Archive for November 23rd, 2007
Afghanistan ‘falling into hands of Taliban’
Afghanistan ‘falling into hands of Taliban’
By: Richard Norton-Taylor
Guardian
Thursday, 22 November 2007
Frontline getting closer to Kabul, says thinktank
Aid not going to those who need it most, warns OxfamThe Taliban has a permanent presence in 54% of Afghanistan and the country is in serious danger of falling into Taliban hands, according to a report by an independent thinktank with long experience in the area.
Despite tens of thousands of Nato-led troops and billions of dollars in aid poured into the country, the insurgents, driven out by the American invasion in 2001, now control “vast swaths of unchallenged territory, including rural areas, some district centres, and important road arteries”, the Senlis Council says in a report released yesterday.
On the basis of what it calls exclusive research, it warns that the insurgency is also exercising a “significant amount of psychological control, gaining more and more political legitimacy in the minds of the Afghan people who have a long history of shifting alliances and regime change”.
It says the territory controlled by the Taliban has increased and the frontline is getting closer to Kabul – a warning echoed by the UN which says more and more of the country is becoming a “no go” area for western aid and development workers.
The council goes as far as to state: “It is a sad indictment of the current state of Afghanistan that the question now appears to be not if the Taliban will return to Kabul, but when … and in what form. The oft-stated aim of reaching the city in 2008 appears more viable than ever and it is incumbent upon the international community to implement a new strategic paradigm before time runs out.”
Its 110-page report coincides with an equally severe warning from Oxfam. In a report for the House of Commons International Development Committee the humanitarian and aid agency warns that the security situation in Afghanistan is deteriorating significantly with the country’s problems exacerbated by corruption in central and local government.
Senior British and US military commanders privately agree despite their public emphasis on short-term successes against Taliban fighters.
The insurgency is divided into a largely poverty-driven “grassroots” component and a concentrated group of “hard-core militant Islamists”, says the Senlis Council, which has an office in Kabul and field researchers based in Helmand and Kandahar provinces in southern Afghanistan.
It says that the Nato-led International Security Force of some 40,000 troops should be at least doubled and include forces from Muslim countries as well as Nato states which have refused to send troops to the country.
There is no sign of any move within Nato to send reinforcements to Afghanistan.
While western governments, like the Senlis Council and Oxfam, are increasingly concerned about the lack of effectiveness of President Hamid Karzai’s government, there is no agreement about how to solve the problems.
Oxfam warns that urgent action is needed to avert humanitarian disaster in Afghanistan where millions face “severe hardship comparable with sub-Saharan Africa”. Though the country has received more than $15bn (£7.5bn) in aid since 2001, the money is not getting to projects which could lead to sustained improvements in people’s lives, says Oxfam.
It adds that at least 1,200 civilians have been killed so far this year, half in operations by international or Afghan forces. It notes there are four times as many air strikes by international forces in Afghanistan than in Iraq.
The Senlis Council wants Nato forces, and their Provincial Reconstruction Teams, to take on a bigger role distributing aid and Oxfam says the military should stick to providing security.
http://www.stopwar.org.uk/index.php?option=com_content&task=view&id=405&Itemid=27
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Comment : So – it wasn’t so easy after all. Victory proclaimed in 2001 , then the US need ever more NATO troops (most of their GI’s are bogged down in Iraq, remember) to prevent a defeat. Remember last time? Brezhnews troops had marched in victoriously in 1979, first they tried to hide the difficulties through propaganda and news blackouts, then they finally had to admit defeat and withdraw.It meant the end of the Soviet empire. So which empire is going to perish this time in the Hindu Kush Mountains? You could never guess!
Here in Norway , we do already see how the government propaganda is getting more desperate to keep the Norwegian troops in. The government controlled media (that means, nearly all the media here in Norway) have started to accuse the Afghan resistance of using “dirty tricks” when they manage to kill one of the occupiers sent from us to fight in a country where they have nothing at all to do.
- Well – it is really a sign of coming defeat.
by laertes
China Signals Flight From Dollar
China Signals Flight From Dollar
Investment CEO says he’s ‘never seen people more nervous’
WorldNetDaily.com
11-21-07
An unprecedented signal from senior Chinese leaders that the Asian economic giant might abandon the U.S. dollar sent shockwaves through the markets today as the Dow Jones Industrial Average lost 360 points and the greenback fell to a record low against the euro.
Xu Jian, a Chinese central bank vice director, told a conference in Beijing, “The dollar is “losing its status as the world currency.” Meanwhile, at the same meeting, Cheng Siwei, vice chairman of China’s National People’s Congress, said, “We will favor stronger currencies over weaker ones, and will readjust accordingly.”
Craig R. Smith, CEO of Swiss America Trading Corp., told WND he’s been in the investment business for 30 years and has “never seen people more nervous.”
Alarmed by today’s economic news, he dispatched a note to brokers with a warning of ominous potential consequences if China and other trading partners abandon the dollar.
“If that were to happen, all bets are off, and we will be in a depression that makes 1929 look like child’s play,” he said, “or we will experience Weimar Republic inflation as the dollar makes extreme moves toward devaluations.”
China has $1.43 trillion of foreign exchange reserves. During the five months up to August, Chinese investors reduced their holdings of U.S. Treasuries by 5 percent to $400 billion.
Smith told WND that underlings in Beijing have been suggesting for some time that China could abandon the dollar, “but this is the first time a senior leader came forward, and it sent shockwaves through markets.”
Craig R. Smith
“What we’re experiencing today is a result of loose monetary policy, deficit spending and bad trade policies,” said Smith, a WND columnist. “It’s all coming home to roost at once.”
The dollar’s decline today to $1.47 against the euro helped push the price of crude oil to a record $98.62 a barrel and gold to a 27-year high. The U.S. dollar also reached its lowest level against the Canadian dollar since the end of a fixed exchange rate in 1950 and a 23-year low against the Australian dollar. The New York Board of Trade’s dollar index fell to 75.077, the lowest since March 1973, when the index began.
Smith said the U.S., and consequently the world, may face a major financial crisis if “we can’t find a way to get the $3 billion a day we need to stay alive and make balance of payments with foreign countries.”
The Federal Reserve faces a dilemma, he explained. If it raises interest rates to prop up the dollar, the housing market and the stock markets will be slammed, causing a recession. A lowering of interest rates to stimulate the economy would erode the dollar further and spark massive inflation.
Underscoring the alarm among investors, Smith said a prominent Connecticut investor called him this morning and said, “I’m terrified, I think we could be sitting on a collapse.”
Smith said the fundamental conditions are worse today than in 1979 and 1980, when gold spiked to $850 an ounce then fell for the next 20 years.
Today, instead of a rapid increase, there has been a gradual rise in oil and gold prices, among others, that suggests a long-term condition. Gold, for example, has gone from $265 in 2000 to $845 today.
Smith said the only solution is fiscal responsibility by consumers, corporations and government.
“We cannot spend money we don’t have, anymore,” he said. “The only thing that keeps us alive as a nation is our ability to borrow. We spend more money that we make.”
Now, Smith said, “the world is saying, ‘We lent you that much money, we’re not going to do it anymore.’”
The problem, of course, Smith notes, is that if Americans don’t spend, the economy doesn’t grow, and the nation goes into a recession.
But continuing to reduce interest rates and print money to maintain the spending leads to inflation.
Eventually, he said, Americans simply are going to have to live within their means to lay a foundation for long-term economic health.
“To get through some of this stuff, we’re going to go through some pain,” Smith said
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Comment : by CANUKISTAN_VIEW
Global Derivatives Market Expands to 516 Trillion
Nov. 22 (Bloomberg) — The market for derivatives grew at the fastest pace in at least nine years to $516 trillion in the first half of 2007, the Bank for International Settlements said.
Credit-default swaps, contracts designed to protect investors against default and used to speculate on credit quality, led the increase, expanding 49 percent to cover a notional $43 trillion of debt in the six months ended June 30, the BIS said in a report published late yesterday.
Derivatives of debt, currencies, commodities, stocks and interest rates rose 25 percent from the previous six months, the biggest jump since the Basel, Switzerland-based bank began compiling the data. Investors have been turning to credit derivatives as a way to speculate on a growing risk of defaults amid record U.S. mortgage foreclosures.
h ttp://www.bloomberg.com/apps/news?pid=20601087&sid=a58EF32GpHeg&refer=home
THE SIZE OF THE TOTAL WORLD ECONOMY IS AROUND $ 47 TRILLIONS! So when the derivative scam starts getting burned at the edge by the subprime credit collapse, IT WILL BE NO MONEY, NO GOLD AND NO TANGIBLE ASSETS THAT CAN PAY EVEN TWO CENT FOR A DOLLAR when the derivatives goes belly up. The timing for the subprime is next spring-early summer. The derivatives scam will follow . . . AFTER THE ELECTION? Or BEFORE WW III major kick off event? . .
BUT FOR SURE, by 2015 the most optimistic scenario is that US AND WESTERN EUROPEAN SOVEREIGN BONDS WILL BE ALL JUNKS! So think about the euro! Besides Germany, the UK, Spain, France, Italy, Portugal, . . . are ALL IN DEEP RED WHEN IT COMES TO CURRENT ACCOUNT BALANCES. These countries with the exception of Germany are within the worst 10 countries out 160 monitored!
Peace
The Financial Tsunami: Sub-Prime Mortgage Debt is but the Tip of the Iceberg
The Financial Tsunami: Sub-Prime Mortgage Debt is but the Tip of the Iceberg
by F. William Engdahl
Global Research, November 23, 2007
Part 1: Deutsche Bank’s painful lesson
Even experienced banker friends tell me that they think the worst of the US banking troubles are over and that things are slowly getting back to normal. What is lacking in their rosy optimism is the realization of the scale of the ongoing deterioration in credit markets globally, centered in the American asset-backed securities market, and especially in the market for CDO’s—Collateralized Debt Obligations and CMO’s—Collateralized Mortgage Obligations. By now every serious reader has heard the term “It’s a crisis in Sub-Prime US home mortgage debt.” What almost no one I know understands is that the Sub-Prime problem is but the tip of a colossal iceberg that is in a slow meltdown. I offer one recent example to illustrate my point that the “Financial Tsunami” is only beginning.
Deutsche Bank got a hard shock a few days ago when a judge in the state of Ohio in the USA made a ruling that the bank had no legal right to foreclose on 14 homes whose owners had failed to keep current in their monthly mortgage payments. Now this might sound like small beer for Deutsche Bank, one of the world’s largest banks with over €1.1 trillion (Billionen) in assets worldwide. As Hilmar Kopper used to say, “peanuts.” It’s not at all peanuts, however, for the Anglo-Saxon banking world and its European allies like Deutsche Bank, BNP Paribas, Barclays Bank, HSBC or others. Why?
A US Federal Judge, C.A. Boyko in Federal District Court in Cleveland Ohio ruled to dismiss a claim by Deutsche Bank National Trust Company. DB’s US subsidiary was seeking to take possession of 14 homes from Cleveland residents living in them, in order to claim the assets.
Here comes the hair in the soup. The Judge asked DB to show documents proving legal title to the 14 homes. DB could not. All DB attorneys could show was a document showing only an “intent to convey the rights in the mortgages.” They could not produce the actual mortgage, the heart of Western property rights since the Magna Charta of not longer.
Again why could Deutsche Bank not show the 14 mortgages on the 14 homes? Because they live in the exotic new world of “global securitization”, where banks like DB or Citigroup buy tens of thousands of mortgages from small local lending banks, “bundle” them into Jumbo new securities which then are rated by Moody’s or Standard & Poors or Fitch, and sell them as bonds to pension funds or other banks or private investors who naively believed they were buying bonds rated AAA, the highest, and never realized that their “bundle” of say 1,000 different home mortgages, contained maybe 20% or 200 mortgages rated “sub-prime,” i.e. of dubious credit quality.
Indeed the profits being earned in the past seven years by the world’s largest financial players from Goldman Sachs to Morgan Stanley to HSBC, Chase, and yes, Deutsche Bank, were so staggering, few bothered to open the risk models used by the professionals who bundled the mortgages. Certainly not the Big Three rating companies who had a criminal conflict of interest in giving top debt ratings. That changed abruptly last August and since then the major banks have issued one after another report of disastrous “sub-prime” losses.
A new unexpected factor
The Ohio ruling that dismissed DB’s claim to foreclose and take back the 14 homes for non-payment, is far more than bad luck for the bank of Josef Ackermann. It is an earth-shaking precedent for all banks holding what they had thought were collateral in form of real estate property.
How this? Because of the complex structure of asset-backed securities and the widely dispersed ownership of mortgage securities (not actual mortgages but the securities based on same) no one is yet able to identify who precisely holds the physical mortgage document. Oops! A tiny legal detail our Wall Street Rocket Scientist derivatives experts ignored when they were bundling and issuing hundreds of billions of dollars worth of CMO’s in the past six or seven years. As of January 2007 some $6.5 trillion of securitized mortgage debt was outstanding in the United States. That’s a lot by any measure!
In the Ohio case Deutsche Bank is acting as “Trustee” for “securitization pools” or groups of disparate investors who may reside anywhere. But the Trustee never got the legal document known as the mortgage. Judge Boyko ordered DB to prove they were the owners of the mortgages or notes and they could not. DB could only argue that the banks had foreclosed on such cases for years without challenge. The Judge then declared that the banks “seem to adopt the attitude that since they have been doing this for so long, unchallenged, this practice equates with legal compliance. Finally put to the test,” the Judge concluded, “their weak legal arguments compel the court to stop them at the gate.” Deutsche Bank has refused comment.
What next?
As news of this legal precedent spreads across the USA like a California brushfire, hundreds of thousands of struggling homeowners who took the bait in times of historically low interest rates to buy a home with often, no money paid down, and the first 2 years with extremely low interest rate in what are known as “interest only” Adjustable Rate Mortgages (ARMs), now face exploding mortgage monthly payments at just the point the US economy is sinking into severe recession. (I regret the plethora of abbreviations used here but it is the fault of Wall Street bankers not this author).
The peak period of the US real estate bubble which began in about 2002 when Alan Greenspan began the most aggressive series of rate cuts in Federal Reserve history was 2005-2006. Greenspan’s intent, as he admitted at the time, was to replace the Dot.com internet stock bubble with a real estate home investment and lending bubble. He argued that was the only way to keep the US economy from deep recession. In retrospect a recession in 2002 would have been far milder and less damaging than what we now face.
Of course, Greenspan has since safely retired, written his memoirs and handed the control (and blame) of the mess over to a young ex-Princeton professor, Ben Bernanke. As a Princeton graduate, I can say I would never trust monetary policy for the world’s most powerful central bank in the hands of a Princeton economics professor. Keep them in their ivy-covered towers.
Now the last phase of every speculative bubble is the one where the animal juices get the most excited. This has been the case with every major speculative bubble since the Holland Tulip speculation of the 1630’s to the South Sea Bubble of 1720 to the 1929 Wall Street crash. It was true as well with the US 2002-2007 Real Estate bubble. In the last two years of the boom in selling real estate loans, banks were convinced they could resell the mortgage loans to a Wall Street financial house who would bundle it with thousands of good better and worse quality mortgage loans and resell them as Collateralized Mortgage Obligation bonds. In the flush of greed, banks became increasingly reckless of the credit worthiness of the prospective home owners. In many cases they did not even bother to check if the person was employed. Who cares? It will be resold and securitized and the risk of mortgage default was historically low.
That was in 2005. The most Sub-prime mortgages written with Adjustable Rate Mortgage contracts were written between 2005-2006, the last and most furious phase of the US bubble. Now a whole new wave of mortgage defaults is about to explode onto the scene beginning January 2008. Between December 2007 and July 1, 2008 more than $690 Billion in mortgages will face an interest rate jump according to the contract terms of the ARMs written two years before. That means market interest rates for those mortgages will explode monthly payments just as recession drives incomes down. Hundreds of thousands of homeowners will be forced to do the last resort of any homeowner: stop monthly mortgage payments.
Here is where the Ohio court decision guarantees that the next phase of the US mortgage crisis will assume Tsunami dimension. If the Ohio Deutsche Bank precedent holds in the appeal to the Supreme Court, millions of homes will be in default but the banks prevented from seizing them as collateral assets to resell. Robert Shiller of Yale, the controversial and often correct author of the book, Irrational Exuberance, predicting the 2001-2 Dot.com stock crash, estimates US housing prices could fall as much as 50% in some areas given how home prices have diverged relative to rents.
The $690 billion worth of “interest only” ARMs due for interest rate hike between now and July 2008 are by and large not Sub-prime but a little higher quality, but only just. There are a total of $1.4 trillion in “interest only” ARMs according to the US research firm, First American Loan Performance. A recent study calculates that, as these ARMs face staggering higher interest costs in the next 9 months, more than $325 billion of the loans will default leaving 1 million property owners in technical mortgage default. But if banks are unable to reclaim the homes as assets to offset the non-performing mortgages, the US banking system and a chunk of the global banking system faces a financial gridlock that will make events to date truly “peanuts” by comparison. We will discuss the global geo-political implications of this in our next report, The Financial Tsunami: Part 2.
F. William Engdahl is the author of A Century of War: Anglo-American Oil Politics and the New World Order. He is a Research Associate of the Centre for Research on Globalization (CRG). His most recent book, which has just been released by Global Research is Seeds of Destruction, The Hidden Agenda of Genetic Manipulation.
Cholera on the rise in Baghdad – 80 new cases
Cholera on the rise in Baghdad -80 new cases
Cholera spreads in Baghdad – Public health officials fear catastrophe with new cases
Reuters, BAGHDAD – 23/10/2007
Iraq is facing a health “catastrophe” in the capital Baghdad, with reports of cholera rising sharply over the past weeks to more than 80 new cases, the Health Ministry said today.Most of the new cases have been reported in the eastern part of Baghdad, especially in poor areas routinely deprived of water and other basic services, an official at the ministry said.
One cholera death was recorded in November, in addition to another death in September, said the official, who asked not to be named. “We have a catastrophe in Baghdad,” she said.
In western Baghdad, six people at a government home for the disabled were confirmed to have the disease, she said. Another girl at the al-Hanan Institute for the Severely Disabled died from the disease.
The Health Ministry official blamed a lack of proper sanitation for the cholera cases at the institute.
Cholera, which is normally caused by consuming water or food containing the Vibrio cholerae bacterium, causes diarrhoea and can swiftly kill its victims.
The official said that six governmental hospitals suffer from unsafe water supplies, including Yarmouk, one of Baghdad’s chief hospitals.
A Nov. 13 report from the United Nations reported 22 deaths from cholera this year, and 4,569 laboratory-confirmed cases, almost exclusively in northern Iraq.
But the United Nations also warned that the illness is on the rise in Baghdad. It reported 49 laboratory-confirmed cases in the capital as of Nov. 11.
The ministry spokeswoman said that Kirkuk province in northern Iraq was the epicentre of this year’s outbreak, with 3,006 cases and five deaths.
In neighbouring Sulaimaniya province, 14 people have died and 1,234 cases have been recorded. Arbil province, also in the north, has seen 275 cases, she said.
The ministry was trying to educate Iraqis about how to avoid the disease with advertisements on television and in newspapers and with leaflets handed out at checkpoints, she said.
