Israeli Jets Bomb Targets In Gaza, Rusia And Turkey Are Preparing For A Military Confrontation Along Syria's Border With Turkey

Israeli jets bomb targets in Gaza after rocket hits south

Israeli warplanes struck the Gaza Strip early Monday morning in response to a rocket fired at southern Israel on Sunday evening.

The Israeli Air Force struck targets near the cities of Khan Younis and Deir al Balah in the south and center of the Gaza Strip, Palestinian sources in the coastal territory said. The IDF said it hit a training facility belonging to Hamas’s armed wing, the Izz al-Din al-Qassam Brigades in the central Gaza Strip in retaliation for the rocket fired at southern Israel. 

The IDF said Sunday’s was the third rocket fired at Israel since the beginning of 2016.

There were no immediate reports of injuries or damage. 

One rocket was shot from Gaza at southern Israel Sunday evening, landing harmlessly in an open field.

"A Historic Wealth Illusion Built On A Foundation Of False Promises"

Global markets were too close to dislocating this week. Wednesday saw the S&P500 trade decisively below August lows. Japan’s Nikkei 225 Index sank to test November 2014 lows. Emerging stocks fell to six-year lows, with European equities at 13-month lows. Wednesday also saw WTI crude trade below $27 (sinking almost 7%), boosting y-t-d losses to 25%. Credit spreads were blowing out, and currency markets were increasingly disorderly. Early Thursday trading saw the Russian ruble down 5.3% (at a record low vs. dollar), with Brazil’s real also under intense pressure. The Hong Kong dollar peg was looking vulnerable. The VIX traded to the highest level since the August “flash crash,” while the Japanese yen traded to one-year highs (vs. $). De-risking/de-leveraging dynamics were quickly overwhelming global markets.

Something had to be done...

Bloomberg adjusted its original Friday morning headline, “Global Stocks Charmed by Draghi Effect as Oil Rallies With Ruble,” to “Global Stocks Charmed by Central Banks as Oil Jumps, Bonds Fall.” Draghi did have some help. The People’s Bank of China (PBOC) injected $61 billion of liquidity into the system, the “most in three years.” China’s Vice President assured the markets that Beijing will “look after” Chinese stock investors. There was also talk of added stimulus from the Bank of Japan (BOJ) and a much more dovish Fed. The markets interpreted a feistily dovish Draghi as evidence that global central bankers had assumed crisis-management mode.

The markets will now have six-weeks to ponder whether Draghi can deliver. Even assuming that he successful drags ECB hawks along, it’s not easy to envisage how an additional $10 billion or so of QE will have much impact on (bursting) global Bubble Dynamics. An emphatic Draghi was, however, certainly capable of reversing global risk markets that were increasingly positioned/hedged for bearish outcomes. Over the years we’ve witnessed powerful short squeezes take on lives of their own, repeatedly giving the global Bubble an extended lease on life. And while bear market rallies tend to be the most spectacular, at this point I expect nothing beyond fleeting effects on the unfolding global Bubble unwind. Draghi is a seasoned pro at punishing speculators betting against Europe.

Going back to 2009, I’ve referred to the “global government finance Bubble” as the “Granddaddy of All Bubbles.” I am these days more fearful than ever that this period has indeed been the terminal phase of decades of serial Bubbles. Bubble excess made it to the heart of contemporary “money” and Credit – central bank Credit and government debt. This period also saw a historic Bubble engulf the emerging markets, including China. It encompassed stocks, bonds, derivatives and financial assets generally – virtually everywhere. Central bankers “printed” Trillions out of thin air.




Conflict In Syria Escalates As Russia And U.S. Establish Air Bases Along Turkish Border

According to intelligence sources in the United States, Russia has dispatched engineers to the northeastern city of Qamishli on the border. In late October, according to Syria Direct, the Qamishli International Airport was closed to civilian air traffic and turned over to the Syrian military.

On Friday the London-based Syrian Observatory for Human Rights quoted sources in Syria as saying 200 Russian personnel will fortify the airfield in Qamishli and ready it for military aircraft.

The Turkish newspaper Hurriyet also reported the presence of Russian engineers.

Also on Friday The Australian reported the US has established a secret airbase 30 miles outside of Qamishli. Syrian activists reported several dozen US military personnel are busy setting up a base at a former agricultural airfield a few miles from the Iraqi and Turkish borders.

“The airfield has been reconstructed and now has one airstrip for the American helicopters and a command centre,” Abu Jad Haskawi, a Syrian activist based in the nearby town of Hasakah, told the newspaper.

Turkey is currently busy preparing the border in preparation for a military operation against Kurdish forces in Syria. Ankara says it is stepping up maneuvers against the Islamic State, but this appears to be a cover for a strike against the Kurds.

In recent months evidence has emerged showing Turkish support for IS. Turkey has long considered Kurdish militias terrorists. President Recep Tayyip Erdogan has stated his country believes various Kurdish factions in Syria and Turkey are equal to the danger posed by ISIS.

“Turkish forces began clearing minefields along the Syrian border this week in an area north of Aleppo where it has previously spoken of establishing a ‘safe zone.’ Removing minefields is often an indicator that a ground intervention is imminent,” the Australian reports.

Turkey is also digging trenches in its declared buffer zone on the border.

Turkey has declared it will not tolerate the presence of Russian troops along the border.

“We have said this from the beginning: we won’t tolerate such formations (in northern Syria) along the area stretching from the Iraqi border up to the Mediterranean,” Erdogan said on Friday following Friday prayers in Istanbul.

“We maintain our sensitivities on this issue,” added Erdogan, citing the reported presence of Russian engineers.

Russia is also positioned to Turkey’s north along the Black Sea. In December tension was heightened when Turkish maritime authorities detained 27 Russian ships on the country’s ports on Black Sea in retaliation for the seizure of eight Turkish-flagged ships at Russian port.