Sunday, April 15, 2018

US-led Bombing of Syria: Donald Trump’s Mutt and Jeff Reality Show

In this issue

US-led Bombing of Syria: Donald Trump’s Mutt and Jeff Reality Show
-Events Leading to Syria’s Bombing
-Trump’s Bellicose Tweet: Reading Between the Lines
-Trump’s Militaristic PR: The Mutt and Jeff Foreign Policy

US-led Bombing of Syria: Donald Trump’s Mutt and Jeff Reality Show

Are we headed for World War 3?

The way most of the establishment media has projected unfolding developments in the Middle East, a buildup of such frightening impression can be irresistible

But nothing is what it seems.

Events Leading to Syria’s Bombing

Here is the back story.

Last March 17, RT.com warned of a possible false flag in chemical attacks, which would be blamed on Syria and Russia, could be in the works: “Russia’s Defense Ministry says “US instructors” are training militants to stage false flag chemical attacks in south Syria. The incidents are said to be a pretext for airstrikes on Syrian government troops and infrastructure. “We have reliable information at our disposal that US instructors have trained a number of militant groups in the vicinity of the town of At-Tanf, to stage provocations involving chemical warfare agents in southern Syria,” Russian General Staff spokesman General Sergey Rudskoy said at a news briefing on Saturday.”

Either the Russian’s government has smelled something cooking or they were telegraphing their moves intended to psychologically shift the blame to the West once they acted.

But why should the Russians do so when Mr. Trump even tinkered with the idea of a US troop pullout in Syria?

Last March 29, US President Donald Trump defied Pentagon’s desire to keep US troops in Syria and suggested a pullout. Mr. Trump said the US will "be coming out of Syria like very soon”.

In the next few days, Mr. Trump backpedaled; he reportedly had been “persuaded not to pull out immediately”.

For the recalcitrant Mr. “art of the deal” US President to have changed his mind would have entailed either a deal had been consummated or vested interest groups or “the deep state” may have overwhelmed Mr. Trump

And while Trump may be seen as de-escalating, the West continues to demonize and intensify their geopolitical strains with Russia.

The Russian government has been accused of meddling in US elections and for being instrumental in having Donald Trump as President

The Russian interference in domestic politics has supposedly spanned 27 nations since 2004.

Forget that as the policeman of the world, the US government has had more interventionist role in global affairs. For the establishment, the only government entitled to interfere with the domestic political concerns of ‘sovereign’ states would be the US.

And because Russia has been portrayed as evil, brinkmanship politics has only been mounting.

The British government accused its Russian counterpart of deliberating poisoning double spy agent Sergei Skripal his daughter Yulia Skripal with a deadly nerve ‘Novichok” agent, early March. While both parties have accused one another of responsibility, the government of United Kingdominitiated the expulsion of Russian diplomats. The governments of the US and other European nations followed (Independent March 26, 2018).More than 20 nations ejected Russian diplomats almost simultaneously. The Russian government retaliated on most of these countries tit-for-tat.

However, the US expanded actions against Russia. Aggravated by the Skripal episode, additional sanctions were slapped against Russian oligarchs and on government officials last week.  The Russian government reportedly has plans to restrict titanium sales to Boeing as part of the countermeasures on US sanctions.

Ironically, the Skripals survived what was supposedly an assassination attempt by the Russian government! Such incompetent Russians!

Why should the world be at risk of a war with merely the poisoning of a spy double agent?

Have talking and due process been passé?

Worst, an attack on non-combatants with chemical gas in the last held rebel town of Douma reportedly claimed 70 lives. Three days after Mr. Trump’s announcement that the US would keep its troop in Syria, the gas attack struck.  What a coincidence.

And the Syrian government, as well as Russia and Iran were impulsively and automatically blamed by the US President Trump and allies for such ghastly act.

From Trump’s Tweet: “Many dead, including women and children, in mindless CHEMICAL attack in Syria. Area of atrocity is in lockdown and encircled by Syrian Army, making it completely inaccessible to outside world. President Putin, Russia and Iran are responsible for backing Animal Assad. Big price.”

Again, have talking and due process been passé?

Since the Russian government pushed back on such accusations and warned that they would correspondingly respond to a military strike in Syria, US President Donald Trump responded in a tweet“Russia vows to shoot down any and all missiles fired at Syria. Get ready Russia, because they will be coming, nice and new and “smart!” You shouldn’t be partners with a Gas Killing Animal who kills his people and enjoys it!”

Wow. The prospects of World War 3 right at tweeter

Trump’s Bellicose Tweet: Reading Between the Lines

But I offer a different extended translation of Mr. Trump’s Tweet (A fictional message of Trump to Putin)

Hey Vladimir. You should know that I am a true friend.

You should also know I don’t just specialize in the “art of the deal”, I am an expert in managing media. I was a star in my own reality TV show. Let us use my expertise for us to gain an advantage on foreign policies and for entertainment

Let us do a Mutt and Jeff show. I, Donald, play the good cop, and you, Vladimir, the bad cop. That’s how the world wants to see it. So let us just give them one heck of a good time.

It should be a win-win for both of us.

Hey Vlad. You know that my trade war with Xi is connected to my sanctions against you. The world wants to see it as my “art of the deal”, so be it. Take a look. I pulled out of the Trans-Pacific Partnership in January of 2017, and now I am sending signals that I want back in!

Have you not been persuaded?

Let us go back to Syria. You, Mr. Rouhani and Mr. Assad have nearly beaten the rebels sponsored by the inner sanctums of my government. Though I publicly asserted that support for these rebels would end, you know that that’s not gonna happen.

And that’s just one of the reasons why a show of force was imperative. It was not about chemicals, or the collateral damage, but about both of our political survival.

We don’t want to end this world, do we?

Besides I am not permitted to end the war in Syria. There are many factions in my government and among my allies who want Assad out and the Iranians thrashed.

So my “art of the deal” foreign policy governance has been to seek a compromise among these groups.

Israel’s Bibi Netanyahu has been uncomfortable with Assad’s progress against the rebels. Israel has been apprehensive over losing out to Iran as the region’s key political power. Even more, Israel’s water supplies have been in peril.  That’s why they have been pressing on me. Since a large part of my voting base comes from them, I have to do something.

Saudi’s Mohammed bin Salman (MBS) has also been a key ally who shares Israel concerns about losing regional power to Iran. A critical foundation behind the US dollar status as the international reserve currency has been due to Saudi’s support of the Petrodollar system. Traded in US dollars, the excess oil revenues are plowed back to finance the US debt. In return for the seignorage privilege, the US government provides protection to the Saudis and other friendly oil producers.

For this reason, Saudi Arabia is almost an unexpendable ally. Most of the perpetrators of 9/11 came from Saudi. Perhaps even the previous Saudi government may have been involved. But we in the US government has opted to close our eyes on it. And as much as 10,000 civilians deaths in the civil war of Yemen have been due to the repressive Yemen coalition which continues to receive support from Saudi’s MBS. But instead of bombing MBS, we have to continue to sell them weapons!

Sorry for the bifurcations or policy inconsistencies. Our preference for Bibi and MBS is a matter of national security.

And to assuage these groups by assuring them continuity of their political privileges, I had to publicly brand your friends as “destabilizers”. 

And there is more to the relationship. The selling of weapons to MBS and Mr. Netanhayu will benefit my other benefactors, particularly, the military-industrial complex.

I have exhorted Congress to approve my proposed increase of their budget to $716 billion in 2019. Again, this is largely due to our Mutt and Jeff relationship. The justification for the increase in funds for the good cop comes from the projected menace of the bad cop! Thanks, Vlad.

We used about 100 missiles to hit some of the targets, which I signaled to you before we struck.  If each (tomahawk) missiles cost $1.4 million, the April 14 operations amounted to a cool $140 million. That’s for missiles alone. I am quite sure that you, Vlad, can ask your government for budget increases to defend against the good cop.

And there is the neoconservative group, who have been influenced by philosopher Leo Strauss. They believe in the Wolfowitz doctrine that the US hegemony is an entitlement. They believe that geopolitical challenges to the supremacy of the US have to be arrested at all cost, even if it means World War III.  And even among fellow Americans, neocons would do anything including employing “deception, religious fervor and perpetual war to control the ignorant masses”.

So far I have given you the national interest.

I have a significant personal stake in this too. Without uniting the divisive and fragmented political environment, I cannot muster support for a bigger defense fund.

Because rallying against the bad cop would unify our political climate, what better way for you to grant me this opportunity to achieve a personal goal. In return, I will limit our exposure to Assad’s kingdom

This year’s April 14th operations haven’t been the first. You previously accommodated my bombing of Assad’s airbase on April 6, 2017.

To show the world I meant power, I did this just right after I had dinner with China’s President Xi, who said he understood what I did. Of course, Xi can’t complain. He was in my HOUSE (Mar-a-Lago resort)! That is how to negotiate from a position of strength!

Thanks to you, last year’s air strike gave me a bipartisan support. Perhaps that may have helped seal my signature tax law, the Tax Cuts and Job Act of 2017. Although of course, party-based votes mainly determined its passage, Republicans may have been unified partly through my actions on Assad.

If there was an Oscar’s for politics, Assad deserves the lead supporting actor award!

Another factor why I had to bomb Assad for the second time is because of partisan politics. I had to show to America and to the world that I don’t owe my power to you.

Though Special Council Robert Mueller’s investigation of my ties to you have led nowhere, it produced a nasty side effect: my personal lawyer for years, Michael Cohen, has now been embroiled in possible cases of fraud, tax evasion or even money laundering. To keep my steamy relationship with a hot porn babe off the public, Michael may have said something unsuitable. The Mueller investigation could use Michael’s lapse as leverage to find fault with me.

Hence underneath my belligerent tweet is a message of mutuality, joint participation, personal appreciation and peace.

My actions will punctuate on it.

Trump’s Militaristic PR: The Mutt and Jeff Foreign Policy

Let us see how my interpretation of Trump’s tweet figured.

On April 14th early morning Saturday, the governments of the US, United Kingdom and France rained down on several Syrian targets over 100 missiles (CNN: 110, Business Insider 118).

Almost double the number of missiles had been used in 2018 compared to the bombing of a Syrian airfield (59 Tomahawks) on 6th of April 2017(or a year ago!). The alleged use by the Syrian government of chemical weapons on non-combatants incited both events. 

Though many reports allege that the Russians were not “pre-notified” this year, the US-led strike force carefully avoided any encounter with them.

Here’s the thing.  A Bloomberg report noted that the US-led strike force “didn’t enter airspace guarded by advanced systems above Russian bases”, targets were “limited” to a “few linked to Syria’s chemical-weapons program”, “targets were chosen to minimize the risk of accidentally hitting Russian forces” and the “US used a hotline” on Russia “to ensure the airspace was clear”.

And while the US may not have directly notified the Russians, it was the French who did; “France said Russia was warned in advance of the strikes to avoid direct confrontation”.

Thus, the US-led bombing was derisively labeled by a Russian official as done by “political thugs” for “some militaristic PR for their own political reasons but they’re scared of getting hit back”.

The Russia government claimed that Syria’s old defense weapons system downed 71 out of the 103 missiles launched by the allies. Russia’s vaunted S-400 surface-to-air defense system may not have been used as reports indicate. With the element of surprise out of the equation, even a third world country like Syria can put up a good showing.

And the Russian government’s caterwauling of the bombing “an act of aggression” has been the same today as was a year ago!

Perhaps the US bombing of Syria will become a yearly April Trump-Putin Two-to-Tango affair!

Here’s more. Donald Trump declared Syrian bombing as “Mission Accomplished” which intended to signal the culmination of the short campaign.  This declaration was echoed by the Pentagon who said that this was a "one-time shot" at Syria.

Donald Trump’s Mutt and Jeff Syrian Realty Show seems to have worked.

Mutt and Jeff should be better than risking the end of the world.

But the most optimal option wouldn’t be Mutt and Jeff.

And while it may be win-win for Trump and Putin, for pawns to suffer (collateral damage) from such political maneuverings signifies an act of obnoxious immorality 

And there's the financial aspect. The launching of the US-led airstrikes against Syria may have been timed coincidentally with closed financial markets. Could it be because Mr. Trump has owned the upside run of the US stock market, such an event would burden the queasy market and hit Trump’s popularity?

Finally, since sanctions imposed against Russia is just an extension of Trump’s “trade war” with China, the ensuing reduction in trade and investments and confiscations will translate to the diminishment of global liquidity. With global debt reported at $237 trillion in 2017, just how will the system cope with diminished commerce and liquidity?

Thursday, April 12, 2018

Yields of Philippine 10-year and 25-year ROPs and T-Bills Soar! Has Credit Risk Emerged from the War on Boracay???

“I think they've [Labour Government] made the biggest financial mess that any government's ever made in this country for a very long time, and Socialist governments traditionally do make a financial mess. They always run out of other people's money. It's quite a characteristic of them. They then start to nationalise everything, and people just do not like more and more nationalisation, and they're now trying to control everything by other means. They're progressively reducing the choice available to ordinary people”—Margaret Thatcher


Yields of Philippine 10-year and 25-year ROPs and T-Bills Soar! Has Credit Risk Emerged from the War on Boracay???

Wow. Aside from shifting from the USD-Php to the ROP market, liquidity strains have escalated!
 

The ROP 10-year yield spiked to 7%, a level last reached in 2011! And the 25-year ROP yield has rocketed to the same level!
 
Even more interesting, yields of ROP bills, the 1-month, 3-month and 6-month bills have spiraled to similar levels!

 
 
 
Interestingly, the 1-month and 6-month yield has breached the BSP’s ceiling (O/N Lending rate) on its corridor system!

Money has been tightening on its own! 

 

Soaring short-term yields could have most been likely about stubbornly rising inflation expectations.

For the long end tenors, aside from the combo of inflation and more supplies, I’d add credit risk to it.

Statistics is the principal tool used by the National Government in formulating policies for implementation. Scarcely has the economy been seen as a dynamic and complex process reflecting the human action 

These soaring yields are manifestations of tightening liquidity.

I think that the NG has not appraised the liquidity aspect from its war on Boracay and or its war on Tourism

The government estimates that there would be some Php 20 billion in lost revenue. They see these statistics and then stopped thinking.

They have taken for granted people’s response in the context of the complex interlocking latticework of the demand chain, the supply chain and credit flows

Boracay doesn’t operate in a vacuum

Lost revenues will transmit not only as losses in earnings, rents, wages and jobs but as diminished consumption. Hence, demand will fall not only on Boracay but on where its stakeholders usually spend their income.

Boracay doesn’t operate in a vacuum

Supplies for the island’s commerce usually emanate from within the Western Visayan Region or its neighbors from Region 6 (Aklan, Antique, Capiz, Guimaras, Iloilo and Negros Occidental).

Thus, the initial blow from Boracay’s repression will be in the demand and supply chains of the region.

And the subsequent ripple should spread around the country. Perhaps by the end of the year, the effects should be evident nationally.

Boracay doesn’t operate in a vacuum

Bank credit growth has been booming in the hotel and food industry. The BSP doesn’t provide detailed distribution on the banking’s system’s loans

Nevertheless, given the vibrant credit growth nationwide, certainly Boracay’s economy have gorged profusely on credit as well

And by closing the island, Mr. Duterte may have pricked the nation’s credit bubble.

The island’s business losses will now segue into loan delinquencies or bad debts that will slam banks and other creditors. Bad debt will most likely rise first in the Western Visayan Region and then spread elsewhere.

Surging long-term yields could be the emergent manifestation of the credit risks!

Mr. Duterte’s attack on commerce (capitalists) from different angles will exacerbate on this.

Curiously, Mr. Duterte first denied knowing about plans to construct a casino. He also claimed Boracay will be distributed as land reform.

The bizarre part from this has been that Mr. Duterte entertained the entourage of the Chinese casino investor last December. And media reports say that there are no farms in Boracay.

These are smokescreens meant to divert the public

I end this outlook with a sullen excerpt from a publicly listed company with substantial exposures in Boracay

Friday’s Holdings, Inc., owner and operator of Friday’s Boracay Beach Resort, despite 100% full DENR/DILG compliant is affected by theimpulsive pronouncements by the government to close Boracay for six months effective 26 April 2018.

1) The closure and prior threats in the press are right in the middle of our summer high season; and this has caused almost Php 22 million in advanced deposit cancellations from places like China and Germany.

2) Total estimated losses due to fixed costs and expenses to be incurred representing utilities, maintenance, repairs, depreciation, personnel costs for engineering, housekeeping, accounting and other general expenses would be around Php 35 million with an estimated monthly foregone revenues of Php 6.5 million for seven months from April to October 2018.

3) Our poor staff of 80 receiving 15k to 20k per month will mostly be laid off.

4) Of our people only 15 to 20 will be transferred to the new hotel, Friday’s Puerto Galera Beach Resort, a 100% full environmentally compliant structure in that tourist destination which soft opened in December 2017. We lament and cry for what the other 60 employees of 12 years avg. loyal service told us yesterday: they will go home to Roxas, Kalibo, and Iloilo; and raise vegetables and live off the plants at home until Boracay is re-opened.

5) This 6-month closure came suddenly and whimsically, without rigorous thinking. Maybe it could be shortened as suddenly by the government at least for non-violators like our heavily invested Fridays Boracay Resort at the current market price of 120k per sq.m. without the value of the building, the hotel’s 1.5 hectare prime beach frontage parcel is valued at Php1.8 billion, and it will soon not be yielding anything good to support BHI's livelihood. BHI and its people will be living on razor thin earnings because of the close of our crown jewel.

Mr. Duterte’s grand socialist projects will be jeopardized if liquidity continues to evaporate