Mountain Goat tells everyone to take off their RV glasses and see reality

a. In the past I said - Do not even expect ANY window for an RV until as least a June 2015 timeframe. This does not even say there was a window, does it? Go back and re-read my news letters. This statement was predicated on the fact of a June second Paris Conference to take place. This was an evaluation of the Iraq progress by debtor nations and the IMF. At that time many gurus were saying any day, any time for an RV. I said Really? I told you this was ridiculous since there was still so much progress to be made on these reforms and they were not even having a status meeting on them until mid June. Oh, but these same gurus told you these reforms were all done, as they now also tell you. Really?

Then why so many articles on this topic telling us otherwise? I can back up everything I tell you with FACTS not some “intel” from some “secret “ sources from Iraq and the government.

b.Then when June came and news from the Paris Conference was publicized, Iraq told us that many of the reforms needed for currency reform had timeframes of mid August to mid September, having September as the outer most timeframe for the reconciliation reforms to be completed.

We also learned at this time the ‘decentralization” effort was scheduled to be completed on August 5th.  This is also needed to complete full implementation of the Iraqi constitution (also needed for the RV). We all watched and waited for the August “report card” and it was given to us. Remember I talked about this in my news letters. The progress was good as only 8 out of the 30 reforms remained. A date was agreed to of  mid Sept for the completion. Does this mean I think its going to RV in September? No – but I hope so as we all do. We will have to wait and see what happens as we progress closer to this timeframe. 

c. So with the Aug 5th date looming and then being late, because eight of the ministries were not ready to transition to the provinces.  August also was the 1 year mark when he promised each member of his staff (council of ministers and all ministers in general) were to get a performance review. These recent dismissals we read about last week are a result of these evaluations of the ministers. Abadi is not playing around. He is a   leader and makes everyone accountable.

So we got passed mid August and still no National Guard law, Amnesty, Accountability and Justice, Investment Law, Parties Law or HCL money payments. So no RV. Just as we were told would happen if these laws were not implemented. No mistake or hype, just the facts.

d. Now as August progresses we move towards the second timeframe of mid September to watch. We know this is the 1 year date when all the Reconciliation Reforms are supposed to be done, (meaning passed and implemented). Can Abadi do it? This is why I now say if they can conclude these reforms we might see some movement in mid September. If not completed they  will have another meeting and decide what to do. I can not tell you what they will do. I can predict  and I believe they will extend out the date. This may go on to Jan 2016 for all we know. Maybe this is why the CBI told us they have a window for currency reform to happen at this timeframe. Again all we can do is watch and wait. Even the CBI does not make firm commitments and just tells us they are planning this timeframe of Jan 2016. How many times have they too delaying this project of currency reform already?

We also now see they intend to sell Bonds international in order to also help finance the debt on the 2015 budget. Is this part of the money that is needed for paying out on the citizens Qi – Cards I referred to above (being almost 21 days late )?  Do they have to RV in order to sell these bonds? 

The answer is big fat NO!  However would you as an investor for a major bank want to purchase these bonds for you client’s portfolios at the 1166 rate (less than .06 per dinar)?

So my Question is this – How do they plan to sell this 6 trillion dinars (6 billion USD) in bonds once this effort is launched? They have some heavy hitters handling these bonds like Citigroup Inc., Deutsche Bank AG and JPMorgan Chase & Co. They plan to launch this by the end of August, so they told us already.

This is exciting news (article follows below) so lets watch and see what happens. So far they seemed to do the impossible and most times these events flopped due to not having a marketable currency. Will this happen again?

Article Follows: 

IRAQ HIRES BANKS INCLUDING CITIGROUP FOR $6 BILLION SALE      

August 18, 2015 — 5:24 AM EDT Updated on August 18, 2015 — 7:57 AM EDT

Iraq hired banks for its first international bond issue in almost a decade, seeking $6 billion to help plug a widening fiscal deficit.

The government appointed Citigroup Inc., Deutsche Bank AG and JPMorgan Chase & Co., said Muneer Mohammed Omran, director general of the central bank’s investor department in Baghdad. The bond program will be in tranches, with the first sale coming this year, he said by phone Tuesday. Spokesmen for the banks declined to comment.

Iraq, holder of the world’s fifth-largest oil reserves, is looking to bolster its finances amid civil conflict and the global slump in oil prices. Fitch Ratings expects the fiscal deficit to top 10 percent for 2015 because of lower crude prices, higher military spending and costs associated with civil unrest. It ranked Iraq five levels below investment grade this month in its first ratings for the country.

“Iraq is going through some difficulties at the moment because of its conflict with ISIS, but oil production is at a record high,” Anthony Simond, a London-based investment analyst who helps manage $13 billion of emerging-market debt at Aberdeen Asset Management Plc, said by e-mail. “Things could look a lot different if we see a rebound in oil prices.”

Investor Meetings
The country plans to meet with international investors as soon as next month, said two people familiar with the program, asking not to be identified because the talks are private.

Iraq’s bonds have fallen 4.5 percent in the past three months, more than double the loss on JPMorgan Chase & Co.’s EMBI Global Diversified Index. The yield on its notes due January 2028 rose 66 basis points this year to 8.55 percent today.

Iraq has struggled to emerge from violence after the U.S.- led occupation, with the army trying to recapture large areas of the country from Islamic State in a campaign backed by the U.S. Increased oil production has coincided with a market slump. The International Monetary Fund approved $1.24 billion of emergency financing in July.

Government debt may equal 51 percent of Iraq’s gross domestic product by the end of 2015, with the ratio forecast to increase next year, Fitch said. Savings built up over years of high oil prices have largely been eroded, the ratings firm said.

Iraq’s crude production climbed to an all-time high of nearly 4.2 million barrels a day in July, according to the International Energy Agency, with record exports from southern terminals mostly unscathed by Islamic State militants.

http://www.bloomberg.com/news/articles/2015-08-18/iraq-hires-banks-including-citigroup-for-6-billion-sale

Article Ends

Maliki Update
As we know Maliki traveled to Iran with a delegation from his party. I believe his intent was to defect to Iran since he also traveled with his family. Once there he was asked to return to Iraq. He is now back in Iraq however he left his family in Iran. We have read articles that he has returned. 

Abadi is moving quickly on the clean up of the Judiciary system to get the Judicial Reforms implemented. This will clear the way for any obstacles for many future reform objectives including bringing Maliki and his goons to their final demise thus stopping the stalling of needed legislation to complete the Reconciliation efforts agreed to be completed by mid September. These reforms are moving lightening fast.

Maliki MIGHT be able to lie  and wiggle his way around the Mosul, Ramadi and Anbar incidents as well as some of the accusations on corruption. However there is one charge he will not be able to wiggle out from under and that is the Streicker AFB incident as they have files and files and many witnesses on his guilt. Remember this would be a charge of treason thus facing a penalty of death in Iraq (by hanging). Seems he might soon get a chance to join Saddam in hell after all.

I have been saying for years and fully believe that Maliki and his goons must be dealt with prior to any Reconciliation effort completion and thus prior to any currency reform completion (RV). They will not encourage hundreds of investors to come to Iraq if the climate is not conducive to doing business. What does this statement mean?

It means they need items like the following (this is why these reforms are so important):

• 1.    having an honest and FAIR JUDICIAL SYSTEM (need judicial reforms implemented NOW);
  
• 2.    BANKING and INVESTMENT LAWS in place to conduct international transactions and best banking practices (no corruption) we see this in the new Investment and Banking laws required by the IMF. We also have seen lately the clean up of many corrupt banking officials;
  
• 3.    allow for MECHANISMS OF INSURANCE to compensate against accidental losses (insurers will not do business in an unstable environment…too risky);
  
• 4.    allow for OVERALL SECURITY ON THE STREETS (need provincial decentralized security forces National Guard law and need it NOW);
  
• 5.    Need more LOCAL AUTONOMY IN RUNNING GOVERNMENTAL MATTERS, thus need the decentralization effort completed  and funded (I think this may be all but done);
  
• 6.    BOARDER PROTECTION;
  
• 7.    TRADE TARIFFS AND CUSTOMS (implemented but stalled due to slow economy);
  
• 8.    CLEAN UP OF THE CORRUPTION caused by the last administration (need judicial reforms);
  
• 9.    STREAMLINING GOVERNMENT –finding ways to meet the 2015 budget
  

When we see a stabilization of Iraq and many of these items I listed above (did I miss any)  we will then see the currency reform take place and NOT before.  Remember currency reform is a by-product of this ongoing process and not the driver force. This is what some very creditable people have told me over and over again each time I question it and it seems they are correct.

Please take off you RV glasses and see reality !

Peace and Luv To Ya All, 
Mnt Goat