Thursday, May 31, 2018

Another Global Financial Crisis Coming?

Here comes another global financial crisis ...

Is another global financial crisis on the horizon?

Investors are increasingly worried that an escalating political crisis in Italy could lead to a populist, euroskeptic government taking power. As a result, there's rising uncertainty about whether the country might eventually abandon the euro currency zone or default on its giant debt pile. 

To make things worse, the Trump administration continues to toy with the idea of a trade war with Europe and China. That would be the last thing the global economy would need if the Italian situation deteriorates further. Debt crises and trade wars are a toxic combination.

To fully understand the risk, it's helpful to recall that before there was a Brexit, there was the threat of Grexit. There was widespread concern a few years ago that Greece's government debt crisis would force it to exit the eurozone, and that such a shock departure would be a crushing blow to both the broader European economy, in the middle of recession, and the American economy, which was still recovering from its own downturn.

These fears prompted what is perhaps the most amazing — albeit apocalyptic — research note ever published by a major Wall Street bank or investment firm. In December 2011, Citigroup clients were treated to dark speculation by the firm's chief economist, Willem Buiter, on what might happen if Greece's departure led to a daisy chain of eurozone exits and the eventual collapse of the European Union:

A breakup of the euro area [currency zone] would be rather like the movie War of the Roses version of a divorce: disruptive, destructive, and without any winners. ... If Spain and Italy were to exit, there would be a collapse of systemically important financial institutions throughout the European Union and North America and years of global depression. ... Even if the breakup does not destroy the EU completely and does not represent a prelude to a return to the intra-European national and regional hostilities, including civil wars and wars, that were the bread and butter of European history between the fall of the Roman empire and the gradual emergence of the European Union from the ashes of two made-in-Europe world wars, the case for keeping the euro area show on the road would seem to be a strong one: financially, economically, and politically, including geopolitically. [Willem Buiter, Citigroup]

So, yeah, pretty much everything other than pestilence, famine, and zombies roaming through Manhattan. Now generally, Wall Street research doesn't read like the Book of Revelations or a dystopian alt-history novel. But Citigroup was hardly the only financial player pondering the worst.
Thankfully, the worst didn't happen. Europe muddled through thanks to a combination of Greek debt bailouts and massive money printing by the European Central Bank. 

But Italy poses a far bigger threat than Greece ever did.

Italy is the eurozone's third-largest economy, 10 times the size of Greece's. It also has the world's third-largest sovereign debt market, some $2.7 trillion. Only Greece has a higher public debt-to-GDP ratio in the eurozone. My AEI colleague Desmond Lachman, a former International Monetary Fund official and Wall Street emerging market strategist, argues that Italy's troubles have the potential to roil the global economy much like the 2008 Lehman bankruptcy. (The 10th anniversary of "Free Market Day" is coming!) America wouldn't be spared.

Italy is a mess. It's too big to fail, but also too big to bail out. To a large extent, it will need to save itself though economic reforms that boost its lagging productivity and reduce its debt load as a share of the economy. And America cannot simply sit idly by and pretend that this is not our problem.

Italy must get its financial house in order. But America also has a role to play, such as avoiding trade disputes with Europe or China that will exacerbate market tension and potentially weaken global growth. There is little evidence that any of the trade actions currently being contemplated by Team Trump would have much impact on economic or job growth. But a second global financial crisis surely would.

Top IDF Officer: Iran May Use Gaza Terrorists Again To Distract From Syria

Top IDF officer: Iran may use Gaza terrorists again to distract from Syria

A top commander in the Israeli army said Thursday that if Iran finds itself in trouble in Syria, it could again mobilize its ally in Gaza, Palestinian Islamic Jihad (PIJ), to attack Israel as a distraction.
The senior officer in the IDF’s Southern Command, in a briefing to Israeli journalists, also said Hamas and PIJ had improved their combat tactics in this week’s round of cross-border violence by launching many rockets and mortars from underground positions, and using timers to delay the launches until their fighters were no longer around to be targeted.
He said Israel had “expected” Islamic Jihad to launch an offensive, explaining that the terror group has had an account to settle ever since Israel exposed and destroyed a tunnel belonging to it earlier this year. “Its command center is abroad, and from there it receives its orders with Iranian consent,” he said.

“The group has an approval by its commanders abroad to carry out terror attacks against us,” the officer said. “After it tried to carry out an attack at the beginning of this week and we killed three of the group’s combatants, we understood it was going to react.

“We didn’t know when it would come, but we prepared. We told community heads that gunfire could be directed at posts and communities. Everyone in this area knows what to do in such situations.”

On Tuesday, the Gaza-based Hamas and Palestinian Islamic Jihad terrorist groups launched more than 100 rockets and mortar shells at Israel, prompting dozens of retaliatory airstrikes. Four Israelis were hurt, including a soldier who suffered moderate injuries, and projectiles caused damage to a kindergarten yard an hour before the children arrived, and to a home as a family slept in a fortified room inside.
Following criticism in Israel that the military failed to prevent any launchings by identifying the launchers ahead of time, the officer said the groups had improved their tactics.

He denied that there were orders not to hit and kill the terrorists. “There were orders to locate and attack the cells, but the enemy has improved and learnt lessons. A large portion of the launches was done with timers and from underground.”
The senior officer said that Hamas only joined the offensive after the IDF struck targets in response to the two initial barrages fired by Islamic Jihad.
He said Israel was the “closest” it had been to war in four years, since the 2014 Gaza War, known in Israel as Operation Protective Edge.
“Israel needs to insert other stabilizing factors to the conflict with Gaza. Small steps can be made to give 12-18 months of calm, and we can reach a long-term arrangement,” the officer said.
“We are at a crossroads. We brought Hamas to its toughest state, and it’s good we did so. [But] if we don’t stabilize the situation, we risk entering a slippery slope and being the reactors instead of the initiators.
“Hamas shouldn’t be helped, but the extent of its willingness for concessions in development, [weapons] tests, power-building, smuggling and terror shows it is willing to talk about everything to save itself from collapsing. They understand the only solution other than an arrangement is war, and are doing everything to prevent a war.”

Israel At Closest Point To War Since 2014

Despite relative calm returning to southern Israel after over 100 mortars and rockets were fired towards Israeli communities from the Gaza Strip, Israel is at its closest point to war since Operation Protective Edge four years ago, a senior IDF officer in the Southern Command said Thursday.

According to the senior officer, the Iranian-funded Islamic Jihad did not show all of its strength and, under the guidance of Tehran, might still be able to act against Israel from the Hamas-run Gaza Strip. 

"This week, Islamic Jihad operated with Iranian consent and Iran has an interest in escalating the situation in Gaza in light of what is happening in Syria and other areas,” he told reporters.

The Southern Command, he said, operated with a “very clear” directive on Tuesday to make sure the latest round of violence didn’t escalate into a full-blown war so that Israel “could focus” on confronting larger threats like Iran and Syria.

The senior officer said that the Israeli army had anticipated an attack by Islamic Jihad and while the military was not certain when the attack by the Gaza terror group would happen, the IDF spoke to regional council heads and deployed Iron Dome batteries. The warning system was also improved for residents within seven kilometers of the Gaza Strip, giving them 23 seconds to run for shelter up from 15, he said.

According to the senior officer, Israel struck dozens of high-value Hamas and Islamic Jihad targets in the Hamas-run coastal enclave but admitted that the IDF did not succeed in targeting the cells who had fired the projectiles.

"We were instructed to locate and attack the cells who carried out the launches, but the enemy has improved and learnt lessons since the last round of fighting, and much of the shooting was carried out with timers and from underground,” he said.

The officer nevertheless stressed that “the terrorist organizations limited themselves in the range of rocket fire this week,” but “if it continued, we were ready for something a lot broader and meaningful and Hamas knew it. It could have ended very differently.”

The senior officer stated that the 65 targets struck by the IDF “were targets that have been on our ‘waiting list,’” adding that Hamas planned to use the sites in the next war with Israel.

Among the high value targets was a offensive tunnel built in the last year that infiltrated both into Egypt’s Sinai Peninsula as well as into Israeli territory. The officer stated that the intelligence on the tunnel was shared with Egypt, who neutralized it in their territory as well.

On Wednesday, UN Special Coordinator for the Middle East Peace Process Nickolay Mladenov told the UN Security Council that the escalation was a “warning to all of us of how close we are to the brink of war every day.”

According to the senior officer, Israel should allow for additional measures in order to stabilize the humanitarian situation, "otherwise, we will be in a slippery slope,” pointing out that even the Palestinian Authority has disengaged itself from the Strip.

Hamas, the senior officer said, is trying to save itself from collapse and has no solution.

“No one wants the problem of Gaza, not even us,” he said. “Small steps can be taken that will give a year and a half of quiet, and allow for a long arrangement to be reached. We do not need to help Hamas, nor lift it up, but as large as Hamas' concessions will be, so will be the size of the arrangement,” he said.

Beyond the ongoing operations of the Erez and Kerem Shalom Crossings, as well as the limited opening of the Rafiah Crossing with Egypt, additional “arrangements” are being examined the senior officer said.

Soros Proposes The EU Should Borrow Money To Pay For Unrestricted Migration Into Europe

George Soros Wants the EU to Borrow Money to Pay for Unrestricted Migration into Europe

George Soros has published a new article. It is paywalled, but the Hungarian versionis not.
In the article he recommends a Marshall plan for Africa, and he seems to recommend acquiring the money for it by putting the EU into debt.
He also says, among other interesting things (and whining against Orbán):
“My opinion has always been that refugees must be distributed strictly on a voluntary basis. Member states must not be forced to take them in, nor must refugees be directed to countries where they don’t want to go.” (my translation)
This is the diametrical opposite of what he proposed just thee years ago, when he said, among other things:
“First, the EU has to accept at least a million asylum-seekers annually for the foreseeable future. And, to do that, it must share the burden fairly — a principle that a qualified majority finally established at last Wednesday’s summit.”
Our Hungarian translator CrossWare declined to translate the source document linked above — she said she didn’t want to help Mr. Soros spread his [expletive redacted]. Instead she volunteered to translate this report from the news portal
The “philanthropist” Soros would have Europe take out a loan for the reception of migrants
George Soros has had another perverted collection of ideas. According to him, he has now come up with the latest idea for money-laundering, because he is afraid of the European Parliament’s defeat of the immigration forces he supports, by the patriotic forces in agreement with Viktor Orbán. That is why, before it is done, the US billionaire wants to pull tens of billions of dollars from EU pockets to move migrants in bulk to Europe.
The American billionaire, who only communicates with the world through open letters, speaking declaratively of the EU’s migration plans which now being threatened with failure, reappeared with one of its favorite cannons: the EU should take out loans for the supply and reception of migrants. Soros would resolve the migration crisis by allowing more migrants, moreover, at the expense of EU taxpayers.
“How to Save Europe?” — this is the ringing title of the billionaire’s opinion piece, where he slipped his demand for money into a glaze of honeyed drool.
Surprisingly, Soros also explains why he came up with his latest plan. The great financial conspirator is very afraid of the victory of the anti-immigration forces of European nation-states, as represented by Hungarian Prime Minister Viktor Orbán, at the next European Parliament election. Therefore, if he could, he would do a little business on the migrants with the EU until then.
“In Hungary, Viktor Orbán based his campaign on falsely accusing me of flooding Europe and Hungary with Muslim refugees. Orbán is now defending his own Christian vision of Europe. This vision is in contrast with the EU principles,” writes the probably desperate Soros, who is the self-proclaimed defender of the EU’s non-established principles.
The financial construction advertised by Soros, “giving Marshall aid to Africa”, is essentially about making financial resources available to Soros in the amount of 30 billion euros annually from the European Union, to support the import of African migrants (he calls them “refugees”) into Europe.
George Soros describes his own model fairly euphemistically as an infinitely positive process about reducing illegal migration and organizing legal migration. Indeed, the American billionaire’s plan is about making mass migration legitimate and publicly subsidized.
Obviously, for his own financial gain, George Soros has devised an astonishingly naughty and wicked political-economic plan. The wealthy immigrant investment magnate would force EU citizens to pay for massive imports of migrants into the EU to make an even larger profit. A sumptuous idea!
“In order for an African Marshall Plan to succeed, at least €30 billion would be needed annually. Member states could cover only a small part of this. Where do we get money from? Keep in mind that the refugee crisis is a European problem, and requires a pan-European solution. The EU’s creditworthiness is high, but unused. When do we have the opportunity, if not in such a historic crisis? We know from history that public debt rises in times of war. Of course, the borrowing is against the prevailing orthodoxy, which calls for austerity…” writes the stock-market shark, camouflaged as a philanthropist.
But again, the main problem with the whole of Soros’s plan, and with all of his other ideas — why does Soros think that he has the right to speak for the lives of 500 million people in the EU, without any electoral mandate?
With the usual bold, thick skin on his face, Soros, in his open letter, in addition to his important financial plan, deliberately misrepresents and lies about many other political issues.
For example, while Soros is pushing immigration around the world, he ratiocinates why Brexit is an important for the EU, that is, to prevent the British from leaving, and to reverse the decision. All while Britain’s population has decided to exit the EU due to the overwhelming effects of uncontrolled migration. And what else does George Soros have to do with British citizens’ decision? Why does the American billionaire think he has the right to override the British decision?
The Hungarian-born stock market speculator, however, in his most recent open letter, also expresses his intention of eliminating nation states using the global network of civilian organizations that he maintains and uses to represent his interests.
“A joint effort is needed; the management of EU bodies combined with the civilian movements,” states Soros, who obviously does not spare money from his private network of Open Society Foundations, which works to achieve unlimited and unrestricted migration.

Hawaii Volcano Lava Forces New Evacuations

Fast-moving lava flows on Hawaii’s Big Island from the Kilauea volcano have blocked one major evacuation route and are headed toward the crossroads of another, prompting a new round of evacuations for rural neighborhoods in the area.
Authorities going door to door in the early-morning hours Wednesday called for emergency evacuations in the Kapoho, Beach Lots and Vacationland areas, about 35 miles from Hilo, the island’s biggest city.
The lava crossed Highway 132 on Tuesday afternoon and was moving diagonally toward an intersection known as Four Corners, where Highways 132 and 137 cross near the coast. As of 4 p.m. local time, the lava was within 1/2 a mile of 137, the USGS said.
Both highways are the primary evacuation routes for the area, raising concerns that authorities might have to bulldoze an emergency route through the jungle connecting several existing small roads. They’ve also made plans for helicopter evacuations using military aircraft.

"The Hawaii Police Department has ordered a mandatory evacuation for Noni Farms Road and Hale Kamahina Rd off of Hwy 132, around the 5 mile marker due to lava inundation," police said early Wednesday morning. "This notice affects all residents and businesses in Hwy 132 at the 5 mile marker and immediate surrounding area.  Evacuees may seek shelter at the Pahoa Community Center or the Keaau Community Shelter."

It wasn't immediately clear how many people were ordered to leave in the newest round of evacuations, but about 2,000 had already been barred from their homes. Kilauea has been erupting since 1983 with only occasional pauses of quiet activity.  The latest eruption began May 3 in a part of Leilani Estates, a subdivision near the town of Pahoa.
Area residents reported power outages and spotty cellphone coverage as the flows destroy power lines. Authorities said the flow was moving about 200 yards an hour, slower than walking pace. 
Those same kinds of implacable flows are blamed for the destruction of at least 12 homes Sunday and Monday and left neighborhoods covered with up to 20 feet of new rock. Authorities said the lava flows themselves are a danger but also warn ash, poison gases and hair-like threads of cooled lava pose respiratory risks.
Fountains of lava are reaching about 200 feet high, the U.S. Geological Survey reported.
"Pele’s Hair is falling in Pahoa. Can cause skin, nose, eye and lung irritation. Stay inside or use ash masks for protection," the county warned.
The flows raise the stakes for a community that already has struggled with nearly a month of mandatory evacuations prompted by  lava from the Kilauea volcano further inland. Tempers are flaring, residents are frustrated, and businesses are struggling.  
The flow near the Leilani Estates neighborhood about 35 miles from Hilo had already destroyed at least 82 structures, including 41 homes.

So far the lava has not caused any problems at a geothermal electricity plant that residents feared could release toxic gases. Authorities say the lava has flowed over portions of the plant and blocked its access road.
Leilani Estates residents Brady Metcalf and his fiancée, Ana Luquin Jiminez, have been evacuated since May 3 and expect the lava to take their house any day. It was still standing Tuesday, but they had little hope it would stay that way.
“When the lava comes, it comes at a huge volume and obliterates everything," Metcalf said. "That used to be one of the nicer neighborhoods with paved streets, nice homes and friendly neighbors. Now the bottom half of it is gone, and it looks like an ocean of lava for as far as you can see.”

Golan Heights Recognition Thwarted By The Swamp

Golan Heights Recognition Thwarted By The Swamp

Last week, House Foreign Affairs Committee Member, Congressman Ron DeSantis (R.,-Fla.), proposed an amendment to the National Defense Authorization Act recognizing the Golan Heights as an integral part of Israel thereby validating Israel’s 1981 annexation of the territory. Though non-binding, the declarative resolution, which would have likely passed if brought to the House floor for a full vote, would have sent a strong message to the world, but chiefly Israel's enemies, that after eight years of relentless hostility from the previous American administration, the US-Israel alliance is back on track and stronger than ever. 
But for inexplicable reasons, the amendment didn’t pass muster with the House Rules Committee and consequently, never made it do the House floor for a full up or down vote. Sources close to the matter stated that the White House put pressure on Speaker Paul Ryan to kill the resolution and render it dead on arrival. The White House for its part denied playing any role in the shelving of the resolution claiming to have only recently become aware of its existence. When contacted by the Washington Free Beacon for comment on the matter, Speaker Ryan’s office remained uncharacteristically mute.  
On the heels of President Donald Trump’s historic decision to recognize Jerusalem as Israel’s capital city and transfer the United States embassy there in compliance with U.S. law, a congressional resolution recognizing Israeli sovereignty over the Golan would have represented a powerful one-two combination. It would have signaled an end to past anachronistic foreign policies dictated by the swamp.
Up until June 1967, the Golan Heights, a rocky volcanic plateau overlooking Galilee, served as a platform for Syrian artillery strikes against Israeli Galilean villages and collectives. It is roughly 45 miles long and 17 miles wide at its widest point. From 1948 until 1967, Syrian artillery harried and harassed Israeli farmers tilling their fields and fishermen tending to their business in the Sea of Galilee, also known as the Kinneret. In addition to artillery strikes, the Syrians also tried to divert the Golan’s waters from flowing into the Jordan River in an effort to deprive Israel of water resources. In sum, rather than using the Golan for productive purposes, the Syrians used the plateau to rain death and destruction and make life for Israelis miserable.
On June 5th 1967, Israel, rather than waiting for its enemies to hit first, acted resolutely and launched a preemptive strike against its belligerent Arab neighbors. While Israel was engaged in battling Egyptians to the south and Jordanians to the east, Syria decided to take advantage of the situation to indiscriminately shell Israeli towns, villages and farming collectives in Galilee. 
The Syrians were caught up in fabricated Arab propaganda and hysterics of phantom Arab victories. It’s likely that had they known the extent of defeat inflicted on their Arab brethren, they would have refrained from shelling Israel. Once Israel dispatched Egypt and Jordan, it turned its attention to Syria. On June 9, Israeli armor, mechanized and heli-borne infantry, backed by artillery and air power stormed the Golan and quickly overwhelmed and broke through strong Syrian defenses that had taken the Syrians years to construct. The Syrians, who proved to be adept at indiscriminately shelling civilians, proved to be no match for the Israel Defense Forces. 
On June 10, the guns fell silent leaving Israel in full control of the Sinai Peninsula, Judea & Samaria, east Jerusalem and crucially, the strategic Golan Heights. No longer could the Syrians menace Israel as they had done before the Six-Day War.
In 1981, Israel passed the Golan Heights Law, which extended Israeli sovereignty over the Golan Heights. Syrian Druse residents of the Golan were given the option of accepting Israeli citizenship and many have since taken up Israel on the offer. Before 1967, the Golan was largely barren but today the land is productive featuring a booming tourist industry, the largest ski resort in the Middle East, cattle farms, a commercial green energy wind power station, and an abundance of wineries. In fact, some of the world’s premier wines herald from the Golan. Currently, there are approximately 20,000 Jews and 20,000 Druse living in the Golan in peace and tranquility. The area is in fact, among the most tranquil in Israel with many Israelis vacationing there to escape the hustle and bustle of daily life. 
The Syrians, who never demonstrated any meaningful, good-faith effort to reach peaceful accommodation with Israel, despite Israeli flexibility on territorial concessions, attempted to retake the Golan Heights in October 1973 but were repulsed with severe losses. In 2011, Syria devolved into full-scale civil war that witnessed the use of poison gas by Assad as well as massacres and indiscriminate shelling. Syria no longer exists as an independent country. Instead, Assad can be viewed as a petty warlord who takes his dictates from Tehran. 
No one seriously believes that Israel should be compelled to give back the Golan. Had it ceded the territory, a move encouraged by former Secretary of State John Kerry, Iran or ISIS would today be dipping their feet in the Kinneret. Though Representative DeSantis and supporters of a strong Israel haven’t received a plausible explanation as to why the Golan Heights resolution was shelved, DeSantis hasn’t given up the fight. Following the nixing of the resolution he tweeted, “With respect to US recognition of Israel control over the Golan Heights, we’ve only begun to fight...” We wish him Godspeed. 

Iran And Syria Move On To Their Next Target Flashpoint - Quneitra

As Gaza front cools, Iran and Syria move on their next flashpoint – Quneitra

Hours after the Palestinians paused on Wednesday, May 30, in their broadest rocket/mortar assault on Israel in four years, their Iranian backers were already moving on the Golan. 

Under cover of the deafening Gaza clash, Iran, Syria and Hizballah began marching military units on the road to Quneitra opposite Israel’s Golan border. They include the Syrian army’s 42nd armored brigade of the elite 4th Division. DEBKAfile’s military and intelligence sources report Iran is employing its classical tactic of cooling one sector – on Israel’s southern border with Gaza – while creeping up silently on another – the Golan front in the north 

The movement is timed to reach Quneitra on Thursday, March 31, when Russian defense minister Gen. Sergei Shoigu and his Israeli counterpart Avigdor Lieberman are due to meet in Moscow.

Israel Blames Iran For Gaza Violence As Rocket Fire Pauses

Israel Blames Iran For Gaza Violence As Rocket Fire Pauses

A day after the largest exchange of rocket fire between Israel and Hamas since 2014, Israel is blaming Iran for supplying both Hamas and Islamic Jihad with advanced surface-to-surface missiles, capable of traveling longer distances to hit targets inside southern Israel.

The Jerusalem Post reports based on official Israeli military statements :
Despite Israel’s intelligence superiority over terror groups, as well a blockade imposed both by the IDF and Egypt, Hamas and other terror groups in the Strip have restocked their supply of weapons in the four years since the last round of fighting between Israel and Hamas.
The mass-produced Iranian mortar shells used in yesterday’s salvos were also used by Islamic Jihad in an attack in January, as well as a barrage 12 mortar shells toward an army outpost in November.

Israeli officials describe Tuesday's Israeli strikes on Gaza as precipitated by dozens of projectiles fired toward Israeli settlements. In total throughout the day the Jerusalem Post estimates that 180 "Iranian-made" 120 millimeter mortar shells were fired by terrorists operating in the Gaza Strip, as well as 107-millimeter rockets, which have a reach of up to ten kilometers inside Israel. 
Israel for its part struck 65 locations across Gaza it described as Hamas terror sites, including what Israeli officials have identified as a massive weapons smuggling tunnel said to reach nearly a full kilometer into Israeli territory.

Israel has consistently blamed both "smuggling tunnels" and commercial ships asmeans through which Iran resupplies militant groups within the Gaza Strip — though Israel has had the 25 miles long by few miles wide strip of Palestinian land under near total blockade for years.
During the 2014 Gaza conflict which Israel refers to as Operation Protective Edge, Israeli authorities say they seized a "Klos-C Iranian commercial ship" operating under the Panamanian flag which was filled with Syrian long-range rockets. The Israeli Defense Forces (IDF) subsequently published video showing the boat seizure and the uncovering of the large cache of missiles. 
IDF officials have partly credited the total maritime blockade of Gaza, which human rights groups have denounced as tantamount to a war crime due to medicine and other essential humanitarian supply shipments being prevented from entering the deeply impoverished strip, with drastically reducing the number of projectiles fired from Gaza over the past few years.

Blame for Tuesday's somewhat brief yet very intense round of violence was predictably put on the shoulders of the Iranians by Israeli officials. The Jerusalem Post cites Brig. Gen. (ret.) Yossi Kuperwasser, the former director general of the Ministry of Strategic Affairs and an IDF Military Intelligence division head, as saying Tuesday's violence was "encouraged by the Iranians" — though offering no concrete evidence beyond past references.

General Kuperwasser said it was “another reflection of Iran’s frustrations and tensions which is trying to show it can cause trouble and instability,” he said, while also implying that IRGC Quds Force commander Maj.-Gen. Qassem Soleimani may have had a part to play in violence over the past months in tandem with Hamas political leader Yahya Sinwar.
The Israeli general said further, “Iran doesn’t want stability here. They want to make everyone realize that they are a player and that they should be taken very seriously with a lot of respect and in this way deter people from putting more pressure on them, but it isn’t working.”

Meanwhile Israeli military vehicles appear to be mustering along Israel's southern border with Gaza, even as a reported Egyptian-assisted Israeli-Hamas tenuous ceasefire has continued to hold through Wednesday. Israel has denied early reports that it reached a ceasefire with Gazan militant groups; however, fighting is widely reported to have ceased by evening Wednesday

It's unclear if any casualties resulted from Tuesday and early Wednesday's strikes as none were immediately reported - though the Israelis say a Jewish kindergarten was hit, with no one killed. An emergency UN session is set to meet Wednesday after the US and other western states called for a formal condemnation of recent Hamas rocket attacks.
Violence has soared along the Gaza frontier in recent weeks during which 116 Palestinians were killed by Israeli fire at mass demonstrations for a right of return to ancestral lands now in Israel. Amid international condemnation for its use of lethal force at the mass demonstrations, Israel said many of the dead were militants and that the army was repelling attacks on the border fence.
Palestinians and their supporters, however, say most of the protesters were unarmed civilians and Israel was using excessive force against them

Israel Warns That 'Threshold Of War' Will Be Crossed If Hamas Doesn't Stop Firing Rockets

Israel Warns That "Threshold Of War" Will Be Crossed If Hamas Doesn't Stop Firing Rockets

Over the past 24 hours, Hamas and Islamic Jihad have fired approximately 70 rockets and mortars into Israel, and the IDF has responded by conducting at least 60 airstrikes in Gaza. 

If the hostilities continue, we could very well see a full blown war erupt, and such a war could ultimately draw in the Palestinians in the West Bank, Hezbollah and more of Israel’s neighbors as well.  
To say that things are tense in the region would be a major understatement.  
On Tuesday, it was reported that there was a full moon over Jerusalem that was “almost red”, and some are taking that as an ominous sign.  This is also the Islamic holy month of Ramadan, and that certainly adds an extra dimension to the events that are unfolding right in front of our eyes.  

This is the worst violence that we have seen between the Israelis and Hamas since 2014, and many are extremely concerned about what we may see next.

Randomly firing rockets and mortar shells toward civilian population centers is a great act of cowardice, and these recent attacks by the Palestinians are being condemned all over the world.  The following comes from Time Magazine
Palestinian militants bombarded southern Israel with dozens of rockets and mortar shells Tuesday, while Israeli warplanes struck targets throughout the Gaza Strip in the largest flare-up of violence between the sides since a 2014 war.
The Israeli military said most of the projectiles were intercepted, but three soldiers were wounded, raising the chances of further Israeli retaliation. One mortar shell landed near a kindergarten shortly before it opened.
In Israel, this kind of thing is simply accepted as a part of life, and despite the attack the school day continued as scheduled

“We are lucky the children weren’t in the kindergarten yet, and that they didn’t hear the explosion. It was just a stroke of luck that nobody was injured,” said Gadi Yarkoni, head of the Eshkol Regional Council.
Danny Cohen, community coordinator at the kibbutz, said that despite the incident, nearly all of the 20 students in the kindergarten came to school as scheduled.
“The parents are used to these kind of events. We’ve experienced them in the past,” Cohen told TPS. “The parents know that the building of the kindergarten is reinforced and that the staff knows how to handle this kind of situation.”

Needless to say, Israel was going to have a very strong response to these attacks.  According to Fox News, Israeli Prime Minister Benjamin Netanyahu believed that Hamas was responsible from the very beginning…
“Israel will exact a heavy price from those who seek to harm it and we see Hamas as responsible for not preventing such attacks,” Prime Minister Benjamin Netanyahu said following the barrage.
And later on we did get word that Hamas and Islamic Jihad had issued a joint statement in which they both took responsibility for the rocket and mortar attacks.
Not since the 2014 Gaza war has Hamas claimed responsibility for rocket attacks into Israel.  They had to know that there would be a high price to pay, and so what was their goal?

Do they actually want to start another war?
If both sides keep firing, that is precisely what is going to happen.  In fact, Israel’s defense minister is warning that “the threshold of war” is about to be crossed…
Israel Katz, the Israeli intelligence minister, said: ‘We are the closest to the threshold of war since Operation Protective Edge.
‘We don’t want it, and the other side doesn’t either, but we have our red lines.’

If we do see a war, the only way that Hamas can hope for any sort of a victory is to draw in as many of Israel’s neighbors as possible.  The last time that Hamas and Israel went head to head, Hamas was handed a crushing defeat

The last war in 2014 was especially devastating, with over 2,000 Palestinians killed, including hundreds of civilians, and widespread damage inflicted on Gaza’s infrastructure in 50 days of fighting. Seventy-two people were killed on the Israeli side.

Meanwhile, hostilities between Israel and Syria continue to heat up as well.  Let us pray for peace, because we are closer to a major war in the region than we have been in a very long time.

U.S. Sec Of Defense Vows That American Ships Will Continue To Confront China Over Islands In S China Sea

Mattis: US Will Confront China With "Steady Drumbeat" Of American Ships Over Weaponized Islands

U.S. Secretary of Defense Jim Mattis vowed on Tuesday that American ships will continue to confront China over its militarization of man-made islands in the South China Sea, where Beijing has established an extensive military presence despite its promise not to do s

Mattis said that U.S. forces are maintaining a "steady drumbeat" of naval operations around the disputed Spratly islands, adding that "only one country" seems to be bothered by the maneuvers.

We are going out of our way to cooperate with Pacific nations, that’s the way we do business in the world,” Mattis told reporters. “But we are also going to confront what we believe is out of step with international law, out of step with international tribunals that have spoken on the issue.”
Mattis's comments follow Beijing voicing "strong dissatisfaction" on Sunday after two US warships sailed past the Paracel Islands, which lie north of the Spratlys.

Reuters, citing anonymous sources, said the USS Higgins (DDG-76), a United States Navy Arleigh Burke-class destroyer (flight II) and the USS Antietam (CG-54), a Ticonderoga-class guided missile cruiser of the United States Navy, came within 12 nautical miles of the heavily disputed, weaponized Paracel chain in the South China Sea.
“The U.S. military vessels carried out maneuvering operations near Tree, Lincoln, Triton and Woody islands in the Paracels,” a source told Reuters.

The sources claim the passage had been planned month ago, as missions to sail warships around Beijing’s weaponized islands in the South China Sea have become more routine. Washington’s motive behind the operation is said to counter Beijing’s efforts to restrict freedom of navigation in critical shipping lanes around the islands.
The US Navy periodically conducts “freedom of navigation” operations in the contested waterway, where it sails close to island features China has built into military facilities as a way of showing it rejects any territorial claims. -SCMP
"Our diplomats are robustly engaged on this," Mattis said. "The concerns have come to me not just from American government circles, but also from foreign nations that are concerned, very concerned about this continued militarisation of features in the South China Sea."

In early May, People’s Liberation Army Air Force (PLAAF) for the first time landed several strategic bombers on the islands and reefs, some human-made, in the region where China is actively preparing for war.
In a statement, the Chinese Air Force said that “a division of the People’s Liberation Army Air Force (PLAAF) recently organized multiple bombers such as the H-6K to conduct take-off and landing training on islands and reefs in the South China Sea in order to improve our ability to ‘reach all territory, conduct strikes at any time and strike in all directions.”

Wednesday, May 30, 2018

Soros: The EU In An 'Existential Crisis', And The Need For A 'Savior'

"Everything Has Gone Wrong": Soros Warns "Major" Financial Crisis Is Coming

[It appears that the EU needs a 'savior' to hold things together with the promises of a better future. It needs to happen relatively soon, because the EU appears to be tearing at the seams. We know how this ends, therefore the solution to the EU's problems should be relatively soon]

In a speech delivered Tuesday in Paris, billionaire investor George Soros warned that the world could be on the brink of another devastating financial crisis, as debt crises reemerge in Europe and a strengthening dollar pressures both the US's emerging- and developed-market rivals.
And Europe, with Italy dragging worries about the possible dissolution of the euro back to the forefront, won't be far behind. Political pressures like the dissolution of its transatlantic alliance with the US will eventually translate into economic harm. 
Presently, Europe is facing three pressing problems: The refugee crisis, the austerity policy that has hindered Europe's economic development, and territorial disintegration - not only Brexit, but the threat that countries like Italy might follow suit...

But in the near-term, the US's decision to pull out of the Iran deal is straining Europe's alliance with its most important Western partner just as the strengthening dollar is constricting financial conditions around the world.

Until recently, it could have been argued that austerity is working: the European economy is slowly improving, and Europe must simply persevere. But, looking ahead, Europe now faces the collapse of the Iran nuclear deal and the destruction of the transatlantic alliance, which is bound to have a negative effect on its economy and cause other dislocations.
The strength of the dollar is already precipitating a flight from emerging-market currencies. We may be heading for another major financial crisis. The economic stimulus of a Marshall Plan for Africa and other parts of the developing world should kick in just at the right time. That is what has led me to put forward an out-of-the-box proposal for financing it.

Adding to the urgency, it is no longer a "figure of speech" to claim that the EU is in "existential danger," Soros said. It's an obvious reality.
“The EU is in an existential crisis. Everything that could go wrong has gone wrong,” he said.
To escape the crisis, “it needs to reinvent itself.”
"The United States, for its part, has exacerbated the EU’s problems. By unilaterally withdrawing from the 2015 Iran nuclear deal, President Donald Trump has effectively destroyed the transatlantic alliance. This has put additional pressure on an already beleaguered Europe. It is no longer a figure of speech to say that Europe is in existential danger; it is the harsh reality."

The only way to prevent an all-out collapse, Soros explained, would be a 30 billion euro ($35.4 billion) "Marshall Plan" for Africa that Soros believes would help stem the flow of migrants into Europe, something that, Soros finally admits, is one of the biggest problems facing Europe.  The EU, Soros believes, should use its "largely unused" borrowing authority to finance the plan.

“We may be heading for another major financial crisis,” Soros said explicitly.

The alternative, Soros claims, is further "territorial disintegration" of the EU as countries that have largely suffered as a result of the monetary union contemplate leaving. To prevent this, Soros says Europe must acknowledge and address the flaws of the euro system. Perhaps the most glaring of which is that the euro created an entrenched two-tiered system of debtors and creditors.

I personally regarded the EU as the embodiment of the idea of the open society. It was a voluntary association of equal states that banded together and sacrificed part of their sovereignty for the common good. The idea of Europe as an open society continues to inspire me.
But since the financial crisis of 2008, the EU seems to have lost its way. It adopted a program of fiscal retrenchment, which led to the euro crisis and transformed the eurozone into a relationship between creditors and debtors. The creditors set the conditions that the debtors had to meet, yet could not meet. This created a relationship that was neither voluntary nor equal – the very opposite of the credo on which the EU was based.

As some will remember, Soros Fund Management - the family office that manages Soros's money, which he has mostly dedicated to his "Open Society" network of NGOs - closed most of its long-EM positions after President Trump defeated Hillary Clinton. Of course, where Soros sees danger, others see opportunity. For example, Mark Mobius "un-retired" last month to open a fund that he hopes will take advantage of opportunities amid the EM carnage, as analysts continue to see EM as the area that's most vulnerable to a re-pricing in USD.