#GREXIT And The #IRANDEAL

July seems to be so generous this year because in one week Greece saved its behind, Iran struck a deal with the “Greater Devil”, New horizons sent us live pictures of Pluto and Bastian Schweinsteiger became a red devil (this last piece of info can be a source of conflict though!).

If anything, the Greek and Iranian deals are purely business driven. Make no mistake, no party involved in any of both deals struck a “yes” purely because of goodwill or good citizenship. A Greek exit from the EU would have signaled the beginning of the union’s end and would have opened the door for other less convinced members to leave the group (Britain comes right on top of my head) and the domino would have rolled and although France and Germany seem somewhat eager to trim off the extra fat, deep down they knew that they had to keep Greece tucked in.  Perhaps the biggest catalyst for the Greek deal came from Russia; it was more than enough for President Putin to hint in one of his press conferences that a Greek exit meant more currency freedom for the country and meant that they were acquitted from all agricultural quota agreements with the EU to make all members eager to solve the situation. Last year’s EU’s sanctions against Russia have hurt both the EU’s and Russia’s economies and Putin might have seen in an independent Greece a possible ally especially that Russia lost important agricultural suppliers in Europe.

On the surface, one might think that Putin was dealt a hand, but the truth is that comrade Putin was a winner because he was smart enough not to slide in the Greek mud while successfully pushing the troubled EU further deep inside.

On the other hand, Putin’s real trophy was the Iranian nuclear deal; and I’m not talking in the political terms but rather in the economic terms. You see, Iran has tons of cash stacked in banks all over the world and years of sanctions have created a very thirsty economy that is ripe to use these funds in attracting investors and in investing heavily in the country. On the other hand, all the global economy is suffering and they are all in dire need for new markets and new money sources. These were the exact reasons that forced USA to restore diplomatic relationships and of course business with CUBA and they were also the reason here. Even France, the biggest ever opponent of the deal was the first country to announce that French companies might still get a chance to invest in Iran despite France’s official stand on the deal and French foreign minister Laurent Fabius has already announced that he will be visiting Iran next week (wait a minute dude, did you consult with your Israeli friends before taking such a hasty decision?). It’s very strange how the slight notion of money and profit can make one turn against their closest allies – just like the current situation of France and Israel.

But before everyone starts drooling over the Iranian pie, take a minute to remember that this is Iran – the country which until recently has been considered the heart of axis of evil and was named all sorts of names and remember that they are not known to be forgetful, so if anything then the biggest chunk will go to their staunch ally – yes you guessed it, it’s comrade Putin again. Russia has already announced that there will be deals that involve planes and if the sanctions are lifted then this will definitely mean both civilian and military planes. In addition, the country that has been for the longest time ever suffering from oil shortages will be able to fulfill its needs both in production and consumption with all the ramifications that will come from such a thing.

Iran might not really replace the EU in terms of trade size with Russia but Putin will definitely benefit the most especially that Iran has high agricultural production which Russia can definitely benefit of. On the other hand, Poor Obama has worn himself out to get that deal done and it so far seems that the Americans will not benefit financially whatsoever despite Obama’s relentless offers to market the deal in USA as a means to prevent war and promote peace, not unless Iran decides to lure them in even more.

A few years ago, Britain released the Lockerbie bomber who was Iranian; the official reason back then was humanitarian – the man was supposedly suffering from terminal cancer. The real reason though was to allow BP to strike a deal in Iran and that was what happened exactly. In 2015, the same is going to happen and nuclear Iran will be allowed to become so in return for financial benefits that the whole world desperately needs.

A lot can be said about diplomacy, about peace, about war and negotiations; a lot has been said about these in the last few weeks but the truth is it was all purely business; the country that until recently represented radicalism and extremism has become the world’s sweet heart and Israel which also until recently was Europe’s and America’s protégée has been shoved aside because it is not economically interesting anymore. For after all, and as one of my MBA finance professors used to frequently say: “It is not unethical, it is just business.”

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As Oil Profits Decline, ISIS Taps Into A New Resource: Archeological Artifacts

ISIS top man is almost a ghost, a man of very few appearances and whenever he does show up he makes sure that all the 6 billion inhabitants of the planet know about it. In one of his staged appearances, the whole wide world seemed to ignore all what he said and focused on one thing: The Rolex watch in his hand. After all the guy does have an exquisite taste but it’s not his taste what matters here, what matters is the fact that traditionally Rolex watches have been linked to the big money owners, the affluent and successful business leaders and this here is the core of the issue.

Since its debut, ISIS has shown business skills as equally as military skills and although one would question how can you form a well trained and highly occupied militia in a fortnight, some sorts of business successes can be done in such a short time especially when the resource is strategic, offers high returns and the competition is virtually non-existent. All these apply to oil so it was normal and understandable that the first thing ISIS did after invading parts of Iraq and Syria was to control oil resources; they even advertised a job opening in November 2014 for an oil field manager to manage their valuable asset, and put it back on the right track all the while pushing competition out of the market by turning to the black market to sell their oil for prices as low as $20/barrel and sure enough there was never any shortage of customers. But that was just a short lived phase because the world which was happy with the low prices at the beginning quickly realized that the negative effects reached as far the shale oil rigs in North Dakota. That was when the US led a coalition in order to presumably stop ISIS and they started their air raids and soon enough it was obvious that those raids where just orchestrated to prevent ISIS from entering certain areas of interest; for example the raids were really effective and served their purpose when ISIS threatened the federal state of Irbil yet not even one plane left base when the Yazidis were being slaughtered and pushed to extinction.

With oil profits drying up, the rolex-wearing business man had to tap into another resource that is abundantly available in the area he controls (and no I’m not talking about dates); actually this area is extremely rich in archeological ruins and artifacts that are valued in many millions of dollars and which have a buyer base that is as enthusiastic and deep pocketed as the oil clients ( just today I heard that someone paid $187 million for a Picasso painting, so can you imagine how much they would pay for a 4000 year old statue?)

And as any smart investor he first tested the grounds and he did so in Mosul. People sat horrified in front of their tv screens as they watched ISIS fighters tear down and break apart statues that were almost older than humanity itself but then they all sighed in relief after archeologists came to say that most of the statues on display were dummies and replicas and that the real ones were hidden. Great news, now instead of having to tour all the sites, ISIS can go to one central warehouse and find all what they need to sell (that’s how you cut your supply chain costs and increase profitability, told you this guy was a business man in a previous life!)

A few days ago, the US military euphorically announced the killing of a top ISIS oil expert along with 40 aides (maybe that was the dude who replied to their 2014 ad and got hired) yet they sat and watched as the militia entered the 4000 year old Palmyra which we call Tadmor; again no planes flew over that area (starting to sound a bit eerie no?) there also is a great historical reserve and while after the attack on Mosul ISIS videoed how they were destroying the ruins, nothing has come out of Palmyra yet and I don’t think anything will because  the guys will be busy making deals to sneak as much as they can out of the country and sell for whatever prices they can get – after all they need the money and the same parties that had no problem in buying ISIS oil have no problem buying those valuable ruins and historical artifacts either. UNESCO has confirmed it and EBAY as well – you can find many valuable coins on e-bay and for relatively low prices.

ISIS seems to be investing heavily in 3 things that are highly profitable, oil, the trade of rare artifacts and prostitution – 3 commodities and services that has been sought out since the oldest time and although they claim that prostitution and all what is related to tourism are against their dogma it seems they have little trouble when it comes to making money of them for after all and like one of my MBA professors used to constantly state “It’s not unethical, it’s just business.”

Why Low Oil Prices are Bad for the Global Economy as Well

In 2 weeks I’m going to be in Lebanon for vacation and as I will stop by the gas stations to fill up my car, I will be paying almost the same price that I used to pay when I first graduated from university around 6 years ago. At nearly 25,000 Lebanese Pounds per 20 liters all the Lebanese will be raving about it and enjoying this Holiday season to the maximum ( yes they will forget all the economic, social, residential, and environmental issues, they will also forget the refugee spillover from the neighboring war-plagued Syria, they will forget that we are still without a president for almost 8 months now and that our parliament is aiming to outlive the parliament that was around during all the 15 years of civil war. Ironically enough most of the faces are still the same and yes I am talking about the parliament and not about a senior citizens residential compound)

Of course not only the Lebanese are the ones joyful about it; in fact they share the same feelings with more than half of the residents of the planet. Americans are planning more and more road trips and the demand for big SUVs is ramping up again, and the Europeans might have something to cheer them up and keep them warm this winter after fears of Russia cutting them from the oil supply as a result of the ongoing tension between Russia and well most of the world. But all this comes with a price tag and a hefty one also; just as the increasing prices have been hurting the economies so will the decreasing prices. OPEC is still insisting on keeping the production and supply levels on current levels although supply is far exceeding demand and thus challenging the free market theory that supply and demand will lead to a market balance. The reasons behind this decision are plenty but I am not going to delve into the politics of it right now but the fact is everyone is hurting from it.

Oil producing countries are going to face massive budget deficits with many of them starting to question for how long they will be able to sustain such low prices and still go on with their development plans. Europe seems to be heading towards another recession in which low oil prices will not be of much help (the PIGS are now PIIGS with Ireland joining the club) they should start looking for a different animal name soon and preferably a longer one it seems.

In USA seemingly it will have the worst effect. The country that started the global economic crisis in 2008 might as well be leading the world into another one and if USA sneezes, Europe gets the flu. Right after the crisis, a massive effort was put into creating a more efficient economy that is not as much relying on oil as before and as a result a wide variety of fuel economic cars started to take more place on the roads instead of the traditional much larger gas guzzling V8s, the Prius which was literally the laughing stock of every movie and every comedian started to have its last laugh against all the skeptics. Green energy was strongly supported and subsidized and the glass panels industry witnessed a great boom. Now the lower oil prices have halted all this with the people reacting very fast to the low oil prices and ordering big trucks again and the still expensive alternative energy sources are being ditched in favor of traditional energy sources. What is even more, GM has announced its plans to lay off some workers from its Lake Oreon plan starting January 2015 and the reason cited is simply due to decreased demand on its economical cars the Buick Verano and the Chevrolet Sonic and I am guessing it won’t be long before the other carmakers will follow lead. Such is how much shortlived is the people’s memory and that’s how quickly they go back to old habits. Am I the only one seeing a “cash for clunkers” campaign looming in the Horizon once more?

Fiat was gambling on its tiny 500 model to conquer the streets of USA, Smart America was hoping that this would be its revival point and VW group were betting that their fuel economical tiny cars will help them dethrone BMW and Daimler as the kings of European cars in the USA. Alas, all those dreams might be going with the wind now.

In Lebanon, we party all the time; in the middle of the Israeli invasion on us we were partying, in the peak of the global crisis we were partying and now we are partying. In fact we don’t need a reason to party, we just need…… a place! But this time we have a reason and it’s the oil crisis. While countries have been bracing for the damages that the oil prices will cause to their economies, we are planning where to spend New Year’s Eve! I just hope that the economy does not sour so much that I lose my job and miss the chance of enjoying the low gas prices!

Lessons from History: ISIS of our Days, is Taliban of the Last Century

“History repeats itself” one of the most controversial sayings out there that has lead to many debates and to lots of digging in our history just to prove it right or wrong. Whether it is true or not is a debate that will go on forever, but for now I will focus on an incident that is alarmingly similar to a historic predecessor and maybe, just maybe it will support the believers of that saying.

The whole world seems to be consumed and shocked with the uprise of ISIS and claiming that its ways and its brutality were never seen before. I beg to differ; for as brutal and unusual their acts might seem, they are not new because some 35 years ago a predecessor movement called “Taliban” emerged in Afghanistan and tried to implement the same plan that ISIS is trying to implement now in the Middle East. Not only their goals are similar, but how they came to power, how they were created, what was their role, and what they did are almost typical as if they were exact twins.

A few days ago, I came across a documentary that was once aired on The History Channel titled “The Taliban Declassified” and the similarity between Taliban as depicted in the documentary and ISIS is so striking that at one point you just can’t tell who’s who.

Here’s why I find both guerrillas to be of the exact genetic pool:

  • To begin with, little is known about the background and history of Mullah Omar, the leader of Taliban; even less is known about Abu Bakr Al-Baghdadi, the leader of ISIS which strikes me as very odd since we are in the era where nothing can be hidden from the internet (you might want to check the facebook pictures from your “latest event” to verify my sayings) – Many rumors link both man to secret services.
  • Pakistani secret services are believed to be the creators of Taliban – in the case of ISIS, there are many “Godfathers” who fit that profile. Maybe someday we will know the true father.
  • Back in the 80’s Mujahidin flocked from all over the world to support Taliban because they believed that it was there to implement what they viewed as the true Islamic teachings – in 2014 a main export item should be added to Europe’s GDP because they are the biggest exporters of fighters going to Syria to join ISIS.
  • ISIS performs flogging, crossing, beheading, stoning and takes extreme measures to perform their view of Shari’aa. They banned music, forced men to grow their beards, imposed the religious police, put the 5 prayers a day law into effect, they also forced women to be fully veiled, and banned them from driving cars. Moreover, they changed school books and the teaching curriculum, punished men who were caught eating during Ramadan fasting days. They are convinced that the whole world is fighting Islam and it is their job to protect it. A quick look into Taliban’s history and dogma shows that they were exactly the same, albeit ISIS seems to believe more in sexual freedom because they believe that a cow’s boobs are sexually provocative and should be covered – all of you heartless people who accused them of being sexually intolerant should rethink your accusations after this piece of information!
  • On October 21st 2014, and as US air force fighters were dropping military support to Kurdish Guerilla fighters defending Kobani they “mistakenly” dropped some supplies inside ISIS controlled territory. Of course the official account from US officials was that it was made by mistake but given all the technology and GPS systems makes it hard to believe such a “mistake”. What adds to my doubt is a piece in the documentary where US ambassador Peter Tomsen who was at one point a US special envoy to Afghanistan between 1989-1992 says, and I quote his exact words: “while the Soviet Military was still in Afghanistan there was every reason for the United States to continue supporting the Pakistani approach of providing the extremists with the greatest bulk of American weaponry. However after the soviets moved out in February of 1989 we should have readjusted our policy and provided weapons to all groups not only the extremists but the moderates and other groups in Afghanistan.” Perhaps this time the Americans have learned from their previous mistake and this is why they dropped the supplies “by no mistake”
  • ISIS does not tolerate any other military faction next to it and this is why we see them fighting with Al-Nusra most of the time. Back in the days, Taliban also eliminated all competition to reign on the Afghani scene.
  • There were always indirect talks between the USA and Taliban through many channels since after all they were their “Godfathers”. Mrs. Clinton admits in her memoirs that ISIS also is the offspring of American secret intelligence but it probably is a more refined version of Taliban. They probably sat down and learnt from all the mistakes committed in the Taliban era and tried to avoid them this time with ISIS. I believe it is safe to say that there will be no September 11 this time.
  • Taliban was created for the sole reason of fighting the Soviet Union back then; both the USSR and USA led a proxy fight on Afghani territory with little attention to the real needs of the Afghani people. Both were looking into increasing their territories, have access to more resources and in cheaper ways and stop the other side from doing so. The whole war in the region today is to try to cut off Russia’s access to the Mediterranean and also to try to find cheaper ways to get oil and gas to Europe in an attempt to break Russia’s monopoly.
  • In 1985 and in the height of the fight between Russia and Taliban, an unexplained surge in oil production made a downward push on the prices. This initiative was lead by Saudi Arabia and it hit right in the heart of Russia’s economy. Today oil prices are at an all time low and have hit lows never seen before ( I still can’t believe that gasoline prices are down to just $20 / 20 liters in Lebanon, it definitely must be a dream!) Saudi Arabia has reiterated many times that they have no plans to cut production which means prices are not going to go up again anytime soon – Another hit to the Russian and Iranian economy this time.
  • Just as Taliban became out of control, the USA eliminated it and Mulla Omar just disappeared into thin air – Just as ISIS became a threat to Kurdistan (USA’s protégée) the USA stepped in and hit ISIS with airstrikes to stop its march towards that state.

What I find to be extremely interesting is how accurate and effective where the hits performed by the US airforce against ISIS when they were threatening Kurdistan and how much less effective they became when ISIS was marching towards Kobani.

USA, Russia, oil seem the theme words of this decade just as they have been since the 50’s of the last century. This here is another model of the ongoing economic fight between the 2 global superpowers; they still lead their proxy wars on territories that aren’t theirs in the first place, innocent casualties still die and along the way they are creating more and more beasts. The question is how long will the life span of ISIS be this time? We surely hope it will be short because we are getting tired and frustrated of it.

ISIS as an Economic Threat

In the popular US Tv show called “The Mentalist” there’s a serial killer called “Red John” who’s famous for marking his crime scenes  with a red smiley face but that’s not what we’re here to talk about; a few days ago the Christian Minorities in Mosul, Iraq woke up to find their front doors marked in red. Ironically the red marking on the houses was the letter “”ن which is the Arabic letter for N which stands for Nazareens – the naming that ISIS members give to Christians in the region. Put that letter in a circle and it will somewhat look like our fellow’s funny face. Christians were not the only ones marked for death in Mosul, the Shiites in that region and other minorities faced the same fate.

Ever since ISIS’s star started to shine amidst the Syrian revolution they have been in a rapid expansion. Of all the so called “opposition” factions (they are referred to as “so called” because we have lost count of how many of them are there now) ISIS seemed to be the most organized add to that they are the most brutal and the most feared amongst all the guerrillas there. And unlike the others, they seemed to have a vision, mission and mostly a strategy; they targeted key points in the Syrian landscape, forged for resources and mostly spread fear with their brutal and beyond the extreme methods. Their tactical strategies helped them attain keypoints in the Syrian landscape including oil refineries – a strategic resource in any war.

After a series of setbacks in Syria they shifted their strategy to Iraq; a location where they had more fertile soil due to the policies of the ruling regime and as a result of years of sectarian tensions and just like the US invasion to Baghdad in 2003, Mosul fell in their hands with no resistance at all. The bounty was massive and it ranged from piles of cash money in banks to a huge supply of very advanced US weapons that were proctored to the Iraqi Army (or should I call this army Casper since it keeps disappearing?) that astonishingly vanished into thin air when word of the invasion came in. some statistics put their current fortune at $2 billion dollars – try to let this sink in for a moment!

After securing territory in Iraq and starting to perform their regular “cleansing” techniques in order to clean out all opposition and spread fear, they shifted towards Lebanon in a short stint where they tried to take over a border town in the farthest Northern Bekaa point with the Syrian borders. Their invasion lasted only a few days where they were forced to retreat back into Syria since they were not able to face the Lebanese army. But had they managed to conquer the town “A’arsal” and spread inside Lebanon their main target would have been the water resources for that country in addition to its seaports on the Mediterranean – an important focal point to help them have access to Europe. They previously tried to do so in Syria but back then Russia proved to them and to the whole world for that matter that they are willing to go to a world war but not let Syria or most specifically the Syrian shores fall in the hands of any opposing faction. Not to mention that in the last 2 years there have been important information and findings about massive amounts of oil in Lebanon mostly off of its shores.

So what will happen here is that the combined reserves of those 3 countries will exceed those of the current second biggest oil producer globally and the largest producer regionally which Saudi Arabia, they will also have access to the Mediterranean Sea through the Lebanese and Syrian shores which will give them ease of access to Europe and to USA. Having oil and gas as key commodities might represent Europe’s opportunity to get out of Russia’s grip and they can use the water resources to trade with the water thirsty gulf nations.

Forget about religion, minorities, women, children, senior citizens and human rights for that matter and focus on dollars here because this is the key point and it is another proof that war is the key for propelling economy forward. European Countries and the USA have no shame at all when dealing with blood diamond coming from the civil war–plagued-African continent nor they have any problem doing business with many of the tyrant regimes there so why should it be any different in this case? Tomorrow they will claim that ISIS prevailed because people allowed it to and that they are loved and popular in Lebanon, Syria, and Iraq. They will forget all the displaced people, they murdered victims and that atrocities committed and say that since this is what the people there want, we don’t have any problem in acknowledging that state and having diplomatic and business relationships with them.  But it is Saudi Arabia who has to be scared from that and the kingdom should go all-in to face this threat. At almost 10 million barrels a day, the oil rich kingdom’s economy revolves around that commodity only; take that from them and their economy will instantly collapse since all other economical sector are not as significant. Saudi Arabia should not under any circumstance accept that all those reserves fall in the hands of 1 regime that has proven over and over again that they have no ethical boundaries in what they do. They will lose a major European market, will be forced to lower their prices and maybe lose a competitive advantage against the USA

In short, ISIS is not a threat to Christianity or any other religious groups as much as it is a threat to oil rich countries. Building an empire on such a stretch will give them the upper hand and will surely make it easier for oil thirsty nations to go to one source instead of searching in many places. ISIS has shown over and over again that they have no interest in fighting with the Israeli regime – a fact that will make USA comfortable and it will encourage them more and more to go deeper in business with ISIS as long as they keep their little ally on the Mediterranean alone.

In the recent days, ISIS brutality in Iraq reached new heights with them emptying Mosul from all its Christians not to mention the casualties and then they moved to surrounding the Azydian minorities located in the Sinjar mountain area. Slaughtering 500 innocent and defenseless civilians sent a resounding message to the whole world; yet it was only when ISIS reached the borders of Kurdistan and threatened “US interests” in IRAQ that Mr. Obama ordered airstrikes against them. Yet another proof that the world is not moved by humanity but by money and interests. The airstrikes proved successful and ISIS was not able to reach Erbil although they managed to spread fear in the whole state and caused millions of dollars in economic losses. We still have to find out yet whether those airstrikes will be continued to totally destroy ISIS or they were just meant to draw borderlines for them.

As I was finishing that blog, I got a flash news that the UN council has voted to cut off all financial support to ISIS and Al Nusra, wait, what? Come again? Is this a confession? Are they admitting that they were the ones that created that monster? If the UN was designed to protect the world from agressors, tyrants, crazy dictators and war criminals well then who is going to protect the UN from itself?

I strongly believe that human nature is mostly controlled by 2 factors: greed and fear and it seems that ISIS greed has shown how far they can go. They seem to be confident about the success of their plan and their clients are already there. Rumor has it that Secretary of the State Hilary Clinton admits in her new memoirs “Hard Choices” that the USA is behind the creation of ISIS to fulfill exactly the purposes stated above; one small advice to the creators of Taliban and Al Qaeda in the 80’s “what goes around, comes around” maybe you would like to ask your troops in Afghanistan about that.