en Peak Sovereign Wealth Fund? <p><em>Via ConvergEx&#39;s Nicholas Colas,</em></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>Sovereign wealth funds tied to oil producing states have been much in the news of late.</strong> With the volatility in energy prices, Norway, Saudi Arabia and Russia have all tapped their SWFs over the course of the year to plug budget shortfalls.&nbsp; <strong>So have we seen &ldquo;Peak SWF&rdquo; in terms of assets under management with last year&rsquo;s $7 trillion balance?</strong>&nbsp; Only if oil prices stay permanently low, an unlikely event barring a global depression.</p> <p>&nbsp;</p> <p><strong>SWFs are here to stay, and a review of this year&rsquo;s major conferences dedicated to these investors points to how the global investment landscape will change in coming years.&nbsp;</strong> SWFs want more exposure to non-correlated returns from private equity, infrastructure and hedge funds while using more passive strategies for their &ldquo;core&rdquo; financial asset investments. Also, aware that much of their funding comes from carbon-based fuels, some are keenly interested in &ldquo;Green&rdquo; investing and other socially-conscious initiatives. <strong>The only caveat to the money management industry: SWFs are becoming much more fee conscious.</strong></p> </blockquote> <div> <div> <p><em><strong>There was a small piece of good news out of civil war ravaged Libya today: there&rsquo;s a tanker loading some oil at a terminal in the east of the country.&nbsp; </strong>According to a Wall Street Journal article, it is the first such production in months and provides a glimmer of hope that the country can begin to stabilize the local petroleum-based economy. &ldquo;Normal&rdquo; production for Libya is 1.5 million barrels/day. Current output is less than a third of that number.</em></p> </div> </div> <p><em><strong>Given all the terrible news out of the country since the fall of Muammar Ghaddafi in 2011, you might be surprised to know that the country is far from broke.&nbsp;</strong> In fact, the Libyan Investment Authority (LIA) has some $67 billion in assets &ndash; the equivalent of $10,000 for every citizen. The only problem is that no one seems to quite agree on the legitimate leadership of the country, and both sides are pressing their claims in British courts. In the meantime, the fund is still a player in global finance with +$8 billion in public equity investments alone.&nbsp;</em></p> <p><strong>Sovereign wealth funds such as the Libyan Investment Authority started in the 1950s &ndash; Kuwait had one even before its independence from Great Britain &ndash; and they most often associated with energy exporting countries</strong>. Their goal is to invest excess cash generated from oil and other fossil fuel sales so that when the country&rsquo;s natural resources run out there is another base of assets to support the population. There are also SWFs in countries with long histories of exporting finished goods, such as Singapore, Hong Kong and, of course mainland China.&nbsp;</p> <p><strong>Now, with oil prices under pressure over the last year it should be no surprise that energy exporting countries would be tapping their SWFs to fill budgetary gaps.</strong>&nbsp;Some recent headlines:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong><a href="">Norway</a>, which actually runs the largest sovereign wealth fund in the world, plans to draw approximately $450 million from the fund in 2016 to replace oil revenues diminished by low energy prices.&nbsp;</strong> Since the fund has $820 billion under management, that&rsquo;s not much of a drawdown. The fixed income portion of the fund generates more than that in interest over the next 12 months, so the fund doesn&rsquo;t actually have to sell assets to meet the government&rsquo;s financial needs.</p> <p>&nbsp;</p> <p><strong><a href="">Saudi Arabia</a>, where the central bank also doubles as the country&rsquo;s SWF, is drawing on its foreign currency reserves to make up for declining oil revenues.&nbsp;</strong> Now, the country still has over $600 billion in reserves, but that is down 10% from last year.</p> <p>&nbsp;</p> <p><strong><a href="">Russia</a> has tapped its SWF for $14.3 billion over the course of 2015 according to press accounts</strong></p> </blockquote> <p><u><strong>So was last year some kind of &ldquo;Peak SWF&rdquo;, or will the $7 trillion invested in these funds continue to grow?</strong></u>&nbsp; The short answer is that it depends on energy prices, with 60% of SWF assets domiciled in oil and gas producing countries. So if you believe energy prices will remain low for the next 10 years, then yes&hellip;&nbsp; Sovereign wealth funds might continue to shrink. But if and when (emphasis on the latter) oil prices recover, these funds will certainly resume their growth track.</p> <p><strong>Regardless of when oil prices turn, SWFs are large enough right now &ndash; and for the near future &ndash; to play a prominent global role in capital markets.&nbsp; </strong>There are two major conferences for this group of investors just this month &ndash; <a href="">the International Forum of Sovereign Wealth Funds in Milan</a>, and the<a href=""> Institute Fund Summit (hosted by SWFI) in Amsterdam</a>.&nbsp; If you want to know what&rsquo;s important to SWFs at the moment, the answers are in the titles of the presentations at these two events:</p> <ul> <li>Interest in alternative asset classes, specifically Private Equity, Infrastructure Investments, and Hedge Funds.</li> <li>A focus on European investment, leveraging an improving economic picture for the region.</li> <li>&ldquo;Decarbonizing Investment Portfolios&rdquo; by lowering exposures to fossil fuel related companies and also investing in &ldquo;Clean energy&rdquo;.</li> <li>Optimal Asset allocation,&nbsp;with an eye on underappreciated asset classes.</li> <li>Responsible Investing&nbsp;benchmarking.</li> <li>Smart beta and factor-based investing.</li> </ul> <p><strong>There are three distinct threads from these topics.</strong>&nbsp; First, at least some SWFs clearly feel they must synchronize their investing approach to the populations they serve.&nbsp; If environmental responsibility is a national social priority, then that should be reflected in the portfolio (even if the source of the capital was not originally so pristine). Second, SWFs clearly want to move beyond the 60/40 equity-fixed income model and invest in alternative assets. Some of the largest funds (Norway, for example) are already doing this, especially in real estate. Lastly, they want low cost options for &ldquo;Core&rdquo; investments in stocks and bonds that still offer some opportunity for outperformance.&nbsp;</p> <p><strong>The bottom line to this brief tour of sovereign wealth funds is that, even with the drop in oil prices, the $7 trillion invested in SWFs makes them important participants in global capital markets; what they do, even at the margin, matters.&nbsp; </strong>Having seen the volatility in equity markets &ndash; first in 2008 and again this year &ndash; they want to diversify.&nbsp; Moreover, SWFs have the time horizon to look at long time frame projects like real estate and infrastructure; they don&rsquo;t have to limit their scope to just liquid capital markets like stocks and bonds.<strong><em> The great unknown is how they will reallocate capital if oil prices really do remain muted for longer than expected.&nbsp; Will they take more risk?&nbsp; Or less?&nbsp; And in what form?&nbsp;</em></strong> Given their collective size, those decisions could alter the global investment environment more permanently than issues like Federal Reserve policy or next quarter&rsquo;s corporate profits.</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="227" height="185" alt="" src="" /> </div> </div> </div> Capital Markets China Equity Markets Federal Reserve fixed headlines Hong Kong Kuwait Norway Private Equity Real estate Saudi Arabia Volatility Wall Street Journal Sat, 10 Oct 2015 20:00:00 +0000 Tyler Durden 514668 at Trump's Success Exposes America's Winner-Loser Society <p><strong>Everywhere you look - from political campaigns, both Democratic and Republican, that are focused on the haves and have-nots</strong>, to much of the Internet - people are upset. They are angry that they are being bullied by folks who have more power - and sometimes lots more money — than they have.</p> <p><strong>You feel a tension in America now between “us” and “them.”</strong> This is not about the usual suspects of polarization - conservatives and liberals. It is “us” and those myriad groups that the public feels have disempowered them. <strong><em>Because bullying isn’t just an issue for children any more. It is an issue - perhaps the issue - for everyone.</em></strong></p> <p>...</p> <p>Trump is a beneficiary of something ubiquitous in America today: <strong><em>The United States is a winner and loser society.</em></strong></p> <p>That is how most Americans think of it. <strong>We have long been told that anyone in this country who wants to succeed, can.</strong> Casting aside the increasing impediments to social mobility, such as high college tuition costs and the loss of high-paid, blue-collar jobs, the onus is entirely on the individual. Surveys show that Americans strongly believe it. <em><strong>In fact, among industrialized nations, Americans are the only people who believe that they have the power to determine their own destiny.</strong></em></p> <p><em><span style="text-decoration: underline;"><strong>Yet, however much Americans espouse it, that belief is shakier than we let on. </strong>Many Americans increasingly feel, deep down, that the game is rigged. That the people who run this country - the economic, political and intellectual elites - get all the advantages. <strong>Average Joe can’t win.</strong></span></em></p> <p><strong>We know people feel this way because they say so. </strong>It is what unites Tea Party activists and Senator Bernie Sanders’ supporters, reactionaries and radicals. Both sides rail at the abuse of power and the power of abuse.&nbsp; <strong>They may not agree on much, but they see themselves as victims of the same force: bullies.</strong></p> <p><a href=""><em>Read more here at Reuters...</em></a></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="417" height="419" alt="" src="" /> </div> </div> </div> Reuters Sat, 10 Oct 2015 19:15:00 +0000 Tyler Durden 514670 at "It's Over For Me" Matt Drudge Warns Public "You're A Pawn In The 'Ghetto-isation'" Of The Web <p>The very<strong> foundation of the free Internet is under severe threat from copyright laws that could ban independent media outlets</strong>, according to Matt Drudge. <strong><em>&quot;I had a Supreme Court Justice tell me it&rsquo;s over for me,&rdquo;</em></strong> said Drudge, warning web users that they were being pushed &quot;pawn-like&quot; into the cyber &quot;ghettos&quot; of Twitter, Facebook and Instagram.</p> <p><a href=""><img alt="" src="" style="width: 416px; height: 341px;" /></a></p> <p><em>&quot;Reclusive&quot; Drudge says he has not had a photo taken in 8 years</em></p> <p><a href=""><em>As reports,</em></a></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>During an appearance on the Alex Jones Show, Drudge asserted that copyright laws which prevent websites from even linking to news stories were being advanced.</p> <p>&nbsp;</p> <p><strong>&ldquo;I had a Supreme Court Justice tell me it&rsquo;s over for me,&rdquo; said Drudge. &ldquo;They&rsquo;ve got the votes now to enforce copyright law, you&rsquo;re out of there. They&rsquo;re going to make it so you can&rsquo;t even use headlines.&rdquo;</strong></p> <p>&nbsp;</p> <p>&ldquo;To have a Supreme Court Justice say to me it&rsquo;s over, they&rsquo;ve got the votes, which means time is limited,&rdquo; he added, noting that <strong><u>a day was coming when simply operating an independent website could be outlawed</u></strong>.</p> <p>&nbsp;</p> <p>&ldquo;That will end (it) for me &ndash; fine &ndash; I&rsquo;ve had a hell of a run,&rdquo; said Drudge, adding that <strong>web users were being pushed into the cyber &ldquo;ghettos&rdquo; of Twitter, Facebook and Instagram.</strong></p> <p>&nbsp;</p> <p><u><strong>&ldquo;This is ghetto, this is corporate, they&rsquo;re taking your energy and you&rsquo;re getting nothing in return &ndash; nothing!&rdquo;</strong></u></p> </blockquote> <p>Watch the full interview below...</p> <p><iframe allowfullscreen="" frameborder="0" height="315" src="" width="560"></iframe></p> <p><strong>Drudge warned that social media giants like Twitter and Facebook were swallowing up content and strangling the organic growth of independent Internet news platforms. </strong>Automated news aggregators like Google News also came under fire.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&ldquo;Google News &ndash; hello anybody? <strong>The idiots reading that crap think there is actually a human there</strong> &ndash; there is no human there &ndash; you are being programmed to being automated even up to your news&hellip;.a same corporate glaze over everything,&rdquo; said Drudge.</p> <p>&nbsp;</p> <p><strong>&ldquo;Stop operating in their playground, stop it,&rdquo;</strong> said Drudge, asserting that <u><strong>people were being confined by what the likes of Facebook and Twitter defined as the Internet as a result of this &ldquo;corporate makeover&rdquo; of the web.</strong></u></p> <p>&nbsp;</p> <p><strong><em><u>&ldquo;I&rsquo;m just warning this country that yes, don&rsquo;t get into this false sense that you are an individual when you&rsquo;re on Facebook, no you&rsquo;re not, you&rsquo;re a pawn in their scheme,&rdquo;</u></em></strong> concluded Drudge.</p> </blockquote> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="416" height="341" alt="" src="" /> </div> </div> </div> CRAP Google headlines Twitter Twitter Sat, 10 Oct 2015 18:45:00 +0000 Tyler Durden 514657 at We Are All (Almost) Japanese Now <p><a href=""><em>Submitted by Jeffrey Snider via Alhambra Investment Partners,</em></a></p> <p><strong>It may be unexpected to economists, but the sudden and uniform economic downside that is either appearing or strengthening almost everywhere in the world is closely tracking the wholesale &ldquo;dollar.&rdquo;</strong> In many cases, that flows through China and so is given that gloss, but there can be little doubt now about either cause or effect. In Japan, machine orders (a highly-used proxy for capex) <a href="" target="_blank">tumbled &ldquo;unexpectedly&rdquo;</a> in August after a mixed view from July (to put it kindly).</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Machine orders &ndash; a proxy for private capital expenditures &ndash; fell 3.5 per cent in August from a year earlier, with the drop catching economists off guard.</p> <p> </p><p>They had predicted a 3.5 per cent increase for the month, building upon a 2.8 per cent year-on-year gain in July.</p> </blockquote> <p>Worse than that, the measure of private &ldquo;non-volatile&rdquo; (read: core) machine orders fell 5.7% year-over-year in August after declining 3.6% in July and 7.9% in June. <u><strong>The fact that there is apparent downside gathering two and a half years into QQE without any actual upside to date is perfectly ruinous.</strong></u> As noted discussing Japan&rsquo;s <a href="" target="_blank">lack of progress</a> for industrial production, <strong>there has been no such upside to QE in <em>any</em> of the channels and pathways that economists were absolutely sure would result</strong>. Instead, without any gains, there has only been engineered a massive economic hole that is &ldquo;unexpectedly&rdquo; widening and deepening again.</p> <p><a href=""><img alt="ABOOK Oct 2015 Global Econ Japan Machine Orders" class="aligncenter size-full wp-image-33831" src="" style="width: 599px; height: 360px;" /></a><a href=""><img alt="ABOOK Oct 2015 Global Econ Japan IP" class="aligncenter size-full wp-image-33832" src="" style="width: 600px; height: 338px;" /></a></p> <p><strong>The Bank of Japan mercifully held off from expanding QQE again this week, which only allows some minor reprieve for Japan&rsquo;s beleaguered households. </strong>Real wages were up just 0.2% Y/Y in August only because &ldquo;inflation&rdquo; was calculated as close to zero. Total hours worked was once more flat, suggesting that the best that the Japanese can hope is &ldquo;scraping along the bottom&rdquo; before any renewed contraction.</p> <p><a href=""><img alt="ABOOK Oct 2015 Global Econ Japan Hours" class="aligncenter size-full wp-image-33835" src="" style="width: 600px; height: 397px;" /></a> <a href=""><img alt="ABOOK Oct 2015 Global Econ Japan Real Wages" class="aligncenter size-full wp-image-33834" src="" style="width: 600px; height: 368px;" /></a> <a href=""><img alt="ABOOK Oct 2015 Global Econ Japan Real Wages Index" class="aligncenter size-full wp-image-33833" src="" style="width: 600px; height: 336px;" /></a></p> <p>The Japanese economy has only &ldquo;grown&rdquo; smaller without any apparent catalyst for the recovery (QQE no longer counts, having been proved decisively ineffective and harmful) and &ldquo;defeat of deflation&rdquo; that pushed at least asset markets to multi-year extremes.<strong> So where Japan risks continuing a downward slope of depression, despite pressing against quadrillion and the true debasement via orders of magnitude, there is purportedly no connection to the &ldquo;unexpected&rdquo; trade developments <a href="" target="_blank">in Germany</a></strong>:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>German exports fell sharply in August, in the latest sign that the slowdown in emerging markets is beginning to affect Europe&rsquo;s biggest exporter.</p> <p> </p><p>Exports in August were 5.2 per cent lower than July, their sharpest monthly fall since the financial crisis, according to Germany&rsquo;s national statistics office. Imports also fell 3.1 per cent.</p> </blockquote> <p><strong>Of course, we are re-assured that all that is left &ldquo;overseas&rdquo; and unrelated to the monetary-driven boom in the QE feudal districts of the US and Europe </strong>(it must be that Japan&rsquo;s extra &ldquo;Q&rdquo; in QQE is the difference):</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&ldquo;The figures are consistent with the industrial data we&rsquo;ve already had this week and round off quite a bad August for German data,&rdquo; said Richard Grieveson, an economist at the Economist Intelligence Unit.</p> <p> </p><p>&ldquo;Clearly, what&rsquo;s happening in emerging markets &mdash; particularly China and Russia &mdash; is having an effect and the outlook is not as positive as it was, given the fall in factory orders and the possible impact of the Volkswagen scandal on the &lsquo;Made in Germany&rsquo; brand.</p> <p> </p><p>&ldquo;However, it would be dangerous to read too much into one month&rsquo;s numbers, given the impact of summer holidays, as well as the fact that the year-on-year data and sentiment indicators are not showing a big change in trend.&rdquo;</p> </blockquote> <p><u><strong>&ldquo;Transitory&rdquo; again?</strong></u> The credentialed economist assures us that there isn&rsquo;t yet any slowdown in trade activity with especially the US and non-Eurozone EU, despite the Census Bureau <a href="" target="_blank">reporting this week</a> an August continuation of the 2015 slowdown in US imports from Europe (to nearly 0%).</p> <p><a href=""><img alt="ABOOK Oct 2015 USTrade Imports Europe" class="aligncenter size-full wp-image-33804" src="" style="width: 601px; height: 355px;" /></a></p> <p>Perhaps the US is importing more from Germany than the rest of the EU, but even if that were the case such a situation where the US is buying from Germany at the expense of other European nations doesn&rsquo;t bode well for any European trade business in the future. <strong>Denials aside, there isn&rsquo;t any evidence to support the idea of US economic strength which is why the September payroll report was only shocking to those that testify to the Yellen economy; US and global</strong>. Thus, Japan wages and machine orders and German exports all figure in with US consumers further slipping down in economic function, to and through China or not. &nbsp;<u><strong>And each is met with the growing chorus of &ldquo;more stimulus&rdquo; as if the word itself accomplished the directive</strong></u> (since semantics is undoubtedly all that is left of it).</p> <p><a href=""><img alt="ABOOK Sept 2015 Stimulus Japan QE the rest" class="aligncenter size-full wp-image-33125" src="" style="width: 600px; height: 872px;" /></a></p> <p>&nbsp;</p> <p><u><strong>Apparently the &ldquo;<a href="" target="_blank">slippery slope</a>&rdquo; of economic denial is likewise as universal as the aligned direction of economic progression across the world</strong></u>:</p> <ol> <li>Dollar doesn&rsquo;t matter, indicates strong economy relative to the world</li> <li>Dollar matters for oil, but lower oil prices mean stronger consumer</li> <li>Manufacturing slump doesn&rsquo;t matter, only temporary</li> <li>Manufacturing declines are consumer spending, but only a small part</li> <li>Manufacturing declines are becoming serious, but only from overseas</li> <li>...</li> <li>Global Recession</li> <li>MORE GLOBAL STIMULUS!!</li> </ol> <p><u><em><strong>Fittingly, we are all almost Japanese now.</strong></em></u></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="293" height="128" alt="" src="" /> </div> </div> </div> Bank of Japan Capital Expenditures Census Bureau China Germany Japan recovery The Economist Volkswagen Sat, 10 Oct 2015 18:30:00 +0000 Tyler Durden 514671 at China's President Tops Obama In "Most Influential" Ranking <p><strong>Chinese President Xi Jinping topped US President Barack Obama to take the second place amongst 50 people in <a href="">Bloomberg&#39;s 5th annual Market Most Influential Ranking</a></strong>. <a href=""><em>As Xinhua notes</em></a>, according to Bloomberg, the world is waiting for Xi and the Communist Party of China to steer the world&#39;s second largest economy through turmoil. <strong>Xi, however, lost out on the &quot;most&quot; influential position to the diminutive Federal Reserve Chairwoman Janet Yellen</strong>... which, rather worryingly, <em><u>exposes the terrifying central-planned reality of our &#39;utopian&#39; new world order.</u></em></p> <p>&nbsp;</p> <p><a href=""><img height="775" src="" width="600" /></a></p> <p>&nbsp;</p> <p>Apple&#39;s CEO Tim Cook ranked the third, with Berkshire Hathaway CEO Warren Buffett came the fifth and <u><strong>U.S. President Barack Obama the sixth.</strong></u></p> <p><strong>Meanwhile, the number of Chinese people got on the list this year marks a record high.</strong> Among them were Bao Fan, Chairman and Chief Executive Officer at China Renaissance (22th); Wang Qishan, the head of the CPC Central Commission for Discipline Inspection (33rd); and Wang Jianlin, Chairman of Wanda Group (37th) - <strong><em>clearly signifying China&#39;s growing influence on global markets</em></strong>.</p> Apple Barack Obama Berkshire Hathaway China Federal Reserve Janet Yellen Reality Renaissance Warren Buffett Sat, 10 Oct 2015 17:45:00 +0000 Tyler Durden 514669 at The Tragic Ending To Obama's Bay Of Pigs: CIA Hands Over Syria To Russia <p>One week ago, when summarizing the current state of play in Syria, <a href="">we said </a>that for Obama, "<strong>this is shaping up to be the most spectacular US foreign policy debacle since Vietnam</strong>." Yesterday, in tacit confirmation of this assessment, the Obama administration threw in the towel on one of the most contentious programs it has implemented in "fighting ISIS", when the Defense Department announced it was abandoning the goal of a U.S.-trained Syrian force.</p> <p>But this, so far, partial admission of failure only takes care of one part of Obama's problem: there is the question of the "other" rebels supported by the US, those who are not part of the officially-disclosed public program with the fake goal of fighting ISIS; we are talking, of course, about the nearly 10,000 CIA-supported "other rebels", or technically mercenaries, whose only task is to take down Assad. </p> <p>The same "rebels" whose fate the <a href="">AP profiles today </a>when it writes that <strong>the CIA began a covert operation in 2013 to arm, fund and train a moderate opposition to Assad. </strong>Over that time, the CIA has trained an estimated 10,000 fighters, although the number still fighting with so-called moderate forces is unclear. </p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>The effort was separate from the one run by the military, <strong>which trained militants willing to promise to take on IS exclusively. </strong>That program was widely considered a failure, and on Friday, the Defense Department announced it was abandoning the goal of a U.S.-trained Syrian force, instead opting to equip established groups to fight IS.</p> </blockquote> <p>It is this effort, too, that in the span of just one month Vladimir Putin has managed to render utterly useless, as it is officially "off the books" and thus the US can't formally support these thousands of "rebel-fighters" whose only real task was to repeat the "success" of Ukraine and overthrow Syria's legitimate president: something which runs counter to the US image of a dignified democracy not still resorting to 1960s tactics of government overthrow. That, and coupled with Russia and Iran set to take strategic control of Syria in the coming months, the US simply has no toehold any more in the critical mid-eastern nation. </p> <p>And so another sad chapter in the CIA's book of failed government overthrows comes to a close, leaving the "rebels" that the CIA had supported for years, to fend for themselves. </p> <p><a href="">From AP</a>:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>CIA-backed rebels in Syria, who had begun to put serious pressure on President Bashar Assad's forces, <strong>are now under Russian bombardment with little prospect of rescue by their American patrons, U.S. officials say.</strong></p> <p>&nbsp;</p> <p>Over the past week, Russia has directed parts of its air campaign against U.S.-funded groups and other moderate opposition in a concerted effort to weaken them, the officials say<strong>. The Obama administration has few options to <span style="text-decoration: underline;">defend those it had secretly armed and trained.</span></strong></p> <p>&nbsp;</p> <p>The Russians "know their targets, and they have a sophisticated capacity to understand the battlefield situation," said Rep. Mike Pompeo, R-Kan., who serves on the House Intelligence Committee and was careful not to confirm a classified program. "They are bombing in locations that are not connected to the Islamic State" group.</p> </blockquote> <p>With the US now in damage control mode, the finger pointing begins. </p> <p>First, it is only natural that finger will point at Putin - after all he is an easy target:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>U.S. intelligence officials see many factors motivating Russia's intervention: Moscow's reasserting its primacy as a great power, propping up Assad and wanting to deal a blow to the United States, which has insisted that Assad must go to end Syria's civil war.</p> <p>&nbsp;</p> <p>Russia is also interested in containing IS, an organization that includes thousands of Chechen fighters who may pose a threat to Russia, officials say. </p> <p>&nbsp;</p> <p>But in the short term, "my conclusion is that the timing of their intervention was driven by Assad really going critical," said Rep. Jim Himes, D-Conn., also a House Intelligence Committee member.</p> </blockquote> <p>Alas, blaming Putin only underscores his latest victory over the US state department, leaving the US diplomatic corps no choice but to blame its own. This is imminent, and many heads will - or should - roll.</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>The administration is scrambling to come up with a response to Russia's moves, <strong>but few believe the U.S. can protect its secret rebel allies. </strong>The administration has all but ruled out providing CIA-backed groups with surface-to-air missiles that can down aircraft, fearing such weapons would end up in the wrong hands, officials say. </p> <p>&nbsp;</p> <p>Rep. Adam Schiff, the top Democrat on the committee, says the U.S. should consider establishing a no-fly zone that allows rebels a safe place from which to operate, and shooting down Syrian helicopters that are bombing civilians. He said the U.S. also should provide arms to the Ukrainian government fighting Russian-backed separatists. </p> <p>&nbsp;</p> <p>A no-fly zone would require the U.S. military to be ready to engage in air battles with the Syrian government, something it is not prepared to do.</p> </blockquote> <p>Why? Because it is not the Syrian government that is flying those sorties above Syria, it is Putin, and despite all the posturing, Obama is unwilling to risk World War III just to stop a Qatar gas pipeline to Europe. </p> <p>Which means Obama now has just one option: admitting that his latest gamble to overthrow Assad, one which started in 2013 with the fake YouTube clips of "chemical attacks", and the resultant naval escalation, coupled with the CIA's training of thousands of local <span style="text-decoration: line-through;">rebels</span> mercenaries, and which escalated with the "appearance" of ISIS in the summer of 2014, is about to end with Obama admitting yet another major political defeat. </p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>The administration "<strong>is debating the merits of taking further action or whether they are better off letting Putin hang himself</strong>," he said, referring to Russian President Vladimir Putin.</p> </blockquote> <p>Because somehow handing over control of the Middle East to the Russian-controlled axis - incidentally the topic of another article yesterday in the WSJ "<a href="">America's Fading Footprint in the Middle East</a>" - is now spun as a defeat for Putin.</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>"Our options are much narrower than they were two weeks ago," said Sen. Angus King, I-Maine, who serves on the Intelligence and Armed Services committees. "I don't think there is any simple answer. ... Further air involvement has become very problematic because of the Russian engagement."</p> </blockquote> <p>* * * </p> <p>And so Putin has once again "won", or as the administration would prefer to spin it, <em><strong>"has hung himself."</strong></em></p> <p>Incidentally, this is just the beginning. Now that the U.S. has begun its pivot <em><strong>out </strong></em>of the middle-east, handing it over to Putin as Russia's latest sphere of influence on a silver platter, there will be staggering consequences for middle-east geopolitics. In out preview of things to come last week, we concluded by laying these out; we will do the same again:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>The US, in conjunction with Saudi Arabia and Qatar, attempted to train and support Sunni extremists to overthrow the Assad regime. Some of those Sunni extremists ended up going crazy and declaring a Medeival caliphate putting the Pentagon and Langley in the hilarious position of being forced to classify al-Qaeda as "moderate." The situation spun out of control leading to hundreds of thousands of civilian deaths and when Washington finally decided to try and find real "moderates" to help contain the Frankenstein monster the CIA had created in ISIS (there were of course numerous other CIA efforts to arm and train anti-Assad fighters, see below for the fate of the most "successful" of those groups), the effort ended up being a complete embarrassment that culminated with the admission that only "four or five" remained and just days after that admission, those "four or five" were car jacked by al-Qaeda in what was perhaps the most under-reported piece of foreign policy comedy in history.</p> <p>&nbsp;</p> <p>Meanwhile, Iran sensed an epic opportunity to capitalize on Washington's incompetence. Tehran then sent its most powerful general to Russia where a pitch was made to upend the Mid-East balance of power. The Kremlin loved the idea because after all, Moscow is stinging from Western economic sanctions and Vladimir Putin is keen on showing the West that, in the wake of the controversy surrounding the annexation of Crimea and the conflict in eastern Ukraine, Russia isn't set to back down. Thanks to the fact that the US chose extremists as its weapon of choice in Syria, Russia gets to frame its involvement as a "war on terror" and thanks to Russia's involvement, Iran gets to safely broadcast its military support for Assad just weeks after the nuclear deal was struck. Now, Russian airstrikes have debilitated the only group of CIA-backed fighters that had actually proven to be somewhat effective and Iran and Hezbollah are preparing a massive ground invasion under cover of Russian air support. Worse still, the entire on-the-ground effort is being coordinated by the Iranian general who is public enemy number one in Western intelligence circles and he's effectively operating at the behest of Putin, the man that Western media paints as the most dangerous person on the planet. </p> <p>&nbsp;</p> <p><strong>As incompetent as the US has proven to be throughout the entire debacle, it's still difficult to imagine that Washington, Riyadh, London, Doha, and Jerusalem are going to take this laying down and on that note, we close with our assessment from Thursday:&nbsp; "</strong>If Russia ends up bolstering Iran's position in Syria (by expanding Hezbollah's influence and capabilities) and if the Russian air force effectively takes control of Iraq thus allowing Iran to exert a greater influence over the government in Baghdad, the fragile balance of power that has existed in the region will be turned on its head and in the event this plays out<strong>, one should not expect Washington, Riyadh, Jerusalem, and London to simply go gentle into that good night."</strong></p> </blockquote> <p><a href=""><img src="" width="506" height="347" /></a></p> <p>Which is not to say that the latest US failure to overthrow a mid-east government was a total failure. As Joshua Landis, a Syria expert at the University of Oklahoma says "probably 60 to 80 percent of the arms that America shoveled in have gone to al-Qaida and its affiliates."</p> <p>Which is at least great news for the military-industrial complex. It means more "terrorist attacks" on U.S. "friends and allies", and perhaps even on U.S. soil - all courtesy of the US government supplying the weapons - are imminent.</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="506" height="347" alt="" src="" /> </div> </div> </div> Iran Iraq Middle East Obama Administration Oklahoma Saudi Arabia Ukraine Vladimir Putin Sat, 10 Oct 2015 17:06:55 +0000 Tyler Durden 514672 at Fairy Tales & The Gun Control "Middle Ground" <p>Presented with no comment...</p> <p><strong><em><span style="text-decoration: underline;">Because of this...</span></em></strong></p> <p><a href=""><img src="" width="600" height="472" /></a></p> <p><a href=""><em>Source:</em></a></p> <p>&nbsp;</p> <p><em><span style="text-decoration: underline;"><strong>This...</strong></span></em></p> <p><img src="" width="600" height="405" /></p> <p><a href=""><em>Source:</em></a></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="636" height="500" alt="" src="" /> </div> </div> </div> Sat, 10 Oct 2015 16:15:00 +0000 Tyler Durden 514666 at The Massive Energy Top <p style="line-height: 1.71429; margin: 0px 0px 1.71429rem; color: #444444; font-family: 'Open Sans', Helvetica, Arial, sans-serif; font-size: 14px;"><strong><em><a href="" target="_blank">From the Slope of Hope</a></em></strong>: &nbsp;I'm getting uncomfortable pounding on the same theme over and over again (there's only so many times I can point out the large, looming topping patterns across the board), so I thought I'd mix things up a bit and just get of the price bars entirely and catch up on a trio of exponential moving averages to show how things have turned south, irrespective of the gargantuan, quadruple-point rally on the Dow. Here are the Industrials:</p> <p style="line-height: 1.71429; margin: 0px 0px 1.71429rem; color: #444444; font-family: 'Open Sans', Helvetica, Arial, sans-serif; font-size: 14px;"><img src="" alt="1010-indu" width="869" height="667" style="height: auto; max-width: 100%; border-radius: 3px; box-shadow: rgba(0, 0, 0, 0.2) 0px 1px 4px;" class="alignnone size-full wp-image-49624" /></p> <p style="line-height: 1.71429; margin: 0px 0px 1.71429rem; color: #444444; font-family: 'Open Sans', Helvetica, Arial, sans-serif; font-size: 14px;">The even-more-important Dow Composite:</p> <p style="line-height: 1.71429; margin: 0px 0px 1.71429rem; color: #444444; font-family: 'Open Sans', Helvetica, Arial, sans-serif; font-size: 14px;"><img src="" alt="1010-comp" width="864" height="663" style="height: auto; max-width: 100%; border-radius: 3px; box-shadow: rgba(0, 0, 0, 0.2) 0px 1px 4px;" class="alignnone size-full wp-image-49625" /></p> <p style="line-height: 1.71429; margin: 0px 0px 1.71429rem; color: #444444; font-family: 'Open Sans', Helvetica, Arial, sans-serif; font-size: 14px;">And the S&amp;P 500:</p> <p style="line-height: 1.71429; margin: 0px 0px 1.71429rem; color: #444444; font-family: 'Open Sans', Helvetica, Arial, sans-serif; font-size: 14px;"><img src="" alt="1010-spx" width="866" height="665" style="height: auto; max-width: 100%; border-radius: 3px; box-shadow: rgba(0, 0, 0, 0.2) 0px 1px 4px;" class="alignnone size-full wp-image-49626" /></p> <p style="line-height: 1.71429; margin: 0px 0px 1.71429rem; color: #444444; font-family: 'Open Sans', Helvetica, Arial, sans-serif; font-size: 14px;">I'll be the first one to admit that the moving averages looked very similar to this in October 2011, after which time we simply kept soaring higher. But - dare I say it? - it's different this time! OK, OK, stop throwing rotten vegetables at me. I'm serious.</p> <p style="line-height: 1.71429; margin: 0px 0px 1.71429rem; color: #444444; font-family: 'Open Sans', Helvetica, Arial, sans-serif; font-size: 14px;">Even more enticing to me is the shape of the energy sector, which has been simply nuked:</p> <p style="line-height: 1.71429; margin: 0px 0px 1.71429rem; color: #444444; font-family: 'Open Sans', Helvetica, Arial, sans-serif; font-size: 14px;"><img src="" alt="1010-xoi" width="678" height="648" style="height: auto; max-width: 100%; border-radius: 3px; box-shadow: rgba(0, 0, 0, 0.2) 0px 1px 4px;" class="alignnone size-full wp-image-49627" /></p> <p style="line-height: 1.71429; margin: 0px 0px 1.71429rem; color: #444444; font-family: 'Open Sans', Helvetica, Arial, sans-serif; font-size: 14px;">I have vastly expanded my short holdings over the course of this week, and if we (finally) start re-weakening this week, I'm going to augment my favorite positions. As I suggested, my favorite sector is (once again) energy, as giants like Exxon are exhibiting topping patterns that strike me as once-a-generation type opportunities.</p> <p style="line-height: 1.71429; margin: 0px 0px 1.71429rem; color: #444444; font-family: 'Open Sans', Helvetica, Arial, sans-serif; font-size: 14px;"><img src="" alt="1010-XOM" width="742" height="667" style="height: auto; max-width: 100%; border-radius: 3px; box-shadow: rgba(0, 0, 0, 0.2) 0px 1px 4px;" class="alignnone size-full wp-image-49623" /></p> Exxon Moving Averages Slope of Hope Sat, 10 Oct 2015 15:38:21 +0000 Tim Knight from Slope of Hope 514667 at US Recession Watch: The Inventory Liquidation Looms <p><a href=""><em>Submitted by Eugen von Bohm-Bawerk via,</em></a></p> <p><strong>In <a href=""><em>The Coming US Recession Charted</em></a> (June 20, 2015) we argued that the US economy is heading toward recession, not escape velocity as the sell-side and Fed officials have been telling us. </strong>Today we will revisit the possibility of the US entering a recession in 2016 and by extension substantiate <a href="">our argument for NIRP</a>, and not lift-off, as the most likely next move by FOMC.</p> <p>One of the most reliable predictors for the business cycle is the <strong>yield curve.</strong> Unfortunately, due to Federal Reserve manipulation, whereby the short end of the curve have been permanently pegged to zero, an inverted yield curve is more or less impossible. However, if we look at the relative change from trend we can construct an equally good predictor. The blue line in the chart below depicts difference in the 10/5 term spread vs. its underlying trend. Historically, a breach of 50 basis points have indicated an upcoming recession. While the current trend deviation is not giving a clear signal yet, it is close enough to suggest we are heading straight into another recession. &nbsp;&nbsp;<a href=""><img alt="Term Spread Recession" class="aligncenter size-full wp-image-514" src="" style="width: 601px; height: 320px;" /></a></p> <p><em>Source: Federal Reserve Bank of St. Louis,</em></p> <p><strong>The growth rate in real GDP for 2015 goes a long way to validate what we see in the picture above.</strong> Sup-par performance, even by a lacklustre post-crisis standard, is the most likely outcome for the year. Recent data point to a very weak third quarter, with growth probably coming in less than 1 per cent SAAR;&nbsp; supported by the prescient Atlanta nowcast model. The annual run rate for GDP suggest growth below 2 per cent, thus entering 2016 on slowing momentum.</p> <p><a href=""><img alt="Nowcast vs, actua" class="aligncenter size-full wp-image-511" src="" style="width: 600px; height: 329px;" /></a></p> <p><em>Source: Federal Reserve Bank of Atlanta, Federal Reserve Bank of St. Louis,</em></p> <p><u><strong>Why do we believe the second half will weaken from an already dismal first half?</strong></u> One reason stems directly from the outcome of the so-called residual seasonality debate that raged after the catastrophically poor first quarter. In what, by now, have become a sell-side embarrassing ritual, first quarter GDP ruin all preceding year-end forecast of impending escape velocity.</p> <p>This year they had enough of it and demanded from the BEA to remove any <em>residual seasonality </em>that had to still be left in the data. The BEA complied and revised the first quarter as requested. The problem with such myopic thinking is that it obviously comes back to bite you when you least need it. We are sure the Atlanta Fed model does not account for the fact that GDP &ldquo;given&rdquo; to the first quarter must be &ldquo;taken&rdquo;, most likely from second and third quarter, since seasonal adjustment cannot (or should not) change the average growth rate for the year as a whole. If BEA shifted GDP units into the first quarter, they must revise down second and third quarter correspondingly as shown by our &ldquo;second round&rdquo; seasonal adjustment in the chart below. In other words, there should be downside in the already downbeat Atlanta Fed nowcast.</p> <p>The FOMCs lift-off debate will thus do a one-eighty quicker than most people think possible.<a href=""><img alt="Residual Seasonality" class="aligncenter size-full wp-image-515" src="" style="width: 599px; height: 294px;" /></a></p> <p><em>Source: Bureau of Economic Analysis (BEA),</em></p> <p>In addition, as we pointed out in our update from June 20, time is getting <strong>ripe for another down cycle.</strong> Historically the trough to peak last around 40 months, while the current expansion has been ongoing for 75 and is by that the fourth longest on record (actually third, as the second world war was not a time of prosperity in the US, but the statistics measure it as such).<a href=""><img alt="Expansion Length" class="aligncenter size-full wp-image-510" src="" style="width: 600px; height: 359px;" /></a></p> <p><em>Source: National Bureau of Economic Research,</em></p> <p><strong>As we should expect in a mature expansion, business sales stalls and have actually started to fall; this is not something that just tend to happen now and then.</strong> The chart below clearly shows what falling business sales means &ndash; recession. &nbsp;<a href=""><img alt="Total Bus Sales" class="aligncenter size-full wp-image-516" src="" style="width: 600px; height: 315px;" /></a></p> <p><em>Source: Federal Reserve Bank of St. Louis, </em></p> <p>Inventories, as witnessed in the latest wholesale sale report, are rising fast with the inventory to sales ratio clearly in recessionary territory.<strong> As ZeroHedge recently pointed out, the dollar value of inventories over sales have never been higher.</strong><a href=""><img alt="Wholesale Sales with dollar diff" class="aligncenter size-full wp-image-512" src="" style="width: 600px; height: 309px;" /></a></p> <p><em>Source: Census Bureau,</em></p> <p><strong>In this environment, we should expect imports to slow down, but due to a strong dollar, it makes more sense for Americans to import goods than buy from local suppliers.</strong> We calculate the non-oil trade deficit to be at a record while the overall deficit is flattered by increased domestic oil production and oil product exports. As the shale-gale settles down, domestic oil production will fall; probably 400 &ndash; 600kb/d in 2016. Imports will obviously rise accordingly. The total deficit will converge with the non-oil deficit, creating another GDP headwind.<a href=""><img alt="Total and non oil trade balance" class="aligncenter size-full wp-image-513" src="" style="width: 601px; height: 311px;" /></a></p> <p><em>Source: Census Bureau, Federal Reserve Bank of St. Louis,</em></p> <p><em>As a side-note regarding the strong dollar and how the Fed has become the global central bank. In times of QE, dollar liquidity has improved, which includes the all-important Eurodollar market. With increased confidence that actual dollars will be there if needed, money flows back out pulling the dollar value down. <strong>However, as soon as the Fed stops the flow of fresh dollars, &nbsp;the dollar value spikes wreaking havoc to global dollar liquidity. </strong>What is interesting to note is how QE3 completely failed to lift confidence in the global dollar market and the mere taper crushed the remaining confidence leading to a scramble for actual dollars, thus bringing the EM down with it.&nbsp;</em><a href=""><img alt="USD and QE" class="aligncenter size-full wp-image-517" src="" style="width: 600px; height: 304px;" /></a></p> <p><em>Source: Federal Reserve Bank of St. Louis,</em></p> <p>But we digress, with higher inventories and more goods flowing in from foreign markets <strong>US industrial production growth has fallen</strong> (to a large extent tied into reduced activities in shale oil development) and will soon cross the zero line as production need to be realigned with demand.</p> <p><a href=""><img alt="Industrial Production" class="aligncenter size-full wp-image-506" src="" style="width: 599px; height: 302px;" /></a></p> <p><em>Source: Federal Reserve,</em></p> <p><strong>The factory order report confirms our view. </strong>Both &ldquo;core&rdquo; and headline factory orders are pointing to tougher times for US manufacturing. &nbsp;</p> <p><a href=""><img alt="Factory Orders" class="aligncenter size-full wp-image-507" src="" style="width: 600px; height: 299px;" /></a></p> <p><em>Source: Census Bureau, Federal Reserve Bank of St. Louis,</em></p> <p><strong>Excess capacity leads to another round of deflationary pressure; exacerbated by the dramatic change in EMs FX reserve accumulation.</strong> We showed yesterday that <a href="">even Norway is on the brink of becoming a&nbsp;<em>net</em> seller of financial securities</a>. Bond markets agree with that assessment witnessed in the rapidly falling 5Y/5Y, in both Europe and the US.</p> <p><strong>We end with an update to our cumulative goods sales vs. cumulative inventories chart derived from the GDP report. </strong></p> <p><a href=""><img alt="Cumulative goods sales vs inventory" class="aligncenter size-full wp-image-508" src="" style="width: 600px; height: 514px;" /></a></p> <p>&nbsp;</p> <p><u><strong>There can be little doubt that the massive, unprecedented surge in inventory accumulation (which counts positively to GDP) will eventually be liquidated. </strong></u>When it does the US enter recession, &nbsp;global dollar liquidity crashes, the value of dollar surges even higher, pulling EM further down and a world recession will be upon us again. <em><u><strong>In this scenario central banks panic; NIRP, QE4 and helicopter money is the only thing they know and they will stick to it.</strong></u></em></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="719" height="310" alt="" src="" /> </div> </div> </div> Bond Census Bureau Central Banks EuroDollar Federal Reserve Federal Reserve Bank Norway Recession Trade Deficit Yield Curve Sat, 10 Oct 2015 15:35:00 +0000 Tyler Durden 514665 at "The Biggest Protest This Country Has Seen In Years" - Quarter Million Germans Protest Obama "Free Trade" Deal <p>When it comes to official and media opinion on Obama's crowning trade "achievements", the Trans-Pacific Partnership (TPP) and the Transatlantic Trade And Investment Partnership (TTIP), the party line is united. As <a href="">previously noted</a>, Barack Obama has assured the population that this treaty&nbsp;<a href="" target="_blank" title="is going to be wonderful for everyone">is going to be wonderful for everyone:</a></p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>In hailing the agreement, Obama said,&nbsp;“Congress and the American people will have months to read every word” before he signs the deal that he described as a win for all sides.</p> <p>&nbsp;</p> <p>“If we can get this agreement to my desk, then we can help our businesses sell more Made in America goods and services around the world, and we can help more American workers compete and win,” Obama said.</p> </blockquote> <p>The mainstream media's chorus of support for these trade deal is likewise deafening: here are some indicative headlines from this past Monday:</p> <ul> <li>Time Magazine: “<a href="" target="_blank" title="Pacific Trade Deal Is Good for the U.S. and Obama’s Legacy">Pacific Trade Deal Is Good for the U.S. and Obama’s Legacy</a>”</li> <li>The Washington Post: “<a href="" target="_blank" title="The Trans-Pacific Partnership is a trade deal worth celebrating">The Trans-Pacific Partnership is a trade deal worth celebrating</a>”</li> </ul> <p>The far less popular opposing view, one <a href="">repeatedly presented here</a>, is that like with every other "free trade" agreement that the U.S. has entered into since World War II, the exact opposite is what will actually happen: the outcome will be that the US trade deficit (which excluding <a href="">petroleum is already back to record levels</a>) will get even larger, and we will see even more jobs and even more businesses go overseas, thus explaining the secrecy and the fast-track nature of the TPP and TTIP's passage through Congress.</p> <p>And while the US population, which is far more perturbed by what Caitlyn Jenner will wear tomorrow than D.C.'s plans on the future of world trade, has been mute in its response to the passage of the first part of the trade treaty, the TPP - after all the MSM isn't there to tell it how to feel about it, aside to assure it that everything will be great even as millions of highly-paid jobs mysteriously become line cooks - other countries are standing up against globalist trade interests meant to serve a handful of corporations.</p> <p>Case in point Germany, where today hundreds of thousands of people marched in Berlin in protest against the planned "free trade" deal between Europe and the United States <em><strong>which they say is anti-democratic and will lower food safety, labor and environmental standards.</strong></em></p> <p>TTIP critics fear that it would lead to worse safeguards in Europe, bringing down standards for consumer safety, food and health or labor rights down to those in America. European nations have stricter regulations for things like genetically modified foods or workers benefits than the US does. There is also discontent with the secretive nature of the negotiations, which prompts skeptics to assume the worst about the document they would eventually produce.</p> <p>The organizers - an alliance of environmental groups, charities and opposition parties - <strong>claimed that 250,000 people were taking part in the rally against free trade deals with both the United States and Canada</strong>, far more than they had anticipated.</p> <p><a href=""><img src="" width="500" height="281" /></a></p> <p><em>As many as 250,000 protesters gathered in Berlin, according to organizers</em><br /><strong>&nbsp;</strong></p> <p><strong>"This is the biggest protest that this country has seen for many, many years</strong>," Christoph Bautz, director of citizens' movement Campact told protesters in a speech. </p> <p>According to <a href=";feedName=worldNews">Reuters</a>, "opposition to the so-called Transatlantic Trade and Investment Partnership (TTIP) has risen over the past year in Germany, with critics fearing the pact will hand too much power to big multinationals at the expense of consumers and workers."</p> <p>Popular anger appears to be focused on the encroachment by corporations into every corner around the globe:</p> <p>"What bothers me the most is that I don't want all our consumer laws to be softened," Oliver Zloty told Reuters TV. "<strong>And I don't want to have a dictatorship by any companies."</strong></p> <p>Other are mostly concerned about the secrecy covering the treaty and its negotiations: "Dieter Bartsch, deputy leader of the parliamentary group for the Left party, who was taking part in the rally said he was concerned about the lack of transparency surrounding the talks. <strong>"We definitely need to know what is supposed to be being decided," </strong>he said."</p> <p>As <a href="">Deutsche Welle adds, </a>the EU and US aim to conclude the negotiations, which began in 2013, by sometime next year. The next round of negotiations is set to begin later this year. <strong>Once completed, TTIP would create the world's largest free-trade zone, home to some 800 million consumers.</strong></p> <p><strong>Campaigners are particularly concerned about a provision in the deal that would allow companies to sue governments in special tribunals. Such an arrangement, they fear, would lead to an erosion of labor and environmental protections </strong>. TTIP's supporters dismiss such thinking and argue that the deal would boost the EU's economy by removing tariffs and creating common standards.</p> <p>Gerhard Handke, who heads the Federation of German Wholesale, Foreign Trade and Services, told DW that TTIP would even help uphold such standards. Europe, he explained, would soon be overshadowed by other economic players, such as India and China. "Now is the time to set standards, rather than have other countries dictate them later on," he said. "Otherwise, one day, we'll have Asia setting those standards, without anyone asking us what we think."</p> <p>Those gathered in Berlin, though, take a very different view. "We have heard these promises before, these promises of jobs and prosperity and growth," Larry Brown, a trade unionist from Canada - which is negotiating a similar trade deal with the EU - shouted into a microphone on Saturday as demonstrators clapped and cheered and several police looked on. "<strong>They are lies. They have to be stopped.”</strong></p> <p>* * * </p> <p>Oddly, few in the US aside from the fringe media, share any of these concerns.</p> <p>In Germany however, the marchers banged drums, blew whistles and held up posters reading "Yes we can - Stop TTIP." </p> <p>As Reuters adds, the level of resistance "has taken Chancellor Angela Merkel's government by surprise and underscores the challenge it faces to turn the tide in favor of the deal which proponents say will create a market of 800 million and serve as a counterweight to China's economic clout." </p> <p>And just like in the US, the government is scrambling to soften the popular opposition before the deal is scuttled:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>In a full-page letter published in several German newspapers on Saturday, Economy Minister Sigmar Gabriel warned against "scaremongering".</p> <p>&nbsp;</p> <p>"We have the chance to set new and goods standards for growing global trade. With ambitious, standards for the environment and consumers and with fair conditions for investment and workers. This must be our aim," Gabriel wrote.</p> <p>&nbsp;</p> <p>"A fair and comprehensive free trade deal promotes growth and prosperity in Europe. We should actively participate in the rules for world trade of tomorrow," Ulrich Grillo, head of the BDI Federation of German industries, said in a statement.</p> </blockquote> <p>Businesses hope the trade deal will deliver over $100 billion of economic gains on both sides of the Atlantic.</p> <p>Which, naturally, is jargon for millions in cost-cuts and layoffs, meant to boost profitability and shareholder equity. </p> <p>For now the U.S. public remains largely inert to the TPP and TTIP concerns sweeping the globe; we expect that to last until the next major round of layoffs hits the US, just in time for the NBER to admit the country has been in a recession for at least 6 months.</p> <p>This is how the protest looked like covered by social networks and other non-US media outlets:</p> <p><iframe src="" width="500" height="281" frameborder="0"></iframe></p> <p><iframe src="" width="500" height="281" frameborder="0"></iframe></p> <blockquote class="twitter-tweet" lang="en"><p dir="ltr" lang="es"><a href="">#Berlin</a> <a href="">#StopTTIP</a> demo <a href=""></a></p> <p>— Thomas Occupy (@ThomasOccupy) <a href="">October 10, 2015</a></p></blockquote> <script src="//"></script><blockquote class="twitter-tweet" lang="en"> <p dir="ltr" lang="und"><a href="">#nottip</a> <a href="">#ttip</a> <a href="">#ttipdemo</a> <a href="">#ceta</a> <a href="">#berlin</a> <a href=""></a></p> <p>— Alex Poucher (@alexpoucher) <a href="">October 10, 2015</a></p></blockquote> <script src="//"></script><blockquote class="twitter-tweet" lang="en"> <p dir="ltr" lang="es"><a href="">#Berlin</a> <a href="">#StopTTIP</a> demo <a href=""></a></p> <p>— Thomas Occupy (@ThomasOccupy) <a href="">October 10, 2015</a></p></blockquote> <script src="//"></script><blockquote class="twitter-tweet" lang="en"> <p dir="ltr" lang="es"><a href="">#Berlin</a> <a href="">#StopTTIP</a> demo <a href=""></a></p> <p>— Thomas Occupy (@ThomasOccupy) <a href="">October 10, 2015</a></p></blockquote> <script src="//"></script> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="700" height="394" alt="" src="" /> </div> </div> </div> Barack Obama China Germany headlines India Recession Reuters Time Magazine Trade Deficit Transparency Twitter Twitter World Trade Sat, 10 Oct 2015 14:56:52 +0000 Tyler Durden 514663 at