There were indications Sunday of the strong potential for an imminent Turkish/Saudi invasion of Syria, following two days of Turkish artillery shelling positions of both the Syrian Arab Army and Kurdish militias near the Syrian city of Aleppo. Both Saudi aircraft and special forces troops have moved into southern Turkey since Feb. 12, and Turkish government figures have spoken publicly of a “major escalation” in the war in Syria — when Russian Foreign Minister Lavrov and U.S. Secretary of State Kerry have announced an attempt to stop the war with a ceasefire.

Several military commentators in the United States have described this possible, completely illegal invasion of Syria as a “race to get to Racca.” Russian-supported Syrian forces and their allies have recently moved from their advances around Aleppo, toward Racca, the “capital” of the proclaimed “caliphate” of the ISIS terrorists. The Turkish-Saudi move would be an attempt to sabotage the ceasefire, and a desperate try at defying Russian President Putin’s clearly successful strategy for bringing war to an end in Syria and Iraq.

EIR Founding Editor Lyndon LaRouche said on Sunday of Turkey and Saudi Arabia, that “if they are not insane, they will not do this. They are panic-stricken because they know they are losing power, and Putin is prepared for this.”

But in fact, on Feb. 11, U.S. Defense Secretary Ashton Carter, although in Brussels for a NATO defense ministers’ meeting, held another meeting which was “the centerpiece” of his trip. Defense News called it “the first summit of its kind” with 28 other countries and 21 observer countries of the so-called U.S.-led coalition against ISIS.

Defense News’s Aaron Mehta reports blunty, “[q]uestions remain about how successful the campaign can be if Russia remains active in Syria.”

Carter and the U.S. Commander in charge of the anti-ISIS coalition’s fight, Lt. Gen. Sean MacFarland, presented a strategy for the rapid re-taking of Raqqa and Mosul, ISIS’ stronghold in Iraq. Carter repeatedly pushed Sunni Arab nations to get more involved. NPR quoted Carter in an interview pushing the Turks: “I think the Turks can do more to fight ISIL. They’re helping us fight ISIL by hosting our aircraft in Turkey. I’m grateful for that, but I think they can do more.” Saudi Arabia reportedly agreed to increase its airstrikes inside Syria, and consider Saudi troops on the ground, “potentially giving Barack Obama the Sunni ground force he publicly called for,” as Defense News proclaimed.

If the Turks and Saudis are now insane enough to “do more” and invade, it will be Obama, then, who sent them in to risk war, potentially world war, with Russia.

The People’s Bank of China reminded the financial world today that trans-Atlantic and Japanese banks and stock markets just had their worst week of 2016, with all Chinese markets closed and no new data about the Chinese economy available.

It is not China, but the zero- and negative-interest policies of the Western central banks and the oil price collapse, which have triggered the crisis, Xinhua quoted central bank governor Zhou Xiaochuan.

The trans-Atlantic bank blowout is still only in early stages. The Feb. 14 Money Morning newsletter notes, “We Haven’t Seen the End of Bank Troubles,” with a subhead, “European ‘Gambler’ Banks Will Detonate.” “The carnage in European banks is much worse than U.S. banks,” it states, “but then again European banks have much more serious problems. They suffer from inadequate capital and enormous amounts of bad loans that could force them into insolvency without government support.” After discussing the great distress of Deutche Bank and Credit Suisse in particular, the newsletter concludes, “Europe’s banks are in big trouble and that poses a serious risk to the rest of the world, because these banks do business with every other financial institution in the world. The U.S. economy and U.S. markets cannot insulate themselves from their problems…. U.S. banks are well capitalized and should not pose a systemic risk -… unless their derivatives books blow up.”

A blizzard of financial media “commentary” over the weekend tried to argue, not so much the classic “This time is different,” but “This country [i.e., U.S. banks] is different.”

But oil and commodity debt continues to drag U.S. banks over the cliff. The Markit financial data firm has a report that 26% of all “high-yield” bonds held by U.S.-based banks are now classed as distressed debt: i.e., they have yields more than 10% higher than U.S. Treasuries. The “distressed” share was 7% a year ago. That is 26% of approximately $2 trillion, or about $500 billion in distressed debt. “Bad loans,” already non-performing, are approximately 11%, or about $225 billion.

An experienced Japanese source noted of this, that a safe regulatory standard for such a crisis, would be classifying all that “high-yield” debt as either “risk” or “high-risk” debt, requiring that banks hold loan-loss reserves of either 50% or 75% of their total high-yield debt assets.

But the major Wall Street banks each have $15-20 billion of such assets, except for Citibank, which has about $50 billion. And these banks’ loan-loss reserves against these investments are only in the hundreds of millions, between 5% and 7% of the assets, although 11% of the assets are already non-performing. The loan-loss reserves of the major Canadian banks, against oil/gas exposure, are typically only 0.5% to 1.5%.