Reading between the lines, and thinking outside the box . . .
Benedict XVI made a strong appeal for peace in Iraq Sunday, in the wake of the kidnapping and death of the archbishop of Mosul. "His beautiful witness of fidelity to Christ, to the Church and his people, whom he did not want to abandon despite numerous threats, moves me to cry out forcefully and with distress: Enough with the bloodshed, enough with the violence, enough with the hatred in Iraq!"
(And: Full text of address)
Shares in Siemens fell by more than 10% in early trading after the German industrial giant unexpectedly issued a profit warning.
[Europress] [Russopress]
One month before Italy goes to the polls, the election campaign is in full swing. Despite the usual demagogy, it is evident that all of the established political parties have moved closer together and shifted further to the right. There is literally nobody who articulates the concerns and needs of working people, let alone provides a serious answer to them.
UN police were ordered to pull out of northern Kosovo today as hundreds of Serbs opposed to Kosovo's independence rioted in the flashpoint town of Mitrovica. NATO troops were also under automatic weapons fire during the clashes.
(And: NATO vows to respond firmly)
Israel and Germany upgraded their ties today, approving a host of joint projects and agreeing to hold annual government consultations, in one of the highlights of Chancellor Merkel's 3-day visit marking the 60th anniversary of Israel's creation.
Merkel was accompanied by 7 Cabinet members. Germany already has similar arrangements with France, Italy, Spain, Poland and Russia, while it's the first time Israel enters into such an agreement.
Merkel and Prime Minister Olmert chaired a joint session of members of the German and Israeli Cabinets, at which both governments signed off on a range of projects, including in education, the environment and defense. They agreed to hold such meetings once a year, alternating as hosts.
However, Olmert struck a defiant tone, saying he would keep expanding Jewish neighborhoods in eastern Jerusalem, the area claimed by the Palestinians for a future state. Such construction has been criticized by the international community, but Olmert said these neighborhoods are an inseparable part of Jerusalem.
On Tuesday, Merkel is to address the Knesset, becoming the first foreign head of government to speak to Israel's parliament. In the past, the honor has been reserved only for heads of state and monarchs.
In the face of a possible escalation with Syria and Iran's efforts to obtain a nuclear weapon, parts of the country will shut down next month in what security officials say will be the largest emergency exercise in Israel's history. The drill, which is being organized by the newly-established National Emergency Authority, will take place over five days starting on Sunday, April 6.
A Chadian rebel leader threatened on Sunday to attack Chad's southern oil-producing Doba region unless France and the US put pressure on President Deby to start a dialogue with his foes.
He said the Doba basin, where Exxon Mobil Corp heads a consortium pumping 140,000-160,000 bpd of oil via a pipeline to Cameroon's Atlantic coast, could become a military target unless Paris and Washington did more to achieve a political settlement. "We could quite easily halt the flow of oil," he said.
Iran's Foreign Minister is to attend this month's Arab summit hosted by its top regional ally Syria that is expected to be dominated by the political crisis in Lebanon. The March 29-30 Damascus summit has been mired in controversy over the crisis in Lebanon amid a standoff between the Syrian-backed opposition and the majority backed by the West and many Arab states.
The Iranian Foreign Ministry has condemned a statement issued by the EU criticizing the country's parliamentary elections. A spokesman dismissed the comments made by the EU as 'hasty, politically motivated, and unacceptable.'
"It would have been better for the EU presidency to heed the countless messages the Iranian nation sent out to Europe with the results of its democratic elections and reconsider its unfair and unconstructive approach, instead of issuing such hasty prejudgments. The elections for Iran's 8th Majlis, which received the approval of the overwhelming majority of the Iranian people, were held in an accurate, fair, and peaceful fashion and with extensive coverage by foreign media."
Israel yet again hammers the stance on Iran, suggesting that Tehran will have a legion of supporters should the world fail to take action. Iran is a threat to moderate Arab nations which are likely to interpret the hesitation of the international community as a form of weakness, said Israel's foreign minister in a meeting with her German counterpart.
The West vs Iran:
The American government remains on a collision course with Iran. It has repeatedly said that "nothing is off the table." The Democratic opposition in Congress fully supports this confrontation policy, as does the EU.
President Sarkozy has even upped the ante recently by saying that the US-Iranian "standoff" is "the world's greatest crisis" and that the world is confronted with a "catastrophic alternative: an Iranian bomb or the bombing of Iran."
Public opinion in Western countries largely seems to have accepted this view of the Iranian regime as evil, irrational, and unpredictable. How "evil" is Iran really? Iran can by no stretch of the imagination be called a totalitarian country.
More to the point is that Iran cannot credibly be called a threat to "world peace." The Iranian regime has never invaded another country, initiated a war, or tried to impose its rule by military means on other nations.
It is equally false to claim, as President Bush has done, that Iran "is the world's leading state sponsor of terrorism." Iran has always opposed al-Qaeda, it does not sponsor terrorist acts in Western countries, and it has never supported the Taliban, even though Bush has claimed that it does.
Iran does support Hezbollah and Hamas, but these are groups that fight against what they believe to be the repressive policies of Israel.
Clearly there is no moral or historical justification for the current US and Western policy of confrontation toward Iran. What is more, it is counterproductive.
One possible reason the US needs an anti-missile shield in Europe is that an invasion of Iran is still being planned. A sudden, short time-scale event would be needed, for example, an attack by Israel, a provocation or false flag incident that could be spun as an attack on NATO.
Calls are growing on Admiral William Fallon and other senior military officers to make a public stand against the Bush administration's alleged plans to attack Iran. The Westminster Committee on Iran claimed that Fallon and other key military and political insiders had a "moral duty" to make public their private reservations and to make a stand against the push for attacks on Iran.
During a disastrous week, with the country poised on the brink of financial collapse, the president stumbled through a series of appearances, the impact of which can only be described as ghastly. Clearly few believe him any more.
Admiral Fallon's firing makes it clear to the rest of us: Bush has not been telling us the truth. Dick Cheney is the only "commander on the ground" that he relies on. Cheney's moral compass would have no trouble sticking the country with a war in Iran.
Everyone here is flummoxed about why the president is in such a fine mood. Boy George crashed the family station wagon into the globe and now the global economy. Yet the more terrified Americans get, the more bizarrely carefree he seems.
(Cartoon: Not all bad)
John McCain plans at least one campaign event on his week-long congressional trip to Europe and the Middle East: a March 20 fundraiser in London. An invitation sent out by the campaign says the luncheon will be held at Spencer House, St. James's Place, "by kind permission of Lord Rothschild OM GBE and the Hon Nathaniel Rothschild.
The signs are everywhere now. One needn't be an apocalyptic junkie to notice that something is wrong. America is heading into a deep systemic crisis. Our currency continues its free fall, unemployment is rising, and inflation is surging. Our political system has become radically dysfunctional. America's days as the world economic hegemon are winding down.
Ron Paul on...
The problem is, policing the world is expensive, and if elected officials insist upon continuing to fund our current foreign policy, the money has to come from somewhere. Supporting a welfare state is expensive as well.
Our current financial situation is completely untenable, and the worst part is, as government is becoming more and more voracious, the economy is shrinking.
History has shown that all empires eventually crumble under a worthless currency and with an exhausted military. Since too many of our nation's leaders haven't taken the time to learn from history, we are seeing mistakes repeated through recently enacted policies.
The prices of oil and gold have hit records as investors have switched money into commodities to escape turmoil in other financial markets. The main contract for US light sweet crude hit $111.80 a barrel today, before slipping back. The spot price for gold also briefly hit a record above $1,030 an ounce.
International Forecaster
We are afraid that the case of "yellow fever" which stock markets have just developed may be a terminal one because this gold rally is far from being over. In fact, it is starting to accelerate. There is not a single negative fundamental for the precious metals, and the bad news emanating now on a daily basis is simply horrendous.
Our economy has been trashed beyond recognition. We hear war drums beating in the background as the Illuminati look for a diversion, possibly in Serbia, Iran, Syria or Lebanon, from all these economic problems and/or for a reason to implement martial law and suspend the November elections along with our Constitution. Another 911-type event here in the US is also a possibility.
Markets from New York to Tokyo have recorded heavy losses in reaction to the emergency bailout of Bear Stearns over the weekend.
"The current financial crisis in the US is likely to be judged in retrospect as the most wrenching since the end of the 2nd world war."
The interesting thing about economics is that it is rather like the weather in some ways. It's easy to read the signs and know that autumn is on the way, but it's very hard to predict the precise date of the season's first snowfall. Like the early leaves of autumn, the first financial institutions are beginning to fall.
Globalization and financial innovation have not mitigated economic risk; they have merely allowed the wrinkled whores of Wall Street to conceal the extent of the crises and delay their inevitable day of reckoning.
Although the mainstream economists have finally begun to acknowledge that the US economy is already in the recession that was long proclaimed to be unlikely, the problem is that there are more than a few signs that a true depression is in the works.
European press...
The US financial systems shows concrete signs of imploding. There will be an emergency meeting in the White House with Bush, Bernanke and Paulson in attendance later today. The real question is now not whether the government is going to bail out the financial system, but on, and on which terms.
On Friday, Bear Stearns blew up. It was the worst possible news at the worst possible time. For weeks, the markets have been battered with bad news.
In truth, the biggest risk to the financial system is counterparty risk; the possibility that some large investment bank, like Bear, goes under and sucks the rest of the market with it from the magnitude of its losses.
Last year, Bear was the 12th largest counterparty to CDS trades according to Fitch ratings. If they were to suddenly disappear, the effects to the rest of the system would be catastrophic.
(Op-ed: Bear necessities)
The announcement was an implicit admission of a looming credit crisis of monumental proportions: an unprecedented write-down of bank assets. We are in the early stages of a write-down of assets not seen since the Great Depression. This is going to go into the history textbooks.
Acting quickly to prevent a run on major global financial firms, the Federal Reserve cut its discount rate by a quarter percentage point to 3.25% and offered to lend money to a longer list of firms than ever before.
(Op-ed: The B-word)
In the aftermath of Friday's emergency action by the Federal Reserve Board to prevent the immediate collapse of the Wall Street investment bank Bear Stearns, US and global markets are bracing for signs that other major US financial institutions will similarly implode.
Noting the danger of "systemic" consequences of such a development, the Fed in effect signaled that it feared a collapse of Bear Stearns would lead to a panic on financial markets and collapse of confidence in the US banking system.
The near-panic mood in US and global markets is not likely to improve this week, as 4 of the 5 biggest Wall Street investment banks report their 4th quarter earnings. It is widely expected that the firms will report billions more in write-downs and losses.
Notwithstanding the assurances by the Bush administration that the present crisis is little more than a "rough patch," the signs of impending disaster are mounting.
The dollar's sharp slide to 13-year lows against the yen and fresh all-time lows versus the euro today is stoking jitters about the possibility of joint central bank intervention to prop up the dollar.
"The speed of the slide in the dollar/yen is so rapid that US action alone can no longer stop the dollar's downward trend. The time is ripe for coordinated intervention by US, European and Japanese authorities."
The yield on US 3-month Treasury bills fell below 1% today to levels not seen in 50 years prompted by intense safety bids for cash spurred by the ongoing global credit crunch.
Investors were pulling money out of stocks and even the booming commodity market even after the Federal Reserve conducted a fresh round of measures over the weekend to alleviate the credit crisis.
As feared, foreign bond holders have begun to exercise a collective vote of no confidence in the devaluation policies of the US government. The Federal Reserve faces a potential veto of its rescue measures.
Asian, Mid East and European investors stood aside at last week's auction of 10-year US Treasury notes. "It was a disaster. We may be close to the point where the uglier consequences of benign neglect towards the currency are revealed."
The share of foreign buyers ("indirect bidders") plummeted to 5.8%, from an average 25% over the last 8 weeks. On the Richter Scale of unfolding dramas, this matches the death of Bear Stearns.
Rightly or wrongly, a view has taken hold that Washington is cynically debasing the coinage, hoping to export its day of reckoning through beggar-thy-neighbour policies. It is not my view. I believe the forces of debt deflation now engulfing America - and soon half the world - are so powerful that nobody will be worrying about inflation a year hence.
The Fed's emergency actions are imperative. Last week's collapse of confidence in the creditworthiness of Fannie Mae and Freddie Mac was life-threatening. "The situation is getting worse, and the risks are that it could get very bad. There's no doubt that this year and next year are going to be very difficult."
We can no longer exclude a partial nationalisation of the American banking system. The imminent risk is that global flight from US Treasury and agency debt drives up long-term rates, the key funding instrument for mortgages and corporations. Overall credit conditions could tighten into a slump (like 1930). It's the stuff of bad dreams.
As the Wall Street Journal wrote this weekend, the entire country is facing a "margin call". The US has come to depend on $800bn inflows of cheap foreign capital each year to cover shopping bills. They may have to pay a much stiffer rent.
Petrodollar funds, working through UK off-shore accounts, are clearly dumping dollars amid rumours that Gulf states - overheating wildly - are about to break their dollar pegs. But mostly likely, the twin crash in the dollar and US agency debt reflects a broad exodus by global wealth managers, afraid that America is spinning out of control.
It is unsettling to watch the world's reserve currency disintegrate. Commodities from gold to oil and wheat are taking on the role of safe-haven "currencies". The monetary order is becoming unhinged.
The spreading credit contagion will cause large parts of the globe to downgrade in hot pursuit - starting with Europe. Few noticed last week that the Italian treasury auction was also a flop. The bids collapsed. For the first time since the launch of EMU, Italy failed to sell a full batch of state bonds.
The euro blasted higher anyway, driven by hot money flows. The funds are beguiled by Germany's "Exportwunder", for now. It cannot last. The demented level of $1.57 will not be tolerated by French, Italian and Spanish politicians. The Latin property bubbles are deflating fast. The race to the bottom must soon begin...
One group conspicuously absent from a last minute deal to scoop up Bear Stearns on the cheap were the sovereign wealth funds that have spent billions of dollars on Wall Street lately.
Given the hundreds of billions of dollars these state-backed funds control, that is bad news for Western companies or any other firm hit by the credit crunch that is tightening its grip on the US and Europe.
With no money coming from the Middle East or Asia in the latest deal for a struggling Wall Street bank, analysts said Monday that sovereign funds are likely to keep away from US financial assets for now.
And it is not just the big funds shying away from Wall Street. As the funds and foreign investors stay away, there could be little comfort for Wall Street workers hoping a foreign investor will help them keep their jobs.
Japan has been told that it must make radical changes to its diet and also undertake a complete overhaul of its traditional business practices if it is to avert a food crisis that could send Asia's biggest economy "back to the 1950s".
Analysts have even introduced a new word to the Japanese vocabulary - kaimake, or "deal-blowing" - as the country comes to terms with the ever-rising challenges posed by China and India in the race for resources. For Japan, one of the least self-sufficient in terms of food production of all the world's developed countries, it is a particularly dangerous threat.
The UN reports that a variety of the rust fungus originally detected in Uganda in 1999 has already spread as far north as Iran, threatening wheat production across its range. The fungus infects wheat stems and affects 80% of wheat varieties, putting crops at risk and threatening the food sources for billions of people across central Asia.
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