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Monday, October 10, 2011

Cosmic Chess Match with L.A. Marzulli

Russia to lend Venezuela $4 bln to pay for arms deals

Russia and Venezuela have signed an agreement on a $4 billion loan for the oil-rich Latin American partner to buy Russian weaponry, Venezuelan leader Hugo Chavez said on Thursday.

Russia and Venezuela have signed an agreement on a $4 billion loan for the oil-rich Latin American partner to buy Russian weaponry, Venezuelan leader Hugo Chavez said on Thursday.

The loan agreement was signed during a snap visit by Russian Deputy Prime Minister Igor Sechin to Caracas on Thursday in view of Chavez’s deteriorating health. The 57-year-old Venezuelan leader has been fighting cancer since June.

“Two billion will be provided next year and another two billion in 2013,” Chavez said.

In August, a Russian diplomatic source signaled Russia’s willingness to extend the loan. “Considering the current election campaign in the country, this loan would mean the opportunity to support our key ally in the region,” the source said in a reference to the 2012 presidential elections in Venezuela.

Venezuela is a leading importer of Russian arms. Between 2005 and 2007, Caracas signed $4 billion worth of arms deals with Russia to buy Sukhoi fighter jets, combat helicopters, and small arms. Chavez’s government also secured a $2.2-billion loan in 2010 to purchase Russian T-72 tanks and S-300 air defense systems.

Venezuela has been seeking a loan of another $6.5 billion from Russia for infrastructure development. Finance Minister Jorge Giordani said in August he would visit Moscow for negotiations in the near future.

The two countries are also interested in oil cooperation. A group of Russian energy firms including Gazprom, Rosneft, TNK-BP, Surgutneftegaz and LUKoil formed an oil consortium chaired by Sechin in 2008 for projects in Venezuela.

Moscow said it would invest $12 billion in Venezuelan oil production in the next ten years.

RIA Novosti

Window for strike on Iran nuke facilities growing slimmer'

Israeli-American scholar on nuclear proliferation tells 'Post' that Iranian advances limiting Israeli ability to launch effective attack.

The chance for a military strike to succeed in stopping Iran’s race toward a nuclear weapon is becoming “slimmer” as Tehran continues to produce and disperse its enriched uranium and technology, according to Prof. Avner Cohen, a premier Israeli-American scholar on nuclear proliferation.

“I think we are moving to the point that the chance of success for doing something effective militarily is getting slimmer,” Cohen warned in an interview with The Jerusalem Post.
“The fact that the Iranian nuclear program is further dispersed, that the time for Iran to reach a breakout capability gets shorter and that material can be moved quickly from site to site, would require a very dynamic intelligence capability to know where everything is,” he said.

A professor and senior fellow at the Monterey Institute of International Studies in California, Cohen has written two groundbreaking books on Israel’s nuclear program –Israel and the Bomb and The Worst-Kept Secret: Israel’s Bargain with the Bomb.

Furthermore, according to Cohen, even if Israel had all of the intelligence it would still be impossible “to know that you know everything important since you do not know what you do not know.”

Israel and other Western countries have expressed concern in the past that Iran might have additional undeclared nuclear facilities.

Cohen stressed that he did not currently advocate militaryaction.

At the same time, he said that Iran’s “salami approach” – dispersing its enriched uranium to a number of facilities, its general policy of making only small and invisible-like advances in its program, as well as its proven ability to enrich uranium to 20 percent levels – showed that “Iran is not only positioning itself on the bomb threshold, but it appears to gear itself to slowly crossing the threshold and becoming a nuclear weapon state.”

Iran recently announced that it is moving an advanced new centrifuge into the Fordo facility near Qom.

“Some Americans with access to intelligence believe that the window for the militaryoption is closing and growing slimmer,” he said.

Cohen said that Iran was working under a policy of nuclear ambiguity, similar to Israel’s policy, under which Israel neither confirms nor denies its nuclear status. Like Israel, he said that Iran could eventually redefine what it means to be a nuclear state.

Last week, the Post reported on concerns within Israel that Iran was adopting such a policy.

“Given the increasing quantities that Iran is enriching to 20%, they are increasingly shortening the time they need to reach the so-called breakout stage, which means that the warning time is getting shorter and shorter to the point that it becomes meaningless,” he said. “Their opacity policy aims to blur and obscure the very issue of possession and non-possession of nuclear weapons.”

US Secretary of Defense Leon Panetta’s visit to Israel last week, Cohen said, was likely part of an American effort to ensure that Israel is not planning any unilateral militarysteps that would not be coordinated first with Washington.

“The US wants itself, and also Israel, to be engaged in a thorough effort to contain Iran – like the way the Soviet Union was contained during the Cold War – meaning that for all practical purposes and short of extreme circumstances, both the US and Israel would have to put aside the military option and instead work to contain Iran,” Cohen said.

“My gut sense is that something happened in recent weeks which was interpreted as if Israel had made clear that the military option is alive and kicking, and Panetta wanted to make sure that Israeli independent action will not happen,” he said.
Jerusalem Post

Iran: Wall Street protests are start of 'American Spring'

TEHRAN, Iran — An Iranian military commander said Sunday that the protests spreading from New York's Wall Street to other U.S. cities are the beginning of an "American Spring," likening them to the uprisings that toppled Arab autocrats in the Middle East.

Gen. Masoud Jazayeri of Iran's Revolutionary Guard said the protests against corporate greed and the gap between rich and poor are a revolution in the making that will topple what he called the Western capitalist system.

The Occupy Wall Street movement started in New York City last month and is spreading to other parts of the country. The loosely affiliated movement is peacefully protesting the power of the financial and political sectors.

Jazayeri said President Barack Obama's election promises of change have reached a dead end.

"The failure of the U.S. president to resolve the Wall Street crisis will turn this economic movement into a political and social movement protesting the very structure of the U.S. government," the official IRNA news agency quoted Jazayeri as saying Sunday.

"A revolution and a comprehensive movement against corruption in the U.S. is in the making. The last phase will be the collapse of the Western capitalist system," he said, according to IRNA.

Read more: http://www.ctv.ca/CTVNews/TopStories/20111009/iran-capitalism-wall-street--occupy-american-spring-111009/#ixzz1aNyDfCop

Volcanic Alert In Effect On El Hierro As 4.3 Magnitude Earthquake Hits

Epicentre of Saturday night's earthquake on El Hierro. Image Google Maps

A 4.3 magnitude earthquake struck El Hierro, the smallest of The Canary Islands, late on Saturday night. It was the strongest earthquake to be recorded on the Spanish island since an unprecedented earthquake swarm commenced during the summer.

The Instituto Geografico Nacional (IGN) has reported an increase in the intensity of earthquakes recorded on El Hierro, the smallest of The Canary Islands, during the last 48 hours. The number of earthquakes recorded since July 17 , 2011 on El Hierro has now reached 10,000, figures from the IGN confirm.

The IGN also confirmed surface deformations exceeding 35mm on the 280-sqkm island, where residents have been put on alert for a possible volcanic eruption. However, seismologists have moved to reassure the local population that a volcanic eruption is not imminent.

The agency confirmed on Friday that 886 earthquakes, most of them located in the sea to the SW of the island, have been recorded in the 7 days since 02 October, 2011. During this period, 71 earthquakes were felt by the island’s estimated 10,000 residents.

Since Friday morning, there have been more than two dozen earthquakes exceeding 3.0 on the Richter Scale with epicentres both North and South of the NW Ridge and depths between 10 and 15 km have been recorded. The strongest of the tremors measured 4.3 magnitude on the Richter Scale, many times stronger than other earthquakes recorded on the island since mid-July. It was recorded on Saturday night at a depth of 12 km. The quake produced small rockslides but no injuries were reported.

Hierro, a shield volcano, has had a single historic eruption from the Volcan de Lomo Negro vent in 1793. The eruption lasted approximately one month and produced lava flows.

The recent surge in the number and intensity of earthquakes prompted officials from the IGN and The Canary Islands Government to raise the alert level for the Hierro volcano to ‘Yellow’ late last month. The alert remained in place on Sunday.

Seismologists say the majority of the earthquake activity has shifted from El Golfo in the island’s northwest to beneath the Las Calmas Sea in the south.

However, magma is now on the move upwards while the depth of earthquakes has become increasingly shallow in recent days with most being recorded at a depth of 9 to 14 kilometres. Movement of magma towards the surface signifies that a volcanic eruption is likely to happen, but the timing of such remains unclear.

Volcanologist Juan Carlos Carracedo last week suggested that an eruption on El Hierro would “not be a major surprise”. He explained: “It is the youngest of the Canary Islands. There is a ball of magma which is rising to the surface and it is stationed at the limit of the earth’s crust. At the moment we do not know if that ball of magna will break the crust and cause an eruption.”

IGN Director, María José Blanco said that any eruption on El Hierro would most likely have a “low explosion value”.

A dramatic rise in recorded earthquakes on El Hierro last week prompted officials to evacuate some local residents, shut El Hierro’s main tunnel, and close local schools.

The Spanish Civil Guard (Guardia Civil) advised almost 50 residents of the municipality of La Frontera to leave their homes because of landslide fears. Two units of the Spanish military’s emergency intervention unit (EMU) were also placed on standby to depart the nearby island of Tenerife to assist in the possible evacuation of hundreds of other El Hierro residents.

Meanwhile, the island’s main tunnel (Tunel del Golfo), which links Frontera to Valverde, was shut forcing motorists to travel across the 280-sq-km island via a mountain road. The Cabildo de El Hierro also ordered the closure of schools.
Earthquake Swarms

Earthquake swarms are events where a local area experiences sequences of many earthquakes striking in a relatively short period of time. The length of time used to define the swarm itself varies, but the United States Geological Survey (USGS) points out that an event may last for days, weeks, or months.

El Hierro is situated in the most southwestern extreme of the Canaries. The island was formed after three successive eruptions, and consequent accumulations, the island emerged from the ocean as an imposing triangular pyramid crowned by a volcano more than 2,000 metres high.

The volcanic activity, principally at the convergence of the three ridges, resulted in the continual expansion of the island. A mere 50,000 years ago, as a result of seismic tremors which produced massive landslides, a giant piece of the island cracked off, crashed down into the ocean and scattered along the seabed. This landslide of more than 300km3 gave rise to the impressive amphitheatre of the El Golfo valley and at the same time caused a tsunami that most likely rose over 100 metres high and probably reached as far as the American coast.

El Golfo, El Hierro, The Canary Islands (Spain) where the majority of earthquakes have been recorded up to recentlyAccording to the Global Volcanism Program, the massive Hierro shield volcano is truncated by a large NW-facing escarpment, seen here from the east, which formed as a result of gravitational collapse of the volcano. The steep-sided 1500-m-high scarp towers above a low lava platform bordering 12-km-wide El Golfo Bay, which is barely visible at the extreme left. Holocene cones and flows are found both on the outer flanks and in the El Golfo depression. The last eruption, during the 18th century, produced a lava flow from a cinder cone on the NW side of El Golfo.

According to ElHierro.com: “Although over 200 years have elapsed since the last eruption, El Hierro has the largest number of volcanoes in the Canaries with over 500 open sky cones, another 300 covered by the most recent outflows, and some 70 caves and volcanic galleries, notably the Don Justo cave whose collection of channels surpasses 6km in length.”

El Hierro is located south of Isla de la Palma (population 86,000), currently the most volcanically active of the Canary Islands. About a half a million years ago, the volcano, Taburiente, collapsed with a giant landslide, forming the Caldera de Taburiente. Since the Spanish occupation, there have been seven eruptions.

France, Belgium reach deal on Dexia

AFP - France, Belgium and Luxembourg announced on Sunday that they had reached a deal to dismantle troubled bank Dexia, the first victim of the eurozone debt crisis.

"The proposed solution, which is the result of intensive consultations between all involved parties, will be submitted to the Dexia board, whose responsibility it is to approve the plan," a joint statement said without elaborating.

French and Belgian prime ministers, Francois Fillon and Yves Leterme, held a lunch-time meeting to finalise the deal to dismantle the bank, which also had to be rescued in 2008 at the start of the global financial crisis.

Leterme said he hoped that Dexia's board of directors which met at 3:00 pm (1300 GMT) would rapidly approve the deal.

France and Belgium, Dexia shareholders after the 2008 bailout, needed to agree on the sale price of Dexia shares, including in its Belgian retail banking arm Dexia Bank Belgium that Brussels wants to buy, media reported.

They also needed to agree on the guarantees backing up a so-called "bad bank" that will remain after Dexia's dismantling to hold high-risk assets.

After the Dexia board meeting key members of Leterme's cabinet were to convene later Sunday to give their blessing to the deal of which no details were immediately known.

The NYSE Euronext stock exchange suspended trading in Dexia shares on Thursday following a request of the Belgian market regulator, FSMA.

Trading in the stock was halted during a session in which it had fallen 17.24 percent to 0.85 euros per share.

The bank's woes were to figure highly during a summit by the leaders of France and Germany, the eurozone's top economies, in Berlin where Chancellor Angela Merkel and President Nicolas Sarkozy will try to find common ground on a plan to recapitalise banks amid rampant fears of a credit crunch.

France and Belgium, who were forced last week to step in and rescue Dexia, are in disagreement over the price for Dexia Bank Belgium, which the Belgian state now wants to buy, according to media reports.

Belgium is seeking to pay the lowest possible price, a problem for French shareholders who want a lucrative deal and favour a transfer to another bank, said the Belgian economic daily l'Echo.

It estimated the price for the bank between three billion and 7.5 billion euros ($4 billion to $10 billion).

Belgian Finance Minister Didier Reynders said in a television interview on Sunday that Brussels was not excluding completely buying up the subsidiary.

"The state is going to substantially raise its stake," he said. "If we were at 100 percent, which I do not exclude, it is not our intention to stay forever. (But) That doesn't mean that we will stay for three or six months."

"I don't exclude that in three or five years, maybe more, we will still be present" in the bank, he said.

Several banks, including Deutsche Bank, Rabobank, Credit Mutuel and BBVA, have shown interest in Dexia Bank Belgium, said the Belgian press.

France and Belgium also need to agree on what share each government will cover in guarantees for the bad bank's portfolio.

France favours a division of 60/40 or even 65/35 with Belgium taking the bigger bite, said L'Echo. Paris fears that taking a bigger share may see it lose the top AAA credit rating that allows it to borrow cheaply on the international financial markets.

Credit ratings agency Moody's warned Friday that Belgium could be downgraded over its support for Dexia.

Dexia had relied heavily on money market funding for its operations, but such financing has become scarcer and more expensive for eurozone banks due to concerns over their sovereign debt exposure.

Also present at the meeting between the prime ministers on Sunday was a Luxembourg delegation to discuss the negotiations to sell Dexia's Luxembourg operations, Dexia BIL. Those talks are reportedly at an advanced stage with an unnamed international investor.

Meanwhile Russia's largest bank Sberbank is looking to acquire Dexia's Turkish subsidiary DenizBank, according to media reports.

And Germany's Der Spiegel magazine said Dexia's German unit was also fighting for its survival due to heavy exposure in indebted European countries.

The subsidiary Dexia Kommunalbank Deutschland AG made loans of 5.4 billion euros ($7.2 billion) to Greece, Italy, Portugal and Spain, which are all struggling with mounting debts, Spiegel said.

European bank bill well over £86 billion - Ireland

(Reuters) - There is general agreement that European banks will need fresh capital well in excess of 100 billion euros (£86 billion) and it will likely come from a variety of sources, including the euro zone rescue fund, Ireland's finance minister said on Saturday.

Germany and France are split ahead of key talks on Sunday over how to strengthen shaky European banks. Paris is keen to tap the euro zone's 400 billion rescue fund, the EFSF, to recapitalise its own banks and Berlin is insisting the fund should be used as a last resort.

The International Monetary Fund (IMF) has said European banks need 200 billion euros in additional funds.

"I think there is general agreement that it will be significantly in excess of 100 billion (euros)," Michael Noonan told reporters on the sidelines of an economic forum in Dublin.

"I know that some of the big German banks that I was talking to personally intend raising money on the market so it will be private funding. Other banks would like to avail of the EFSF fund. Other banks will rely on their sovereign governments to provide the capital so there is going to be a range of ways of doing it."

"I think the principle should be that sovereign governments are responsible for their banking system on the advice of the European Central Bank."

"If banks can't capitalise themselves, either by issuing equity to the market or by getting exchequer funds then obviously they would have the option of requesting EFSF funding. When we recapitalised our banks here we went the EFSF option."

Noonan said recent credit rating downgrades of Spain and Italy reflected frustration at Europe's failure to solve a long-running sovereign debt crisis.

"There is certainly an impatience that Europe should resolve the problems of the euro zone and do it pretty quickly," he said.

Ireland's banks were at the heart of its financial crisis and subsequent EU-IMF bailout and earlier this year Dublin put a 70 billion euros bill on recapitalising its lenders.

Noonan is currently looking at ways to try and restructure nearly 31 billion euros worth of promissory notes, a form of IOU, used to recapitalise shuttered lenders Anglo Irish Bank and Irish Nationwide Building Society.

The notes carry an interest bill of 17 billion euros, spread out over 20 years and Noonan would like to tap the EFSF to pay off the remaining amount outstanding, nearly 44 billion euros, and then repay that money to the EFSF over a longer timeframe and at a lower interest rate.

"We are moving on it with colleagues in Europe and they have given no commitment but they are prepared to proceed on the basis of joint policy papers, which we have just commenced to draft now."

"I want to position ourselves in a changing European situation so that Ireland's interests are studied carefully and taken into account in any wider solution that goes forward in the next month."