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from The Great Debate:

The U.S.-Iran non-alliance alliance against Islamic State

Smoke rise over Syrian town of Kobani after an airstrike, as seen from the Mursitpinar crossing on the Turkish-Syrian border

One irony about the fight against Islamic State is that the nations now striking the extremist group the hardest also dislike each other the most.

Iran’s supreme leader, for example, declared last month that the United States has “a corrupt intention and stained hands” and cannot be trusted to fight against Islamic State. Meanwhile, State Department spokeswoman Jen Psaki said Washington is “not and will not coordinate militarily” with Tehran.

Washington and Tehran say they abhor each other. Yet they appear to be tacitly working together -- if awkwardly and at arm’s length -- to fight Islamic State. When everyone hates everyone else (welcome to the Middle East!) and pursues their own self-interest, strange political alliances can emerge.

Tracer rounds cross the sky over the Syrian town of Kobani during an airstrike, as seen from the Mursitpinar crossing on the Turkish-Syrian border

Is this deemed an ugly, politically distasteful relationship for all sides? Yes. Is our ad hoc alliance good enough to degrade and destroy Islamic State? Maybe not. Is Washington tacitly working with nations and organizations that have American blood on their hands? You’d better believe it.

from The Great Debate:

How the West buys ‘conflict antiquities’ from Iraq and Syria (and funds terror)

1"Many antique collectors unwillingly support terrorists like Islamic State, ” Michel van Rijn, one of the most successful smugglers of antique artifacts in the past century, told German broadcaster Das Erste this month.

And smuggling is booming in Iraq and Syria right now. In Iraq, 4,500 archaeological sites, some of them UNESCO World Heritage sites, are reportedly controlled by Islamic State and are exposed to looting. Iraqi intelligence claim that Islamic State alone has collected as much as $36 million from the sales of artifacts, some of them thousands of years old. The accounts data have not been released for verification but, whatever the exact number is, the sale of conflict antiquities to fund military and paramilitary activity is real and systematic.

from MacroScope:

UK growth robust so what’s eating David Cameron?

Britain's Prime Minister Cameron arrives at the European Council headquarters ahead of a EU summit in Brussels

British GDP data are forecast to show healthy growth of 0.7 percent in the third quarter.

Britain’s economy is growing at a strong annual clip of around three percent, a pace most euro zone countries could only dream of. But the government is worried that the currency area’s new malaise could take the shine off things in the run-up to May’s general election.

from MacroScope:

EU leaders meet for a gas

France's President Hollande talks with German Chancellor Merkel  during a meeting on the sidelines of a Europe-Asia summit in Milan

A two-day summit of EU leaders is supposed to focus on climate and energy policy including efforts to enhance energy security following the threat of interruptions to gas supplies from Russia.

That is no small issue. Russia and Ukraine have failed so far to reach an accord on gas supplies for the coming winter but agreed to meet again in Brussels in a week in the hope of ironing out problems over Kiev's ability to pay.

from The Great Debate:

Obama learns LBJ’s tough lesson: You can have guns or butter, not both

lbj-obama-combo(1)

President Barack Obama has lost his hold on a majority of Americans, according to recent polls. Though more than two years remain in his term, the popular appeal that propelled him to win the 2008 and 2012 elections may be beyond recovery.

It is sadly reminiscent of what President Lyndon B. Johnson experienced in the mid-1960s after winning the 1964 presidential election by one of the largest landslides in U.S. history.  This is not to suggest that history is repeating itself. There are too many differences between Johnson and Obama -- both the men and their presidencies -- to argue that. Yet, as Mark Twain said, history may not repeat itself, but it does rhyme.

from MacroScope:

Nearing a gas deal

A pressure meter and gas pipes are pictured at Oparivske gas underground storage in Lviv region

Russian and Ukrainian energy ministers are due to meet European Energy Commissioner Guenther Oettinger in Brussels after presidents Petro Poroshenko and Vladimir Putin said they had agreed on the "basic parameters" of a deal to get gas flowing to Ukraine again this winter.

Russia cut off gas supply to Ukraine in mid-June following more than two years of dispute on the price and said Kiev had to pay off large debts for previously-supplied gas before it would resume supply.

from The Great Debate:

Islamic State’s rules of attraction, and why U.S. countermoves are doomed

Demonstrators hold placards outside the U.S. embassy near to where a 9/11 anniversary memorial was being held in central London

The U.S. State Department is producing anti-Islamic State propaganda to persuade American and other would-be jihadis not to join the extremist group. It’s ham-handed, and often sarcastic, and unlikely to have the intended effect.

Why? Because the department fails to understand how Islamic State attracts recruits in the first place.

from MacroScope:

Franco-German meeting

German Finance Minister Schaeuble and his French counterpart Sapin attend news briefing after talks in Berlin

The big question of the week is whether financial market gyrations continue, worsen or calm. European stocks are being called higher at the open.

Greece has been effectively shut out of the bond market. If it and others on the euro zone’s southern flank come under persistent market pressure, in a way that hasn’t happened for two years, the onus on the European Central Bank to act will grow and grow.

from MacroScope:

Putin – is he ready to deal?

Russian President Vladimir Putin and Ukrainian President Poroshenko are due to meet on the sidelines of the EU/Asia summit in Milan today to try to find a way out of the Ukraine crisis.

Germany’s Angela Merkel and French President Hollande will also meet the pair as part of a four-way contact group. The Kremlin has just said Putin and Merkel have "serious differences".

from MacroScope:

Market selloff – blip or new crisis?

A trader watches the screen in his terminal on the floor of the New York Stock Exchange in New York

A two-day summit of EU and Asian leaders, which was going to be most notable for a meeting between the heads of Russia and Ukraine, risks being overtaken by financial market tremors which have spread worldwide.

There’s a good case that markets, primed with a glut of new central bank money, had climbed to levels which the state of the economies that underpin them did not justify. With the Federal Reserve about to turn its money taps off, investors seem to have woken up to poor growth prospects in much of the world.

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