Monday

The Daily WAR (06-27)

Reading between the lines, and thinking outside the box . . .
 
 
 
    Benedict XVI will return to the Vatican this week, concluding his stay at the papal summer residence of Castel Gandolfo.
 
    Here is the address Benedict XVI gave Saturday upon receiving the credentials of the new Czech envoy to the Holy See.
 
    It may have taken God a week to create the world, but it will take nearly as long to read the Bible from beginning to end in what is being described as the longest live television broadcast in Italian history.
    On Sunday, Pope Benedict XVI will read the opening verses of the Book of Genesis. The nonstop Bible recital will end 139 hours later when Cardinal Tarcisio Bertone, the Vatican secretary of state, tackles the final verses from the Apocalypse in the Book of Revelation.
 
 
 
    The conservative Christian Social Union turned in its worst election result since 1954 in Bavarian state elections on Sunday. The ballot box collapse brings a decades-long political monopoly to an end -- and may call Chancellor Angela Merkel's re-election into question.
    Nobody, though, expected the result to be quite as bad as it turned out. The CSU ended up with just 43.4% of the vote -- fully 17.3% lower than its vote total in the last state elections 5 years ago.
    The vote also marks the first time since 1962 that the CSU has not won an absolute majority in Bavaria, meaning that it will now have to begin the search for a coalition partner.
    The only party that didn't benefit from the collapse of the CSU was the hapless Social Democrats. It garnered only 18.6% of the vote, the SPD's worst result in Bavaria since 1945.
    Given the dimensions of the election-day disaster, however, the CSU leadership itself is also up for discussion.
 
    Analysts said that voters punished the CSU for clinging to traditional social values and Catholic Church doctrine in a Europe that has become increasingly secular.
 
    Some bolder analysts suggested that a weakening of the CSU might work to Merkel's advantage in the long-term as it has often stood in the way of her policies. Weakened by its election performance, it might be more open to compromise.
    But there is also the danger that the CSU may radicalise in an effort to win back dissenters.
 
    The Freie Waehler, or Free Voters, won 10.2% of the vote, surprising everyone, including themselves. The election result now makes them the 3rd strongest party in Bavaria, behind the once mighty CSU and the Social Democrats.
    In terms of policy, the Free Voters don't differ greatly from the main CSU party. But in terms of structure, the Free Voters are miles apart. They consider themselves a grassroots organization, and don't have the same hierarchical structures as other political parties. Their only ideology, they say, is that they are not a party.
 
German press review
    German commentators warn that the consequences of the CSU decline could be felt far away in Berlin.
    * "The unthinkable has happened: The CSU has not only lost its absolute majority, but it can no longer govern Bavaria without a coalition partner. An entire generation has grown up with the conviction that the CSU was invincible. This myth has been debunked once and for all. It is the end of an era."
    * "With the loss of the absolute majority the CSU has ceased to be an exceptional case in Europe."
    * "Bavaria has become more normal … Something that, 19 years after the fall of the Berlin Wall, emphatically ends the history of the old West Germany. The CSU disaster is something of a mystery."
 
    The CSU's poor showing in Bavaria could weaken the conservative bloc on the federal level.
    The Christian Social Union lost so much ground in Bavaria because Beckstein failed to assert his authority after he replaced the charismatic and powerful Edmund Stoiber in a party coup last year.
    But above all, parts of Bavaria, including Munich, the regional capital, are now more cosmopolitan, less conservative and less Catholic.
 
    Austria's far-Right has become the country's most powerful political force in an election that gave mainstream parities their lowest level of support since WW2.
    The country's 2 far-Right parties, which campaigned on anti-immigrant and anti-EU platforms, took almost 30% of the vote to deliver a stunning blow to Austria's political establishment.
 
 
 
    Russia called Saturday for a revival of the global anti-terrorism coalition that formed after Sept. 11, 2001 but started to unravel with what it called the subsequent domination by a single power — a veiled reference to the United States.
 
 
 
     A new dynamic has emerged in the West Bank: Jewish settlers block roads, burn tires or set fire to Palestinian fields when troops try to dismantle unauthorized settlements. Activists call the tactic "price tag." They hope the havoc will deter Israeli security forces from removing any of the dozens of squatter camps, or outposts, dotting West Bank hills.
    Coupled with recent settler reprisal raids on Palestinian villages and a pipe bomb attack that wounded a prominent settler critic, the outpost battle has revived debate about the dangers posed by ultra-nationalists.
    Outgoing Prime Minister Ehud Olmert warned Sunday that an "evil wind of extremism" is threatening Israel's democracy. Without naming any specific group, he complained that extremists are undermining "the ability of those in charge in Israel to make decisions."
 
The real troublemakers in the Mideast
    While the American people are consumed with the news on the home front, if you look behind the headlines the outline of an emerging crisis in – where else? – the Middle East is beginning to take shape.
    What the heck is going on in Syria? The news of a huge explosion in Damascus, caused by a car bomb, has shaken the region, and it isn't at all clear who or what is responsible. Whatever the source, however, the attack – which killed 17 bystanders, including possibly a top Syrian intelligence official – augurs ill for the future of peace in the Middle East.
    The key to understanding what is going on in the Middle East today is to be found in a seminal paper published in 1996 by an Israeli think-tank, the Institute for Advanced Strategic and Political Studies: "A Clean Break: A New Strategy for the Realm."
    The premise is that Israel is caught in a bind, hemmed in by hostile neighbors and unfavorable demographic facts on the ground. Israel, the authors aver, must break out of its box, or perish in the attempt.
    Damascus has always been the primary target of the Israelis, whether they are engaged in Lebanon or the occupied territories, and now that Iraq is out of the way, thanks to Uncle Sam, it makes sense that the Israelis are moving against Damascus.
    The Israelis are using their new position of strength to exert enough pressure to cause the brittle Syrian regime to implode. That this would introduce chaos into the region and unleash the forces of Islamic extremism concerns them not at all.
    If Syria implodes, the consequences for the US will be incalculably awful.
 
    The Israeli Mossad is a prime suspect in a car bomb in Damascus this past weekend in which at least 17 people were killed, claimed a senior source in Syria's Ministry of Information speaking to WND.
 
    A former Iranian president warned the West that its support for Israel would backfire. Akbar Hashemi Rafsanjani, who is still considered influential in Iranian politics, said the US, Britain and France back Israel and this is dangerous.
 
    President Bush will leave office without concluding either of the 2 wars he initiated after 9/11. Now, in the waning months of his administration, the president seems intent on expanding his "global war on terror" still farther. To the existing fronts in Afghanistan and Iraq, he is adding a 3rd: Pakistan.
(Cartoon: The 3rd trap)
 
 
 
    Germany's foreign minister has recalled its ambassador to Iran after a German diplomat attended a military parade in Tehran, a ministry spokeswoman said on Sunday. The FM was "very annoyed" that Germany's defence attache in Tehran attended the parade despite the advice of the European Union ambassador to stay away.
 
    China has called for an end to the 'use of force' against Tehran in a move that will further complicate the push for new anti-Iran sanctions.
    Days after the US failed to convince the UN Security Council permanent members plus Germany to impose further sanctions against Tehran, China has urged world powers not to resort to 'force' over Iran's nuclear program.
    "Major powers should pursue peaceful talks with Iran rather than resort to the willful use of force or the intimidation of force."
 
    Are we going to have an October surprise, an attack on Iran by either the Bush administration or by Israel to stop the regime from becoming a nuclear power?
    It could happen - and alter the dynamics of the presidential race in the blink of an eye - but only if Israel pulls the trigger. Don't expect the US to drop bombs anytime soon. The reason: Iran has us over a barrel.
    But Israel - on its own, without US complicity - is moving closer to a decision to attack Iran, almost by the day.
 
 
 
    The British government is drawing up plans to end a 300-year-old exclusion of Catholics from the line of succession, as well as ending the priority given to male heirs, a UK newspaper reported on Saturday.
 
    In the race for the presidency, what we are really seeing is a race to lose the presidency. And while it may not be immediately apparent, this is a total win for the American people, and the country.
 
    World leaders looked beyond the Bush administration during their speeches to the UN General Assembly, often addressing their remarks - even if indirectly - to the next US president.
 
    If the presidential debate Friday night told us anything, it was that whichever of these candidates is elected, we can expect more wars, or at least more conflicts that put US forces or citizens in danger for dubious reasons.
    The idea that the US might be better off simply minding its own business and dealing only with actual threats – of which, truth to tell, there are very few – doesn't seem to have penetrated either skull. No matter who is elected, we will be spending blood and treasure to try to resolve disputes that are not our own.
 
    Although he is frantically trying to distance himself from President Bush, McCain, by his own accounting, would be more Bushian in foreign policy than even Bush is now.
    While Bush has been forced to accept more sensible policies in his 2nd term, McCain has become steadily more of a neocon in the cowboy role that Bush played in his 1st term, prone to solving problems with stealth bombers rather than UN resolutions.
 
    The religious right can be confident that they'd have a fundamentalist in the White House with Sarah Palin.
 
    President Peres of Israel yesterday met for the first time with Governor Palin. "I wanted to meet you for many years," Palin told Peres, according to an aide to the president. "The only flag at my office is an Israeli flag, and I want you to know and I want Israelis to know that I am a friend."
 
    The global financial crisis will see the US falter in the same way the Soviet Union did when the Berlin Wall came down. The era of American dominance is over.
    Our gaze might be on the markets melting down, but the upheaval we are experiencing is more than a financial crisis, however large. Here is a historic geopolitical shift, in which the balance of power in the world is being altered irrevocably. The era of American global leadership, reaching back to WW2, is over.
 
    Defying a federal law that prohibits US clergy from endorsing political candidates from the pulpit, an evangelical Christian minister told his congregation Sunday that voting for Barack Obama would be evidence of "severe moral schizophrenia."
    He and 32 other pastors across the country set out Sunday to break the rules, hoping to generate a legal battle that will prompt federal courts to throw out a 54-year-old ban on political endorsements by tax-exempt houses of worship.
    [WAR: Don't change the law, just yank their -- and every other religious group's -- tax-exempt status. They should pay taxes just like every other corporation!]
 
    A judge has reaffirmed an order that a Utah attorney can conduct taped depositions of Oklahoma City bombing conspirator Terry Nichols and a federal death-row inmate. The judge said information from the 2 men might help Trentadue better identify the existence of other records pertaining to his FOIA requests.
    Lawyers for the FBI asked Kimball to reconsider his ruling, contending that judges in FOIA cases lack the authority to order depositions and that a video recording would pose a threat to prison security.
    Both Nichols and Hammer, who says he had lengthy conversations with McVeigh while they were both housed at the Terre Haute facility, say McVeigh claimed to be an undercover operative for the military.
 
 
 
    Stocks tumbled in Europe and Asia and US index futures retreated as bank bailouts accelerated and the plan to rescue American financial institutions failed to unlock money markets.
 
    A draft bill on the biggest bailout in US history was agreed yesterday by Congressional leaders, Treasury Secretary Henry Paulson and the White House, after marathon negotiations that introduced greater congressional oversight, caps on pay for executives and extra protections for tax-payers.
    It is hoped the bill could be passed by the lower house by the end of today before moving to the Senate, which cannot take its own vote before Wednesday because of other business.
 
    Washington's $700 billion bail-out is doomed to failure and will see banks returning to the White House before Christmas for new funds, a leading debt specialist has told The Times.
    Banks in New York believe that the Washington bail-out fund has failed to address the problems facing the world's biggest capital market. Experts on Wall Street pointed out that the deal fails to help bankers raise new capital, the bloodline of banking.
 
    Rep. Michael Burgess (R-TX) reports from the floor of the House that the Republicans have been cut out of the process and called unpatriotic for not blindly supporting the fraudulent bailout. He says the only debate has been about what talking points to use on the American people.
    The most ominous revelation is when he claims the Speaker has declared martial law. "I have been thrown out of more meetings in this capital in the last 24 hours than I ever thought possible, as a duly elected representative of 825,000 citizens of north Texas."
 
    Congresswoman Marcy Kaptur boldly slammed the bailout bill this past weekend as the work of criminal insiders who have shut down the normal legislative process to commit "high financial crimes" and defraud the American people, while Rep. Michael Burgess warns that "martial law" has been declared.
    The 2 Congress members are part of a growing minority of representatives sounding the alarm about the dictatorial nature of the bailout bill, which is expected to be up for a vote in the House today, with most in Congress having not had the opportunity to even read the legislation.
 
    With Wall Street now looking to the US Treasury for an unprecedented bailout, it's suddenly Washington that has become the center of financial action -- creating, at least for this instant, an unlikely shift of power and influence.
 
    During its weeklong deliberations, Congress made many changes to the Bush administration's original proposal to bail out the financial industry, but one overarching aspect of the initial plan that remains is the vast discretion it gives to the Treasury secretary.
    To be sure, the Treasury secretary's powers have been tempered since the original Bush administration proposal, which would have given Paulson nearly unfettered control over the program. There are now 2 separate oversight panels involved, one composed of legislators and the other including regulatory and administration officials.
    Rarely if ever has one man had such broad authority to spend government money as he sees fit.
 
    Conservative House Republicans and economists warn about the toll a $700 billion federal bailout of the financial sector would have on the taxpayers footing the bill. But according to Bloomberg TV analyst Marc Faber, the actual cost could be closer to $5 trillion.
    "So now they try to solve the problem by having this credit bubble actually extended and I think the $700 billion will be like a drop in the bucket because the total credit market in the US is something close to $60 trillion, then you have the CDS market – credit default swap – of around $62 trillion. Then you have the whole derivatives worldwide worth about a notional $1,300 trillion. So the $700 billion is really nothing and the Treasury is just giving out this figure when actually the end figure may be $5 trillion."
 
    I'm in shock. Can this crisis get any worse? My instinct is it can. My deep concern is it will. Last week, we all saw a light at the end of the tunnel. Yet, as we now know, that light was an oncoming train.
(Cartoons: Wall Street stress)
 
     The Fed opened the various "auction facilities" to create the appearance that insolvent banks were thriving businesses, but they are not. They're dead; their liabilities exceed their assets.
    Now the Fed is desperate because the hundreds of billions of dollars of mortgage-backed securities (MBS) in the banks vaults have bankrupt the entire system and the Fed's balance sheet is ballooning by the day.
    The market for MBS will not bounce back in the foreseeable future and the banks are unable to roll-over their short term debt. Game over. The Federal Reserve itself is in danger.
 
    The crime of the century. The greatest one ever. Author Danny Schechter calls it "Plunder." The title of his important new book on the subprime and overall financial crisis.
    Economist Michael Hudson and others refer to a kleptocracy. A Ponzi scheme writ large. Maybe an out-of-control Andromeda Strain. An economic one. Deadly. Unrecallable. Science fiction now real life. Potentially catastrophic. World governments trying to contain it. Trying everything but not sure what can work. Maybe only able to paper it over for short-term relief. Buy time but in the end vindicate the maxim that things that can't go on forever, won't.
 
    Wachovia, America's 4th biggest retail bank, was in advanced discussions on Sunday night to sell itself to Wells Fargo.
 
 
    The global banking crisis, born across the Atlantic, again sent waves crashing into Europe on Sunday as the Belgian, Dutch and Luxemburg governments partly nationalised Belgo-Dutch banking and insurance giant Fortis in an €11.2 billion bailout.
    In Germany, troubles at lender Hypo Real Estate are also the subject of emergency talks between German banks and domestic authorities. A possible rescue of the Munich-based bank is under consideration.
 
    Bradford & Bingley, the UK's biggest buy-to-let mortgage lender, has become the latest victim of the deepening financial crisis, with the Government nationalising its mortgage book and Spanish bank Santander buying its branches.
 
    It seems even the British Queen is hit by the global credit crunch - in fact, the Buckingham Palace is said to be suffering so badly that it may run out of cash in 3 years. Even secret pleading by the Queen's aides for some extra funding from the British government appears to have gone in vain, leaving her forced to make massive cutbacks before she goes broke.
 
    We wrote earlier that the hedge fund industry was facing significant redemptions due to lousy performance and the desire of many investors to reduce their risk exposures. The Lehman bankruptcy, the biggest to date, is pouring gas on that fire. The great unwind is on.
 
    First, the money rushed into hedge funds. Now, some fear, it could rush out. New worries are building inside the nearly $2 trillion world of hedge funds. After years of explosive growth, losses are mounting — and so are concerns that some investors will head for the exits.
    To pay back investors, some funds may be forced to dump investments at a time when the markets are already shaky.
    The big worry is that a spate of hurried sales could unleash a vicious circle within the hedge fund industry, with the sales leading to more losses, and those losses leading to more withdrawals, and so on.
 
    Ironically, the Wall Street has noticed that Shariah-compliant investments -- which avoid speculative risk and debt-ridden greed -- have fared much better in these troubled markets. In the past few years, Shariah-compliant investments in Western markets have grown to more than half a trillion dollars.
    The Quran prohibits al-Maysir or speculative risk, warning the faithful to avoid games of chance in which the probability of loss in is much higher than the probability of gain.
    Shariah-compliant investments, therefore, avoid speculative risk, including interest rate options, naked equity options, futures, derivative and numerous leveraged products purportedly designed to hedge investments.
 
    Banks in Asia mostly dodged the ravages of the subprime mortgage meltdown but now must contend with depressed markets and a darkening economic picture resulting from the financial crisis plaguing the West.
 
    Bank of China, the country's largest foreign-exchange lender, is open to buying into US banks in the wake of the global financial crisis, a senior executive said on Sunday.
 
    Russian economists are expressing shock today over a new US law that will allow for the first time in that nation's history the police forces of a foreign nation to have law enforcement powers over their citizens.
    Not being understood by the American people is that China is the holder of over $1.4 Trillion of US debt backed by the mortgages on the homes and property of tens of millions of people -- which, in essence, makes the Chinese one of the largest holders of land in the US, and which the Chinese government has stated they will protect 'at all costs'.
 
    The long lines and closed pumps seen across the South this week are a warning: inventories are way too low.
    A different kind of economic crisis emerged across the South this week: A severe, hurricane-related gasoline shortage has curtailed trucking from Atlanta to Asheville, NC, and created a wave of panic buying among motorists.
    That's because nationwide our gasoline inventory is shockingly low. Liquidity must be restored soon to this market, or we could be facing a crippling run on the gasoline bank. And if you think Americans are outraged about Wall Street, wait until their Main Street grocery store doesn't get the bread and milk delivery for a week or two.
    "Our system is so fragile. All you need is a tiny change to go from 'Oh, we're in fine shape' to an unmitigated disaster. If we end up having gasoline shortages, the odds are about 90% that Americans will do what we always do: We'll top up our tanks. And in topping up our tanks, within 3 or 4 days we'll drain the pool dry and then within 7 days we'll run out of food."
 
 
[Latest edition of The Religion WAR]
 
    The fall feasts begin Sept. 30 with the Feast of Trumpets, or Rosh Hashana.
    [WAR: No, and yes. No, the Feast of Trumpets is not Tuesday (Jewish/Rabbinic calendar), or even Thursday (Karaite calendar). But yes, the Jewish holiday of Rosh Hashana is one, or both?, of those days.
    The appointed time of the Feast of Trumpets will actually be on "Friday."]
 
 
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