barrel. At first, it sold the oil to middlemen, who moved the oil to Iran, Syria, Jordan and Turkey. But as IS’ operations grew, they forced out the middlemen, beat back other militant groups, and are now providing security to their own convoys of oil tanker trucks heading out of their territory to market. Air strikes may succeed in destroying vehicles and other military equipment under IS control, but cutting off the flow of money – specifically from oil smuggling – will likely go further in weakening the Islamic State.
The starting point in comprehending the dynamics of modern "markets' is to recognize that once they gain a head of steam, financial bubbles tend to envelope virtually every nook and cranny of the economy, creating terrible distortions and destructive excesses as they rumble forward. In this instance, Wolf Richter explains how Silicon Valley has once again (like 1999-2000) been transformed into a rollicking capital “burn rate” machine that has spawned a whole economy based on striving for bigger losses, not better profits. Even the leading venture capitalists now recognize that the insanity of the dotcom era has re-emerged. One of these days, even the monetary politburo may notice. But by then it will be too late. Again.
We recently explained how ISIS remains so well funded but what was unclear was who exactly what purchasing their 'recently-provisioned' oil reserves? The assumption being some desperate third-world nation or some scheming offshore hedge-fund arbitrageur; however, as Sott.net reports, a senior European Union official has revealed that some EU member states have purchased oil from ISIL Takfiri militants despite their rhetoric against the group. The official declined to disclose any names but Turkey remains a front-runner (having already shunned President Obama) and potentially France (after their recent anti-Petrodollar comments).
US Industrial Production and the NY Fed Empire State Manufacturing survey are the two main releases for the US. In Europe, the euro area trade balance will be the notable print. Beyond today, US PPI, German ZEW and UK CPI are the main economic reports tomorrow. Wednesday will see the release of BOE’s meeting minutes, the US CPI, and the Euro area inflation report. On Thursday, President Obama will host Poroshenko and on the data front we have Philly Fed, initial claims, and building permits to watch out for, but the biggest market moving event will surely be the Scottish independence referendum. German PPI will be the key release on what will otherwise be a relatively quiet Friday.
First it was the 'broad coalition' that appeared a little narrower than President Obama explained to the world last week. Today, 2 more crucial aspects of the 'strategy' appear to be faltering. Despite the promise of $500 million to train "moderate" Syrian terrorist/rebels to fight ISIS, GlobalPost reports Syrian rebels and jihadists from the Islamic State have agreed a non-aggression pact for the first time. Under the deal, "the two parties will respect a truce until a final solution is found and they promise not to attack each other because they consider the principal enemy to be the Nussayri regime." Not exactly what Obama and Kerry had in mind. But it is John Kerry's trip to Iraq that appears to have had blowback already as Reuters reports the newly installed US-friendly PM al-Adadi ordered his air force to halt strikes on civilian areas, "even in those towns controlled by ISIS," just a day after Kerry's visit (which left Turkey explaining how it would not support US airstrikes either). So far, so good?!
While a misnomer, if President Obama is to be believed, The Islamic State, according to The Institute for the Study of War, poses a grave danger to the United States and its allies in the Middle East and around the world. As they exclaim, reports that it is not currently planning an attack against the American homeland are little comfort. Its location, the resources it controls, the skill and determination of its leaders and fighters, and its demonstrated lethality distinguish it from other al-Qaeda-like groups..."It must be defeated," they conclude... and here's how.
President Obama's 4-pronged strategy to 'degrade and destroy' ISIS includes a 'financial attack' (according to the Treasury) as they recognize, as The Daily Signal notes, one major hurdle in the way of the 'strategy' is the brutal organization's control of oil fields in Iraq and Syria; which ISIS uses that oil wealth to help finance its terror operations. Here's how they do it...
"The apparently long-term rupture of Russia's relations with the West offers an opportunity to the Chinese leadership to enhance its already close relationship with the Kremlin and thus turn the global geopolitical balance in its favor - not unlike former US president Richard Nixon and former secretary of state Henry Kissinger who reached out to Chairman Mao Zedong in 1972. The Russians, angry with Washington, are now more amenable to giving China wider access to their energy riches and their advanced military technology. The Western sanctions pushing Russia out of the international financial system are also making Moscow more ready and willing to back the Chinese yuan against the US dollar." - China Daily
It appears the 'broad coalition' that President Obama so confidently described just two days ago is crumbling faster than the Iraqi army. First UK and Germany deny support for airstrikes in Syria and now Turkey refuses to allow a U.S.-led coalition to attack jihadists in neighboring Iraq and Syria from its air bases, nor will it take part in combat operations against militants, a government official. US Secretary of State John Kerry arrived in Ankara this morning to 'build the coalition' but, as AFP reports, Turkish officials have already made their position clear, "Turkey will not be involved in any armed operation but will entirely concentrate on humanitarian operations." Their 'excuse': "our hands and arms are tied because of the hostages," but follows PM Erdogan's recent shunning of Obama.