Middle East: Growing Fears Of Regional Conflict As Violence Spreads

After Syria Bombs Iraq, Growing Fears Of Regional Conflict

Syrian warplanes bombed Sunni militants’ positions inside Iraq, military officials confirmed Wednesday, deepening the concerns that the extremist insurgency that spans the two neighboring countries could morph into an even wider regional conflict. US Secretary of State John Kerry warned against the threat and said other nations should stay out.

Meanwhile, a new insurgent artillery offensive against Christian villages in the north of Iraq sent thousands of Christians fleeing from their homes, seeking sanctuary in Kurdish-controlled territory, Associated Press reporters who witnessed the scene said.

The United States government and a senior Iraqi military official confirmed that Syrian warplanes bombed militants’ positions Tuesday in and near the border crossing in the town of Qaim. Iraq’s other neighbors — Jordan, Kuwait, Saudi Arabia and Turkey — were all bolstering flights just inside their airspace to monitor the situation, said the Iraqi official, who spoke on condition of anonymity because he was not authorized to speak to the media.

American officials said the target was the Islamic State of Iraq and the Levant, the Sunni extremist group that has seized large swaths of Iraq and seeks to carve out a purist Islamic enclave across both sides of the Syria-Iraq border.

A top Iraqi intelligence official said Iran was secretly supplying the Iraqi security forces with weapons, including rockets, heavy machine guns and multiple rocket launchers. “Iraq is in a grave crisis and the sword is on its neck, so is it even conceivable that we turn down the hand outstretched to us?” said the official, who spoke on condition of anonymity because of the sensitivity of the subject.

The involvement of Syria and Iran in Iraq suggests a growing cooperation among the three Shiite-led governments in response to the raging Sunni insurgency. And in an unusual twist, the U.S., Iran and Syria now find themselves with an overlapping interest in stabilizing Iraq’s government.

In a reflection of how intertwined the Syria and Iraq conflicts have become, thousands of Shiite Iraqi militiamen helping President Bashar Assad crush the Sunni-led uprising against him are returning home, putting a strain on the overstretched Syrian military as it struggles to retain territory recaptured in recent months from rebels.

Qaim, where the Syrian airstrikes took place Tuesday, is located in vast and mostly Sunni Anbar province. Its provincial government spokesman, Dhari al-Rishawi, said 17 people were killed in an air raid there.

Reports that the Sunni militants have captured advanced weapons, tanks and Humvees from the Iraq military that have made their way into Syria, and that fighters are crossing freely from one side to the other have alarmed the Syrian government, which fears the developments could shift the balance of power in the largely stalemated fight between Assad’s forces and the Sunni rebels fighting to topple him.

More of Iraq’s sectarian tensions boiled over into violence on Wednesday, with Sunni militants shelling a Christian village 45 miles (75 kilometers) from the frontier of the self-ruled Kurdish region, which has so far escaped the deadly turmoil unscathed.

The shelling of the village of Hamdaniya sparked a flight by thousands of Christians from it and other nearby villages toward the Kurdish region. Hundreds of cars, many with crucifixes swinging from their rear-view mirrors, waited to cross into the relatively safe northern Iraqi Kurdish city of Irbil.

Others were forced to walk, including 28-year-old Rasha, who was nine months pregnant and carried her 3-year-old son on her hip. After her husband’s car broke down, the woman, who would give only her first name for fear of militant reprisals, and her mother-in-law walked for miles toward the checkpoint, fearful she would give birth before reaching safety.

Report: Syrian Forces Bomb Sunni Targets In Iraq

Iraqi officials accused Syrian President Bashar Assad's forces of taking advantage of the crisis near Baghdad Wednesday, saying that Syrian warplanes struck several border areas in Anbar province Tuesday. 

At least 57 Iraqi civilians were killed and 120 wounded in the attacks, local officials told CNN, in cities controlled by the Islamic State of Iraq and the Levant (ISIS). 

This is not the first time this week Syrian forces have fired into a neighboring country. On Sunday, Syrian forces lobbed a mortar shellinto the Golan Heights, killing a 13 year-old boy and seriously wounding a Ministry of Defense civilian subcontractor. Israel responded with airstrikes. 

If true, the report would indicate an even broader spillover of the Syrian Civil War, which has mushroomed since 2011 from a statewide dispute into an all-out Islamic holy war between Sunni and Shi'te groups.

Sabah Karkhout, the head of Iraq's Anbar provincial council, told CNN that Tuesday's airstrikes hit markets and fuel stations in Rutba, al-Walid and Al-Qaim (see map below). 

ISIL Fighters Advancing Towards Large Haditha Dam

Fighters for the Islamic State of Iraq and the Levant are advancing on the Haditha Dam, the second-largest in Iraq, security officials said.

The militants are coming from the north, the north-east and the north-west. The ISIL fighters had already reached the nearby town of Burwana, on the eastern side of Haditha, and government forces were fighting to halt their advance.

Worried that the insurgents would reach the dam on the Euphrates River, about 190 kilometres north-west of Baghdad, army officers told employees to stay inside and to be prepared to open the dam's floodgates if ordered to do so, an employee said.

"This will lead to the flooding of the town and villages and will harm you also," the dam employee said he told the army officer.

This would not be the first time that the Iraqi government and ISIL have engaged in dam warfare. Earlier this year, when ISIL fighters seized the Fallujah dam, they opened it to flood fields of crops all the way south to the city of Najaf. The water at one point washed east as well, almost reaching Abu Ghraib, just west of Baghdad.

Separately on Wednesday, Prime Minister Nouri al-Maliki rejected calls for a caretaker government, as he has before, but it appeared to be a repudiation of the Western leaders who have asked him to agree to share power with Iraq's Sunnis and Kurds.

In a televised address, he criticised "other parties," a reference to Sunnis and Kurds, for not doing more to support the government, and he rejected the idea of a caretaker government, which could be formed without his participation.

"Despite what we are suffering through, we haven't heard from our political partners with any support," al-Maliki said. "They are not partners in facing the crisis but they are partners in spending the wealth of Iraq."

He also severely criticised remarks that the president of Iraq's autonomous Kurdish region, Masoud Barzani, made in a meeting with US Secretary of State John Kerry. The Kurdish leader had suggested that gains by the ISIL militants had changed the political landscape.

PM Fears U.S. Hatching Bad Deal With Iran, Summons DC Envoy, Calls Putin

Israel’s Prime Minister Benjamin Netanyahu on Wednesday summoned home his ambassador to the US for emergency consultations, spoke by phone with Russian President Vladimir Putin, and prepared to dispatch a delegation of top officials in a bid to thwart what he reportedly fears is a dangerous deal being prepared by US-led negotiators over Iran’s rogue nuclear program.

“There is growing concern in Jerusalem that a deal is being hatched,” Israel’s Channel 2 news reported.

Ron Dermer, Israel’s ambassador to the United States and one of Netanyahu’s closest advisers, who was on hand in DC Wednesday to greet the visiting Israeli President Shimon Peres, was called home later in the day for two days of urgent consultations with the prime minister, the TV report said.

Netanyahu also selected a team of officials, led by his Minister of Intelligence and Strategic Affairs Yuval Steinitz, and his National Security Adviser Yossi Cohen, who are set to leave Israel on Sunday for urgent talks with representatives of the P5+1 nations negotiating with Iran over its nuclear program. Those negotiations are set to resume next Wednesday.

In Netanyahu’s phone conversation with Putin, the TV report said, the message conveyed was that any deal with Iran must leave it years away from a potential breakout to the bomb. Netanyahu’s concern is that the deal being hatched would turn Iran into a threshold nuclear state, capable of breaking out to the bomb in a matter of months.

Last November, taken by surprise as the P5+1 negotiators reached an interim agreement with Iran, Netanyahu publicly slammed it as a “historic mistake” and urged the US in vain not to approve it.

During their talks at the White House on Wednesday, President Barack Obama told Peres — who steps down as president next month — that the US would not allow Iran to develop nuclear weapons. Netanyahu, however, has been demanding that Iran be denied the capacity to build nuclear weapons — which would entail the dismantling of Iran’s entire “military nuclear program,” the prime minister says, notably including its uranium enrichment capabilities. Obama has indicated that Iran could retain an enrichment capacity, if subject to intrusive inspections.

Israel’s concern is that the deal taking shape would leave Iran with 2,000 to 4,000 centrifuges enriching uranium, rather than the symbolic few hundred centrifuges that earlier drafts of the deal were understood to allow.

After the meeting, Peres told journalists that he hoped the final agreement with Iran would be similar to the agreement by which Syria was forced to part with its entire chemical weapons stockpile and the dismantling of its related infrastructure earlier this year. With such a deal in place, Peres said, Israel would consider supporting the removal of some of the sanctions against Tehran.

Peres also underlined that no deal with Tehran would be better than a bad deal that turned Iran into a threshold state.

The U.S. Economy Has Collapsed: 'This Is A Monstrous Negative Revision'

For months the administration, financial pundits and Wall Street analysts made it a point to inform Americans about the healthy state of our economy. One of the key metrics they’ve used as proof of recovery was the Gross Domestic Product (GDP) which measures the productive output of the U.S. economy as a whole.

Earlier this year the U.S. Bureau of Economic Analysis noted that this measure was showing positive growth. But now, after a second official revision, all of that purported growth used to goad consumers into spending more money on homes, cars and other goods has been revealed to be nothing but conjecture. According to the BEA, not only did economic growth stall during the first quarter of 2014, it completely collapsed, signalling a significant shift in consumption habits amid increasing food and energy prices:

Real gross domestic product — the output of goods and services produced by labor and property located in the United States — decreased at an annual rate of 2.9 percent in the first quarter of 2014 according to the “third” estimate released by the Bureau of Economic Analysis.

The government first made consumers believe that the economy grew. Then they revised this down to slight negative growth. The latest revision of -2.9% growth is significant, because even with official inflation at over 2% America’s economic output has declined. It seems that no matter how much money they pump into the system, it isn’t enough to offset the lack of income or job growth.

This is a monstrous negative revision.

A big part of it was non-residential fixed investment.  Rather than invest, companies have issued debt and bought back stock.  But this does nothing for the economy — it simply blows a bubble in the market.  How long before that comes home to roost?  Not long now, I suspect.

If you think companies don’t expect a recession inbound, you’re nuts.  Inventory draw-downs subtracted 1.7% from the GDP number.  Companies don’t build inventories if they don’t think they can sell them — as such this is a forward indicator.

Oh, and current production profits?  They’re down while current taxes were up.  Obamacare anyone?  Worse is that undistributed profits decreased too and this is the second quarter sequentially in which they did.  What does a company pay dividends with?  Undistributed profits.

So for two quarter the markets has risen like a rocket while the fuel for that rise has been exhausted for the last six months.

This will turn out well, I’m sure.

Source: Karl Denninger’s Market Ticker

Officially, we have not yet entered a recession. That requires two quarters of negative growth. However, the current trend indicates that’s exactly what’s going to happen. In the next 30 days the BEA should be releasing the GDP rate for the second quarter of 2014. According to economist John Williams that will more than likely show a negative print and will lead to an official confirmation that the U.S. has entered another recession.

What’s worse, unlike the previous recession that followed the collapse of 2008, there is no way out of this one.

The reason for this is that the consumer is strapped… doesn’t have the liquidity to fuel the growth in consumption.

Income… the median household income, net of inflation, is as low as it was in 1967. The average guy is not staying ahead of inflation.

…

As a result – personal consumption is more than two thirds of the economy – there’s no way you can have positive sustainable growth in the U.S. economy without the consumer being healthy.

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As the renewed downturn gains wider acceptance or wider recognition, that will intensify the selling pressure.  When someone starts selling, it’s going to be a race for the door, and I am looking for a dollar selling panic to be the trigger for the onset of hyperinflation.

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I don’t see what will save it at this point.

To cries of fear mongering and ‘doom porn’ contrarian economists and analysts warned that these numbers were being fabricated, despite the fact the the underlying fundamentals showed a clear draw-down in consumer confidence, company inventory, home sales and overall spending.

Now all of those warnings are coming to pass.

We have entered the next leg down and given that the governments of the world have pretty much used up all of the arrows in their quivers, there is nothing to stop what’s coming.

And what’s coming is nothing short of a complete collapse of our way of life. Hard to believe? Yes. Implausible? No.

It is so plausible, in fact, that well known radio commentator Mark Levin recently noted that the U.S. government has been actively preparing for and simulating the collapse of our financial system, as well as the widespread violence that will follow.

I’ll tell you what I think they’re simulating.

The collapse of our financial system, the collapse of our society and the potential for widespread violence, looting, killing in the streets, because that’s what happens when an economy collapses.

I’m not talking about a recession. I’m talking about a collapse, when people are desperate, when they can’t get food or clothing, when they have no way of going from place to place, when they can’t protect themselves.

There aren’t enough police officers on the face of the earth to adequately handle a situation like that.

This is happening right here and now. The streets may not devolve into madness tomorrow or next month, but piece by piece the foundations of America’s economic health and social structure are crumbling. The time to finalize preparations for what’s coming is now.

It’s going to go from bad to worse.