Buck Brief: 50K Refugees Flee Mosul, Turn to Peshmerga and US Forces for Protection

Michael Pregent, adjunct fellow at the Hudson Institute and a senior Middle East analyst, joined The Glenn Beck Program on Tuesday with an update on the situation in Mosul. Pregent is also a former military intelligence officer.

"The effort to take Mosul back from the Islamic State is now many weeks underway. What is the latest in this battle against ISIS on the ground in northern Iraq?" Buck Sexton asked, filling in for Glenn on radio.

Pregent had both good and bad news to relay. Among his concerns were the 50,000 refugees that have fled the area.

"They're preferring to go to places where the Peshmerga are in control of territory, because the Peshmerga have a heavier U.S. presence. And they believe that the U.S. can actually act as a guarantor, but they don't feel necessarily the same way about moving towards predominantly Shia forces," Pregent said.

With food supplies running low, Pregent calls it an "overwhelming" situation.

Listen to this segment from The Glenn Beck Program:

Below is a rush transcript of this segment, it might contain errors:

VOICE: You are entering TheBlaze threat ops center. This is a secure space. All outside coms are down. Prepare to receive the Buck Brief.

BUCK: Michael Pregent joins us now. He's an adjunct fellow at the Hudson Institute where he's a senior Middle East analyst. And he's also a former military intelligence officer. Great to have you, Michael. Thanks for calling in.

MICHAEL: Hey, thanks, Buck. Thanks for having me.

BUCK: All right. The effort to take Mosul back from the Islamic State is now many weeks underway. What is the latest in this battle against ISIS on the ground in northern Iraq?

MICHAEL: Well, it's slowed down to a crawl. As the Iraqi security forces are starting to enter from the east, they're encountering a lot of resistance, but they're not getting the US air support or artillery support that they had counted on. And that's because the United States is not going to provide artillery and air support to a predominantly Shia force, as they enter a predominantly Sunni town, where there's still a population of almost a million people still there. So that's why it's slowed down to a crawl.

BUCK: And the -- so far, the humanitarian issues that have been concerns leading up to this, about refugees fleeing the area, the numbers are surging. Are they able -- are the proper authorities and resources in place to try to handle the outflow of refugees, or are they becoming overwhelmed?

MICHAEL: Well, they're already becoming overwhelmed. I think there's 50,000 refugees that have left Mosul so far, and they are running out of food supplies at some of these organizations. But what's more telling is the direction in which the refugee flow is going. The refugees aren't going to the west, where the Shia militias are. They're not going to the south, where the Iraqi military is. They're preferring to go to places where the Peshmerga are in control of territory, because the Peshmerga have a heavier US presence. And they believe that the US can actually act as a guarantor. But they don't feel necessarily the same way about moving towards predominantly Shia forces.

One of the things we're seeing is when CNN, Fox, BBC report on this, they're saying that the Iraqi military are separating the women and children from the men. Now, that is the normal process. A process that is more comfortable when the US is doing the along with Peshmerga to make sure that any military-aged male, who is actually affiliated with ISIS, is screened out.

The problem is when the Iraqi security forces do this, or when the Shia militias do this, they basically say that any Sunni military-aged male is likely collaborated with ISIS. And we've seen people who have disappeared off the battlefield in Fallujah, Ramadi, and Tekrit, when the Shia militias and the predominantly Shia Iraqi military are left in charge of this process.

BUCK: Now, as US support directed to the Peshmerga is limited because we don't want to be -- well, we don't want to be, one, taking any casualties, but also we don't, two, want to be close to some of the battle. They want it to be an Iraqi-led force, and they want the tip of the spear to be Iraqi as much as possible.

The Shia militias, it seems, are going to be more heavily utilized in this process, which could bring about some serious sectarian tension.

MICHAEL: What I'm looking at now is, you look at the forces that are participating in the Mosul operation. It's a counterterrorism service. A lot of these guys are already bandaged from previous battles. They're going in with wounds that they sustained fighting in Tikrit or Ramadi and Fallujah. They're taxed. These guys are tired. They're effective. But they're just overstressed. The 15th Iraqi army -- or 15th Iraqi Army Division is out of Baghdad -- so these are all Shia soldiers, a lot of them affiliated with Jay Salmedi. The 9th Iraqi Army Division is all Shia.

Now, notice I just talked about the Iraqi Army here. They're already heavily infiltrated with militias, except they wear uniforms. They're still flying sectarian flags. Now, the Shia militias in the West, as they move to HEP Talaffer, they're going in, and they're starting to cause some problems there.

What I'm looking at now is, where do these Shia militias put their artillery and their rockets? Because the United States and the coalition is not going to blow up civilian neighborhoods like the Iraqi military and the militias did in Fallujah and Ramadi. So if you keep track of these Shia militias, where they put artillery and rockets, that will be very telling, because as they move into range of Mosul, they will start hitting these neighborhoods where these population centers are still in play.

BUCK: Is there any sense that you've picked up from your contacts on the ground, that the Sunni Arabs who live in Mosul, a city in which no one really knows how many people live there now, but in the past, it's about about a million people. Do you get any sense from those who are in contact with Sunni airbags there, that they feel like it's a good thing obviously that the Islamic State is hopefully going to lose control of Mosul within weeks, maybe months. But it's certainly taken a very long time for the Iraqi government to get to this point. It feels like an unacceptable delay, despite the fact that we should be -- it's a positive development that this is happening. It took, what, two years?

MICHAEL: Well, I would argue that we never really defeated or controlled Mosul when the US was there. We developed networks. We developed relationships to travel leaders. We built a Sunni intelligence network. And we slowly used an intelligence-backed strategy to decimate the leadership, which led to their demise, using the sons of Iraq and the awakening. I think this is a great opportunity to do that, put that back into play now. Obviously, you're not going to be able to take Mosul and the US is unable to provide air support and artery. Now is the time to slow it down, start to develop the Sunni sources, have them provide intelligence, because they've been doing that. They've given intelligence to the Peshmerga and some of the Iraqi security forces that have pinpointed ISIS locations, that have allowed US airstrikes to come in. I think right now, if I was able to advise something on it, let's slow it down. Let's make an intelligence operation that empowers the Sunni operation in Mosul with manpower and Intel to go after ISIS. And then create that political space for them to start building trust with Baghdad again. But that requires huge leverage on our part with Baghdad, to increase that leverage, to pull those levers to make sure that we make Baghdad a government that the Sunni population in Iraq can trust again. And that's going to be the hardest challenge.

BUCK: And this clearing operation will last months, at this point?

MICHAEL: Well, there will be a -- there could be a PR victory. We've replaced the flag in the center of Mosul. And that's exactly what happened.

But if you look at any of those three cities today, you'll still see that there are ISIS networks active, and that they're still able to conduct high profile attacks in Bagdad so there can be a victory that the media celebrates, that ISIS has been defeated in Mosul. And I will argue that that isn't going to happen until the Sunni population in Iraq trusts Baghdad. So I see this going on for a while.

Like I said, we were there from '03 to '11. And there were still pocket of resistance symbols. They just chose not to attack us.

BUCK: Michael, switching gears with one more question for you. You're former US military. What do you think about the likely pick of General Mattis for Secretary of Defense?

MICHAEL: I love the pick. I hope he takes it because he balances everything that people are worried about with the Trump administration. He's hard on Russia. He's hard on Iran. He's pragmatic. He believes that the use of military force needs to be one where you only put the military in if you want to win and you empower them to win. I hope he takes the position. He'd be a great voice -- a great pragmatic voice, a well-respected voice. And I think he would -- he would stay the concerns of most Middle Eastern leaders on what the next administration looks like over the next four years.

BUCK: Michael Pregent is an adjunct fellow at the Hudson Institute. Mike, always great to have you. We'll talk to you soon. Thanks for calling in.

MICHAEL: Thanks, Buck. Thanks for having me.

Featured Image: A picture taken through the bullet-riddled windshield of an Iraqi Special Forces armoured vehicle shows residents walking on a street in the Aden district of Mosul after troops almost entirely retook the area from Islamic State (IS) group jihadists on November 22, 2016. The fighting inside the city so far has focused on eastern neighbourhoods, which elite counter-terrorism and army forces entered earlier this month. The Islamic State group has offered fierce resistance to defend its last remaining bastion in Iraq, the city where its leader Abu Bakr al-Baghdadi proclaimed a caliphate in June 2014. (Photo Credit: THOMAS COEX/AFP/Getty Images)

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Can you remember the economic crisis of 2008 and how you felt when the news broke that Lehman Brothers had collapsed? I have found an economic threat that everyone needs to be aware of, so you can prepare yourself in case we see another 2008 type collapse. I am going to present the evidence to you and I urge you to verify everything and to form your own opinion.

What is that threat?

It is a bank called Deutsche Bank. They are by far the most dominant bank in Germany which is the world's fourth-largest economy. In 2018 they had €2.08 Trillion worth of assets and the second-placed bank (DZ Bank) had €506 Billion worth of assets. To show you how dominant this bank is, they have more assets than the 2nd, 3rd, 4th, 5th and 6th sized banks combined.
When we review a business there are three key parts to analysis:

  • Market sentiment
  • Business numbers
  • Technical Analysis

Market Sentiment

Deutsche Bank has a long history of potential scandals including going all the way back to World War 2 and dealing in Nazi gold. Below are five recent stories which have increased the negative sentiment around Deutsche Bank.

  1. In 2007, they purchased a portfolio of loans worth $7.8 billion and purchased insurance from Warren Buffets Company. It was discovered they did not set aside enough capital to cover any potential losses. Over the course of the ten years, they lost $1.6 billion, and when they sold the loan they did not update their financial statements to include the big loss
  2. The Panama Papers are an ongoing investigation looking for many things including offshore tax havens. These investigations have resulted in several heads of state resigning including in Iceland and Pakistan. Last November, 170 police raided 6 different offices in Frankfurt looking for evidence of money laundering.
  3. Estonia is a small country in Eastern Europe. It has a population of 1.3 million people and a GDP of €26 billion. In January, it was discovered Deutsche Bank got involved with a Danish bank called Danke Bank and processed over $230 billion worth of cross country payments (including from Soviet Russia) through one bank in Estonia.
  4. There have been rumors of issues with Deutsche for a while now and one of the solutions put forth was a merger with a bank called CommerzBank. The leaders of both companies met and they even got support from politicians. In April, news broke that the merger talks had failed because over worries the risks and costs would be too great.
  5. Last week in France, Investment banking boss Garth Ritchie and others were arrested in France over illicit tax transactions.

Business Numbers

Deutsche Bank is already struggling as they are losing staff, losing market share, and bonuses are expected to be down at least 10% and further rounds of cost-cutting to come. Now imagine the impact if business costs start going up.

The banking industry works in a very simple way. They raise funds through large bonds at low-interest rates and then sell those funds to business and individuals thru products like loans and credit cards at a higher interest rate which results in a potential profit.

Earlier this year, Deutsche Bank tried raising money through several bonds. They paid 180bp (basis points) on a two-year bond and 230bp on a seven-year bond. Let me put this in context for you. There is a small bank in Spain called Caixabank which paid 225bp on a five-year bond and one of the larger banks in Spain, BBVA paid 130bp on a five-year bond.

  • How and why is a small bank in Spain getting a better deal on bonds than a huge bank in Germany?
  • Why is a large bank in Spain getting a bond 100bp cheaper than a German bank?
  • What does the market know that we do not?

Stock Price

Deutsche is also missing revenue projections which further hurt the business ability to survive and prosper. As you can imagine all of this news has a deep and lasting impact on its stock price which is in deep trouble. Before I share the stock price, I need to put this into the context of the market and the industry compared to the big economic crash of 2008. Below you will see a chart of some banking stocks from around the world with their peak price prior to the 2008 crash, the low of the 2008 recession and the price today:

As you can see from the above chart the banks in America have recovered from the 2008 recession by anywhere up 375% and JP Morgan has not only recovered its price in full but is constantly setting new high's. Ireland went bankrupt and had to be bailed out by the EU/IMF following the 2008 crash and even our national bank has more than doubled its price since 2008. The worst performing bank I could find was Societe Generale which has issues but is still hovering around its 2008 low price levels.

Now let's put that into the context of Deutsche Bank. Not only has the stock not rebounded but it is over 65% below its 2008 low at $6.75.

Technical Analysis

When you are dealing with the stock market, you also have people who study pricing through technical analysis. Experts look at things like FIB sequences, trend lines, and support levels. Support levels are a key metric for a stock failing because are looking to find where it will find support and potentially bounce higher.

We are very close to a key support level ($6.40) and if the price goes below this level, there is no saying exactly how low the price could go. At least one company expects Deutsche to fall below this support level, as several weeks ago UBS downgraded the stock to a sell order. This news was compounded last Friday when rating agency Fitch, downgraded their credit rating to BBB or two levels above JUNK status.

Other Information

I know you are likely reading this and thinking "this bank must have smart people in charge and surely they have a plan, right?" I am sure there is a plan and while they have kept their cards close to their chest, they have spoken in the past about the areas they foresee having growth for the company – they include business in Saudi Arabia, UAE, and Egypt. Do they strike you as countries which are stable and will offer steady and reliable growth? Do you have to think really hard to imagine how this could go potentially very wrong?

Questions

I believe there is at least a solid case Deutsche is in a LOT of trouble. So what are possible scenarios for the future? I will lay out the key questions below but I must stress that it's impossible to say for sure what exactly will happen. One of the key numbers to remember here is they have roughly €50 billion worth of derivatives.

  • How likely is it that the bank can turn things around and survive?
  • How likely is it the bank continues to run into trouble, its stock price fails and eventually fails?
  • If you think it is likely it will fail, the question becomes what will the fallout be? Who will be affected?
  • Will they be bailed out?
  • If so, by whom? The German government, ECB, IMF, the Federal Reserve?
  • What will the German government think? Some members recently spoke out saying they would block public money for the proposed merger? Will they block funds if it failed?
  • Will other banks be exposed and affected? Will they have to take losses?
  • Will those losses be spread around or will one or more bank be mainly affect?
  • Will this affect the sentiment of the banking sector and cause a panic?
  • If there are issues and it starts affecting the stock prices, what will be the impact on other industries?

Last Question

The last question revolves solely around the banks and the regulators? How secure are the other banks? We all hear about how banks are now put through "stress tests" but how much trust do you put in those results? How much trust do you have in the regulators?

I know this may make me sound like a conspiracy theorist to some but it's an honest question. The Fed is on public record saying they want to keep this economy strong as long as possible. If a bank did not perform strongly in a stress test or even barely failed one, do you think they would report it?

Can you imagine the pressure that body would come under to stay silent? Can you imagine the rhetoric they would face with questions like, "Are you really going to fail one bank? Do you know how many people will lose their jobs if you do that?" Am I saying this is happening? No, but can you really rule it out 100% as a possibility?

I urge you to ponder on these questions, do your own research and find YOUR answers.

Update: The most freaquently asked question I have received from this column / show is how much time do we have to prepare. This is an impossible question to answer, as it could fail tomorrow, next week or might be next year. However I want to provide you a potential date for your diary – July 24th. That is when Deutsche will release their next earnings report and if it comes in below expectations, it could cause a further drop in price casting more doubt over the future viability of the bank.

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Survey: Where do you stand on these conspiracy theories?

Thought Catalog / Unsplash

Have you seen this survey on the most-believed conspiracy theories in America?

It's no surprise the survey has been getting so much attention. The results are actually a pretty disturbing.

Infographic: Belief in Conspiracy Theories in the United States | Statista

I decided to put together a quick survey of my own, with slightly different wording.

Up-vote the ones you agree with and down-vote the ones you disagree with.

I believe Lee Harvey Oswald killed JFK alone. However, I would not be surprised to find out the government sealed evidence that others were involved.

If by "deep state" you mean long-time Washington power brokers who are used to calling the shots and now feel threatened by Donald Trump not listening to their advice or council — yes, I do believe that many people like that are working against him and his administration.

Whether alien bodies are in Area 51 or not, I do believe the government knows more about UFOs than they have told us.

I do not believe the U.S. government was involved in 9/11, but as we know, NSA advisor Sandy Berger was caught destroying documents from the national archives related to both Bush and Clinton. All U.S. administrations have been to close to the Saudis, and the Saudis were involved in 9/11 at some level.

I believe the climate is always changing — it's natural. I would be willing to accept that man MAY play a role in this. But I do not believe in the solutions currently being discussed, nor do I believe the intention of most political activists are pure.

Any talk of the Illuminati provides the true dangers to man's freedom — like very powerful NGOS and men like George Soros — a perfect cover.

The U.S. government has done some horrible experiments on people and land — I also suspect they will do more things in the future. But I do not believe in the systematic spraying of chemicals using chemtrails.

The moon landing was real, but I see a time coming when people will not be able to trust their eyes due to deep fakes.

What do you think?

Let me know in the comments section below.