Several Turkish prime ministers tried to eliminate the Deep State. An informal, hard right-wing, secularist group composed of military and intelligence officers, judges, corporatists and organized crime groups.

The Deep State was part of NATO’s Operation Gladio during the cold war and, applying a strategy of tension, was responsible for the killing of several thousand people. Several military coups de état were done under its directions.

It is back in action:

Cont. reading: The Deep State Is Back in Action

Panic is creeping up in the Republican camp.

Neo-con Kristol in the NYT comments:

[McCain]
read a disjointed set of remarks at a badly staged rally at the
Pontchartrain Center in Kenner, La. Here’s part of an e-mail message I
received as McCain spoke, from a Republican who admires him: “They
could have done so well tonight, shown a tone of confidence. Instead it
looks like a bad Congressional race: dumb green puke background, small
crowd … Makes me want to cry.”

From the ground in Ohio LA Times reports:

If McCain tried to gather his volunteers in Ohio, "you could meet in a phone booth," said radio host Bill Cunningham, who attacks the Arizona senator regularly on his talk show. "There’s no sense in this part of Ohio that John McCain is a conservative or that his election would have a material benefit to conservatism."

Novak opines in WaPo:

The evangelicals are not an isolated problem for the Arizona senator. Enthusiasm for McCain inside the Republican coalition is in short supply. During the four months since McCain clinched the nomination, he has not satisfied conservatives opposed to his positions on global warming, campaign finance reform, immigration, domestic oil drilling and how to ban same-sex marriages.

There will be more of such reports and voices. The false ‘maverick’ image that made McCain a media darling and gave him the primary votes is now hurting him with the ultra conservatives.

It will not keep all of them away from the polls though.

If McCain runs a positive campaign, arguing the conservative causes, they will not believe him. So instead  McCain must and will run a campaign that instigates ‘fear of worse’. That will motivate many conservatives to hold their nose and give him their vote in hope of preventing a Democratic presidency.

But others will also choose the libertarian alternative to the right of McCain. Some will stay at home. The total will not be enough.

For now the conservative coalition puzzle in the U.S. seems to have fallen apart. McCain is not the person who can put the pieces back together.

As this slowly sinks into the party’s mind, some elders may start to acknowledge the necessity of an intervention by some ‘higher force’ before the convention opens.

The usually very well informed Swoop writes:

The next round of US-China Strategic Economic Dialogue taking place from June 17th-18th will air new concerns about China’s currency policy. At the same time attitudes in the Pentagon are hardening. At a speech in Singapore on May 31st Secretary of Defense Gates sharply criticized Chinese policy in the South China Sea. We understand he did this despite objections from the State Department. Further, the Pentagon has established what may be described as a “dirty tricks” unit charged with developing ideas for disrupting China. We do not believe that the White House has authorized any of these activities – which remain in the planning phase. But these indications point toward greater tension in US-China relations.

In the key judgement it adds:

However, the aftermath of the speech may have heightened tensions, with a senior Chinese general attacking US bilateral alliance relationships and missile defense policies as “undercutting the equilibrium of regional powers.” This has only boosted the Pentagon’s suspicions. A senior Pentagon officer told us “the Chinese have no idea how we can hurt them. We have not started yet.” Plans to encourage greater pliancy, we were told, include encouraging overseas Chinese to pull their investments out of the mainland.

Of course this is brain dead policy. There is absolutely no need for the U.S. to see China as a threat.

The real purpose of such politics is to put more taxpayer money into useless military super gadgets like the F-22 fighter. There is hardly any justification for the plane at all, but the Air Force and Lockheed want more. Therefore they invent a China threat.

The danger is that such stuff might eventually be used just because it is there. UN ambassador Madeleine Albright once asked then Chairman of the Joint Chiefs of Staff Colin Powell, "What’s the point of having this superb military you’re always talking about if we can’t use it?"

But an even bigger danger here is the role of the Pentagon as displayed above.

• Gates talking against China despite objections from the State Departments. The Pentagon should be a tool of foreign policy, not the foreign policy maker.
• The military planning "dirty tricks". That is definitely not the task of the military but the job of the CIA and other civil clandestine services.
• A senior Pentagon officer talking about economic warfare issues like coerced divestment. Such measures are the job of the treasury.
• All the above measures should be planed and coordinated by the National Security Council, not by the Pentagon.

Having multiple bureaucracies and power centers within a government is a feature, not a bug. It helps to avoid one sided, single minded decisions.

The trend over the years has been to put ever more tasks into the Pentagon or rather, the Pentagon robbing these roles from other agencies without any resistance from above. It is now playing NSC, State, Treasury and CIA on top of its original job.

Everybody should fear the future state this will lead to.

Thomas L. Flatman writes:

Israel’s economic and military power today is entirely dependent on extracting intelligence from its people. Israel’s economic power is endlessly renewable.

Thanks Thomas! Now please explain this to the U.S. taxpayers:

JERUSALEM (AFP) — The United States signed a deal on Thursday to boost its military aid to Israel to 30 billion dollars over the next decade aimed at countering a "resurgent" Iran and its allies.

I will stop beating the NYT when it stops lousy reporting.

Today the ‘grey lady’  tells us that a: Ex-Premier Is Expelled From Governing Party in Iraq

BAGHDAD – In a shakeup at the top of Iraq’s Shiite power structure, former Prime Minister Ibrahim al-Jaafari was expelled from the governing Dawa political party, officials said Saturday.

Dr. Jaafari, a physician who was an Iraqi exile leader for decades before returning in 2003 to serve as prime minister, was expelled for creating a political movement that had opened talks with rivals of Dawa’s leader, Prime Minister Nuri Kamal al-Maliki, a senior party member, Haider al-Abadi, said in a telephone interview.

…

First issue: It is ridiculous to have as only source for this a selfserving Maliki mouthpiece in a telephone interview when the byline suggests the report is from Baghdad.

Second issue: Jaafari is at least since a week ago no longer member of Dawa. He was not ‘expelled’ but walked away from it.

The developments come as Ibrahim al-Jaafari, a former prime minister, launches a new political party, National Reform.

The party will take part in the next provincial elections under a separate list from the Dawa party, al-Jaafari said on Saturday.

Third issue: Jaafari did not only "open talks" with others, but these talks were finished two days ago.

Jaafari and his coalition now have 90 nationalist votes in the parliament. That is a serious challenge to Maliki and his overlords in Washington and Teheran.

Oil prices had their biggest gains ever on Friday, jumping nearly $11 to a new record above $138 a barrel, after a senior Israeli politician raised the specter of an attack on Iran and the dollar fell sharply against the euro.

Reasons given for the oil rise: A. Israel, B. Dollar

The above is how Laura Rozen and dozens of other people quote the first graph of a story in today’s New York Times.

But when I read the piece under the same URL a bit later the sequence of the NYT’s explanation for the rise of oil prices had changed.

The rise in oil prices turned into a stampede on Friday with futures jumping a staggering $11 a barrel to set a record above $138 a barrel. The unprecedented surge came as the dollar fell sharply against the euro and a senior Israeli politician once again raised the possibility of an attack against Iran.

Reasons now given for the oil rise: A. Dollar, B. Israel

It is not only the opening paragraph that changed.

The complete earlier version of the piece is still carried
by the International Herald Tribune. It expands on the threat from
Israel in the sixth paragraph and on the dollar fall in the ninth.

The later ‘corrected’ version at the NYT site expands on the dollar in the fifth paragraph and on a possible Israeli attack on Iran in the eighth.

Which version is factual more correct in its emphasis?

Yesterday the US dollar index fell by 0.93% from 73.066 to 72.390. Crude futures for August delivery went up by 7.8% from 128.13 to 138.16.

Is a less than 1% change in the U.S. dollar the prime explaining factor for a 7.8% rise in crude oil?

Or is a threat of another war on the second biggest OPEC producer by Israel’s Deputy Prime Minister Shaul Mofaz the more important reason for the oil rise?

"If Iran continues with its programme for developing nuclear weapons, we will attack it. The sanctions are ineffective," said Mr Mofaz, referring to pressure by the United Nations security council to end Iran’s disputed programme of uranium enrichment. "Attacking Iran, in order to stop its nuclear plans, will be unavoidable."

The answer seems obvious to me. The market freaked because of the war drums, not because of a slight dollar move.

So why did the NYT editor change the piece and preferred to cite the dollar fall as the primary explanation?

The current discussions about the U.S.-Iraq Status of Force (SOFA) and Strategic Framework Agreement (SFA) are intensifying.

The parties in Iraq aligned with the government want, to one degree or another, modify the  U.S. written agreements, while the parties not aligned with the government want no such agreements at all.

Some believe the issue is money, while I believe that it is more than that.

Patrick Cockburn reports in today’s Independent that the U.S. is using financial blackmail to get the agreements signed:

Cont. reading: Iraq-U.S. Deal – Money is not the Issue

How would the public react to the consequences of an attack on Iran.

Here is a one scenario I can imagine but have not seen discussed in any analysis.

• The public does not want an attack on Iran.
• The public would see any attack on Iran by Israel and/or the U.S. to be launched for the sole benefit of Israel.
• Any attack on Iran would double crude oil prices and gas in the U.S. would shot up to $8/gallon, guaranteeing a deep recession.
• While the media would not point it out, the people would know who to blame for such prices and their consequences for the ‘American way of life’.
• Voters would demand from their representatives to distance themselves from Israel and pro-Israel funds.
• Over a few years Israel would lose most U.S. financial, diplomatic and military support.

How plausible is this?

Have the U.S. administration or the Israeli government or the Iranian government made such calculations?

The Senate Intelligence Committee Report on pre-war intelligence on Iraq, is finally out.

The first part is a (big pdfs)

"Report on Whether Public Statements Regarding Iraq by U.S. Government officials Were Substantiated by Intelligence Information".

At first glance there is nothing new in there. Bush lied, people died.

The second part is a

"Report on Intelligence Activities Relating to Iraq Conducted by the Policy Counterterrorism Evaluation Group and the Office of Special Plans Within the Office of the Under Secretary of Defense for Policy"

and it has some interesting and funny stuff. For your amusement I excerpt some bits below.

Cont. reading: A Napkin Plan for Regime Change in Iran

The next round of the credit crunch has started in earnest.

The rating agencies are downgrading the bond insurers MBIA and Ambac. This should have happened months ago. There triple-A rating was ridiculous. With the downgrading of the insurers, the bonds insured by these companies will also be downgraded immediately and thereby lose value.

That means another round of losses for the financial industry. The Lehman Brothers brokerage firm is in big trouble too. It is now looking for some white knight to infuse capital. More capital may help Lehman for a few weeks, but I would not bet one dollar on the company’s long term survival.

Meanwhile the regulators are waking up a bit. There is a move by the Financial Accounting Standards Board (FASB) to change the rules for ‘Special Purpose Vehicles’. Those are highly leveraged entities set up by banks to borrow short term money to buy long term bonds.

Today these entities do not show up on the balance sheets of the banks. They thereby do not count as risk and do not require additional reserve holdings. The total amount of money in such vehicles is estimated as $5,000 billion. If these have to be brought onto the books, the banks will either need much more capital or they will have to reduce their lending to others.

There is international political pressure for these rule changes and the banking lobby will not able to stop the issue. While a rule change would only be implemented in mid 2009, the effect on availability of credit will be immediate as the banks will have to prepare for the change.

The credit crunch is far from being over.

Without credit real econommy investment will continue to slow down.

What to expect?

An administration ignoring and breaking international law, working against the possibility of peace in Palestine and selling out U.S. interests to the Likud party of Israel.

Jerusalem will remain the capital of Israel, and it must remain undivided.

So much for change …

As expected, Obama is the Democratic candidate for the U.S. presidency. Congratulations.

The main campaign issues for the next month will be the wars and the economy.

The negative, hidden campaign themes will be Obama’s race and McCain’s age.

Obama got advantages over McCain in nearly any field except race. He is a much better speaker than McCain.  His Iraq position is supported by a wide margin of voters. His economic proposals are better than McCain’s pure neoliberal tax cutting schemes.

But racism is something the U.S. has a deep problem with. It is also an issue that is hard to catch in polls. Many people do not give truthful answers when asked about it. How relevant Obama’s race really is will only be seen when the votes are counted.

The economic situation in the U.S. will continue to deteriorate. McCain admitted that he does not know much about that field. That was a huge mistake. The Obama campaign should emphasise its economic competence and the economic costs of the wars.

"It’s the economy, stupid" is still correct. But is it a bigger issue than race?

MoA lives off comments. Feed it!

News & views …

Syria to allow UN probe of alleged nuclear site

VIENNA, Austria – Syria will allow in U.N. inspectors to probe allegations that a remote building destroyed in an Israeli airstrike was a nuclear reactor built secretly with North Korean help, the International Atomic Energy Agency said Monday.

Thus writes the Associated Press.

But that may well be wrong but anyone who just skims the first graph will never learn so. This is very typical manuplative AP reporting from Vienna.

A few paragraphs later the facts come out:

IAEA head Mohamed ElBaradei did not say whether inspectors would be granted access to the site during the planned June 22-24 visit, but a senior diplomat with knowledge of the planned inquiry said they would be able to visit the facility.

…

Diplomats told The Associated Press that during the visit, agency officials will also ask for information on the alleged existence of at least two and possible three undeclared such facilities. The diplomats, who demanded anonymity because of the sensitivity of their information, indicated they had their knowledge either from the U.S. or from IAEA officials.

One of them said the IAEA was following up on a U.S. intelligence-based tip of alleged unreported facilities to process any nuclear material. The diplomat emphasized the IAEA had not seen the intelligence itself.

This is typical for AP. The headline claims that Syria committed itself to something. But Syria may not have committed to anything at all. It might turn out that Syria will just give a nice talk to the IAEA folks when they visit Damascus. Then of course AP will ‘report’ that in such a fashion that readers will assume Syria broke a committment it never agreed to.

IAEA folks are not "Diplomats".  So we have the U.S. ambassador to the IAEA and maybe also the UK ambassador talking to the Associated Press in the interests of their respective governments.

It is so far unclear if the inspectors will visit any site at all. And there opinions if Assad should allow such vary.

Pat Lang says the Syrian president Assad should let the IAEA see anything and everything anywhere in his country:

Cont. reading: Syria and the IAEA

“The elections have led to almost a
paranoia on the part of the Kremlin administration about who is on
television,” said Mr. Pozner, who is president of the Russian Academy
of Television.

In practice, Mr. Pozner said, he tells Channel One
executives whom he wants to invite on the show, and they weed out
anyone they think is persona non grata.

“They will say, ‘Well,
you know we can’t do that, it’s not possible, please, don’t put us in
this situation. You can’t invite so and so’ — whether it be Kasparov or
Kasyanov or someone else,” Mr. Pozner said.

He added: “The thing that nobody wants to talk about is that we do not
have freedom of the press when it comes to the television networks.”
It Isn’t Magic: Putin Opponents Are Made to Vanish From TV, June 3, 2008

BILL MOYERS:  You had Scott Ritter, former weapons inspector. Who was saying that if we invade, it will be a historic blunder.

PHIL DONOHUE: You didn’t have him alone. He had to be
there with someone else who supported the war. In other words, you
couldn’t have Scott Ritter alone. You could have Richard Perle alone.

BILL MOYERS:  You could have the conservative.

PHIL DONOHUE: You could have the supporters of the
President alone. And they would say why this war is important. You
couldn’t have a dissenter alone. Our producers were instructed to
feature two conservatives for every liberal.
…
BILL MOYERS: Eric Sorenson, who was the president of MSNBC,
told the NEW YORK TIMES quote: "Any misstep and you can get into
trouble with these guys and have the patriotism police hunt you down."

PHIL DONOHUE: He’s the management guy. So his phone
would ring. Nobody’s going to call Donahue and tell him to shut up and
support the war. Nobody’s that foolish. It’s a lot more subtle than
that.
"Buying the War", April 25, 2007

Two years ago the editor of a rightwing Danish paper screamed FIRE! in a filled theater.

It printed useless, bad themed cartoons of Muhammad to provoke a reaction. There were lots of demonstrations in some Muslim countries, but things calmed back down.

In February several Danish editors reprinted the cartoons.

They now got the reaction they asked for:

A massive blast targeting the Danish Embassy in Pakistan Monday killed at least six people and wounded more than a dozen, authorities said.

The dead are Pakistani and a Brazilian.

The editors of these papers will now beat their chests, add more fuel to the fire and claim that this prove that they were right to begin with.

There are simply idiots and psychopaths on both sides of this. This is the worst one:

"’Kick ass!’ [Bush] said, echoing Colin Powell’s tough talk. ‘If somebody tries to stop the march to democracy, we will seek them out and kill them! We must be tougher than hell! This Vietnam stuff, this is not even close. It is a mind-set. We can’t send that message. It’s an excuse to prepare us for withdrawal.

"There is a series of moments and this is one of them. Our will is being tested, but we are resolute. We have a better way. Stay strong! Stay the course! Kill them! Be confident! Prevail! We are going to wipe them out! We are not blinking!’"

How can we stop the propaganda-death spiral? Can it be stopped at all?

Two week ago I wrote about Junk Accounting at used by Radian Group Inc. The company, in deep trouble, marked its debt "to market" and booked the difference of what it really owned to what other expected it would be able to pay back as a profit.

Today Bloomberg picks up the issue and there are bigger names involved:

Merrill Lynch & Co., Citigroup Inc. and four other U.S. financial companies have used an accounting rule adopted last year to book almost $12 billion of revenue after a decline in prices of their own bonds.
…
Here’s how it works, according to Richard Bove, an analyst at New York-based Ladenburg Thalmann & Co. A company decides to designate $100 million of its subordinated bonds as subject to mark-to-market accounting. The price of the bonds drops to 80 cents on the dollar from 100 cents. So the firm books $20 million on the "presumed savings that you have on your liabilities," Bove said.

The rule change by the Financial Accounting Standards Board (FASB) that allowed this mess was introduced in February 2007 after heavy lobbying by Wall Street.

According to Bloomberg, the Federal Reserve, Federal Deposit Insurance Corp., Office of the Comptroller of the Currency and Office of Thrift Supervision protested against the introduction of the new rule.

But the FASB is a private institution and the Security and Exchange Commission, which has statutory authority over accounting rules, simply did not use its legal power, but defered to the industry owned institution.

Banks ‘regulating’ themselves will end in a big, big mess. Then the taxpayers will be asked to bail them out again. Thus rulez the market.

There is a new round of "Mission Accomplished" cheers:

First came this ‘defeat’:

Al Qaeda is on the verge of a strategic defeat in Iraq,” [CIA Director Michael Hayden] told FOX News. “There are clear elements of clear defeat in Saudi Arabia. … In about 2003 there were a series of terrorist activities, which the Saudi government responded to very vigorously.”

Today the WaPo editors headline:

The Iraqi Upturn – Don’t look now, but the U.S.-backed government and army may be winning the war.

In The Guardian a British general declares: British troops put Taliban ‘on the run’

The Taliban have been tactically routed in southern Afghanistan, with enemy forces ‘licking their wounds’ after a series of emphatic defeats, say senior British military commanders.

Must be the season …

Now there is no need to look anymore. We can now all sleep in peace and will not have to care about these ‘finished’ wars anymore.

Maybe I should close down this blog? What can I write about when these wars are over?

But are they? Of course not.

All wars have such phases:

At the end of November [1967], the ["Sucess Offensive"] campaign reached its climax when Johnson summoned Westmoreland and the new U.S. Ambassador, Ellsworth Bunker, to Washington, D.C.,
for what was billed as a "high level policy review". Upon their
arrival, the two men bolstered the administration’s claims of success.
From Saigon, pacification chief Robert Komer
asserted that the pacification program in the countryside was
succeeding. Sixty-eight percent of the South Vietnamese population was
under the control of Saigon while only seventeen percent was under the
control of the NLF. General Bruce Palmer, one of Westmoreland’s three Field Force
commanders, claimed that "the Viet Cong has been defeated" and that "He
can’t get food and he can’t recruit. He has been forced to change his
strategy from trying to control the people on the coast to trying to
survive in the mountains."

Wikipedia: Tet offensive

In a huge blow to Hillary’s hopes, such as they are, the DNC Rules and Bylaws Committee has now voted in favor of a compromise measure for Michigan, giving 69 pledged delegates to Hillary Clinton and 59 to Barack Obama at a half-vote each.

Why this mess? Why not simply stick to the Rules?

Some people would be outraged, but the game would be over.

Now Clinton will go all the way to the convention. The party will split even more and probably even lose the presidential election. Stupid, stupid, stupid.

Via Atrios today’s talk show "bobbleheads:

ABC’s "This Week" — Terry McAuliffe, campaign chairman for Hillary Rodham Clinton.

CBS’ "Face the Nation" — Sen. Claire McCaskill, D-Mo.; Gov. Ed Rendell, D-Pa.; Mandy Grunwald, Clinton campaign adviser.

NBC’s "Meet the Press" — Scott McClellan, former White House press secretary; former Sen. Tom Daschle, D-S.D.; Harold Ickes, Clinton campaign adviser.

CNN’s "Late Edition" — Sens. Chris Dodd, D-Conn., and Bill Nelson, D-Fla.; Gov. Mark Sanford, R-S.C.; former Rep. David Bonior, D-Mich.; Harold Ickes, Clinton campaign adviser; Democratic strategists Jamal Simmons and Hilary Rosen; Republican strategist Leslie Sanchez.

"Fox News Sunday" — Howard Wolfson, Clinton campaign adviser; former Rep. David Bonior, D-Mich.; Brendan Sullivan, director of the children’s sports program Headfirst.

Where are the Obama surrogats?