The European Banking Authority, in conjunction with the European Central Bank, conducted a stress test of 123 leading banks within the European Union. A total of 24 banks failed the stress tests, which gauges the ability of a bank located within the EU to withstand macroeconomic pressures, which are rapidly accumulating not only in Europe but throughout the global economy. This represents a full 20 percent of all the major banks subjected to the stress test by the EBA and ECB. (http://www.eba.europa.eu/documents/10180/669262/2014+EU-wide+ST-aggregate+results.pdf)

Nine of the banks with failing grades are Italian; three are Greek and another three are Cypriote. Though only one of the banks  on the list of vulnerable banks is Irish (Ireland had previously been afflicted with a major banking crisis, requiring a massive bailout), that institution, Permanent TSB, is one of Ireland’s largest financial institutions. Permanent TSB was found to have a massive €854.8 million hole in its reserves. Overall, the EBA found that the banks surveyed in the stress test were short of 24.6 billion euros in capital reserves–the amount required in their modeling to withstand a three-year recession. This is the equivalent  of 31.17 billion U.S. dollars at current exchange levels.

Since the global economy imploded into systemic crisis in 2008, central banks and regulating authorities in major economies throughout North America and Europe have held periodic stress tests, apparently in an effort to reassure the public in those countries that their banks are in generally good financial condition. There is a suspicion among many that those stress tests are often rigged in a manner designed to present the most favorable indication possible regarding those banking institutions. The fact that this most recent stress tests undertaken by the EBA reveals that 20 percent of the European Union’s major banks are in trouble, and this at a time of economic stagnation throughout Europe, with increasing indications of looming recession, should serve as a warning klaxon on how fragile Europe’s financial health remains a full six years after the onset of the global economic and financial crisis.

If Hillary Clinton runs for President of the United States  in 2016, see the video about the book that warned back in 2008 what a second Clinton presidency would mean for the USA:

CLICK ON IMAGE TO VIEW VIDEO Hillary Clinton Nude

In the past few days the equity markets, in particular the Dow Jones index, have displayed wild gyrations. One day stocks fall sharply, followed by a near equal climb the following day, only to shortly afterwards swing down sharply again. The sentiment-driven swings on the world’s bourses display extreme nervousness  by investors. Increasingly, they are beginning to catch on that the “recovery” was no secular recovery following the  global economic and financial crisis of 2008, but a short-lived stabilization. Now, reality is catching up fast.

For the past few months, there have been indications of stagnation in the world’s fourth largest economy, Germany, which has been the sole force holding together the debt-ridden Eurozone. Now comes the August figures on German exports: a decline of 5.8 percent (http://www.dw.de/german-exports-take-a-deep-dive-in-august/a-17983575), the worst contraction in Germany’s critical export sector since January of 2009, at the worst point of the global economic crisis.

The German export contraction is merely a hint of what is happening globally. Trade growth is slowing, inhibiting the ability of sovereigns to finance their massive structural deficits and cope with record high levels of unemployment. The geopolitical situation is very bad and getting worse, pointing to further erosion in economic confidence. It may be that the global economy is only one major crisis away from another catastrophe, as in 2008. And the sources of that next crisis are everywhere around us: the Islamic State war in the heart of the Middle East; looming tension with Iran over the nuclear issue; border tensions between India and Pakistan;  a territorial dispute in the Far East that pits China against Japan and Vietnam. Then there is the Ukraine crisis, pitting Russia against most of Europe and the United States. On top of the geopolitical flashpoints, there is now the emerging global health crisis involving the Ebola virus. Any one of these flash points can trigger a “Black Swan” event that could plunge all major economies into a severe recession.

While all those negative indicators envelope our world, central banks across the globe are giving increasing signs that sooner rather than later the policy of essentially zero-interest rates will have to be reversed, as the distorting effects  of artificially low rates cannot be maintained in perpetuity. Yet, it has been largely those low rates, in combination with the unleashing of a flood of liquidity, that are largely responsible for the limited economic growth that has occurred since 2008, along with the recovery of the world’s stock markets from their worst losses  incurred during the onset of the crisis.

The mood swings on Wall Street and elsewhere appear to be the tracing of a fiscal and economic electrocardiograph, delineating that not all is well with the global economy, and the warning signals are flashing red. Underlying and reinforcing those fears is the knowledge within the financial community that sovereigns expended so much of their capital in coping with the last worldwide economic crisis, there is little left for policymakers to react with when the next big financial and economic tsunami  strikes the global economy.

If Hillary Clinton runs for President of the United States  in 2016, see the video about the book that warned back in 2008 what a second Clinton presidency would mean for the USA:

CLICK ON IMAGE TO VIEW VIDEO Hillary Clinton Nude

A  full-blooded war in its early stages is now underway, involving two antagonists, the Islamic State led by Abu Bakr al-Baghdadi, known to his followers as Caliph Ibrahim, and the United States of America, led by President Barack Obama. The former, creator of the world’s first Islamic caliphate in nearly a century, is strong-willed, determined, persistent and utterly ruthless. The latter, by contrast, is a reluctant warrior, tentative, incoherent in his understanding and articulation of the threat posed by his nemesis, and prone to missteps. It is the distinction in the capacities of these two leaders far more than the relative military potential of the two opposing actors that will determine the outcome of this potentially epochal struggle. The present trajectory revealed in the leadership style and substance of the President leads me to a pessimistic assessment of this evolving military conflict . The following comprises my diagnosis of why President Obama is leading the United States towards a potentially cataclysmic outcome for his nation:

1. President Obama has consistently underestimated–and misunderstood– his opponent. Hubris is one of the most fatal afflictions that can undermine a national leader engaged in a great struggle. Unfortunately, Obama has time and again demonstrated an inability to accurately gauge his opponent’s capacity.  The intelligence failures and abject unwillingness to comprehend the emerging threat posed by al-Baghdadi and his Islamic State by the President  are already well recognized, such as his reference in January 2014 to the Islamic State as a “JV team.” Recent formulations by the President display continued misconceptions regarding the leader of the Islamic State.

In a nationally televised statement made by President Obama on September 10, 2014 he said, “ISIL is not Islamic. No religion condones the killing of innocents.” (http://www.whitehouse.gov/the-press-office/2014/09/10/statement-president-isil-1) Considering that neither the President nor his principal national security advisors are practicing Muslims, while Abu Bakr a-Baghdadi holds two advanced degrees in Islamic studies from the Islamic University of Baghdad, including a PhD, it is an astonishing display of naiveté for America’s Commander-in-Chief to engage in a contest on the relative expertise of the two leaders in the field of Islamic jurisprudence and Koranic exegesis. The brutal truth is that the Caliph of the Islamic State has the credentials and expert knowledge to base all of his military decisions on Islamic principles, and that is a defining strength of al-Baghdadi that enables him to inspire his followers to a fanatical religious devotion. The President’s ill-founded characterizations reveals a lack of ability to comprehend the glue that binds together the military prowess that defines the Islamic State. Furthermore, history repeatedly reveals that religion (and rigid secular ideologies)–not only Islam, but all three monotheistic faith traditions–have scriptures and theological precepts that can and have been used to justify the slaying of non-combatants.

By attempting to turn the conflict  that has been initiated by the Islamic State into a contest in defining the true nature of Islam, President Obama arouses contempt and ridicule from the enemy while achieving nothing on the battlefield.

2. The Commander-in-Chief is attempting to wage war on the cheap. One gets the impression that President Obama believes he can determine the course of a military conflict by edict. For example, he can decide to withdraw troops from one operational theatre, and declare no ground forces will be deployed to another arena, as though politically-determined polices are a substitute for careful, long-term strategic and operational decision-making. Clearly, Obama hopes to contain the Islamic State through airpower and drones, primarily American but supposedly involving a large coalition of allies.

If massive aerial bombing and the deployment of hundreds of thousands of troops could not defeat the Vietcong during the Vietnam war, what historical parallels is the President turning towards to instill confidence that airpower alone will bring the forces of the caliphate to their knees? As for the military contribution by several NATO and Arab allies, the miniscule number of combat aircraft being offered by these nations is irrelevance in the broader context of the struggle. The farcical nature of this contribution was illustrated by the British Ministry of Defense highlighting the deployment of a mere two aircraft and their subsequent destruction of a single Islamic State Toyota pickup truck as a major “triumph” on the battlefield.

To date, America’s leader and his key allies are thinking small and short-term, while the looming struggle will be massive and enduring. Conducting this warfare through minimalist means will only guarantee a far lengthier and costly struggle with the forces of the Islamic State.

3. President Obama lacks a grand strategic vision for confronting the Islamic State. The President’s external priorities have been all over the map, diluting the ability of the U.S. to comprehensively and effectively confront the challenge being posed by the Islamic State.  While al-Baghdadi was building up strength, training his cadres and formulating his strategy, America’s  foreign policy and national security agenda has been globally dispersed. Obama and his key advisors, in particular John Kerry, were simultaneously retreating from the Middle East while seeking to have the other anti-American Islamic theocracy in the region, Iran, serve as a substitute for protecting U.S. regional interest through concessions on the nuclear issue; devoting massive allocations of time and effort towards “resolving” the Palestinian-Israeli issue when  all the known facts indicated that this was at present a fool’s errand that was also a marginal factor in the continuing disarray  in the region; pivoting towards the Asia-Pacific region in  a manner that signaled that China, America’s principal financial creditor, was being viewed as a future threat; and restarting the Cold War with Russia through miscalculations and ill-advised intervention in the political turmoil in Ukraine.

If the Islamic State was an insignificant threat, perhaps the United States would have the luxury of engaging in multilateral policy endeavors that would add to Washington’s list of adversaries and estranged allies. However, in the kind of contest of wills that the Caliph has unleashed, I don’t think a wise policymaker would characterize the threat being posed as insubstantial. That being the case, a more coherent presidency would be focused on defeating the threat, and building the alliances that would maximize the ability to crush the Islamic State. Russia and China are both viewed as enemies by the Islamic State, along with the United States. Obama should be reaching out to Moscow and Beijing as potential and powerful allies in the war against the Islamic State, rather than engaging in policies that create tension in the relationship with these two counties, while diverting attention and resources away from the confrontation with the Islamic State.

4. Thus far, the President does not appear to fully recognize the nature and scope of the threat being posed to America by al-Baghdadi and his army. In essence, everything that President Obama has said and every decision he has made in connection with the Islamic State reveals that Obama views it as a phenomenon in continuity with the general “War on Terror,” which actually began prior to September 11, 2001. The very conceptualization labeled as the “War on Terror” betrays the strategic disconnect and intellectual vacuum within the decision-making apparatus in Washington. Terror, per se, is a tactical means employed by a hostile entity, and not the entity itself. Obama apparently sees the conflict as one involving a  confrontation with “terrorists” as opposed to a structured entity, the Islamic State, with an army, battlefield commanders, an effective military staff and strong leadership. Furthermore, this structured entity is clearly at war with the United States, and there is no ambiguity or lack of clarity by Abu Bakr al-Baghdadi and his leadership regarding their intentions towards the United States. This is made clear in a propaganda film released by the Islamic State, “Flames of War,” which concludes with a message from the Caliph aimed directly at the American people:

“Finally, this is a message we direct to America. Know, O defender of the cross, that a  proxy war won’t help you  in Sham [Syria] just as it didn’t help you in Iraq. As for the near future, you will be forced into a direct confrontation, with Allah’s permission, despite your reluctance. And the sons of Islam have prepared for this day, so wait and see, for we too are also going to wait and see.” (https://www.youtube.com/watch?v=0XZ3ovDxhw4&bpctr=1412479968)

The Islamic State wants the United States to once again deploy a large field army in the heart of the Arab world, and will seek to provoke President Obama to undertake what his enemy knows he is reluctant to do. How will they achieve their objective? In all probability, by launching a massive attack on American soil, at the level of September 11, 2001, at a minimum. And why do they seek the return of large ground forces from the U.S. to the Middle East? In the short term, this will aid in their recruitment. Long term, the leadership of IS are convinced that they can wear down the U.S. Army in grinding battles of attrition in urban combat, in the process crippling America militarily and economically.

A President who truly understood the threat facing the nation would not be expending time on the golf course or fundraising expeditions; he would be devoting every waking moment he has available in defending the United States from perhaps its most dangerous enemy since the Second World War.

If Hillary Clinton runs for President of the United States  in 2016, see the video about the book that warned back in 2008 what a second Clinton presidency would mean for the USA:

CLICK ON IMAGE TO VIEW VIDEO Hillary Clinton Nude

The Eurozone economy is dead in the water, the ill winds of economic recession are blowing and the politicians are dumfounded. Once again, the European Central Bank must step in with radical monetary fixes to cope with the lack of coherent economic and fiscal policy by the sovereigns. With ECB interest rates already at a nominal 0.05 percent–essentially zero interest rate– a  desperate ploy has just been announced.

Mario Draghi, president of the ECB, has made it known that he will now be buying up troubled assets and collateralized debt. The hope is that this will cool off the heat of threatening deflation, while kick-starting the Eurozone economy. If that fails, he will no doubt then resort to quantitative easing.  Stay tuned.

If Hillary Clinton runs for President of the United States  in 2016, see the video about the book that warned back in 2008 what a second Clinton presidency would mean for the USA:

CLICK ON IMAGE TO VIEW VIDEO Hillary Clinton Nude