Submitted by David Stockman via Contra Corner blog, The giant credit fueled boom of the last 20 years has deformed the global economy in ways that are both visible and less visible. As to the former, it only needs be pointed out that an economy based on actual savings from real production and income and a modicum of financial market discipline would not build 65 million empty apartment units based on the theory that their price will rise forever as long as they remain unoccupied! That’s the Red Ponzi at work in China and its replicated all across the land in similar wasteful investments in unused or under-used shopping malls, factories, coal mines, airports, highways, bridges and much, much more. But the point here is that China is not some kind of one-off aberration. In fact, the less visible aspects of the credit ponzi exist throughout the global economy and they are becoming more visible by the day as the Great Deflation gathers force. As we have regularly insisted, there is nothing in previous financial history like the $185 trillion of worldwide credit expansion over the last two decades. When this central bank fueled credit bubble finally reached its apogee in the past year or so, global credit had expanded by nearly 4X the gain in worldwide GDP. Moreover, no small part of the latter was simply the pass-through into the Keynesian-style GDP accounting ledgers of fixed asset investment (spending) that is destined to become a write-off or public sector white elephant (wealth destruction) in the years ahead. The credit bubble, in turn, led to booming demand for commodities and CapEx. And in these unsustainable eruptions layers and layers of distortion and inefficiency cascaded into the world economy and financial system. One of these was an explosion of CapEx in the oil patch and the mining sector in response to massive price and margin gains and the resulting windfall rents on existing assets. In the case of upstream oil and gas, for example, worldwide investment grew from $250 billion to $700 billion in less than a decade. Needless to say, there is now so much excess supply and capacity on the world market that oil has plunged into a collapse that is likely to last for years, as old investment come on-stream while world demand falters in the face of the gathering global recession. Already, investment is estimated to have dropped by 20% in 2015, and that is just the beginning. This unfolding collapse of oil and gas investments, of course, will ricochet through the capital goods and heavy construction sectors with gale force. Eventually, annual investment may decline by $250 to $400 billion before balance is restored, meaning that what were windfall profits and surging wages and bonuses in these sectors just a year or two back will evaporate in the years ahead. Contrary to the circular logic of our Keynesian central planners and Wall Street stock peddlers, the pending massive loss of value added capital spending in the energy patch is not a part of some grand reallocation game; it won’t be made up by households—-which are already at peak debt—— borrowing even more in order to go to the restaurant or yoga studio. Instead, as the credit bubble begins to shrink it means that profits, incomes, balance sheets and credit-worthiness are all shrinking, too. So is the related GDP. The same kind of malinvestment occurred in the mining sectors where Australia’s boom in iron ore, coal, bauxite and other industrial materials provides a good proxy. As shown below, CapEx in mining grew by nearly 6X in less than a decade. But given the massive oversupply and plunging prices and margins in these commodities, and the overhang of still more capacity in the pipeline coming to completion, it is fair to say that investment in the global mining industry is sinking into a depression that will last the better part of a decade. Indeed, as shown above, global mining industry CapEx soared by 5X during the seven years through the 2012 peak, but the overwhelming share of that was in greenfield and brownfield investments. Yet given the massive global overcapacity in iron ore, copper, metallurgical coal, bauxite/alumina etc., those kinds of projects are likely to be few and far between in the years ahead. Needless to say, that means shrinking profits and the massive loss of high wage jobs and vendor service contracts. Even baristas at Starbucks do not earn a fraction of what had been paid to miners and UAW members on the Caterpillar assembly line. Nor was the credit-fueled CapEx boom limited to energy and metals. Bloomberg carried a story today outlining a similar super-cycle in the global rubber industry. As a result of massive rubber plantation expansion in response to soaring prices and windfall profits, the industry is now facing investment and job killing surpluses as far as the eye can see. Global demand for natural rubber, used mostly in tires, is slowing as the economy cools in China, the world’s largest buyer of new cars. Supplies are expanding after a decade-long rally in prices to a record in 2011 encouraged top producers like Thailand, Indonesia and Vietnam to plant more trees. Output will exceed use for two more years, with the surplus quadrupling in 2016, according to The Rubber Economist Ltd., a London-based industry researcher. ……Rubber traded in Tokyo, a global benchmark, has tumbled 70 percent from a record in 2011, touching a six-year low of 153 yen ($1.26) a kilogram on Nov. 6. Futures in Shanghai have slumped 22 percent in 2015. The export price from Thailand, the top producer, is down 23 percent….. Global production is set to exceed demand by 411,000 metric tons next year and by 430,000 tons in 2017, compared with a surplus of 98,000 tons in 2015, The Rubber Economist predicted on Dec. 9. Output will increase 3.8 percent next year to 13 million tons and will keep expanding through 2018, the researcher said. Consumption won’t grow nearly as fast, which will leave stockpiles by the end of 2017 at a record 3.7 million tons, said Prachaya Jumpasut, managing director of The Rubber Economist. Excess supplies may keep prices subdued for a decade, said Hidde Smit, an industry adviser who has studied the market for more than 30 years and is the former secretary-general of the International Rubber Study Group. Even with some smaller farms cutting back now, the planted area across 11 Asian countries that are the primary growers has surged 45 percent since 2004, he said. So with producer profits and incomes falling in commodity sectors and capital goods industries all over the world, there is no prospect of a smooth rotation into more services and consumption. Deflation means not just lower oil or steel prices; it also means the evaporation of production and incomes which were falsely inflated by the 20-year credit binge. And that’s not the half of it. The massive windfalls on commodities and capital goods earned by producers during the great credit inflation were not entirely reinvested in new capacity and fixed assets. As the Wall Street Journal documented recently, it also enabled a huge increase in the balance sheets of sovereign wealth funds due to state ownership or heavy taxation of oil and mineral production. But now the days of heady accumulation of “sovereign wealth” in Saudi Arabia, Norway, Kazakhstan and dozens of commodity producers in between is over and done. What is happening is that these funds are entering a cycle of liquidation which is unprecedented in financial history. Indeed, the data for Saudi Arabia, Qatar, Kuwait, the UAE and other members of the Gulf Cooperation Council (GCC) is stunning. During the global credit boom they amassed sovereign wealth funds totaling $2.3 trillion. But with deficits now estimated at 13% of GDP and rising, the level of asset liquidation is soaring. Thus, if crude oil prices recover to $56 per barrel next year, the GCC states will need to liquidate $208 billion of investments. Yet if prices fall to $20 per barrel, as Goldman Sachs has warned, they would need to liquidate nearly $500 billion of their booty in a single year. But regardless of the exact crude oil path in the years ahead, prices are sure to stay in the sub-basement for an extended period. That means that the GCC states may need to liquidate the entirety of their sovereign wealth funds by early in the next decade. The same is true on a worldwide basis for all of the energy and mineral based sovereign wealth funds. They will be in a liquidation mode for years to come as the great commodity deflation runs its course. In a word, the unnatural Big Fat Bid of the sovereign wealth funds is going All Offers as oil and commodity producers struggle to fund their budgets. Stated differently, just as the commodity bubble effects did not stay contained in the energy and metals markets as the global credit bubble expand, the same will be true in the deflation cycle. The unfolding correction of the visible excesses of the credit inflation - such as overinvestment and malinvestment - will destroy incomes and profits; the Great Unwind of the less visible effects, such as the sovereign wealth fund liquidations, are a giant pin aimed squarely at the monumental worldwide bubbles in stock, bonds and real estate.
Submitted by David Stockman via Contra Corner blog, The S&P 500 closed at 2052 on November 18,2014. That was 405 days ago, and despite the rips and dips in the interim the broad market average has gone nowhere. So two of the Wall Street bromides that have lured punters into the casino since the March 2009 bottom are now failing. To wit, there have been about 33 attempts to rally off the dip during that period, but that gambit is self-evidently no longer working. Likewise, fear of being left on the sidelines is rapidly abating; at some point soon safety on the sidelines will be hard to deny. ^SPX data by YCharts By contrast, during the approximate 2,100 days between the March 2009 stock market bottom and November 2014, there were only two periods when the S&P 500 treaded water for any appreciable period of time; and those were early in the Fed’s latest cycle of bubble inflation. Thus, between April 20, 2010 and November 9th of that year, you could have been on the sidelines for 203 days without missing any gains, and between the July 2011 debt ceiling crisis and early February 2012 there was another 190 day period of sideways action. But other than during those two episodes, the dry spells were infrequent and increasingly shallow as the equity bubble inflated. Accordingly, during 80% of the time (1700 days) there were no extended drawdowns, plenty of dips to buy and a fairly considerable “cost” to being on the sidelines. Indeed, for the period as a whole, the S&P 500 index gained 206%. ^SPX data by YCharts But now the market has struggled to merely drift sideways for 405 days and counting. So why are the die-hard gamblers and robo-machines still buying—-even if fitfully—– when there are stiff economic headwinds gathering from all points on the global economy’s compass, and when the casino itself has clearly lost its mojo? And how in the world does the mainstream financial press still blather on about 4 days left for the Santa Claus rally? The short answer is two decades of financial repression and open-throttle money printing by the central banks have destroyed honest capital markets and completely disabled price discovery in the stock market. What is left is a mechanical routine whereby the fast money chases the chart points by the hour and day, while the Wall Street sell-side desperately attempts to lure the retail sheep with yet one more rendition of the hockey stick incantation. But now its getting truly absurd. The 2016 consensus for ex-items earnings is currently $126 per share, meaning that there is allegedly still plenty of room for the bull to run. After all, at today’s S&P 500 index level that’s a forward PE of only 16.3X. Well, not exactly. With most of the results in for Q3 2015, reported earnings for the last 12 months (LTM) came in at $90.66 per share; and those are the kind of GAAP earnings that exactly one thousand CEOs/CFOs of the S&P index companies signed as fair and accurate on penalty of jail time. Needless to say, that LTM result doesn’t bring Cramer’s buy-buy-buy button to top of mind. In fact, it reflects a thumping 15% reduction from $106 per share of S&P 500 earnings reported one year ago for the September 2014 LTM period. Stated plainly, why would you pay 22.7X for earnings that have dropped all the way back to the level ($90.95/share) reported for June 2013? As it happens, even Wall Street’s ex-items game doesn’t help much, and actually points squarely at the skunk in the woodpile. Thus, if you don’t count roughly $150 billion of collective S&P “nonrecurring” losses over the past year “ex-items” earnings came in at $104 per share for the September LTM period. This magical inflation of earnings by 15%, of course, is all just Wall Street snake oil. The fact is, goodwill write-offs from failed M&A deals, restructuring charges owing to the closure of facilities and firing workers, charges for the cost of executive stock options, write-downs of inflated mineral and energy reserves and many more like and similar “one-timers” reflect the destruction of corporate cash and other real assets. But where the true absurdity actually lies is in the hockey stick path of even these artificially bloated ex-items profits. Specifically, as of March 2014, the ex-items consensus for 2015 was a whopping $137 per share—-an estimate that dropped to $118 per share by March 2015 and is now struggling to make $104. That’s right. During the last 21 months the Wall Street hockey stick has been deflated by 24%! Still, Charlie Brown and Lucy can’t hold a candle when it comes to the game of moving the football before the kick. The consensus outlook for 2016 started out at nearly the identical spot—-$135 per share—–in March 2015 and has already tumbled to $126, and there is still a whole year of reality to unfold. But here’s the thing. Why would you expect corporate earnings—even the ex-items variety—-to rise nearly 20% during the coming year? Needless to say, the headwinds are numerous and some of these will be recounted in the coming days. But two of them merit brief mention. First, even the tepid growth of ex-items earnings in recent years was mainly due to share buybacks and other financial engineering maneuvers. To wit, between the LTM period for September 2011 and the most recent period ex-items earnings grew from $94.64 per share to $104. That’s just 10% or 2.4% annually. And over half of that was due to shrinking the share count. Stated differently, during the final four years of QE, corporate earnings even on an ex-items basis grew at less than 1% annually before share buybacks. And that was with the tailwinds of massive QE, rock bottom interest rates and the final phase of the global credit inflation and artificial economic boom in China and the EM. By contrast, the Fed is now slouching toward normalization, the massive global dollar short is facing an endless margin call and world trade is heading into negative territory in the period just ahead. This time, however, these obstacles to organic earnings growth cannot be compensated by financial engineering. The fact is, there was upwards of $8 trillion of share repurchases and M&A based share shrinkage during the last six years. On the margin, this massive equity liquidation was funded with borrowed money, not operating cash flow, and much of the latter was below investment grade. But with the junk debt market cratering, that artificial boost to EPS is vanishing fast. Secondly, there is more to the unwinding of the global credit bubble than simply bone rattling commodity deflation, a worldwide CapEx depression and shrinking trade, GDP and corporate profits. What’s also happening is that the massive windfall profits generated during the 1994-2014 credit driven boom are about to be clawed back. That is, the massive inflation of oil, metals and other commodity prices and profits were partially captured by sovereign wealth funds. The magnitude of their expansion during the past decade is staggering, as shown in the chart below. During that period these funds grew from $1.6 trillion to $7 trillion, and much of this went into dollar and euro markets for stocks and bonds. But as the Wall Street Journal pointed out in a piece over the weekend, the days of heady accumulation of “sovereign wealth” in Saudi Arabia, Norway, Kazakhstan and dozens of commodity producers in between is over and done. What is happening now is that these funds are entering a cycle of liquidation which is unprecedented in financial history. And it is likely to continue for years to come as the great commodity deflation runs its course. In a word, the unnatural Big Fat Bid of the sovereign wealth funds is going All Offers as oil and commodity producers struggle to fund their budgets based on break-evens that are double or triple the $30 dollar oil price that is destined to prevail for years to come. Now, some funds are shrinking or are being tapped by governments as oil revenues fall. That is forcing them to borrow or sell investments, potentially pressuring global markets just as other investors are pulling back from risk. Saudi Arabia’s central bank, which functions in some ways like a sovereign-wealth fund as it holds significant reserves that are invested widely, has sold billions in assets this year. Norway says it plans to tap its fund, the world’s largest, for the first time in 2016. Call that a double whammy. The C-suite will be drastically curtailing its injection of cash into the casino because it will not be able to borrow as readily, if at all, to buyback shares and fund M&A deals; and the sovereign wealth funds will be disgorging the windfall profits that they had temporarily parked in the casino in order to compensate for the drastic plunge in current cash flow. Even if profits do not continue to fall beyond the 15% drop already recorded for GAAP earnings during the LTM period just ended, that hardly constitutes a recipe for sustaining the massive multiple expansion that has occurred during the last several years. Back in Q3 2013 when the S&P 500 companies posted $91 per share on an LTM basis or exactly the same number as for the most recent period, the S&P 500 index was trading at 1600, implying a PE multiple of a hefty 17.6X. Today it closed at 22.6X the same level of earnings. So five points of multiple contraction alone would amount to a 22% decline in the index - and that’s before recessionary forces hammer reported profits in the time worn manner.
Western sanctions have delayed work on the Tsentralnoye offshore field in the Caspian Sea, The Times of Asia reports the president of Russian oil company Lukoil, Vagit Alekperov, as saying. The field is jointly being developed by Russia’s Lukoil and Gazprom and Kazakhstan’s...
Iran fulfilled a key commitment under its nuclear deal with the U.S. and other world powers on Monday when it shipped more than 25,000 pounds of low-enriched uranium to Russia.Secretary of State John Kerry praised the move in a statement that also briefly alluded to new disputes over the deal, which is expected to be fully implemented sometime in January."This removal of all this enriched material out of Iran is a significant step toward Iran meeting its commitment to have no more than 300 kilograms of low-enriched uranium by Implementation Day," Kerry said. "The shipment today more than triples our previous 2-3 month breakout timeline for Iran to acquire enough weapons-grade uranium for one [nuclear] weapon, and is an important piece of the technical equation that ensures an eventual breakout time of at least one year by Implementation Day."Kerry thanked Russia — "a country with significant experience in transporting and securing nuclear material" — as well as Kazakhstan, Norway and other nations who helped Iran export the uranium by ship to Russia. Kazakhstan and Russia have provided Iran with natural uranium in exchange for the enriched material. Norway helped fund the commercial transactions involved, Kerry added. The International Atomic Energy Agency has to verify that Iran now has less than 300 kilograms of enriched uranium stockpiled; the U.N. watchdog also has to sign off on Iran's other moves before the U.S. and its international partners lift sanctions on the country as part of the nuclear deal struck in July. The IAEA also will monitor Iran's program after Implementation Day to ensure that it does not seek to produce nuclear weapons.Iran has always insisted its nuclear program was for peaceful purposes, but it agreed to the deal with world powers so that they would lift sanctions that have badly damaged its economy.As Implementation Day nears, concerns about the nuclear deal are surfacing. Republican-led critics of the nuclear deal are warning the Obama administration not to ignore Iran's non-nuclear activities in the Middle East. Iran, meanwhile, is objecting to new U.S. visa rules it says violate the nuclear deal by undermining Iranian businesses.In his statement, Kerry insisted that the U.S. "remains fully committed and on track to implement its sanctions-related commitments." In an apparent reference to the visa dispute, he added, "It is not the policy of the United States to prevent permissible business activities with Iran."
We’re nearing the end of this year, and that’s when the major banks come out with their Christmas shopping lists. And of course as you could have expected, not a single decent bank is even considering to add gold to the list, and the bearish voices are now stronger than ever before. Source: birchgold.com Goldman Sachs expects the price of the yellow metal to fall to $1000/oz whilst the Bank of America, BNP Paribas and ABN Amro all expect the gold price to fall below the $1000-level in 2016. That reminds us of the exact opposite stance just a few years ago when gold was skyrocketing. Back then everybody was saying the yellow metal was a very useful addition to a portfolio and even the common man in the street was considering buying gold. And of course, that has proven to be a good counter-indicator. The more gold is liked/hated by the common man, the higher the chance is its price will undergo a correction/put a bottom in place. And that might be exactly what we are seeing here at the $1080-1060-level. The gold price has tested this theoretical and technical bottom a few times but has repeatedly failed to fall towards a triple-digit number and always bounced slightly. Of course, that’s not a good enough reason to run out and increase your exposure to gold as we’re obviously not out of the woods just yet, but there’s a bigger picture we’d like to present here. Source: silverdoctors.com We all know the non-conventional countries are still keen on getting their hands on even more gold, and when the gold price falls, these countries are actually stepping up their buying pace. Russia, for instance, has purchased 5.27 million ounces in the first ten months of this year and will very likely end 2015 with a 6M oz higher gold position compared to the end of 2014. That by itself already is a very interesting and important fact as it shows that even when the Russian economy is falling apart it still considers gold to be a very important part of its strategic reserves. The next chart shows you how gold as a percentage of Russia’s official foreign assets has evolved. And Russia obviously isn’t alone. Its friends in Kazakhstan have increased their gold holdings by 13% YTD and gold now accounts for 28% of the total amount of official reserve assets. Source: bullionstar.com China also continues to buy more gold and is believed to have purchased no less than 35 tonnes of physical gold in just October and November alone, increasing the official stash by 1.1 million ounces in just two months. In fact, when the gold price was correcting in November, China stepped up its buying rate by a stunning 40%, and we wouldn’t be surprised to see the country having imported an additional 20-25 tonnes of gold in December. And no, it’s not just Russia & friends and China that are buying gold, but India has also confirmed it expects to import 1,000 tonnes of gold this year, roughly 100 tonnes more than originally anticipated as the jewelers are stepping up the plate to take advantage of the current low price. All of this leads us to one question. Please, Goldman Sachs, BNP Paribas, JP Morgan and other Bank of Americas, please tell us why these countries are so keen to destroy their own wealth? There’s no fundamental reason why the gold price should go further south and the country with probably the best long-term vision (China, which is also stockpiling as much oil as its strategic reserve tanks can hold) is filling the basement of its Central Bank with newly-smelted shiny bars. >>> Protect Your Wealth: Download our Exclusive Gold Report Secular Investor offers a fresh look at investing. We analyze long lasting cycles, coupled with a collection of strategic investments and concrete tips for different types of assets. The methods and strategies are transformed into the Gold & Silver Report and the Commodity Report. Follow us on Facebook @SecularInvestor [NEW] and Twitter @SecularInvest
IRAN Milestone year in Iran's gas to power plans While Iran is preparing to enhance power plants to boost the efficiency rate from the current 35 percent to 45 percent, the country increased the share of gas in power plant's fuel significantly. Deputy Energy Minister Houshang Falahatian said on December...
Жить в городе мечты, Париже, который еще называют городом влюбленных – желание многих людей. Однажды увидев красоту Елисейских полей, романтичную Эйфелеву башню и чистые воды Сены, в этот европейский мегаполис влюбляются и стремятся многие ребята. Может быть, именно поэтому население Парижа многонационально. В том числе, здесь можно встретить и казахстанцев, по тем или иным причинам оказавшихся в столице Франции. Своими историями поделились двое «парижан из Казахстана» с корреспондентом NUR.KZ. «В Париже мы обучаем казахским танцам» — история Маржан Камардиновой Трудности казахстанцев До Парижа я жила и училась в Москве. Закончив МГУ, решила продолжить учебу и как страну обучения выбрала Францию. Здесь сильное и престижное образование, к тому же Франция выделяет много грантов для иностранных студентов, нужно только сдать экзамен, подтверждающий свободное владение французским языком. Языка я не знала, поэтому записалась в языковую школу в городе Бордо и поехала учить французский. Поиск жилья – это одна из трудностей, с которой сталкивается иностранец во Франции. По закону квартирант должен иметь гаранта на случай, если он не сможет оплачивать аренду. Избежать этой проблемы мне помогла моя школа, предоставив мне французскую семью, в которой я жила. Мы много путешествовали вместе и всегда — за жилье, дорогу, еду – платили они. И такое отношение было к каждому студенту, кто снимал у них комнату, по сути это был целый этаж в трехэтажном доме. С ними я объездила все знаменитые виноградники близ Бордо, они показали мне курортный город Монпелье, поставили меня впервые на лыжи в Пиренеях, научили играть в гольф и большой теннис. А в момент, когда на меня однажды напала тоска по дому, Моник привезла меня на океан (я тогда его увидела впервые) в свой загородный домик, так сказать спасать от хандры и печали. Они помогали мне со всеми бюрократическими процедурами, с ними я узнала о традициях французских семей, благодаря им я смогла полностью интегрироваться в европейскую жизнь и, конечно, подтянуть свой французский язык. Я платила семье 250 евро, из них сто мне возвращались как социальная помощь студенту, о существовании которой я даже не догадывалась. Мои друзья из Америки, у которых было трое детей, получали такие пособия, что поначалу боялись их снимать – думали, что это какая-то ошибка. Я успешно сдала экзамен, поступила в магистратуру и переехала в Париж. Сегодня уже 5 лет как я во Франции, из них четыре в столице. С Парижем многое меня связывает. Здесь я вышла замуж (за казаха), мы расписались в мэрии в кругу друзей, было очень красиво и торжественно. Оттуда мы поехали кататься по городу, гулять и фотографироваться, а вечером пошли в ресторан. Все было легко и спонтанно. На следующий день уехали в свадебное путешествие в круиз по Средиземному морю, а позже в Казахстане сыграли свадьбу по нашим традициям. Недавно у нас родился сын. Несмотря на то, что он родился здесь, у него казахстанское гражданство, как и у нас. И у нас, и у французов – культ еды Французы во многом схожи с казахстанцами. И у нас, и у французов – культ еды. На протяжении долгого времени французы могут говорить о еде, будь то в дорогом ресторане или в кругу семейного застолья, делиться кулинарным опытом или адресами вкусной кухни. Однако у них есть определенные правила и очередность приема пищи, которые они не нарушают. К примеру, сыры — это десерт и никак по-другому их не едят. На завтрак традиционно подаются круассаны и кофе, обед здесь ровно в полдень, а ужин может длиться несколько часов. Французы уделяют особое внимание путешествиям и готовятся к ним основательно. Уезжают, как правило, на весь отпуск, чтобы от и до изучить страну пребывания. Выбирают места, которые еще не посещали и очень любят экзотику. У французов есть естественное желание обогатиться новыми знаниями, поэтому, когда спрашивают о Казахстане, я всегда с энтузиазмом отвечаю на все их вопросы. Видимо миссия такая у тех, кто живет вдали от Родины — рассказывать людям о ней и менять стереотипы, если таковые имеются. В Париже популярностью пользуется модная профессия — личный шоппер-стилист. Сегодня многие девушки, включая и наших соотечественниц, обращаются к ним за консультацией и помощью, потому как здесь очень легко затеряться в бесконечных магазинах одежды, аксессуаров, парфюмерии и косметики. Основной поток покупателей приходится на сезон скидок – в январе и в июле. Что касается местных женщин, то мне кажется, что чем старше француженка, тем она элегантнее, ухоженнее и красивее. Обязательны макияж, каблучок, украшения, подобранные аксессуары. Молодежь же, как будто, не придает этому особого значения, одевается просто и удобно. Но на вечеринки могут прийти ярко и стильно. Казашки здесь стараются хорошо выглядеть всегда. Это, наверное, особенность нашей национальности. Казахи в Париже В свободное время мы устраиваем пикники у берегов Сены и любим гулять у Эйфелевой башни. Этим летом мы ездили на Лазурный берег – Ницца, Канны, Монако. Зимой катаемся на лыжах в Альпах или Пиренеях. Франция компактна, она в пять раз меньше Казахстана, при этом очень богата на туристические места. В будни и в выходные посещаем выставки, экспозиции, концерты. На день-два можем съездить в такие красивейшие места как Мон-Сен-Мишель, Сад Клода Моне в Живерни, Этрета и Замки Луары. В Париже не просто красивые парки, в них живет история, особенно в Люксембургском и в Тьюлери. Кстати, в сентябре в одном из парков около тридцати казахов собрались на шашлыки. Вообще здесь очень дружная казахская диаспора. Наша ассоциация JAAK (с французского – «Молодой альянс друзей из Казахстана») старается создавать встречи и мероприятия, чтобы еще сильнее сплотить земляков. Мы обучаем казахским народным танцам и планируем устраивать встречи, на которых будем говорить исключительно на родном языке. В прошлом году с девушками из стран СНГ и Прибалтики, проживающими в Париже, мы создали женский онлайн-журнал «8 Парижанок». Изначально он создавался как блог-платформа о культурной жизни в Париже, кулинарии и детях; сейчас темы материалов значительно шире. Под ником Жанка-парижанка я пишу о беременности и материнстве, веду проект «Наши девушки с не нашими парнями», брала интервью у нашего соотечественника — легионера, освещаю казахстанские мероприятия, проводимые в Париже. С этими девушками мы также выступали на радио «Две Столицы» в Париже и вели свою передачу. О терактах В тот вечер вместе со своим девятимесячным сыном и подругами я ехала на репетицию. По средам и пятницам мы разучиваем казахские народные танцы. В дороге малыш вдруг стал капризничать, и девочки настояли на том, чтобы мы пропустили занятие и ехали домой. Так, по счастливой случайности, в момент терактов я была дома. Узнала о случившемся от парижских друзей, включила телевизор и … ком к горлу подступил. В Париже творилось страшное, город был перекрыт, движение транспорта приостановлено, подруги были вынуждены переночевать у одной из участниц нашего коллектива, проживающей неподалеку. Надо признать, что несмотря на ужас и панику, охватившей Париж, французы оставались верны своим принципам. Они твердили, что не имеют права бояться и сдаваться и на следующий же день вышли на улицы, чтобы почтить память ушедших, приносили цветы и свечи на места трагедий, неизвестный пианист сыграл «Imagine» Джона Ленона, другой устроил акцию толерантности «Если доверяешь — обними». Все это, чтоб продемонстрировать единство, мужество и силу. В такие моменты особенно сильно чувствуется третья составляющая девиза Франции «Свобода! Равенство! Братство!» Многие сейчас задаются вопросом, изменится ли отношение французов к мусульманам в связи с последними событиями. Вот, что по этому поводу говорят сами французы. Адвокат Даниэлла Мериан (Danielle Mérian) в интервью каналу BFM TV заявила: «Объединившись с 5 миллионами мусульман, практикующих свою религию свободно и мирно, мы будем бороться против 10 000 варваров, которые убивают якобы во имя Аллаха». Это видео получило огромную популярность и поддержку, в комментариях в шутку даже писали: «Мадам в президенты!». А журналист Антуан Лери (Antoine Leiris), чья супруга была убита во время теракта в парижском концертном зале «Батаклан», в своем фейсбуке написал: «Вы хотите, чтобы я боялся. Вы хотите, чтобы я относился к своим согражданам с недоверием и жертвовал свободой ради собственной безопасности. Вы проиграли». «Французский язык помог встретиться с Патрисией Каас» — история Андрея Иванова Однажды – во Францию Однажды я приехал из Усть-Каменогорска в Алматы поступать в КазГУМОиМЯ на «международные отношения» или переводчика – как повезет. Первым иностранным языком я хотел выбрать английский, но случайно зашел не в тот корпус и увидел, что все написано на французском, и меня поприветствовала одна из лучших преподавателей факультета Карбаева Айнур Садвакасовна. Так получилось, что я поступил именно на французское отделение, на грант, и стал изучать этот язык. Забегая вперед, скажу, что французский дал мне много возможностей – я работал переводчиком у Жерара Депардье, Патрисии Каас, Мирей Матье, Софи Марсо, Кристофера Ламберта, у Кевина Рони, персонального тренера Майка Тайсона и многих других. Также знание языка позволило мне участвовать в знаменитой экспедиции на велосипедах в составе 115 велосипедистов от Парижа до Пекина, первая экспедиция на велосипедах через весь материк Евразия в Истории человечества. Впервые я пересек всю нашу необъятную страну нашу от запада на восток. Во Франции я уже седьмой год. Сюда приехал, потому что выиграл стипендию французского Правительства, когда учился в Алматы и активно участвовал в жизни Французского Альянса города Алматы. Когда я увидел университет Париж — Сорбонна, у меня появилась мечта учиться здесь, в старейшем и самом известном университете Франции и через два года я поступил сюда. Сначала я закончил магистратуру в Высшей Школе Устных и Письменных Переводчиков при Сорбонне по специальности «Синхронный Перевод», затем поступил в магистратуру на экономиста, а потом – в докторантуру по экономике в том же университете. Сейчас я работаю экономическим аналитиком в Организации Экономического Сотрудничества и Развития (ОЭСР) по Программе повышения конкурентоспособности стран Евразии в международной команде по изучению Казахстанской Экономики. Наша Организация несколько лет занимается изучением экономики Казахстана и дает рекомендации нашей стране о том, какие секторы экономики нуждаются в развитии, и что нужно сделать, чтобы Казахстан мог повысить свою конкурентоспособность, инновационный потенциал и улучшить благосостояние своих граждан, а также вступить в подобную организацию, а это — закрытый круг самых развитых государств мира. Я считаю, что работаю во благо Казахстана и на моем скромном уровне вношу вклад в развитие моей Родины. Мне нравится, что у Казахстана большие амбиции. Во Франции сейчас стали все больше и больше говорить о Казахстане, как о главном дипломате Центральной Азии. Переводчик Президента Мне повезло работать переводчиком у Нурсултана Абишевича в его предыдущий приезд, у Патрисии Каас, которая была тогда приглашена на встречу. Президент мне показался человеком с очень сильной энергетикой. Когда стоишь рядом с таким человеком — могущественным, грамотным – это вдохновляет на подвиги, стремление учиться. Встреча с ним повлияла на то, что я стал учить казахский язык именно здесь, во Франции, и довольно успешно. В его недавний приезд Президент подошел к студентам, среди которых был и я, и поговорил с нами. Мне повезло больше всех, он подошел и пожал мне руку. Когда он спросил, чем я занимаюсь, а я рассказал о работе в ОЭСР, он ответил «Алга!». О Франции… Я думаю, что Франция – красивая и богатая страна во всех отношениях. Меня поразило, как бережно и с уважением французы хранят свою многовековую историю, богатейшее культурное наследие, памятники истории. Это страна парадоксов, потому что здесь все такие учтивые, улыбающиеся, вежливые, но при этом никто не уступает место в метро, будь то девушка или бабушка. Это шокировало меня, я до сих пор пытаюсь встать, когда вижу бабушку (французскую апашку или татешку), но они особо и не хотят садиться, как будто я на личное пространство претендую. Говорят, что французы не пунктуальны, но на самом деле они очень пунктуальны и серьёзны в работе. В личном плане французы очень веселый, жизнелюбивый и открытый народ. Они интересуются другими национальностями. Их ничем не удивишь, но когда я говорю, что я из Казахстана, они удивляются и проявляют большой интерес. Скучать здесь не приходится. В Париже проходят сотни, если не тысячи концертов, экспозиций и выставок каждый месяц. Я обогатился в культурном плане, играю на фортепиано, занимаюсь живописью, посещаю курсы театра, будучи в доме Мексики смог выучить испанский язык, а так же практиковать казахский – будучи не в Казахстане. Теперь я свободно владею 5 языками. Во Франции очень часто не принимают в университет, если у вас недостаточно опыта по специальности, на которую вы поступаете. Мне пришлось параллельно работать, чтобы нарабатывать опыт для резюме. Учиться интересно и очень трудно, мне повезло учиться на бесплатной основе, но отбор был жесткий: из 180 кандидатов на первый год магистратуры взяли около ста студентов, а на второй год магистратуры в Сорбонне прошло 33 человека, с дипломами вышло 30 человек. Но как бы мне не казалось это все трудным, я с легкость преодолевал любые испытания благодаря поддержке моих близких, мамы Нурганым, папы Владимира, сестры Оксаны, брата Виталия, близких и дорогих друзей. Не хватает бешбармака Главные расходы здесь во время учёбы – это жилье. Потому что здесь как таковых общежитий нет, где в одной комнате селят по несколько человек, как у нас. Тут у каждого своя комната, и это дорого. Я жил в международном студенческом кампусе la Cité Internationale Universitaire de Paris – это уникальное место, где есть 46 домов и каждый из них посвящен какой-нибудь стране. Я жил сначала в доме Ливана, а затем в доме Мексики. К сожалению, из государств СНГ представлена только Армения. У меня есть мечта — построить дом Казахстана на этой территории, чтобы студенты из нашей страны могли получить качественное и недорогое жилье во время учебы в Париже, а также познакомить с культурой Казахстана 12000 студентов из практически всех стран мира, которые проживают в этом кампусе ежегодно. Больше всего мне не хватало тут казахского гостеприимства, искренности казахов и нашей кухни. Очень хочется сорпы, бешбармака, казы, горячих баурсаков, шашлыка, корейских салатов, борща. Продукты питания недорогие, что-то здесь дороже, чем в Казахстане, что-то дешевле. В этом году сбылась мечта.. мои друзья казахи и я создали Ассоциацию Казахстанских Студентов во Франции официально зарегистрированная в префектуре – JAAK (Jeune Alliance des Amis du Kazakhstan). Цель — продвигать культуру Казахстана, помогать друг другу, организовывать мероприятия для казахстанцев и друзей Казахстана. Идея создания ассоциации появилась в 2009 году, когда я и мой друг Кайрат Жаксылыков приехали учиться во Францию. Он активно собирал казахов на вечеринки, культурные курултаи в Лионе, затем мы подключили казахстанцев в Париже и других городах. Сейчас я являюсь вице-президентом ассоциации, а Гульшат Дуллат — Президентом. Это очень серьёзная и трудолюбивая девушка, которая искренне любит родину и организует нашу ассоциацию. У нас есть девушки, которые обучают всех желающих казахским народным танцам, есть те, кто организовывает спортивные мероприятия. Недавно появился новый проект – впервые в истории франко-казахских отношений — курсы казахского языка для всех желающих. Единственная загвоздка – у нас нет пока помещения, где бы мы проводили уроки казахского языка и иногда — свои собрания, ведь сейчас приходится собираться, где придется. Надеюсь, что посольство Казахстана и наша страна помогут нам в этом начинании. Я рад, что наше посольство активно организовывает культурные мероприятия и праздники. Франция и Казахстан — настоящие друзья и деловые партнеры, и я верю, что эта дружба между нашими народами будет крепнуть все больше и больше. Жизнь после случившегося Мы с друзьями уехали отдыхать на берегу моря в город Довиль за пару часов до печальных событий, я плохо себя чувствовал из-за сезонного гриппа. По приезду в Довиль нас встретил стол с морепродуктами, но веселью не могло быть места: кто-то случайно включил телевизор для фона и мы услышали трансляцию новостей. Мне не верилось, что происходящие теракты происходят в Париже. Все это казалось каким-то нелепым и страшным фильм. Я не заметил, как уснул от усталости, переживаний и температуры. Я получил много смс, звонков и электронных писем в ту ночь. На следующий день, вернувшись в Париж, я увидел, что в городе тихо, прохладно. Казалось, стоило крикнуть изо всех сил и никто не услышит: такое ощущение пустоты и одиночества. В ту ночь Париж изменился. Люди пытаются показать, что все как прежде, что они так же беззаботны и веселы, но чувствуется грусть с оттенком страха. Повсюду стало больше полицейских, жандармов, военных собак. Надо сказать, что французы все больше воспрянули духом: большинство стран мира поддержали французов в этот нелегкий и печальный момент. Действительно, французы сейчас переживают не самый лучший этап в жизни государства, но все больше и больше в воздухе ощущается все та свобода, та дорогая свобода, за которую так яростно боролись французы на протяжении веков. The post «Парижане из Казахстана» рассказали истории своей жизни appeared first on Свежие Новости Казахстана на сегодня онлайн. Последние новости в мире и Казахстане на NUR.KZ.
Сохраняя верность глобальной политике корпоративной социальной ответственности LG Electronics, компания LGEAK реализует проект «LG. Заботясь о каждом». Одним из этапов которого стал онлайн конкурс «Время добрых дел», где люди делились трогательными, искренними рассказами о добрых делах свидетелями которых они стали. 25 декабря, 2015 года, г. Алматы – Компания LG Electronics Almaty Kazakhstan подвела итоги конкурса «Время добрых дел». На протяжении месяца каждый житель Казахстана мог принять в нём участие и поделиться самым трогательным рассказом о доброте, заботе, неравнодушных и отзывчивых людях. Наталья Новикова, директор по маркетингу LGEAK: «Забота о людях, стремление помочь, сделать жизнь комфортнее – принципы добра заложены в основе философии компании LG Electronics. В рамках конкурса «Время добрых дел» люди делились рассказами о хороших поступках, тем самым пробуждая в читателях лучшие качества. Мы хотим, чтобы цепочка добрых дел не прерывалась ни на секунду. Ведь энергия доброты заряжает людей, вдохновляет и пробуждает желание жить». На протяжении конкурса формировался рейтинг работ и были выбраны топ-10 лучших историй авторы которых получат в подарок сертификаты на покупку техники LG на сумму 60 000 тенге и 30 000 тенге. Ключевым моментом данного проекта стало и то, что набранные участниками баллы, стали частью суммы из 1 500 000 тенге, которые были перечислены LG на счет Общественного Фонда «Добровольное общество Милосердие», возглавляемого Аружан Саин. Фонд «Добровольное Общество Милосердие» одна из ключевых организаций, разделяющая стремление компании LG сделать мир ярче и лучше. Официально он работает с 2006 года. Фонд помогает детям из всех регионов Казахстана и является инициатором и организатором постоянной акции «Подари Детям Жизнь». Благодаря работе волонтеров были вылечены несколько тысяч детей, страдавших заболеваниями, неизлечимыми в Казахстане. Также как и компания LG, Фонд «ДОМ» уделяет большое внимание проблеме донорства в стране. В 2006 году, по инициативе команды фонда, был создан сайт www.donor.kz, в помощь детям с заболеваниями крови. Акция «ПОДАРИ ДЕТЯМ ЖИЗНЬ», организованная фондом «ДОМ», продолжается, и каждый может принять участие в помощи больным детям. Для этого необходимо отправить сообщение с цифрой 1 на короткий номер 9099 для абонентов KCELL и 8099 для абонентов Beeline и Tele2 (стоимость сообщения 280 тенге). Аружан Саин, директор благотворительного фонда «ДОМ»: «Для некоторых детей чудо становится возможным, потому что есть добрые, неравнодушные люди. Проект компании LG Electronics «Время добрых дел» стал отличным примером того, как важно заботиться о тех, кому нужна поддержка и помощь. Мы вкладываем свои усилия в одну большую идею, и это делает мир вокруг нас лучше и может спасти ни одну жизнь. Такие акции, меняют сознание людей». *На правах рекламы The post Итоги онлайн проекта «Время добрых дел» от LG Electronics appeared first on Свежие Новости Казахстана на сегодня онлайн. Последние новости в мире и Казахстане на NUR.KZ.
ALMATY, Dec 23 (Reuters) - Opponents and rights groups have accused authorities in Kazakhstan of clamping down on free speech on the Internet in order to keep a lid on discontent as falling oil prices push down people's real incomes.
Kazakh national operator KazTransGaz has announced that it has repaid a syndicated loan in the amount of $400 million early. The loan was received from international investment banks Citibank, ING Bank and Natixis, the press service of company reports. “Previously, as part of the [company's] work...
Russia Gold “Buying Spree” Continues – Buy 22 Tons In November - Russia adds another 700,000 ounces (22 tonnes) to gold reserves in November- Russian ally Kazakhstan increased gold reserves for 38th month to 7 million ounces- Russia has added 197.1 tonnes in 2015 – Compared with 172 tonnes in all 2014- November gold buying is Russia’s ninth straight month of increase- Russia now has sixth largest gold reserves in the world- Central bank buys all Russian gold production- Other Russian gold demand imported- Russia views gold bullion as “100% guarantee from legal and political risks” Russia continues to add to its gold reserves and added another 700,000 ounces in November or another 22 metric tonnes, and analysts believe this buying will continue and may intensify in the coming months. Russian ally Kazakhstan increased its gold reserves for a 38th month to 7.03 million ounces in November from 6.96 million ounces a month earlier. The latest large increase in Russia’s gold reserves – a “buying spree” as reported onReuters Africa has again gone largely unnoticed by most analysts. Indeed, the important monetary and geopolitical ramifications continue to be largely ignored in western media. Russia’s total gold reserves have now increased to 44.8 million ounces or around 1,392.8 metric tonnes, with a current value of just $48.3 billion. Russia’s total FX reserves are $371.2 billion and their gold allocation remains just 13% of their total reserves. The share of gold in Russian foreign exchange reserves is much lower than in many other countries such as the U.S., Italy and France. Russian diversification into gold is likely to continue and could intensify if relations with the U.S. and NATO powers further deteriorate. Russia still have less than a fifth of the gold reserves of the U.S. which are believed to be over 8,400 metric tonnes of gold. However, the U.S. has no foreign exchange reserves and is the largest debtor in the world – indeed it is one of the largest debtors the world has ever seen. Russia now has the sixth highest gold reserves in the world – behind the U.S., Germany, Italy, France and China. In 2014, Russia bought more gold in than in any year since the break-up of the Soviet Union. The country acquired over 173 metric tonnes according to World Gold Council figures. Reserve diversification intensified after April — averaging about 20 tonnes per month. Russia gold buying has intensified in 2015 and now stands at 197 metric tonnes year to date. Much of the gold bought likely came from Russian gold production which is currently at about 25 metric tonnes per month. In 2014, Russia was the third largest gold miner in the world at 266.2 tonnes, just six tonnes short of Australia in second place and China in first place. Thus, the Russian central bank is generally consuming all of Russian gold production and sometimes having to import gold. Therefore, all domestic demand for gold and Russia is an increasingly wealthy nation with thousands of millionaires and hundreds of billionaires including mega rich oligarchs. If any of these oligarchs decide to begin accumulating gold, then the already delicate supply balance in the physical gold market will be impacted resulting in much higher prices. It is worth noting that some of these oligarchs remain close to Putin and the Kremlin and thus this could be a coordinated strategy. Clearly, Russia puts great strategic importance on its gold reserves. Both President Putin and Prime Minister Medvedev have been photographed on numerous occasions holding gold bars and coins as a display of economic stability and strength and the central bank declared in May 2015 that Russia views gold bullion as “100% guarantee from legal and political risks.” Prudent investors are following Russia’s lead by diversifying and having an allocation to physical gold coins and bars. MUST READ GUIDE: Gold and Silver Storage Must Haves BREAKING GOLD NEWS and COMMENTARY TODAY – CLICK HERE GOLD BARS AT 2% PREMIUM, FREE DELIVERY & FREE STORAGE FOR SIX MONTHS ON ORDERS BEFORE DECEMBER 31st 2016 looks set to be stormy – never been a better time to buy gold Gold bars (1 oz, LBMA) at just 2% on orders placed prior to December 31st One of lowest premiums in market today for one ounce bullion coins and bars 50% reduction in premium on these gold bars Free storage for six months – allocated and segregated storage of your bars in safest vaults in world * This is a phone offer only** For storage – minimum order of 5 gold bars*** For delivery – minimum order of 10 gold bars Call Us Today To Secure Your Allocation IRL +353 (0)1 632 5010UK +44 (0)203 086 9200US +1 (302) 635 1160
Back in May, Seymour Hersh upended the “official” narrative surrounding the death of Osama bin Laden and in the process created a media firestorm prompting a response from the White House. The explosive revelations about the events that ultimately led to bin Laden’s demise came a year-and-a-half after Hersh accused the Obama administration of not telling the whole story with regard to an infamous sarin gas attack that nearly served as an excuse for airstrikes against the Assad regime in 2013. In the six months since Hersh’s bin Laden story made international headlines, the war in Syria has escalated meaningfully. Indeed, the country is now the theatre for what amounts to World War III with the US, France, Britain, Russia, Iran, Turkey, Saudi Arabia, Qatar, and Iraq all involved either directly or indirectly. As we noted just three days ago, we're beginning to see the formation of three alliances in the Mid-East: 1) Russia, Iran, Syria, and Iraq; 2) Turkey, Saudi Arabia, and Qatar; 3) Britain, France, and Germany. Here’s how we described the situation: The first alliance is pro-Assad, anti-terror. The second is anti-Assad, pro-Sunni extremist. The third is anti-Assad (although less vehemently so), anti-terror (conspiracy theories aside). Note that we've left the US out. Why? Because Washington is now stuck. The US wants desperately to maintain coordination with Ankara, Riyadh, and Doha, but between stepped up media coverage of Saudi Arabia's role in underwriting extremism (via the promotion of Wahhabism) and hightened scrutiny on Erdogan's role in financing terrorists, the position is becoming increasingly untenable. But aligning solely with the UK, France, and Germany entails adopting a more conciliatory approach to Assad - just ask Berlin which, as we reported on Friday, is now working with Assad's intelligence police and may soon establish a base in Damascus. Well, if you believe Seymour Hersh’s latest expose, we were even more right than we knew because as it turns out, some elements within the US military began tacitly cooperating with Assad two years ago after becoming concerned with Turkey and Saudi Arabia's support for Sunni extremists. In a new 6,600 word piece, Hersh details what he says was a covert plot by the Joint Chiefs of Staff to undercut the “Assad must go” line promoted and pursued by the Obama administration and the CIA on the way to sharing valuable intelligence with the Assad government. The report also verifies the role of Saudi Arabia, Qatar, and especially Turkey in arming and financing al-Nusra and ISIS. Hersh begins by recounting a secret assessment of the security situation in Syria that dates from 2013 : The military’s resistance dates back to the summer of 2013, when a highly classified assessment, put together by the Defense Intelligence Agency (DIA) and the Joint Chiefs of Staff, then led by General Martin Dempsey, forecast that the fall of the Assad regime would lead to chaos and, potentially, to Syria’s takeover by jihadi extremists, much as was then happening in Libya. A former senior adviser to the Joint Chiefs told me that the document was an ‘all-source’ appraisal, drawing on information from signals, satellite and human intelligence, and took a dim view of the Obama administration’s insistence on continuing to finance and arm the so-called moderate rebel groups. By then, the CIA had been conspiring for more than a year with allies in the UK, Saudi Arabia and Qatar to ship guns and goods – to be used for the overthrow of Assad – from Libya, via Turkey, into Syria. The new intelligence estimate singled out Turkey as a major impediment to Obama’s Syria policy. The document showed, the adviser said, ‘that what was started as a covert US programme to arm and support the moderate rebels fighting Assad had been co-opted by Turkey, and had morphed into an across-the-board technical, arms and logistical programme for all of the opposition, including Jabhat al-Nusra and Islamic State. He then moves immediately to indict Ankara: Lieutenant General Michael Flynn, director of the DIA between 2012 and 2014, confirmed that his agency had sent a constant stream of classified warnings to the civilian leadership about the dire consequences of toppling Assad. The jihadists, he said, were in control of the opposition. Turkey wasn’t doing enough to stop the smuggling of foreign fighters and weapons across the border. ‘If the American public saw the intelligence we were producing daily, at the most sensitive level, they would go ballistic,’ Flynn told me. ‘We understood Isis’s long-term strategy and its campaign plans, and we also discussed the fact that Turkey was looking the other way when it came to the growth of the Islamic State inside Syria. And here, according to Hersh, is how the plan was hatched: ‘Our policy of arming the opposition to Assad was unsuccessful and actually having a negative impact,’ the former JCS adviser said. ‘The Joint Chiefs believed that Assad should not be replaced by fundamentalists. The administration’s policy was contradictory. They wanted Assad to go but the opposition was dominated by extremists. So who was going to replace him? To say Assad’s got to go is fine, but if you follow that through – therefore anyone is better. It’s the “anybody else is better” issue that the JCS had with Obama’s policy.’ The Joint Chiefs felt that a direct challenge to Obama’s policy would have ‘had a zero chance of success’. So in the autumn of 2013 they decided to take steps against the extremists without going through political channels, by providing US intelligence to the militaries of other nations, on the understanding that it would be passed on to the Syrian army and used against the common enemy, Jabhat al-Nusra and Islamic State. Germany, Israel and Russia were in contact with the Syrian army, and able to exercise some influence over Assad’s decisions – it was through them that US intelligence would be shared. Once the flow of US intelligence began, Germany, Israel and Russia started passing on information about the whereabouts and intent of radical jihadist groups to the Syrian army; in return, Syria provided information about its own capabilities and intentions. There was no direct contact between the US and the Syrian military; instead, the adviser said, ‘we provided the information – including long-range analyses on Syria’s future put together by contractors or one of our war colleges – and these countries could do with it what they chose, including sharing it with Assad. We were saying to the Germans and the others: “Here’s some information that’s pretty interesting and our interest is mutual.” End of conversation. But the intelligence didn't come without conditions: The Joint Chiefs let it be known that in return the US would require four things: Assad must restrain Hizbullah from attacking Israel; he must renew the stalled negotiations with Israel to reach a settlement on the Golan Heights; he must agree to accept Russian and other outside military advisers; and he must commit to holding open elections after the war with a wide range of factions included. The Joint Chiefs then allegedly pulled a fast one on the CIA: By the late summer of 2013, the DIA’s assessment had been circulated widely, but although many in the American intelligence community were aware that the Syrian opposition was dominated by extremists the CIA-sponsored weapons kept coming, presenting a continuing problem for Assad’s army. Gaddafi’s stockpile had created an international arms bazaar, though prices were high. ‘There was no way to stop the arms shipments that had been authorised by the president,’ the JCS adviser said. ‘The solution involved an appeal to the pocketbook. The CIA was approached by a representative from the Joint Chiefs with a suggestion: there were far less costly weapons available in Turkish arsenals that could reach the Syrian rebels within days, and without a boat ride.’ But it wasn’t only the CIA that benefited. ‘We worked with Turks we trusted who were not loyal to Erdo?an,’ the adviser said, ‘and got them to ship the jihadists in Syria all the obsolete weapons in the arsenal, including M1 carbines that hadn’t been seen since the Korean War and lots of Soviet arms. It was a message Assad could understand: “We have the power to diminish a presidential policy in its tracks.”’ Then comes yet another damning indictment of the Erdogan government: But the Saudis were far from the only problem: American intelligence had accumulated intercept and human intelligence demonstrating that the Erdogan government had been supporting Jabhat al-Nusra for years, and was now doing the same for Islamic State. ‘We can handle the Saudis,’ the adviser said. ‘We can handle the Muslim Brotherhood. You can argue that the whole balance in the Middle East is based on a form of mutually assured destruction between Israel and the rest of the Middle East, and Turkey can disrupt the balance – which is Erdogan’s dream. We told him we wanted him to shut down the pipeline of foreign jihadists flowing into Turkey. But he is dreaming big – of restoring the Ottoman Empire – and he did not realise the extent to which he could be successful in this.’ Hersh even spoke to firebrand Congresswoman Tulsi Gabbard (profiled here and here): Gabbard later told me that many of her colleagues in Congress, Democrats and Republicans, have thanked her privately for speaking out. ‘There are a lot of people in the general public, and even in the Congress, who need to have things clearly explained to them,’ Gabbard said. ‘But it’s hard when there’s so much deception about what is going on. The truth is not out.’ Ultimately, Hersh says the effort to assist Assad died with Dempsey's retirement: The military’s indirect pathway to Assad disappeared with Dempsey’s retirement in September. His replacement as chairman of the Joint Chiefs, General Joseph Dunford, testified before the Senate Armed Services Committee in July, two months before assuming office. ‘If you want to talk about a nation that could pose an existential threat to the United States, I’d have to point to Russia,’ Dunford said. ‘If you look at their behaviour, it’s nothing short of alarming.’ In October, as chairman, Dunford dismissed the Russian bombing efforts in Syria, telling the same committee that Russia ‘is not fighting’ IS. He added that America must ‘work with Turkish partners to secure the northern border of Syria’ and ‘do all we can to enable vetted Syrian opposition forces’ – i.e. the ‘moderates’ – to fight the extremists. Obama now has a more compliant Pentagon. There will be no more indirect challenges from the military leadership to his policy of disdain for Assad and support for Erdogan. Dempsey and his associates remain mystified by Obama’s continued public defence of Erdogan, given the American intelligence community’s strong case against him – and the evidence that Obama, in private, accepts that case. ‘We know what you’re doing with the radicals in Syria,’ the president told Erdogan’s intelligence chief at a tense meeting at the White House (as I reported in the LRB of 17 April 2014). The Joint Chiefs and the DIA were constantly telling Washington’s leadership of the jihadist threat in Syria, and of Turkey’s support for it. The message was never listened to. Why not? Read the full report below. * * * “Military to Military”, Seymour M. Hersh on US intelligence sharing in the Syrian war courtesy of the London Review of Books Barack Obama’s repeated insistence that Bashar al-Assad must leave office – and that there are ‘moderate’ rebel groups in Syria capable of defeating him – has in recent years provoked quiet dissent, and even overt opposition, among some of the most senior officers on the Pentagon’s Joint Staff. Their criticism has focused on what they see as the administration’s fixation on Assad’s primary ally, Vladimir Putin. In their view, Obama is captive to Cold War thinking about Russia and China, and hasn’t adjusted his stance on Syria to the fact both countries share Washington’s anxiety about the spread of terrorism in and beyond Syria; like Washington, they believe that Islamic State must be stopped. The military’s resistance dates back to the summer of 2013, when a highly classified assessment, put together by the Defense Intelligence Agency (DIA) and the Joint Chiefs of Staff, then led by General Martin Dempsey, forecast that the fall of the Assad regime would lead to chaos and, potentially, to Syria’s takeover by jihadi extremists, much as was then happening in Libya. A former senior adviser to the Joint Chiefs told me that the document was an ‘all-source’ appraisal, drawing on information from signals, satellite and human intelligence, and took a dim view of the Obama administration’s insistence on continuing to finance and arm the so-called moderate rebel groups. By then, the CIA had been conspiring for more than a year with allies in the UK, Saudi Arabia and Qatar to ship guns and goods – to be used for the overthrow of Assad – from Libya, via Turkey, into Syria. The new intelligence estimate singled out Turkey as a major impediment to Obama’s Syria policy. The document showed, the adviser said, ‘that what was started as a covert US programme to arm and support the moderate rebels fighting Assad had been co-opted by Turkey, and had morphed into an across-the-board technical, arms and logistical programme for all of the opposition, including Jabhat al-Nusra and Islamic State. The so-called moderates had evaporated and the Free Syrian Army was a rump group stationed at an airbase in Turkey.’ The assessment was bleak: there was no viable ‘moderate’ opposition to Assad, and the US was arming extremists. Lieutenant General Michael Flynn, director of the DIA between 2012 and 2014, confirmed that his agency had sent a constant stream of classified warnings to the civilian leadership about the dire consequences of toppling Assad. The jihadists, he said, were in control of the opposition. Turkey wasn’t doing enough to stop the smuggling of foreign fighters and weapons across the border. ‘If the American public saw the intelligence we were producing daily, at the most sensitive level, they would go ballistic,’ Flynn told me. ‘We understood Isis’s long-term strategy and its campaign plans, and we also discussed the fact that Turkey was looking the other way when it came to the growth of the Islamic State inside Syria.’ The DIA’s reporting, he said, ‘got enormous pushback’ from the Obama administration. ‘I felt that they did not want to hear the truth.’ ‘Our policy of arming the opposition to Assad was unsuccessful and actually having a negative impact,’ the former JCS adviser said. ‘The Joint Chiefs believed that Assad should not be replaced by fundamentalists. The administration’s policy was contradictory. They wanted Assad to go but the opposition was dominated by extremists. So who was going to replace him? To say Assad’s got to go is fine, but if you follow that through – therefore anyone is better. It’s the “anybody else is better” issue that the JCS had with Obama’s policy.’ The Joint Chiefs felt that a direct challenge to Obama’s policy would have ‘had a zero chance of success’. So in the autumn of 2013 they decided to take steps against the extremists without going through political channels, by providing US intelligence to the militaries of other nations, on the understanding that it would be passed on to the Syrian army and used against the common enemy, Jabhat al-Nusra and Islamic State. Germany, Israel and Russia were in contact with the Syrian army, and able to exercise some influence over Assad’s decisions – it was through them that US intelligence would be shared. Each had its reasons for co-operating with Assad: Germany feared what might happen among its own population of six million Muslims if Islamic State expanded; Israel was concerned with border security; Russia had an alliance of very long standing with Syria, and was worried by the threat to its only naval base on the Mediterranean, at Tartus. ‘We weren’t intent on deviating from Obama’s stated policies,’ the adviser said. ‘But sharing our assessments via the military-to-military relationships with other countries could prove productive. It was clear that Assad needed better tactical intelligence and operational advice. The JCS concluded that if those needs were met, the overall fight against Islamist terrorism would be enhanced. Obama didn’t know, but Obama doesn’t know what the JCS does in every circumstance and that’s true of all presidents.’ Once the flow of US intelligence began, Germany, Israel and Russia started passing on information about the whereabouts and intent of radical jihadist groups to the Syrian army; in return, Syria provided information about its own capabilities and intentions. There was no direct contact between the US and the Syrian military; instead, the adviser said, ‘we provided the information – including long-range analyses on Syria’s future put together by contractors or one of our war colleges – and these countries could do with it what they chose, including sharing it with Assad. We were saying to the Germans and the others: “Here’s some information that’s pretty interesting and our interest is mutual.” End of conversation. The JCS could conclude that something beneficial would arise from it – but it was a military to military thing, and not some sort of a sinister Joint Chiefs’ plot to go around Obama and support Assad. It was a lot cleverer than that. If Assad remains in power, it will not be because we did it. It’s because he was smart enough to use the intelligence and sound tactical advice we provided to others.’ * The public history of relations between the US and Syria over the past few decades has been one of enmity. Assad condemned the 9/11 attacks, but opposed the Iraq War. George W. Bush repeatedly linked Syria to the three members of his ‘axis of evil’ – Iraq, Iran and North Korea – throughout his presidency. State Department cables made public by WikiLeaks show that the Bush administration tried to destabilise Syria and that these efforts continued into the Obama years. In December 2006, William Roebuck, then in charge of the US embassy in Damascus, filed an analysis of the ‘vulnerabilities’ of the Assad government and listed methods ‘that will improve the likelihood’ of opportunities for destabilisation. He recommended that Washington work with Saudi Arabia and Egypt to increase sectarian tension and focus on publicising ‘Syrian efforts against extremist groups’ – dissident Kurds and radical Sunni factions – ‘in a way that suggests weakness, signs of instability, and uncontrolled blowback’; and that the ‘isolation of Syria’ should be encouraged through US support of the National Salvation Front, led by Abdul Halim Khaddam, a former Syrian vice president whose government-in-exile in Riyadh was sponsored by the Saudis and the Muslim Brotherhood. Another 2006 cable showed that the embassy had spent $5 million financing dissidents who ran as independent candidates for the People’s Assembly; the payments were kept up even after it became clear that Syrian intelligence knew what was going on. A 2010 cable warned that funding for a London-based television network run by a Syrian opposition group would be viewed by the Syrian government ‘as a covert and hostile gesture toward the regime’. But there is also a parallel history of shadowy co-operation between Syria and the US during the same period. The two countries collaborated against al-Qaida, their common enemy. A longtime consultant to America’s intelligence community said that, after 9/11, ‘Bashar was, for years, extremely helpful to us while, in my view, we were churlish in return, and clumsy in our use of the gold he gave us. That quiet co-operation continued among some elements, even after the [Bush administration’s] decision to vilify him.’ In 2002 Assad authorised Syrian intelligence to turn over hundreds of internal files on the activities of the Muslim Brotherhood in Syria and Germany. Later that year, Syrian intelligence foiled an attack by al-Qaida on the headquarters of the US Navy’s Fifth Fleet in Bahrain, and Assad agreed to provide the CIA with the name of a vital al-Qaida informant. In violation of this agreement, the CIA contacted the informant directly; he rejected the approach, and broke off relations with his Syrian handlers. Assad also secretly turned over to the US relatives of Saddam Hussein who had sought refuge in Syria, and – like America’s allies in Jordan, Egypt, Thailand and elsewhere – tortured suspected terrorists for the CIA in a Damascus prison. It was this history of co-operation that made it seem possible in 2013 that Damascus would agree to the new indirect intelligence-sharing arrangement with the US. The Joint Chiefs let it be known that in return the US would require four things: Assad must restrain Hizbullah from attacking Israel; he must renew the stalled negotiations with Israel to reach a settlement on the Golan Heights; he must agree to accept Russian and other outside military advisers; and he must commit to holding open elections after the war with a wide range of factions included. ‘We had positive feedback from the Israelis, who were willing to entertain the idea, but they needed to know what the reaction would be from Iran and Syria,’ the JCS adviser told me. ‘The Syrians told us that Assad would not make a decision unilaterally – he needed to have support from his military and Alawite allies. Assad’s worry was that Israel would say yes and then not uphold its end of the bargain.’ A senior adviser to the Kremlin on Middle East affairs told me that in late 2012, after suffering a series of battlefield setbacks and military defections, Assad had approached Israel via a contact in Moscow and offered to reopen the talks on the Golan Heights. The Israelis had rejected the offer. ‘They said, “Assad is finished,”’ the Russian official told me. ‘“He’s close to the end.”’ He said the Turks had told Moscow the same thing. By mid-2013, however, the Syrians believed the worst was behind them, and wanted assurances that the Americans and others were serious about their offers of help. In the early stages of the talks, the adviser said, the Joint Chiefs tried to establish what Assad needed as a sign of their good intentions. The answer was sent through one of Assad’s friends: ‘Bring him the head of Prince Bandar.’ The Joint Chiefs did not oblige. Bandar bin Sultan had served Saudi Arabia for decades in intelligence and national security affairs, and spent more than twenty years as ambassador in Washington. In recent years, he has been known as an advocate for Assad’s removal from office by any means. Reportedly in poor health, he resigned last year as director of the Saudi National Security Council, but Saudi Arabia continues to be a major provider of funds to the Syrian opposition, estimated by US intelligence last year at $700 million. In July 2013, the Joint Chiefs found a more direct way of demonstrating to Assad how serious they were about helping him. By then the CIA-sponsored secret flow of arms from Libya to the Syrian opposition, via Turkey, had been underway for more than a year (it started sometime after Gaddafi’s death on 20 October 2011).?? The operation was largely run out of a covert CIA annex in Benghazi, with State Department acquiescence. On 11 September 2012 the US ambassador to Libya, Christopher Stevens, was killed during an anti-American demonstration that led to the burning down of the US consulate in Benghazi; reporters for the Washington Postfound copies of the ambassador’s schedule in the building’s ruins. It showed that on 10 September Stevens had met with the chief of the CIA’s annex operation. The next day, shortly before he died, he met a representative from Al-Marfa Shipping and Maritime Services, a Tripoli-based company which, the JCS adviser said, was known by the Joint Staff to be handling the weapons shipments. By the late summer of 2013, the DIA’s assessment had been circulated widely, but although many in the American intelligence community were aware that the Syrian opposition was dominated by extremists the CIA-sponsored weapons kept coming, presenting a continuing problem for Assad’s army. Gaddafi’s stockpile had created an international arms bazaar, though prices were high. ‘There was no way to stop the arms shipments that had been authorised by the president,’ the JCS adviser said. ‘The solution involved an appeal to the pocketbook. The CIA was approached by a representative from the Joint Chiefs with a suggestion: there were far less costly weapons available in Turkish arsenals that could reach the Syrian rebels within days, and without a boat ride.’ But it wasn’t only the CIA that benefited. ‘We worked with Turks we trusted who were not loyal to Erdo?an,’ the adviser said, ‘and got them to ship the jihadists in Syria all the obsolete weapons in the arsenal, including M1 carbines that hadn’t been seen since the Korean War and lots of Soviet arms. It was a message Assad could understand: “We have the power to diminish a presidential policy in its tracks.”’ The flow of US intelligence to the Syrian army, and the downgrading of the quality of the arms being supplied to the rebels, came at a critical juncture. The Syrian army had suffered heavy losses in the spring of 2013 in fighting against Jabhat al-Nusra and other extremist groups as it failed to hold the provincial capital of Raqqa. Sporadic Syrian army and air-force raids continued in the area for months, with little success, until it was decided to withdraw from Raqqa and other hard to defend, lightly populated areas in the north and west and focus instead on consolidating the government’s hold on Damascus and the heavily populated areas linking the capital to Latakia in the north-east. But as the army gained in strength with the Joint Chiefs’ support, Saudi Arabia, Qatar and Turkey escalated their financing and arming of Jabhat al-Nusra and Islamic State, which by the end of 2013 had made enormous gains on both sides of the Syria/Iraq border. The remaining non-fundamentalist rebels found themselves fighting – and losing – pitched battles against the extremists. In January 2014, IS took complete control of Raqqa and the tribal areas around it from al-Nusra and established the city as its base. Assad still controlled 80 per cent of the Syrian population, but he had lost a vast amount of territory. CIA efforts to train the moderate rebel forces were also failing badly. ‘The CIA’s training camp was in Jordan and was controlled by a Syrian tribal group,’ the JCS adviser said. There was a suspicion that some of those who signed up for training were actually Syrian army regulars minus their uniforms. This had happened before, at the height of the Iraqi war, when hundreds of Shia militia members showed up at American training camps for new uniforms, weapons and a few days of training, and then disappeared into the desert. A separate training programme, set up by the Pentagon in Turkey, fared no better. The Pentagon acknowledged in September that only ‘four or five’ of its recruits were still battling Islamic State; a few days later 70 of them defected to Jabhat al-Nusra immediately after crossing the border into Syria. In January 2014, despairing at the lack of progress, John Brennan, the director of the CIA, summoned American and Sunni Arab intelligence chiefs from throughout the Middle East to a secret meeting in Washington, with the aim of persuading Saudi Arabia to stop supporting extremist fighters in Syria. ‘The Saudis told us they were happy to listen,’ the JCS adviser said, ‘so everyone sat around in Washington to hear Brennan tell them that they had to get on board with the so-called moderates. His message was that if everyone in the region stopped supporting al-Nusra and Isis their ammunition and weapons would dry up, and the moderates would win out.’ Brennan’s message was ignored by the Saudis, the adviser said, who ‘went back home and increased their efforts with the extremists and asked us for more technical support. And we say OK, and so it turns out that we end up reinforcing the extremists.’ But the Saudis were far from the only problem: American intelligence had accumulated intercept and human intelligence demonstrating that the Erdo?an government had been supporting Jabhat al-Nusra for years, and was now doing the same for Islamic State. ‘We can handle the Saudis,’ the adviser said. ‘We can handle the Muslim Brotherhood. You can argue that the whole balance in the Middle East is based on a form of mutually assured destruction between Israel and the rest of the Middle East, and Turkey can disrupt the balance – which is Erdo?an’s dream. We told him we wanted him to shut down the pipeline of foreign jihadists flowing into Turkey. But he is dreaming big – of restoring the Ottoman Empire – and he did not realise the extent to which he could be successful in this.’ * One of the constants in US affairs since the fall of the Soviet Union has been a military-to-military relationship with Russia. After 1991 the US spent billions of dollars to help Russia secure its nuclear weapons complex, including a highly secret joint operation to remove weapons-grade uranium from unsecured storage depots in Kazakhstan. Joint programmes to monitor the security of weapons-grade materials continued for the next two decades. During the American war on Afghanistan, Russia provided overflight rights for US cargo carriers and tankers, as well as access for the flow of weapons, ammunition, food and water the US war machine needed daily. Russia’s military provided intelligence on Osama bin Laden’s whereabouts and helped the US negotiate rights to use an airbase in Kyrgyzstan. The Joint Chiefs have been in communication with their Russian counterparts throughout the Syrian war, and the ties between the two militaries start at the top. In August, a few weeks before his retirement as chairman of the Joint Chiefs, Dempsey made a farewell visit to the headquarters of the Irish Defence Forces in Dublin and told his audience there that he had made a point while in office to keep in touch with the chief of the Russian General Staff, General Valery Gerasimov. ‘I’ve actually suggested to him that we not end our careers as we began them,’ Dempsey said – one a tank commander in West Germany, the other in the east. When it comes to tackling Islamic State, Russia and the US have much to offer each other. Many in the IS leadership and rank and file fought for more than a decade against Russia in the two Chechen wars that began in 1994, and the Putin government is heavily invested in combating Islamist terrorism. ‘Russia knows the Isis leadership,’ the JCS adviser said, ‘and has insights into its operational techniques, and has much intelligence to share.’ In return, he said, ‘we’ve got excellent trainers with years of experience in training foreign fighters – experience that Russia does not have.’ The adviser would not discuss what American intelligence is also believed to have: an ability to obtain targeting data, often by paying huge sums of cash, from sources within rebel militias. A former White House adviser on Russian affairs told me that before 9/11 Putin ‘used to say to us: “We have the same nightmares about different places.” He was referring to his problems with the caliphate in Chechnya and our early issues with al-Qaida. These days, after the Metrojet bombing over Sinai and the massacres in Paris and elsewhere, it’s hard to avoid the conclusion that we actually have the same nightmares about the same places.’ Yet the Obama administration continues to condemn Russia for its support of Assad. A retired senior diplomat who served at the US embassy in Moscow expressed sympathy for Obama’s dilemma as the leader of the Western coalition opposed to Russia’s aggression against Ukraine: ‘Ukraine is a serious issue and Obama has been handling it firmly with sanctions. But our policy vis-à-vis Russia is too often unfocused. But it’s not about us in Syria. It’s about making sure Bashar does not lose. The reality is that Putin does not want to see the chaos in Syria spread to Jordan or Lebanon, as it has to Iraq, and he does not want to see Syria end up in the hands of Isis. The most counterproductive thing Obama has done, and it has hurt our efforts to end the fighting a lot, was to say: “Assad must go as a premise for negotiation.”’ He also echoed a view held by some in the Pentagon when he alluded to a collateral factor behind Russia’s decision to launch airstrikes in support of the Syrian army on 30 September: Putin’s desire to prevent Assad from suffering the same fate as Gaddafi. He had been told that Putin had watched a video of Gaddafi’s savage death three times, a video that shows him being sodomised with a bayonet. The JCS adviser also told me of a US intelligence assessment which concluded that Putin had been appalled by Gaddafi’s fate: ‘Putin blamed himself for letting Gaddafi go, for not playing a strong role behind the scenes’ at the UN when the Western coalition was lobbying to be allowed to undertake the airstrikes that destroyed the regime. ‘Putin believed that unless he got engaged Bashar would suffer the same fate – mutilated – and he’d see the destruction of his allies in Syria.’ In a speech on 22 November, Obama declared that the ‘principal targets’ of the Russian airstrikes ‘have been the moderate opposition’. It’s a line that the administration – along with most of the mainstream American media – has rarely strayed from. The Russians insist that they are targeting all rebel groups that threaten Syria’s stability – including Islamic State. The Kremlin adviser on the Middle East explained in an interview that the first round of Russian airstrikes was aimed at bolstering security around a Russian airbase in Latakia, an Alawite stronghold. The strategic goal, he said, has been to establish a jihadist-free corridor from Damascus to Latakia and the Russian naval base at Tartus and then to shift the focus of bombing gradually to the south and east, with a greater concentration of bombing missions over IS-held territory. Russian strikes on IS targets in and near Raqqa were reported as early as the beginning of October; in November there were further strikes on IS positions near the historic city of Palmyra and in Idlib province, a bitterly contested stronghold on the Turkish border. Russian incursions into Turkish airspace began soon after Putin authorised the bombings, and the Russian air force deployed electronic jamming systems that interfered with Turkish radar. The message being sent to the Turkish air force, the JCS adviser said, was: ‘We’re going to fly our fighter planes where we want and when we want and jam your radar. Do not fuck with us. Putin was letting the Turks know what they were up against.’ Russia’s aggression led to Turkish complaints and Russian denials, along with more aggressive border patrolling by the Turkish air force. There were no significant incidents until 24 November, when two Turkish F-16 fighters, apparently acting under more aggressive rules of engagement, shot down a Russian Su-24M jet that had crossed into Turkish airspace for no more than 17 seconds. In the days after the fighter was shot down, Obama expressed support for Erdo?an, and after they met in private on 1 December he told a press conference that his administration remained ‘very much committed to Turkey’s security and its sovereignty’. He said that as long as Russia remained allied with Assad, ‘a lot of Russian resources are still going to be targeted at opposition groups … that we support … So I don’t think we should be under any illusions that somehow Russia starts hitting only Isil targets. That’s not happening now. It was never happening. It’s not going to be happening in the next several weeks.’ The Kremlin adviser on the Middle East, like the Joint Chiefs and the DIA, dismisses the ‘moderates’ who have Obama’s support, seeing them as extremist Islamist groups that fight alongside Jabhat al-Nusra and IS (‘There’s no need to play with words and split terrorists into moderate and not moderate,’ Putin said in a speech on 22 October). The American generals see them as exhausted militias that have been forced to make an accommodation with Jabhat al-Nusra or IS in order to survive. At the end of 2014, Jürgen Todenhöfer, a German journalist who was allowed to spend ten days touring IS-held territory in Iraq and Syria, told CNN that the IS leadership ‘are all laughing about the Free Syrian Army. They don’t take them for serious. They say: “The best arms sellers we have are the FSA. If they get a good weapon, they sell it to us.” They didn’t take them for serious. They take for serious Assad. They take for serious, of course, the bombs. But they fear nothing, and FSA doesn’t play a role.’ * Putin’s bombing campaign provoked a series of anti-Russia articles in the American press. On 25 October, the New York Times reported, citing Obama administration officials, that Russian submarines and spy ships were ‘aggressively’ operating near the undersea cables that carry much of the world’s internet traffic – although, as the article went on to acknowledge, there was ‘no evidence yet’ of any Russian attempt actually to interfere with that traffic. Ten days earlier the Times published a summary of Russian intrusions into its former Soviet satellite republics, and described the Russian bombing in Syria as being ‘in some respects a return to the ambitious military moves of the Soviet past’. The report did not note that the Assad administration had invited Russia to intervene, nor did it mention the US bombing raids inside Syria that had been underway since the previous September, without Syria’s approval. An October op-ed in the same paper by Michael McFaul, Obama’s ambassador to Russia between 2012 and 2014, declared that the Russian air campaign was attacking ‘everyone except the Islamic State’. The anti-Russia stories did not abate after the Metrojet disaster, for which Islamic State claimed credit. Few in the US government and media questioned why IS would target a Russian airliner, along with its 224 passengers and crew, if Moscow’s air force was attacking only the Syrian ‘moderates’. Economic sanctions, meanwhile, are still in effect against Russia for what a large number of Americans consider Putin’s war crimes in Ukraine, as are US Treasury Department sanctions against Syria and against those Americans who do business there. The New York Times, in a report on sanctions in late November, revived an old and groundless assertion, saying that the Treasury’s actions ‘emphasise an argument that the administration has increasingly been making about Mr Assad as it seeks to press Russia to abandon its backing for him: that although he professes to be at war with Islamist terrorists, he has a symbiotic relationship with the Islamic State that has allowed it to thrive while he has clung to power.’ * The four core elements of Obama’s Syria policy remain intact today: an insistence that Assad must go; that no anti-IS coalition with Russia is possible; that Turkey is a steadfast ally in the war against terrorism; and that there really are significant moderate opposition forces for the US to support. The Paris attacks on 13 November that killed 130 people did not change the White House’s public stance, although many European leaders, including François Hollande, advocated greater co-operation with Russia and agreed to co-ordinate more closely with its air force; there was also talk of the need to be more flexible about the timing of Assad’s exit from power. On 24 November, Hollande flew to Washington to discuss how France and the US could collaborate more closely in the fight against Islamic State. At a joint press conference at the White House, Obama said he and Hollande had agreed that ‘Russia’s strikes against the moderate opposition only bolster the Assad regime, whose brutality has helped to fuel the rise’ of IS. Hollande didn’t go that far but he said that the diplomatic process in Vienna would ‘lead to Bashar al-Assad’s departure … a government of unity is required.’ The press conference failed to deal with the far more urgent impasse between the two men on the matter of Erdo?an. Obama defended Turkey’s right to defend its borders; Hollande said it was ‘a matter of urgency’ for Turkey to take action against terrorists. The JCS adviser told me that one of Hollande’s main goals in flying to Washington had been to try to persuade Obama to join the EU in a mutual declaration of war against Islamic State. Obama said no. The Europeans had pointedly not gone to Nato, to which Turkey belongs, for such a declaration. ‘Turkey is the problem,’ the JCS adviser said. Assad, naturally, doesn’t accept that a group of foreign leaders should be deciding on his future. Imad Moustapha, now Syria’s ambassador to China, was dean of the IT faculty at the University of Damascus, and a close aide of Assad’s, when he was appointed in 2004 as the Syrian ambassador to the US, a post he held for seven years. Moustapha is known still to be close to Assad, and can be trusted to reflect what he thinks. He told me that for Assad to surrender power would mean capitulating to ‘armed terrorist groups’ and that ministers in a national unity government – such as was being proposed by the Europeans – would be seen to be beholden to the foreign powers that appointed them. These powers could remind the new president ‘that they could easily replace him as they did before to the predecessor … Assad owes it to his people: he could not leave because the historic enemies of Syria are demanding his departure.’ * Moustapha also brought up China, an ally of Assad that has allegedly committed more than $30 billion to postwar reconstruction in Syria. China, too, is worried about Islamic State. ‘China regards the Syrian crisis from three perspectives,’ he said: international law and legitimacy; global strategic positioning; and the activities of jihadist Uighurs, from Xinjiang province in China’s far west. Xinjiang borders eight nations – Mongolia, Russia, Kazakhstan, Kyrgyzstan, Tajikistan, Afghanistan, Pakistan and India – and, in China’s view, serves as a funnel for terrorism around the world and within China. Many Uighur fighters now in Syria are known to be members of the East Turkestan Islamic Movement – an often violent separatist organisation that seeks to establish an Islamist Uighur state in Xinjiang. ‘The fact that they have been aided by Turkish intelligence to move from China into Syria through Turkey has caused a tremendous amount of tension between the Chinese and Turkish intelligence,’ Moustapha said. ‘China is concerned that the Turkish role of supporting the Uighur fighters in Syria may be extended in the future to support Turkey’s agenda in Xinjiang. We are already providing the Chinese intelligence service with information regarding these terrorists and the routes they crossed from on travelling into Syria.’ Moustapha’s concerns were echoed by a Washington foreign affairs analyst who has closely followed the passage of jihadists through Turkey and into Syria. The analyst, whose views are routinely sought by senior government officials, told me that ‘Erdo?an has been bringing Uighurs into Syria by special transport while his government has been agitating in favour of their struggle in China. Uighur and Burmese Muslim terrorists who escape into Thailand somehow get Turkish passports and are then flown to Turkey for transit into Syria.’ He added that there was also what amounted to another ‘rat line’ that was funnelling Uighurs – estimates range from a few hundred to many thousands over the years – from China into Kazakhstan for eventual relay to Turkey, and then to IS territory in Syria. ‘US intelligence,’ he said, ‘is not getting good information about these activities because those insiders who are unhappy with the policy are not talking to them.’ He also said it was ‘not clear’ that the officials responsible for Syrian policy in the State Department and White House ‘get it’. IHS-Jane’s Defence Weekly estimated in October that as many as five thousand Uighur would-be fighters have arrived in Turkey since 2013, with perhaps two thousand moving on to Syria. Moustapha said he has information that ‘up to 860 Uighur fighters are currently in Syria.’ China’s growing concern about the Uighur problem and its link to Syria and Islamic State have preoccupied Christina Lin, a scholar who dealt with Chinese issues a decade ago while serving in the Pentagon under Donald Rumsfeld. ‘I grew up in Taiwan and came to the Pentagon as a critic of China,’ Lin told me. ‘I used to demonise the Chinese as ideologues, and they are not perfect. But over the years as I see them opening up and evolving, I have begun to change my perspective. I see China as a potential partner for various global challenges especially in the Middle East. There are many places – Syria for one – where the United States and China must co-operate in regional security and counterterrorism.’ A few weeks earlier, she said, China and India, Cold War enemies that ‘hated each other more than China and the United States hated each other, conducted a series of joint counterterrorism exercises. And today China and Russia both want to co-operate on terrorism issues with the United States.’ As China sees it, Lin suggests, Uighur militants who have made their way to Syria are being trained by Islamic State in survival techniques intended to aid them on covert return trips to the Chinese mainland, for future terrorist attacks there. ‘If Assad fails,’ Lin wrote in a paper published in September, ‘jihadi fighters from Russia’s Chechnya, China’s Xinjiang and India’s Kashmir will then turn their eyes towards the home front to continue jihad, supported by a new and well-sourced Syrian operating base in the heart of the Middle East.’ * General Dempsey and his colleagues on the Joint Chiefs of Staff kept their dissent out of bureaucratic channels, and survived in office. General Michael Flynn did not. ‘Flynn incurred the wrath of the White House by insisting on telling the truth about Syria,’ said Patrick Lang, a retired army colonel who served for nearly a decade as the chief Middle East civilian intelligence officer for the DIA. ‘He thought truth was the best thing and they shoved him out. He wouldn’t shut up.’ Flynn told me his problems went beyond Syria. ‘I was shaking things up at the DIA – and not just moving deckchairs on the Titanic. It was radical reform. I felt that the civilian leadership did not want to hear the truth. I suffered for it, but I’m OK with that.’ In a recent interview in Der Spiegel, Flynn was blunt about Russia’s entry into the Syrian war: ‘We have to work constructively with Russia. Whether we like it or not, Russia made a decision to be there and to act militarily. They are there, and this has dramatically changed the dynamic. So you can’t say Russia is bad; they have to go home. It’s not going to happen. Get real.’ Few in the US Congress share this view. One exception is Tulsi Gabbard, a Democrat from Hawaii and member of the House Armed Services Committee who, as a major in the Army National Guard, served two tours in the Middle East. In an interview on CNN in October she said: ‘The US and the CIA should stop this illegal and counterproductive war to overthrow the Syrian government of Assad and should stay focused on fighting against … the Islamic extremist groups.’ ‘Does it not concern you,’ the interviewer asked, ‘that Assad’s regime has been brutal, killing at least 200,000 and maybe 300,000 of his own people?’ ‘The things that are being said about Assad right now,’ Gabbard responded, ‘are the same that were said about Gaddafi, they are the same things that were said about Saddam Hussein by those who were advocating for the US to … overthrow those regimes … If it happens here in Syria … we will end up in a situation with far greater suffering, with far greater persecution of religious minorities and Christians in Syria, and our enemy will be far stronger.’ ‘So what you are saying,’ the interviewer asked, ‘is that the Russian military involvement in the air and on-the-ground Iranian involvement – they are actually doing the US a favour?’ ‘They are working toward defeating our common enemy,’ Gabbard replied. Gabbard later told me that many of her colleagues in Congress, Democrats and Republicans, have thanked her privately for speaking out. ‘There are a lot of people in the general public, and even in the Congress, who need to have things clearly explained to them,’ Gabbard said. ‘But it’s hard when there’s so much deception about what is going on. The truth is not out.’ It’s unusual for a politician to challenge her party’s foreign policy directly and on the record. For someone on the inside, with access to the most secret intelligence, speaking openly and critically can be a career-ender. Informed dissent can be transmitted by means of a trust relationship between a reporter and those on the inside, but it almost invariably includes no signature. The dissent exists, however. The longtime consultant to the Joint Special Operations Command could not hide his contempt when I asked him for his view of the US’s Syria policy. ‘The solution in Syria is right before our nose,’ he said. ‘Our primary threat is Isis and all of us – the United States, Russia and China – need to work together. Bashar will remain in office and, after the country is stabilised there will be an election. There is no other option.’ The military’s indirect pathway to Assad disappeared with Dempsey’s retirement in September. His replacement as chairman of the Joint Chiefs, General Joseph Dunford, testified before the Senate Armed Services Committee in July, two months before assuming office. ‘If you want to talk about a nation that could pose an existential threat to the United States, I’d have to point to Russia,’ Dunford said. ‘If you look at their behaviour, it’s nothing short of alarming.’ In October, as chairman, Dunford dismissed the Russian bombing efforts in Syria, telling the same committee that Russia ‘is not fighting’ IS. He added that America must ‘work with Turkish partners to secure the northern border of Syria’ and ‘do all we can to enable vetted Syrian opposition forces’ – i.e. the ‘moderates’ – to fight the extremists. Obama now has a more compliant Pentagon. There will be no more indirect challenges from the military leadership to his policy of disdain for Assad and support for Erdo?an. Dempsey and his associates remain mystified by Obama’s continued public defence of Erdo?an, given the American intelligence community’s strong case against him – and the evidence that Obama, in private, accepts that case. ‘We know what you’re doing with the radicals in Syria,’ the president told Erdo?an’s intelligence chief at a tense meeting at the White House (as I reported in the LRB of 17 April 2014). The Joint Chiefs and the DIA were constantly telling Washington’s leadership of the jihadist threat in Syria, and of Turkey’s support for it. The message was never listened to. Why not?
In late October, we noted that for the second time this year, Russia overtook Saudi Arabia as the biggest exporter of crude to China. Russia also took the top spot in May, marking the first time in history that Moscow beat out Riyadh when it comes to crude exports to Beijing. “Moscow is wrestling with crippling Western economic sanctions and building closer ties with Beijing is key to mitigating the pain,” we said in October, on the way to explaining that closer ties between Russia and China as it relates to energy are part and parcel of a burgeoning relationship between the two countries who have voted together on the Security Council on matters of geopolitical significance. Here's a look at the longer-term trend: You may also recall that Gazprom Neft (which is the number three oil producer in Russia) began settling all sales to China in yuan starting in January. This, we said, is yet another sign of the petrodollar’s imminent demise. On Monday, we learn that for the third time in 2015, Russia has once again bested the Saudis for the top spot on China’s crude suppliers list. “Russia overtook Saudi Arabia for the third time this year in November as China's largest crude oil supplier,” Reuters writes, adding that “China brought in about 949,925 barrels per day (bpd) of Russian crude in November, compared with 886,950 bpd from Saudi Arabia.” This is an annoyance for Riyadh. China was the world's second-largest oil consumer in 2014 and closer ties between Moscow and Beijing not only represent a threat in terms of crude revenue, but also in terms of geopolitics as the last thing the Saudis need is for Xi to begin poking around militarily in the Arabian Peninsula on behalf of Moscow and Tehran. As we documented in "Saudis Poke The Russian Bear, Start Oil War In Eastern Europe," Riyadh has begun to encroach on Moscow's markets in Poland. Here's what Bloomberg wrote back in October: Poland has long been a client of Russian oil companies. Last year, about three-quarters of its fuel imports came from Russia, with the rest from Kazakhstan and European countries. Poland, however, is at the center of efforts to reduce the European Union's dependence on Russian energy. A new and reliable supplier is a godsend. As for the Saudis, they need to expand outside Asia where demand is falling. This could turn into a more active shoving match between the world's two biggest oil exporters, which already are at odds over the Syrian conflict. Indeed, one could plausibly argue that one of the reasons the Saudis moved to artificially suppress prices last year was to sqeeze Putin and ultimately force The Kremlin to give up its support for Assad. As The New York Times put it, a dramatic decline in crude prices has certain "ancillary diplomatic benefits." Unfortunately for Riyadh, the strategy hasn't worked. In fact, it's backfired in more ways than one. First, Saudi Arabia is facing a fiscal crisis as Riyadh's budget deficit balloons to 20% of GDP, forcing the kingdom to tap the debt market in order to offset the SAMA burn. Second, Putin not only refused to give up his support for the government in Damascus, he actually doubled down by sending the Russian air force to Latakia. Meanwhile, Russia continued to pump even more oil, and as Bloomberg reports, Moscow is now producing at "the fastest pace since the collapse of the Soviet Union." "Russia’s unexpected oil bounty this year is the result not of a new Kremlin campaign but of dozens of modest productivity improvements across the sprawling sector. Even pressured by plunging prices, as well as U.S. and European Union sanctions that cut access to much foreign financing and technology, Russian companies have managed to squeeze more crude out of some of the country’s oldest fields," Bloomberg writes, before noting that "Bashneft and other Russian companies working fields in the Volga River basin -- some of the first to be discovered in Russia early in the last century -- are benefiting from Soviet inefficiency as [the old motto was]: 'whatever we don’t produce will be left for our children.'" For analysts, Russia's resiliency has come as a surprise. “I know of no one who had predicted that Russian production would rise in 2015, let alone to new record levels,” Edward Morse, Citigroup’s global head of commodities research said. As for what it would take to curtail production, Mikhail Stavskiy, head of upstream at Bashneft PJSC which has been "the biggest single contributor to increased crude output this year," says he doesn't know. “I don’t know what the oil price would have to fall to for things to change dramatically. We’ve been through $9 a barrel and production continued, so if something like that happens, we know what to do.” Indeed, thanks to the low cost of extracting crude from Russia's oil fields in West Siberia and the devaluation of the ruble, production costs are rock bottom: But not everyone agrees that this is sustainable. Some say efforts to improve efficiency have run their course and with financing for exploration scarce, further gains may be hard to come by. Interestingly, Bloomberg also notes that because Moscow takes "nearly everything above $30-$40 a barrel" on exports, producers won't feel the impact of low prices until crude falls substantially below those levels. “Russia will maintain its current oil production levels within the bandwidth of 525 million to 533 million tons next year, as the federal government’s budget is set on such production levels,” Stratfor's Lauren Goodrich says, presaging more of the same in 2016. The takeaway here is that the Saudi gambit failed to wrench market share away from the Russians and between the conflict in Syria, Moscow's closer ties with Beijing, and Riyadh's move to antagonize The Kremlin by encroaching on Russia's eastern European market share, one shouldn't expect Putin to back down any time soon. In short, if John Kerry and Riyadh did in fact plan to bankrupt the Russians by tanking crude prices, the effort was a miserable failure that resulted not only in a 20% fiscal deficit for the Saudis, but also in the destruction of American jobs in the oil patch. We close with a bit of humor from Deputy Energy Minister Kirill Molodtsov: “I will tell you when Russian companies are for sure going to decrease production -- when oil costs $0."
OPEC blowback continues to ripple around the world. With Russia's Ruble pushing back towards record lows against the USD, and Kazakhstan's Tenge having tumbled to record lows, the writing was on the wall for Azerbaijan. As Bloomberg reports, the third-biggest oil producer in the former Soviet Union moved to a free float on Monday and the manat crashed almost 50% instantly to its weakest on record with the second devaluation this year. First the Russian Ruble... Then Kazakhstan's Tenge... While Azerbaijan’s former Soviet allies Russia and Kazakhstan have moved to floating currency regimes in the past year, the Azeri central bank has questioned whether the country was prepared for a similar shift. Governor Elman Rustamov said there was no need for another devaluation of the manat, according to a televised interview broadcast on Sept. 25. And now Azerbaijan's Manat crashes 50%... As Bloomberg reports, “It looks like Azerbaijan’s authorities are following Kazakhstan’s devaluation path,” said Oleg Kouzmin, a former Russian central bank adviser who works as an economist at Renaissance Capital in Moscow. “After devaluing the currency once, some time ago, they concluded that the first move was not enough to tackle all the challenges of a weaker oil price environment.” Azerbaijan relies on hydrocarbons for more than 90 percent of its exports and the manat has lost almost half its value against the dollar this year, the worst performance of currencies globally. The Azeri central bank’s reserves were at $6.2 billion at the end of November, down from more than $15 billion a year earlier. The Russian ruble’s collapse and a 70 percent plunge in the crude price since June last year have ushered in a new era of volatility for Azerbaijan, which is also beset by challenges ranging from declining oil output to a festering conflict with neighboring Armenia. “The only real surprise is that they waited so long, blew scarce FX reserves in the process, and thereby undermined the sovereign balance sheet and credibility and confidence in the process,” Timothy Ash, head of emerging-market strategy at Nomura International Plc. in London, said by e-mail. Charts: Bloomberg
Kazakhstan Three Month Interbank Rate was quoted at 12 percent on Wednesday April 26. Interbank Rate in Kazakhstan averaged 7.53 percent from 2004 until 2017, reaching an all time high of 24 percent in February of 2009 and a record low of 0 percent in March of 2012. The interbank rate is the rate of interest charged on short-term loans made between banks in the local currency. This page provides - Kazakhstan Interbank Rate- actual values, historical data, forecast, chart, statistics, economic calendar and news.
On Wednesday evening, Argentina’s FinMin (and former head of global FX research at JP Morgan) Alfonso Prat-Gay abolished currency controls, fulfilling new President Mauricio Macri’s promise to unify the official and black market peso rates. The move came on the heels of central bank governor Alejandro Vanoli's forced resignation. Macri has accused Vanoli of endangering the country's finances by racking up some $17 billion in dollar futures which the new government attempted to renegotiate ahead of the deval. “For those interested in a case study of what happens after a dramatic devaluation, you now have front row seats for what is likely to be a 25-30% peso plunge,” we said two days ago. Yesterday, the peso did indeed take a nosedive as the parallel rates converged on 14 ARS/USD. What does this mean for Argentinians, you ask? Well, as FT reports, “Argentines woke up on Thursday richer than Poles, Chileans and Hungarians [but] by bedtime they were not only poorer than all three, but also more pecunious than Mexicans, Costa Ricans and the good people of Equatorial Guinea.” In dollar terms, the sharp peso plunge pushed the country down eleven slots on the list of richest nations in GDP per capita terms. As the following table shows, Argentineans are now worse off than citizens of Chile, Poland, Equatorial Guinea, Hungary, Lebanon, Panama, Croatia, Kazakhstan, Costa Rica, Malaysia, and Mexico. More generally, the devaluation will cost the country some $167 billion in GDP. "[This is] just the latest ignominy to hit the seemingly accident-prone nation, which just over a century ago was the seventh-wealthiest country in the world on a per capita basis, ahead of the likes of Denmark, Canada and the Netherlands and five times wealthier than Brazil," FT goes on to say. While the devaluation is likely the right move from a long-term perspective, in the short-run things will be painful. “The peso devaluation is a bitter pill for Argentinian households who kept their savings in pesos and for multinationals who had reported peso cash balances at the official exchange rate on financial disclosures,” Bill Adams, senior international economist at PNC Financial Services Group says. And with that, we'll close with a few passages from one of the world's greatest economic minds. This is from May 3, 2012: "...press coverage of Argentina is another one of those examples of how conventional wisdom can apparently make it impossible to get basic facts right. Articles about Argentina are almost always very negative in tone — they’re irresponsible, they’re renationalizing some industries, they talk populist, so they must be going very badly. Matt Yglesias, who just spent time in Argentina, writes about the lessons of that country’s recovery following its exit from the one-peso-one-dollar 'convertibility law'. As he says, it’s a remarkable success story, one that arguably holds lessons for the euro zone."