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Thursday, April 12, 2012

Armageddon - Chuck Missler

Unusual hail, heavy rain, snow hit southern Saudi

Unprecedented weather in the Saudi southern province of Aseer resulted in the drowning of two children and two men. (Al Arabiya)

High areas in the southern Saudi province of Aseer witnessed unusual rough weather that included the fall of heavy rain, wind, hail, snow that resulted in the drowning of two children and two men.

Some areas of the southern region were covered in almost a white sheet of snow as rain continued to fall on Wednesday.

The municipality head Saraj al-Ghamidi told Al Arabiya that vehicles were successful in removing snow from the streets and thoroughfares.

The unusual weather had trapped citizens of the province’s al-Areen Center but the civil defense authorities managed to rescue them.

The weather also swept away farms in two villages in the province.

Residents said this weather is unprecedented.

The Aseer region is located in the southwestern part of Saudi Arabia and has an area of 80,000 Km2 and a population of 2.1 million. It borders on the west by the Red Sea. Unlike the rest of kingdom, it has a high annual rainfall (15-57 cm) which increases the risk of drowning in lake water.

Al Arabiya News

Royal Canadian Mint to create digital currency

The Royal Canadian Mint wants to get rid of pocket change — and it’s enlisting hacker-types for help.

Less than a week after the government announced the penny’s impending death, the Mint quietly unveiled its digital currency called MintChip.

Still in the research and development phase, MintChip will ultimately let people pay each other directly using smartphones, USB sticks, computers, tablets and clouds. The digital currency will be anonymous and good for small transactions — just like cash, the Mint says.

To make sure its technology meets the gold standard in a world where digital transactions are gaining steam, the Mint is holding a contest for software developers to create applications using the MintChip.

The old-fashioned prize? Solid gold wafers and coins worth about $50,000.

It’s such an unusual move from the crown corporation, which has been in the coin-making business for more than 100 years, that Hacker News questioned whether it was an “elaborate hoax.”

It’s not, the Mint’s chief financial officer Marc Brûlé said Tuesday.

Commerce is changing and the Mint has always been innovative, Brûlé said. (For instance, it did an initial public offering of exchange traded receipts of its gold holdings last year.)

“There’s been a very huge growing digital economy that is really going to be fueled by smartphones and mobile being the next big thing,” he said.

Despite the variety of payment options, he said there are “still no cost effective electronic solutions” for low value transactions that can be used regardless of a person’s age or credit standing.

MintChip, a secure microchip, will be able to do this by letting people transfer small amounts of money (for an iTunes song or a newspaper) with no personal information attached to it, he said.

The Mint’s move into the digital market is a reflection the competitive payments industry, Interac spokeswoman Caroline Hubberstey said.

Despite a December 2011 government report claiming Canada’s payments system is “outdated” and “has simply not evolved,” Hubberstey said it the industry is “highly competitive and rapidly changing.”

Interac pegs the value of small cash and coin transactions (under $20) at $90 billion, and companies big and small want a share of that market as it turns digital, Hubberstey said.

“Players you wouldn’t have thought of before” are looking for ways to get into the market of secure transactions, she said.

“You’re seeing competitors that have been in the space in a while and new competitors looking at the payments market as an opportunity.”

The payments industry’s last major shake happened in the mid-90s when debit card use took off. As more smartphones adopt Near Field Communication (NFC) technology, which lets users hover their phones over NFC-enabled devices to make payments, mobile payments are expected to soar.

Interac, Mastercard and Visa already have contactless cards that use near field communication (NFC) chips for small payments at gas stations and grocery stores.

PayPal, Google and Visa have introduced digital wallets where consumers control all their cashless payments from one place. Companies Square and Payfirma let people accept credit card payments on their smartphones.

The difference with MintChip is it doesn’t plan to link to a person’s bank account or credit card information. And unlike BitCoin, a peer-to-peer hosted digital currency with a fluctuating value, MintChip is simply a new way to exchange Canadian dollars. Plus, it’s backed by the Canadian government.

It’s still too early for specifics such as how the Mint will make a profit from this, how it will prevent hackers from stealing cash, whether the money is anyway traceable or who exactly will load a chip with money, but Brûlé said the response to the contest has been tremendous.

Developers may have been skeptical about MintChip, but the 500 contest spots were filled in just four days.

The star

Philippines sends second ship amid China stand-off

The Philippines says it has withdrawn its largest warship from a continuing stand-off with Chinese boats in the disputed South China Sea.

Earlier on Thursday a Philippine coastguard vessel arrived in the area, known as the Scarborough Shoal.

The Philippines also says China has sent a third ship to the scene.

The Philippine foreign minister said negotiations with China would continue. Both claim the shoal off the Philippines' north-west coast.

The Philippines said its warship found eight Chinese fishing vessels at the shoal when it was patrolling the area on Sunday.

It did not say why the warship had been pulled back. "That is an operational undertaking I can't discuss with you," Foreign Affairs Secretary Albert del Rosario was quoted by AFP news agency as saying.

"We are pursuing the diplomatic track in terms of coming to a resolution on the issue," Mr Del Rosario said.Differing views

In a statement, the Philippines said that its navy boarded the Chinese fishing vessels on Tuesday and found a large amount of illegally-caught fish and coral.

Two Chinese surveillance ships then apparently arrived in the area, placing themselves between the warship and the fishing vessels, preventing the navy from making arrests.

The Philippines summoned Chinese ambassador Ma Keqing on Wednesday to lodge a protest over the incident. However, China maintained it had sovereign rights over the area and asked that the Philippine warship leave the waters.

China's state-run newspaper China Daily claimed in an editorial that the Chinese fishermen were "harassed" by the Philippine ship.

"China should take more measures to safeguard its maritime territory," the newspaper stated.

"The latest moves by China's two neighbours are beyond tolerance," it added, also referring to Vietnam. "They are blatant challenges to China's territorial integrity."

However, the Global Times newspaper added that China "has the patience to work out solutions with the countries concerned through negotiation".

The stand-off comes as the Philippines prepares for joint naval exercises with the United States from the 16 to 27 April near the disputed area.

Six countries claim competing sovereignty over areas in the South China Sea, which is believed to contain huge deposits of oil and gas.

Along with China and the Philippines, they are Brunei, Malaysia, Vietnam and Taiwan.

China's claim includes almost the entire South China Sea, well into what the UN Convention on the Law of the Sea recognises as the 200-mile-from-shore Exclusive Economic Zones of other claimants.

That has led to occasional flare-ups and to competition to occupy islands, reefs and sandbars.

Map locator

Profits will plummet and stocks will plunge 43%

The S&P 500 just broke a five-day losing streak today, but the index is still down from its highs.

Market bear Gary Shilling was on Bloomberg TV today saying that with a hard landing in China and a strong dollar, he expects the operating earnings of S&P 500 companies to drop to $80 this year.

He said this would almost guarantee a major bear market with a PE ratio low of about 10, which implies that the S&P 500 index should be around 800—a 43 percent decline from its recent level.

"Bear in mind that the analysts have been cranking their numbers down. They started it off at north of a 110, then 105, they're now 102. They're moving in my direction.

But yeah I think that's true because as you just mentioned you've got the foreign earnings that don't look good because of the recession unfolding in Europe, a stronger dollar so there are translation losses, hard landing in China and the U.S. I think we could see a moderate recession led by consumer retrenchment, and I think that kind of earnings estimate is not unreasonable."

Shilling said that while the U.S. is "the best of the bad lot", it doesn't necessarily mean that people will rush into U.S. stocks if things turn worse in Europe and China. He also said the Fed has been driving stocks and that investors are ignoring other crucial aspects of the economy like housing, consumer spending, and profits.

Shilling said he is sticking with his "quartet"; i.e. he's long treasuries, short stocks, short commodities and long the dollar.

Read more: http://www.businessinsider.com/gary-shilling-sp-500-to-fall-43-percent-2012-4?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+TheMoneyGame+%28The+Money+Game%29&utm_content=Google+Reader#ixzz1rqCTj8qC

Fall in safe haven assets threatens global financial stability... IMF

Demand for so-called "safe-haven" assets has been rising, driven by regulatory changes and investors' reduced risk appetite. However, the supply of safe assets is dwindling because of the fall in the number of AAA-rated countries and the drying up of the securitisation market, the Washington-based institution said.

The IMF said the drop in the number of countries whose sovereign debt qualified as "safe" would reduce the supply of safe assets by $9 trillion (£5.5 trillion) from 2016 – equivalent to 16pc of the total.

"Safe asset demand is expanding at the same time the universe of what is considered safe is shrinking," the IMF said in a chapter of its Global Financial Stability Review released ahead of the full publication next week.

The imbalance could lead to "more short-term volatility jumps, herding behaviour and runs on sovereign debt", it added, and "[increase] the price for safety in global markets".

Higher prices could force investors to buy riskier assets. "The tightening market for safe assets can have considerable implications for global financial stability, including an uneven or disruptive pricing process for safety," the report said. As investors try to find "scarce safe assets, they may be compelled to move down the safety scale, prompting the average investor to settle for assets that embed higher risks".

The report advised governments to minimise the impact by easing in new regulations that require banks to hold larger volumes of safe assets: "Although regulatory reforms to make institutions safer are clearly needed, insufficient differentiation across eligible assets to satisfy some regulatory requirements could precipitate unintended cliff effects – sudden drops in the prices – when some safe assets become unsafe and no longer satisfy various regulatory criteria."

The Telegraph

Iceland Volcano Katla Sparks fears

The last major eruption at the volcano was in 1918, and caused such a large glacier meltdown that icebergs were swept into the ocean. Picture: Thinkstock

More than 500 tremors detected at volcano Katla
An eruption could cause catastrophic flooding
Eruption could also disrupt air travel

A HUGE Icelandic volcano long overdue for an eruption is showing signs of activity that could disrupt air traffic, experts reported.

There have been more than 500 tremors at Katla in the south of the country in just the last month.

An increase in activity at the site since July has also been causing concern among volcano experts.

The last major eruption at the volcano was in 1918, and caused such a large glacier meltdown that icebergs were swept into the ocean by resulting floods.

Significant activity at Katla -- which has a huge 6.2 mile (10 km) crater -- usually occurs every 40 to 80 years.It is feared when it does eventually erupt, it could be the most powerful volcano activity the country has seen in almost a century.

Catastrophic flooding could result as the frozen surface of the volcano melts, sending vast amounts of water into the Atlantic Ocean.

Volcano expert Andy Hooper from Delft University said that while there had been increased activity at the site, it was difficult to predict if and when Katla would erupt.

However, he said that the implications for Iceland if an eruption did occur would be "major."

"Because of the glacier on top, massive amounts of ice would melt, washing away the roads.

"There could also be a big ash fallout on people living in the area and that will affect the farms.

"There could be big implications for people there.

"In terms of the rest of the world, it really depends on the weather at the time of the eruption.

If Katla erupts, it will erupt higher (than recent volcanoes) and that means the ash will stay around longer -- that could impact on air traffic."

A statement on Iceland's Met Office website warned there was no imminent threat but that "given the heightened levels of seismic activity, the situation might change abruptly."

In 2010, the eruptions at Iceland's Eyjafjallajökull volcano disrupted air traffic for weeks, affecting hundreds of thousands of travelers.

Before News

Europe Will Collapse in May-June

The following is an excerpt from a client letter published back in mid-March. By the look of things, this forecast is playing out precisely.
Starting back in August, I began suggesting that we were approaching a Systemic Crisis/ Crash scenario in the markets. 
The technical and fundamentals both supported this forecast, but I completely underestimated the degree to which the Central Banks and EU would attempt to prop up the market.
At that time, I thought it likely we’d see a Crash, which would then be met with another round of stimulus, which would push the economy temporarily into the green. It seemed the most logical outcome given that we were heading into an election year with a President whose ratings were at record lows.
Instead, the Federal Reserve, particularly those Fed Presidents from Financial Centers (Charles Evans of Chicago and Bill Dudley of New York) began a coordinated campaign of verbal intervention, hinting that more easing or QE was just around the corner.
These verbal interventions coincided with coordinated monetary interventions between the Federal Reserve and other world Central Banks: first on September 15 2011 and again on November 30 2011.
The effects of both coordinated moves were short-lived in terms of equity prices, but they did send a message that the Central Banks were willing to intervene in a big way to maintain the financial system. This in turn helped to ease interbank liquidity problems in Europe (more on this in a moment) and maintain the belief that the Fed backstop or “Bernanke Put” was still in effect.
Another issue that served to push the markets higher was European leaders’ decision to go “all in” on the EU –bail out project. I’ve tracked those developments closely in previous articles. 
Regarding this factor, I also underestimated the extent to which leaders would push to hold things together. After all, Greece had already received bailouts in excess of 150% of its GDP and still posted a GDP loss of 6.8% in 2011. It’s hard to believe they’d want to accept more austerity measures and more debt. 
Moreover, political tensions between Greece and Germany had reached the point that Greeks were openly comparing German Chancellor Angela Merkel and Finance Minister Wolfgang Schauble as Nazis while the Germans referred to Greece as a “bottomless hole” into which money was being tossed. 
Looking back on it, the clear reality was that Germany wanted to force Greece out of the EU but didn’t want to do it explicitly: instead they opted to offer Greece aid provided Greece accepted austerity measures so onerous that there was no chance Greece would go for it. 
Well, Greece surprised many, including myself, and went for it. And so the EU experiment continues to exist today. However, before the end of this issue I will make it clear precisely why this will not be the case for much longer and why we are on the verge of a systemic collapse in Europe. 
For starters, unemployment in Greece as a whole is now over 20%. For Greek youth (aged 15-24) it’s over 50%. The country is in nothing short of a Depression.
Indeed, Greece has now experienced five straight years of contraction bringing the total contraction of Greece’s GDP to 17%. To provide some historical perspective here, when Argentina collapsed in 2001 its total GDP collapse was 20% and this was accompanied by full-scale defaults as well as systemic collapse and open riots.
With new austerity measures now in place there is little doubt Greece will see a GDP contraction of 20%, if not more. I expect we’ll see other “Argentina-esque” developments in the country as well. Put mildly, the Greek issue is not resolved.
The one thing that would stop me here would be if Greece staged a full-scale default. While the political leaders and others view a total default as a nightmare (and it would be for Greek pensions, retirees, and many EU banks), it is only a total default that could possibly solve Greece’s debt problems and allow it to return to growth.
Defaults are akin to forest fires; they wipe out all the dead wood and set the stage for a new period of growth. We’ve just witnessed this in Iceland, which did the following between 2008 and 2011:

  1. Had its banks default on $85 billion in debt (the country’s GDP is just $13 billion).
  2. Jailed the bankers responsible for committing fraud during the bubble.
  3. Gave Icelandic citizens debt forgiveness equal to 13% of GD.

Today, just a few years later, Iceland is posting GDP growth of 2.9%: above that of both the EU and the developed world in general. In plain terms, the short-term pain combined with moves that reestablished trust in the financial system (holding those who broke the law accountable) created a solid foundation for Iceland’s recovery. 
Now, compare this to Greece which has “kicked the can” i.e. put off a default, for two years now, dragging its economy into one of the worst Depressions of the last 20 years, while actually increasing its debt load (this latest bailout added €130 billion in debt in return for €100 billion in debt forgiveness).
Iceland staged a REAL default, and has returned to growth within 2-3 years. Greece and the Eurozone in general have done everything they can to put off a REAL default with miserable results. I’ll let the numbers talk for themselves:

2011 GDP Growth
2012 GDP Growth Forecast
EU (all 27 countries)
17 EU countries using Euro
* Data from EuroStat

The point I’m trying to make here is that defaults can in fact be positive in the sense that they deleverage the system and set a sound foundation for growth. The short-term painis acute (Iceland saw its economy collapse 6.7% in 2009 when it defaulted). However, a combination of defaulting and debt forgiveness (for households) can restructure an economy enough for it to begin growing again.
However, EU leaders refuse to accept this even though the facts are staring them right in the face. The reason is due to one of my old adages: politics drives Europe, NOT economics. 
And thanks to the Second Greek Bailout (not to mention the talk of a potential Third Bailout which has already sprung up), we now know that EU leaders have chosen to go “all in” on the EU experiment.
Put another way, EU leaders will continue on their current path of more bailouts until one of two things happens:

  1. The political consequences of maintaining this strategy outweigh the benefits
  2. The European markets force EU leaders’ hands (hyper-inflation or widespread defaults and the break up the EU).

Regarding #1, this process is already well underway for those countries needing bailouts. Investors must be aware that the Governments of Ireland, Portugal, Spain, and Italy have all watched/are watching the Greece situation closely.
Moreover we can safely assume that the topic of defaulting vs. asking for bailouts in return for austerity measures has been discussed at the highest levels of these countries’ respective Governments (more on this in a moment).
These discussions are also underway at those countries that are providing bailout funds. German politicians have won major political points with German voters for playing hardball with Greece. As I’ve stated before Germany may in fact be the country that ends up walking if EU continues down its current path of bailout madness. 
With that in mind, there are three key political developments coming up.
  1. Ireland’s upcoming referendum
  2. Greece’s upcoming election
  3. France’s upcoming elections (April and May)

Regarding #1, Ireland will be staging a referendum regarding the new fiscal requirements of the EU sometime before October. While the actual date has yet to be set, Ireland will likely stage its referendum after the French elections in (April and/or May… more on this in a moment).

Ireland has already staged two referendums which Irish citizens voted AGAINST until various concessions were made. This time around the primary concession being discussed is potential debt forgiveness (the country definitely needs it). Indeed, according the Boston Consulting Group, Ireland needs to write-off some €340 billion in debt just to make its debt levels “sustainable.”
So Ireland could easily be a wildcard here. The country is already in recession. So we need to monitor developments there as this referendum could go very, very wrong for the EU.
However, the BIG election of note is that of France where the current frontrunners are Nicolas Sarkozy (Angela Merkel’s right hand man in trying to take control of the EU) and super-socialist François Hollande.

A few facts about Hollande:
  1. He just proposed raising tax rates on high-income earners from 41% to 75%.
  2. He wants to lower the retirement age to 60.
  3. He completely goes against the recent new EU fiscal requirements Merkel just convinced 17 EU members to agree to and has promised to try and renegotiate them to be looser.

Currently polls have Sarkozy and Hollande securing the top slots in the first round of the election on April 22. This would then lead to a second election in May which current polls show Hollande winning (this has been the case in all polls for over two months). 
However, there’s now another leftist wildcard coming into the mix: communist Jean-Luc Mélenchon who is now taking 11% in the polls (he was at 5% last month). And Mélenchon’s primary campaign message? Rejecting austerity measures completely via “civic uprising.” 
Now, Mélenchon could end up taking votes away from Hollande therby allowing Sarkozy to win. It’s difficult to say how this will play out. But if Sarkozy loses to either of these candidates, then the EU in its current form will crumble as Germany loses its principle ally in pushing for fiscal reform and austerity measures.
Finally, let’s not forget Greece where politicians are now pushing for an election on April 29 or May 6 (the Second Bailout was passed based on new parliamentary elections being held soon after). 
This could be yet another wildcard as it is around the time of the French elections, which Greek politicians will be watching closely. Remember, the key data points regarding Greece’s economy:

  1. A 20% economic contraction over the last five years
  2. Unemployment north of 20% and youth unemployment over 50%
  3. Unfunded liabilities equal to 800% of GDP courtesy of an aging population and shrinking working population (which is shrinking all the time as youth leave the country in search of jobs)

These facts will not play out in a victory for “pro-bailout” politicians. So the Greece deal, which is supposed to solve Greece’s problems, could actually be in danger based on a change in politics. 
Remember, as stated before, politics rule Europe, not economics. And Europe now appears to be shifting towards a more leftist/ anti-austerity measure political environment. If this shift is cemented in the coming Greek, French, and Irish elections/ referendums, then things could get ugly in the Eurozone VERY quickly. 
That’s the political analysis of Europe. Now let’s take a look at what the various EU economies/ markets are telling us.
Spain’s current economic condition matches that of Greece… and it hasn’t even begun to implement aggressive austerity measures. Unemployment is already 20+% without any major austerity measures having been put in place.
Anecdotal reports show Spain to be an absolute disaster. Spanish banks GREATLY underplay their exposure to the Spanish housing market (“officially” prices are down 20% but most likely it’s a lot more than that). 
In simple terms, things are getting worse and worse in Spain… and the market knows it. Indeed, the charts of most EU indexes, particularly Spain, are telling us in no uncertain terms that the markets are expecting a truly horrific collapse sometime in the not so distant future. Timing this precisely is difficult but the window between May-June is the most likely time, as it will coincide with:

  1. The end of seasonal buying (November-May)
  2. The French, Greek, and Irish elections/ referendums all of which could go very wrong for the EU (April-May)
  3. The end of the Fed’s Operation Twist 2 Program (June).

Now, having said all of this I have to admit I have been very early on my call for a Crash. I’m fine with admitting that. Calling a crash is difficult under normal conditions, let alone in a market that is as centrally controlled as this one.
Indeed, going back to March 2009, it is clear that the Fed has been the ONLY prop under the markets as QE 1, QE lite & QE 2, and now Operation Twist 2 have all been announced any time stocks staged a sizable correction (15+%).
In fact, on a weekly chart of the S&P 500 going back four years, we find two items of note:
  1. The Fed will only tolerate a 15% drop or so in stocks before it announces a new monetary program.
  1.  Each successive Fed program has had a smaller and smaller impact on stock prices: (QE 1: 44%, QE lite and QE 2: 33%, Operation Twist 2: 22%)
Aside from these monetary interventions, we also have to deal with the Fed’s verbal interventions: every time stocks start to break down some Fed official (usually Charles Evans or Bill Dudley) steps forward and promises more easing… or the Fed releases some statement that it will maintain ZIRP an additional year… and VOOM! stocks are off to the races again.

With that in mind, I will admit I’ve been caught into believing a Crash was coming several times in the last few years. In some ways I was right: we got sizable corrections of 15+%. But we never got the REAL CRASH I thought we would because the Fed stepped in.

So what makes this time different?

Several items:

  1. The Crisis coming from Europe will be far, far larger in scope than anything the Fed has dealt with before.
  2. The Fed is now politically toxic and cannot engage in aggressive monetary policy without experiencing severe political backlash (this is an election year).
  3. The Fed’s resources are spent to the point that the only thing the Fed could do would be to announce an ENORMOUS monetary program which would cause a Crisis in of itself.

Let me walk through each of these one at a time.
Regarding #1, we have several facts that we need to remember. They are:
  1. According to the IMF, European banks as a whole are leveraged at 26 to 1 (this data point is based on reported loans… the real leverage levels are likely much, much higher.) These are a Lehman Brothers leverage levels. 
  1. The European Banking system is over $46 trillion in size (nearly 3X total EU GDP).
  1. The European Central Bank’s (ECB) balance sheet is now nearly $4 trillion in size (larger than Germany’s economy and roughly 1/3 the size of the ENTIRE EU’s GDP). Aside from the inflationary and systemic risks this poses (the ECB is now leveraged at over 36 to 1).
  1. Over a quarter of the ECB’s balance sheet is PIIGS debt which the ECB will dump any and all losses from onto national Central Banks (read: Germany)

So we’re talking about a banking system that is nearly four times that of the US ($46 trillion vs. $12 trillion) with at least twice the amount of leverage (26 to 1 for the EU vs. 13 to 1 for the US), and a Central Bank that has stuffed its balance sheet with loads of garbage debts, giving it a leverage level of 36 to 1.
And all of this is occurring in a region of 17 different countries none of which have a great history of getting along… at a time when old political tensions are rapidly heating up.

Zero Hedge

State Department set to cede oil-rich Alaska islands to Russia

Obama’s State Department is giving away seven strategic, resource-laden Alaskan islands to the Russians. Yes, to the Putin regime in the Kremlin. … The seven endangered islands in the Arctic Ocean and Bering Sea include one the size of Rhode Island and Delaware combined. The Russians are also to get the tens of thousands of square miles of oil-rich seabeds surrounding the islands. The Department of Interior estimates billions of barrels of oil are at stake.

The State Department has undertaken the giveaway in the guise of a maritime boundary agreement between Alaska and Siberia. Astoundingly, our federal government itself drew the line to put these seven Alaskan islands on the Russian side. But as an executive agreement, it could be reversed with the stroke of a pen by President Obama or Secretary Clinton.

The agreement was negotiated in total secrecy. The state of Alaska was not allowed to participate in the negotiations, nor was the public given any opportunity for comment. This is despite the fact the Alaska Legislature has passed resolutions of opposition – but the State Department doesn’t seem to care.

Read more at: http://times247.com/articles/obama-must-stop-alaskan-islands-giveaway

Congressman says 80 fellow lawmakers are communists

Freshman Rep. Allen West (R-FL) claimed at a town hall meeting that about 80 members of Congress are communists, a remark which has drawn quick fire from opponents.
"I believe there's about 78 to 81 members of the democratic party that are members of the communist party," West told supporters at a town hall meeting in Jensen Beach, FL. He was responding to a question by a participant who asked, "what percentage of the American legislature do you think are card carrying Marxists?"
Asked to respond to the comments, West spokeswoman Angela Marvin told NBC News that the Congressman was referring to the 76 members of the Congressional Progressive Caucus.
"The Congressman was referring to the 76 members of the Congressional Progressive Caucus," Marvin said in a written statement. "The Communist Party has publicly referred to the Progressive Caucus as its allies."
"The Progressive Caucus speaks for itself," Marvin continued, "These individuals certainly aren't proponents of free markets or individual economic freedom."
West's office also referred to a post on the website for the Communist Party USA where it says they made a mistake by turning "away from our allies in Congress, the Progressive Caucus, and John Conyers" during their fight for a single-payer system being included in Obama's health care law.
Libro DellaPiana, who is one of the vice chairs of the Communist Party USA, called West's statements "ridiculous" and "a cheap shot."
"There are no members of Congress in the Communist party," DellaPiana said, "We support public parks and I assume Congressmen West does too, that doesn't mean he's a Communist."
Allen West has been thrust into the spotlight after a number of notable Republicans listed him as a possible running-mate for Mitt Romney in the general election.  Of those who have called for West to be considered is Sarah Palin, Senator Lindsay Graham (R-SC), and Herman Cain.
This isn't the first time West has criticized a member of the Congressional Progressive Caucus. In January of last year, West criticized Progressive Caucus Co-Chair Rep Keith Ellison (D-MN) as "someone that really does represent the antithesis of the principles upon which this country was established" because he is a practicing Muslim.

First Read

Iranian forces to conduct joint military maneuvers

The Islamic Republic Army of Iran and the Revolutionary Guards are to conduct joint military exercises in the southwest or southeast of the country, a senior Iranian army commander said on Wednesday.

Brig.-Gen. Ahmad-Reza Pourdastan, commander of the Iranian ground forces, said that the army and the Revolutionary Guards will carry out a special joint air exercise that will be the first of its type since the Islamic Revolution, Iran’s ISNA news outlet and hardline Mashregh news reported. A further eight joint military exercises would be held in the upcoming year, Pourdastan said.

The ground forces commander added that the exercises would be performed using live ammunition and in battle conditions, to prepare soldiers for war.

The Revolutionary Guards and the Islamic Republic Army of Iran act as parallel ground forces, but while the regular army is tasked with defending the country and maintaining civil order, the job of the Revolutionary Guards is to protect Iran’s Islamic regime. The Revolutionary Guards, which the US designated a terrorist organization in 2007, also controls Iran’s Basij militia, and the secret Quds Force, which conducts operations outside Iran.

The announcement came days before Iran and six world powers are due to restart negotiations on Iran’s nuclear program, and as the Islamic Republic continues to give mixed messages about its position.

According to Pourdastan, who made the announcement during a speech for Iran’s Army Day, the Islamic Republic has also developed its own vertical wind tunnel for military use. Vertical wind tunnels are used to teach skydiving to elite troops.

The military commander said that while there are several such wind tunnels in Arab countries, those were of Western origin, whereas Iran’s had been built domestically, in cooperation with the Self-Sufficiency Jihad Organization.

Pourdastan also said Iran plans to improve its domestic- built Zulfiqar tank by adding a new firing control system and laser range-finder.

Iran’s Zulfiqar is a second-generation main battle tank, developed and mass-produced since the 1990s and believed to be based on components from Russia’s T-72 tank as well as American M48 and M60 Patton tanks.

Currently, the most updated model, Zulfiqar-3, is equipped with a firing system based on a Soviet design.

According to Pourdastan, Iran has produced a Gatlingtype 7.62 caliber machine gun, dubbed the Akhgar, which has an effective range of over 2 kilometers.

The maneuvers would be the latest in a series of military exercises and war games Iran has staged since the start of the year, amid growing tensions and concerns of war with Israel.

In February, the Revolutionary Guards announced they had begun a two-day military exercise outside the central Iranian city of Yazd, which Iran said was designed to upgrade its defense capabilities.

Also in February, Iran announced that it had deployed anti-aircraft artillery and warplanes to protect its nuclear sites from possible Israeli airstrikes, in a military exercise it dubbedSarollah, from an Arabic term meaning “the vengeance of God.” That same month, the Revolutionary Guards conducted military exercises in the south of Iran.

Jerusalem Post

Earthquake Strikes the Coast of Mexico

A strong earthquake struck off the coast of Mexico on Thursday, waking up residents living near the Gulf of California, only hours after a separate temblor swayed tall buildings in Mexico City, causing evacuations.

Authorities said neither quake left major damage nor victims.

The U.S. Geological Survey reported a 6.9 magnitude quake hit the waters between the Baja peninsula and the northern state of Sonora at 12:15 a.m. local time.

Residents in the city of Hermosillo woke up as their beds swayed and their ceiling fans shook. Luis Enrique Cordova, director of emergency services in Sonora, said confused residents clogged the phone lines of the civil protection office in Hermosillo, the largest city and capital of the state, where some 700,000 people live. But Cordova said no major damages have been detected in the region.