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Tuesday, September 23, 2014 2:58 PM


Battle for Perpetual War is Won; US Admits Attacks on ISIS Could Last Years; Expect an Accident


Victory Announced in Battle "for" Perpetual War

The warmonger dream of perpetual war has been won: US says Attacks on Isis Could Last Years.

The multiple airstrikes launched by the US and its Arab allies against Islamist militants in Syria were the “beginnings of a sustained campaign” that could last for years, the Pentagon said on Tuesday.

The airstrikes represent a dramatic volte face for a president who has spent three years battling pressure in Washington to get more involved in Syria and who was elected on a promise to bring the country’s wars in the Middle East to an end.

The US separately bombed facilities controlled by the al-Qaeda affiliate Khorasan group in Syria, near Aleppo, after receiving intelligence it was planning “imminent” attcks on Europe and possibly the US, the Pentagon said.

The bombing of non-Isis militants angered some Syrian rebels groups who feared any Islamist group could be targeted, even if they had no intention of mounting attacks outside Syria, to the benefit of Bashar al-Assad’s regime.

“We did not request the regime’s permission. We did not co-ordinate our actions with the Syrian government. We did not provide advance notification to the Syrians at a military level, or give any indication of our timing on specific targets,” said Jen Psaki, the state department spokeswoman.
No Permission, No Coordination, From "Natural Allies"

Syrian president Assad is fighting ISIS so is the US. Please consider Syria's Deputy Foreign Minister: We're 'Fighting the Same Enemy'
Syria has “no reservations” about U.S. airstrikes against ISIS and wants to team up with Washington to tackle the militants, the country’s deputy foreign minister told NBC News.

Faisal Mekdad called Syria’s President Bashar al-Assad “a natural ally” for the U.S. in its battle against ISIS, saying in an exclusive interview that both countries are “fighting the same enemy” and should be working together — not antagonizing each other.

“When it comes to terrorism, we should forget our differences… and forget all about the past,” Mekdad said. “It takes two to tango...We are ready to talk."
Obama Threatens Assad if US Planes Downed

Ready to Talk? The US is not ready to talk.  Why talk when the battle for perpetual war has been won?

Instead Obama Threatens Assad if US Planes Downed in Syrian Airspace.
US President Barack Obama has threatened to wipe out Syria’s air defense system and topple the Syrian government if President Bashar al-Assad ordered his forces to shoot American planes entering Syrian airspace.

He made the remarks during a meeting in the White House before his speech about Washington’s strategy about the ISIL terrorist group, The New York Times reported on Sunday.

Obama ordered the US military on Wednesday to expand its bombing campaign against ISIL terrorists and launch airstrikes in Syria.

“If he [Assad] dared to do that, Mr. Obama said he would order American forces to wipe out Syria’s air defense system, which he noted would be easier than striking ISIS (or ISIL) because its locations are better known,” the newspaper said.

“He went on to say that such an action by Mr. Assad would lead to his overthrow, according to one account,” the Times said.
Expect an Accident

  1. Assad has no interest in downing a US aircraft. Syria even offered cooperation (not that Syria had much to cooperate with - but at least the position of Assad towards ISIS is credible).
  2. The US responded with a credible threat to flatten Syria's air defense system.
  3. The only group happier than the warmongers with that prospect would be ISIS.
  4. Thus, the top priority of ISIS is now clear. Shoot down any US military aircraft.
  5. If ISIS can succeed or if something (even a friendly fire accident) happens to cause a US pilot to eject, the US will flatten Syria’s air defense system.

Anyone smell an accident coming up?

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

12:36 PM


Miracle Not Enough to Save Italy; Disruptive Eurozone Breakup Awaits


Analysis of what's happening and what to do about problems are two different things.

Financial Times writer Wolfgang Münchau provides an excellent example in Italy Debt Burden is a Problem For Us All.

Münchau's opening gambit is "We need extreme and co-ordinated policy to make it possible for Italy to ultimately stay in the eurozone."

Münchau states, "I think it is high time to address the consequences of failure with more clarity than is usually done. Put bluntly, Italy’s economic position is unsustainable and will result in eventual debt default unless there is a sudden and durable change in economic growth. At that point, Italy’s future in the eurozone would also be in doubt – and indeed the future of the euro itself."

High Time For Honest Assessment

Actually, it is indeed "high time" for something. What we need is an honest assessment from political leaders and euro puppets that the euro is doomed.

The flaws of the euro are well understood. I am 100% certain that Münchau could write a playbook on them with ease.

Münchau even admits that it would be "naive" to believe economic reforms can save Italy.

"The economic adjustment needed goes much beyond a few structural reforms. Italy needs changes in the legal system, it needs to bring taxes down to the eurozone average, and to improve the quality and efficiency of the public sector. It needs, in other words, to change the entire political system. Even that may not be enough."  

According to Münchau (and I wholeheartedly agree), Italy needs economic reform, a new legal system, lower taxes, less government spending, pension reform, and more productivity. And even that might not be enough! 

Nonetheless, to support his political beliefs, he seeks a miracle.

Miracle Requested

"I could see the ECB buying a wide range of debt instruments, starting with asset-backed securities and covered bonds as already announced. On top of that, it could buy other types of financial securities – bonds from the European Stability Mechanism, the eurozone’s rescue umbrella, and from the European Investment Bank. The Commission could use the EIB to launch a big programme of infrastructure bonds. The best hope for Italy is that some of that trickles down into the real economy. I am optimistic that these programmes will have a noticeable positive effect on the eurozone as a whole, but much less certain of their effect on Italy."

Miracle Might Not Be Enough!

Münchau asks for that set of miracles from the ECB, yet is "less certain of their effect on Italy". Why? because "radical reform is not enough".

Note the irony in Münchau's conclusion "Italian debt sustainability requires policies at eurozone level that have so far been ruled out. This is where the eurozone’s success or failure will be decided."

Eurozone Already Failed

Spain's unemployment rate is close to 25%. Its growth and unemployment prospects are nil.

Spain has no chance of meeting budget targets. Nor do France and Italy. Greece and Cyprus are in depressions. France is waiting on deck with problems as big as Italy's.

Any thinking person with an ounce of common sense he would readily admit the eurozone has already failed and it cannot and will not be revived by wishful thinking.

Miracles are not coming. However, there are choices, all of them unpalatable, to the eurozone nannycrat.

Eurozone Choices

1. Voluntarily dismantle the eurozone in the least destructive manner
2. Dismantle the eurozone by populist choice with huge financial disruptions
3. Suffer through decades of stagnant growth and extremely high unemployment

Option 4, pray for a miracle is not a logical choice.

Unless done voluntarily, it's easy to predict what will eventually happen: After suffering long enough in option 3, a populist office-seeker will stand before the voters, hold up a copy of the EU treaty and declare all the bailouts and debt foisted on their country to be null and void. That person will be elected.

What to Do About It

No miracle that can keep the eurozone project intact. If Münchau was honest with himself, he would admit it.

The only thing that makes any sense to do is dismantle the eurozone, by choice, before someone like Marine Le Pen in France, Beppe Grillo in Italy, or an unknown person in Spain or elsewhere does it by force.

Disruptive Eurozone Breakup Awaits

Instead of seeking miracles that won't work and are not coming in the first place, how about an honest dialog on the best way to break up the eurozone?

Unfortunately, that will not happen because it is politically unacceptable.  A disruptive breakup of the eurozone awaits.

Addendum

Reader Marian states "If indeed Italy's problems are it's legal system, tax rates, quality and efficiency of the public sector, then simply dissolving the EU, even in an orderly way, would not address these fundamental issues."

Marian is of course correct! But why should the rest of Europe have to suffer with bailing out Italy when that approach cannot possibly fix the problem?

Can-kicking exercise only make the problem worse for all involved. By dissolving the eurozone, countries would be forced to address the real issues instead of praying for miracles from the ECB.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

12:01 AM


Video: The Bizarre Reason Your Health Insurance Plan Was Cancelled


There are lots of reasons why your health care plan may have been cancelled but this one is arguably the most bizarre.



Please play the video or the following discussion will not make much sense.

Link if video does not play: Why Your Plan Was Cancelled: Health Insurance and the Affordable Care Act.

I am automatically skeptical of such videos and articles. So I did some digging. It appears the video has it right.

"De Minimis Variation"

PDF page 36 of 40 of Federal Register, Vol. 78, No. 37 / Monday, February 25, 2013 / Rules and Regulations, spells things out nicely.

§ 156.140 Levels of coverage. (a) General requirement for levels of coverage. AV, calculated as described in § 156.135 of this subpart, and within a de minimis variation as defined in paragraph (c) of this section, determines whether a health plan offers a bronze, silver, gold, or platinum level of coverage. (b) The levels of coverage are: (1) A bronze health plan is a health plan that has an AV of 60 percent. (2) A silver health plan is a health plan that has an AV of 70 percent. (3) A gold health plan is a health plan that has an AV of 80 percent. (4) A platinum health plan is a health plan that has as an AV of 90 percent. (c) De minimis variation. The allowable variation in the AV of a health plan that does not result in a material difference in the true dollar value of the health plan is +- 2 percentage points.
Outside of the video, the above obscure government doc was the only place I found an accurate discussion of bronze, silver, gold, and platinum ranges.

Since I did not have the term "de minimis variation" in my search, it took me a while to find that doc.

As Typically Presented

Most sites offer woefully inadequate explanations. For example Medical Mutual accurately defines Actuarial Value (AV) as "the percentage of total spending on Essential Health Benefits (EHBs) that is paid by the health plan," yet, falls woefully short in describing the various metals as follows.

  • Bronze: 60 percent of Actuarial Value
  • Silver: 70 percent of Actuarial Value
  • Gold: 80 percent of Actuarial Value
  • Platinum: 90 percent of Actuarial Value

That is what we have come to believe, and similar explanations appear on numerous healthcare sites. Ten percent ranges seem reasonable, but they are against the law.

Health Insurance AVs

  1. 0-57 Invalid
  2. Bronze AV: 58-62
  3. 63-67 Invalid
  4. Silver AV: 68-72
  5. 73-77 Invalid
  6. Gold AV: 78-82
  7. 83-87 Invalid
  8. Platinum 88-92
  9. 93-100 Invalid

Range Analysis

  • Number of 1-Point Ranges: 100
  • Acceptable Ranges: 16
  • Invalid Ranges: 84

Competition Not

If for any reason, health care providers do not want to modify pre-existing plans that are just outside the acceptable ranges, their only option under the law is cancellation.

The legislation guarantees "If you like your plan you may not be able to keep it."

What reason might insurers have to cancel plans?

Thanks to ACA, the providers all have captive audiences. They all understand that no other provider can offer a plan in anything but the 16 of the 100 possible ranges.

If a plan outside one of the allowed ranges makes a smaller percentage profit than something inside one of the ranges, there is a huge incentive for providers to simply dump the plan.

And Obamacare was supposed to increase competition!

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

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