Friday

The Daily WAR (12-05)

Reading between the lines, and thinking outside the box . . .
 
 
 
    Pope Benedict XVI's third encyclical will discuss Catholic social teaching, touching on issues as varied as poverty, peace, wars, international cooperation, energy sources, and globalization. The encyclical will be titled "Caritas in Veritate," "Love In Truth," La Repubblica reports.
 
 
 
 
Press review
    The slow-motion self-destruction of Germany's Social Democrats continued on Thursday with a new poll showing that leader Kurt Beck's popularity is eroding even in his home state. German commentators have been taking stabs at analysing the crisis for weeks. On Thursday, a few more papers have a go and shake their heads at the party's mismanagement.
 
 
 
    Chancellor Merkel is to travel to Ireland next month to help persuade Irish citizens to vote yes in the country's referendum on the EU treaty. She is expected to make a keynote speech in favour of the EU treaty.
 
    A dispute over the sale of snuff looks like it may be putting the ratification of Europe's Reform Treaty at risk, after a group of Finnish islands threatened to reject the treaty if the EU does not allow them to continue selling the product on board their ships.
    The spat between the group of 6,500 Baltic Sea islands and Brussels could conceivably result in this tiny part of the EU opting out of the treaty completely.
 
    EU leaders on Thursday approved a watered-down version of a plan put forward by President Sarkozy for a grand Mediterranean Union stretching from Morocco to Turkey and aiming to foster cooperation with the EU's southern neighbours.
    After strongly criticising Sarkozy's original version of the plan, which was only to involve certain EU member states but be funded by EU money, Germany gave its support, allowing the project to go ahead after Paris agreed a milder all inclusive version of the plan.
    The details of the plan are to be worked out by June, before a summit on 13 July in Paris under the French EU presidency, which would formally launch the Union for the Mediterranean. The fledgling union is to involve some 39 countries - the EU's 27 members and around 12 southern states.
 
    Macedonia's main ethnic Albanian political party has walked out of the governing coalition, possibly collapsing the government.
 
    Hundreds of Kosovo Serbs have taken over a UN courthouse in the northern Kosovo town of Mitrovica, raising a Serbian flag to replace the UN's. The protesters broke into the building in the Serb-dominated part of the city, forcing UN police to retreat.
 
 
 
    The Israel Antiquities Authority announces the first time in the history of the archaeological research of Jerusalem that building remains from the First Temple period have been exposed so close to the Temple Mount – on the eastern slopes of the Upper City.
    A rich layer of finds from the latter part of the First Temple period (8th-6th centuries B.C.E.) has been discovered in archaeological rescue excavations near the Western Wall plaza. The dig is being carried out in the northwestern part of the Western Wall plaza, near the staircase leading up towards the Jaffa Gate.
 
    Is it oil, or a military strike after the resignation of Fallon? Is it settling and arranging compromising equations that can coexist with a Palestinian unity government? Is it a temporary truce for preparing a new war against Syria and Lebanon and Gaza?
    Is it a preparation for raids on Iran and preparing for a new stage of adapting to the difficult equations and waiting for the surprises of the US elections? All these questions surround the tour of the US war leader Dick Cheney in the area.
 
    Impeachment of President Musharraf may move to the top of the new PPP-PML-N government's agenda, even putting the restoration of the deposed judges behind if the "disturbing signals" from the Presidency do not stop, credible sources in both parties say.
 
    Times China Correspondent gives the background to the violence in Tibet.
 
    Charles Taylor, the former Liberian President, ordered his militias to eat captured enemies and UN soldiers, a former close aide testified at the captured leader's war crimes trial in The Hague. "He said we should eat them. Even the UN white people — we could use them as pork to eat."
 
 
 
    As Iranians vote in parliamentary polls today, Deutsche Welle's chief correspondent and Mideast expert writes about his impressions on Europe and Germany's waning clout in the country.
 
    The young cleric in this spiritual center of the Islamic revolution says today's vote will sweep the country closer to hard-liners' ideal of the Islamic state.
    Conservatives, particularly allies of hard-line President Ahmadinejad, are expected to maintain the domination of parliament they have had since 2004. If they do so by a strong margin, it would demonstrate the Islamic leadership's ability to ward off a comeback by reformists.
    Iran's supreme leader, Ayatollah Khamenei, threw his support behind hard-liners. In a speech Wednesday, he called on voters to back candidates who are opposed to the US and "whose loyalties are to Islam and justice."
 
    The sudden retirement announcement of Admiral William "Fox" Fallon signals another White House attempt to set the stage for a war on Iran. Bush and his war gang have advocated aggression to such an extent that US officials have frequently suggested striking Iran as part of their hostile games of domination in the Mideast.
    The 4-star commander Fallon, however, had shown himself to be knowledgeable about the fact that when Bush and his neocon war crew rattle sabers, they mean war.
    It is clear that Fallon's departure will be a flaming torch of victory for Bush and will help his administration silence the few remaining anti-war officials in Washington. Fallon's early and sudden retirement just comes to show that Bush will stop at nothing and will push forth with his bellicose games against Tehran in spite of all obstacles.
 
    Fallon's greatest concern appears to have been preventing war with Iran. He was one a group of senior military officers, apparently including most of the Joint Chiefs of Staff, who were alarmed in late 2006 and early 2007 by indications that Bush and Cheney were contemplating a possible attack on Iran.
    As Inter Press Service reported last May, Fallon was also quoted as saying privately at that time, "There are several of us trying to put the crazies back in the box." That was an apparent reference to the opposition by the Joint Chiefs of Staff to an aggressive war against Iran.
 
 
 
    The rival campaigns for the Democratic Party presidential nomination intensified their mutual mudslinging over race, gender, and political tactics, as the two candidates each vied for support among the top party officials and corporate interests that will tip the balance in the closely contested race.
    The decision will be in the hands of the 796 superdelegates, about half of them not yet committed publicly. The two campaigns are waging an increasingly ferocious and unscrupulous struggle to gain their support.
 
    The Republican Party, in its search for consistency, has now nominated a confessed war criminal to be its presidential nominee. Having a war criminal for president for the past 8 years, at least now the republicans have a candidate who admits it.
    While John McCain states that he signed a confession admitting to being a war criminal after being tortured repeatedly, this was most likely the only time in his military/political career he embraced the truth.
    Still, there are many in the Prisoner of War/Missing in Action community, including former POWs, who have their doubts about McCain ever being tortured while a Prisoner of War, and actually believe he received preferential treatment at the hands of the North Vietnamese, Russians and Cubans.
    Why has McCain fought so hard to keep the facts of his imprisonment secret? John McCain is no hero; many veterans refer to him as the Manchurian Candidate.
 
    This week's events involving the governor of New York, Eliot Spitzer, may have helped to hide a more egregious misuse of authority, namely that of Federal Reserve chief Ben Bernanke and his central banking cohorts around the world.
    In another one of those nice coincidences that seem to happen whenever Wall Street is down and out, the unpopular governor of New York was found consorting with prostitutes through a Federal investigation that has all the hallmarks of a "hit job" ordered from the very top.
    Spitzer was deeply unpopular in the corridors of power, and especially with the current Treasury Secretary Hank Paulson, for daring to take various Wall Street firms down a few notches earlier this decade.
    After also hitting other sacred cows such as large insurance companies, Spitzer was readying ammunition to strike at the heart of the current subprime crisis by attacking the monoline insurers and rating agencies.
    Spitzer through his actions hurt his family and a small band of friends very badly. That however pales in comparison to the wide-ranging systemic damage being wrought by Bernanke through his ill-considered actions. The wrong government official resigned this week.
 
Spitzer's article last month...
    Not only did the Bush administration do nothing to protect consumers, it embarked on an aggressive and unprecedented campaign to prevent states from protecting their residents from the very problems to which the federal government was turning a blind eye.
    The administration accomplished this feat through an obscure federal agency called the Office of the Comptroller of the Currency.
    But the unanimous opposition of the 50 states did not deter, or even slow, the Bush administration in its goal of protecting the banks. In fact, when my office opened an investigation of possible discrimination in mortgage lending by a number of banks, the OCC filed a federal lawsuit to stop the investigation.
    When history tells the story of the subprime lending crisis and recounts its devastating effects on the lives of so many innocent homeowners, the Bush administration will not be judged favorably.
    The tale is still unfolding, but when the dust settles, it will be judged as a willing accomplice to the lenders who went to any lengths in their quest for profits. So willing, in fact, that it used the power of the federal government in an unprecedented assault on state legislatures, as well as on state attorneys general and anyone else on the side of consumers.
 
 
 
    Governments might have to intervene with taxpayers' money to shore up the financial system and prevent a "downward credit spiral" from taking hold, the International Monetary Fund said yesterday. "We must keep all options on the table, including the potential use of public funds to safeguard the financial system."
 
    European consumer prices and wages rose in February more than economists forecast, leaving the European Central Bank with little room to lower interest rates as economic growth slows. Economists have pushed back their forecasts for possible interest rate cuts this year as food and energy costs soar. This is a "major headache for the ECB."
 
    Global stock markets may have cheered the US Federal Reserve Wednesday, but on Wall Street the Fed's unprecedented move to pump $280 billion into global markets was seen as a sure sign that at least one financial institution was struggling to survive.
    The name on most people's lips was Bear Stearns. Although the Fed billed the co-ordinated rescue as a way of improving liquidity across financial markets, economists and analysts said that the decision appeared to be driven by an urgent need to stave off the collapse of an American bank.
 
    Bear Stearns has got emergency funding, in a move that raises fears that even the top Wall Street names are suffering amidst the credit crunch. The Federal Reserve of New York and rival bank JP Morgan Chase will provide the money to Bear Stearns for 28 days.
 
    To understand the risks that the financial system is facing today I present the "nightmare" or "catastrophic" scenario that the Fed and financial officials around the world are now worried about.
    Wednesday's action by the Federal Reserve proves that the banking system is insolvent. It also shows that the Fed is willing to intervene directly in the stock market if it keeps equities propped up. This is clearly a violation of its mandate and runs contrary to the basic tenets of a free market.
    In fact, Bernanke is destroying the currency by trying to reflate the equity bubble. And how much damage is he inflicting on the dollar?
    According to Bloomberg, "the risk of losses on US Treasury notes exceeded German bunds for the first time ever amid investor concern the subprime mortgage crisis is sapping government reserves....Support for troubled financial institutions in the US will be perceived as a weakening of US sovereign credit.''
    America is going broke and the rest of the world knows it.
 
    The dollar has plummeted against all major currencies on dire US retail sales and fears that the Federal Reserve may need to slash interest rates further to stop the downward spiral in the credit markets.The plunge came amid an investor flight into commodities, seen as a way of insulating wealth from the dollar's decline.
    The European Central Bank has so far refused to blink, holding rates at 4% since the credit crunch began. The result is a yawning transatlantic yield gap, drawing huge sums of hot money into Europe.
    "We're in the eye of the dollar storm," said the currency chief at HSBC. "The last phase of a sell-off is always the most extreme. We think the dollar will recover in the 2nd quarter. People are treating the euro as if it was the D-Mark. They are looking at how well German exports are doing, but ignoring the weakness in Italy and Spain. This is a big mistake. We will soon see contagion from the US, and then both sterling and the euro will be in trouble."
    Peter Schiff, a dollar-bear at Security Pacific Capital, said the greenback faced the danger of outright collapse as countries in Asia and the Middle East mull plans to break their dollar pegs, which are fuelling inflation across the region. "The decline could accelerate rapidly. The world is still holding a lot of dollars it doesn't need,"
 
    The Carlyle debacle was accompanied by other developments pointing to both recession and rising inflation. Crude oil prices hit a new record of $111, gold futures breached the $1,000-an-ounce mark, and the dollar fell to record lows versus the Japanese yen, the euro and the Swiss franc.
    The collapse of Carlyle Capital has far-reaching implications. In the first instance, it shows to what extent the credit crisis has extended beyond the subprime market. CCC did not hold subprime-based securities.
    At the same time, the hard line taken by the fund's bankers demonstrates how nervous the biggest financial institutions have become about their own loan exposures. Increasingly, banks hit by billions of dollars in write-downs and losses have begun issuing margin calls to hedge funds and other borrowers, leading to a further decline in the market prices of many forms of debt and assets.
 
    Selling the dollar is now close to a one-way bet. So great is concern about the health of the US financial system that the dollar traded below Y100 on Thursday, and above $1.56 against the euro. The danger of a dollar rout is rising, and the Federal Reserve, ECB and Japan's Ministry of Fi­nance should co-ordinate intervention to slow the greenback's fall.
    Aggressive rate cuts and fears that US taxpayers will have to bail out their banks are undermining the dollar. Both make a surge in US inflation more likely, and since the Fed first cut rates last September the risk has been that foreign investors lose confidence, dump assets and trigger a run on the dollar.
 
    Antique store owners in lower Manhattan, ticket vendors at India's Taj Mahal and Brazilian business executives heading to China all have one thing in common these days: They don't want US dollars.
    Hit by a free fall with no end in sight, the once mighty US dollar is no longer just crashing on currency markets and making life more expensive for American tourists and business people abroad; its clout is evaporating worldwide as foreign businesses and individuals turn to other currencies.
(Cartoon: Baghdad Cafe)
 
    Jim Rogers, a well respected financial analyst, openly calls for the abolishment of the Federal Reserve on CNBC.
 
    Median home prices plunged in many of California's most populous counties in February, with Southern California leading the slide with an overall drop of 18% compared to a year earlier.
 
    The credit crunch has finally hit the traditional mortgage market. Investors are now shunning mortgage-backed securities issued by government sponsored enterprises Fannie Mae and Freddie Mac, which have been critical in keeping the real estate market from completely falling apart. Some fear this development will make it harder for people, even those with strong credit histories, to get a home loan.
 
 
 
    A Polish priest and mathematician who was a friend of the late Pope John Paul II has won the world's richest academic prize for work that shows how maths can offer circumstantial evidence of God's existence.
    Professor Michael Heller, 72, a pioneering cosmologist and philosopher specialising in mathematics and metaphysics, received the £820,000 prize yesterday in New York.
    His theories do not so much offer proof of the existence of God as introduce doubt about the material existence of the world around us. He specialises in complex formulae that make it possible to explain everything, even chance, through mathematical calculation.
    "If we ask about the cause of the universe we should ask about the cause of mathematical laws. By doing so we are back in the great blueprint of God's thinking about the universe, the question on ultimate causality: why is there something rather than nothing? When asking this question, we are not asking about a cause like all other causes. We are asking about the root of all possible causes."
 
    It's Pi Day, a celebration of the mathematical ratio that man has been trying to unlock for millennia. But why are we driven to find the answers behind it? Pi Day is a time to honour not just a number and our fascination with it, but also the essential truth that there are some things we simply cannot know. We can only get close to knowing.
 
 
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