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April 9, 2009
Billmon: Scalia’s Nightmare

I've suspected for some time that conservatives would eventually have serious reservations about where Norm and his mouthpieces are trying to take them. Maybe it's finally dawning on some of them that making a federal case out this election contest risks a long-term disaster for the GOP — one that would completely outweigh the short-term benefits of depriving the Democrats of their 59th vote.
Billmon: Scalia's Nightmare

Links April 09 09
  • It is legal: Iran’s ‘Outlawed’ Nuclear Program (FP Journal)
  • Fake negotiations: U.S. to Join Iran Talks Over Nuclear Program NYT

    "By showing a readiness to engage Iran, American officials said, the administration is trying to build support among allies like Germany and France, and more skeptical players, like Russia, so that if diplomatic efforts fail, it can marshal support for tougher sanctions against Tehran."
  • Also: How the corporate media alienate Iran: Prof. Mojtahedzadeh (FP Journal)
  • Buffet is old: Moody’s downgrades Berkshire Hathaway (FT)
  • Nassim Nicholas Taleb: Ten principles for a Black Swan-proof world (FT)

    "In France in the 1980s, the socialists took over the banks. In the US in the 2000s, the banks took over the government."
  • What was his share of the loot? Former FBI chief defends flow of money to Saudi ambassador (LAT)
  • Defense pork propaganda: US electricity grid hit by cyber attacks: report (AFP)
  • Only chimps? Study shows chimps exchange meat for sex (UPI)
  • Racist writing: "At least one is believed to be a student, the others were born in Pakistan."
    Met blunder prompts terror arrests (Guardian)

Please add your news and views in the comments.

April 8, 2009
Pakistan Asserts Itself

The Pakistani government finally had enough of U.S. meddling and took a stand:

Two top US officials, presidential envoy for the region Richard Holbrooke and Chairman of the Joint Chiefs of Staff Admiral Mike Mullen, had come to Islamabad with the idea of doing some tough talking and pressuring both the political and the military leadership to step up their efforts in the war on terror. Instead, what they got was a barrage of criticism of the American position and the allegations constantly levelled against Islamabad about either protecting some Taliban elements or not doing enough to eliminate what the United States believes are the main elements carrying out attacks on Nato forces in Afghanistan.

According to a source in the US delegation, the stance taken by the Pakistani side came as a rude shock to the Americans, who had so far been taking the civilian and military leadership for granted.

Cont. reading: Pakistan Asserts Itself

Moldova – A Private Color Revolution?

Following elections in Moldova violent protests broke out and some youth NGOs and the opposition is trying to overthrow the reelected government. While this looks like a color revolution, the otherwise usual support for it from the U.S. and EU seems to be missing.

Moldova is a small landlocked and very poor country between Romania and Ukraine in south east Europe. Throughout history ownership of Moldova changed several times between Romania and Russia. Since 1991 it is independent but the Russophon part east of the river Dniester split off and is now the effectively independent Transnistria. The official language in the rest of the country is Romanian.

The 1990s were economically catastrophic for Moldova. The GDP per person is the lowest in Europe. Out of 4.2 million Moldovans 600,000 live and work abroad. Since 2001 the communist party, essentially social-democrats more or less friendly with Russia, is ruling the country and two days ago again won elections.

International election observers from the OECD confirmed the results.

Allegations of election fraud led to opposition demonstrations in the capitol Chisinau where some youth groups stormed (video) and set fire to (video) the parliament and the president's office. The police came out and the government now has again the upper hand. Youth protests after elections with demands of re-voting seem to follow the typical scheme of a U.S. engineered color revolution.

A good, though a bit partisan chronology of the last days is here. Additionally some links through twitter.

What is missing from a normal color revolution is the support from 'western' countries and their media. But there are some hints that this is a privately arranged coup, probably with support from Romania, that uses the color revolution tools.

The conflict here has several layers. The young city folks voted for the opposition for economic reasons and the elder rural majority voted for the 'communists'. Something weird: Photos from the riots show lots of people with very short hair – Skinheads? Hooligans? Police?

There is movement from Romania to essentially annex Moldova and some of the protesters indeed carried Romanian (and EU) flags. Moldova's government recalled its ambassador to Romania, told the Romanian ambassador to Moldova to leave and closed the border.

Another conflict layer is a personal spat between the oligarch Anatol Stati, Moldova's richest man, and the 'communist' president Vladimir Voronin, father of another rich oligarch. Voronin accuses Stati of financing the opposition party and of dubious business practices.

Cont. reading: Moldova – A Private Color Revolution?

Links April 08 09
  • Annie linked this yesterday: Baghdad, City of Walls by Ghaith Abdul-Ahad, four parts. Please watch at least part 3 and remember that those instigated this are still being payed by U.S. taxpayers or this or that lobby.
  • FDIC preparing for the big one: 'FDIC Job Postings are Bad News For Big Banks' (FDL)
  • 'Communities print their own currency to keep cash flowing' (USA Today) In the late 1920s in Germany this was called Notgeld, 'Emergency Money', and every city or bigger county had its own.
  • 'Default Count Rises to Highest Since Great Depression' (Bloomberg)
  • US, UK to default? 'The green shoots are weeds growing through the rubble in the ruins of the global economy' (Willem Buiter)
  • Unsuccessful color revolution attempt? 'Protests in Moldova Explode, With Help of Twitter' (NYT)
  • 'What's the Problem With Pakistan? (Foreign Affairs)  One big problem is Indian mangling in Afghanistan:

"Having visited the Indian mission in Zahedan, Iran, I can assure you they are not issuing visas as the main activity! Moreover, India has run operations from its mission in Mazar (through which it supported the Northern Alliance) and is likely doing so from the other consulates it has reopened in Jalalabad and Qandahar along the border. Indian officials have told me privately that they are pumping money into Baluchistan. Kabul has encouraged India to engage in provocative activities such as using the Border Roads Organization to build sensitive parts of the Ring Road and use the Indo-Tibetan police force for security."

Please add your news and views in the comments.

April 7, 2009
Geithner Plan Worse Than You Think

The more people think about the Paulson Geithner plan the more they start to see the scam behind it.

Laurence J Kotlikoff and Jeffrey Sachs explain the scheme in a Financial Times online piece.

A bank has a 'toxic asset' (a legacy securities in Treasury newspeak) with a notional value of $1,000 million, a marked-to-fantasy book value of $900 million but a real value of $100 million. It sets up a special purpose vehicle (SIV) that is not on its balance sheet. The SIV joins Geithner's Public Private Investment Plan (PPIP).

The bank lends $70 million to the SIV. Under PPIP the Treasury joins the SIV with additional capital of $70 million. The Federal Deposit Insurance Corp (FDIC) then gives a 1:6 non-recourse loan to the PPIP SIV. That has now $140 million + 6 * $140 million = $980 million and offers that money to buy up the banks 'toxic asset'.

The bank sells the 'bad asset' for $980 million to the SIV. Eventually the SIV will have to acknowledge the real value of the paper and, as it can not pay back the FDIC loan, go bankrupt. The bank makes a $70 million loss on the SIV but got $980 net for something that was only worth $100 million. In total it even makes a book profit of $10 million, a good reason to pay out an additional management bonus.

The Treasury will lose its $70 million capital investment. The FDIC will get the 'toxic asset' worth $100 million for the $840 million loan it gave. It may eventually sell that 'toxic asset' to a bank for the real market value and will have to eat the losses. Eventually it will be bankrupt too and the taxpayer will have to pay up for it.

In total there will hundreds of transactions as described above and
future taxpayers will have to come up with millions of millions to pay
for them.

Even if the above scheme is not carried out as openly as described above, with such high incentives it is certain to happen. A few phone calls and a Bank of America SIV will buy Citigroup's 'toxic assets' while a Citigroup SIV will buy BoA's 'toxic assets'. They are already preparing for this and aquiring extra 'toxic assets' from others to increase their possible loot in the scheme.

That alone shows of course that there are markets for such 'toxic assets' and that they do have a market price. The official reasoning for Geithner's plan is that there is no such market and that the assets are undervalued. The real reason for the PPIP is of course different. After robbing the last penny from private households the banks ran out of prey. They are now going after the state as a whole. Geithner and Summers are their tools in this and Congress is complicit.

Something is deeply wrong with the world when such open robbery is allowed without a public outcry.

Who Is Again Bombing Baghdad?

Yesterday seven car bombs killed 37 across Baghdad. These bombs were hidden in parked cars and not suicide attacks. So far nobody has claimed responsibility.

  • The U.S. blames 'Al-Qaeda'.
  • Maliki blames Baath party elements.
  • Disgruntled Son of Iraq groups that are now without pay may be another possibility.
  • Some of the thousands of prisoners the U.S. is currently releasing may also have a motive.
  • And of course one should never exclude the possibility of a false flag/black operation by some other interested side. Maliki? Iran? The U.S. military?

Who do you you think is most likely responsible for these attacks?

Links April 07 09

War Of Terror:

  • Graham Usher on Pakistan vs. India in Afghanistan: Taliban v. Taliban (LRB)
  • More Drone Attacks in Pakistan Planned (NYT)

Slowly reality sets in:

  • From Bubble to Depression, (WSJ)
  • Why this will not be a normal cyclical recovery, (FT)
  • Toxic debts could reach $4 trillion, IMF to warn, (London Times)
  • Debtor's Prison NYT

Media manipulation:

  • Gates proposes US defence cuts Al Jazeera
  • Gates unveils sweeping defence cuts (FT)
  • Gates cuts US defence spending (Reuters)

Overall, Obama has said he would seek roughly $534 billion for the Pentagon's core budget in 2010, not including war funding, about 4 percent more than the $513.3 billion Congress provided for 2009.

Gates' proposal would change the makeup of the spending, not the overall figure.

On food:

  • G8 report says food crisis may threaten stability (Reuters)
  • It’s Not Rocket Science: Land Productivity, Food Rights (DeAnander)

Please add your links, news and views in the comments.

April 6, 2009
Erdoğan Please Note: The U.S. Is A Secular State

On visit in the United States of America the Turkish Prime Minister Recep Tayyip Erdoğan spoke to the majority-Christian population in a speech to the Joint Session of the United States Congress:

I know there have been difficulties these last few years. I know that the trust that binds Turkey and the United States has been strained, and I know that strain is shared in many places where the Christian faith is practiced. So let me say this as clearly as I can: Turkey is not, and will never be, at war with Christianity. In fact, our partnership with the Christian world is critical not just in rolling back the violent ideologies that people of all faiths reject, but also to strengthen opportunity for all its people.

I also want to be clear that Turkey's relationship with the Christian community, the Christian world, cannot, and will not, just be based upon opposition to terrorism. We seek broader engagement based on mutual interest and mutual respect. We will listen carefully, we will bridge misunderstandings, and we will seek common ground. We will be respectful, even when we do not agree. We will convey our deep appreciation for the Christian faith, which has done so much over the centuries to shape the world — including in my own country. Turkey has been enriched by Christian Turks. Many other Turks have Christians in their families or have lived in a Christian-majority country.

Link and questions:

  1. How would you have reacted to the above?
  2. How would the U.S. public react to it?
  3. How would the media react?
The NoKo Missile and UNSC Sanctions

While Russia had first confirmed a North Korean satellite launch, it now says that no satellite reached the orbit.

According to U.S. information the third stage never separated from the second one and both fell into the sea south of Japan.

The 'west', i.e. the U.S., is trying to get additional UN sanctions on North Korea but the Chinese and Russians will likely block those. The 'western' argument is that the North Korean launch violated UN Security Council resolution 1718 (pdf) established in 2006 after NoKo exploded a nuclear device.

China and Russia have a good formal reason to dispute that. As the 'western' media will not spell that out I will do so here. In UNSCR 1718 the Security Council:

2. Demands that the DPRK not conduct any further nuclear test or launch of a ballistic missile;

5. Decides that the DPRK shall suspend all activities related to its ballistic
missile programme
and in this context re-establish its pre-existing commitments to a
moratorium on missile launching;

The term ballistic missile is quite specific:

A ballistic missile is a missile that follows a sub-orbital ballistic flightpath with the objective of delivering a warhead (often nuclear) to a predetermined target.

A satellite, by definition, is an orbital object and the launch of satellites is thereby not forbidden under UNSCR 1718. There are signs that this was indeed an attempted satellite launch. North Korea took all the necessary steps in international law that are required for a satellite launch like informing the international air and shipping organizations about the flight path and drop zones. A picture of the missile shows a big nosecone which is typical for a satellite launcher and atypical for a ballistic missile.

Of course the launch of such a satellite carrying missile will also bring experience for the further development of ballistic missiles. As the FAS security blog remarks:

The reason the world is worried about this test is not because we are worried about competition in the satellite launch business. (Good luck to them!) The world worries because the launcher the North Koreans used is a Taepodong-2, which most everyone believes is their next step up toward a long-range ballistic missile. By taking a warhead off and putting a small third stage and a satellite on top, they might call it a space launcher but the first two stages are exactly the same.

As the third stage never separated, it either failed or it was only a mock up to start with. But as South Korea plans to launch its first satellite this summer, a North Korean satellite now would have been a great point in the permanent North-South propaganda war. That is why I personally believe that this was a real satellite launch attempt.

The question of satellite launch or ballistic missile launch with a mock third stage is for now undecidable. The sea where the second and third stage landed is about 20,000 feet deep. Unless Captain Nemo's Nautilus brings the wreckage to the surface, the UNSC will have to agree to disagree over what the missile really was and if the launch was a breach of UNSCR 1718 or not.

Links April 06 09

  • Wet: North Korean satellite on subaquatic orbit?
  • Lauding the exception: Israeli army unit receives citation for not committing war crimes.
  • It ain't over …: U.S. bank woes just the start, Whitney says
  • Pesticide industry to White House: Please use our stuff (via Tiny Revolution):

Mrs. Barack Obama [sic!]
The White House
Washington, DC 20500

Dear Mrs. Obama,

As you go about planning and planting the White House garden, we respectfully encourage you to recognize the role conventional agriculture plays in the U.S in feeding the ever-increasing population, contributing to the U.S. economy and providing a safe and economical food supply. America's farmers understand crop protection technologies are supported by sound scientific research and innovation.

Please add your links, news and views in the comments.

April 5, 2009
Obama Bows

Pat Lang is outraged the Obama bowed to the Saudi King as is the Agonist's Sean Paul Kelly:

Repeat after me: American presidents do not bow to kings.

Hey – the bow will lower oil prices and sell lots of Treasuries. What is bad about that? And where was the outrage when Obama lowered his head to the queen of England?

I wonder why U.S. people are so touchy on this issue. Both royals are much older than Obama is and to lower the head while greeting them is simply good manners.

Meanwhile Obama held a pretty noteworthy speech in Prague. Besides the usual nonsense he said:

"To put an end to Cold War thinking, we will reduce the role of nuclear weapons in our national security strategy and urge others to do the same," Mr. Obama said. "Make no mistake, as long as these weapons exist, the United States will maintain a safe, secure and effective arsenal to deter any adversary and guarantee that defense to our allies, including the Czech Republic. But we will begin the work of reducing our arsenal, to reduce our warheads and stockpiles. We will negotiate a new strategic arms reduction treaty with the Russians this year."

Reducing the number of nuclear weapons and a new treaty with Russia are significant policy changes. The big public announcement in Prague will make it difficult to step back from these promises.

Of course some will get outraged about that too as it likely includes a (reciprocal) bow to Medevev.

The Flogging Video

In February I wrote about Pressure on Zardari:

[Zardari's] recent peace offer to opposition fighters in Swat was a smart move. But in the 'west' it was immediately criticized and he will now be pressured to continue the fighting there.

The fighting over a local justice system has continued since the early 1990s and has little to do with the Taliban issues in Afghanistan. A compromise in Swat could actually help to take away support from Wahabbi/Deobandi hardliners that are at the core of the Taliban. Pressure on Zardari on this issue can only increase the strife in Pakistan and speed up his downfall.

Even without 'western' interference a compromise as now in negotiation will not be easy to achieve as there are already many other possible spoilers.

One spoiler has now appeared in form of a cellphone video that shows the flogging of a women.

Video of Taliban flogging girl stirs anger in Pakistan
Flogging video shakes Pakistan peace accord

Pak President Zardari Condemns Flogging of Teenage Girl, Orders Inquiry

The cellphone video of the flogging will be used to step back from the compromise deal and that move may well reignite fighting in Swat.

The short cellphone video is part of this Channel 4 report:

Cont. reading: The Flogging Video

Links April 05 09

A Pentagon official told us: “We have effectively abandoned our hopes that NATO will provide extra fighting strength. This war, and in Pakistan, is now almost an American monopoly.

  • Ignatius:

    The Saudis hope that if Obama's charm offensive toward Iran fails, it will be followed by tough action. "He's building a case against Iran," predicts the Saudi source.

  • Congrats to the people of North Korea for launching their version of Sputnik. This is the 11th nation with satellite launch capability. The NYT writes:

    North Korea’s missiles have ranked among its few profitable exports — Iran, Syria and Pakistan have all been among its major customers. If this long-range test ends up a success, it would presumably make the design far more attractive on the international black market.

The NoKo government sells something to the Syrian government. Why is that characterized as  'black market'???

Please add your links, news and views in the comments.

April 4, 2009
End NATO

NATO is celebrating its sixties birthday in disunity. There is lots of quarrel over the operation in Afghanistan. Turkey is against the election of the right-wing Danish premier as NATO secretary. There is no common strategic view of what NATO is supposed to be. Meanwhile its original commitment is no longer credible.

Consider this scenario:

Estonia has been hit hard by the economic crisis. It had a quite extreme housing bubble with the mortgages financed mostly in foreign currency. Inflation during earlier years had increased wages and made its exports uncompetitive. A flat tax limits state income but created a class of oligarchs. GDP has fallen nearly 10% year over year.

As most debt is in foreign currency to Nordic banks to devalue the Estonian krooni would increase the money that will have to be payed back. The other way to regain some competitiveness is internal deflation, i.e. wage decrease by some 20%. The government decided to take the second path and to thereby impoverish its population.

Some 25% of the 1.2 million people in Estonia are ethnic Russians and speak Russian as their first language.

In the fall of 2009 the ever increasing economic troubles lead to the rise of nationalism and some right-wing populist politician/oligarch redirects the peoples anger over the economy towards the minority. Cases of ethnic violence against Russian shops and workers start to appear.

Leaders of the Russian minority party publicly ask Moscow to step in. After a local slaughter during which a mob kills some 20 ethnic Russians in front of running international news cameras, the government in Moscow comes under heavy internal pressure to react. After additional violence three Russian divisions cross the borders and occupy Estonia. The Estonian army has only one brigade size force and after a day of small skirmishes resistance ends.

How will NATO react?

The right in the U.S. as well as liberal interventionists may well call for war. The public opinion, wary of war in Iraq and Afghanistan and also under economic stress does not favor this.

NATO countries will have to sit down and decide if they want to invoke article 5 and start a war with Russia to liberate Estonia.

Cont. reading: End NATO

Links April 04 09
  • At Wired Sharon Weinberger has a major scoop: How To: Get a No-Bid Contract for Russian Choppers. Helicopters for Iraq – a shady Pentagon office, a $500 million no-bid contract to a dubious U.S. company. Hundreds of millions payed to a Russian company that does not deliver …
  • William Pfaff compares the ‘Long War’ with Europe’s Thirty Years’ War.
  • Realist Stephen Walt doesn't like the AfPak Muddle
  • It is hard to get Urdu language books in Pakistan because they are 'Indian'. It is hard to get Urdu language books in India because …  - 
    A funny story from Sepoy at Chapati Mystery.
  • Did Israel really bomb Sudan? We don't think so. Even Debka doubts the story (and adds its own spin.)
  • Pat Lang on Ambassador Feltman and Lebanon. As elections approach, Lebanon will heat up again.
  • 14 people get killed in a Mumbai like attack. Why isn't this called terrorism?

Please add your links, news and views in the comments.

April 3, 2009
Africa Comments (1)

On the left side of the homepage is a new category box titled 'b real's Africa Comments'. b real posts lots and lots of Africa news items in the comments here, mostly on the countries around the Horn. One can not find such a collection elsewhere and his work deserves a permanent link from the homepage.

There will be a new thread for Africa Comments when the older one has 50 or so comments. The newest one will always be the top one linked in that category box. Of course everyone is welcome to add relevant thoughts, news or cheers for b real in those threads.

So what are all these navies really doing around the Horn of Africa? We are told they are there to protect against piracy. Somali fishermen tell a very different story.

From b real's latest item in the older thread.

SOMALIA: Getting tough on foreign vessels to save local fishermen

NAIROBI, 2 April 2009 (IRIN) – Somalia has revoked fishing licences for foreign vessels and is planning a new law to regulate fishing in its waters, a minister told IRIN on 2 April.

Abdullahi Sheikh Hassan, head of a fishing cooperative in the southern coastal town of Merka, told IRIN that livelihoods were being destroyed. "Fishing is the only thing we know and without it we have nothing," he said, adding that lack of support, combined with the foreign fishing vessels, was ruining fishing communities.

Reports of crews of foreign-owned ships harassing and intimidating local fishermen had been made by Somali fishermen.

"They are not only taking our fish, but they are also stopping us from fishing," said Mohamed Abdirahman, a fisherman in Brava, 200km south of Mogadishu. "They have rammed boats and cut nets.”
He said a number of Somali fishermen were missing and presumed dead after encounters “with these big ships”.

Abdirahman said the number of foreign ships in the south had increased after they were chased from the north by pirates. He said the foreign ships were now being protected by the navies of their countries and “do whatever they want to us”.

Cont. reading: Africa Comments (1)

Links April 03 09

Please add your remarks and links of the day in the comments.

April 2, 2009
Carte Blanche For Lying

Years ago accounting rules were amended to demand that banks and other financial institutions account for the real value of their 'assets' by marking them to market prices. That was a good move as investors in banks and other companies could have a more bit trust that their balance sheets showed some approximation to the real value of these.

Now, after heavy lobbying (with TARP money) by financial institutions Congress pressed the Financial Standard Accounting Board to change the rules:

The changes to so-called mark-to-market accounting allow companies to use “significant” judgment when gauging the price of some investments on their books, including mortgage-backed securities.

So from now on all banks etc will again lie about the real value of their assets. The management will show 'significant judgment' to boost the profit and loss statements and to increase its bonuses. The books will again show inflated values and all numbers derived from that will essentially be fake.

The Bloomberg writer obviously did not get that:

Cont. reading: Carte Blanche For Lying

Magic U.S. Troop Increase in Afghanistan

Why doesn't Obama tell tell the public how many troops he really sends to Afghanistan? The official announcements were for 59,000 U.S. troops deployed. The real number now crept up to 68,000.

This was the news on February 18:

President Obama has ordered the first combat deployments of his presidency, saying yesterday that he had authorized an additional 17,000 U.S. troops "to stabilize a deteriorating situation" in Afghanistan.

The new deployments, to begin in May, will increase the U.S. force in Afghanistan by nearly 50 percent, bringing it to 55,000 by mid-summer, along with 32,000 non-U.S. NATO troops.

Months ago, the commander of U.S. and NATO forces in Afghanistan, Gen.
David D. McKiernan, requested more than 30,000 additional troops this
year, and an initial 6,000 arrived last month under orders signed by
the Bush administration.

Note the 55,000 include the 6,000 Bush sent.

That number was still valid on March 21:

The United States is adding 17,000 troops to the 38,000 it has in Afghanistan, and may send further reinforcements when a policy review by Obama's administration is finished.

Note: 38,000 + 17,000 = 55,000. Fine.

On March 27 an additional 4,000 troops deployment was announced:

Along with the 17,000 additional combat troops authorized last month, he said, Obama will send 4,000 more this fall to serve as trainers and advisers to an Afghan army expected to double in size over the next two years.

The total of 21,000 new troops, added to a combat brigade authorized by the Bush administration and deployed in January, will exceed the 30,000 that Gen. David D. McKiernan, the U.S. and NATO commander, had requested for this year in Afghanistan and will bring the total U.S. force to more than 60,000. Non-U.S. NATO troops there currently total about 32,000.

Note: 55,000 + 4,000 suddenly added up to "more than 60,000" !?!

And only five days later the March 27 numbers magically increased again:

Cont. reading: Magic U.S. Troop Increase in Afghanistan

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