We will have a mirror site at http://nunezreport.wordpress.com in case we are censored, Please save the link

Thursday, January 19, 2012

Affirmations to Costa Concordia Parable

Joseph Herrin (01-18-2012)

Europe and America Sinking Together

The image above was taken from an article posted on Financial Times on July 4th of 2011. The article was titled America and Europe Sinking Together. Following is an excerpt:

In Washington they are arguing about a debt ceiling; in Brussels they are staring into a debt abyss. But the basic problem is the same. Both the US and the European Union have public finances that are out of control and political systems that are too dysfunctional to fix the problem. America and Europe are in the same sinking boat...
[Source: http://www.ft.com/article]

This rather prescient article used the metaphor of a sinking ship to describe the impending economic ruin of the United States and Europe. Little did the author suspect that this parable would be duplicated before the world in stunning fashion seven months later when the cruise liner Costa Concordia ran aground and foundered. There are many, even among the worldly and non-Christian members of society who have discerned a parable in this catastrophe. This morning a brother forwarded me a link to an article posted yesterday on the Wall Street Journal’s website.

JANUARY 17, 2012
What Is Europe Sinking About?
The shipwreck of a cruise liner is a metaphor for a continent.

The Lord works in mysterious ways, or so it is often said. But in an era when few can read His signs, those signs have a way of becoming a bit more obvious. Like 45-10. Or how about another Titanic-type event, right on the eve of the 100th anniversary of the first one, as a way of prefiguring some great European disaster?

OK, probably better to leave Him out of it. But as metaphors go, Friday night's tragic-ridiculous shipwreck of a cruise liner off the Italian coast is an apt one for a continent in which nine countries had their credit ratings downgraded earlier that same day. Even the biggest ship can founder in calm waters if the captain is negligent. Even a rescue operation 50 feet from shore can turn into a fiasco if nobody has conducted a drill and the crew have no idea how to steer a lifeboat.

When the hors d'oeuvres are listing hard to starboard and the waiters tell you nothing's wrong, something's terribly wrong.

That last detail—from passenger accounts of the accident—reminded me of listening to European Council President Herman Van Rompuy in New York last fall, explaining that Greece would never default, that the euro zone's financial position was not a serious cause for alarm, and that the main thing was to prevent further outbursts of market irrationalism. In other words, it wasn't the ship that was sinking, in Mr. Van Rompuy's view, it was just that the passengers had an odd way of occasionally going berserk.
[Source: http://online.wsj.com/article]

It is truly amazing to me to find this article on the Wall Street Journal website. Christ’s saying is true:

Luke 16:8
For the sons of this world are wiser in their generation than the sons of light.

The church continues apace proclaiming a prosperity gospel while many in the world are recognizing that the party is about to come to a sudden end. The Concordia Wreck is quite obviously a sign of great financial and political trouble coming to the world. It would be hard to construct a more fitting metaphor of the foundering of nations. Following is an diagram of the Costa Concordia showing the names assigned to the various deck levels.

Translating these nation names to English, they are: Sweden, Greece, Great Britain, Portugal, Germany, Austria, Poland, Spain, France, Ireland, Italy, Belgium, and The Netherlands. This ship was clearly designed to convey a message of unity (corcord) among nations. The United States enters the picture by virtue of the parent company, Carnival Cruise Lines, being a British and American corporation. What happens in Europe clearly has an impact upon America.

Art, a brother in Christ who has the New Wineskin blog, posted the following comment to yesterday’s post:

It is no coincidence that the ship went down just as several major bond rating agencies (such as Standard and Poor's) were downgrading the sovereign (i.e., national) debt of several European countries (but not all), raising their borrowing costs and driving yet another wedge between them.

The first press release regarding those downgrades was issued by S&P at 4:36 PM Eastern Standard Time, which was 10:36PM Central European Time (i.e., in Italy).

The Concordia had hit a granite outcrop off Giglio Island slightly less than an hour prior to that, at 9:42 PM European Central Time.
[End Quote]

God is certainly giving a sign of impending disaster. The nations will be shaken. Even secular sources of news and commentary have made the connection to this event and the conditions in Europe and the United States. This is attested to by the following politcial cartoons.

The Concordia is renamed Euro in this cartoon, indicating that the Euro is soon to fail as a monetary system. This will set the stage for a new, global monetary system to be put in place, plans for which have already been put in place.

September 9, 2009
United Nations Proposes New "Global Currency"
By Declan McCullagh

The United Nations would like the dollar, euro, yen, and other national currencies to be succeeded by a new "global currency."

That recommendation appears in a U.N. report released this week, which suggests the dollar's outsize role in international finance has ended -- and says that it's time to invent a successor currency that would be managed by a "Global Reserve Bank."
[Source: http://www.cbsnews.com/article]

It is interesting to note that the date of the report above is 9/9/9, a number mentioned yesterday in the post on the Concordia disaster. The Concordia wreck occurred 99 years and 9 months after the wreck of the Titanic. In the same post it was mentioned that the number 9 in Scripture is “THE NUMBER OF FINALITY OR JUDGMENT.”

This is another political cartoon. Angela Merkel of Germany and Nicolas Sarkozy of France are shown atop the sinking Eurozone ship while Monti, the leader of Italy is desperately clinging to the side of the ship.

This political cartoon makes a correlation to Obama saving himself from the sinking ship of America even as the captain of the Concordia abandoned ship while passengers were still aboard.

Here is a further twist on this idea that emphasizes Congress’s role in causing America to founder. People of God, we would do well to pay heed to the signs that are being given. Even the world is taking note, though I doubt too many are actually taking any steps that will prove beneficial in surviving the coming economic collapse and resulting political turmoil.

Are you truly prepared to weather what is to come? What will you do when the dollar is devalued, and your wealth ends up at the bottom of the ocean? Have you already divested yourself from an attachment to the world’s goods and possessions? Are you walking as a true disciple of Christ? You do not want to have attachments to that which God is testifying will soon sink beneath the waves. It is those who are free from entanglements that will find it easiest to extricate themselves from the wreckage.

II Timothy 2:3-7
Suffer hardship with me, as a good soldier of Christ Yahshua. No soldier in active service entangles himself in the affairs of everyday life, so that he may please the one who enlisted him as a soldier... Consider what I say, for the Lord will give you understanding in everything.

Have you learned to walk by faith, being directed by the Spirit, and confident of God’s provision and care for your life? Do you have the assurance that there will be corn supplied to you in a time of famine? Those who do not have faith in God will be swept up in the panic that follows the sinking of the world economic system.

Do not say to yourself that it will not happen. Very few gave any credence at all to the thought that financial systems would be rocked in 2008. Nevertheless, the world faced a tremendous calamity with one crisis following hard on another. Major financial companies like Bear Stearns, Merrill Lynch, and Lehman Brothers became insolvent. AIG, the world’s largest insurance company faced imminent collapse. Home values that had been rising at double digit rates year over year suddenly tanked. In the ensuing years millions lost their homes to foreclosure. Millions more lost their jobs as the economy contracted and businesses failed.

Now, four years later, nothing has improved. State after state has faced a severe budgetary crisis. The Federal government has continued only by increasing debt load to “titanic” levels. The weight of all of this debt must soon pull the ship of state under water.

What should you do seeing that Yahweh is giving testimony to the catastrophic things soon to occur? First, do not place your confidence in leaders who do not walk in the ways of God, who do not have compassion for the people they are elected to serve. They are hirelings. When they see danger come, they will flee. Place your trust and confidence in God. What He tells you to do, you must do, and that without delay. Get your house in order. Free yourself from worldly entanglements lest you be unable to escape the coming ruin.

If you have yet to accept the cost of being Christ’s disciple, there is no time to lose. To be Christ’s disciple you must yield yourself to His leadership. You must lay aside self-governance and surrender to be governed by Christ. He must be the One who determines what you do with your time, money, and possessions.

Luke 14:33
"So then, none of you can be My disciple who does not give up all his own possessions.”

I Corinthians 6:19-20
Or do you not know that... you are not your own? For you have been bought with a price...

In the aftermath of the Concordia disaster it became known that the people had not been prepared for an emergency. The ship’s captain had not carried out rescue drills. Overconfidence gave rise to complacency. The ship had sailed (nearly) the same route many times. There had never before been a need to abandon ship or use lifeboats. The ship seemed exceptionally solid. She appeared to be able to remain floating for the imaginable future. No one, from captain to passengers, anticipated that this magnificent vessel would soon have a huge breach in her hull and quickly fill up with water and capsize.

Even after the damage was done, the captain refused to acknowledge what had occurred. It was passengers on board who reportedly contacted land based authorities with their cell phones to be the first to report a crisis.

Do not wait for the leaders of your nation to tell you a crisis is at hand. Do not look to them to tell you how to safely respond to what is to come. You will suffer loss if you do. Press into God. Seek His mind. Ask Him what He would have you do, and you must do this in all things. Do not just ask God how to survive economic and political turmoil. You must ask Him what He would have you to do in all things.

Psalms 146:3-10
Don't put your trust in princes, each a son of man in whom there is no help. His spirit departs, and he returns to the earth. In that very day, his thoughts perish. Happy is he who has the God of Jacob for his help, whose hope is in Yahweh, his God: Who made heaven and earth, the sea, and all that is in them; Who keeps truth forever; Who executes justice for the oppressed; Who gives food to the hungry. Yahweh frees the prisoners. Yahweh opens the eyes of the blind. Yahweh raises up those who are bowed down. Yahweh loves the righteous. Yahweh preserves the foreigners. He upholds the fatherless and widow, but the way of the wicked he turns upside down. Yahweh will reign forever; Your God, O Zion, to all generations. Praise Yah!

'Radioactive material stolen from Egypt plant'

CAIRO - Radioactive material has been stolen from a nuclear power station on Egypt's Mediterranean coast that was the site of violent protests last week, state-run Al-Ahramnewspaper reported on Thursday.

A safe containing radioactive material at the Dabaa nuclear power plant was seized while another safe containing radioactive material was broken open and part of its contents taken, the newspaper said.

The government has alerted security authorities and asked that specialised teams help in the search for the stolen material, Al-Ahram reported.

More than a dozen people were wounded last weekwhen military police tried to disperse hundreds of Egyptian protesters demanding the relocation of the Dabaa plant, which is still under construction.

Plant staff have refused to go to the site because of the deterioration in the security situation there, Al-Ahramsaid.

About 500 Egyptians rallied in front of the plant last weekto demand that the project be terminated, with some saying they had lost their land on the plant's site.

Soldiers and the protesters hurled stones at each other and exchanged gunfire after the protesters demolished a wall surrounding the site, a security source and witnesses said.

Jerusalem Post

Ex-CIA Officer: Worst-case Iran scenario is WW3!

Nato urges Iran to keep Strait of Hormuz open

Nato pressed Iran to guarantee the security of energy supplies through the Strait of Hormuz but said the Western military alliance had no plans to intervene in the area – used for a third of the world's seaborne oil exports.

Nato Secretary-General Anders Fogh Rasmussen said in Brussels it was of "utmost importance to make sure energy supplies continue to flow through the vital waterway".

"I would like to stress that the Iranian authorities have a duty to act as responsible international actors and in accordance with international law," Mr Rasmussen told a joint news conference with Turkey's Foreign Minister Ahmet Davutoglu, confirming that Nato had no plans of intervention.

Mr Davutoglu said he had been in contact with the EU's Foreign policy chief Catherine Ashton, and confirmed Turkey was ready to host a new round of talks between Western powers and Iran over Tehran's nuclear programme.

"During my visit in Tehran, Iran declared that they are ready to restart the talks. Before that I had consultations with Madame Ashton, she in fact asked me to consult this with the Iranian side as well, and after this I spoke with Madame Ashton again. both sides declared the intention to meet and to restart the negotiations. Of course it is up to both sides to decide, but as Turkey we will be happy to host these new round of talks," said Mr Davutoglu.

Speaking on a visit to Turkey earlier on Wednesday, Iran's Foreign Minister Ali Akbar Salehi said negotiations for new talks were under way.

The last talks between Iran and the permanent members of the UN Security Council – the US, Britain, France, Russia and China – along with Germany stalled in Istanbul a year ago, with the parties unable to agree even on an agenda.

The Telegraph

Financial Attack: US Blocks Vital Oil Pipeline

Tel Aviv named top gay city

Tel Aviv has topped New York to be named the best gay city in the world, in a recent survey conducted by American Airlines and GayCities.com.

The Israeli city was named City of the Year 2011 by GayCities readers and American Airlines customers, with a whopping 43 percent of the popular vote -- far outstripping those of the next closest city, New York, which secured 14 percent.

Other contenders including Toronto with seven percent, Sao Paulo with six percent and Madrid and London five percent each -- San Francisco, popularly known as the gay capital of the US, was nowhere to be seen, although it did receive top marks for its Pride carnival.

Runners up for the world's Best Pride City included Sao Paulo, Toronto, Amsterdam and Atlanta.

For the best gay nightlife, vacationers should head to New York, which topped London and Madrid to take the vote from night owls, while gastronomes should head to Paris, followed by New Orleans.

Those with a sharp sense of style will also feel most comfortable in New York, the survey suggested, with London and Rome in second and third place respectively for the Best Dressed City award.

Read more: http://www.nydailynews.com/life-style/tel-aviv-named-top-gay-city-israeli-city-bumps-york-best-pride-city-article-1.1007487#ixzz1jq9n7DDp

Israelis, Arabs tied to Sudan oil conflict

JUBA, South Sudan, Jan. 18 (UPI) -- The swelling confrontation between newly independent South Sudan and its former rulers in Khartoum over the region's oil resources is becoming linked to the seeming endless Palestinian-Israeli conflict.

Israel has been renewing links with the south, as the Jewish state, increasingly isolated internationally, seeks to forge new alliances in Africa, Asia and the Balkans.

At the same time, the leaders of the Iranian-backed fundamentalist Palestinian movement Hamas, which rules the troubled Gaza Strip on Israel's southern border, have been cozying up the Muslim regime of President Omar al-Bashir in Khartoum.

With Islamic parties making giant gains in free parliamentary elections across North Africa amid the Arab Spring, Israel is scrambling to find new friends in the region, the Mediterranean and Africa.

The 2010 rupture of relations between Israel and a key non-Arab ally, Turkey, has heightened the Jewish state's sense of isolation at a time when it sees an existential threat from a nuclear-armed Iran.

Israel's emerging relationship with predominantly Christian South Sudan, which became independent of Khartoum's rule in July 2011 after decades of civil war, was marked by a December visit to the Jewish state by Salva Kiir, the former separatist leader who's now president of the world's newest state.

Israel recognized the Republic of South Sudan within hours of its independence.

The Jewish state's ties with southern Sudan go back to the Anyanya rebellion in the 1960s when it covertly provided arms shipments and military training to the guerrillas.

By doing so, Israel sought to pin down the Arab Muslim regime in Khartoum and prevent it deploying Sudanese troops to support Egypt along the Suez Canal after the 1967 war.

Israel continued to aid southern separatists over the years that followed when Sudan supported Islamic fundamentalists, including the late Osama bin Laden.

Kiir, wearing his signature black Stetson hat, was accompanied by his defense and finance ministers during his visit to Israel, during which he was feted by Prime Minister Binyamin Netanyahu and Defense Minister Ehud Barak.

Kiir reportedly requested Israeli help in technology, agriculture and water. Israeli sources said he also discussed military cooperation.

There has been no public indication of a formal defense agreement but it is likely that Israel's intelligence service, the Mossad, and Military intelligence will upgrade their long-time presence in South Sudan.

Khartoum has long been involved in supporting militant anti-Israel groups and in recent years has been a conduit for Iranian arms shipments into Egypt en route for Hamas militants in Gaza.

"Nobody will talk about security cooperation, which is obviously something that the South Sudanese, already involved in skirmishes with Sudan, have in mind," The Jerusalem Post reported.

"It is a friendly country in the heart of a region that Iran is trying to penetrate. Israel is concerned about a flow of arms going from Iran, through Sudan, into Egypt, Sinai and then Gaza."

Israeli warplanes were reported to have destroyed two arms convoys crossing Sudan's northern desert in January 2009, while the navy seized shipments in the Red Sea.

In November 2011, Israeli aircraft were reported to have attacked trucks in the Wadi al-Allaqi region of northern Sudan near the Egyptian border. Another Israeli raid reportedly took place Dec. 15. The Sudanese media said Israeli Apache helicopter gunships landed near a Sudanese radar installation.

There have even been reports of Israeli submarines off Sudan's Red Sea coastline.

Iran has been making diplomatic inroads into Africa of late, so establishing an intelligence-military presence in South Sudan would clearly be advantageous to Israel, particularly at a time when East Africa looks like it's headed for an oil boom.

Meantime, South Sudan is locked in a potentially explosive dispute with Khartoum over oil resources along the border between the two states. Most of these lie in the south but the only export pipeline runs across the north to Port Sudan. Khartoum recently seized large southern oil shipments, sharpening tensions.

Read more: http://www.upi.com/Top_News/Special/2012/01/18/Israelis-Arabs-tied-to-Sudan-oil-conflict/UPI-88451326915775/#ixzz1juyjXZIl

In MF Global, JPMorgan again at center of a financial failure

(Reuters) - In late October, as MF Global Holdings Ltd teetered toward bankruptcy, Jon Corzine phoned his close-knit circle of Wall Street friends for help.

His firm, facing demands from customers and other firms for cash, needed to sell billions of dollars in securities to raise the money. As the week progressed, MF Global executives came to believe that JPMorgan Chase & Co., one of MF Global's primary bankers and a middleman moving that cash, was dragging its feet in forwarding the funds.

Corzine phoned Barry Zubrow, then JPMorgan's chief risk officer, to question the slow payments. Corzine also called William Dudley, president of the Federal Reserve Bank of New York, to update him on MF Global's status and told him that payments were slow to arrive from JPMorgan and others. Dudley said he'd monitor the situation.

The delays contributed to a serious cash shortage at MF Global, according to people familiar with the matter. These people say the firm started trading one day in late October with $600 million in cash and spent the whole day selling securities, only to end with just $200 million in cash.

By adhering to procedure and not cutting MF Global any slack, these people say, JPMorgan was able to slow the delivery of funds, worsening MF Global's distress. As a result, they note, hundreds of millions of dollars of MF Global money may be still stuck in accounts at JPMorgan.

The details of MF Global's trading, based on court documents and multiple interviews with people familiar with the situation, shed light on what could have happened to more than $600 million in customer funds at MF Global, which are still being sought by regulators nearly three months after the firm filed for bankruptcy protection on October 31.

An early sign that money was missing came as auditors from the CME Group Inc., which audited MF Global, combed through the company's books in Chicago and New York, according to congressional testimony by CME executive chairman Terrence Duffy. After MF Global reported a quarterly loss on October 25, the CME had dispatched two auditors to the Chicago office to review customer accounts on October 27 - the first of several confusing days as auditors and regulators, working in Chicago and New York, tried to understand whether funds were intact.

In a statement last week , a JPMorgan spokeswoman said, "Our firm lost money because of MFG's failure, and we are cooperating with the regulators with full transparency to assist their investigation."

Through a spokesman, Corzine declined to comment.

To be sure, regulators have made no allegation of wrongdoing against JPMorgan, and there is no evidence that JPMorgan did anything improper. Indeed, it seems to have been simply following banking procedure, according to people familiar with the matter.

Futures trading firms and brokers like MF Global are heavily dependent on borrowing, which then exposes the big banks that lend to them was well as their trades. That gives banks like JPMorgan the ability to protect themselves in a crisis.

The transactions that JPMorgan handled are drawing increased scrutiny from regulators, a bankruptcy trustee and MF Global because understanding MF Global's money flow could aid in identifying customer money flows, according to people familiar with the situation.

"They made things that are in normal times quite plain vanilla, easy things to do very difficult to do," said a person involved in MF Global's struggle, referring to JPMorgan. "What normally works well was taking forever because JPMorgan was dotting every 'i' and crossing every 't,' and they were holding on to as much money as they possibly could under the law."


The role that JPMorgan played as both a lender and middleman to MF Global illustrates the procedures banks can deploy to protect their own interests when dealing with weaker counterparties.

On one side of its ledger, JPMorgan and a syndicate of banks had lent MF Global $1.3 billion in its final week through a loan commitment the firm could draw down at any time. JPMorgan also was a primary banker for MF Global, a role that gave it significant insight into, and control over, MF Global's accounts.

On the other side, JPMorgan was clearing some of the asset sales MF Global was making. In this role, its job was to take the securities from MF Global and the cash from the buyer and pass them along to the other party when the deal was complete .

Normally such trades can settle within a day or two, if the back-office mechanics function smoothly. But that week, the money didn't arrive when MF Global executives expected, according to people familiar with the situation.

JPMorgan, a major lender to rival firms as well as one of Wall Street's biggest middlemen in settling trades, has previously drawn scrutiny for protecting its own interests when rival firms ran aground. In 2008, a week before Lehman Brothers Holdings Inc. sought bankruptcy protection, JPMorgan demanded collateral to protect its role as counterparty to Lehman. While the request was not improper, Lehman's bankruptcy estate later claimed Lehman posted the collateral because JPMorgan had threatened to withhold funding.

A Congressional panel that looked at the 2008 crisis, the Financial Crisis Inquiry Commission, investigated the events surrounding Lehman's fall in a 2011 report. A JPMorgan official told the FCIC that the bank didn't believe "the request put undue pressure on Lehman," the report said. The FCIC didn't draw a conclusion about the incident.


When Corzine took the helm in 2010, MF Global was a little-known boutique futures trading firm. Corzine, who joined Goldman Sachs as a bond trader in 1975 and ultimately became chairman, also was a former U.S. Senator and former governor of New Jersey. He brought star power to the CEO role, and sought to increase MF Global's profits. Among his trades was a series of purchases of deeply discounted European government debt. European Union leaders, he reasoned, would never allow the countries to default.

In September, MF Global said the Financial Industry Regulatory Authority had required the firm to bolster its capital.

On Monday, October 24, things took a turn for the worse when Moody's Investors Service downgraded MF Global's credit rating to one level above junk. A day later, MF Global reported its largest-ever quarterly loss.

By Wednesday, October 26, customers were demanding millions of dollars from accounts held at MF Global. To meet the sudden outflow, MF Global during the week of October 24 tapped the $1.3 billion loan commitment from a syndicate of banks led by JPMorgan.

MF Global also decided to sell $1.3 billion of IOUs known as commercial paper. The short-term debt was part of some $7 billion of securities the firm sold that week. But this sale was critical, people familiar with the situation said, because MF Global had used customer funds to invest in the short-term debt and now badly needed to liquidate the IOUs and move cash into the customer accounts to meet their demands. The investments in the IOUs were allowed by industry regulations, these people said.

For help, Corzine turned to his old employer, Goldman Sachs, which specializes in trading the short-term paper. Corzine phoned Goldman President Gary Cohn to ask him to buy the IOUs, offering a slight discount, according to people familiar with the situation.

Cohn agreed, and Goldman traders made the purchases, these people said. Because it needed the cash immediately, MF Global sought to settle the deal that day, according to Corzine's testimony in Congress.

JPMorgan, in its role as middleman, was able to control the speed with which MF Global's asset sales were processed, according to people familiar with the situation.

Two people familiar with the transaction say that JPMorgan was slow to process the trade. A spokeswoman for JPMorgan said the bank was not able to confirm the information about that specific trade. It remains unclear exactly whether cash from the sale was ultimately routed to MF Global.

On Thursday October 27, Moody's downgraded MF Global again, this time to junk. At that point, "we were finished," said a former employee in MF Global's New York office.

While MF Global waited for the funds from JPMorgan, it frenetically tried to avoid a second cash demand generated by the second Moody's downgrade. The downgrade sparked margin calls from trading partners. The New York Fed at one point issued its own margin calls.

To meet those demands, MF Global on October 28 undertook yet another set of asset sales totaling $4.5 billion. It sold the securities to JPMorgan, yet the bank was slow to settle this trade as well, according to people familiar with the situation. JPMorgan declined to confirm whether it bought the securities.


One thread regulators are now examining is how MF Global got hold of enough funds to cover an overdrawn account at JPMorgan. Corzine told a congressional panel that during the morning of October 28, "I was trying to sell billions of dollars of securities to JPMorgan Chase in order to reduce our balance sheet and generate liquidity. JPMorgan Chase told me that they would not engage in those transactions until overdrafts in London were cleaned up."

To clear that hurdle, Corzine contacted MF Global's back office in Chicago and told them to resolve the problem-ostensibly by routing money to JPMorgan. JPMorgan then asked whether a transfer of funds violated industry regulations. Corzine said that the Chicago office "explicitly confirmed to me that the funds were properly transferred." Corzine said he assumed JPMorgan signed off because the bank then executed billions of dollars in trades.

People familiar with JPMorgan say that the bank had to contend with numerous issues in assisting MF Global with the asset sales, including the fact that some MF Global assets couldn't immediately be sold.

As MF Global tried to complete the sales, MF Global officials and regulators, who were trying to untangle customer accounts in Chicago and New York, discovered a shortfall of cash in the customer accounts -- including those that had once held MF Global's commercial paper holdings.

"Despite our best efforts to sell assets and generate liquidity, the marketplace lost confidence in the firm," Corzine said at a congressional hearing.

While it may appear that records for the trades would be clear, regulators say they have been stymied in tracing the money flowing to and from MF Global.

"They are circuitous money trails," said Bart Chilton, a commissioner at the Commodity Futures Trading Commission, one of the agencies probing MF Global. "They are not simple linear transactions."

"There were an extraordinary number of transactions during MF Global's last few days and I do not know, for example, whether there were operational errors at MF Globalor whether banks and counterparties have held onto funds that should rightfully have been returned to MF Global," Corzine told a congressional panel in December.

The concern for a clearing bank like JPMorgan is over exposure when it is extending a lot of credit, according to Craig Pirrong, a finance professor at the University of Houston.

JPMorgan, as a clearing bank, has the ability to take some actions to protect itself, but the bank "is going to undergo a lot of scrutiny," Pirrong said. "Any action it takes to reduce its exposure comes into question when a bankruptcy is involved."


MF Global, during the weekend before it filed bankruptcy proceedings, made one final push to sell more assets. In London, it tried to sell off short-term European bonds, according to one trader at a London bank.

But by then, MF Global had run out of time, this trader said. Tagged with a junk credit rating and unable to meet margin calls, the firm could no longer effectively function in the markets.

The firm's stock, which hit $7.74 at the end of June, fell from $3.87 at the beginning of October to $1.20 on October 28, its final day of trading before it filed for bankruptcy protection.

"Their stock was toast," the trader said.

What remains unclear is whether JPMorgan held on to the funds, and where the funds are now. People familiar with the situation suggest that the funds are still at JPMorgan.

Regulators and the bankruptcy trustee have not said. They say they are still trying to verify which customer accounts may have been tapped for funds during MF Global's final hours.

'Hezbollah has long-range surface-to-air missiles'

The IDF has changed its operational assessment regarding the threat from Lebanon and is currently working under the assumption that Hezbollah has obtained sophisticated long-range surface-to-air missile systems from Syria, The Jerusalem Post has learned.

According to Western intelligence assessments, Hezbollah is believed to have taken advantage of the ongoing upheaval in Syria to obtain advanced weapons systems, such as additional long-range rockets as well as Russian-made air-defense systems.

While Hezbollah is known to have a large quantity of shoulder- launched anti-aircraft missiles, the IDF now assumes that the Lebanese Islamist group has received the SA-8, a truck-mounted Russian tactical surface- to-air missile system reported to have a range of 30 kilometers.

In addition to the possible transfer of air-defense systems, Hezbollah is also believed to have received several dozen more M600 long-range missiles, as well as additional 302 mm. Khaibar-1 rockets, which have a range of about 100 kilometers.

It is already believed to have a significant arsenal of M600s, which are manufactured in Syria as a clone of Iran’s Fateh- 110. The M600 has a range of around 300 kilometers. It can carry a half-ton warhead and has superior accuracy.

Syria recently deployed some of the more sophisticated air-defense systems it has received over the past year from Russia, including the SA-17, an even more advanced system than the SA-8, with longer ranges and greater accuracy. A number of batteries are believed to have recently been declared operational in Syria, which has spent close to $2 billion on air-defense systems in recent years.

As reported two weeks ago in the Post, Israel is particularly concerned with the
possibility that Syria’s arsenal of chemical weapons will fall into terrorist hands, amidpredictions that President Bashar Assad’s regime will fall in the coming months. This has not yet happened, though, and Syrian chemical warfare facilities are understood to still be under the control of Assad’s regime.

Syria has one of the most extensive chemical weapon arsenals in the world, reportedly including sarin, VX and mustard gas.

Jerusalem Post

Lavrov: 'Attack on Iran won't be an easy walk'

During his annual news conference, Foreign Minister Sergey Lavrov described the scenario Russia and the global community could face if things in the Middle East, especially in Iran, get out of hand.

Addressing what is certainly the most worrisome development on the global stage, Lavrov spoke at length on the standoff involving Iran, which faces deepening sanctions, as well as the threat of military attack, over its nuclear energy program.

The Russian Foreign Minister did not mince his words when he spoke about the “grave” consequences of a military strike against Iran.

"As for the chances that this disaster (a military attack against Iran) could occur, this question would be better addressed to those who keep mentioning this as an option that remains on the table,” Lavrov said in a comment apparently intended for Israel and the United States. “The consequences will be really grave, and we are seriously concerned about this.”

A possible military attack against Iran would trigger a huge migration of refugees, who would pour into Azerbaijan, possibly pushing up against the Russian border.

"This is one and perhaps not the main aspect of the problem,” Lavrov admitted. “This will not be an easy walk, and it's impossible to calculate all of the possible consequences."

Finally, an attack against Iran would also "pour oil on the…smoldering flames of the Sunni-Shiite confrontation,"Lavrov said. "Then a chain reaction will begin, and I don't know where it will stop.”

Unilateral sanctions work against united front

The Foreign Minister told the conference that “unilateral sanctions” against the Islamic Republic could backfire by placing a “suffocating grip” on the national economy and its people.

"What Western states…have been adding as they adopt their additional unilateral sanctions against Iran has nothing in common with the desire to keep the nuclear weapons nonproliferation regime unshaken,” Lavrov warned at his Q&A press conference in Moscow. “This is seriously calculated to put a suffocating grip on the Iranian economy and on Iranian citizens, possibly in the hope of provoking discontent.”

The UN-backed sanctions regime against Iran over its nuclear energy program, which some Western countries suspect is a cover for a nuclear weapons program, threatens to hit at Iran’s central bank, as well as its oil exports to Europe. Lavrov says the effort to impose sanctions on Iran to influence its policies have been “exhausted.”

"This was so when the resolution on Iran was being negotiated 1.5 years ago,” he said. “After its adoption, all thinkable sanctions that could influence Iran in the nuclear field and its cooperation with the International Atomic Energy Agency were exhausted."

A more effective way of dealing with Iran would be to continue the negotiation process, he believes.

"We are calling for the six negotiators to continue their work,” Lavrov stressed. “Currently we have information that the Iranians are also prepared for this (the six-party talks). We are working with Iran.”

Although the way is clear for six-party talks – between Iran and the five permanent members of the UN Security Council, plus Germany – Lavrov alluded to Russia’s concern over “obstacles” that are thwarting the start of the negotiations.

"We are convinced that we now have an available opportunity to restart the talks between the Sextet and Iran,” he said.“And we are deeply concerned that these processes sometimes run up against obstacles.”

Addressing the heightened tensions in and around Iran, which recently threatened to impose a naval blockade on the Strait of Hormuz, a critical passageway for about 20 per cent of the world’s oil shipments, the foreign minister stressed that Russia objects to unilateral sanctions in international affairs, saying this undermines the UN Security Council's authority.

"Unilateral sanctions always undermine collective efforts, whether this concerns Iran, Syria, or any other situation,"Lavrov said.

Launch negotiations, not attacks on Syria

Russia opposes military intervention in Syria, proposing instead to launch an immediate internal national dialogue in this country without delay, Lavrov told journalists at his press conference.

"We insist that a political settlement is a must and we support the efforts which the monitoring mission of the Arab League have been making," the Foreign Minister said. "We think all manifestations of violence must cease in Syria, wherever they derive, and a national, all-inclusive dialogue must be launched.”

Meanwhile, Lavrov suggested that foreign governments could actually feign a humanitarian disaster in an effort to discredit the ruling authorities.

"There are other ideas that are being implemented in practice: sending so-called humanitarian convoys to Syria in the hope of provoking a reaction on the part of government forces and border guards, and feigning a humanitarian catastrophe," he said at a news conference in Moscow.

He also mentioned disturbing incidences of weapons infiltrating Syria for use by the opposition.

"It is also known, which no one has denied, that weapons are coming to Syria for militants and extremists to be used for seizing power," the head of Russian diplomacy said. "This is unacceptable and absolutely counterproductive, since this is only spurring the spiral of violence."

Finally, Lavrov said it would be “unacceptable” to attempt to apply the so-called “Libyan scenario” to resolve similar internal conflicts in other countries.

"We deem attempts to expand the so-called Libyan precedent to other conflicts absolutely unacceptable," he said.

Taking aim at missile defense

Concerning Russia-US relations, the conversation turned to the issue of US missile defense in Europe, a subject that threatens not only to short-circuit the so-called reset, but even spark another arms race.

The Foreign Minister said he hopes the United States will take Russia's legitimate concerns into account over the thorny issue.

"We hope the US will finally hear our legitimate concerns, which we have been absolutely, specifically and professionally bringing to them, and take them into account,” Lavrov said. “And we hope that our partners will opt for concerted efforts to find agreed responses to modern challenges, which are common for both of us.”

Relations between the two former Cold War foes took a dramatic turn for the worse when Washington announced it was building a missile defense system in Eastern Europe, just miles from the Russian border, and without Russia’s assistance.

President Dmitry Medvedev warned the US and NATO on numerous occasions that Russia would be forced to respond in military language unless the two sides came to acceptable terms. Both sides continue to work on resolving the issue.

Business as usual following presidential elections

Russian foreign policy will not undergo significant changes following the presidential election in March 2012, Lavrov said.

“I think that our partners abroad have every reason to count on the continuity of our foreign policy in relation to the forthcoming presidential election in our country," the Foreign Minister said.

Lavrov stressed that the Kremlin’s foreign policy enjoyed “broad consensus” throughout Russian society.

"We estimate that there is broad consensus in our society in support of the basic guidelines of the foreign policy course that is set down in Russia's foreign policy concept," he said.

Lavrov outlined the key elements of Russia’s foreign policy, which includes “pragmatism and predictability of our foreign policy, its focus on protecting our national interests, the well-balanced multi-vector nature of our actions on the international stage with a view to … facilitating economic growth, solving social problems and in general securing the welfare of Russian citizens.”


New York Moves to Deploy Body Scanners on Street

NYPD Commissioner Ray Kelly told CBS in New York his department is looking to deploy Terahertz Imaging Detection scanners on the street in the war on “illegal guns.”

Kelly said the scanners would be used in “reasonably suspicious circumstances” and intended to cut down on the number of stop-and-frisks on the street. So called stop-and-frisks are considered aviolation of the Fourth Amendment.

New York City is largely a Second Amendment free zone. The city’s mayor, Michael Bloomberg, has said that citizens “acting outside of any governmental military effort” should not be allowed to protect themselves with firearms.

“The NYPD and Department of Defense are working together testing Terahertz Imaging Detection, a new way to get concealed illegal weapons off the streets,” CBS reports. Terahertz Imaging Detection measures energy radiating from the body up to 16 feet away and can detect anything blocking it.

The ACLU and civil libertarians oppose the effort to use the technology on the street. “It’s worrisome. It implicates privacy, the right to walk down the street without being subjected to a virtual pat-down by the Police Department when you’re doing nothing wrong,” the NYCLU’s Donna Lieberman said.

In addition to violating the Fourth Amendment, the proposed technology would subject citizens to a documented health risk – the destruction of DNA.

Studies reveal that THz waves “unzip double-stranded DNA, creating bubbles in the double strand that could significantly interfere with processes such as gene expression and DNA replication,” according to MIT’s Technology Review.

For more information, see this paper posted at the Cornell University Library.

If we are to believe CBS, most residents either are not concerned about the privacy aspects of the technology or think it is a reasonable trade-off to stop gun crime and terrorism.

CBS does not mention the ability of THz to destroy DNA. If they did, no doubt most people interviewed would oppose the new technology.


Financial crisis: get ready for next wave

AUSTRALIA should brace for a return to the ''ugliest'' of times if the latest World Bank warning of a new financial crisis proves correct, a leading economist says.

The World Bank yesterday signalled a downturn so severe it would eclipse the chaos that followed the collapse of Lehman Brothers in 2008. Deloitte Access Economics director, Chris Richardson, said if there was not a sharp turnaround overseas, Australians were in for a rocky ride through a ''GFC Mark II''.

''If we get a re-run of last time, you get higher unemployment, sharp hits to company profits and a slowdown in the Australian economy without a technical recession, largely due to the momentum in the big mining construction projects,'' he said.

Launching the World Bank's latest six-monthly assessment of global prospects in Beijing, the bank's lead economist, Andrew Burns, called on vulnerable nations to prepare for the worst and refinance loans now rather than waiting until funds dry up.

The bank halved its previous 2012 forecast for economic growth in high-income countries and is forecasting negative growth for the collection of nations that use the euro as their currency. Its concern is that financial markets could stop working if lenders refuse to roll over European debts.

"A much wider financial crisis that could engulf private banks and other financial institutions on both sides of the Atlantic cannot be ruled out," the report says. "Should this happen the ensuing global downturn is likely to be deeper and longer-lasting than the recession of 2008-09.

"Countries do not have the fiscal and monetary space to stimulate the global economy or support the financial system to the same degree as they did in 2008-09. While developing countries are in better shape than high-income countries, they too have fewer resources available. No country and no region will escape."

Australia, not specifically mentioned in the report, has a relatively good budget position and a better ability than most to ward off a downturn by interest rate cuts and increased government spending, as it did in 2008.

But the bank says commodity-exporting nations such as Australia will find their budgets hit by much lower prices.

Each of its scenarios are worse than envisioned in the government's December budget update, calling into question the government's forecast of a 2012-13 budget surplus.

The acting Treasurer, Bill Shorten, acknowledged the budget would "obviously be hit".

"The past year was difficult and disappointing for the global economy. The outlook for 2012 looks even more challenging," he said. "But the Australian economy is now around 7 per cent larger than it was prior to the global financial crisis … We have a proven track record having fought off the global recession and the worst the world can throw at us."

The World Bank is forecasting worldwide economic growth of just 2.5 per cent this year, down from its previous forecast of 3.6 per cent. Anything less than 3 per cent is commonly defined as a global recession.

Mr Richardson said the ''horror headline'' effect of reporting on the European financial fiasco was to blame for a sharp downturn in domestic consumer confidence.

''When you have the papers and the nightly news full of reports - and rightly - that Europe is in trouble, the banks are in danger of blowing up and all the dire outcomes that would produce, you get people worrying about their own situation, even though the economic settings are very different in Australia than those of overseas.''
Read more: http://www.smh.com.au/business/financial-crisis-get-ready-for-next-wave-20120118-1q6n3.html#ixzz1jux13ZHB