Italy’s Political Disaster Has World Financial Markets Running Scared

(THIS ARTICLE IS COURTESY OF CNBC)

 

Markets stabilize as Italian fears ease  

Political uncertainty in Italy has unhinged world markets, raising the specter of a euro crisis that could ripple across the global economy and even force the Federal Reserve to slow its rate-hiking plans.

Several strategists say there is little chance the euro zone’s third-largest economy will move to leave the single currency, creating a continent-wide crisis of confidence. But internal chaos and a new election could make for a rocky summer for markets and even put a dent in European economic growth.

Italy moved to the foreground as the latest source of angst for markets, after a weekend of drama in which President Sergio Mattarella on Sunday blocked the formation of a government that would have been decidedly against the euro.

Traders and financial professionals work ahead of the closing bell on the floor of the New York Stock Exchange (NYSE), April 6, 2018 in New York City.

U.S. markets set to rebound amid Italy uncertainty  

The anti-establishment 5-Star Movement, Italy’s biggest party, and the far-right League party picked euro critic Paolo Savona as their economy minister. The two parties, both critical of Europe’s single currency, had won more than half the votes in March’s parliamentary elections. Mattarella vetoed the choice and instead asked Carlo Cottarelli, a former IMF official,toform a temporary government, but both parties object to him, and a new vote is now expected in late July.

The euro sank, losing 0.7 percent Tuesday to $1.1540, and investors dumped Italian bonds while seeking safety in U.S. Treasurys and German bunds. The 2-year Italian yield briefly snapped above 2.73 percent, a sharp move from just 0.48 percent on Friday and a negative yield earlier this month.

Global equity markets slumped, with the Dow tumbling more than 450 points. Banks led the selloff, and the S&P financial sector declined more than 3 percent. In Europe, yields on Italian bank debt spiked as bank shares sold off.

Chris Rupkey, chief financial economist at MUFG Union Bank, said a rash of recent data has already raised concerns about European growth. “This could be the straw that breaks the camel’s back in the case of prospects for Europe. It will spill over into the U.S. They won’t buy as many of our imports,” he said.

“When world economic growth has been threatened in the last three years, it was a concern. It hurts confidence on the economic outlook for the U.S.,” he said. “Given what we know right now, I would not be comfortable rushing out and forecasting a rate hike in September.”

But Rupkey also said the markets are reacting to news that occurred over a three-day holiday weekend in the U.S. and may not be as turbulent in upcoming sessions. “It’s not a full-blown European sovereign debt crisis yet. For one thing, the Italian 10-year yield is a little over 3 percent. Back in 2012, it was at 8 percent. It’s not the same situation yet.”

“I’m sure many American traders wish that Europe, in general, would stop having these mini referendums on whether the euro is going to survive,” said Rupkey. “It’s going to be really dragged out. I don’t think we can trade on this every day. I don’t think 10-year yields in Italy are going to go higher and higher every day, waiting for that vote. The focus is going to shift back pretty quickly to the U.S., which is employment and wage data on Friday.”

For some traders, the Italian political crisis is deja vu to the Greek debt crisis, which wound down three years ago after fanning fears that the whole financial and economic fabric of the euro zone could unravel.

“The chaos in Europe is pushing down U.S. interest rates so money is flowing to the U.S., fleeing Europe, making people think, that [with falling interest rates], coupled with the rising dollar, that the Fed responds by maybe having second thoughts about the trajectory of Fed policy,” said Marc Chandler, head of foreign exchange strategy at Brown Brothers Harriman. “It also is a risk to the real economy because Europe’s a big trading partner.”

The Federal Reserve, driven by a stronger U.S. economy, is on track to raise interest rates for a second time this year at its meeting June 13. The Fed has forecast three hikes for this year, but the markets had been expecting an added hike in September, in addition to December.

“The Fed is going to raise in June, raise in September and then they’re going to play it by ear,” said Peter Boockvar, CIO at Bleakley Advisory Group.

The U.S. 2-year Treasury yield, the most sensitive to Fed rate hikes, slipped to 2.38 percent, after touching 2.60 percent recently. The 10-year dipped to 2.82 percent from 3.12 percent just several weeks ago.

Chandler said he does not expect a new Italian government to push to exit the euro, though it could threaten other measures. Italy is the biggest debtor in the euro zone, with 2.3 trillion euros in debt, or 132 percent of GDP last year. That is double Germany’s level and well above the 87 percent of the euro zone.

“Their tactics would be to make some demands like: ‘Let’s cut taxes. Let’s use our t-bills to pay down our arrears. … Let’s keep challenging the EU,'” Chandler said. “That’s the back door to leave. You place demands on the EU.”

If this Italian situation gets worse, it could mean pain in the short term: Randy Warren

If this Italian situation gets worse, it could mean pain in the short term: Randy Warren  

He said the next coalition government could have a list of proposals to challenge the existing rules of the EU. “That’s why despite what their lips say, ‘We’re not looking to leave immediately,’ what it increases is the stress on the system, the demands they are placing,” Chandler said.

But the likelihood Italy leaves the euro are “slim to none,” he said.

Spain is another worry for markets, with a vote of confidence later this week on the administration of Prime Minister Mariano Rajoy because of a campaign finance scandal. That could force a new election for that country, which has already seen a deep divide over the Catalan region’s wish to split from Spain.

“The outcome in Italy is hard to see as an investment-friendly outcome. It’s much easier to see an investor-friendly outcome in Spain. Spain is bad, but Italy is a lot worse,” he said.

Chandler said one outcome in the next election is that Silvio Berlusconi, former prime minister, could run for office again. A court ruled that the three-time prime minister may again seek office, after being banned because of tax fraud for more than five years. Berlusconi has been supportive of a “parallel” currency to the euro, Chandler said.

Also unclear is how the European Central Bank will respond to the turmoil kicked up by Italy, and some strategists say ECB President Mario Draghi would be sure to retain stimulus as needed. The ECB is expected to announce in September that it will put aside its asset purchases, but if Italy’s woes spill into the broader economy, that could be in doubt.

“He’s completely lost control of the Italian bond market in two weeks,” said Boockvar. “I think he’s going to do his best to verbally calm nerves, but as far as legally using his balance sheet to help, I don’t see what he can do.”

But some traders appear to see the Italian situation as enough of a red flag to slow the Fed, particularly after the U.K. Brexit vote led to a market correction.

“The market is still pricing in a Fed hike for next month. It’s already in the cards. Why would the Fed not raise interest rates, given the kind of economic data we expect this week?” said Chandler. “Where I really see this having an effect is on the back end, the September hike.”

Robert Sinche, chief global strategist at Amherst Pierpont, does not see enough damage from Italy to slow the Fed.

“I think this will be a lot of noise, but I’ve seen this movie three or four times before. Italy stays in [the euro zone], and life goes on. There could be a little more uncertainty over the summer. They’ve realized that, which is why they pushed up the election to late July/early August,” he said.

“The ECB has been notoriously quiet because I think they like the signals the market is sending to Italy on the type of fiscal policies they’re talking about,” said Sinche. “I think we’ve had this spasm of risk off and in another couple of days we’ll be focused on some other bright light that comes along. I think what we’re seeing now is really a lot of liquidations of shorts in the bond market that were feeling pretty confident in Fed hikes and inflation.”

WATCH: Costa says Italian political risk way overdone

Italian political risk way overdone: Costa

Italian political risk way overdone: Costa  

China applies its own maximum pressure policy on Pyongyang

(THIS ARTICLE IS COURTESY OF CNBC NEWS)

 

China applies its own maximum pressure policy on Pyongyang

  • Beijing appears to have gone well beyond U.N. sanctions on its unruly neighbor, reducing its total imports from North Korea in the first two months this year by 78.5 and 86.1 percent in value — a decline that began in late 2017, according to the latest trade data from China.
  • Trade with China is absolutely crucial to North Korea’s survival.
  • Estimates vary, but it is believed that roughly half of all transactions in the North Korean economy are made in foreign currencies, with the Chinese yuan being the most common.That gives Beijing tremendous leverage, though for political and national security reasons it has generally been reluctant to exert too much pressure on Pyongyang.

North Korean leader Kim Jong Un at a military parade in Pyongyang marking the 105th anniversary of the birth of his grandfather, the late North Korean leader Kim Il Sung.

STR | AFP | Getty Images
North Korean leader Kim Jong Un at a military parade in Pyongyang marking the 105th anniversary of the birth of his grandfather, the late North Korean leader Kim Il Sung.

As the U.S.-North Korea summit looms, President Donald Trump‘s maximum pressure policy on North Korea may be working — thanks to China.

Beijing appears to have gone well beyond U.N. sanctions on its unruly neighbor, reducing its total imports from North Korea in the first two months this year by 78.5 and 86.1 percent in value — a decline that began in late 2017, according to the latest trade data from China. Its exports to the North also dropped by 33 percent to 34 percent both months.

The figures suggest that instead of being sidelined while North Korean leader Kim Jong Un made his surprising diplomatic overtures to Seoul and Washington, China’s sustained game of hardball on trade with Pyongyang going back at least five months may have been the decisive factor in forcing Kim’s hand.

Trade with China is absolutely crucial to North Korea’s survival.

It accounts for the largest share of the North’s dealings with the outside world and provides a lifeline to many of the necessities Pyongyang relies on to keep its nation fed and its economy from breaking down. Estimates vary, but it is believed that roughly half of all transactions in the North Korean economy are made in foreign currencies, with the Chinese yuan being the most common.

That gives Beijing tremendous leverage, though for political and national security reasons it has generally been reluctant to exert too much pressure on Pyongyang.

That reluctance is clearly wearing thin.

The statistics need to be taken with a dose of caution. Neither country is known for its commitment to transparency. Even so, more specific data reveal an even tougher, targeted crackdown, according to Alex Wolf, a senior emerging markets economist with Aberdeen Standard Investments:

— China’s exports of refined petroleum have collapsed over the past five months — to an annual rate of less than 4 percent of what it exported last year. With the pace on a downward trend, he believes, total exports could actually fall further.

— North Korean steel imports from China have also collapsed in 2018, and the same goes for cars. Wolf notes that it’s unclear if China is blocking such exports or North Korea simply can’t afford them. But either one, he wrote in a recent report for the company, would be a clear signal the North’s economy is “under a great deal of stress.”

“While China’s role over the past few months has often been overlooked or little understood, it appears a strategy could be emerging: China wants to play a central role in ‘resolving’ this crisis, but wants to do it on its own terms,” he wrote. “It’s increasingly clear that Chinese pressure is a driving force and China will play a central role in any future talks.”

Kim announced in his New Year’s address he would reach out to the South to ease tensions on the Korean Peninsula. He then agreed to hold a summit with South Korean President Moon Jae-in on April 27 and with Trump after that. But to the surprise of many, Kim suddenly showed up in Beijing first for a summit with President Xi Jinping last month, underscoring the continued primacy of China in North Korea’s foreign relationships.

Lu Chao, director of the Border Study Institute at the Liaoning Academy of Social Sciences, noted that China accounts for almost 80 percent of the North’s total trade, meaning the onus for implementing U.N. sanctions has been mainly borne by Beijing, whose enforcement has created “huge pressure on North Korea.”

“There is no doubt China is doing more than ever when it comes to sanctions,” he said, adding restrictions on sales of textile and seafood products to North Korea imposed by China last autumn “have dealt a huge blow to the country.”

“China has played a very important role in promoting the current change of the situation,” he said.

The decrease in trade isn’t just about politics.

China’s economy is also dealing with overproduction in many industries and its demand for North Korean imports is low. Efforts at joint development projects have languished and difficulties suffered by Chinese firms in North Korea — especially problems receiving payment — have soured enthusiasm for cross-border trade.

But the deficit presents an obvious dilemma for the Kim regime: the more it depletes its foreign reserves by buying in excess of what it sells, the less money it has to buy anything at all. Normally, that would lead to inflation — and even hyperinflation — as imported necessities become scarcer and people who can afford to do so dump their holdings in the local currency to buy safer U.S. dollars or Chinese yuan.

Georgetown University economist William Brown said he believes the North’s current account deficit has risen dramatically since the strengthening last November of sanctions on North Korean exports by China, which he said are by now “certainly biting.”

“Why is Kim venturing his offer now? My impression is he is feeling very strong pressure from China’s virtual embargo on North Korea’s exports, and what he must see as a gradual ratcheting down of needed imports, even petroleum,” Brown wrote in a recent blog post. “This is an enormous economic hit of a sort the country has never had to deal with on this scale.”

Brown believes an important indicator of the North’s economic health will be movement of the unofficial but widely used exchange rate for the North Korean currency, which has been surprisingly stable at around 8,000 to the U.S. dollar for years but should now be under intense inflationary pressure.

“China is giving us the chance, and (we should) use it cleverly to get what we want out of the nuclear program and systemic reform,” he added. “It’s not so impossible if you realize everyone, even young Kim, can benefit.”

Philippines plans to withdraw from from International Criminal Court

(THIS ARTICLE IS COURTESY OF CNBC NEWS)

 

Philippines plans to withdraw from International Criminal Court amid crimes against humanity investigation

  • In a lengthy statement released Wednesday, the Filipino strongman leader decried what he believed to be an “outrageous” attack on his character by United Nations (UN) officials.
  • Duterte has been accused of facilitating extrajudicial killings and other rights abuses during a campaign to stamp out illegal drugs in the Asian country.
  • Police are thought to have killed more than 4,100 people since Duterte took office in May 2016 and rights groups allege approximately 8,000 others have been murdered during the country’s war on drugs.

Philippine President Rodrigo Duterte walks past honor guards as he arrives at Manila international airport in Manila on May 24, 2017, after returning from a visit to Russia. Duterte threatened on May 24 to impose martial law in Mindanao to combat the rising threat of terrorism, after Islamist militants beheaded a policeman and took Catholic hostages while rampaging through a southern city.

NOEL CELIS / AFP / Getty Images
Philippine President Rodrigo Duterte walks past honor guards as he arrives at Manila international airport in Manila on May 24, 2017, after returning from a visit to Russia. Duterte threatened on May 24 to impose martial law in Mindanao to combat the rising threat of terrorism, after Islamist militants beheaded a policeman and took Catholic hostages while rampaging through a southern city.

Philippines President Rodrigo Duterte intends to pull his country out of the International Criminal Court (ICC), shortly after the judicial body launched a crimes against humanity investigation into his controversial war on drugs.

In a lengthy statement released Wednesday, the Filipino strongman leader decried what he believed to be an “outrageous” attack on his character by United Nations (UN) officials. Duterte has been accused of facilitating extrajudicial killings and other rights abuses during a campaign to stamp out illegal drugs in the Asian country.

Last month, the ICC said it was investigating allegations the Philippines president had committed crimes against humanity.

Duterte initially welcomed the move, suggesting it would provide him with an opportunity to clear his name of any apparent wrongdoing. However, in a dramatic U-turn, he has since decided the judicial body has demonstrated a “brazen ignorance of the law.” He also said the ICC was “useless” and “hypocritical.”

Duterte should ‘see a psychiatrist’

Police are thought to have killed more than 4,100 people since Duterte took office in May 2016 and rights groups allege approximately 8,000 others have been murdered during the country’s war on drugs. The Philippines has consistently said its legal processes are functional and independent, while the country’s police deny allegations of murder and cover-ups.

Duterte’s contentious bid to clamp down on illegal drugs has long been a source of international alarm, with several countries and UN officials condemning the campaign.

On Friday, the UN’s High Commissioner for Human Rights said the maverick former mayor was in need of a psychiatric evaluation. Speaking at a news conference, Zeid Ra’ad al-Hussein said Duterte’s attacks on human rights activists were “unacceptable” and should not continue “unanswered.”

According to the ICC’s guidelines, a pledge to withdraw from its organization would only become effective one year after the initial notification. The Philippines is currently under the jurisdiction of the ICC as a result of it being a member, while withdrawing from the group does nothing to change its jurisdiction retroactively.

World’s First Flying Car’s Are Now For Sale

(THIS ARTICLE IS COURTESY OF CNBC)

 

The world’s first flying car that you can buy has been unveiled at the Geneva International Motor Show in Switzerland.

Dutch firm PAL-V revealed its final production model Tuesday and is now taking pre-orders for the car/aircraft on its website.

PAL-V said the first delivery will be made in 2019 once the production model has received final safety certifications.

Source: PAL-V

The firm claims the two-person vehicle has a top road speed of about 100 miles per hour (mph) while it can reach 112 mph in the air. With a maximum altitude of 11,000 feet, the air range is estimated to top out at around 350 miles.

Transforming from road to air isn’t quite as simple as pushing a button, requiring manual intervention, but Pal-V claims this can be done in less than 10 minutes.

The first limited edition model will retail at an expected 499,000 euros ($621,500) with only 90 available for sale. Thereafter a “Liberty Sport Edition” will be available for an expected price of 299,000 euros.

Flying lessons are included in the price and the company’s website is taking orders tied to hefty non-refundable reservation fees.

The flying car is certified to fly under the rules of U.S. and European safety agencies but owners will need a pilot’s licence. Pilots will also need access to a small airstrip to take off and land.

‘world’s richest 1% get 82% of the wealth,’

(THIS ARTICLE IS COURTESY OF CNBC)

 

Inequality gap widens as ‘world’s richest 1% get 82% of the wealth,’ Oxfam says

  • Approximately 82 percent of the money generated last year went to the richest 1 percent of the global population, the report said, while the poorest half saw no increase at all
  • Last year, Oxfam said billionaires would have seen an uptick of $762 billion — enough to end extreme poverty seven times over
  • The report is timely as the global political and business elite gather in snow-clad Davos for the World Economic Forum’s annual meeting this week

Superyachts and other smaller luxury vessels sit moored in the Port de Fontvieille in Monaco, on Monday, May 18, 2015.

Andrey Rudakov | Bloomberg | Getty Images
Superyachts and other smaller luxury vessels sit moored in the Port de Fontvieille in Monaco, on Monday, May 18, 2015.

Just 42 people own the same amount of wealth as the poorest 50 percent worldwide, a new study by global charity Oxfam claimed.

In a report published Monday, Oxfam called for action to tackle the growing gap between the super-rich and the rest of the world. Approximately 82 percent of the money generated last year went to the richest 1 percent of the global population, the report said, while the poorest half saw no increase at all.

The report is timely as the global political and business elite gathers in snow-clad Davos for the World Economic Forum‘s annual meeting this week, which aims to promote responsive and responsible leadership.

‘Increasingly concentrated’

Oxfam said its figures, which some observers have criticized, showed economic rewards were “increasingly concentrated” at the top. The charity cited tax evasion, the erosion of worker’s rights, cost-cutting and businesses’ influence on policy decisions as reasons for the widening inequality gap.

The charity also found the wealth of billionaires had increased by 13 percent a year on average in the decade from 2006 to 2015. Last year, billionaires would have seen an uptick of $762 billion — enough to end extreme poverty seven times over. It also claimed nine out of 10 of the world’s 2,043 billionaires were men.

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David Ryder | Getty Images

Booming global stock markets were seen as the main driver for a surge in wealth among those holding financial assets last year. The founder of AmazonJeff Bezos, saw his wealth balloon by $6 billion in the first 10 days of 2017 — leading to a flood of headlines marking him as “the richest man of all time.”

‘Something is very wrong’

Mark Goldring, chief executive of Oxfam GB, said the statistics signal “something is very wrong with the global economy.”

“The concentration of extreme wealth at the top is not a sign of a thriving economy but a symptom of a system that is failing the millions of hard-working people on poverty wages who make our clothes and grow our food,” he added.

Oxfam has published similar reports over the past five years. At the start of 2017, Oxfam said eight billionaires from around the globe had as much money as the 3.6 billion people who make up the poorest half of the world’s population. Improved data has seen last year’s figure revised to 61, but the charity said the trend of widening inequality was still evident.

The report, “Reward Work, Not Health,” is based on data from Forbes and the annual Credit Suisse Global Wealth datebook, which has detailed the distribution of global wealth since 2000.

Check out the world leaders and celebrities that are going to Davos this year

Larry Busacca | Getty Images Entertainment | Getty Images

The survey assesses a person’s wealth based on the value of an individual’s assets — mainly property and land — minus any debts they may hold. The data excludes wages and income to determine what he or she is perceived to own. This methodology has attracted criticism in the past, as a student with high debt levels and a high future earning potential would classify as poor under the current criteria.

Nonetheless, Oxfam said even if the wealth of the poorest half of the population was recalculated to remove the people in net debt, their combined wealth would still be equal to 128 billionaires.

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US Air Force official: Missile targeting Saudis was Iranian

(THIS ARTICLE IS COURTESY OF CNBC NEWS)

 

US Air Force official: Missile targeting Saudis was Iranian

  • Iran manufactured the ballistic missile fired by Yemen’s Shiite rebels toward the Saudi capital, says the top U.S. Air Force official in the Mideast.
  • Saudi Arabia long has accused Iran of giving weapons to the Shiite rebels and their allies, though Tehran has just as long denied supplying them.
  • “There have been Iranian markings on those missiles,” Harrigian told journalists. “To me, that connects the dots to Iran.”

A still image taken from a video distributed by Yemen's pro-Houthi Al Masirah television station on November 5, 2017, shows what it says was the launch by Houthi forces of a ballistic missile aimed at Riyadh's King Khaled Airport on Saturday.

Houthi Military Media Unit | Reuters
A still image taken from a video distributed by Yemen’s pro-Houthi Al Masirah television station on November 5, 2017, shows what it says was the launch by Houthi forces of a ballistic missile aimed at Riyadh’s King Khaled Airport on Saturday.

Iran manufactured the ballistic missile fired by Yemen’s Shiite rebels toward the Saudi capital and remnants of it bore “Iranian markings,” the top U.S. Air Force official in the Mideast said Friday, backing the kingdom’s earlier allegations.

The comments by Lt. Gen. Jeffrey L. Harrigian, who oversees the Air Force’s Central Command in Qatar, further internationalizes the yearslong conflict in Yemen — the Arab world’s poorest country.

Saudi Arabia long has accused Iran of giving weapons to the Shiite rebels known as Houthis and their allies, though Tehran has just as long denied supplying them.

“There have been Iranian markings on those missiles,” Harrigian told journalists at a news conference in Dubai ahead of the Dubai Air Show. “To me, that connects the dots to Iran.”

There was no immediate reaction from Tehran.

Saudi Arabia says it shot down the missile Nov. 4 near Riyadh’s international airport, the deepest yet to reach into the kingdom. Saudi Arabia’s Foreign Ministry later said investigators examining the remains of the rocket found evidence proving “the role of Iranian regime in manufacturing them.” It did not elaborate, though it also mentioned it found similar evidence after a July 22 missile launch. French President Emmanuel Macron similarly this week described the missile as “obviously” Iranian.

Nikki Haley, the U.S. ambassador to the United Nations, said in a statement Tuesday that the July launch involved an Iranian Qiam-1, a liquid-fueled, short-range Scud missile variant. Iran used a Qiam-1 in combat for the first time in June when it targeted Islamic State group militants in Syria over twin militant attacks in Tehran.

Harrigian declined to offer any specifics on what type of missile U.S. officials believed it was, nor did he show any images of the debris. He also didn’t explain how Iran evaded the blockade by the Saudi-led coalition, which intensified after the missile targeting Riyadh.

“How they got it there is probably something that will continue to be investigated over time,” the lieutenant general said. “What has been demonstrated and shown based on the findings of that missile is that it had Iranian markings on it. That in itself provides evidence of where it came from.”

The Houthis have described using Burkan-2 or “Volcano” Scud variants in their recent attacks, including the one Nov. 4. Those finless missiles are reminiscent of the Qiam, wrote Jeremy Binnie of Jane’s Defense Weekly in a February analysis.

“The Burkan-2 is likely to heighten suspicions that Iran is helping Yemen’s rebel forces to develop their ballistic missile capabilities,” Binnie wrote.

Adding to that suspicion is the fact that Yemen’s missile forces previously never had experience in disassembling and rebuilding the weapons, said Michael Knights, a fellow at The Washington Institute For Near East Policy who previously worked in Yemen.

It is “not a stretch to believe that Tehran is supporting the Houthi missile program with technical advice and specialized components,” Knights wrote in an analysis Thursday. “After all, the Houthis have rapidly fielded three major new missile systems in less than two years while under wartime conditions and international blockade.”

The U.S. already is involved in the war in Yemen and has launched drone strikes targeting the local branch of al-Qaida, though it stopped offering targeting information under the Obama administration over concerns about civilian casualties. That prohibition continues today, though the Air Force continues to refuel warplanes in the Yemen theater and offers support in managing airspace over the country, Harrigian said. The Saudi-led coalition also uses American-made bombs and ordinance in its attacks.

Yemen long has had ballistic missiles, dating back to the 1970s when Yemen was split between the socialist South Yemen and North Yemen. After unification in 1990 and a later civil war, Yemen largely moved its ballistic missile stockpile to a mountain base in Sanaa, the capital. It also purchased more from North Korea.

When the Houthis seized Sanaa in September 2014, their allied fighters also held control of the ballistic missiles. The Yemeni military was widely believed to possess around 300 Scud missiles at the time, though exact figures remain unknown.

The Saudi-led coalition entered the war in March 2015 on the side of Yemen’s internationally recognized government. It then attacked the ballistic missile base in April 2015, touching off massive explosions that killed several dozen people. Saudi Arabia implied at the time that the Scud arsenal in Yemen had been seriously degraded, if not entirely destroyed, as a result of the airstrikes.

It soon would become clear that wasn’t the case. In June 2015, the rebels fired their first ballistic missile into Saudi Arabia near the southwestern city of Khamis Mushait. In the time since, Yemen’s rebels have fired over 70 ballistic missiles into Saudi Arabia, according to the Washington-based Center for Strategic and International Studies’ missile defense project.

For its part, Iran long has denied offering any arms to Yemen, though it has backed the Houthis and highlighted the high civilian casualties from the Saudi-led coalition’s campaign of airstrikes.

But others in Iran have been coy about the ballistic missiles in Yemen. Mehdi Taeb, an influential hard-line cleric who is a brother to the intelligence chief of the hard-line Revolutionary Guard, said in April that Iran tried three times to send missiles to Yemen. The Guard, answerable only to Supreme Leader Ayatollah Ali Khamenei, oversees Iran’s missile program.

“We did it one time via an airplane, one time via a Navy boat and one time with a ship,” Taeb said in an online video.

The cleric said ultimately the administration of Iranian President Hassan Rouhani ordered the transfers stopped over negotiations on the nuclear deal with world powers, without offering a specific time for the attempted shipments.

“They said come back because the Americans said, ‘If you send missiles to Yemen, we will end the negotiations,'” Taeb said.

STEPHEN HAWKING AI WARNING: ARTIFICIAL INTELLIGENCE COULD DESTROY CIVILIZATION

(THIS ARTICLE IS COURTESY OF NEWSWEEK)

(JUST YESTERDAY NOV. 6th, I WROTE AN ARTICLE TITLED ‘THE UNNEEDED POOR WILL BE EXTERMINATED’, THINGS I POINTED OUT IN THAT ARTICLE DO AGREE WITH WHAT MR. HAWKING IS SAYING HERE IN THIS ARTICLE TODAY, PLEASE CONSIDER READING YESTERDAYS ARTICLE ALSO, THANK YOU.)

STEPHEN HAWKING AI WARNING: ARTIFICIAL INTELLIGENCE COULD DESTROY CIVILIZATION

World-renowned physicist Stephen Hawking has warned that artificial intelligence (AI) has the potential to destroy civilization and could be the worst thing that has ever happened to humanity.

Speaking at a technology conference in Lisbon, Portugal, Hawking told attendees that mankind had to find a way to control computers, CNBC reports.

“Computers can, in theory, emulate human intelligence, and exceed it,” he said. “Success in creating effective AI, could be the biggest event in the history of our civilization. Or the worst. We just don’t know. So we cannot know if we will be infinitely helped by AI, or ignored by it and side-lined, or conceivably destroyed by it.”

stephen hawking Earth extinction colonizeStephen Hawking sits onstage during an announcement of the Breakthrough Starshot initiative with investor Yuri Milner in New York City, on April 12, 2016. Hawking, the English physicist, warns humanity needs to become a multiplanetary species to ensure its survival.REUTERS/LUCAS JACKSON

Hawking said that while AI has the potential to transform society—it could be used to eradicate poverty and disease, for example—it also comes with huge risks.

Society, he said, must be prepared for that eventuality. “AI could be the worst event in the history of our civilization. It brings dangers, like powerful autonomous weapons, or new ways for the few to oppress the many. It could bring great disruption to our economy,” he said.

This is not the first time Hawking has warned about the dangers of AI. In a recent interview with Wired, the University of Cambridge Professor said AI could one day reach a level where it outperforms humans and becomes a “new form of life.”

artificial intelligence Artificial intelligence GLAS-8/FLICKR

“I fear that AI may replace humans altogether,” he told the magazine. “If people design computer viruses, someone will design AI that improves and replicates itself. This will be a new form of life that outperforms humans.”

Even if AI does not take over the world, either by destroying or enslaving mankind, Hawking still believes human beings are doomed. Over recent years, he has become increasingly vocal about the need to leave Earth in search of a new planet.

In May, he said humans have around 100 years to leave Earth in order to survive as a species. “I strongly believe we should start seeking alternative planets for possible habitation,” he said during a speech at the Royal Society in London, U.K. “We are running out of space on Earth and we need to break through the technological limitations preventing us from living elsewhere in the universe.”

The following month at the Starmus Festival in Norway, which celebrates science and art, Hawking told his audience that the current threats to Earth are “too big and too numerous” for him to be positive about the future.

“Our physical resources are being drained at an alarming rate. We have given our planet the disastrous gift of climate change. Rising temperatures, reduction of the polar ice caps, deforestation and decimation of animal species. We can be an ignorant, unthinking lot.

“We are running out of space and the only places to go to are other worlds. It is time to explore other solar systems. Spreading out may be the only thing that saves us from ourselves. I am convinced that humans need to leave Earth.”

The U.S. Just Dropped The ‘Mother Of All Bombs’ In Afghanistan. But What Is That?

(THIS ARTICLE IS COURTESY OF TIME)

The U.S. Just Dropped the ‘Mother of All Bombs’ in Afghanistan. But What Is That?

Apr 13, 2017

The United States on Thursday dropped “the mother of all bombs,” the largest non-nuclear bomb it has ever used in combat, on an ISIS tunnel and cave complex in eastern Afghanistan.

The bomb, officially called the GBU-43/B Massive Ordnance Air Blast (MOAB), was dropped from a MC-130 aircraft in the Achin district of Nangarhar province, Pentagon spokesman Adam Stump said, according to the Associated Press. The target was near Afghanistan’s border with Pakistan.

President Donald Trump said Thursday the bombing was a “very successful mission,” according to Reuters, and he touted the mission as evidence of a stronger foreign policy under his administration. It was not immediately clear how much damage the bomb did, how many militants were killed, or whether any civilians were killed.

Here’s what you need to know:

What is the bomb?

The GBU-43 is a GPS-guided weapon that weighs an enormous 21,600 pounds, according to an article from the Eglin Air Force Base. Each one costs $16 million, according to military information website Deagel.

During testing in the early 2000s, it created a mushroom cloud that could be seen from 20 miles away, according to the Air Force story.

Why was it developed?

The MOAB was designed in 2002 as a replacement for the BLU-82 Daisy Cutter, according to the Air Force article. Its purpose was initially to put pressure on former Iraqi dictator Saddam Hussein.

“The goal is to have the pressure be so great that Saddam Hussein cooperates,” said then-Defense Secretary Donald Rumsfeld in a 2003 interview, according to the Air Force article. “Short of that — an unwillingness to cooperate — the goal is to have the capabilities of the coalition so clear and so obvious that there is an enormous disincentive for the Iraqi military to fight against the coalition.”

Has it been used before?

The bomb was sent to the Middle East in 2003, but it had never been used before this week.

How many does the U.S. have?

The U.S. military says it has 20 MOAB bombs and has spent about $314 million producing them, according to CNBC.

What kind of destruction does it cause?

While not all details from Thursday’s blast have been made public, the bomb is very powerful. “What it does is basically suck out all of the oxygen and lights the air on fire,” Bill Roggio, of the Foundation for Defense of Democracies, told Air Force Times. “It’s a way to get into areas where conventional bombs can’t reach.”

While it was initially intended to deter U.S. opponents, this week’s strike marks a change to using the weapon as an active tool in fighting ISIS. The use of the MOAB in the Nangarhar province indicates the U.S. still considers ISIS a threat in the area.

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