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Friday, November 18, 2011

News on Israel

Fitch: Italy 'already in recession'

Italy is probably already in recession, ratings agency Fitch said on Thursday, adding that it could cut the country's rating further if Europe's third largest economy were shut out of the debt markets.

"Italy is likely already in recession and the downturn in activity across the euro zone has rendered the task of the new government much more difficult," the ratings agency said in a statement.

Fitch, which downgraded Italy to A+ from AA- with a negative outlook last month, warned it would cut the country's ratings to the low investment grade category if it were unable to borrow at sustainable rates on the markets.

"Sustaining political and public support for structural reforms and austerity will be challenging in the face of rising unemployment. Convincing investors that the reforms will be effectively implemented and will boost economic growth over the medium term will be equally if not more challenging," it added.

Italy's borrowing costs hovered close to euro-era highs on Thursday, with yields on 10-year bonds touching 7.1pc early in the day - past the levels that forced its smaller neighbours Greece and Portugal to seek a bail-out.

The country has to refinance €312bn (£267bn) of debt next year. Fitch said Italian bond yields had risen to a level which, if protracted, would place public debt on an unsustainable path.
"In the event that the Italian government loses market access -- not Fitch's base case -- the ratings would be lowered, likely to the low investment grade category."

Italy's new prime minister, Mario Monti, said the euro zone's third-largest economy faces an emergency, and he promised sweeping but fair reforms to dig the country out of a major financial crisis.

Monti's government of technocrats must pursue fiscal and structural economic reforms but the downturn in Italy and Europe will complicate his job, Fitch said.

Analysts say Italy's 1.8 trillion euro public debt -- the third-largest in the world -- would overwhelm the euro zone's current financial defences if the country had to ask for help like its smaller EU partners did.

The Telegraph

Israel to employ high-tech weapons in Iran strike

American intelligence officials tell the Daily Beast Israel assembling multibillion-dollar array of high-tech weapons that would allow it to jam Tehran's defenses in case of pre-emptive strike

Current and former US intelligence officials estimate that any Israeli attack on nuclear sites in Iran would go far beyond airstrikes from F-15 and F-16 fighter jets and likely include electronic warfare against the Islamic Republic's electric grid, Internet, cell phone network, and emergency frequencies for firemen and police officers.

The officials, who based their assessment on a US intelligence report published last summer, told the Daily Beast news website that Israel has been assembling a multibillion-dollar array of high-tech weapons that would allow it to jam, blind, and deafen Tehran's defenses in the case of a pre-emptive aerial strike.

According to the officials, one of the weapons Israel has developed is capable of mimicking a maintenance cell phone signal that commands a cell network to “sleep,” effectively stopping transmissions. The Israelis also have jammers capable of creating interference within Iran’s emergency frequencies for first responders, they told the Daily Beast.

The sources also said that in case of an attack on Iran, Israel would likely exploit a vulnerability that American officials detected two years ago in Iran's big-city electric grids, which are not “air-gapped”—meaning they are connected to the Internet and therefore vulnerable to a Stuxnet-style cyberattack.

One source told the Daily Beast that Israel has the capability to bring a denial-of-service attack to nodes of Iran’s command and control system that rely on the Internet.

According to the report, the likely delivery method for the electronic elements of this attack would be a drone the size of a jumbo jet.

The Daily Beast said Israel had already employed some of the technology at its disposal during its alleged aerial attack on aSyrian nuclear reactor in 2007.


"Syrian military got a taste of this warfare when Israeli planes 'spoofed' the country’s air-defense radars, at first making it appear that no jets were in the sky and then in an instant making the radar believe the sky was filled with hundreds of planes," the report said.

A recent report published by the International Atomic Energy Agency suggested Iran was pursuing nuclear weapons. On Wednesday Defense Minister Ehud Barak caused a storm when told American broadcaster Charlie Rose he'd also seek nuclear weapons if he were Iranian.

Meanwhile, an Iranian website reported Thursday that "at least 36" members of the Revolutionary Guard were killed during last week's massive explosion at a military base outside Tehran. Initial reports said 17 people were killed in the blast.

Russia warships to enter Syria waters in bid to stem foreign intervention

Russian warships are due to arrive at Syrian territorial waters, a Syrian news agency said on Thursday, indicating that the move represented a clear message to the West that Moscow would resist any foreign intervention in the country's civil unrest.

Also on Friday, a Syrian official said Damascus has agreed "in principle" to allow an Arab League observer mission into the country.

Russia President Dmitry Medvedev, right, and Syrian President Bashar Assad in Damascus, May 10, 2010.
Photo by: AP

But the official said Friday that Syria was still studying the details. The official asked not to be named because the issue is so sensitive.

The Arab League suspended Syria earlier this week over its deadly crackdown on an eight-month-old uprising. The 22-member body has proposed sending hundreds of observers to the country to try to help end the bloodshed.

The report came a day after a draft resolution backed by Arab and European countries and the United States was submitted to the United Nations General Assembly, seeking to condemn human rights violations in the on-going violence in Syria.

Jordan, Morocco, Qatar, and Saudi Arabia were among Arab states that joined Germany, Britain, and France to sponsor the draft submitted to the assembly's human rights committee. In Washington, State Department spokesman Mark Toner said the U.S. would sign on as a co-sponsor of the resolution.

The draft demanded an end to violence, respect of human rights and implementation by Damascus of a plan of action of the Arab League.

The move comes as clashes escalated in Syria and after Russia and China used their veto in October to block a Security Council resolution that would have condemned the Syrian government of President Bashir for the violence.

Such a veto is not applicable in the 193-nation assembly, which will consider the issue after the human rights committee reports back to it.
The UN says more than 3,500 people have been killed since unrest erupted in spring against Assad.

Iran trains Gazans to operate anti-tank missiles

Gazan holds anti-tank missile (illustrative)

IDF believes select group of Palestinian terrorists have undergone extensive military training in Islamic Republic.

A select group of Palestinian terrorists in the Gaza Strip have undergone extensive military training recently in Iran, turning them into expert operators of sophisticated anti-tank missiles, The Jerusalem Post has learned.

The IDF believes that Hamas and Islamic Jihad have obtained several hundred advanced Russian-made antitank missiles – such as the Kornet and the Fagot – which have a range of more than 4 kilometers and are capable of penetrating armored personnel carriers and some IDF tanks.

Terrorist groups in the Gaza Strip had a small number of these missiles ahead of Operation Cast Lead – Israel’s offensive against Hamas in 2009 – but only used them in a handful of known instances.

“They were not trained well then, and as a result, the missiles were not effective,” a senior IDF officer explained this week. “Since then, the groups have significantly increased the stockpile and have also sent specific terrorists to Iran for extensive training where they became anti-tank missile experts.”

The level of expertise was demonstrated earlier this year when Hamas fired a Kornet anti-tank missile at a school bus near Nahal Oz, which killed 16-year-old Daniel Viflic.

The missile was fired from a distance of close to 3 kilometers and the operator had to fire in between the Gaza security fence and electrical cables. “He also had to hit the bus, which was not easily seen on the road,” the officer said, explaining the complexities of the attack as a demonstration of the level of expertise in Gaza.

The anti-tank missiles are obtained by Hamas in several different ways. In some cases, they are purchased directly from Russia by Syria and are then transferred to Hamas or Hezbollah.

In other cases, Hamas operatives buy the weaponry on the black market and then smuggle it into the Gaza Strip via the tunnels it maintains under the Philadelphi Corridor.

“The Gaza Strip is completely different today than what it was almost three years ago,” a senior defense official said. “The amounts of weaponry are significantly higher as well as the type of weaponry and its sophistication.”

In face of the threat, the IDF is moving forward with plans to install the Trophy active protection system on Merkava Mk 4 tanks that are in production ahead of their delivery to the 401st Armored Brigade. Two of the brigade’s battalions have already received the system and the remaining battalion will finish receiving it by the beginning of 2012.

The Trophy system creates a hemispheric protected zone around armored vehicles such as the Merkava tank, which operated prominently in Lebanon and the Gaza Strip.

Using advanced radar, the system is designed to detect and track a threat and counters it with a launched projectile that intercepts the anti-tank missile.

Jerusalem Post

Police in Northern Ireland consider using mini drones

Mini-drone (pic from Aeryon Labs)

Police aerial surveillance in Northern Ireland may be about to take on a whole new form - one that belongs more to the world of sci-fi and the future.

The PSNI is considering the use of mini drones to combat crime and the dissident republican threat.

They are not the large missile carrying drones used by the US military.

It is understood the models being considered are small enough to fit into a rucksack and can be assembled and deployed within minutes.

Aeryon Labs, the Canadian manufacturers of one of these unmanned aerial vehicles, known by the military as UAVs, say it snaps together as easily as children's building blocks.

It might look like a toy - but it's anything but.'Game-changing'

It is fitted with a camera that automatically tracks a subject, can relay live pictures back to the operator, has a three kilometre range and flies at ground speeds of 50 kilometres an hour.

The UAVs are described as game changing technology - policing from the sky. Indeed, one source told me they could act as modern day watch towers.

Security sources say border areas like south Armagh are where the use of the technology would be most valuable because they can cover large areas at a fraction of the cost of a helicopter.

They are not so easy to use in built-up urban areas, where they're also governed by tighter regulations.

Because of potential risks to other aircraft and people on the ground, the Civil Aviation Authority must grant permission for UAVs to take to the skies.

The CAA has confirmed to the BBC that it has already had discussions with the PSNI about possible drone deployment.

The drones, or UAVs, used by law enforcement agencies around the world, have already been deployed by some UK police forces.River crash

But there have been problems. A drone used by police in Liverpool crashed into the river Mersey. In addition there were red faces when police discovered they hadn't obtained the necessary CAA permission.

At a time when policing budgets are under pressure, there is a strong economic argument for their deployment.

The latest police helicopter cost £7m when it was bought last year.

Adding up the figures, maintenance, fuel and pilot salaries, running the police's fleet of three helicopter costs over £1.5m every year.

A police drone could cost at most £150,000 and, powered by batteries and able to remain airborne for up to seven hours, the running costs are substantially lower.

In a statement to the BBC, the PSNI said it constantly reviews the availability of new equipment and technology but at this stage has no immediate plans to buy any UAVs.

Earlier this year, the police were given a quarter of a billion pounds of additional funding to combat the threat from dissident republicans.

If the police decide to deploy UAVs, they have the option of using some of this special security fund, or finance the purchase from the normal policing budget.


With MF Global Money Still Missing, Suspicions Grow

Nearly three weeks after $600 million in customer money went missing from MF Global, the search for the cash has been hampered by the bankrupt brokerage firm’s sloppy record-keeping, an increasingly worrisome situation that has left regulators frustrated and customers in the lurch.

The round-the-clock effort has consumed an alphabet soup of federal regulators and criminal investigators, with lawyers sleeping at open desks and each agency commandeering a different conference room at the firm’s offices. But as authorities comb through some 38,000 customer accounts, they are growing more suspicious about what went wrong at MF Global, the commodities powerhouse once run by Jon S. Corzine, the former Democratic governor of New Jersey.

“The lost money is sort of like a lost child,” said Bart Chilton, a Democratic member of the Commodity Futures Trading Commission. “Every day that passes is more and more concerning, and there’s less and less hope.”

At a bankruptcy hearing on Wednesday, a lawyer for the trustee overseeing the liquidation of the brokerage house would not speculate on the matter, acknowledging simply that the money was still missing.

After MF Global filed for bankruptcy in late October, hundreds of examiners descended on the firm’s New York and Chicago offices. Since then, they have been poring over records, verifying customer accounts and interrogating the skeleton staff that remains.

The futures commission is heading the search in the futures business for the missing $600 million, armed with at least 15 accounting and enforcement staff members on site in New York. The Securities and Exchange Commission is focusing on a separate MF Global unit, as workers report back to bosses in Washington in twice-daily conference calls. Federal prosecutors in New York and Chicago have issued subpoenas, according to one person with knowledge of the matter who spoke on the condition of anonymity.

As part of the effort, the Federal Bureau of Investigation has taken the lead in the interviews of former employees who can explain MF Global’s inner workings. The federal authorities have also taken control of an off-site emergency recovery system, where e-mail and phone records from MF Global were stored, said two people who also spoke on condition of anonymity.

Authorities are particularly focused on the final days of MF Global. In the run-up to the bankruptcy filing, clients withdrew their assets, trading partners closed out trades and others demanded more collateral.

Amid the flurry of activity, MF Global failed to register all the transactions in its books. Regulators must now reconstruct the ledger, dollar by dollar.

“The volume and pace of trading activity that occurs at a brokerage firm undergoing a crisis of confidence makes it almost impossible to keep up,” said David Pauker, managing director at Goldin Associates, who oversaw the restructuring of Refco, another failed brokerage. “A large backlog inevitably results.”

As regulators carve out distinct parts of the investigation, James Giddens, the trustee, is taking a broader perspective. Called in shortly after the firm filed for bankruptcy, Mr. Giddens, who is charged with returning customers’ funds, quickly hired the accounting firm Deloitte to create a claims process for customers and Ernst & Young to scour the firm’s books. All told, the trustee has amassed a team of more than 200 to unwind the firm, in addition to the roughly 200 MF Global employees who were kept on the job.

Mass bond selloff takes Europe from bad to worse

The European debt crisis is rolling across the continent at alarming speed, proving that almost no country is immune to the contagion unleashed by Greece and Italy as confidence in the region’s ability to reduce its debt loadsevaporates.

Yields on the 10-year bonds of France, Belgium, Spain and Austria all soared to record euro zone highs on Tuesday in spite of fresh data showing that the German economy is still expanding and despite the tentative launch of caretaker governments in Rome and Athens with mandates for economic reform.

The mass selloff drove up the debt yields of countries that had been considered havens, including Finland and the Netherlands. “Global financial markets are facing a key pivotal point,” analysts at Barclays Capital said in a Tuesday research note. “A further escalation of the European debt crisis is putting at risk the nascent stabilization of global growth.”

Italy’s post-Silvio Berlusconi honeymoon proved exceedingly short-lived. Last week, yields on 10-year Italian bonds went to a record 7.48 per cent. They dipped after Mr. Berlusconi resigned as prime minister, then came roaring back, climbing back above 7 per cent on Tuesday, even as Mario Monti, his replacement, came close to forming a new, cross-party government. Mr. Monti is to unveil his cabinet on Wednesday in Rome.

The bond selloff hit France, whose triple-A credit rating is at risk. The French bond spread over equivalent German bonds widened by 23 basis points to 188 basis points, the most since the common currency was launched in 1999 (100 basis points equals one percentage point).

The yield on German debt – the euro zone’s last low-yield sanctuary – continues to sink as investors rush to safety. At 1.76 per cent, the yield on 10-year German bonds is now less than half of the French yield.

Spain, where the economy is on the verge of another recession and unemployment is still rising – it reached a new euro zone high of 22.6 per cent in September – saw its 10-year bond yields surge to 6.3 per cent. That took the spread over German bonds to a record 458 basis points.

The resurgence of Spain’s debt crisis was underlined by the treasury’s failure on Tuesday to reach the target sale of €3.5-billion ($4.8-billion) of 12- and 18-month bills. The yield on the 12-month securities went to 5 per cent, well above the 3.6 per cent at a similar sale only a month ago.

The rising bond yields throughout the euro zone, outside Germany, can in good part be blamed on the banks’ wholesale retreat from sovereign debt. The banks are under political pressure to keep their Greek bonds, for fear that a wave of selling would destroy what little remains of the country’s debt market. That means the banks are unloading other risky sovereign bonds, in particular Italy’s, to bring down their overall exposure.

BNP Paribas, one of the largest French banks, reduced its Italian bond holdings to €12.2-billion from €20.8-billion in the third quarter. Deutsche Bank reduced its Italian exposure by 88 per cent in the first six months of the year. Germany’s Commerzbank AG said earlier this month that it is selling sovereign bonds at a loss, and Global Sovereign Open, Japan’s biggest mutual fund, unloaded all of its Italian bonds this month, according to a Bloomberg News report.

Economists think the rush to sell sovereign bonds was triggered by several factors: a European Union agreement with the banks to write down Greek bonds by 50 per cent, creating a precedent that bond investors fear will be repeated elsewhere in the euro zone; the European Central Bank’s reluctance to buy distressed bonds; and European politicians open talk about member countries leaving the euro zone.

On Tuesday, Dutch Prime Minister Mark Rutte said it should be possible to expel members from the euro zone. The day before, German Chancellor Angela Merkel’s Christian Democratic Union party voted to allow countries to leave the euro zone. While the vote carries no legal weight, it reflects the CDU’s rising skepticism about the euro project.

The near certainty that the euro zone is about to enter another recession also spooked the bond markets.

Eurostat, the European Union’s statistics agency, reported Tuesday that the euro zone’s gross domestic product expanded by a mere 0.2 per cent in the third quarter over the previous three months. While Germany performed well (with third-quarter growth of 0.5 per cent) economists warned that 0.2 per cent was probably as good as it gets and that the next figure might be negative because of the escalating debt crisis and austerity programs.

The Globe

Once Hailed For Financial Prowess, Corzine Takes Steep Fall After MF Global Bankruptcy

Jon Corzine

Former U.S. Senator and New Jersey Gov. Jon Corzine is a man known for taking risks. In 2007, he wasn't wearing a seatbelt when his chauffeur-driven SUV crashed on the New Jersey Turnpike doing 90 miles per hour. Corzine was severely injured.

Now, critics, are saying Corzine brought that same level of risk to his management of MF Global -- a company that crashed in spectacular fashion last month after it disclosed a $6 billion exposure to Eurozone nations like Italy and Portugal.

The former Goldman Sachs CEO’s penchant for juggling finances was once considered an asset. During the tumultuous early months of the Obama administration -- as it faced the immensity of recession -- Vice President Joe Biden hailed Corzine as a wise financial sage. At a campaign stop in October 2009 in support of Corzine's gubernatorial re-election bid, Biden recalled that time and Corzine's counsel.

"I literally picked up the phone and called Jon Corzine and said, 'Jon, what do you think we should do?'"

Just two years later, as the country struggles with recovery, Corzine sits atop the wreckage of MF Global. Its demise is the subject of at least six investigations, including by the FBI and Commodities Futures Trading Commission.

In addition to its bankruptcy filing and lay-offs of more than 1,000 employees, MF Global has told investigative authorities that $600 million of customer money is missing. The shortfall was withheld from investigating authorities for five days -- an apparent violation of the law, according to the head of the Commodities Futures Trading Commission.

"The statute is quite clear that customer money has to be segregated at all times of the day, at every moment of the day," CFTC Chairman Gary Gensler testified recently before a congressional committee. "They're in deficiency in their own words of their own email."

Not long after those remarks, Gensler recused himself from the investigation, admitting to a long relationship with Corzine. The two worked together at Goldman Sachs. Corzine helped arrange a speaking engagement for Gensler at Princeton University last year. Gensler also contributed $10,000 to the New Jersey Democratic Party in 2005.

On Thursday, as the bankruptcy court tried to sort through the debris of MF Global, Judge Martin Glenn ordered 23,000 of 38,000 personal accounts to be reassigned to other brokerage dealers. The move is worth about $520 million. The trustee in charge of the MF Global's liquidation had been cautious about moving too much too fast since so much money is still missing, but Glenn ruled the customers need access to their cash.

"It will take unfortunately some period of time for all of these accounting issues and other issues to be sorted out, and it would be inappropriate in the court's view to delay any distributions to customers," Glenn told the court, The Wall Street Journal reported.

Meanwhile, Corzine has been keeping a low profile since he resigned as CEO of MF Global earlier this month. Repeated attempts by Fox News to reach him at his New Jersey home and his New York City apartment have been unsuccessful. He has hired a prominent defense attorney.

Read more: http://www.foxnews.com/politics/2011/11/17/once-hailed-for-financial-prowess-corzine-takes-steep-fall-after-mf-global/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+foxnews%2Fpolitics+%28Internal+-+Politics+-+Text%29&utm_content=Google+Reader#ixzz1e4DO7eIY

U.S. boosts estimate of auto bailout losses to $23.6B

The Treasury Department dramatically boosted its estimate of losses from its $85 billion auto industry bailout by more than $9 billion in the face of General Motors Co.'s steep stock decline.

In its monthly report to Congress, the Treasury Department now says it expects to lose $23.6 billion, up from its previous estimate of $14.33 billion.

The Treasury now pegs the cost of the bailout of GM, Chrysler Group LLC and the auto finance companies at $79.6 billion. It no longer includes $5 billion it set aside to guarantee payments to auto suppliers in 2009.

The big increase is a reflection of the sharp decline in the value of GM's share price.

The current estimate of losses is based on GM's Sept. 30 closing price of $20.18, down one-third over the previous quarterly price.

GM's stock closed Monday at $22.99, up 2 percent. The government won't reassess the estimate of the costs until Dec. 30.

The government has recovered $23.2 billion of its $49.5 billion GM bailout, and cut its stake in the company from 61 percent to 26.5 percent. But it has been forced to put on hold the sale of its remaining 500 million shares of stock.

The new estimate also hikes the overall cost of the $700 billion Troubled Asset Relief Program costs to taxpayers. TARP is the emergency program approved by Congress in late 2008 at the height of the financial crisis.

In total, the government used $425 billion to bailout banks, insurance companies and automakers, and provided $45 billion in housing program assistance.

The government now expects to lose $57.33 billion, including the full cost of the housing program, up from $36.7 billion. The new estimate means the government doesn't believe it will make an overall profit on its bailouts.

Republican presidential candidates, including former Massachusetts Gov. Mitt Romney, have seized on the auto bailout losses estimates, as evidence that the Bush and Obama administrations "wasted" money.

Matt Anderson, a spokesman for the Treasury Department, said, "Both TARP and the auto industry rescue are still on track to cost a fraction of what was originally expected during the dark days of the financial crisis."

In 2009, the government initially forecast it would lose $44 billion on its auto industry bailout. It revised it down to $30 billion, and later to as low as $13.9 billion earlier this year.The administration and President Barack Obama have argued that any losses on the auto bailout were worth the hundreds of thousands of jobs saved.

"The investment paid off. The hundreds of thousands of jobs that have been saved made it worth it," he said at an appearance last month at GM's Orion Assembly plant. "I want to especially thank the people of Detroit for proving that, despite all the work that lies ahead, this is a city where a great American industry is coming back to life and the industries of tomorrow are taking root, and a city where people are dreaming up ways to prove all the skeptics wrong and write the next proud chapter in the Motor City's history."

The new bailout forecast also represents an increase in the government's forecast in its losses from its $17.2 billion bailout of Detroit-based auto and mortgage lender Ally Financial Inc. The government holds a 74 percent stake in Ally, which has been forced to put its planned initial public offering on hold because of market conditions.
From The Detroit News: http://detnews.com/article/20111114/AUTO01/111140434/U.S.-boosts-estimate-of-auto-bailout-losses-to-$23.6B#ixzz1dyJ1fqBw

Rome clashes: Italy cops beating protesters with batons

There Are No Bullets To Fight Next Recession

Last time, America quadrupled its debt. The system is much more extended now, and America cannot quadruple its debt again. Greece cannot double its debt again. The next time around is going to be much worse. - in CNBC
Jim Rogers

Mass arrests, OWS blame NYPD for brutality

Ron Paul: U.S. In Denial That Country Is "Bankrupt" And "Insolvent"

"They don't want to hear what I have to say because I do challenge the status quo. The statue quo of both parties, and our foreign policy, and the policy of the Federal Reserve which serves a lot of powerful special interests, so maybe there is a concerted effort to make sure these views are circulated too widely," Paul said.

"The country, basically a lot of people still, as well as the politicians here, they're in denial. They don't realize we're technically bankrupt. We're insolvent. We can't pay the bills. The only thing that keeps us going is this illusion that our dollars will last forever and all we have to do is create new money, pay the bills and bail out Europe and everybody else. But that is coming to an end and that's what our financial crisis is telling us," Rep. Ron Paul (R-TX) said on FOX News today.