Congress Is Asked for Support on Syria, Which Is not Required Anyway
On Saturday, the president decided to ask Congress for a vote in support of a 'limited strike' against Syria (whatever that is – as John Glaser notes, promises of 'limited war' should be taken with a grain of salt). Since then, the administration has reportedly 'increased the pressure on Congress'. The always dependable war hawk John McCain is already saying that it is out of the question for Congress to deny the administration's request. A summary of the associated to and fro can be seen at the WAPO.
Meanwhile, secretary of state John Kerry opines that the president has the right to order a military strike against Syria with or without Congressional approval. That must be due to the famous 'limited strikes' footnote to Section 8 of the US constitution. Seriously though, there is the 'War Powers Resolution' of 1973, the constitutionality of which has never been tested. This resolution delimits what types of conflicts the president can engage in without Congressional approval, but it has already been ignored by two presidents (Reagan and Clinton) and has been held to be unconstitutional by every president since it was made law. Its aim was to reduce presidential power following the undeclared Korea and Vietnam wars. The UK government meanwhile has given up on a Syrian strike after its defeat in the House of Commons.
“A day after Barack Obama vowed to put any intervention in Syria to a vote of both the Senate and House of Representatives, Kerry said the administration was confident of winning a motion of the kind that David Cameron unexpectedly lost last week. "We don't contemplate that the Congress is going to vote no," Kerry said, but he stressed the president had the right to take action "no matter what Congress does".
He said the Obama administration's clear preference was to win a vote in Congress, which could come as early as next week, after politicians return from their summer recess on 9 September. He could "hear the complaints" about presidential abuse had Obama not gone to Congress, and its backing would give any military action greater credibility: "We are stronger as a nation when we act together." But he added: "America intends to act."
On Sunday, Britain definitively ruled out any involvement in military strikes against Syria even if further chemical attacks take place.
William Hague, the foreign secretary, said Britain would offer only diplomatic support to its allies. "Parliament has spoken. I don't think it is realistic to think that we can go back to parliament every week with the same question having received no for an answer."
So the vote seems to be a pure formality, if Kerry is to be believed. However, the New American doubts that an attack would be constitutional without a Congressional vote in favor.
Jihadists in Syria Worry They are the Actual Target
Meanwhile, some of the West's dubious new friends in Syria worry that they might actually end up being shot at. According to the BBC:
“In theory, any US-led strike against the Syrian regime of President Bashar al-Assad is a gift to the jihadists fighting to overthrow him.
The hailstorm of Tomahawk Land Attack Missiles (TLAMs) that is expected to rain down on Syria's bases and command-and-control centres – if President Barack Obama wins Congressional approval – would certainly hurt the jihadists' enemy, although perhaps not fatally.
Yet instead of being welcomed in jihadist ranks, the prospect has triggered alarm and confusion there and amongst other Islamist groups. Many are convinced that the real target of any US strikes will be the numerous anti-Western Islamist militias that have proliferated in the two-and-a-half-year-long civil war in which more than 100,000 people have already been killed.
"An imminent US attack will target al-Nusra Front and Islamic State of Iraq and the Levant (ISIL) positions," announced a message on Twitter on 25 August from an account that supports one of the two most effective jihadist fighting forces in Syria.
It went on to list what it believes will be the primary targets of a US missile strike: Syrian government radar and other air defence systems, Scud missile depots and vehicles involved with chemical weapons. It says "the second barrage will most probably be with cruise missiles", and lists the targets as al-Nusra Front and ISIL training sites, high-ranking and senior leaders of the prominent jihadist factions and finally, Sharia courts.
Whether or not Syria's jihadist groups are in America's sights, they are taking no chances.
"Do you think we trust the Americans?" one fighter from the rebel group Liwa al-Islam was quoted as saying, adding: "They gave Assad two weeks' notice to clear his bases. We know we are the real target."
Not many things are funny about Syria at the moment, but this certainly is.
(Photo via AFP)
Syria and Poison Gas – A Contradictory Report
Mintpress, an alternative news site, has published a report that is contradicting the official story of the poison gas attack in Syria, specifically with regard to who was actually responsible for it. The Mintpress report can be seen here. It states that people interviewed by its reporters on the ground in Syria claim that rebel forces were supplied with Sarin by Saudi Arabia, and that the incident was basically an accident, because they didn't know how to properly handle the stuff. On the surface, this is not necessarily less credible than the official line, considering that the official line has a long history of been wrong on many occasions, usually deliberately. Also, one must consider that Assad seems to be the last person likely to actually profit from a poison gas attack. For the sake of completeness, there are also speculations that people lower down in the Syrian army's command structure may have acted on their own, without the Syrian leadership's placet.
An assessment of the Mintpress report's credibility compared to the official account can be found at the 'Fairness & Accuracy in Reporting' blog, penned by Jim Naureckas. The article also contains some background information regarding Mintpress and the reporters working for it (at least Mintpress admits it cannot independently verify numerous aspects of the story). A summary of the official accounts can be seen at the BBC (entitled 'What We Know', which doesn't seem to be much, if by 'we' they mean us hoi-polloi).
One can probably not rule out that rebel forces have come into possession of nerve gas, although if they have, it seems more likely that it came from a Syrian government stock pile that Saudi Arabia's Prince Bandar.
Anyway, let us assume that the Mintpress story is true. That should not necessarily be seen as an impediment to bombing Syria, as there is by now a well-established tradition of bombing completely different people when Saudi nationals do something bad, as long as they are in the general vicinity.
Meanwhile in Libya: Oil Supply Dries Up
In another country that has been a recent subject of intervention, not all is well. As so often in the region, oil is the bone of contention. Libyan crude oil output has completely collapsed by now to 100,000 bbl./day, from its normal level of 1.6 m. bbl./ day.
A group of former rebels referred to as the 'guards' has occupied Libya's ports, alleging that government officials are falsifying export data and are selling oil for their own account. The government in turn charges that it is the 'guards' who are selling oil on the black market. Our guess would be they are all in it in some shape or form – it's probably a disagreement between thieves.
A weeks-long blockade by guards at key Libyan oil terminals has sent production plunging to under 100,000 barrels per day in a major blow to the economy, an official says. Guards, mostly ex-rebels who helped topple veteran strongman Muammar Gadaffi in a 2011 uprising, have been on strike since late July and imposed a blockade on oil terminals.
They accuse the authorities of corruption by selling crude in excess of documented cargo, while the government say the guards have been trying to sell oil on the black market.
'Oil production now stands at less than 100,000 barrels per day,' Saad Ben Shrada, a member of parliament's energy commission, told Al-Hurra TV. His comments come after the commission issued a statement saying the production plunge is costing Libya several billion dollars in lost revenues.
The commission urged 'the thwars (ex-rebels) to stop this act of vandalism. Oil production is at almost zero,' the statement said. Libya was producing between 1.5 million to 1.6 million barrels of crude oil per day before the striking guards imposed the blockade on the country's main export terminals. The parliamentary commission warned that the militia's actions 'will encourage other (groups) to carry out similar acts'.
Libya is almost entirely dependent on oil and gas for its foreign exchange earnings, with hydrocarbons accounting for more than 80 per cent of its GNP and up to 97 per cent of its exports. The commission also took a swipe at Libya's National Oil Company (NOC) for declaring on August 21 a force majeure at the main terminals of Zueitina, Ras Lanouf, Al-Sedra and Brega in the east of the country.”
Crude oil prices have actually risen the most this year just prior to the 'guards' beginning their occupation of Libya's ports. Thereafter a sideways consolidation began. They have also not reacted much to the news about a possible strike against Syria. It actually seems that crude oil does best when there are no news 'supporting' it. Meanwhile production in Texas recently. The constant stream of news about increasing US production keeps many people bearish on crude, but so far they have been wrong.
Chart by: StockCharts
It is that time of the year again – our semi-annual funding drive begins today. Give us a little hand in offsetting the costs of running this blog, as advertising revenue alone is insufficient. You can help us reach our modest funding goal by donating either via paypal or bitcoin. Those of you who have made a ton of money based on some of the things we have said in these pages (we actually made a few good calls lately!), please feel free to up your donations accordingly (we are sorry if you have followed one of our bad calls. This is of course your own fault). Other than that, we can only repeat that donations to this site are apt to secure many benefits. These range from sound sleep, to children including you in their songs, to the potential of obtaining privileges in the afterlife (the latter cannot be guaranteed, but it seems highly likely). As always, we are greatly honored by your readership and hope that our special mixture of entertainment and education is adding a little value to your life!
Bitcoin address: 1DRkVzUmkGaz9xAP81us86zzxh5VMEhNke
Most read in the last 20 days:
- A Date Which Will Live in Infamy
President Nixon’s Decision to Abandon the Gold Standard Franklin Delano Roosevelt called the Japanese “surprise” attack on the U.S. occupied territory of Hawaii and its naval base Pearl Harbor, “A Date Which Will Live in Infamy.” Similar words should be used for President Nixon’s draconian decision 45 years ago this month that removed America from the last vestiges of the gold standard. Nixon points out where numerous evil speculators were suspected to be...
- Insanity, Oddities and Dark Clouds in Credit-Land
Insanity Rules Bond markets are certainly displaying a lot of enthusiasm at the moment – and it doesn't matter which bonds one looks at, as the famous “hunt for yield” continues to obliterate interest returns across the board like a steamroller. Corporate and government debt have been soaring for years, but investor appetite for such debt has evidently grown even more. The perfect investment for modern times: interest-free risk! Illuustration by Howard...
- News from TINA Land
Distortions and Crazy Ideas We have come across a few articles recently that discuss some of the strategies investors are using or contemplating to use as a result of the market distortions caused by current central bank policies. Readers have no doubt noticed that numerous inter-market correlations seem to have been suspended lately, and that many things are happening that superficially seem to make little sense (e.g. falling junk bond yields while defaults are surging; the yen rising...
- Trump's Tax Plan, Clinton Corruption and Mainstream Media Propaganda
Fake Money, Fake Capital OUZILLY, France – Little change in the markets on Monday. We are in the middle of vacation season. Who wants to think too much about the stock market? Not us! Yesterday, Republican presidential candidate Donald Trump promised to reform the U.S. tax system. This should actually even appeal to supporters of Bernie Sanders: the lowest income groups will be completely exempt from income and capital gains taxes under Trump's plan. We expect to hear...
- The Great Stock Market Swindle
Short Circuited Feedback Loops Finding and filling gaps in the market is one avenue for entrepreneurial success. Obviously, the first to tap into an unmet consumer demand can unlock massive profits. But unless there’s some comparative advantage, competition will quickly commoditize the market and profit margins will decline to just above breakeven. Example of a “commoditized” market – hard-drive storage costs per GB. This is actually the essence of economic...
- An Old Friend Returns
A Rare Apparition An old friend suddenly showed up out of the blue yesterday and I’m not talking about a contributor who had washed out and, after years of ‘working for the man’, decided to return for another whack at beating the market. Instead I am delighted to report that I am looking at a bona fide confirmed VIX sell signal which we haven’t seen for ages here. Hello, old friend. Professor X and Magneto staring each other down in the plastic...
- Silver is in a Different World
The Lighthouse Problem Measured in gold, the price of the dollar hardly budged this week. It fell less than one tenth of a milligram, from 23.29 to 23.20mg. However, in silver terms, it’s a different story. The dollar became more valuable, rising from 1.58 to 1.61 grams. Who put that bobbing lighthouse there? Image credit: John Lund / Corbis Most people would say that gold went up $6 and silver went down 43 cents. We wonder, if they were on a sinking boat,...
- Retail Snails
Second Half Recovery Dented by “Resurgent Consumer” We normally don't comment in real time on individual economic data releases. Generally we believe it makes more sense to occasionally look at a bigger picture overview, once at least some of the inevitable revisions have been made. The update we posted last week (“US Economy, Something is Not Right”) is an example. Eager consumers storming a store Photo credit: Daniel Acker / Bloomberg We'll make an...
- The Fed’s “Waterloo” Moment
Corrupt and Unsustainable James has been a big help. Trying to get him to sleep at night, we have been telling him fantastic and unbelievable bedtime stories – full of grotesque monsters... evil maniacs... and events that couldn’t possibly be true (catch up here and here). He turned his head until his gaze came to rest on the barred windows of the main building. Finally, he spoke; as far as I was aware these were the first words he had uttered in more than five years....
- Gold and Silver Supply and Demand Report
The Famous Buffett Quote The prices of the metals didn’t change much this week. We thought we would take this opportunity to quote Warren Buffet. A comment he made at Harvard in 1998 earned him the scorn of the gold community. Warren Buffett no doubt is a good investor; but he is also one of the biggest beneficiaries of the vast monetary inflation since the 1970s, a wind that has been at his back ever since. He also doesn't seem to understand gold. We don't say this...
- US Presidential Election – How Reliable are the Polls?
Is Clinton's Lead Over Trump as Large as Advertised? Once upon a time, political polls tended to be pretty accurate (there were occasional exceptions to this rule, but they were few and far between). Recently there have been a few notable misses though. One that comes to mind is the Brexit referendum. Shortly before the vote, polls indicated the outcome would be a very close one, while betting markets were indicating a solid win of the “remain” vote. The actual result was around 52:48...
- The Devil You Know - or the One You Don’t?
Better the Devil You Know? We are providing around-the-clock nursing care to our invalid wife, who is back at home, with cracked ribs, unable to move. We are upstairs in the bedroom – the shutters closed against the heat (we have no air-conditioning) – taking a few minutes to update our Diary... but with nothing important to say. Every day, we look at the headlines, think about what is going on in the big wide world and try to connect a dot or two. It is probably the...