Monday, December 5, 2016

Tomorrow Always Brings New Opportunities!

Tomorrow always brings new opportunities! The question is, will you still be standing or in a position to take advantage of them? Last Thursday was a rough day for me in that I attended an auction to buy a piece of commercial property that I had a personal interest in. My father had owned this property and as a child, I had even lived there for a few years. At the time it was a motel named West-Acres, it was the kind of place you see in the movies with little white cabins sitting along the road waiting for tired travelers needing a room for the night. This was before the interstate system was finished and people drove across America through its cities and towns. We lived in an area behind the office where the front desk was located.

27 Modern Cabins - Individual Showers - Furnace Heat - Open Year 'Round
My father bought the motel around 1962 after the bank foreclosed on his life's dream, a modern new hotel praised as the finest in the city. After spending years building the project it failed and he was forced out. After that, he worked nights at International Harvester and ran the motel during the day. My mother and us kids manned the switchboard and ran the office when he was working his other job. Within a few years, he opened a restaurant next to the office and we moved further back in the building, later he added two new buildings to what existed.

My brother and I got our first taste of work helping to mow the six-acre lot, cleaning rooms, and trimming the vicious thorn covered barberry bushes that took every opportunity to draw blood. Clearly, in my developing years, the property made a mark on me. One of the more brutal task for a young kid was mixing mortar when the old man was laying the brick on the new buildings. I remember one cold day when we worked under a plastic covered scaffold as snow flurries fell, how he tolerated all our complaining and whining I will never know. Sadly, this turned out to be the reason I tended not to force my children into more forced labor as they grew up, this is one of my bigger regrets. I have become a firm believer that making a child do hard work builds character.

Moving forward with this story, the property has long ceased to function as a hotel, land at the back was sold off, cabins were torn down, and a menagerie of businesses and storage units replaced its role of providing shelter as people demanded more amenities than it could provide. Also gone was the old weeping willow tree that provided the reed like switches that left welts on the back of our legs when we were caught up to no good and doing the things youngsters do. The threat of a lashing proved a strong incentive not to step out of line until we learned the threat was often worse than the actual pain.

The owners had allowed this particular piece of property to fall into disrepair and it was politely referred to by the auctioneer as distressed. To say it was a "project" was a bit of an understatement, after years of having several utility meters not used they were pulled, several doors would no longer close and a water leak long ago in one of the buildings had damaged walls, ceilings, and floors leaving them covered in mold. Full of junk it was no bowl of cherries and represented a negative cash flow project that would require both a great deal of time and work as well as a lot of money to set right.

Before I go any further with this story I would like to made it clear I'm not a big fan of auctions because they present too many variables when it comes to pricing. My thoughts on auctions can generally be summed up as "neither a seller nor buyer would I be." More often than not if my feet were held to a fire I would be a buyer but only if I did not value my time and enjoyed spending countless hours hanging out until the right moment arrived. Pricing a purchase on the spur of the moment without complete knowledge of what you are buying is seldom wise. The fact is competition at an auction tends to bring out the animal spirits in many people. This coupled with the fact that a fool and their money are soon parted joins together to form a dangerous combination.

So, in summary, while disappointed that I was not able to purchase the property at my price the regret flows more from the time spent or wasted performing due diligence on a failed effort rather than from an actual feeling of losing a precious gem. When faced with not completing your mission, disheartened, or saddened I find it is best to chalk it up to fate and the idea it was not to be. It is usually a good idea to keep your powder dry. As an investor and businessman, it is best to consider such things as a mental exercise and practice for something better down the road and take solace in the fact you still have your money and probably avoided another mistake on the journey we call life.

Saturday, December 3, 2016

Italy Caught Between A Rock And A Hard Spot

Italy is caught between a rock and a hard spot. A lot is riding on just how certain forces react to Italy's vote and looming in the background is the possibility it might set in motion a series of events that could break apart the Euro-zone. Several key EU figures, such as European Commission President Jean-Claude Juncker and German Finance Minister Wolfgang Schaeuble, have tentatively backed the passage of the referendum indicating a "no" vote could lead to a destabilization of the entire bloc. Many economic watchers believe an altogether quieter crisis lurks at the top of the worry list, and that is Italy’s battle to prop up its debt-laden banks. As proof of their concern, we have only to look at the Central bank which has told Reuters the ECB is ready to temporarily step up purchases of Italian government bonds if the result of the referendum sharply drives up borrowing costs for Italy.

Italian Voters Cast Their Vote
In recent years the economic conditions have not been kind to Italy where unemployment stubbornly remains at 11% and living standards have barely grown since the country became a founder member of the single currency 15 years ago. Nine years after the onset of the financial crisis in 2007, output remains 8% down from its pre-crash level. Italy’s debt, the second-largest in the euro region as a percentage of GDP sits at a whopping 141%. As expected much of this is reflected in Italy's unhealthy banking sector. Adding to the countries woes is the migrant crisis that has worsened with time, every month 25,000 people now arrive on flimsy boats traveling across the Mediterranean Sea from North Africa.

The December 4th referendum on constitutional reform was approved by parliament in April after almost two years of fierce debate. It effectively abolishes the Senate as an elected chamber and prevents it from bringing down a government via a vote of no confidence. Proponents say this will streamline Italy’s political system, clear a path for needed reforms and ensure a clear winner in the next general election. Under the current system, the upper and lower houses of parliament have equal powers and critics say this is one of the reasons why Italy has had 63 governments since World War Two. “We want a more stable and more simple country,”  Matteo Renzi, the Italian prime minister said in a statement after the date for the vote was announced. “Whoever desires change, lend us a hand.”

All opposition parties have lined up to denounce the constitutional reform, with some critics arguing that it strips Italy of vital democratic checks and balances currently in place. Matteo Salvini, head of Italy's Northern League a "no" vote is a "vote against the rules and regulations of Europe" adding that he felt Europe had let Italy down. imposing financial restrictions on its debt-ridden banks and providing little help over almost half a million migrants that had entered the country in the past three years. Yet while opinion polls in a survey in the newspaper La Stampa recently indicated that 71 percent of Italians think leaving the euro would make the country’s economy worse rather than better.

Eight years after the start of the global financial crisis when the UK’s banking meltdown was marked by the queues of panicking customers outside bank branches Italy is facing decisions that will shape not just the future of the Italian banking system but that of the banking system throughout Europe. Non-performing loans (NPLs), those on which customers’ repayments have fallen behind remain a problem. Banks across Europe's index of shares for 600 European banks is down 22% so far. But Italy’s bank stock index is down 35%, with its biggest bank down 40%. Italy has more than 500 banks, and more branches than restaurants lay scattered across the county. They are weighed down by €360bn (£305bn) of bad debts. These create a heavy cost that hangs over them at a time when revenues are under intense pressure since the ECB has cut rates to zero. All this creates a rather complex situation and driving wealth out of Italy.

As far-fetched as the thought Italy would  follow the U.K.'s example and leave the European Union may seem, capital flows suggest that some people aren’t waiting to find out. Europe's central banks track flows of money among the members of the currency union. If, for example, a depositor moves 100 euros from Italy to Germany, the Bank of Italy records a liability to the Eurosystem and the Bundesbank records a credit. If a central bank starts building up liabilities rapidly, that tends to be a sign of capital flight. Lately, Italy's central bank has been building up a lot of liabilities to the Eurosystem. As of the end of September, they stood at about 354 billion euros, up 78 billion since the end of May. The outflow isn't quite as large as during the sovereign-debt crisis of 2012, but it's still significant. The main beneficiary is, of course, Germany, which has seen its credits to the Eurosystem increase by 160 billion over the past year.

People are clearly worried about the state of the country's banks, which are suffering the consequences of bad lending, poor governance and a new euro-area oversight system that makes rescues difficult. Another is political: Italian Prime Minister Matteo Renzi has staked his fate on a December government-reform referendum that, if it goes against him, could strengthen opponents who want to force a vote on whether Italy should remain in the common currency, a key element of the broader union. In that context, it's not surprising that some depositors prefer not to hold Italian euros, given the chance that they might eventually be converted into lira. Either way, the capital flight doesn’t speak well of confidence in the European project. This is something EU leaders will have to keep in mind as they negotiate the terms of Britain's exit.

Austria is the first EU nation to hold a presidential election and face this growing populist sentiment since Trump's surprise victory in the United States. This means both the votes in Austria and Italy are also being viewed as a test of the momentum behind the people's revolt that has led to Donald Trump's presidential win and the historic British vote to leave the European Union. Anxieties over immigration, security and the economy have created vast support for anti-establishment parties and nationalist movements in Europe, the United States and across the world. French President Fran├žois Hollande, whose popularity has plummeted announced he will not seek re-election next year, saying he wants to give his Socialist party a chance “against conservatism and, worse still, extremism.” The events taking place on the world stage are  indeed far from dull. 

Thursday, December 1, 2016

Debt Main Driver Of Both American And World Economy

It is very important to understand and keep the concept of debt before us because such a great deal of our economic system is about debt. It has become the main driver of both the American and global economy. For a long time I have had a problem as economist and others pointing to the auto industry as proof the American economy is on the mend. Today in America we see a land where even unemployed students are buying new cars. Claims that the auto market is hitting on all cylinders is a simplification of the situation and not giving enough focus as to where the sales are coming from. The facts behind what is pushing this market forward are very disturbing. This unsustainable trend in new car sales is being created by the combination of lower rates, loosening underwriting standards and voracious demand for new securitizations by Wall Street and pension funds that will do just about anything for an extra 25bps of yield.

Loaning More On Autos A Growing Problem
A large number of auto loans this year were to subprime borrowers. Subprime loans now account for 36.5% of all outstanding auto loans. The main reason lenders are willing to write these notes is because they are often able to charge these high-risk borrowers more than double what prime borrowers pay, subprime loans can be very profitable for lenders if borrowers do not default. Average rates for subprime loans were 10.36% in the fourth quarter of 2015, for deep subprime borrowers, rates averaged 13.31%, this is at a time when new car buyers with excellent credit paid 2.7% interest. Artificially low-interest rates have sucked yield-thirsty pension funds to purchase every subprime auto securitization they can get their hands on as they ignore the massive auto loan bubble waiting to pop.

The latest report from Edmunds reports that 32% of trade-ins having an average negative equity balance of $4,832. This means many of these buyers are simply rolling that negative equity into a brand new 7-year loan at a 2% interest rate. The amount of negative equity car buyers are rolling has also reached a record high confirming these shoppers are not deterred to absorb a significant financial hit in order to get into a newer vehicle. Another concerning part of this report is that the percentage of used cars being traded in with negative equity values also continues to spike and currently stands at an all-time high 25% with the average balance of the negative equity also, continuing to rise to $3,635 for Q3 2016, up from roughly $2,750 in Q3 2011. 

Growing Debt Looms As A Global Problem
This is not just about auto loans, the debt bubble forming extends to many sectors of our economy. The average student loan debt is now $33,000. Until the Obama administration went Keynesian much of student loan debt was primarily held in the private sector. When Obama entered the White House total student loan debt was $620 billion and delinquencies totaled $50 billion. There are now $1.3 trillion of student loans outstanding, with the Federal government accounting for $830 billion and guaranteeing a large portion of the rest. Delinquencies have skyrocketed to $125 billion and these loans are not aging well. Going forward it is clear another taxpayer bailout is in the cards or someone will be forced to take massive write-downs. 

While I have focused on student and auto loans I'm aware this subprime buying binge has broadly spread to a wide range of consumers. Is was best said by someone who wrote: "Only a University of Phoenix, African Studies major is more of a subprime risk than the millions of ecstatic Escalade drivers cruising around our urban ghetto paradises." The Federal Reserve has been pumping in trillions of dollars of liquidity into the economy and much of it has resulted in pulling future consumption forward. These policies will soon become a headwind to both future sales and growth. This creates future problems and is more proof of just what an infusion of money from the Fed can produce and how it distorts economic reality. The basis of such an economy is unsustainable and because it has been able to exist for so long does not mean it can continue. 

It is important to remember not all debt is created equal. A mirage is a naturally occurring optical phenomenon in which light rays are bent to produce a displaced image of distant objects. Joining the idea of a mirage and contagion with the reality of collapsing debt forms an interesting subject. It is important to remember all debts and obligations do not come due at the same time. Also, it must be noted when a bill is not paid or defaults it often starts a long and drawn out legal battle, this collection process that may extend years without harsh consequences. This, my friends, is the reality of modern life in America and much of the world, debt will always be kicked down the road and this is a good reason not to be the lender when reality hits.

Tuesday, November 22, 2016

National Debt Looms Over America As Growing Issue

Estimates Have Been Very Very Wrong
The chart to the right predicted that by 2019 the national debt would top 12 trillion dollars. Projections made by the government or any group predicting budgets based on events that may or may not happen at some future date are simply that, projections or predictions and not fact. This means that such numbers are totally unreliable. Sadly, as we move toward President-elect Trump taking office in early 2017  the National Debt Clock may already have breached the 20 trillion dollar mark. Yet, this appears to be raising no red flags as we continue to hear from the media how robust economic growth has helped push the U.S. budget deficit down to the lowest level since 2008. Claims bantered about by Washington and the media of the sharpest turnaround in the government’s fiscal position in at least 46 years are targeted at reassuring America that all is well.

Many tricks are used to confuse the issue and muddy the waters when we talk about the debt, one of these is which administration, or President, to blame. While Bush left office with the economy in the sewer most the resulting deficit occurred on Obama's watch.  Over the last few years, the Obama administration has touted how the deficit is dropping and the economy is on the mend. Don't expect a chart put out by somebody with an agenda to clarify this issue, long ago I learned that looking at a chart to see how we are fairing can be very deceiving, little things like the scale or how they are colored often blur how we interpret their message. This has led some Americans into thinking the worst of our problems are now in the rear view mirror. One thing is clear and that is only by looking back decades do we see just how large this problem has grown.

As things stand America continues to rack up a deficit each year of nearly $2,500 for every man woman and child in the country, such deficits were unheard of in the past unless it was during a major war. Deficit spending has been accomplished by borrowing money that will become a long-term drag on the economy going forward. To make matters worse the government has fiddled away the time in deadlock rather than setting right our system. This means much of this money has been poorly spent in ways that do not address the structural problems that plague our economic future. Even the tailwind of lower energy cost through the massive expansion of oil and natural gas supplies has not been enough to move the economy forward. Much of what we have seen should be considered a "one off" that is behind us. Bottom-line all this trickles down to job growth which has been nothing to brag about when you consider many of the jobs being created are not "quality" or even full-time jobs.

Even though we have seen deficits reach unprecedented levels the deficits in our future will be dramatically worse. Any claim that the Obama administration has the budget deficit back under control is a total lie. We are mired in the midst of the greatest government debt bubble in the history of the world. By our actions or lack of action, we are destroying the future of this nation. Only when we use the massive 2009 deficit as a baseline are we given the impression the budget is back under control, it is clear that 2009 was an unplanned budget disaster and should never be used as our reference point. The ugly truth many people choose to ignore is that starting in 2017 entitlements will become the driving force that carries the deficit higher and higher into nosebleed territory.

Click Here To View The National Debt Clock
Negotiating the financial cliff and muddling through what was described as a draconian sequestration has emboldened many Americans and left them feeling immune to economic reality, this is the foundation of a financial  disaster. To the American people, a rising deficit that has yet to yield dire consequences has given us a false sense of security. It is also clear is that running up debt is far easier than paying it off. we should also be aware that figures released by the U.S. Treasury are for public consumption and it relies on accounting tricks which massively understate how much debt is really being accumulated. The myth that a scenario of growth coupled with a falling deficit will allow us to outgrow many of the problems we face brings with it a false optimism and hope.

 If you want to know what the real budget deficit is, all you have to do is go to a U.S. Treasury website which calculates the U.S. national debt. On November 1, 2013 the U.S. national debt was sitting at  $17,108,598955,343 just a year later on October 31, 2014 the number has risen to $17,937,160,394,872 . That means that the U.S. national debt actually grew by 829 billion in less than 12 months. The fact is with the artificially low-interest rates of today many people seem to have little desire to cut spending. We are literally gorging on debt, and most Americans seem to think that it is just fine and dandy to wildly run up debt as if there is no tomorrow. Way back in 2011 the "Gang of Six" committee’s bipartisan plan proposed three dollars of budget cuts for every one dollar in tax increases, after much tough talk this has all been forgotten. The irony is that today lawmakers, claiming to be "austerity-weary" are again looking at boosting spending on both defense and infrastructure programs.

Friday, November 18, 2016

Job Creation Constitutes Real Challenge For Government

Creating jobs in a mature market or economy poses difficult challenges. Globalization has elevated the importance of creating jobs and a balanced economy that supports a strong middle class.  The recent presidential election has again brought the issue of creating jobs front and center. As the forces of automation and robotics grow stronger this will become even more crucial. A look at our monetary policy and general government policy makes it clear that Janet Yellen and many of the people in Washington remain clueless in understanding how "real and sustainable" jobs are created. We must differentiate the difference between creating a valuable and worthwhile product that benefits society and breaking a window then praising the jobs replacing it yields. Creating jobs in a mature market should be required to pass a certain "taste" test. They should be both long lasting and sustainable in nature.

Joblessness Has Huge Implications For Society
During times when the country and its economy are moving forward joblessness seems to diminish as an issue, however, it has huge long-term implications and impact on society. The fact few business owners and job creators have become part of the Washington establishment may be one of the reasons true job creation seems so misunderstood. It should be pointed out that while America is creating jobs it is costing a huge amount. I'm referring to the massive government deficit which I feel is the fuel driving our still rather weak growth. Is it sustainable, and just as important are these the right kind of jobs and will they last? When a job that falling outside the description of government worker fails to make economic sense it becomes a form of working welfare with society picking up the tab.

We as a country and as a society have paid dearly for each unsustainable job created through government incentives and partnerships in recent years. Many of these jobs because of their very nature are temporary. A great weakness in government generated jobs is after a huge outlay to set up, or put them into action, they often do not create or contribute to production. If these jobs are not asked to continually justify their cost, and they often are not, they merely become another burdensome cost to society. The feeble efforts to think through and link a job to a sustainable economic base that creates a needed product or generates real value is a major flaw in most government aided ventures. Once started government sponsored ventures are often slow to react or adjust to economic reality, this can be seen in the Postal Service and its inability to drop Saturday delivery.

Two examples of government over involvement come to mind from the city in which I live, the first I will call Kitty Hawk. In Fort Wayne, Indiana years ago the city aggressively backed a bond and the loan to build a massive hanger at the airport for an air-freight company named Kitty Hawk. The city lured the company to the area because it promised a slew of new jobs where they located their hub, the company is now bankrupt and the jobs are gone. The taxpayers of Fort Wayne are now paying for an empty hanger that they are trying to lease at an "aggressively" low price. This hurts those private investors and property owners that lease building space as they are now forced to compete against the government to which they are forced to pay taxes.

Another mind boggling, and hard to defend venture is Fort Wayne's pathetically underused money-losing bus system, Citilink. Every day buses running their predetermined routes crisscrosses the landscape of the city completely empty, it is more uncommon to see a rider then not. Funded by Federal monies as well as local real-estate taxes, most people give little thought to this economic failure. One could site that the poor or those without transportation need this service, but the cost of this inefficient system is huge. Burning through fuel and polluting the air as they transport so very few riders, it is hard to argue that they make the city green or that the jobs are economically sustainable.

Another place that governments hurt local businesses is to invite a company like Amazon into their community by offering tax incentives to construct a distribution center, as a way to encourage investment or get new jobs. This often puts a dagger into the hearts of existing businesses. Any government subsidy that gives one company an unfair advantage over another tends to lessen the ability of the other to remain competitive, this often results in the destruction of real jobs. Solyndra, the solar panel company that got a $535 million government-backed loan then went belly-up should be placed in the dictionary and used as a definition as to what happens when politicians and bureaucrats and businessman come together to play with taxpayer money.

Footnote; Below are a few other articles concerning this important subject.

Wednesday, November 16, 2016

Wacky Unstable Markets Worrisome Sign Of The Times

Markets Becoming Wacky And Unstable 
A word of caution to those who don't know what to make of the wacky markets we have seen since Trump has assumed the position of President-elect. Do not be surprised if the markets remain unstable for some time. On election night as results came in markets in America and across the world plunged only to reverse by morning and then surged higher. This resulted in new all-time market highs that left many traders stunned. We are forced to wonder if the move was because of traders caught sideways ran for cover or some other force put in place prior to results being reported were unleashed against those positioned for falling prices.

Simply put too many variables are in play and now busy interacting to allow for much in the way of sound decision making. More than a few wild cards are being played and the impact of things like China adding liquidity to its banking system is very important and has consequences. This money is rapidly flowing outside its borders distorting markets across the world. Predictions are often wrong and this influx of endless reactions to crazy policy swings make them no more than guessing. 

It is also important to remember that not all traders are enjoying a post-election bout of glee. Many shorts and bond holders have been hammered. This week has started with the dollar continuing its surge and  pushing the DXY above 100 for the first time since December of 2015. We are seeing global bond yields soar and emerging market currencies tumbling. Where the action is different from last week is that reality is starting to set in over growing concerns that a spike in yields will cap the upside of any rally in equities.

Do not be surprised if  much of the market action we are witnessing proves to be unsustainable. One example is the action in copper where it blew through resistance and sent bears running to cover even though fundamentals have not changed. While speculation of a coming boom in building moves prices in fact nothing has really changed and we have a long way to go before promises that Trump made during the election can take place. The power of the President is not unlimited and is in many ways dependent upon a larger consensus that results in action.

The Trump victory has added a great deal of material to the debate of where this economy is headed, however, much of it is inconclusive and will have to play out over time. To those of us who have become clinical and question the underpinnings of this economy it may bring some relief but it appears an uphill battle to set right all the ills that confront global growth going forward. Cutting taxes while increasing spending on infrastructure and  building up the military does not guarantee success.   Unfortunately, such spending will quickly add to our wall of debt. Trump has pledged to rebuild the military and America's infrastructure, a major problem of a war based economy is the issue of sustainability.

As a taxpayer, I would be more reassured if there was more talk about cutting waste and how we are going to pay for the programs being proposed.  It is expensive to maintain an army and war is a destructive force. Long gone are the days of conquering your enemy then raping and plundering your way to glory and riches. Glaring examples of just how expensive war can be remain fresh in our minds from our recent and continuing excursion into the Middle-East. Infrastructure also has the potential to become a boondoggle with huge cost overruns and is just a waste of money if allowed to be driven by political motivations rather than necessity.

Monday, November 14, 2016

Mosul Is Being Reduced To Rubble

Fact Is Mosul Will Be Reduced To Rubble
A matter that merits attention has become merely a footnote lost in the election noise, these are the events taking place as Iraqi troops and a coalition of anti-ISIS forces try to retake Mosul. The timing is a bit suspect and it could be viewed as a convenient coincidence that forces allied with America descended upon Mosul creating a positive message just as Americans went to the polls, this is coupled with news that a similar attack is starting in Syria against Raqqa the headquarters and capital of ISIS. If someone was suspicious they might think all this beginning in the days leading up to the American Presidential election and being spun in the media as a forthcoming victory was orchestrated to assure voters American foreign policy has not been a dismal failure.  

Even though they are in different countries both Mosul and Aleppo stand in the path of the destruction and are being wrecked by the forces of war. Aleppo is of course further down this path as we have seen in photos that have become far too common, these photos depict the total devastation and death modern warfare brings upon those caught in its way.  Mosul and the surrounding area  in northern Iraq had in the past housed about two and a half million people. Since being occupied by the Islamic State of Iraq and the Levant in June of 2014 many people have fled. Knowing that to stay was to risk your life and the lives of those with you the population today has declined to around five hundred thousand. Alsumaria News reports Islamic State militants have even deployed armed children in Mosul’s Old City as means to bolster the impression they are still in control as forces seeking to liberate the city advance.

Adding to the woes of civilians that have remained are reports from U.S. based Human Rights Watch that Iraqi Kurdish fighters battling the Islamic State have unlawfully destroyed Arab homes in scores of towns and villages in what may amount to a war crime. The good news is the operation to liberate the city of Mosul and eliminate the last bastion of ISIS in Iraq has been moving faster than many people anticipated according to Prime Minister Haider al-Abadi. Still, problems continue to surface, one of the newest is the operation is now being slowed by a wave of car bombs sent by the Islamic State group. Iraqi special forces Maj. Gen. Sami al-Aridi said Sunday that "there are so many civilian cars and any one of them could be a bomb." As Iraqi forces try to advance further into Mosul these suicide car bombs have taken a toll.

Mass Executions By ISIS Are Well Documented
The bad news is that before this is over Mosul most likely will be reduced to rubble if what we have seen happen to other cities in the area becomes its fate. Within its borders, it would not be difficult to imagine 100,000 or more of the innocent people trapped within the city killed as troops seeking to eradicate some four to six thousand ISIS fighters go about their task. Death often occurs in a war zone rather indiscriminately and is dealt out to both civilians and combatants. In this case, civilians will be used as human shields, this will increase the toll and carnage.  

As for the lucky hundreds of civilians who fled fighting near Islamic State-controlled Mosul last week they  are stranded outside the city without basic humanitarian assistance. The situation has become so desperate it is said that army officers have begun distributing rations meant for their soldiers and buying extra supplies with money out of their own pockets. We have seen this all before, when the smoke clears a campaign will begin to raise massive amounts of money to rebuild and set things right but until then it is suffering and death and nothing we do will change this reality of war. The blood and treasure wasted and spent are in many ways a reflection and the legacy of intervening where you don't belong. When this campaign is over victory will be declared but what exactly will we be celebrating?