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With Iran flaunting its nuclear progress, allegedly attacking Israeli diplomats and reportedly strengthening ties with Al Qaeda, the possibility that Israel has finally had enough is not exactly far-fetched. This will no doubt prove the ultimate factor in Israel’s decision to attack; yet the wider regional context may also present Israel with compelling strategic incentives to act sooner rather than later.
Assad’s potential impending collapse has placed Iran at its weakest point since the 2009 Green Revolution, as Syria served as Iran’s bridge to a suspicious Sunni Arab world and an entree into the power politics of the Israel-Palestinian dispute. Today, that security is fast disappearing, along with the leverage afforded by having Hamas as a proxy, since ‘pragmatists’ like Khaled Meshaal have been trying to wean the group away from Syria and Iran and solicit new sources of patronage from powers like Egypt, Turkey and the Gulf states. Wary of ceding power to the actors now lining up behind a supposedly-moderating Hamas, Iran is encouraging Hamas hardliners like Ismail Haniyeh to stand fast: at Haniyeh’s visit to Tehran last week, Ayatollah Khamenei warned the group to "always be wary of infiltration by compromisers in a resistance organization, which will gradually weaken it."
How do these developments herald an escalation between Israel and Iran? Overwhelmingly, Israel has reached the breaking point with Iran and is ready to act - a move Israel’s security apparatus has long indicated they consider inevitable, whatever the costs. Yet Israel may also judge the current regional dynamics as presenting the most propitious opportunity to strike Iran’s nuclear facilities.
Israel may judge that by acting in the coming months, they can take advantage of both Iran’s regional weakness and stoke divisions between and within the Palestinian parties - disrupting the ‘unity deal’ between Fatah and Hamas and causing a potentially fatal split within Hamas by attacking Iran. From Israel’s perspective, this would also have the advantage of disrupting the strong regional bloc which has assembled in support of a unified Palestinian arrangement, and which likely sought to parlay this into extracting significant concessions from Israel in the event of revived peace negotiations.
An imminent attack on Iran would also come at a time of escalating tensions between Saudi Arabia and Iran; a country known to be covertly sympathetic to an Israeli strike on its regional rival. Most recently, tensions between Shiite protestors and the Saudi state erupted into gunfights in the oil-rich province of Awwamiya. As with the Shiite-led unrest in Bahrain, Saudi Arabia has accused Iran of using Shiite proxies to meddle in its internal affairs and its sphere of influence, and their well-known antipathy makes their covert approval of an Israeli strike all the more plausible.
Make no mistake, the end-game for Israel has always been clear - a disarmed Iran, no matter what the costs. Yet the current strategic context could well furnish Israel with additional powerful incentives to fulfill Leon Panetta’s prediction that we could be seeing an attack as early as this spring.
Julia Pettengill is a Research Fellow at the Henry Jackson Society.’
Nuclear alarmism over Iran is backing us into a corner
There are several untenable arguments against a nuclear Iran. It may be undesirable, but it's eminently containable
A float featuring Iran's president Mahmoud Ahmadinejad in the Rose Monday parade in Dusseldorf, Germany, on 20 February 2012. Photograph: Patrik Stollarz/AFP/Getty
Geoffrey Howe's resignation speech of November 1990 tends to be remembered for his lament on negotiating for Britain in Europe: "It is rather like sending your opening batsmen to the crease, only for them to find, as the first balls are being bowled, that their bats have been broken before the game by the team captain."
Last week, the US Congress attempted to break its captain's bat before a very important innings. Thirty two senators from both parties introduced a resolution to rule out "any policy that would rely on containment as an option in response to the Iranian nuclear threat". Closer to home, British foreign secretary William Hague echoed the logic. A nuclear Iran would spark off "the most serious round of nuclear proliferation since nuclear weapons were invented". It would result in "a new cold war in the Middle East" lacking all the "safety mechanisms" of the US-Soviet rivalry.
Comments like these reflect a growing nuclear alarmism that could drag us into an unwinnable and unnecessary war. A nuclear Iran is profoundly undesirable – but it's also eminently containable.
The first argument, that Iran is too crazy to be deterred, is historically untenable. Stalin's Soviet Union was viewed in exactly the same terms. NSC-68, one of the most famous American intelligence assessments of the cold war, judged Moscow to be "animated by a new fanatic faith, antithetical to our own", aimed at "domination of the Eurasian landmass". That was the year after the Soviets' first nuclear test. Mao Zedong, who was to acquire a bomb shortly thereafter, welcomed a nuclear war in which "imperialism would be razed to the ground, and the whole world would become socialist".
Senator Joseph Lieberman last week fumed that "containment might have been viable for the Soviet Union during the cold war, but it's not going to work with the current fanatical Islamist regime in Tehran". Well, fanaticism has pedigree. Stalin and Mao might have been bloodthirsty fanatics, but they were not suicidal. Nor is Mahmoud Ahmadinejad.
Last week, two of America's top intelligence officials told a senate hearing two important things. First, any Iranian decision to build a nuclear weapon would be based "on a cost-benefit analysis". Even fanatical theocracies are governed by reason. Second, "Iran is unlikely to initiate or intentionally provoke a conflict". If Iran is deemed to be unlikely to start a conventional war, it's not going to start a nuclear war.
And there's a simple reason for this. The area around Tehran contains a fifth of Iran's population, and half of the country's industry. A single Israeli thermonuclear bomb would wipe this out in the blink of an eye. Iran's abhorrent calls to wipe Israel off the map are gestures as empty as Mao's nuclear posturing.
Even if Iran is not crazy enough to use a bomb, wouldn't it encourage brinksmanship in one of the most sensitive parts of the world? Hasn't Pakistan been emboldened by its own nuclear shield to ramp up support for militants in Afghanistan and India?
One important distinction is that Pakistan hosts militants on its own soil, whereas Iran largely helps them "off-site", in places like Lebanon and Palestine. India can't attack Lashkar-e-Taiba, responsible for the Mumbai attacks, without attacking Pakistan itself. Israel, by contrast, will continue to be able to strike at Hezbollah or Hamas regardless of Iran's nuclear status.
The second argument concerns safety. The implication here is that a tinpot republic like Iran can't possibly be trusted to look after something so powerful. For a start, this misses the point that nuclear weapons are not like pregnancy – you can be a little bit nuclear. As James Clapper, US Director of National Intelligence, put it last month, Iran – much like Japan – is "keeping open the option to develop nuclear weapons" rather than putting together a bomb and attaching it to a missile.
If Tehran did put together a bomb, it might not be deployed. Iran, a large country with substantial conventional strength, has strategic depth. It can wait for threats to develop before, say, mating warheads to missiles. Apartheid-era South Africa, for instance, built a handful of nuclear weapons, kept them stored unassembled in a vault, and eventually dismantled them.
India, for a decade after its first nuclear test, didn't even bother to prepare a bomb. When it eventually did, neither it nor Pakistan meaningfully deployed their weapons for another 10 years. The two countries have since defied William Hague's suggestion that emerging nuclear powers can't implement safety mechanisms.
The third and final charge is that Iranian nuclear advances would set in motion a uncontrolled proliferation cascade as other regional powers scrambled for their own bombs. Yet history suggests that nukes don't inevitably beget nukes. A declassified American document from 1964, the year China went nuclear, identified over a dozen nations "with the capacity to go nuclear" – yet only a tiny fraction ever did. When the Soviets got the bomb, Yugoslavia or Sweden – both on that list of proliferating risks – did not follow. Taiwan did not follow China. South Korea and Japan did not follow North Korea.
The obvious retort is that all of these states were allies or clients of the US – but so too are Iran's rivals today. There are technical and political challenges to bringing Saudi Arabia, Egypt and Turkey under the American nuclear umbrella – but these are lesser problems when compared with the consequences of a military strike on Iran.
The alarmist response to Iran's nuclear programme reflects a failure of imagination and ignorance of history. Iran has an obligation to the International Atomic Energy Agency and the United Nations to explain the possible military dimensions of its nuclear programme. But if we – like the senators who sought to tie their president's hand last week – fool ourselves into thinking that a nuclear Iran cannot be contained, we increasingly back ourselves into a corner from which we will eventually be able to do little but lash out.
Top Iran officials recommend preemptive strike against Israel
Khamenei adviser: Israeli rhetoric on Iran strike strengthens position of pro-preemptive attack officials.
Senior Tehran officials are recommending a preemptive strike against Israel to prevent an Israeli attack on Iran's nuclear reactors, a senior Islamic Republic official told foreign diplomats two weeks ago in London.
The official, Dr. Seyed G. Safavi, said recent threats by Israeli authorities strengthened this position, but that as of yet, a preemptive strike has not been integrated into Iranian policy.
Safavi is head of the Research Institute of Strategic Studies in Tehran, and an adviser to Supreme Leader Ali Khamenei. The institute is directly affiliated with Khamenei's office and with the Revolutionary Guards, and advises both on foreign policy issues.
Safavi is also the brother of Yahya Rahim Safavi, who was the head of the Revolutionary Guards until a year ago and now is an adviser to Khamenei, and holds significant influence on security matters in the Iranian government.
An Israeli political official said senior Jerusalem officials were shown Safavi's remarks, which are considered highly sensitive. The source said the briefing in London dealt with a number of issues, primarily a potential Israeli attack on an Iranian reactor.
Safavi said a small, experienced group of officials is lobbying for a preemptive strike against Israel. "The recent Israeli declarations and harsh rhetoric on a strike against Iran put ammunition in these individuals' hands," he said.
Transportation Minister Shaul Mofaz said in June that Israel would be forced to strike the Iranian nuclear reactor if Tehran continues to pursue its uranium enrichment program.
Safavi said Tehran recently drafted a new policy for responding to an Israeli or American attack on its nuclear facilities. While the previous policy called for attacks against Israel and American interests in the Middle East and beyond, the new policy is to target Israel alone.
He added that many Revolutionary Guard leaders want to respond to a U.S. attack on Iranian soil by striking Israel, as they believe Israel would be partner to any U.S. action.
Safavi said that Iran's nuclear program is intended for peaceful purposes only, and that Khamenei recently released a fatwa against the use of weapons of mass destruction, though the contents of that religious ruling have not yet been publicized.
Regarding dialogue with the United States and the West, Safavi said Iran's decision would be influenced by the results of the U.S. presidential elections next month, as well as by the Iranian presidential elections in June and the economic situation in the Islamic Republic.
Safavi also said that a victory by U.S. Democratic presidential candidate Barack Obama would pave the way for dialogue with Washington, while a John McCain presidency would bolster Iran's extreme right, which opposes dialogue. If conditions are favorable following the U.S. election, he said, Iran could draw back from President Mahmoud Ahmadinejad's declaration that "the nuclear case is closed," and put it back on the agenda.
Safavi said he believed that U.S. sanctions on Iran have run their course, and that there would be no point in strengthening them. Tehran would therefore demand "firm and significant" U.S. measures in return for stopping uranium enrichment. He also said Ahmadinejad is not guaranteed victory in the June 2009 elections, particularly given the dire economic situation in Iran. Still, Iranian experts believe his only real competition is former president Mohammad Khatami, who has not yet joined the race.
Safavi said the inflation rate in Iran is similar to that before the 1979 Islamic Revolution, but that unrest among civilians today is not as strong. This is because the current government uses oil revenues to help the poor, he said.
Although the armed clashes are not completely over in the beleaguered district of Homs and that the Syrian and Lebanese authorities have yet to inform public opinion of their recent actions, Thierry Meyssan appeared Monday night on the leading Russian television channel to make an initial assessment of the operations, providing first-hand information which he is sharing with the readers of Voltaire Network.
For eleven months, the Western powers and the Gulf States have led a campaign to destabilize Syria. Several thousand mercenaries infiltrated the country. Recruited by agencies in Saudi Arabia and Qatar within the Sunni extremist community, they came to Syria to overthrow the "Alawite usurper" Bashar al-Assad and impose a Wahhabi-inspired dictatorship. They have at their disposal some of the most sophisticated military equipment, including night vision systems, communication centers, and robots for urban warfare. Supported secretly by the NATO powers, they also have access to vital military information, including satellite images of Syrian troop movements, and telephone interceptions.
This has been falsely portrayed to the Western public as a political revolution crushed in blood by a ruthless dictatorship. Of course, this lie has not been universally accepted. Russia, China and the Latin American and Caribbean member states of ALBA repudiate it. They each have a historical background that allows them to readily grasp what is at stake. The Russians have Chechnya in mind, the Chinese think of Xinjiang, and the Latin Americans of Cuba and Nicaragua. In all these cases, beyond ideological or religious appearances, the methods of destabilization by the CIA were the same.
Group of Syrian government opponents, belonging to the hotchpotch commonly known as "Free Syrian Army."
The strangest thing about this situation is to observe the Western media deluding themselves that the Salafists, Wahhabis and Al-Qaeda fighters are motivated by democratic principles, while they continue to demand on Saudi and Qatari satellite airwaves the head of the Alawi "heretics" and Arab League observers. It matters little if Abdel Hakim Belhaj (number 2 of Al-Qaeda and current military governor of Tripoli, Libya) came personally to install his men in northern Syria, and Ayman Al-Zawahiri (current leader of Al-Qaeda since the official death of Osama bin Laden) has called for a jihad against Syria: the Western press pursues its romantic dream of a liberal revolution.
Even more ridiculous is to hear the Western media slavishly disseminating the daily dispatches put out by the Syrian branch of the Muslim Brotherhood ranting about the crimes of the regime and its victims, under the signature of the Syrian Observatory of Human Rights. Besides, since when has this Brotherhood of putchists been concerned about human rights?
Ayman Al-Zawahiri, Al-Qaeda’s number one following the official death of Osama Bin Laden, reiterated his call for hijad to overthrow the Baasist regime in Syria.
All it took to turn "terrorists" into "democrats" was for Western secret services to arrange for the puppet "Syrian National Council" to enter the scene, with a Sorbonne professor as President and as spokesperson the mistress of the former head of the DGSE. In a sleight of hand, the lie has become a media reality. Those abducted, mutilated and murdered by the Wahhabi Legion are transformed by the press into victims of the tyrant. Conscripts of all faiths who are defending their country against aggression are painted as sectarian Alawite soldiers oppressing their people. The destabilization of Syria by foreigners is treated as one more episode of the "Arab Spring." The emir of Qatar and the Saudi king, two absolute monarchs who have never held national elections in their countries and incarcerate protesters, have become the champions of revolution and democracy. France, the United Kingdom and the United States, who just killed 160,000 Libyans in breach of the mandate they received from the Security Council, have turned into philanthropists responsible for the protection of civilian populations. Etc..
However, the low intensity war that the Western press and the Gulf have hidden behind this masquerade has come to an end with the double veto by Russia and China on 4 February 2012. NATO and its allies were ordered to cease fire and withdraw, at the risk of sparking a war on a regional, or even global, scale.
Syrian President Bashar al-Assad with Russian Foreign Minister Serguei Lavrov on 7 February in Damascus.
On 7 February, a large Russian delegation, including the highest ranking foreign intelligence officials, arrived in Damascus where it was greeted by cheering crowds, aware that Russia’s return to the international scene marked the end of their nightmare. The capital, but also Aleppo, the second largest city, were decked out in white, blue, red, and people marched behind banners written in Cyrillic. At the presidential palace, the Russian delegation joined those of other states, including Turkey, Iran and Lebanon. A series of agreements were reached to re-establish peace. Syria has returned 49 military instructors captured by the Syrian army. Turkey intervened to obtain the release of the abducted Iranian engineers and pilgrims, including those held by the French (incidentally, Lieutenant Tlass who sequestered them on behalf of the DGSE was liquidated). Turkey has ceased all support for the "Free Syrian Army," closed down its facilities (except the one on the NATO base at Incirlik), and turned over its commander, Colonel Riad el-Assad. Russia, which is the guarantor of the agreements, has been allowed to reactivate the former Soviet listening base on Mount Qassioum.
The next day, the US State Department informed the Syrian opposition in exile that it could no longer count on its military aid. Realizing that they have betrayed their country to no avail, the Syrian National Council members went in search of new sponsors. One of them even went so far as to write to Benjamin Netanyahu asking him to invade Syria.
Deployment of the Lebanese army during its operation in the north of the country.
After a period of two days, required for the implementation of the agreements, not only the national armies of Syria, but also Lebanon, stormed the bases of the Wahhabi Legion. In northern Lebanon, a massive arsenal was seized in the town of Tripoli and four officers were taken prisoner in Akkar, in a school abandoned by UNRWA and transformed into a military HQ. In Syria, General Assef Shawkat in person commanded the operations. At least 1,500 fighters were captured, including a French colonel of the DGSE technical communication services, and more than a thousand people were killed. At this stage it is not possible to determine how many among the victims are foreign mercenaries, how many are Syrians cooperating with foreign forces, and how many are civilians trapped in the beleaguered city.
Lebanon and Syria have restored their sovereignty over their entire territory.
Intellectuals are debating whether Vladimir Putin might have made a mistake in protecting Syria at the risk of a diplomatic crisis with the United States. The question is wrongly put. Having reconstituted its forces for years and asserted itself today on the international stage, Moscow has put an end to two decades of a unipolar world order, that has permitted Washington to expand its hegemony to achieve global domination. The choice was not between siding with tiny Syria or with the mighty United States, but between allowing the first world power to destroy yet another government or upsetting the balance of power to create a more just international order in which Russia has a say.
A Saudi clan, the Sudairi, is spearheading the counter-revolutionary tide unleashed by the United States and Israel in the Middle East. In a vast overview, published in serial form by the leading Russian language daily, Thierry Meyssan from Damascus paints a general picture of the contradictions which are convulsing the region.
The photo that caused raucous in the United States: at the G20 Summit, President Obama bowed before the Saudi King and kissed his hand.
Within months, three pro-Western governments have fallen in the Arab World: parliament removed Saad Hariri’s Lebanese government, while popular movements drove out Zine el-Abbidine Ben Ali of Tunisia and Husni Mubarak in Egypt.
These changes have been followed by demonstrations against U.S. domination and Zionism. They politically benefit the Axis of Resistance, comprised of Iran and Syria at the state level and at the non-state level by Hezbollah and Hamas.
To lead the counter-revolution in this region, Washington and Tel Aviv have relied on their best support: the Sudairi clan, which embodies despotism at the service of imperialism unlike any other.
You have probably never heard of them, but for decades the Sudairi have been the world’s richest political organization.
Among the fifty-three sons of King Ibn Saud, founder of Saudi Arabia, the Sudairi are the seven that he sired with Princess Sudairi. Their leader was King Fahd, who ruled from 1982 to 2005. Only six are still alive. The eldest is Prince Sultan, minister of defence since 1962, who is 85. At 71, the youngest is Prince Ahmed, deputy interior minister since 1975. Since the 60s, it was their clan that organized, structured, and funded the pro-Western puppet regimes of the “Greater Middle East.”
A look back is required here.
Saudi Arabia is a legal entity created by the British during the First World War to weaken the Ottoman Empire. Although Lawrence of Arabia had invented the concept of the “Arab nation,” he never managed to make a nation of this country, let alone a state. It was and still is the private property of the Al-Sauds. As the British inquiry on the Al-Yamamah Scandal brought to light, in the 21st century there are still no bank accounts or budget for the Kingdom. It is the accounts of the royal family that serve to administer the Kingdom, which is its private domain.
The area fell under U.S. control after the Second World War, when the United Kingdom could no longer maintain its empire. President Franklin D. Roosevelt made an agreement with King Ibn Saud: the family of Saud guaranteed oil supplies to the United States which in return guaranteed the military assistance necessary to keep the House of Saud in power. This alliance is known as the Quincy Agreement, negotiated on a ship by the same name. It is an agreement, not a treaty since it does not bind two states, but a state and a family.
The Quincy Agreement binds the United States to the Saud family.
The founding king, Ibn Saud, having had 32 wives and 53 sons, serious rivalries between potential successors were not slow to emerge. Thus it was decided that the crown would not be handed down from father to son, but from half-brother to half-brother.
Five of Ibn Saud’s sons have already sat on the throne. The current king, Abdullah I, 87, is a rather open-minded person, although totally out of touch with today’s realities. Aware that the current dynastic system is headed for ruin, he intends to reform the rules of succession. The crown would thus be appointed by the Council of the Kingdom – this means selected by representatives of various branches of the royal family - and could potentially go to a younger generation.
This wise idea does not suit the Sudairi. Indeed, given the various abdications to the throne for health reasons or self-indulgence, the next three candidates belong to their clan: Prince Sultan, formerly appointed Interior Minister, 85; Prince Naif, Interior Minister, 78; and Prince Salman, the governor of Riyadh, 75. If it were to be applied, the new dynastic rule would work to their disadvantage.
One can easily understand that the Sudairi, who never cared much for their half-brother, King Abdullah, hate him at present. And, also, that they have decided to throw all their forces into the current struggle.
Prince Bandar and "his brother" George W. Bush.
The Return of Bandar Bush
In the late 70s, the Sudairi clan was headed by Prince Fahd, who noticed the rare qualities of one of his brother Sultan’s children: Prince Bandar. He sent him to Washington to negotiate arms contracts and was impressed by the way he handled an agreement with President Carter.
When Fahd ascended to the throne in 1982, Prince Bandar was a trusted aid. He was appointed military attaché, then ambassador to Washington, a post he held until his abrupt dismissal by King Abdullah in 2005.
The son of Prince Sultan and a Libyan slave, Prince Bandar is a brilliant and ruthless character that has distinguished himself within the royal family despite the stigma attached to his maternal origin. He is now the working arm of the gerontocratic Sudairi clan.
During his long stay in Washington, Prince Bandar befriended the Bush family, in particular George H. Bush, with whom he was inseparable. The latter likes to portray him as the son that he would have liked to have, so much so that his nickname in the capital is “Mr. Bandar Bush.” What George H. – former director of the CIA and U.S. president – appreciated most about him is his taste for illegal actions.
“Mr. Bandar Bush” made a place for himself in U.S. high society. He is both a manager for life of the Aspen Institute and a member of the Bohemian Grove. The British public first found out about him during the Al-Yamamah Scandal: the biggest arms deal in history as well as the largest corruption scandal. Over two decades (1985-2006), British Aerospace, soon renamed BAE Systems, sold $80 billion worth of weapons to Saudi Arabia while quietly dropping a portion of this windfall into the bank accounts of Saudi politicians and probably British politicians, with $2 billion going to Prince Bandar alone.
This is because His Highness has a lot of expenses. Prince Bandar has taken over responsibility for numerous Arab fighters trained by Pakistani and Saudi intelligence during the Cold War to fight the Red Army in Afghanistan at the request of the CIA and MI6. Of course, the best known figure in this milieu was none other than billionaire guru turned anti-communist jihadist, Osama bin Laden.
It is impossible to say precisely how many men Prince Bandar has at his disposal. Over time, we have seen his involvement in many conflicts and terrorist acts across the Muslim world from Morocco to China’s Xinjiang. For example, one may recall the small army that he had planted, by the name of Fatah Al-Islam, in the Palestinian camp of Nahr el-Bared in Lebanon. The mission of these fighters was to incite the Palestinian refugees, mostly Sunnis, to proclaim an independent emirate and to fight Hezbollah. The affair turned sour when the salaries of the mercenaries were not paid on time. Ultimately, in 2007, Prince Bandar’s men entrenched themselves in the camp. 30,000 Palestinians were forced to flee, while the Lebanese army waged a two-month battle to gain control of the camp. This operation cost the lives of 50 mercenaries, 32 Palestinian civilians and 68 Lebanese soldiers.
In early 2010, Bandar staged a coup to overthrow King Abdullah and to place his father, Sultan, on the throne. The plot was discovered and Bandar left in disgrace without however losing his official titles. But in late 2010, the declining health of the king and his surgery gave the Sudairi the upper hand and they engineered Bandar’s comeback with the support of the Obama Administration.
Saudi-Lebanese politician Saad Hariri has rallied behind the Sudairi. After his resignation as Lebanese Prime Minister three months ago, he has remained as caretaker Prime Minister and has blocked the formation of a new government ever since.
It was after having visited the king, who was hospitalized in Washington, and having concluded too quickly that he was dying, that Lebanese Prime Minister Hariri rallied to the side of the Sudairi. Saad Hariri is a Saudi, born in Riyadh, but with dual nationality. He inherited his fortune from his father, who owed everything to Saud. He is therefore obligated to the king and became Prime Minister of Lebanon at his urging, while the U.S. State Department was concerned about his ability to fill the position.
During the period when he had to obey King Abdullah, Saad Hariri began to reconcile with President Bashar al-Assad. He withdrew the accusations he had made against him about the assassination of his father, Rafik Al-Hariri, and apologized for having been manipulated to artificially create tension between Lebanon and Syria. In endorsing the Sudairi, Saad has made a political volte-face. Overnight, he renounced King Abdullah’s policy of conciliation towards Syria and Hezbollah and launched an offensive against the regime of Bashar Al-Assad, for the disarmament of Hezbollah, and for a compromise with Israel.
However, King Abdullah came out of his semi-comatose state and didn’t wait long to demand accountability. Deprived of this essential support, Saad Hariri and his government were overthrown by the Lebanese Parliament in favor of Najib Mikati, another bi-national, but less adventurous, billionaire. As punishment, King Abdullah ordered a tax investigation into Hariri’s largest Saudi society and had several of his associates arrested for fraud.
The Saudiri legions
The Sudairi have decided to launch the counter-revolution in all directions.
In Egypt, where they financed Mubarak on one hand and the Muslim Brotherhood on the other hand, they have now imposed an alliance between the Brotherhood and pro-U.S. army officers.
This new coalition has shared power by excluding the leaders of the revolution in Tahrir Square. It refused to convene a National Assembly and contended itself with amending the constitution marginally.
First, they declared Islam the state religion to the detriment of the Coptic Christian minority (about 10%) who were oppressed by Husni Mubarak and who mobilized en masse against him. In addition, Dr. Mahmoud Izzat, the number two of the Brotherhood, called for the rapid introduction of Sharia law and the restoration of Sharia punishment.
Young Wael Ghoneim, who had played a leading role in the overthrow of the tyrant, was barred from the podium during the victory celebrations, February 18, which rallied nearly 2 million people. Conversely, the star preacher of the Brotherhood, Youssef Al-Qardawi, returning after 30 years of exile in Qatar, was allowed to speak at length. He, who had been stripped of his citizenship by Gamal Abdel Nasser, projected himself as the incarnation of the new era: that of Sharia law and peaceful coexistence with the Zionist regime in Tel Aviv.
Nobel Peace Prize Muhammad Al-Baradei, whom the Muslim Brotherhood opted as a spokesman during the revolution to give themselves a more liberal image, was physically assaulted by the same Brothers during the constitutional referendum and was ejected from the political scene.
The Muslim Brothers made their formal entry into politics through the creation of a new party, Freedom and Justice, with the support of the National Endowment for Democracy (NED) and by imitating the profile of the Turkish AKP (The same strategy was chosen in Tunisia with the Renaissance Party).
In this context, violent attacks were perpetrated against religious minorities. Thus two Coptic churches were burned. Far from punishing the aggressors, the Prime Minister offered them a guarantee: he dismissed the governor that he had appointed in the province of Qenna, the respected General Imad Mikhael, because he is a Coptic Christian and not a Sunni Muslim.
The Gulf Cooperation Council (CGC) clamored for a NATO intervention in Libya and sent the Saudi army and UAE police to crush the protest in Bahrain.
In Libya, the Sudairi transferred armed fighters into Cyrenaica pending the green light from France and Britain to start the insurrection against the government of Tripoli. They are the ones who distributed weapons and the red-black-green star and crescent flags, symbols of the Senoussi monarchy. Their goal is to get rid of troublemaker Gaddafi and restore Prince Mohammed on the throne of what was once the United Kingdom of Libya.
It was the Gulf Cooperation Council that was the first to call for military intervention against the government of Tripoli. At the Security Council, it was the Saudi delegation which led the diplomatic manoeuvres for the Arab League to endorse the attacks by Western armies.
Colonel Qaddafi for his part declared in several speeches that there was no revolution in Cyrenaica, but that his country was facing an Al-Qaeda destabilization operation; claims that wrongly elicited smiles and which were personally confirmed to his great embarrassment by General Carter F. Ham, U.S. AfriCom commander. In charge of the initial U.S. military operations before being supplanted by NATO, General Ham was surprised at having to choose his targets based on information from spies on the ground who were known to have fought against the Coalition forces in Afghanistan – in short, bin Laden’s men.
Bahrain, meanwhile, presents itself as an independent kingdom since 1971. In reality, it is still a territory dominated by the British. During their rule they had chosen a Khalifa as prime minister and the position has been maintained for 40 years continuously, from the fiction of independence up until today. This is a continuum which is not displeasing to the Sudairi.
King Hamad has granted an important concession to the United States, which established its Central Command and the Fifth Fleet naval headquarters in the port of Juffair. In these circumstances, the popular demand for constitutional monarchy would imply access to real independence, the end of British rule, and the departure of U.S. forces. Such a development would certainly have a domino effect in Saudi Arabia and threaten the foundations of the system.
The Sudairi convinced the king of Bahrain to bloodily crush the hopes of the population.
Guarantor of the established order, Prince Nayef has been the implacable Saudi Minister of the Interior and Information for the past 41 years.
On 13 March, U.S. Secretary of Defence Robert Gates arrived in Manama to initiate the coordination of operations, which began with the entry of Saudi special forces, known as “Nayef Eagles”, under the command of Prince Nayef. Within days, all the symbols of protest were destroyed, including the public monument erected in Pearl Square. Hundreds of people died or went missing. Torture, which had been abandoned for almost a decade, was again widespread. Doctors and nurses who treated injured protesters were arrested in their hospitals, detained incommunicado, and brought before military tribunals.
But, the most important element in this terrible repression is the determination to transform a classic class struggle, between an entire population and a privileged class tied to foreign imperialism, into a sectarian conflict. The majority of Bahrainis are Shiites while the ruling family is Sunni. The Shias are seen as the vehicle of the revolutionary ideal of Ruhollah Khomeini, who was designated as a target. In one month, the "Nayef Eagles" razed 25 Shiite mosques and damaged 253 others.
21 of the main political protest leaders will soon be tried by a special court. They face the death penalty. More so than the Shiites, the monarchy is going after Ibrahim Sharif, the party chairman of the Wa’ad (a secular leftist party), whom they accuse of not playing by the rules because he is a Sunni Muslim.
Having failed to destabilize Iran, the Sudairi have concentrated their attacks against Syria.
The Destabilization of Syria
All the revolutions staged for the media have a logo. This is for the "Syrian Revolution 2011", which appeared on Facebook.
In early February, when the country had yet to experience any demonstration, a page titled “The Syrian Revolution 2011” was created on Facebook. It called for a "Day of Wrath” on Friday 4; the call was relayed by Al Jazeera, but did not resonate anywhere. Al Jazeera deplored the lack of reaction and stigmatized Syria as the “kingdom of silence” (sic).
The name “The Syrian Revolution 2011” is puzzling: it is in English and has the characteristic of an advertising slogan. But what genuine revolutionary would think that if he fails to realize his objectives in 2011, he would simply go back home?
Even stranger, on the day of its creation this Facebook page registered more than 80,000 friends. Such enthusiasm in a few hours, followed by nothing, suggests manipulation carried out with computer software that creates multiple accounts. Especially considering that the Syrians have a moderate level of internet use and have only had access to ADSL since January 1st.
The troubles began a month later in Deraa, a rural town located at the Jordanian border and a few miles from Israel. Vandals paid adolescents to tag anti-government graffiti on the walls of the city. Local police arrested the students and treated them as criminals to the annoyance of their families. Local notables who intended to settle the dispute were turned away by the governor. The young men were beaten. Furious, the families attacked the police station to set them free. The police responded with even more brutality, killing protesters.
President Bashar Al-Assad then intervened to punish the police and the governor – a cousin whom the President had appointed to Deraa, far from the capital, to keep him out of sight. An investigation was opened to shed light on the police killings. The officials responsible for the violence have been indicted and put under bail. Ministers have apologized and offered condolences to the victims’ families on behalf of the government, gestures which have been publicly accepted.
Everything should have returned to normal, but suddenly masked snipers stationed on rooftops fired on both the crowd and at police, plunging the city into chaos.
Taking advantage of the confusion, the gunmen went outside the city to attack a government building that houses the intelligence services responsible for the observation of the Syrian Golan Heights territory occupied by Israel. The security services fired back to defend the building and its archives. There were deaths on both sides.
This type of confrontation has recurred. People sought protection from the army responding to the attackers who stormed the city. Three thousand men and tanks were deployed to protect the inhabitants. Ultimately, a battle has pitted the infiltrated fighters against the Syrian army in a scenario similar to the Lebanese army siege on Nahr Al-Bared. Except this time, the international media has distorted the facts and accused the Syrian army of attacking the people of Deraa.
Meanwhile, clashes erupted in Lattakia, a port which has long been the home of criminal organizations that specialize in maritime smuggling. These individuals received arms and money from Lebanon. They vandalized the downtown. The police intervened. On presidential order, the police were armed only with batons. The gangsters then unleashed war weapons, killing dozens of unarmed policemen.
The same scenario was repeated in the neighboring town of Banias, a town of less importance, but which is much more strategic because it is home to the main oil refinery in the country. This time the police used their arms and the confrontation turned into a pitched battle.
Finally, individuals in Homs, a major city, came to participate at a mosque and called their fundamentalist followers to demonstrate against “the regime that is killing our brothers in Latakia.”
Reacting to the unrest, the Syrian population descended en masse to affirm its support for the Republic. Huge demonstrations, unprecedented in the history of the country, drew hundreds of thousands of people in Damascus, Aleppo, and Latakia to the cry of “God, Syria, Bashar!.”
While the clashes were intensifying in the localities concerned, the police managed to stop the fighters. According to their televised confessions, they were recruited, armed, and funded by a pro-Hariri MP in Lebanon, Jamal Jarrah, which he denies.
Jamal Jarrah is a friend of Prince Bandar. His name had been cited in the case of Fatah Al-Islam in Nahr Al-Bared. He is the cousin of Ziad Jarrah, a jihadist accused by the FBI of being responsible for the hijacking of Flight 93 that crashed in Pennsylvania on September 11, 2001. He is also the cousin of the Ali and Yousef Jarrah brothers, who were arrested by the Lebanese army in November 2008 for spying for Israel.
From London and Paris, Ali Saad-al-din Bayanouni (secretary general of the Syrian section of the Muslim Brotherhood) and Abdel-Halim Khaddam (former vice president of Syria) call for Bachar el-Assad’s overthrow.
Jamal Jarrah is a secret member of the Muslim Brotherhood, which he also denies. In 1982, the Brotherhood tried to seize power in Syria. They failed and became victims of a terrible repression. Since the amnesty proclaimed by President Bashar Al-Assad it was believed that these painful memories had been forgotten. On the contrary, this branch of the Brothers is now funded by the Sudairi. The role of the Banias Brotherhood in the clashes has now been acknowledged by all.
Allegedly, Jamal Jarrah also used Lebanese Hizb ut-Tahrir militants, an Islamist organization based in London and especially active in Central Asia. Hizb ut-Tahrir, which advocates non-violence, is accused of masterminding many attacks in the Ferghana Valley. It was with the intention of curbing this group that China began its rapprochement with Russia within the Shanghai Cooperation Organization. Despite much debate in the House of Commons about the group, its representatives in London have never been inconvenienced and they all occupy positions as high-level executives in Anglo-American multinationals.
Last year, Hizb ut-Tahrir opened a branch in Lebanon. On that occasion, it organized a conference to which foreign dignitaries were invited, including a Russian intellectual of international repute. During discussions, the organizers called for the establishment of an Islamic state, stating that Lebanese Shiites, Druze, and even some Sunnis are not real Muslims and should be expelled like the Christians. Flabbergasted by such outrageous remarks, the Russian guest promptly gave television interviews to disassociate himself from these fanatics.
At first, Syrian security forces appeared to be overwhelmed by events. Trained in the U.S.S.R., senior officers used force without worrying about the consequences on the population. But the situation was gradually reversed. President Bashar Al-Assad took control of the situation. He changed the government. He repealed the state of emergency and dissolved the State Security Court. He granted citizenship to thousands of Syrian Kurds who were historically denied citizenship because of a disputed census. In addition, he took a number of other measures, such as repealing the fines for late payment of public utilities (electricity, etc.). In doing so, he satisfied the main demands of the population and mitigated opposition. On the “Day of Rage” (Friday, May 6) the overall number of protesters in the country did not reach 50,000 people out of a population of 22 million.
Specifically, Mohammed Al-Sha’ar, the new interior minister, called for anyone who was involed in the riots to report voluntarily to the police and be granted amnesty in exchange for complete cooperation. Over 1,100 people responded. Within days, the principal conduits were dismantled and many weapons caches seized. After five weeks of violence, calm slowly returned to almost all the troubled cities.
Among the ringleaders identified and arrested, several were Israeli or Lebanese officers and one was a politician with close ties to Saad Hariri. This attempt at destabilization has a sequel.
Within the Saudi government, the Sudairi took advantage of King Abdallah’s illness to marginalize him. With U.S. and Israeli support, they thwarted the rapprochement between Abdallah and al-Assad and conduct the Arab counter-revolution.
An open conspiracy
What was originally a plot to overthrow the Syrian regime turned into open blackmail through destabilization. Realizing that the revolt was not picking up steam, the anti-Syrian Arab press shamelessly echoed the negotiations that were in progress.
They reported the visits of negotiators going to Damascus to present the requirements of the Sudairi. If we are to believe the newspapers, the violence will not stop until Bashar Al-Assad bends to two requirements:
break with Iran; and
stop supporting the resistance in Palestine, Lebanon, and Iraq.
The Sudairi want a Western military intervention to end the Syrian resistance, along similar lines as the aggression which is unfolding in Libya. To do this, they mobilized propaganda specialists.
To everyone’s surprise, the satellite TV station Al Jazeera abruptly changed its editorial line. It is no secret that the station was created by David and Jean Frydman, the French billionaire brothers who were counsellors to Ytzakh Rabin and Ehud Barak. They wanted to create a medium that allowed a debate between Israelis and Arabs, since such a debate was forbidden by law in each of the countries concerned.
To set up the network, they called on the Emir of Qatar who initially acted as a cover. The drafting team was recruited among the BBC’s Arabic Service, so that from the beginning the majority of journalists were leading British MI6 agents.
However, the Emir took political control of the network, which became the working arm of his monarchy. For years, Al Jazeera has indeed played a role of appeasement by promoting dialogue and understanding in the region. But the network has also contributed to trivializing the Israeli system of apartheid, as if the violent methods emplyed by IDF were merely unfortunate blunders on the part of a basically acceptable regime, whereas they constitute the essence of the regime itself.
On the run, former president Ben Ali found asylum in Saudi Arabia with Prince Nayef.
Al Jazeera, whose coverage of the revolutions in Tunisia and Egypt was outstanding, abruptly changed its editorial line with the Libyan case to become the mouthpiece of the Sudairi.
This about-face deserves an explanation. The attack on Libya was originally a Franco-British plan conceived in November 2010, i.e. well before the “Arab Spring,” in which the U.S. has been involved. Paris and London intended to settle scores with Tripoli and defend their colonial interests. Indeed, in 2005-2006, the Libya National Oil Company (NOC) had launched three international tenders for exploration and exploitation of its reserves, the largest in Africa. Colonel Gaddafi had imposed his own game rules on Western companies, forcing them to accept agreements that were hardly advantageous in their eyes. They even represented the less favourable contracts to multinationals worldwide. In addition, there were several disputes related to the cancellation of lucrative contracts for equipment and armament.
From the earliest days of the alleged Benghazi uprising, Paris and London set up the Transition National Council that France officially acknowledged as the legitimate representative of the Libyan people. This Council has created a new oil company, the LOC, which was recognized by the international community at the London summit as the holder of the rights to the country’s hydrocarbons. During the gathering, it was decided that the marketing of oil stolen by the LOC would be done by ... Qatar, and that the contact group of allied states would henceforth meet in Doha.
According to Youssef Al-Qardawi, the liberation of Palestine is less important than the establishment of Sharia law.
On cue, tele-evangelist Youssef Al-Qardawi started howling for the overthrow of President Bashar Al-Assad on a daily basis. Sheikh Al-Qardawi is president of the International Union of Scholars and also of the European Council for Fatwa and Research. He is the icon of the Muslim Brotherhood and preaches for an original brand of Islam, a mix of U.S. “market democracy” and Saudi obscurantism: he recognizes the principle of elected officials provided they undertake to enforce the Sharia in its most limited interpretation.
Youssef Al-Qardawi was joined by Saudi cleric Saleh Al-Luhaidan who urged: “kill a third of Syrians so the other two-thirds may live” (sic). Kill one-third of the Syrian population? That would imply slaying the Christians, Jews, Shiites, Druze and Alawite. So that two-thirds may live? That would amount to establishing a Sunni state before it cleanses its own kind.
To date, only the Palestinian branch of the Muslim Brotherhood, Hamas, appears to resist the seductive power of the Sudairi petro-dollars. Its leader, Khaled Meshaal, not without a moment’s hesitation, confirmed he would remain in exile in Damascus vowing his support for President Al-Assad. With the latter’s help, he preempted imperialist and Zionist plans by negotiating an agreement with Fatah’s Mahmoud Abbas.
Since March, Al-Jazeera, BBC Arabic, and Arabic France24 have turned into massive propaganda organs. By multiplying false testimonies and and manipulated images, they spin events to make the Syrian Republic look like the Tunisian regime of Ben Ali.
They have attempted to portray the Syrian army as a force of repression similar to the Tunisian police, one which does not hesitate to fire on peaceful citizens fighting for their freedom. These networks have even announced the death of a young soldier who refused to fire on his fellow citizens and was allegedly tortured to death by his superiors. In fact, the Syrian army is a conscript army, and the young soldier whose vital statistics had been published was actually on leave. In an interview with Syrian television, he affirmed his willingness to defend his country against foreign mercenaries.
Furthermore, these satellite channels have tried to portray several Syrian personalities as profiteers, just like Ben-Ali’s in-laws. They have focused their criticism on Rami Makhlouf, the richest man in the country, who is a cousin of President Al-Assad. They claimed that like the Tunisian model he demanded shares in all foreign companies wishing to do business in the country. This is absolutely unfounded and unimaginable in the Syrian context. In reality, Rami Makhlouf has enjoyed the confidence of President Al-Assad due to his role in establishing a cell phone network. Like anyone who has obtained such concessions in the world, he became a billionaire. The real question is whether or not they used their positions to enrich themselves at the expense of consumers. The answer is no: Syriatel offers the cheapest cellular phone rates in the world!
At any rate, the prize for lying goes to Al Jazeera. The network went so far as to present images of a demonstration of 40,000 people in Moscow calling for the end of Russia’s support for Syria. It was actually footage shot during the annual May 1 celebrations, in which the network had planted actors to make fake statements.
The Reorganization of Prince Bandar’s networks and the Obama Administration
The counter-revolution device used by the Sudairi is up against one difficulty. Until now Prince Bandar’s mercenaries had fought under the banner of Osama bin Laden, whether in Afghanistan, Bosnia, Chechnya or elsewhere. Initially considered an anti-communist, Bin Laden had gradually become anti-Western. His shift was influenced by the ideology of the Clash of Civilizations that was expounded by Bernard Lewis and popularized by his student Samuel Huntington. It experienced its era of glory with the terrorist attacks of September 11 and the War on Terrorism: Bandar’s men fomented disorder wherever the United States wanted to intervene.
In the current period, the image of the jihadists needs to be changed. They are now expected to fight alongside NATO, as they once fought alongside the CIA in Afghanistan against the Red Army. It is therefore advisable to revert to the pro-Western discourse of the past and to find a substitute for anti-communism. This will be the ideological task of Sheikh Youssef al-Qardawi.
To facilitate this makeover, Washington has announced the official death of Osama bin Laden. With their father figure gone, the mercenaries of Prince Bandar can be mobilized under a new banner.
This redistribution of roles is accompanied by a game of musical chairs in Washington.
General David Petraeus, who as commander of CENTCOM was to deal with the men of Bandar in the Middle East, became the director of the CIA. We must therefore expect an accelerated withdrawal of NATO troops from Afghanistan and greater involvement of Bandar’s people in the secret operations of the CIA.
Leon Panetta, the outgoing director of the CIA, became the secretary of defence. According to the internal agreement of the U.S. ruling class, this post should be reserved for a member of the Baker-Hamilton Commission. Panetta, like Gates, was a member. In the case of new wars, he would limit ground deployment, except for Special Forces.
In Riyadh and Washington they have already drafted the death certificate of the “Arab Spring.” The Sudairi can say about the Middle East what Il Gattopardo (the Leopard) used to say about Italy: “everything must change so that everything can stay the same and we can remain masters.”
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One of the things we learned in almost 30 years in the brokerage business is that self-regulation does not work. The players are simply too abusive, greedy and prove to take the regulations to the very edge. We saw that at MF global. All markets are rigged today. Twenty-five years ago perhaps 80% were rigged. The SEC and CFTC are well aware of this and in many cases aid and abet in the crimes. The crimes are too many to mention, but among the leading problems are complicity in front running and naked shorting. There is no such thing as an efficient market hypothesis. Just another phase to led you off into the forest.
A small group of big hitters control Wall Street, the Federal Reserve, our government and our economy. Just ask members of the Council on Foreign Relations, the Trilateral Commission or the Bilderberg Group. They know what is going on because they help make policy, and arrange to get it executed. Wall Street is one long litany of fraud, where the guilty seldom go to jail and the tables are squared via fines, usually paid by the firms and not the individuals. While the SEC and CFTC investigations go nowhere, or don’t happen at all, they relish charging small and medium sized brokerage houses to justify their existence. That is when they are not pursuing some newsletter writer, all of whom cannot afford top legal help, or any legal help at all. The whole game is crooked and has been for many years. It is government and its agencies and Wall Street and baking that controls your entire lives. Their power is immense and that is how they get away with what they get away with.
The same is true with Congress 90% of which are bought and paid for via campaign contributions and other artifices such as insider trading. That is why we have free trade and globalization, offshoring and outsourcing. Congress and those running for the office and president don’t even talk about it, yet, in 12 years it has cost 12 million jobs and 450,000 businesses. Obviously that is not a serious matter for Congress. Or should we say those who pay Congress, transnational conglomerates, want free trade just as it is. Our nation could not compete with slave labor countries in 1795 and they cannot compete now. There has to be a leveling force, a balance that stops the pillaging of America, which destroys economic independence and eventually sovereignty. We are a step away from post industrial dependency and bankrupt as well. Congressional complicity stands out like a beacon, when these asset strippers do not have to pay taxes on foreign earnings. Who has ever heard of something so unreasonable? Instead of lowering corporate taxes as other nations had done we eliminated taxation, so transnational corporations could compete. This is what we call modern colonialism.
After the debacles of the 1790s and British colonialism, the US switched to a tariff system, which worked quite well until about 25 years ago. Then came WTO, NAFTA and CAFTA, the result of which you are witnessing today. The system of tariffs allowed government to fund itself via exercise taxes funded by foreign corporations, which kept Americans from having to pay income taxes for about 100 years. Tariffs are part of what made America great and we cannot be great again without tariffs, it is as simple as that. You cannot have prosperity giving away 12 million jobs in 12 years. As we have seen you cannot have persistent and growing trade deficits year after year and not go broke. Here we are 217 years later doing the same stupid thing over again. The main reason for this is that the public is not paying attention and Congress does whatever their paymasters tell them to do.
The debt position of the US deteriorates each day and with it not only the dollar, the world’s reserve currency, deteriorates versus other currencies and gold and silver. Having the dollar as the world’s reserve currency gives many benefits to Americans and if that advantage is lost so is what is left of American prosperity. Are we to follow in the footsteps of Greece? It is wrong to say that tariffs cause depressions. They were increase six times over the past 200 years and no depression followed. If we do not get tariffs America cannot survive as a world leader.
If a written document exists outlining the deliberate default of Greece and has been in the possession of two Wall Street banks for a month then the fall of Greece has been in the works for some time. The date of March 23rd was supposedly the date for default. The rating agencies are supposed to be the trigger for the default. The 23rd is a Friday and on Saturday Greek bank accounts are to be frozen. If that is true all Greeks should have their euros and any other currencies and valuables out of all Greek banks.
Several months ago we stated that we did not know what was really going on behind the scenes in Germany. Our question was did they really want to save Greece and perhaps the euro, or were they interested as the majority of Germans are, in dumping the euro and the EU? Over the past week commentaries were all over the place, many of them off the wall. We have seen delays for 2-1/2 years, but nothing like we have seen over the past month. It is like most non-Greeks had monkey wrenches to throw into the gears of progress. The US says they do not want to get any deeper into Europe’s problems, as the IMF offers a pittance. The Germans and Schäuble these past 2 weeks had nothing but negative comments and commands trying to keep moving the goal posts, so to cast confusion among Greek negotiators. We are told on Saturday that on Thursday a deal was cut. Mrs. Merkel wants to replace the Greek government with a EU commissioner. In German it is called Gauleiter. We guess they want to have Greece as a subsidiary of Germany.
Draghi then gets in on the act and is upset by Schäuble who insinuates new Greek savings are chump change. That didn’t go over very well in Athens, which seemed like they were doing everything to make a deal. Then the demand comes from FINMINCO that Greek party leaders guarantee the deal by signing a binding document, which is ridiculous. Then German newspapers get into the act with unsubstantiated sensationalized commentaries. You have to ask yourself, does this sound like a Germany that wants to make a deal? We do not think so, even though they can go either way on this.
Then Mrs. Merkel demands the party leaders sign another pledge, because she says she does not trust New Democracy leader Samaras. What an insult. What disgraceful antics. Then Germany’s Schäuble calls Greek debt a bottomless pit straining relations further. Then Chancellor recommends that the Greek election by put off until after the bailout is completed. This is the first time this has been brought up in public. Germany knows as soon as the election is over and Samaras is elected they’ll ask for changes, or the deal will be struck null and void. She knows if a bailout does not occur prior to March 16, then Greece will default.
Finally the Greeks catch on that the Germans want Greece out of the euro zone if for no other reason then that the Germans demand it. Then the Germans all stand and say that is false. Have ou ever seen a politician who tells the truth in any country? Yes, occasionally, but not in this case.
If all that wasn’t enough Luxemburg’s Jean-Claude Junker said there has to be more surveillance of the program implementation. Debt must be serviced. All those euros that the EU is giving to Greece must go directly to the banks. In other words don’t you dare touch the bankers’ blood money.
The EU bureaucrats and politicians have now discovered that the euro zone can have life after Greece is gone. Now that we have $1.6 trillion from the Federal Reserve we do not have to worry about Greece’s paltry debts. That loan could last them two years, but the question is can and will they pay it back, or will American taxpayers pick up the bill? Incidentally, it is obvious the Fed loan for now will hold up Europe, but there is no denying that they do not want a clear cut default, because the banks that own the Fed are on the hook for $70 billion. Those loan funds are also for the bailout of Spain and Italy.
This is all turning into a very bad play with lots of duplicate action. The bad guys are really victims. The Greeks, and the so-called good guys the Germans, may not be all that they seem to be.
The actions of Mr. Schäuble and Mrs. Merkel are not only disgraceful, but are enough to take your breath away. This, as we saw last week, led to violent demonstrations and rioting. Many of these Greeks fought the Germans some 70 years ago and few have forgotten the occupation of their land. What terrible insults from the Germans. We can only surmise that no matter what the Greeks now do they are out of the euro zone.
Greece has already had to cut medicines and hospital costs by 30% as the patient load rises. Salaries have been cut 30% and pension by 50%.
Austerity has collapsed the economy; growth fell 6.8% last year and is projected to fall 7% this year. We ask you how will Greece pay debts in such a condition, as interest compounds exponentially.
Even if they wanted to Greek citizens have little they can find a buyer for under the circumstances. The Troika has been totally irresponsible from the beginning for asking for such rules.
We believe the US, UK, Germany, the Netherlands and Finland have gone too far this time. This deal could totally unravel and the result will be chaos, not matter how much money the Fed pumps into the EU. What has transpired and is continuing to do so cause serious irreparable damage to Europe and everyone will suffer.
Last week the Dow rose 1.2%, S&P rose 1.4%, the Russell 2000 gained 1.9% and the Nasdaq 100 rose 1.4%. Cyclicals rose 1.2%; transports fell 0.3%; consumers rose 1.6%; banks 2.4%; broker/dealers 2.6%; high tech 1.9%; semis 2.8%; Internets 1.0% and biotechs were unchanged. Gold bullion was unchanged, as the HUI fell 0.6% and the USDX gained 0.3%.
We have not seen a conclusion to the Greek debt crisis and it and Europe are an unmitigated disaster. Europe is on the tail end of a post credit boom. The LTRO-ECB-FED new bailout could buy 1 to 2 years. Then they will need another $1.6 trillion.
Two-year T-bills rose 2 bps to 0.29%, the 10-year T-note rose 1 bps to 2.00% and the 10-year German bund rose 2 bps to 1.92%.
Fed credit expanded $4.6 billion to $2.918 trillion – year-on-year that is up 17.1%. Fed foreign holdings of Treasury, Agency debt surged $26.2 billion to $3.447 trillion. Custody holdings were up $63.5 billion, yoy, or 1.9%.
Global central bank international reserve assets rose $958 billion yoy, or 10.3% to $10.250 trillion. Growth over two years has been 31%.
M2, narrow, money supply fell $7.4 billion to $9.772 trillion. That is up 10% yoy.
Total money fund assets rose $3 billion to $2.659 trillion.
Total commercial paper out declined $10.8 billion to $962 billion. That is down $79 billion yoy, or 7.6%.
Following on the Solyndra controversy, the Department of Energy under President Barack Obama is now accused of funneling billions of dollars in funding to companies that have connections within the department.
An investigation by The Washington Post found that the Energy Department has approved nearly $4 billion in federal grants and financing to 21 companies supported by firms with connections to five Obama administration staffers and advisers.
Of this amount, $2.46 billion flowed to nine businesses that have ties to VantagePoint Venture Partners, a venture capital firm where Sanjay Wagle, an Energy Department adviser, worked before coming to Washington.
The other four officials identified by the Post include Assistant Secretary David Sandalow, who previously worked for Good Energies, a company that received $737 million from the Energy Department; and Steve Westly, a longtime Silicon Valley entrepreneur and now a member of Energy Secretary Steven Chu’s advisory board. The Westly Group took in $600 million in federal financing.
The Obama administration says that the Energy Department employees and advisers took no part in grant-making decisions, which would mean that these business windfalls were just happy coincidences.
For some Washington reporters and media execs, cheering their team from the sidelines just isn’t good enough: Tugging on a red, white and blue Team Obama jersey is the answer.That’s the case for a whopping 19 journalists and media executives, including five from the Washington Post and three each from ABC and CNN, who’ve gone into the administration or center-left groups supporting the president.
Those inside the administration hit 14 this month when the Post’s Stephen Barr joined the Labor Department. That’s a record, say some revolving door watchers, and could even be much higher: The Post reports that “dozens” of former journalists have joined the administration, although Washington Secrets couldn’t verify that tally.
Many are in communications and speech writing offices, most prominently Jay Carney, the president’s spokesman who ran Time’s Washington bureau, and husband to ABC’s Claire Shipman. Some joined as the news business collapsed, many to finally voice their politics, and others, notably former Transportation spokeswoman Jill Zuckman, because she liked her future boss, Secretary Ray LaHood, a rare Republican in the administration. That relationship rocked: LaHood broke through the lower-tier Cabinet P.R. ceiling to become one of the most well-known Transportation secretaries ever. She had worked for the Chicago Tribune.
The revolving door isn’t a surprise to critics of the media and Obama. “The number of reporters going into the Obama administration merely confirms what I knew and what most conservatives long believed,” said Noam Neusner, himself one of the few reporters hired as a Bush speech writer. “There is a vast supply of liberals in newsrooms, they are very happy to support Obama administration policies if they can get hired and they barely hide their ideology in the way they cover the news.” Neusner, who I worked with at U.S. News, said that he too might have been guilty of a pro-Bush bias, but said correctly: “My editors and colleagues were surprised to hear that I was a Republican.”
A former GOP Capitol Hill and cabinet spokesman added, “It’s frustrating to see so many reporters that had relationships with trusted sources give up their ‘impartiality’ and start playing for the other side. It does show that the game is stacked in favor of the other side when most reporters still working in their profession remain silent.”
Stephen Hess, a presidential and journalism scholar at the Brookings Institution, said reporters can be “conflicted” when they trade places. “On the other hand,” he added, “reporters going back to journalism after a stint in government are always better reporters in that they now understand how government really works.”
Arizona is one step closer to funding an armed, volunteer militia to patrol the Arizona-Mexico border for undocumented immigrants and drug traffickers.
The Senate Appropriations Committee on Tuesday narrowly passed a revised version of Senate Bill 1083, which would create and fund an Arizona Special Missions Unit.
If the bill passed, the unit would help secure the border and help local law enforcement pursue, detain and arrest those involved in "cross-border criminal activity," according to the bill's language.
The unit also would respond to natural disasters and search-and-recovery efforts.
Unlike an earlier version, the revised measure clarified who would be eligible to volunteer and how the state would vet them. The measure also reduced funding to $1.4 million yearly, down from an initial proposal of $1.9 million, and removed the militia from under the operations of the National Guard.
Instead, the governor would appoint a commander and commission to oversee the unit.
If Gov. Jan Brewer signed SB 1083 into law, Arizona would stand alone in funding a militia focused on border enforcement. Brewer generally does not comment on pending legislation.
"This is more like the Texas Rangers," said Sen. Sylvia Allen, R-Snowflake, the bill's sponsor.
"Our state and local law enforcement doesn't have enough money to focus on this cross-border criminal activity."
Four men arrested last month for allegedly participating in a “criminal club” that made almost $62 million using illegal tips to trade in Dell Inc. stock pleaded not guilty.
Level Global Investors LP co-founder Anthony Chiasson; Todd Newman, a portfolio manager formerly at Diamondback Capital Management LLC; Jon Horvath, an analyst at hedge fund Sigma Capital Management LLC; and Danny Kuo, a fund managerfor Whittier Trust Co., entered not guilty pleas to conspiracy and securities fraud charges yesterday in Manhattanfederal court.
Prosecutors from the office of Manhattan U.S. Attorney Preet Bharara said the ring, which allegedly involved five hedge fundsand investment firms, is the largest identified by the U.S. to date tied to a single stock. One trade earned a $53 million illegal windfall for Chiasson and Level Global, prosecutors allege.
All four men are charged with one count of conspiracy to commit securities fraud. Newman is charged with three counts of securities fraud and Chiasson with four counts of securities fraud. Horvath and Kuo are additionally charged with one count of securities fraud. All four were arrested Jan. 18. They entered their pleas in a hearing before U.S. District Judge Richard Sullivan.
Prosecutors have recordings of conversations between Chiasson and John Kinnucan, founder of an expert networking firm whose mobile phone was wiretapped by federal investigators, Assistant U.S. Attorney Antonia Apps told the judge.
“Mr. Chiasson fired me after only three months, much to my surprise at the time, but after seeing the kind of information he was evidently getting elsewhere, now I understand why he didn’t have any need for the types of channel checks I could provide,” Kinnucan said in an e-mail yesterday.
Kinnucan said he’s “highly confident Mr. Chiasson will not be convicted of any insider trading charges based on any of our conversations, since everything we talked about was industry- standard research, as practiced by all the investment banks, large and small, and which practices have been blessed by the SEC for many years now,” a reference to the U.S. Securities and Exchange Commission.
Prosecutors also have recordings of Newman, Horvath and Kuo speaking with cooperating witnesses, Apps said. She didn’t name the witnesses.
Three other men charged in the scheme pleaded guilty and are cooperating with the U.S. -- Jesse Tortora, formerly of Diamondback; Spyridon “Sam” Adondakis, a Level Global analyst; and Sandeep Goyal, a former employee at Round Rock, Texas-based Dell, the third-largest maker of personal computers.
Sullivan scheduled a hearing in the case for April 13. He didn’t set a trial date.
The case is U.S. v. Newman, 12-cr-121, U.S. District Court, Southern District of New York(Manhattan). Ex-Citigroup Executive Denies Wrongdoing in Tibor-Fixing Case
A former Citigroup Inc. executive accused by Japanese regulators in a probe of suspected interest-rate manipulation denied wrongdoing and said authorities never questioned him before they issued findings.
Christopher Cecere, who worked for Citigroup in Tokyoas head of G10 trading and sales for Asiauntil 2010, was identified as “Director A” in a Dec. 16 administrativecase by Japan’s Financial Services Agency, according to two people with knowledge of the inquiry. The agency said Director A and another Citigroup trader engaged in “seriously unjust and malicious” conduct by asking bankers to alter data they submitted in the process of setting a benchmark Japanese lending rate. Japan’s FSA penalized the firm and took no action against the employees.
During Citigroup’s internal investigation, the New York- based bank didn’t question Cecere about his conduct or indicate to him that it suspected he had acted improperly, he said in a Feb. 10 phone interview. Regulators also didn’t seek his version of events, he said. He left the firm in good standing, he said. He later joined Brevan Howard Asset Management LLP, a London- based hedge fund that manages about $33 billion.
Japan’s regulators were the first to announce findings as authorities in Asia, Europeand the U.S. conduct widening inquiries into whether employees at some of the world’s biggest banks sought to manipulate the London, Tokyo and euro interbank offered rates, known as Libor, Tibor and Euribor, respectively. The rates were used by investors to gauge the ability of firms to borrow money at the height of the 2008 credit crisis and can play a key role in derivatives trades.
While Cecere asserted his innocence, he declined to comment on the FSA’s description of events, including whether he pressed someone to change rates for Tibor, saying he has no insight into the watchdog’s investigation or findings.
Citigroup was forced to write off $50 million as it exited trades made by Tokyo-based employees, a person familiar with the matter said last week. Thomas Hayes, a Tokyo-based trader for Citigroup, was dismissed last year for suspected involvement in the rate manipulation, according to two people familiar with the case. Contact information for Hayes couldn’t be found.
Cecere said the holdings that Citigroup recorded losses on were one of many businesses that reported to him in his role overseeing sales and trading units in Asia.
Mika Nemoto, a Tokyo-based spokeswoman for Citigroup, declined to comment on Cecere’s remarks.
U.S. Secretary of State Hillary Clinton and Mexican Foreign Minister Patricia Espinosa signed an agreement today for development of oil and gas reservoirs that straddle the two nations’ boundaries in the Gulf of Mexico.
The agreement is the first of its kind signed by the U.S., establishing a legal framework and creating incentives for U.S. energy companies to develop oil and gas resources jointly with Petroleos Mexicanos, the Mexican state oil company known as Pemex. When it comes into force, the agreement will end the current moratorium on oil exploration and production in the Western Gap portion of the Gulf of Mexico.
“With this, we are setting aside the old fear that honestly exists among many Mexicans that Mexico’s oil could be extracted from the other side,” said Mexican President Felipe Calderon. “Any joint reservoir will be jointly exploited,” and we will all gain the benefits.
U.S. Secretary of Energy Kenneth Salazar called the agreement an historic step that “opens to door to previously off-limits areas in the Gulf of Mexico,” an area larger than the state of Delaware.
“These reservoirs could hold considerable reserves that would benefit the United Statesand Mexico alike,” Clinton said at the signing ceremony in Los Cabos, Mexico, on the sidelines of an informal meeting of Group of 20 foreign ministers. “But they don’t necessarily stop neatly at our maritime boundary. This could lead to disputes if a company discovers a reservoir that straddles the boundary -- disputes, for example, over who should do the extraction and how much they should extract.”
The agreement will help to resolve issues such as whether oil extracted from the Mexican side of the Gulf but sent directly to crude terminals in the U.S. is considered Pemex output and imported crude, and whether Mexico will charge royalties on it.
If no joint exploration deals are made between U.S. companies and Pemex, the agreement allows each side to exploit its share of hydrocarbons while protecting the other nation’s interests, according to the U.S. State Department.
The agreement also allows for joint inspection teams to ensure compliance with safety laws and environmental rules.
A shortage of investment in technology, exploration and production, and a ban on private-sector involvement has hindered Mexico’s petroleum production in recent years. Mexican law banned private companies from exploring, producing and refining crude oil until legislation championed by Calderon passed in 2008, allowing performance-based service contracts.
Calderon’s government has said deep-water offshore exploration and production in regions such as the transboundary area may be Mexico’s best chance to reverse declining output from the country’s largest reserves.
Mexico was the second-largest source of U.S. oil imports in 2010, exporting1.3 million barrels a day to its northern neighbor, according to the U.S. Energy Information Administration.
The oil sector generated 14 percent of Mexico’s export earnings in 2010, according to Mexico’s central bank, while oil earnings account for 32 percent of Mexican government revenue, according to the EIA.
At the G20 meeting yesterday, Clinton called on developed and emerging economies to eliminate unfair advantages in the global financial and trade systems, such as those enjoyed by state-owned enterprises and sovereign wealth funds.
Underscoring the “need to update the rules of the road” so businesses and economies compete on a level playing field, Clinton warned that free economies face an mounting challenge from “‘state capitalism,’’ which she defined as ‘‘the rise of sovereign wealth and the growing presence and influence of state-owned and state-controlled enterprises that operate globally.’’
Once again, the Securities and Exchange Commission has embarrassed itself. Last week it let off the hook two hotshot former Wall Street hedge-fund managers who lost a bundle for the investors trusting them to manage their money responsibly.
Instead of going to court on Feb. 13 and laying bare the sordid facts for a jury, at the last minute the SEC settled a civil suit against Ralph Cioffiand Matthew Tanninof the now defunct Bear Stearns Cos. These were the hedge-fund managers who five years ago loaded up their two funds with billions of dollars of lousy mortgage-backed securities and collateralized- debt obligations, leveraged them to the hilt and, when the market for the securities soured in July 2007, liquidated the funds.
According to the SEC’s 2008 civil complaint against the men, the collapse of the funds cost investors at least $1.6 billion. These problems were among the very first indications that serious trouble was looming in the housing market and securities tied to it. The liquidation of the two funds led to the effective bankruptcy of Bear Stearns itself in March 2008 and the subsequent financial crisis that nearly wiped Wall Street off the face of the earth.
But the price the SEC extracted from Cioffi and Tannin as part of a settlement -- after previously telling the court it intended to go to trial -- was a mere pittance, “chump change,” according to the federal judge in Brooklynoverseeing the case. Cioffi, who made $22 million in 2005 and 2006 at Bear Stearns, will pay just $800,000 and agree to a three-year ban from the securities industry. Tannin, who was paid $4.4 million in his last two years at Bear, will pay $250,000 and agree to a two-year ban. Neither has to admit to wrongdoing. The agreement will deter absolutely no one from trying to pull off a similar stunt.
In combination with their November 2009 jury acquittal on criminal charges in federal court, the SEC civil settlement provides a major victory for the defendants’ attorneys, Hughes Hubbard & Reed LLP (for Cioffi) and Brune & Richard LLP (for Tannin). The American public, on the other hand, is left with the trillion-dollar bill for Wall Street’s financial crisis caused by the Wall Street bankers and traders who walked off with billions in bonuses.
This outcome is beyond outrageous. In its complaint, the SEC flat-out stated that Cioffi and Tannin mislead their investors: “Particularly during the first five months of 2007, as the funds suffered increasing losses to the value of their portfolios and faced growing margin calls and redemptions… senior portfolio manager Cioffi and portfolio manager Tannin deceived their own investors, as well as the funds’ institutional counterparties, by fraudulently concealing from them the full extent of the funds’ deepening troubles.”
One of the ways Cioffi and Tannin did this was by displaying, graphically, on the monthly account statements the percentage of the funds invested in subprime mortgages. For instance, according to an investor’s statement from March 2007, the amount of the funds invested in subprime mortgages was stated clearly as 6 percent. But when the funds blew up, Bear Stearns created internal “talking points” memos for how to deal with investor complaints. A memo from June 2007 pointed out that one of the questions deemed likely to be asked was: “I thought the fund was diversified, and now it turns out it seems to have had a fair amount of exposure to the subprime mortgage market. What exactly was the exposure?” The answer: “60 percent.”
In other words, Cioffi and Tannin told their investors the funds were diversified -- and raised billions of dollars based on that representation -- but in reality they were highly concentrated in subprime mortgages. And now, thanks to the SEC’s settlement, the two men may never even be held remotely accountable.
Even Frederick Block, the judge who was to preside at the trial but instead has been asked to bless the settlement, openly questioned whether the terms fit the crime. He not only called the monetary settlement “chump change,” but also said the SEC’s injunctive provision was “silly” and asked, “Am I just a rubber stamp here or is there some inquiry I ought to be making about these provisions?”
In this, he was echoing the well-known views of the outspoken federal Judge Jed Rakoff, who last year rejected an agreement between the SEC and Citigroup Inc. (C)where the give-up by the bank was relatively small -- $285 million -- and the firm was allowed to settle without denying or admitting guilt. In the Cioffi-Tannin case, the penalty is even smaller and the investors’ loss greater. Go figure.
John Worland, the SEC’s attorney, defended the agency by saying that it has no ability to sue for damages, only for the disgorgement of ill-gotten gains. While technically correct, it’s not the whole story: The SEC certainly figured out a way to penalize Goldman Sachs Group Inc. (GS)to the tune of $550 million in the so-called Abacus case in 2010, when the firm actually lost some $90 million on the deal.
Then Worland delivered this stunner: “Neither Mr. Cioffi or Mr. Tannin got rich.” You know how far things have gone downhill when a lawyer for the SEC, making a bureaucrat’s salary -- God bless him -- can’t seem to see that two hedge fund managers are in fact quite rich and got that way in the course of losing their investors a fortune.
We are all worse off for the SEC’s continued lax enforcement of wrongdoing on Wall Street. If it won’t protect us from charlatans, who will? Judge Block, please deny the proposed pathetic settlement and send the parties back to the negotiating table or, even better, your courtroom.
(William D. Cohan, a former investment banker and the author of “Money and Power: How Goldman Sachs Came to Rule the World,” is a Bloomberg View columnist. Read his previous column on Wall Street arbitration online. The opinions expressed are his own.)
Rep. Ron Paul's presidential campaign raised $4.5 million in January, a source tells the Washington Post. The source also said Paul raised $1.7 million from a fundraising event last week -- further proof that his campaign will have the money it needs to stay in the presidential race for the long haul.
Don’t Expect Consumer Spending To Be the Engine of Economic Growth It Once Was.
Standard economic-growth theory suggests that an economy must continuously invest in new capital goods and structures in order to grow, become more productive and raise citizens' living standards over time. Empirical evidence confirms the prediction that economies that invest a higher share of their incomes (or that have access to relatively inexpensive investment goods, which presumably results in more investment) tend to grow at faster rates. If consumer spending "crowds out" investment spending, the economy may not grow as fast.
Moreover, just as in cross-country studies, higher investment spending has been associated with higher economic growth, while years of relatively high consumer spending have been associated with relatively low economic growth in the U.S.
Prompted by a delay in a big trade at a popular ETF, the U.S. Securities and Exchange Commission is taking a closer look at a possible connection between high-frequency traders and hedge funds jumping in and out of ETFs, and instances where ETF trades fail to settle on time, this person said.
The SEC's inquiry is part of a wider probe that began last year and focused on complex ETFs that allow investors to magnify returns or bet against stock indexes.
U.S. and UK regulators are concerned that so-called settlement fails - when trades are not completed on time - could contribute to volatility and systemic risk in financial markets. The probe's main focus is on illiquid ETFs, but regulators are now also examining popular ETFs and failed trades, according to the person.
The FHA, once a niche player focused on low-income housing, now backs about a third of new mortgages including super-sized ones for wealthy home buyers. The market for FHA-qualified mortgages runs $25 billion a month. While Citi has only a 2 percent share, BofA is the largest player with more than 26percent, according to FTN Financial, using mortgage servicing as a proxy for origination activity.
Booting offending banks out of the government’s program could make mortgages even harder to come by.
At least that’s what the banks and other interested groups will have told their government masters, who are worried about the still weak housing market in an election year. So Citi and BofA will pay their fines and promise to clean up their acts – while taxpayers can only hope the government will hold them to it.
President Barack Obama’s budget today will outline his ideas for how the government may spend more than $3 trillion in the next fiscal year, starting Oct. 1. There’s no similar document accounting for where taxpayers’ money actually goes. At least three federal sources tally spending, each following its own rules to produce a different total. For the 15 Cabinet-level agencies and Social Security, the White House Office of Management and Budget put expenses at $3.18 trillion in fiscal 2010… Ask the Census Bureau, and the amount rises by $13.1 billion to $3.19 trillion.
USASpending.gov… accounts for $2.23 trillion of spending.
The nation’s budget has more than doubled in the past decade, pushing the annual deficit to more than $1 trillion and the national debt to $15.2 trillion.
Construction of multifamily units will lead the U.S. building industry again this year, allowing housing to contribute to growth for the first time in seven years, according to economists Michelle Meyer and Celia Chen. Work will begin on about 260,000 apartment buildings and townhouse developments in 2012, up 45% from last year and the most since 2008, according to Meyer, a senior economist at Bank of America… Chen, an economist at Moody’s… is even more optimistic, projecting a record 74% jump to 310,000.
GOLD, SILVER, PLATINUM AND PALADIUM
On Tuesday gold and silver prices did very well starting at mid-night up $11.40 and $0.38, and at 9:15 am EST gold was up $30.60 and silver $0. 84. Spot gold rose $33.30 to $1,757.80, as April closed up $35.20 to $1,761.10. Spot silver rose $1.21 to $34.41 as March rose $1.15 to $34.43.
The air was full of fairy tales as Europe tells us the latest bailout deal will take Greece to a debt of 120.5% of GDP by 2020. That is dreaming. Wait until the April election is over – you will see vast changes and a good chance of default.
Fundamentally, gold and silver are again in the process of moving upward having again put in new bottoms.
Gold open interest fell 885 contracts to 439,791, as silver OI fell 308 to 106,926.
The Chicago Fed’s National Activity Index fell 0.22 in January, down from 0.54 in December.
The Gallup Poll says unemployment rose to 9% in mid-February, up from 8.3%. Obviously February unemployment will rise from 8.3%.
The Dow rose 16 to 12,955, S&P rose 7, and Nasdaq fell 20 Dow points. The CRB rose 5.07 to 322.46.
Singapore Budget 2012 No GST for investment-grade gold, precious metals
Singapore will exempt investment-grade gold and other precious metals from the goods-and-services tax as it seeks to develop gold trading, Minister for Finance Tharman Shanmugaratnam said in Parliament on Friday.
‘We will facilitate the development of gold trading, which can draw on Singapore’s strengths as a financial and trading hub, to meet strong demand for investment-grade gold in Asia,’ he said.
Mr Shanmugartnam said investment-grade gold and other precious metals are essentially financial assets that are actively traded and similar to other financial instruments that do not attract GST.
The exemption will bring Singapore’s tax treatment of such goods in line with the practices of many developed economies like Australia, the United Kingdom and Switzerland, he said.
The CRB index jumped 1.3% this week (up 4.0% y-t-d). The Goldman Sachs Commodities Index surged 2.3% (up 6.7%). Spot Gold added 0.1% to $1,723 (up 10.2%). Silver gained 1.1% to $33.67 (up 20.6%). March Crude jumped $4.57 to $103.24 (4.5%). March Gasoline gained 1.4% (up 13.5%), and March Natural Gas rallied 7.5% (down 10%). March Copper added 1.1% (up 8%). March Wheat gained 2.2% (down 1%), and March Corn rose 1.6% (down 1%).
“China, the world’s largest consumer of energy and base metals, is set to displace India this year as the biggest gold user… as surging incomes drive increased demand for jewelry and investments. Demand in China jumped 20% to 769.8 metric tons in 2011, while consumption in India fell 7% to 933.4 tons, according to…the producer-funded World Gold Council…”
After weeks of uncertainty that revived fears about the foundations of the euro, European leaders on Thursday clinched a new rescue plan for Greece that could push the country into default on some of its debt for a short period but would give Europe’s bailout fund sweeping new powers to shore up struggling economies.
At a press conference late Thursday, Chancellor Angela Merkel of Germany confirmed the aid package of 109 billion euros ($157 billion) for Greece.
European officials also said that financial institutions that own Greek bonds would contribute 50 billion euros through 2014 through a combination of debt extensions and the purchase of discounted Greek bonds on the secondary market.
The outlines of the plan worked out by leaders of the 17 euro zone nations seemed particularly bold, dealing with the economic problems of bailed-out Ireland and Portugal as well as Greece, and calling for nothing short of a European Marshall Plan to get Greece itself on a road to recovery. The underlying economies of those countries and others remain remarkably frail, however.
On the central issue of extending debt, rating agencies had already issued strong warnings that such steps might constitute a limited form of default because creditors would not be repaid in full on the original terms.
The agreement came after days of conflict among Europe’s leaders over how to keep the debt crisis from engulfing the much-larger economies of Italy and Spain. Any contagion would not only pose a potent threat to the euro the most important symbol of the European integration but could destabilize the entire global financial system.
French business confidence arrested a seven-month decline in February, the latest sign that Europe’s second-largest economy may be starting to recover after unexpectedly expanding in the fourth quarter.
Sentiment among factory executives held at 92 after January’s reading was revised from an initially reported 91, Paris-based statistics office Insee said today. The reading matched the median forecast of 18 economists surveyed by Bloomberg News. A gauge of the outlook among businesses rose to a six-month high.
Hundreds of thousands of protesters were marching throughout Spain on Sunday in the first large-scale show of anger over new labor reformsthat make it easier for companies to fire workers and pull out of collective bargaining agreements.
Spain’s main trade unions organized marches in 57 cities, beginning midmorning in southern Cordoba. Some events that had been planned for later in the day, such as in eastern Valencia, had to be brought forward because of the early buildup of large crowds.
The European nation is facing economic pain, after the Spanish government slashed welfare budgets and reduced salaries as part of austerity measures to help reduce the country’s dangerous deficit.
An interactive look at the situation in Europe and how it affects you.
Union organizers said around 1 million people had marched by mid-afternoon, but official figures were not released.
Prime Minister Mariano Rajoy’s government passed the package of reforms nine days ago in an effort to shake up a labor market seen as one of Europe’s most rigid and to encourage hiring in a country battling the highest unemployment rate in the eurozone, at nearly 23 percent.
The government, elected in November, is working desperately to chip away at a bloated deficit and a jobless rate that stands at staggering 39 percent for those aged between 20 and 29. Its first big step was a €15 billion (around $20 billion) deficit reduction package of spending cuts and tax hikes approved Feb. 3, followed by the shake-up of the labor market.
Rajoy was overheard saying at an EU summit last month that the reforms he was planning on introducing would “cost me a general strike.”
“If we want Spain to grow and create employment, we had to do what we’ve done,” Rajoy said at his Popular Party’s annual congress in southwestern Seville on Sunday.
The government’s sweeping changes allow Spanish companies facing declining revenues to pull out of collective bargaining agreements and have greater flexibility to adjust employees’ schedules, workplace tasks and wages, as well as making it easier and less costly to fire workers.
“If the government doesn’t rectify this, we will continue with an ever-growing mobilization,” General Workers Union spokesman Candido Mendez said.
Many protesters wore hats with large scissors on top and shouted, “Don’t cut our rights,” while others carried placards in the shape of coffins that read, “Negotiation and collective bargaining, RIP.”
Office worker Manuela Silvela, 58, said the government’s measures were doing nothing to ease the uncertainty felt in Spain.
“Workers who’ve got jobs now are worried these reforms will make it easy to lose them, and in current conditions, those who don’t have work are going to find it impossible to get a job,” she said.
SWISS banks could be forced to carry out checks on the tax status of foreign assets they hold under a new "clean money" strategy being proposed by the finance minister, it was reported today.
Eveline Widmer-Schlumpf wants banks to go a step further than requiring a tax declaration from foreign customers, according to the Sonntags Zeitung.
She wants them to examine suspected cases of evasion to ensure they are respecting the law. Sonntags Zeitung paper described the proposal as "explosive" as banks have so far fought against compulsory checks.
Ms. Widmer-Schlumpf, who as well as being Finance Minister is also the current Swiss President, will put the suggestion to ministers on Wednesday the newspaper said, citing several sources close to the finance department.
Ms. Widmer-Schlumpf is under pressure to reach an agreement with the United States over undeclared assets in Swiss accounts, as Switzerland tries to maintain the reputation of its banking industry.
US authorities are probing 11 Swiss banks as part of a clampdown on offshore tax evasion -- an investigation that recently prompted the collapse of Wegelin, the country's oldest private bank.
Three of its bankers have been charged with conspiring to help American clients hide funds.
In the coming months, Bern is expected to finalise a tax accord with Washington, similar to one already drawn up with Britain and Germany.
"We support the intentions of the finance minister," president of Ms. Widmer-Schlumpf's Conservative Democrats party, Hans Grunder, told the Sonntags Zeitung.
The head of the Socialists Christian Levrat said the suggestions "seem to go in the right direction".
European finance ministers approved a 130 billion-euro ($173 billion) bailout package for Greece early today by tapping into European Central Bank profits and convincing investors to provide more debt relief to the Mediterranean country. The deal includes a 53.5 percent write down for investors in the nation’s debt, according to Luxembourg’s Jean-Claude Juncker, who chaired the talks. Finance ministers haggled into the night in Brussels over the terms of new loans and a possible contribution by central banks.
The odds that Greece will remain encumbered by debt were illustrated by an analysis by European and International Monetary Fundofficials that highlighted what could go wrong with a country unable to grow out of its fiscal woes by devaluing its currency. In a worst-case scenario Greece’s debt might balloon to 160 percent of gross domestic product in 2020, it concluded.
Unless 90 percent of investors sign up to the bond swap, Greece may need to use force to secure the debt relief, entering legal difficulties. Finland and Germany are among the nations whose lawmakers must back the new loans and the International Monetary Fund must also decide how much it is willing to contribute to the package.
A “strictly confidential” report on Greece’s debt projections prepared for euro zone finance ministers reveals Athens’ rescue program is way off track and suggests the Greek government may need another bail-out once a second rescue – set to be agreed on Monday night – runs out…even under the most optimistic scenario, the austerity measures being imposed on Athens risk a recession so deep that Greece will not be able to climb out of the debt hole over the course of a new three-year, €170bn bail-out.
The Dutch want a ‘permanent troika’ in Athens.
We are at the point where success is no longer compatible with democracy. The German finance minister wants to prevent a “wrong” democratic choice…The euro zone wants to impose its choice of government on Greece – the eurozone’s first colony.
Top German Economist: 'Restructuring Greece Within the Euro is Illusory'
He argues that Greece can only solve its crisis if it quits the euro.
Germany drawing up plans for Greece to leave the euro Plans for Greece to default, potentially leaving the euro, have been drafted in Germany as the European Union begins to face up to the fact that Greek debt is spiraling out of control - with or without a second bailout.
The German finance ministry is actively pushing for Greece to declare itself bankrupt and to agree a "haircut" on the bulk of its debts held by banks, a move that would be classed as a default by financial markets.
Euro zone finance ministers meet on Monday to approve the next tranche of loans from the EU and the International Monetary Fund, designed to stave off national bankruptcy while the new Greek governmentputs the country's finances in order…
·March 8 to 11, a €14.4B bond matures on March 20
·Cash sweetener of 10-15% plus 30-yr 3.75% bond that could increase if Greece GDP flourishes.
As a first step towards completing the deal, the Greek parliament is set to pass legislation next week on so-called collective action clauses, with the aim of forcing a minority of “holdout” investors to take losses of around 70 per cent on their holdings.
The Greek government is drawing up legislation that could be used to impose losses on investors who don’t support the debt swap that’s part of the country’s new bailout package, said two euro-region officials familiar with the situation.
The law may be introduced to parliament in Athens in the coming days, said one of the officials, who spoke on condition of anonymity because the deliberations are confidential. Euro region finance ministers are prepared to back the use of so-called collective action clauses if a voluntary debt swap doesn’t drawenough participation, the other person said.
Greece's cabinet on Saturday approved a final set of austerity measures sought by the EU and IMF as a condition for a 130-billion euro ($171 billion) rescue package, raising the chances of a deal next week to avert a chaotic default on its debt. The approval was largely a formality after Athens last week unveiled details of the extra budget and public sector wage cuts worth 325 million euros to euro zone partners.
European industrial production declined in December led by a slump in Germany, adding to signs the region may have slipped into its second recession in three years. Production in the 17-nation euro area fell 1.1% from November… From a year earlier, production decreased 2%.
Asking pricesfor London homes rose to close to a record in February, helping push national values up the most in almost a decade, Rightmove Plc said.
Average asking prices in the U.K. capital rose 2.5 percent from January to 449,252 pounds ($710,300), less than 1,000 pounds below the record reached in October, the operator of Britain’s biggest property website said in a report today. Prices in England and Wales rose 4.1 percent on the month, the most since April 2002.
Brazilian state-controlled banks are boosting credit four times faster than non-government lenders, making it harder for policy makers to lower interest rates while meeting the country’s inflation target. Government-run banks including Banco do Brasil SA and Caixa Economica Federal, which accounted for almost half of all lending in December, boosted credit by 4% that month, compared with 1% for non-state lenders…”
Mexico’s economy expanded at half the rate forecast by economists in the fourth quarter… Gross domestic product… rose 0.4% in the fourth quarter
Lost In The Paper Shuffle: As we pointed out here last week, the first month of 2012 was a very good one for Gold. Between December 29, 2011 and February 2, 2012, Gold rose from $US 1544 to $US 1759 on a spot future closing basis. That's up $US 215 or almost 14 percent.
Then, on February 3, 2012, the Bureau of Labour Statistics (BLS) in the US came out with their official numbers for January. According to the BLS, the unemployment rate fell - totally unexpectedly - from 8.5 to 8.3 percent. This was the start of the flow of positive official US economic statistics which has now once again "convinced" the market that the "recovery" which was supposed to have started in June 2009 is still on track. In early trading on February 3, the spot future Gold price had risen as high as $US 1768. By the close of trading it stopped at $US 1742 - down $Us 17 on the day. Ever since then, Gold in $US terms has essentially been going sideways. Not so the paper markets. The closer we get to the Greek bailout "deadline" of March 20 and the more meetings the EU postpones, the higher global stock markets get.
The BLS January employment number has been comprehensively debunked all over the internet. No matter. The computer algorithms built into the trading desks all over the world don't look to see HOW the number was derived, they simply swallow it whole and act as they are programmed to. The result, so far, is multi year highs on stock markets all over the world. On February 17, the Dow closed at its highest level since May 2008. When the European sovereign debt crisis was ramped up - again - in the second half of last year, the majority of mainstream analysts were terrified. They were expecting a replay of what happened in the wake of Lehman - another HUGE deleveraging rally with the consequent dive in pretty well every market there is except for the ones for US sovereign debt and the US Dollar. And sure enough, the initial reaction was redolent of what happened post Lehman.
To give just one example, in the three weeks between July 21 and August 10, the Dow plummeted from 12724 to 10719. That's a fall of 2005 points or nearly 16 percent. It was not enough for the dreaded 20 percent fall which traditionally signals a bear market, but it wasn't far off. That's where the similarity ended, though. While the US stock market was losing 16 percent, the $US Gold price was gaining a bit more than 12 percent. Gold rose from $US 1587 to $US 1784 between July 21 and August 10. It then went on to hit an all time high spot future close of $US 1892 two weeks later on August 22. Thus, while the paper markets were staging a reasonable facsimile of the early stages of their Lehman crash, Gold was soaring. In the month between July 21 and August 22, Gold gained $US 305 or just under 20 percent.
Then came a speech by Ben Bernanke at Jackson Hole, Wyoming on August 26. Over the two days leading up to Mr Bernanke's speech, the spot future Gold price had plummeted over $US 200 from intraday high to intraday low. When Mr Bernanke spoke, he said very little. There was no hints about another round of QE. There was nothing said about how long he planned to maintain his Zero Interest Rate Policy (ZIRP). All he said was that the next FOMC meeting which was originally scheduled for one day would be lengthened to two days to allow for "fuller discussion".
He did not say what was going to be discussed. That didn't matter, the people at Jackson Hole already knew what was coming. Sure enough, when the September FOMC meeting did take place, the FEd announced "operation twist". By that time, Gold was safely back below the $US 1600 level. Now, another bailout is being eagerly anticipated, this one to take place in Europe sometime over the next month. Once again, the paper markets are gleefully contemplating yet another bailout. The closer the "deadline" gets, the higher the "irrational exuberance" becomes. Gold is doing nothing much at the moment, it is lost in the paper shuffle.
MORE ON THE STREET: Onesteel has announced plans to cut another 430 jobs in its Australian steel operations by the end of June in an attempt to cut costs. The steel and mining company says the move will save it a further $90 million after it cut a total of 470 jobs in the first half of the financial year. Chief executive Geoff Plummer revealed the plans as he announced a first-half loss of $74 million due to multi-million dollar costs associated with discontinuing businesses and purchasing mining assets. The result represents a fall of 163 per cent on the $116 million profit made in the same period last financial year. Mr Plummer says labour is one of the company's largest costs, and this must be reduced to ensure its future.
RECENT MAJOR AUSTRALIAN JOB CUTS:
ANZ: about 1,000 jobs
Westpac: about 560 jobs
Royal Bank of Scotland: around 170 jobs
Holden: about 100 jobs
Toyota: 350 jobs
Reckitt Benckiser: 190 jobs
Onesteel: 430 jobs
Qantas: 500 jobs
Pacific Brands: 106 jobs
Billabong: up to 80 jobs
BHP Billiton: 155 jobs
Alcoa: 600 jobs at risk
Total 4,200 jobs gone from Aussie shores.
RIP-OFF OR FAIR DEAL? An interest rate strategist from international banking giant Societé Generale has sparked a new round of the interest rate debate, labelling the banks' justification for raising rates "dubious". After the Reserve Bank left the cash rate on hold two weeks ago, many banks decided it was time to set their own interest rate policy. All four major banks, and many of the smaller ones, lifted rates by between six and 15 basis points. Their reason was that rising funding costs are eating into profit margins. But Societé Generale's Asian interest rate strategist Christian Carrillo says that public available data shows most of the banks' funding costs have actually been going down, and the rate rises are simply protecting their "high profits". "Our research suggests that effectively pretty much every source of funding that they use in terms of domestic deposits, short -term funding onshore, long-term funding onshore has actually gone down," he said. Mr Carrillo's research was based on publicly available data from the bank regulator APRA and the Reserve Bank. But Reserve Bank governor Glenn Stevens has emphatically refuted this research, saying the RBA's figures show bank funding costs have fallen at a slower pace than the official cash rate. "Since the middle of last year the cash rate's come down 50 points and funding costs, the costs of funding the books, hasn't come down quite that much," he said. "That's what everybody's aggravated about, but that is a fact. "So relative to the rate we set, the funding costs have gone up a little bit because they haven't fallen as much as the cash rate and the banks have responded to that in a way that you would expect they would I think." The Reserve Bank's minutes reveal that markets had been effectively closed for most Australia banks to raise money offshore for the last few months of 2011. Investors were too scared to lend to banks for fear of a European financial meltdown. When the funding markets reopened in January, banks had to pay a much higher rate to get money. The Reserve Bank says the cost of swapping that money, often in euros or US dollars, into Australian currency has also increased. But Mr Carrillo argues local funding, the savings accounts of households and businesses, has become much cheaper. "The deposit rates, which is where they are getting most of their funding nowadays, about 60 per cent of it, have effectively fallen by more than RBA cash since probably the beginning of 2011 to now," he said. Net interest margins down: But the Reserve Bank minutes say competition for deposits has actually meant the interest rates offered to savers have fallen less than the 0.5 percentage point cut to the cash rate. And banking analyst Brian Johnson from CLSA says there is irrefutable evidence in the banks' profit reports that their cost of funding has gone up relative to the cash rate. He says net interest margins - the gap between what the banks pay to borrow money and what they charge to lend it to customers - have gone down. "In the core Australian banking business, net interest margins were certainly down in the 5 to 10 basis point range across each of the banks," he said. "There's a lot of moving pieces here but the irrefutable fact is that the cost of funds is more elevated than it has been historically. "It's probably a little bit improved on where it was towards the end of January when we saw some rather big covered bond issuance by the banks, but it is still certainly higher than it was six months ago and perhaps even higher than it was three months ago." But Mr Johnson says that does not mean bank profits may not be excessive. "The returns on equity are somewhere kind of between the 16 to 19 per cent range," he said. "That looks high to me for what are really utility-type businesses, but that's where they are at the moment. "The absence of economic pricing in the securitisation markets give the banks a tremendous amount of pricing power and that's how they've been able to pass on a lot of this rising costs of funds to borrowers."
Iranstopped sales of crude to French and British buyers to pre-empt a European Union ban on imports of its oil and as OPEC’s second-biggest producer negotiates contracts to supply China.
Iran “will give its crude oil to new customers instead of French and U.K. companies,” the Shana oil ministry news website reported, citing Alireza Nikzad Rahbar, a ministry spokesman.
The action may “prompt further price gains for crude,” John Caiazzo, president of Acuvest Commodity Brokers Inc. in Temecula, California, wrote in a note to clients today.
France got 4 percent of its oil imports from Iran in the first half of 2011 and the U.K. 1 percent, according to the U.S. Energy Information Administration. Iran will raise crude volumes sent to China “soon,” the state Mehr news agency said Feb. 16.
The producer is suspending exports as tension rises in the Gulf over its nuclear program, sending oil prices to the highest level in nine months. The EU and U.S. have imposed additional sanctions against the country, restricting trade and financial transactions. Iran, the largest producer in the Organization of Petroleum Exporting Countries after Saudi Arabia, is also under four rounds of United Nations sanctions.
The country threatened to halt shipments to Italy, Spain, Portugal, Greece, France and the Netherlands when it summoned their ambassadors to the Foreign Ministry on Feb. 15 to protest the EU’s punitive measures, state media reported. Iran would end sales of crude to the six countries unless they agreed to long- term contracts and payment guarantees, state-run Press TV reported that day, without citing anyone. Oil Prices
EU nations bought a combined 18 percent of Iran’s exports of crude and condensates, or 452,000 barrels a day, in the first half of 2011, according to the EIA’s most recent data. Francepurchased 49,000 barrels a day and the U.K. 11,000 barrels.
The EU said today its member countries are cutting oil purchases from Iran and have sufficient reserves to deal with disruptions. Some of the 27 nations, such as the U.K., Austria, Portugal, Belgium and the Netherlands, have already stopped buying and others including Italy, Spain and Greece are reducing imports, Marlene Holzner, an energy spokeswoman for the European Commission, said in an e-mailed reply to questions.
Oil for March delivery rose as much as $2.12 to $105.36 a barrel in electronic trading on the New York Mercantile Exchange, the highest intraday price since May 5. It increased 4.6 percent last week, taking its gain this year to 6.6 percent. BP, Total
Total SA (FP), France’s largest oil company, stopped buying oil from Iran, Chief Executive Officer Christophe De Margerie told Bloomberg Television on Jan. 27 in Davos. Nobody answered calls by Bloomberg News to the French foreign ministry yesterday.
An official for Royal Dutch Shell Plc, the biggest European energy company, declined to comment to Bloomberg. BP Plc doesn’t buy Iranian crude, David Nicholas, a London-based spokesman, said by telephone.
EU emergency stocks are 136 million metric tons, equivalent to 120 days of consumption, or 4.5 years of the region’s imports from Iran, Holzner said, adding that no member state has asked for a release of reserves. EU rules require countries to hold emergency fuel stocks of at least 90 days of the average daily domestic consumption in the previous calendar year.
Iran produced 3.545 million barrels of crude a day in January, data compiled by Bloomberg show. Iranian exports in 2010 averaged 2.154 million barrels a day, according to the EIA. China Contract
China and Iran have agreed on pricing and sales methods for a supply contract, Mehr said, citing an unidentified official at the National Iranian Oil Co. An NIOC official at the company’s Singapore crude-marketing office, who asked not to be identified in line with company policy, declined to comment on the report.
Iran held talks last month with China International United Petroleum & Chemical Corp., the nation’s biggest oil trader, over the Chinese company’s 2012 supply contract, two people with knowledge of discussions said Jan. 10. The accords between the buyer, known as Unipec, and National Iranian Oil were scheduled to be agreed on last year, according to the people, who declined to be identified because the information is confidential.
China buys 22 percent of Iran’s exports, according to the EIA. It has bought an additional 200,000 barrels a day of oil from Iran in recent months, according to the IEA. The country, the second-biggest crude consumer, may continue to increase imports from the country, Didier Houssin, director of energy markets and security, said today at a conference in London.
The OPEC heavyweight saw production decline by 237,000 barrels per day (bpd) from three-decade highs of 10.047 million bpd in November, the JODI data showed on Sunday.
The drawdown was sharper for the actual amount exported, declining by 440,000 bpd, or 5.6 percent, to come in at 7.364 million bpd, the data also showed. The level would still be similar to exports after a steep ramp-up last June. In its monthly report on February 10, the IEA put Saudi Arabia’s production number for December slightly lower at 9.55 million bpd, a disparity of 260,000 bpd versus the JODI Data.
Japanposted a record trade deficit in January as the yen’s strength and weaker global demand eroded manufacturers’ profits and slowed the nation’s recovery from last year’s earthquake and tsunami.
The gap widened to 1.48 trillion yen ($19 billion) and shipments dropped9.3 percent from a year earlier as energy imports surged, a Ministry of Finance reported in Tokyo today. The median estimate of 28 economists surveyed by Bloomberg News was for a shortfall of 1.46 trillion yen.
Japan’s economy shrank an annualized 2.3% in the fourth quarter, more than economists estimated, as slumping exports undermine a recovery from last year’s record earthquake.
Instead of debasing the yuan and engaging in a currency war, China will chance a trade war by instituting a direct export subsidy because yuan debasement will exacerbate inflation and enflame the populace.
Pay rose by 16% to 25% starting Feb. 1, the company said in an e-mailed statement yesterday. The basic monthly pay of a junior worker in Shenzhen has risen to 1,800 yuan ($290) from 900 yuan three years ago.
Investors are pumping the most money into Indian sovereign bond funds since September 2010 on speculation policy makers will cut borrowing costs as inflation slows.
University of Colorado Boulder professor of molecular, cellular and developmental biology Larry Gold is working on a diagnostic tool the size of a postage stamp that could tell patients, with a drop of blood sample, if they have any one of a dozen diseases, based on readings of protein biomarkers in the blood. He is presenting his work at the big science conference in town this weeked, the American Association for the Advancement of Science at the Vancouver Convention Centre, which is hosting 8,000 scientists from around the world.
Photograph by: Submitted , The Province
VANCOUVER — What if screening one drop of blood on a device the size of a postage stamp could diagnose a dozen cancers, neurological diseases and heart disease before you suffer a single symptom?
An American biologist whose company, SomaLogic, is working on a "wellness chip," hopes to make that diagnostic dream a reality within a decade.
Larry Gold is a professor at the University of Colorado Boulder who is presenting his research at the American Association for the Advancement of Science conference in Vancouver this weekend in a session on predictive medicine.
He's working with biomarker proteins that are present in blood. To date, he's helped decode a thousand of the estimated 4,000 proteins in our bloodstream.
His company has discovered how to bond proprietary molecules to these proteins in a way that makes them easy to track at tiny concentrations, revealing the protein-code presence of multiple diseases more accurately and earlier than with traditional diagnostics, and long before symptoms appear.
In one recent study, Gold compared the protein profiles of 1,000 people with confirmed cases of non-small-cell lung cancer to those of 1,000 people in a heavy-smoker risk group who did not have any diagnoses or symptoms of cancer. They were able to detect the presence of early-stage cancer in 60 of the test-group participants.
The company hopes to have these select protein tests available in about a year, while the comprehensive tests will take up to 10 years.
"I don't use the word predictive medicine for what we are doing," said Gold, a professor of molecular, cellular and developmental biology. "It's really about precision medicine. It's about early diagnostics, not of diseases you might get, but of diseases that have already started in your body. That, to me, is where science needs to go."
Gold's research is one of the fascinating advances being presented at the prestigious conference, attended by 8,000 scientists from 60 countries.
It's the first time in 30 years America's largest general scientific conference has been held in Canada.