UK warned on debt 'credibility' over AAA rating

The UK's failure to meet a key public debt target "weakens the credibility" of its top AAA credit rating, the Fitch ratings agency has said.

Debt will now not fall as a proportion of the country's output until 2016-17, a year later than Chancellor George Osborne had targeted.

Fitch said that the Autumn Statement confirmed the scale of the challenge facing the UK.

In March, it said the UK's AAA rating was under threat.

A cut to the credit rating would mean that the country is perceived as more risky to lend to, thereby raising the cost of borrowing from international investors.

The Office for Budget Responsibility, the independent body that makes economic forecasts for the government, announced that the UK will miss its debt target and the economy will contract by 0.1% this year - a big revision from the time of the Budget in March, when it said that the economy would grow 0.8% this year.

Growth forecasts for the next five years were also cut.

"We forecast gross general government debt to peak at 97% in 2015-16, approaching the upper limit of the level consistent with the UK retaining its AAA status," Fitch said.

"The government has chosen not to chase the supplementary target by deploying additional consolidation measures over the next two years. In our view, missing the target weakens the credibility of the UK's fiscal framework, which is one of the factors supporting the [AAA] rating."

It warned in March that it could downgrade the UK in the next few years if the government does not contain the level of public debt.

Fitch said it would formally review the UK's rating after the next Budget in March 2013.

In February, rival agency Moody's also warned that the UK's credit rating may be cut in future, potentially increasing borrowing costs.Confusion on borrowing

On borrowing figures, the chancellor said that debt would not begin to fall as a proportion of the country's output until 2016-17, which is a year later than the government's target.

Before the statement, many analysts had predicted that the budget deficit, which is the amount the government is having to borrow in the current year, would be higher than it was last year.

However, it is now forecast to fall from £121bn in 2011-12 to £108bn in 2012-13.

But there was some confusion about how that had been achieved, with shadow chancellor Ed Balls complaining about the full figures not being in the Mr Osborne's statement.


BBC economics editor Stephanie Flanders said that the deficit figure had fallen because the government had decided to use the proceeds from the sale of licences to run 4G mobile phone services to reduce this year's borrowing.

Without that, she said, the deficit would have risen "maybe by a couple of billion pounds".

There was also a reduction in the deficit of £11.5bn in the current year as a result of the Asset Purchase Facility.

As a result of the Bank of England's quantitative easing programme, the central bank currently owns a lot of the government's debt.

If anybody else had lent money to the government it would have had to pay interest on those loans.

The government has now decided it should not be paying interest to the Bank of England, and the benefit of that has reduced the deficit and will continue to do so for the next four years.

BBC

The Government Has Your Emails, All Of Them

A National Security Administration whistle-blower said in a recent interview that the U.S. government collects massive troves of data about American citizens, which it could use against anyone it chooses.

Speaking with RT, William Binney, a former NSA mathematician and code breaker, said that the Federal government uses a powerful data collection tool to store the contents of virtually every email sent by anyone in the Nation.

“[T]he FBI has access to the data collected, which is basically the e-mails of virtually everybody in the country. And the FBI has access to it. All the congressional members are on the surveillance too, no one is excluded. They are all included. So, yes, this can happen to anyone. If they become a target for whatever reason — they are targeted by the government, the government can go in, or the FBI, or other agencies of the government, they can go into their database, pull all that data collected on them over the years, and we analyze it all. So, we have to actively analyze everything they’ve done for the last 10 years at least,” he said.

Binney said the government is collecting the information in bulk without any regard to whether the individuals whose information is being stored is subject to criminal investigation at this time or is considered a threat to national security. According to the former NSA agent, the data is collected with a powerful information technology device called Naris which is capable of collecting all information being sent over fiber optic cables in the United States. The information is then stored in vast data collection centers where it can be searched later by Federal agents.

This sort of vast data snooping by the Federal government was first brought to light when it was discovered that the NSA was working with AT&T to monitor customer phone and Internet activity via a secret office at the company’s headquarters. The discovery led to a lawsuit and much stonewalling by the Federal government.

Binney says government surveillance of data over fiber optic networks has increased since the first lawsuit was filed against AT&T for allowing Fed snoops to mine its data networks. He claims that under the Administration of Barack Obama the government has even had to build larger facilities to store all of the data it is collecting from Americans’ inboxes.

“They are doing more. He is supporting the building of the Buffdale facility, which is over two billion dollars they are spending on storage room for data. That means that they are collecting a lot more now and need more storage for it,” he said. “That facility by my calculations that I submitted to the court for the electronic frontiers foundation against NSA would hold on the order of 5 zettabytes of data. Just that current storage capacity is being advertised on the web that you can buy. And that’s not talking about what they have in the near future.”

Personal liberty digest

China to Continue Ties with Russia

Premier Wen Jiabao said Wednesday on his arrival in Moscow that China will continue to make relations with Russia one of its priorities.

Wen made the remarks in a written speech delivered at the airport Wednesday evening after a visit to Kyrgyzstan, where the Chinese premier attended the prime ministers' meeting of the Shanghai Cooperation Organization (SCO).

With international and regional situations becoming more and more complicated, Wen said, China and Russia should continue to deepen their comprehensive strategic coordination partnership and push their cooperation to a higher level.

China is willing to double its efforts to implement the consensus reached by the heads of state of the two countries in June and strive to realize the 10-year plan for China-Russia relations, he stressed.

Wen said that further development of bilateral relations will contribute to world peace, stability and prosperity.

Wen was expected to hold talks with Russian leaders and exchange views with them during his one-day visit on issues relating to bilateral ties, international and regional issues and other matters of common concern.

"The consensus to be reached will inject more dynamics into the continued, sound and stable development of the comprehensive strategic partnership of coordination between China and Russia," he said, adding that the annual meeting mechanism between the two prime ministers has played a special role in strengthening and deepening pragmatic cooperation between the two neighbors.

The meeting mechanism, launched in the 1990s, is one of the key links between the leaders of the two countries.

CRI English

Mother killed son over Koran studies

A mother who beat her seven-year-old son "like a dog" when he failed to memorise passages of the Koran has been found guilty of his murder.

Sara Ege, 33, beat Yaseen Ege to death at their home in Pontcanna, Cardiff, in July 2010 and set fire to his body.

She was also found guilty of perverting the course of justice at Cardiff Crown Court. Sentence was adjourned.

The boy's father, Yousuf Ege, 38, was acquitted of causing Yaseen's death by failing to protect him.

 

Yaseen Ege was beaten to death by his mother, who then set fire to his body

It was initially thought Yaseen had died in the blaze at the family home but tests later revealed he had died hours earlier.

His mother had pleaded not guilty to his murder and claimed her husband was responsible for Yaseen's death.

She said she feared her husband would kill her and target her family unless she confessed to the murder.

That confession - made to police days after the death of her son - was captured on video and played to the jury during the five week trial.

Sara Ege made no attempt to seek the medical attention he so obviously needed”Ian MurphyProsecutor

During the hour-long harrowing footage, university graduate Ege described how the young boy collapsed after she had beaten him while still murmuring extracts of the Koran.

"He was breathing as if he was asleep when I left him," she said.

"He was still murmuring the same thing over and over again. I thought that he was just tired."

When she returned 10 minutes later she found her son shaking and shivering on the floor. He then died.

Within moments she said she decided to burn his body and ran downstairs to get a lighter and a bottle of barbecue gel.'He never complained'

In police interviews she also confessed to beating her son for no reason and that her anger often led to her being out of control.

She and her taxi driver husband had enrolled Yaseen in advanced classes at their local mosque as they wanted him to become Hafiz - an Islamic term for someone who memorises the Koran.

The court heard Ege become more and more frustrated with her son's inability to learn the passages he needed to.

She told officers: "I was getting all this bad stuff in my head, like I couldn't concentrate, I was getting angry too much, I would shout at Yaseen all the time.

"I was getting very wild and I hit Yaseen with a stick on his back like a dog."'Suffered terribly'

The prosecution said that Yaseen suffered significant abdominal injuries that were the cause of his death.

They included fractures which were non-accidental.

"Sara Ege made no attempt to seek the medical attention he so obviously needed," prosecutor Ian Murphy said.
 

Emergency services at the house in Pontcanna in 2010

"He clearly suffered terribly. She started the fire to hide what she had done."

However, Ege insisted that both she and Yaseen had been beaten by her husband, adding he had been violent throughout their marriage.

She told the jury that she did not take the boy to the doctor because she feared for her safety and that social services would take her son away.

Her mother Nafees Ahmed also gave evidence to say that Ege was a good mother who looked after him well.

Ege was found guilty of murder and perverting the course of justice by burning Yaseen's body.

Her husband was cleared of causing or allowing the death of a child by failing to protect him.

The jury returned unanimous verdicts after eight hours of deliberation.'Deeply tragic'

As the verdict was read out Ege broke down in the dock, holding her head in her hands and crying.

Judge Mr Justice Wyn Williams told her she faces a term of life imprisonment

Her husband showed no emotion as he walked free from court.

Mr Justice Wyn Williams told the court he would determine a minimum sentence for Ege in the New Year after a medical report had been completed.

Speaking after the verdicts, Deborah Rogers, district crown prosecutor for the Crown Prosecution Service, said the "deeply tragic nature" of the case had been "all too apparent".

"We should not forget that at the heart of the case is the loss of a bright and friendly young boy who had his whole life ahead of him," she added.

"It is therefore right that the circumstances of Yaseen's death were fully examined in a criminal court."
BBC

North America at the End of times

What role will the United States play—if any—in the end times?
When New York Times best-selling author Joel C. Rosenberg tells audiences that America isn’t mentioned in Bible prophecy, many are stunned and ask how the wealthiest, most powerful nation in history isn’t a specifically defined player in the last days.

“The Bible doesn’t say what happens to us,” Rosenberg says. “But by the absence of us being clearly defined in the text, it means something has happened. The question is what—what will happen to us that will neutralize our ability or desire to be an influential player in the last days of history before the return of Jesus Christ?”

In his recent book Implosion: Can America Recover From Its Economic and Spiritual Challenges in Time?Rosenberg outlines several potential scenarios he believes could explain why the United States isn’t mentioned in Bible prophecy: The nation—facing $16 trillion in federal debt and $120 trillion in total unfunded obligations—could implode economically, he hypothesizes. Perhaps the U.S. is hit by a surprise nuclear or military attack, blind-sided by a series of terrorist attacks or devastated by an unprecedented spate of natural disasters. America could suddenly lose tens of millions of people in the rapture, triggering any number of cataclysmic events. Or it could be a combination of these events.

Though it’s unknown what tsunami of terror might sweep across our nation, Rosenberg’s book—along with another New York Times best-seller, The Harbinger: The Ancient Mystery That Holds the Secret of America’s Future—indicates a rising wave of public interest regarding America’s role in the end times. These and other end-times books, combined with the appearance of ominous signs such as record-breaking extreme weather and a historic drought, fuel a growing sense that America is in danger of judgment and near collapse. Add a recent, albeit surprising alarm sounded by famed evangelist Billy Graham and it becomes apparent this isn’t just a faddish surge of end-times fascination.

“There is not only a renewed interest in end-time prophecies, but a sense that America is in decline—that the days of what has been called the American age are numbered, and if we don’t change course, they are coming to an end,” says Rabbi Jonathan Cahn, the author of The Harbinger and senior rabbi at the nation’s largest messianic congregation, the Beth Israel Worship Center in Wayne, N.J.

Cahn’s best-seller frames a biblical warning of national judgment in a narrative, as a man encounters “The Prophet,” who claims the same nine harbingers of divine judgment that preceded the destruction of Israel 2,700 years ago are now manifesting in America. The book is based on a real-life prophetic mystery Cahn discovered in Isaiah 9 that unveils the Sept. 11, 2001 terrorist attacks, the “War on Terror,” the economic collapse in 2008 and even public speeches by U.S. leaders as part of a modern replaying of an ancient drama involving a series of intensifying judgments.

“The absence of any clear reference to America in end-time prophecy is a warning of America’s fall from its position of head of nations—the end of the American age,” says Cahn, a descendant of Aaron, the high priest of the ancient Hebrews and the brother of the biblical prophet Moses. “The Harbinger is the filling in of that gap, what happens between now and the scenario foretold in end-time prophecy. I believe that’s one of the reasons The Harbinger has become a best-seller throughout the nation since the first week of its release [in January 2012]. And since its release, that which it foreshadows is already coming true.”

Both The Harbinger and Implosion hit the New York Times best-seller list this year. This marks the first time two books about Bible prophecy by different authors have simultaneously been on the list, says Jerry B. Jenkins, co-author of the 16-volume Left Behind series that has sold more than 65 million copies.

“We live in scary times and people are curious about the future and interested in things beyond themselves,” Jenkins says. “As for the U.S. facing judgment or disaster, it seems to me we’re in the middle of it. Drought, fire, floods and tornadoes—these aren’t new, but they’re worse than ever.”

Jenkins’ Left Behind co-author, minister Tim LaHaye, says the world is on the “verge of chaos, just as the Bible predicted in the end times” and many people are “getting ready for something catastrophic.”

“There are so many signs of what the Bible outlines for the latter days, or the end times,” says LaHaye, 86. “Israel is the super-sign. The Jews were scattered to almost every country in the world for 1,900 years, and in the last 100 years they have been brought back to their homeland. The whole world’s focus is on this super-sign that we prophetic teachers have been talking about for 150 years, and now it’s gaining momentum.”

At World’s End in 2012 ... or 2013
This sense of anxiety and foreboding about the future also comes amid growing interest in ancient predictions by Christians, Jews, Muslims, Native Americans and other ethnic and religious groups. Among the most highly publicized of these has been the Mayan prophecy that purportedly predicts the end of the world on Dec. 21. Though the prediction yielded the $770 million sci-fi movie 2012 three years ago, the public’s fascination with the calendar date seems to have waned, especially since Mayan scholars say new evidence shows the Mesoamericans didn’t believe the end of their long-count calendar on Dec. 21 marked the world’s end.

“The scholarly community doesn’t really take this too seriously,” says Stephen Houston, a Mayan scholar and a professor of social science at Brown University. “It’s really more of a cultural phenomenon. It’s likely to be seen as important today because people are of course concerned about our present age—current conditions, environmental problems and economic dislocations.”

This summer, Nouriel Roubini, a professor of economics and international business at New York University who anticipated the collapse of the U.S. housing market and the global recession, told Bloomberg TV that 2013 could be a “global perfect storm”—with policymakers running out of options to stimulate the economy and a potential war between Iran and Israel that could double gas prices, devastating the world economy.
“You could have a collapse of the Eurozone, a U.S. double-dip, hard-landing of China, hard-landing of emerging markets and a war in the Middle East,” Roubini told Bloomberg TV. “Next year could be a global perfect storm.”

But What About America?
With all the real-world concerns today, what some financial experts fear is the coming “greatest depression of all time” and a drought encompassing nearly two-thirds of the U.S., the public is increasingly intrigued by what the Bible may reveal about America’s future.

“It creates a kind of convergence of interest in the end times,” says Mark Hitchcock, pastor of Faith Bible Church in Edmond, Okla., and author of 2012, the Bible, and the End of the World and The Late Great United States. “You have this Mayan prediction out there. You could have Israel and Iran at war. I see how a lot of things could really come down at the end of the year and really cause a lot of people to wonder, ‘What does the future hold for the United States?’”

Most Bible prophecy scholars agree that God’s Word is mysteriously silent about the fate of the U.S. They say the Bible refers to at least 15 specific nations and regional alliances (e.g., Israel, Iran, Russia, China, Europe) that play roles in the end times. But America is not specifically named, although dozens of biblical passages refer to God’s final dealings with “all the nations.” In Haggai 2:7, for example, the Lord foretold through the Hebrew prophet that He would “shake all nations” in the last days.

“This is certainly coming true in the United States,” Rosenberg writes in Implosion. “We are being shaken physically, financially, socially, spiritually, politically and in numerous other ways, and we can expect this to accelerate and intensity in the years ahead.”

Evangelist Perry Stone, founder of Voice of Evangelism ministries and author of Nightmare Along Pennsylvania Avenue and many other books, believes—like Cahn—that Israel and America are “spiritually linked.”

“America is almost a reflection of Israel,” Perry says. “Israel crossed the Red Sea to get to the Promised Land. Our founders crossed the sea to get to America. Israel and America were both divided between the North and the South. Israel had 13 tribes; America had 13 colonies.”

Based on those parallels, Perry says he realized the same blessings promised to ancient Israel are promised to America if the nation obeys God’s Word. Likewise, the same curses Israel experienced for disobedience would also be experienced by America for not obeying God’s commands.

“The very first warning God gave Israel was, ‘If you disobey My Word, break My commandments and don’t hearken to My Word, I will appoint over you terror,’” Perry says. “When I realized in 2001 that there was an initiation of a ‘War on Terror,’ I started following those passages to see what else it indicated for America’s future.”

Some prophecy teachers say the Bible makes direct references to America and argue that the U.S., or perhaps New York City, is “Babylon the Great”—the “great prostitute who sits on many waters” that is destroyed in one hour, according to Revelation 17 and 18. In these chapters, the apostle John wrote that the “Mother of Harlots and of the Abominations of the Earth” would be destroyed by fire, while the merchants of the earth who grew “rich through the abundance of her luxury” would “weep and mourn over her, for no one buys their merchandise anymore” (17:5; 18:3, 11).

Others have suggested the “merchants of Tarshish, and all their young lions” mentioned in Ezekiel 38:13 is a reference to the United Kingdom—whose Royal Coat of Arms includes a lion—and its offspring, America. Still others say the “great eagle” in Revelation 12:14 is America.

Rosenberg, LaHaye, Hitchcock, Perry and many other Bible prophecy teachers reject these arguments, however. And though Franklin Graham isn’t typically linked with these names, the president of the Billy Graham Evangelistic Association and international Christian relief organization Samaritan’s Purse agrees the Bible doesn’t specifically mention the U.S.

The logical conclusion, Graham says, is that the scenarios Rosenberg has proposed are “certainly viable.” Graham is especially concerned about the nation’s “moral spiral downward,” noting that President Obama’s support of same-sex marriage essentially amounts to “shaking his fist in God’s face.”

“Look at the spiritual decline of this nation and where we are today,” Graham says. “Unless we repent as a nation and reverse course, I think God is going to bring quick and swift judgment on this nation.”

The Hand of Judgment
In Implosion, Rosenberg, a former adviser to Israeli Prime Minister Benjamin Netanyahu and Forbesmagazine Publisher Steve Forbes, examines whether the nation is headed for catastrophic collapse or another Great Awakening.

“There are moments in history, and we know this from Scripture, in which God removes His hand of grace and puts His hand of judgment on a country,” says Rosenberg, who was described as a “modern-day Nostradamus” by U.S. News and World Report for writing a novel about a hijacked jet on a kamikaze mission into an American city nine months before the 9/11 terrorist attacks. “It’s not a pretty picture. How soon? I don’t know. But I fear it might be a lot closer than most people, even I, realize.”

In his new book, One Nation, Under Attack: How Big-Government Liberals Are Destroying the America You Love, the late Grant R. Jeffrey argues America is being systematically plundered by international financiers and powerful socialist forces both within the U.S. and overseas. (See “Grant Jeffrey’s Final View of America,” p. 38).

“In a very short time, the United States will be pushed to the sidelines of world events,” Jeffrey wrote. “All of this is taking place just ahead of the emergence of the prophesied Antichrist. Satan’s representative on earth will consolidate his power and establish his dictatorship, first over the revived Roman Empire and soon after that, over the entire world. And the American Empire, which rose to power with the blessing of God, will be so weak that it won’t play a notable role in the culminating events of the ‘last days.’”

Rosenberg cites several polls that reveal Americans share similar concerns about the nation’s future. A 2011 CNN poll found nearly half of all Americans fear the U.S. is heading for another Great Depression. A 2010 Fox News poll revealed that nearly 80 percent of Americans believe the U.S. economy could collapse entirely.

This year, a worldwide Reuters News poll found that 14 percent of people believe the world will end in their lifetimes. In America, the percentage is 22 percent—the highest anywhere.

One in five Americans believes the Second Coming will occur during his or her lifetime, with 79 percent saying they believe Jesus will return to Earth someday, according to a recent Pew Forum on Religion and Public Life poll.

Meanwhile, the Rapture Index, a “Dow Jones Industrial Average of end-time activity” recorded byRaptureReady.com, hit a record high of 184 in early September. Todd Strandberg, a retired U.S. Air Force staff sergeant who founded Rapture Ready in 1987, attributes the index’s all-time high to a variety of factors: the debt crisis spreading around the world, global arm sales reaching new records, the worsening U.S. drought, rising food prices, extreme weather, record floods and a spate of “super-earthquakes.”

“It just seems like America should have imploded economically a long time ago,” Strandberg says. “It’s so odd that we can keep piling debts upon debts and why we haven’t seen the Middle East explode. It just seems God is holding things together for some event. As time goes by, we think it’s the rapture.”

Indeed, Rosenberg, Cahn, Graham, LaHaye, Hitchcock, Stone, and many other Bible prophecy teachers and faith leaders say they believe God is sending a series of escalating warnings that the nation is in growing danger of judgment unless it repents.

“I think 9/11 was a wake-up call for America,” says Anne Graham Lotz, author of Expecting to See Jesus: A Wake-Up Call for God’s People and the daughter of evangelist Billy Graham. “I think Hurricane Katrina was a wake-up call. I think these record-breaking fires and some of the other things happening are warnings God is giving us, and if we don’t heed these warnings, then something more severe will happen.”

This summer, evangelist Billy Graham, who has preached to more people than any Protestant in history (2.2 billion), issued a letter calling America to repentance. In it, Graham wondered what his late wife, Ruth, would think of the country today, where “self-centered indulgence, pride and a lack of shame over sin are now emblems of the American lifestyle.”

“My heart aches for America and its deceived people,” wrote Graham, 94. “The wonderful news is that our Lord is a God of mercy, and He responds to repentance. In Jonah’s day, Nineveh was the lone world superpower—wealthy, unconcerned and self-centered. When the prophet Jonah finally traveled to Nineveh and proclaimed God’s warning, people heard and repented. I believe the same thing can happen once again, this time in our nation.”

Hope for a Turnaround
Seeking to ignite such a revival, Graham is asking millions of Christians to participate in the My Hope with Billy Graham evangelistic outreach set for Nov. 7, 2013—his 95th birthday. Graham hopes Christians will invite family, friends and neighbors to their homes to watch the “Living Room Crusade” on their TVs, tablets or smartphones. His association hopes to mobilize millions of believers to undergo training to share their faith with others during the event.

The good news, Rosenberg says, is that America has experienced two great spiritual awakenings in the past and could experience another one, based on 2 Chronicles 7:14, where God says: “If My people who are called by My name will humble themselves, and pray and seek My face, and turn from their wicked ways, then I will hear from heaven, and will forgive their sin and heal their land.”

“We desperately need a Third Great Awakening,” Rosenberg says. “We need to beg and plead with God to pour out his Holy Spirit and save us, to turn our hearts away from sin and back to our faith in Jesus Christ. If we don’t have a Third Great Awakening soon, this country will implode. I can’t say when. I can’t even say how. But I’m laying out a number of possible scenarios.”

Franklin Graham says the church has been asleep for far too long—more interested in trying to be “relevant to the culture” than teaching and preparing Christians for Jesus’ return.

“I would encourage pastors in churches to begin to preach and to prepare and to warn their congregations that God is going to judge sin,” Graham says. “We as a nation need to repent and we need the churches calling for repentance.”

Charisma Magazine

Assad’s chemical weapons units head out of Damascus toward Aleppo

As NATO in Brussels gave the go-ahead Tuesday night, Dec. 4, for the deployment of Patriot surface-to-air missiles to protect Turkey against Syrian missiles,DEBKAfile’s military and intelligence sources reported that convoys of the Syrian army’s chemical weapons units headed out of Damascus under cover of dark and turned north up the road to Aleppo. Their destination is not yet known.
The convoys were ferrying self-propelled cannons for firing shells loaded with poisonous sarin gas.
Syrian President Bashar Assad had evidently decided to ignore the warnings President Barack Obama issued Monday night that there would be consequences if he or anyone in Syria resorted to chemical warfare and each would be held accountable.

Our sources report that the Syrian ruler is aparently gambling dangerously on the Americans holding back from attacking the convoys as long as they deploy unconventional weapons, and would only react when they are used.

He is also taking advantage of the heavy winds, rain and cloud over this part of the eastern Mediterranean and counting on the weather to obstruct military operations against his chemical weapons units.

By the time the weather clears some time Thursday, the units will be in place in battle formation. Meanwhile, bombing the convoys in windy weather could cause the deadly gas to spread out of control in unpredictable directions.
In Brussels, a NATO official announced that the alliance had agreed to augment Turkey’s air-defense capabilities by deploying Patriot missiles to Turkey.
DEBKAfile’s military sources report that by the time the missiles arrive, the Syrian chemical weapons units will almost certainly have reached their pre-planned positions. Furthermore, the Patriot air defense systems are not designed to counter artillery and would therefore be unable to stop shells loaded with poison gas.

DEBKAfile reported earlier Tuesday, Dec. 4.
US forces in the region, Israel, Turkey and Jordan were all braced Monday night, Dec. 3 for action against Syria in case Syrian President Bashar Assad ordered his army’s chemical warfare units to go into action against rebel and civilian targets his own country. None of the Middle East capitals are talking openly about this eventuality to avoiding causing panic.
However, oblique references to the peril and preparations for action came from US officials during Monday. White House spokesman Jay Carney said: “We have an increased concern about the possibility of the regime taking the desperate act of using its chemical weapons.” Such a move “would cross a red line for the United States.”

Without going into specifics, Carney added: “We think it is important to prepare for all scenarios. Contingency planning is the responsible thing to do.”
US Secretary of State Hillary Clinton in Prague was slightly more specific: Syrian action on chemical weapons remains a “red line” for the Obama administration, she said, and “would prompt action from the United States.”

Regarding contingencies, DEBKAfile’s military sources report that the American force in Jordan and Jordanian units, who have been training for two months in tactics against Syrian chemical warfare units, are on a high state of preparedness. So, too, are the three special US command centers set up in Turkey, Jordan and Israel for coordinating such operations.

An American official “with knowledge of the situation” told Wired Magazine that “engineers working for the Assad regime in Syria have begun combining the two chemical precursors needed to weaponize sarin gas.”

Anchored opposite the Syrian shore is the USS Iwo Jima Amphibious Ready Group with 2,500 Marines. Facing it is the Russian Black Sea Fleet’s naval task force which too has hundreds of marines on its decks.

DEBKAfile’s sources quote high-ranking officers in the Israel Defense Forces’ Northern Command as saying: “The coming hours and days are extremely critical for Syria. The situation on our northern front could blow up any moment.” They did not elaborate.

Later Monday, as the United Nations regional humanitarian coordinator for Syria, Radhouane Nouicer announced the pullout of nonessential international staff “because of the security situation,” Secretary Clinton flew into Brussels from Prague to discuss with NATO foreign ministers the deployment of Patriot anti-missile batteries at 10 points on the Turkish-Syrian border - a massive number.
NATO sources took note of the Syrian Foreign Ministry’s reply to the spreading reports. He said that the government “would not use chemical weapons, if it had them, against its own people under any circumstances.” This statement carried no promise about using such weapons against external forces, whether American, Turkish, Jordanian or Israeli.

In Istanbul, meanwhile, Russian President Vladimir Putin told reporters at the end of his one-day visit: “What we are concerned about is Syria’s future. We don’t want the same mistakes to be repeated in the near future.” He went on to say: “We shall remember how some regimes supported the militants in Libya and how the situation ended with the killing of the American ambassador in Libya.”
This was meant by the Russian president as a warning to the US not to get involved in the Syrian crisis as it did in Libya.

DEBKAfile

US Ban on Russian Arms Exporter Would Harm Ties: Lavrov

BRUSSELS, December 4 (RIA Novosti) - Russian Foreign Minister Sergei Lavrov said on Tuesday that the proposed US ban on deals with Russia’s state-run arms exporter Rosoboronexport would be detrimental to the development of bilateral cooperation.

The US Senate unanimously approved last Thursday the Cornyn amendment to the defense budget, which bars the use of American taxpayer funds to purchase goods from Rosoboronexport, including helicopters to be flown in Afghanistan.

“I would avoid making any predictions. It is not a law, but rather an opinion of the Senate that has yet to pass all the necessary stages,” Lavrov told a news conference after a Russia-NATO meeting in Brussels.

“We are certain that at least the US administration will draw the inevitable conclusion that the idea born in the Senate contradicts US national interests as well as the development of cooperation with Russia and the goals that we are trying to achieve in Afghanistan and around it,” Lavrov said.

A similar bill cleared the US House of Representatives by overwhelming majority vote in July.

The ban may come into force as early as on January 1, 2013, if President Barack Obama signs the 2013 fiscal budget proposal with respective amendments into law.

Rosoboronexport signed a $367.5 million deal with the United States in May 2011 for delivery of 21 Mi-17V5 helicopters. All those helicopters have now been delivered, according to the Center for Analysis of Strategies and Technologies (CAST), a Moscow-based think-tank.

The break with the United States could affect an option contract signed on July 18 for a further ten machines worth $171 million. Deliveries of the second batch were due by 2016.

Another potential contract that looks set to be lost is for ammunition supplies to Afghanistan. In April, five US defense firms invited Russia for the first time to become a subcontractor on the delivery of Russian-made ammunition for coalition forces in Afghanistan, Rosoboronexport said.

In mid-June, US Senator John Cornyn called on the Pentagon to take action against Rosoboronexport, but the Pentagon dismissed his claims, saying that dealing with Russia’s arms exporter was the "only legally available method" to supply the helicopters to Afghanistan.

Rosoboronexport was subject to US sanctions from 2006 to 2010 for allegedly providing nations including Iran and Syria with equipment that could be used to develop weapons of mass destruction.

RIA Novosti

Horrific stories from Yemen where Al Qaeda has imposed sharia law

This is the New World Order they want to impose.......where lying it´s accepted and they keep on telling us it´s a religion of peace (lie)

Al Qaeda committed 'truly shocking' human rights abuses including crucifixions and the beheading of an alleged sorceror during its 16 months in control of a southern region of Yemen, a report by Amnesty International claimed today.
The London-based charity has also released a video which appears to show a suspected thief having his hand amputated by the Ansar al-Sharia militia, which seized power of the Abyan governorate in February 2011.

Amnesty said dozens more civilians were then killed during reckless counter-insurgency operations by the Yemeni government as it sought to win back the territory from the Al Qaeda-affiliated group.

The tragedies would 'haunt Yemen for decades to come' unless the perpetrators were caught and the families compensated, the charity said.

Amnesty International Middle East and North Africa Director Philip Luther said: 'Abyan experienced a human rights catastrophe as Ansar al-Sharia and government forces vied for control of the region during 2011 and the first half of 2012.

'The Yemeni authorities must ensure that a commission of inquiry announced in September covers the truly shocking abuses committed.

'The tragedy of Abyan will haunt Yemen for decades to come unless those responsible are held to account and victims and their families receive reparations.'

Amnesty's 55-page report, Conflict in Yemen: Abyan's Darkest Hour, documents violations of the rules of war during the armed conflict between government forces and Ansar al-Sharia, an Islamist armed group affiliated to al-Qaeda in the Arabian Peninsula.


Scroll down for video


'Catastrophe': The Yemeni says he had his left hand amputated (above) without attending a trial and without prior knowledge of the punishment



Instilling fear: Residents told Amnesty that the amputated hand was later suspended by a rope in the town's market for all to see

It details horrific human rights abuses committed in the governorate of Abyan and other areas in the south of Yemen during the rule of the Islamist group between February 2011 and June 2012.

In addition, the report shows that the Yemeni government response to Ansar al-Sharia included indiscriminate attacks resulting in the unnecessary loss of civilian life, obstructing medical care and subjecting suspected fighters to enforced disappearance.

There are also reports that some of the air strikes documented in this report may have been carried out by U.S. drones, which appear to have been active during the conflict.

After it took control of most of Abyan during 2011-12, Amnesty says Ansar al-Sharia was responsible for widespread human rights abuses, including via its newly-established 'religious courts'.



No Justice: Amnesty says Ansar al-Sharia was responsible for widespread human rights abuses, including via its newly-established 'religious courts' after it took power of Abyan in February 2011



Coercion: According to a video released by Amnesty these two men are among many who were forced into making confessions to crimes by Ansar al-Sharia



'Widespread abuses': The Islamist group controlled the Abyan region from February 2011 until it was ousted by government forces in June this year


These frequently imposed cruel, inhuman and degrading punishments on alleged criminals, suspected spies, those accused of 'sorcery' and people who transgressed cultural norms, it added.

Punishments included summary killings - including at least one post-execution crucifixion - amputations and floggings.

In one case, 28-year-old Saleh Ahmed Saleh al-Jamli was found guilty by a religious court in the town of Ja’ar of planting electronic devices in two vehicles carrying Ansar al-Shari’a commanders.


Shocking: This image from the Amnesty video reportedly shows a Yemeni's body being crucified in public after they were executed

The ruling obtained by Amnesty said the devices had enabled U.S. drones to kill commanders in Zinjibar and claimed Saleh al-Jamli 'confessed' to a judicial committee.

The court ruled that Saleh al-Jamli should be killed, and his remains crucified. Meanwhile, Ansar al-Shari’a amputated the hand of at least one person suspected of theft.

One of them was a young man Amnesty met whose left hand had been amputated in a public square in Ja’ar.

He was arrested along with two of his friends by members of the armed group and accused of stealing electric wires.

The friends were eventually released but the youth, a member of a marginalised community widely referred to as al-akhdam (servants), said that he was tortured for five days without access to a lawyer or his family, and then had his left hand amputated without attending a trial and without prior knowledge of the punishment.

Amnesty has been given a 90-second video appearing to show the amputation being carried out. Residents told Amnesty that the amputated hand was later suspended by a rope in the town's market for all to see.

Ansar al-Sharia also sought to tighten its grip on power through threats, intimidation and the enforcement of a highly repressive social and religious code.

The rights of women and girls in particular came under attack and severe dress codes were imposed, as was a strict separation of the sexes and restrictions at work and in schools.

After Ansar al-Shari’a took over Abyan and extended its reach to other areas in the south, the Yemeni military launched several attacks to regain control, culminating in a major offensive on May 12 this year using air power and artillery.



Amnesty claims dozens of civilians were killed by reckless counter-insurgency operations by the Yemen government as it sought to seize back control of Abyan



Heavy-handed: Amnesty claims the Yemeni government forces used inappropriate battlefield weapons such as artillery in civilian residential areas

By the end of June, government forces had succeeded in driving the group out of Abyan and surrounding areas.

In the process, Amnesty claims the Yemeni government forces used inappropriate battlefield weapons such as artillery in civilian residential areas.

Scores of civilians, including children, were killed and many more injured as a result of air strikes and artillery and mortar attacks by government forces.




Amnesty says the tragedies will 'haunt Yemen for decades' unless the perpetrators are brought to justice



Although Ansar al-Sharia were driven out of Abyan in June, there remains a danger the group will re-emerge and that the armed conflict will resume

Ansar al-Shari’a meanwhile used residential areas as bases, particularly in Ja’ ar, recklessly exposing civilian residents to harm.

The toxic mix of fighting and human rights abuses meant an estimated 250,000 people from Yemen’s southern governorates, particularly Abyan, were displaced.

While Ansar al-Shari’a were driven out of the cities and towns they controlled in June, there remains a danger the group will re-emerge and that the armed conflict will resume.

The report is based on the findings of an Amnesty fact-finding mission to Yemen in June-July 2012.



Read more: http://www.dailymail.co.uk/news/article-2242719/Al-Qaeda-committed-truly-shocking-human-rights-abuses-power-Yemens-Abyan-region-says-Amnesty-report.html#ixzz2E8L5I88F

Deutsche Bank Hid $12 Billion In Losses To Avoid A Government Bail-Out

Forget the perfectly anticipated Greek (selective) default. This is the real deal. The FT just released a blockbuster that Europe's most important and significant bank, Deutsche Bank, hid $12 billion in losses during the financial crisis, helping the bank avoid a government bail-out, according to three former bank employees who filed complaints to US regulators. US regulators, whose chief of enforcement currently was none other than the General Counsel of Deutsche Bank at the time!

From the FT:

The three complaints, made to regulators including the US Securities and Exchange Commission, claim that Deutsche misvalued a giant position in derivatives structures known as leveraged super senior trades, according to people familiar with the complaints.

All three allege that if Deutsche had accounted properly for its positions – worth $130bn on a notional level – its capital would have fallen to dangerous levels during the financial crisis and it might have required a government bail-out to survive.

Instead, they allege, the bank’s traders – with the knowledge of senior executives – avoided recording “mark-to-market”, or paper, losses during the unprecedented turmoil in credit markets in 2007-2009.

Two of the former employees allege that Deutsche mismarked the value of insurance provided in 2009 by Warren Buffett’s Berkshire Hathaway on some of the positions. The existence of these arrangements has not been previously disclosed.

Naturally, DB is defending itself in the only way it knows: "this is complicated stuff, and we know better than those guys." In other words, this is just a "tempest in a teapot." Where have we heard that before...

The bank said the investigation revealed that the allegations “stem from people without personal knowledge of, or responsibility for, key facts and information”. Deutsche promised “to continue to co-operate fully with the SEC’s investigation of this matter”.

The complaints were made at different times in 2010 and 2011 independently of each other. All of the men spent hours with SEC enforcement attorneys and provided internal bank documents during multiple meetings, people familiar with the matter say.

SEC enforcement attorneys eh? Because this is where it gets really fun: the person who was in charge of DB's legal compliance at the time was none other than Robert Khuzami. The same Robert Khuzami who just happens to be the chief of enforcement at the SEC!

Robert Khuzami, head of enforcement at the SEC, has recused himself from all Deutsche Bank investigations because he was Deutsche’s general counsel for the Americas from 2004 to 2009. Dick Walker, Deutsche’s general counsel, is a former head of enforcement at the SEC. The SEC declined to comment on the investigation.

Sadly, the "we are too sophisicated" defense may not be very effective this time.

Two of the former Deutsche employees have alleged they were pushed out of the bank as a result of reporting their concerns internally.
One of them, Eric Ben-Artzi, a risk manager at Deutsche, was fired three days after submitting a complaint to the SEC. In a separate complaint to the Department of Labor, he claims his dismissal was retaliation for his allegations.

Matthew Simpson, a senior trader at Deutsche, also left the company after submitting his own complaint to the SEC. Mr Simpson declined to comment. Deutsche Bank paid Mr Simpson $900,000 to settle his anti-retaliation lawsuit. Reuters reported in June 2011 that Mr Simpson had raised concerns about improper valuation of the derivatives portfolio.

The third complainant, who worked in risk management and has requested anonymity, raised his concerns to the SEC and voluntarily left the bank.

Or actually, since every bank in the world is forced to lie, cheat and mismark its own balance sheets every single day, not least of all the European Central Bank which as of moments ago has to accepted defaulted Greek bonds as collateral, this may just be completely ignored.

After all opening this particular Pandora's Box may well reveal that not only DB but the world's entire financial system is completely and totally insolvent.

* * *

And for those curious why the SEC's chief enforcer will never lift a finger against his own bank, all other considerations and recusals aside, here is what we wrote back in May 2010

Robert Khuzami Stands To Lose Up To $250,000 If He Pursues Action Against Deutsche Bank

When the SEC'a Robert Khuzami recently recused himself of pursuing an investigation against Deutsche Bank in regard to potential CDO malfeasance, a bank where it is common knowledge the CDOs flowed (and were shorted "where appropriate" by Mr. Lippmann and his henchmen) like manna from heaven, we were curious just how large the conflict of interest must be for him to not pursue his official duty. Luckily, we were able to answer this question when we recently encountered Mr. Khuzami's Public Financial Disclosure Report for Executive Branch Personnel. It appears that Mr. Khuzami, who from 2002 to 2009 worked at DB, most recently as General Counsel, might have directly profited quite handsomely from the very activity he is now prosecuting Goldman, and other banks very likely soon, for engaging in. How handsomely? His 2007 bonus, 2008 salary and bonus, and 2009 salary added up to $3,804,537. This works out to about $1.9 million in comp per year. And let's not forget that 2006/2007 was the peak years for DB's CDO issuance. It sure seems Mr. Khuzami benefited nicely as a participant in precisely the kind of CDO gimmickry that he is currently all over Goldman for. Yet most ironic, is that Robert is expecting to receive between $100,001 and $250,000 in vested deferred stock comp from Deutsche Bank in August 2010. Should he, or someone else at the SEC, commence an investigation into Khuzami's former employer, the SEC's Director of Enforcement is sure to lose a substantial amount of money tied into the absolute value of Deutsche Bank stock.

And it doesn't end there. Khuzami lists the following asset holdings as of June 2009:

• Federated US Treasury Cash Reserves: $1,001-$15,000
• US Treasury Cash Reserves: $1,000,001-$5,000,000
• Fidelity Advisor New Insights Fund: $15,001-$50,000
• Henderson Int'l Opportunities Fund: $15,001-$50,000
• Deutsche Bank Cash Account Pension Plan: $100,001-$250,000
• DB Stable Value Fund: $1,001-$15,000
• Goldman Sachs Mid Cap Value Fund: $1,001-$15,000
• Dodge and Cox Int'l Stock Fund: $50,001-$100,000
• SSGA Money Market Fund: $15,001-$50,000
• Delaware Emerging Markets: $50,001-$100,000
• Gateway Fund (401k): $15,001-$50,000
• Third Avenue Real Estate Fund (401k): $15,001-$50,000
• Touchstone MidCap Growth Class A (401k): $15,001-$50,000
• Wells Fargo Endeavor Select FD (401k): $15,001-$50,000
• Yacktman Fund (401k): $15,001-$50,000
• PIMCO Real Return Class A (401k): $50,001-$100,000
• Principal Short-Term Fixed Income (401k): $1,001-$15,000
• Personal Residence - New York (Gross Rental Income): $1,000,001-$5,000,000
• Deutsche Bank Common Stock (Vested Amount Compensation): $100,001-$250,000
• Vanguard 529 Moderate: $50,001-$100,000
• Vanguard 529 Aggressive: $1,001-$15,000

It appears Mr. Khuzami has done quite well while working in the private sector, undoubtedly defending his German employer from precisely the same actions he, or someone else at the SEC, may soon charge the firm was defrauding investors by. His total disclosed asset range from $2,525,000 to $11,375,000. It is also ironic that nearly half Mr. Khuzami's assets are contained in real estate, and not to mention that a substantial amount of his assets are also contained in Deutsche Bank plans as well as DB stock deferred comp. In fact, let's take a look at that deferred comp of $100,001-$250,000 a little closer.

It appears the SEC's Enforcement Director has between $100,001 and $250,000 in DB deferred stock compensation, which becomes payable in August 2010. Obviously this is not a trivial number. And while Khuzami may have recused himself from pursuing DB for CDO infarctions, that does not mean that some other SEC enforcer (surely, their $1 billion a year budget allows them at least more than one enforcement professional) would not be able to go after DB. The problem as we see it is that since the announcement of the SEC case against Goldman the firm has lost about 25% of its market cap. It is conceivable that DB, which dabbled far more in CDOs, and thus the SEC would have a much stronger case agaisnt the bank, would thus lose far more of its market cap should the SEC announce a case against the Germans. In fact, we could be looking at Mr. Khuzami's Vested Deferred Compensation value dropping from $100,001 - $250,000 to maybe even as low as $15,001-$50,000. Then again, this becomes irrelevant after August, when the former DB GC will have collected all his dues. Does this mean we should expect nothing from the SEC against Deutsche Bank for at least 4 more months? And is September 1 the day when the SEC formally announces charges against Deutsche? We would love to get the SEC's feedback on this.

Mr. Khuzami's potential conflicts of interest do not end with his open exposure to Deutsche Bank. His Schedule A appendix indicates that the man has open equity positions with firms such as Bank of America, Deutsche Bank, and JP Morgan. To wit:

Would this mean that Mr. Khuzami, and thus the entire SEC Enforcement Division, if judging by the Deutsche Bank case study, would recuse itself of investigating these three firms from an enforcement standpoint?

We certainly do not begrudge Khuzami's generous winnings as part of the private sector. If anything, any borderline criminal activity he may have helped cover up as GC of Deutsche (an act he was supposed to do so no ill-will there) should provide him with the knowledge to prosecute just such activity. However, when the head of the main US regulator's enofrcement body is so terminally ensnared in not just the Wall Street complex, but in the very fabric of Keynesianism (that up to $5,000,000 Treasury holding for example and not to mention his up to $5,000,000 rental property), the population should ask just how extremely biased this man can be when prosecuting the very system that allows him to have up to $11 million in assets currently tied in to the perpetuated status quo. Surely, should the Fed, and the market in general, be "surprisingly" uncovered to be the same ponzi construct as Madoff's pyramid scheme, Khuzami, and who knows how many other people, stand to lose virtually the bulk of their assets. This makes them very much conflicted in any real enforcement action, and certainly not independent or impartial. Perhaps Dodd, in his joke of a bill, can consider just how to establish a securities regulator which by its very nature is not constantly in bed with the very subject it is supposed to be investigating.

Zero Hedge

Root of the conflict is not settlements, but Israel’s very existence, Netanyahu says

Prime Minister Benjamin Netanyahu on Tuesday dismissed heavy criticism of Israel’s recent announcement of new housing construction in East Jerusalem and the West Bank, saying the root of the Israeli-Palestinian conflict “is not the settlements, it is the very existence of the State of Israel and the desire to wipe it off the face of the Earth.”

Speaking at a forum on public diplomacy held in Jerusalem, Netanyahu said that “we must constantly repeat that the root of the conflict is the very existence of the State of Israel, the refusal to recognize the State of Israel in any borders whatsoever.”

Palestinian Authority President Mahmoud Abbas, for his part, instructed his subordinates Tuesday to muster international support to halt “Israeli settlements in all of the Palestinian territories, particularly what is referred to as E1.”

“We cannot be silent on the matter of settlements by any means,” he added. “We will pursue this endangering matter with great attention in the coming days for if Israel continues to build, it indicates that it is not interested in arriving at peace.”

Earlier on Tuesday, a senior Palestinian official warned that Israel’s latest settlement plans would destroy any lingering hopes of setting up a Palestinian state next to Israel, as international anger over the planned construction snowballed.

Israel announced the plans in response to last week’s UN General Assembly upgrade, to nonmember observer state status, of “Palestine” in the West Bank, Gaza and east Jerusalem, lands Israel captured in 1967.

The plans include 3,000 more homes for Jews in the West Bank and east Jerusalem, as well as preparations for construction of the especially sensitive E1 project that would link Jerusalem to the large settlement of Ma’aleh Adumim to the east, potentially destroying the possibility of a contiguous Palestinian state in the West Bank. Israeli officials have stressed that the E1 announcement relates to a very preliminary planning stage.

Separately, Israel is moving forward with two major projects in Jewish neighborhoods of East Jerusalem. Israel would build more than 4,200 apartments in the two areas, Ramat Shlomo and Givat Hamatos.

The Ramat Shlomo project touched off a diplomatic crisis with the US in 2010 when the ministry gave it preliminary approval during a visit by Vice President Joe Biden.

Israeli settlement construction lies at the heart of a four-year breakdown in peace talks, and was a major factor behind the Palestinians’ UN statehood bid, the Palestinians said. Previous Israeli government peace offers, rejected by the Palestinians, have shown a readiness to dismantle the majority of the settlements, and to trade land in Israel, in “land swap” arrangements, in order to maintain major settlement blocs. Since 1967, half a million Israelis have settled in the West Bank and East Jerusalem.

The Palestinians say E1 and Givat Hamatos are particularly problematic because they would cut off east Jerusalem, the intended Palestinian capital, from the rest of the West Bank.

Israel’s plans for E1 and Givat Hamatos “will leave us with no peace process,” Saeb Erekat, a senior aide to Palestinian President Mahmoud Abbas, told The Associated Press.

He later told Israel TV that “it’s over” if these two areas are built.

“Don’t talk about peace, don’t talk about a two-state solution … talk about a one-state reality between the River Jordan and the Mediterranean,” Erekat said, referring to the land that the international community hopes will one day accommodate both Israel and a Palestinian state.

British Foreign Secretary William Hague sounded a similar warning Tuesday, telling Britain’s parliament that Israel’s building plans would make a Palestinian state alongside Israel “almost inconceivable.”

Eight countries, Britain among them, summoned local Israeli ambassadors in protest since Monday, and Hague said there could be further diplomatic steps if building proceeds.

Some Palestinian officials have raised the possibility of asking the European Union to reconsider its trade agreements with Israel, butHague said he did not think Europe is ready for economic sanctions against Israel.

Israel has rebuffed the international criticism, which put it at odds with some of its strongest foreign allies, including Australia.

Foreign Minister Avigdor Lieberman said Tuesday that construction plans would move forward, particularly in east Jerusalem and nearby West Bank settlements. “Israel makes decisions according to its national interests, and not in order to punish, fight or confront,” he said.

The Palestinians, meanwhile, were debating their next moves in a meeting of senior officials chaired by Abbas at his government compound in the West Bank on Tuesday evening.

UN recognition could enable the Palestinians to gain access to the International Criminal Court and seek war crimes charges against Israel for construction of settlements on occupied lands.

Last week, before Israel’s announcement of the new settlement plans, Abbas said that he would not be turning to the ICC “unless we were attacked,” and Palestinian officials portrayed an appeal to the court as a step of last resort.

However, Abbas said Tuesday that “no one can keep quiet about the issue of settlement in E1,” adding that if Israel keeps building, “it definitely does not want to reach a peace agreement.”

Actual construction in E1 would be years away even if the planning process is pushed ahead now.

The Palestinian representative to the United Nations, Riyad Mansour, wrote to the UN chief and the heads of the Security Council and the General Assembly late Monday that Israel’s construction constitutes a war crime.

The letter made no mention of possible ICC action, which in any case would first require a series of steps by the Palestinians and the court.

A Palestinian case at the ICC could also expose Abbas’s main Palestinian rival, the Islamic militant Hamas, to possible war crimes charges for its indiscriminate rocket fire from Gaza on Israel.

Hanan Ashrawi, a senior PLO official, said the Palestinians were encouraged by the recent diplomatic sanctions against Israel, but that the international community must go further.

Among other steps, she said the European Union should reconsider its association agreement with Israel that grants the Jewish state considerable trade benefits. She said the EU should also take harsher measures against products from Israeli settlements.

The Times of Israel

The Coming Derivatives Panic That Will Destroy Global Financial Markets

When financial markets in the United States crash, so does the U.S. economy.  Just remember what happened back in 2008.  The financial markets crashed, the credit markets froze up, and suddenly the economy went into cardiac arrest.  Well, there are very few things that could cause the financial markets to crash harder or farther than a derivatives panic.  Sadly, most Americans don't even understand what derivatives are.  Unlike stocks and bonds, a derivative is not an investment in anything real.  Rather, a derivative is a legal bet on the future value or performance of something else.  Just like you can go to Las Vegas and bet on who will win the football games this weekend, bankers on Wall Street make trillions of dollars of bets about how interest rates will perform in the future and about what credit instruments are likely to default.  Wall Street has been transformed into a gigantic casino where people are betting on just about anything that you can imagine.  This works fine as long as there are not any wild swings in the economy and risk is managed with strict discipline, but as we have seen, there have been times when derivatives have caused massive problems in recent years.  For example, do you know why the largest insurance company in the world, AIG, crashed back in 2008 and required a government bailout?  It was because of derivatives.  Bad derivatives trades also caused the failure of MF Global, and the 6 billion dollar loss that JPMorgan Chase recently suffered because of derivatives made headlines all over the globe.  But all of those incidents were just warm up acts for the coming derivatives panic that will destroy global financial markets.  The largest casino in the history of the world is going to go "bust" and the economic fallout from the financial crash that will happen as a result will be absolutely horrific.

There is a reason why Warren Buffett once referred to derivatives as "financial weapons of mass destruction".  Nobody really knows the total value of all the derivatives that are floating around out there, but estimates place the notional value of the global derivatives market anywhere from 600 trillion dollars all the way up to 1.5 quadrillion dollars.

Keep in mind that global GDP is somewhere around 70 trillion dollars for an entire year.  So we are talking about an amount of money that is absolutely mind blowing.

So who is buying and selling all of these derivatives?

Well, would it surprise you to learn that it is mostly the biggest banks?

According to the federal government, four very large U.S. banks "represent 93% of the total banking industry notional amounts and 81% of industry net current credit exposure."

These four banks have an overwhelming share of the derivatives market in the United States.  You might not be very fond of "the too big to fail banks", but keep in mind that if a derivatives crisis were to cause them to crash and burn it would almost certainly cause the entire U.S. economy to crash and burn.  Just remember what we saw back in 2008.  What is coming is going to be even worse.

It would have been really nice if we had not allowed these banks to get so large and if we had not allowed them to make trillions of dollars of reckless bets.  But we stood aside and let it happen.  Now these banks are so important to our economic system that their destruction would also destroy the U.S. economy.  It is kind of like when cancer becomes so advanced that killing the cancer would also kill the patient.  That is essentially the situation that we are facing with these banks.

It would be hard to overstate the recklessness of these banks.  The numbers that you are about to see are absolutely jaw-dropping.  According to the Comptroller of the Currency, four of the largest U.S. banks are walking a tightrope of risk, leverage and debt when it comes to derivatives.  Just check out how exposed they are...

JPMorgan Chase

Total Assets: $1,812,837,000,000 (just over 1.8 trillion dollars)

Total Exposure To Derivatives: $69,238,349,000,000 (more than 69 trillion dollars)

Citibank

Total Assets: $1,347,841,000,000 (a bit more than 1.3 trillion dollars)

Total Exposure To Derivatives: $52,150,970,000,000 (more than 52 trillion dollars)

Bank Of America

Total Assets: $1,445,093,000,000 (a bit more than 1.4 trillion dollars)

Total Exposure To Derivatives: $44,405,372,000,000 (more than 44 trillion dollars)

Goldman Sachs

Total Assets: $114,693,000,000 (a bit more than 114 million dollars - yes, you read that correctly)

Total Exposure To Derivatives: $41,580,395,000,000 (more than 41 trillion dollars)

That means that the total exposure that Goldman Sachs has to derivatives contracts is more than 362 times greater than their total assets.

To get a better idea of the massive amounts of money that we are talking about, just check outthis excellent infographic.

How in the world could we let this happen?

And what is our financial system going to look like when this pyramid of risk comes falling down?

Our politicians put in a few new rules for derivatives, but as usual they only made things even worse.

According to Nasdaq.com, beginning next year new regulations will require derivatives traders to put up trillions of dollars to satisfy new margin requirements.

Swaps that will be allowed to remain outside clearinghouses when new rules take effect in 2013 will require traders to post $1.7 trillion to $10.2 trillion in margin, according to a report by an industry group.

The analysis from the International Swaps and Derivatives Association, using data sent in anonymously by banks, says the trillions of dollars in cash or securities will be needed in the form of so-called "initial margin." Margin is the collateral that traders need to put up to back their positions, and initial margin is money backing trades on day one, as opposed to variation margin posted over the life of a trade as it fluctuates in value.

So where in the world will all of this money come from?

Total U.S. GDP was just a shade over 15 trillion dollars last year.

Could these rules cause a sudden mass exodus that would destabilize the marketplace?

Let's hope not.

But things are definitely changing.  According to Reuters, some of the big banks are actually urging their clients to avoid new U.S. rules by funneling trades through the overseas divisions of their banks...

Wall Street banks are looking to help offshore clients sidestep new U.S. rules designed to safeguard the world's $640 trillion over-the-counter derivatives market, taking advantage of an exemption that risks undermining U.S. regulators' efforts.

U.S. banks such as Morgan Stanley (MS.N) and Goldman Sachs (GS.N) have been explaining to their foreign customers that they can for now avoid the new rules, due to take effect next month, by routing trades via the banks' overseas units, according to industry sources and presentation materials obtained by Reuters.

Unfortunately, no matter how banks respond to the new rules, it isn't going to prevent the coming derivatives panic.  At some point the music is going to stop and some big financial players are going to be completely and totally exposed.

When that happens, it might not be just the big banks that lose money.  Just take a look at what happened with MF Global.

MF Global has confessed that it "diverted money" from customer accounts that were supposed to be segregated.  A lot of customers may never get back any of the money that they invested with those crooks.  The following comes from a Huffington Post article about the MF Global debacle, and it might just be a preview of what other investors will go through in the future when a derivatives crash destroys the firms that they had their money parked with...

Last week when customers asked for excess cash from their accounts, MF Global stalled. According to a commodity fund manager I spoke with, MF Global's first stall tactic was to claim it lost wire transfer instructions. Then instead of sending an overnight check, it sent the money snail mail, including checks for hundreds of thousands of dollars. The checks bounced. After the checks bounced, the amounts were still debited from customer accounts and no one at MF Global could or would reverse the check entries. The manager has had to intervene to get MF Global to correct this.

How would you respond if your investment account suddenly went to "zero" because the firm you were investing with "diverted" customer funds for company use and now you have no way of recovering your money?

Keep an eye on the large Wall Street banks.  In a previous article, I quoted a New York Times article entitled "A Secretive Banking Elite Rules Trading in Derivatives" which described how these banks dominate the trading of derivatives...

On the third Wednesday of every month, the nine members of an elite Wall Street society gather in Midtown Manhattan.

The men share a common goal: to protect the interests of big banks in the vast market for derivatives, one of the most profitable — and controversial — fields in finance. They also share a common secret: The details of their meetings, even their identities, have been strictly confidential.

According to the article, the following large banks are represented at these meetings: JPMorgan Chase, Goldman Sachs, Morgan Stanley, Bank of America and Citigroup.

When the casino finally goes "bust", you will know who to blame.

Without a doubt, a derivatives panic is coming.

It will cause the financial markets to crash.

Several of the "too big to fail" banks will likely crash and burn and require bailouts.

As a result of all this, credit markets will become paralyzed by fear and freeze up.

Once again, we will see the U.S. economy go into cardiac arrest, only this time it will not be so easy to fix.

Do you agree with this analysis, or do you find it overly pessimistic?  Please feel free to post a comment with your thoughts below...

Economic Collapse