The Daily IndigoStar7 / News Ticker
JERUSALEM - Forty years before becoming Israel's top decision-making duo, Benjamin Netanyahu and Ehud Barak first made news on the blood-stained wing of a hijacked Belgian airliner. Full Article
Consumers plot emergency oil release as Saudi decries high prices
By Yann Le Guernigou, Muriel Boselli and Jonathan Leff
PARIS/NEW YORK | Wed Mar 28, 2012 6:19pm EDT
PARIS/NEW YORK (Reuters)- Saudi Arabian Oil Minister Ali al-Naimi mounted his most direct rhetorical attack against high oil prices on Wednesday, but showed no sign of moving to increase supplies even as France joined the United States and Britain in talks for a release of strategic reserves.
Two weeks after Reuters initially reported that Britain and the United States were set to agree on tapping emergency stockpiles, French Energy Minister Eric Besson said the European nation was also in talks with Washington. Le Monde reported that the move could come in a matter of weeks.
At the same time, the Financial Times published a rare opinion piece by the head of the world's largest crude oil exporter, who said a feared shortage of oil supplies was a "myth" but reiterated that Saudi Arabia was ready, able and willing to meet any gap in supplies.
The moves emphasized the growing concern from both sides of the market -- producers and consumers -- about the economic and political impact of the 15 percent jump in oil prices this year. But it also highlighted the different responses they are taking...
By James R. Holmes
March 28, 2012
Gen. Chen Bingde’s instincts on how to battle piracy are sound. Hopefully his, and his political superiors’, strategic judgment is equally sound. “For counterpiracy campaigns to be effective,” declares the chief of the People’s Liberation Army General Staff, “we should probably move beyond the ocean and crash their bases on the land.” He wants to lop the head off the snake. “It’s important,” vouchsafes Chen, “that we target not only the operators, those on the small ships or craft conducting the hijacking activities, but also the figureheads.” And indeed, taking more offensive, more decisive action makes intuitive sense – so much so that in late 2008, as the international community bestirred itself to combat piracy, the United Nations explicitly authorized member states to act against coastal villages from which corsairs stage sea raids.
Of late, the international community has remained mum about carrying the fight ashore. Since 2008, periodic U.N. Security Council resolutions renewing the counterpiracy mission’s mandate have made no mention of it. That’s probably because few political or military leaders are enthusiastic about putting boots on the ground in Somalia. It has no constituency within the Security Council. Why should U.N. ambassadors endure the hassle of negotiating potentially controversial language if no one intends to act on it? If Beijing is serious about offensive action, nevertheless, it can probably convince the council to renew the mandate for land operations. There is precedent....
By Yoshiaki Yano
March 28, 2012
In 2010, China supplanted Japan as the world’s second-largest economy, a headline-grabbing event that underscored an increasingly apparent reality – the gap in economic power between the United States and China is narrowing rapidly.
When he first took office, President Barack Obama emphasized policies aimed at improving ties with China. But the U.S. announcement in January 2010 that it was providing Taiwan with a massive military aid package prompted an angry response from China. Yet while Washington finds itself increasingly at odds with a rising and more militarily capable China, its deteriorating fiscal situation means Washington has little choice but to reconsider its military posture. The fact is that the United States may have to live with a much narrower military focus than has marked its policies in recent decades.
U.S. defense capabilities are critical to its foreign policy strategy, but they are at the mercy of budgetary realities. With costly domestic programs taking a greater share of the U.S. federal budget as baby boomers retire, the country’s budgetary troubles have emerged as a major issue in this year’s presidential election...
March 29, 2012
It’s a good thing for Taiwan’s gangsters that baseball fans have a pretty loose interpretation of the three-strikes-and-you’re-out rule. Otherwise, the flourishing illegal gambling syndicates that prey upon the island republic’s national pastime would have been dead in the water long ago.
In the run up to this month’s China Professional Baseball League’s opening day, Lu Wen-sheng, long-time manager of defending champions Uni-President Lions, admitted to prosecutors that he had passed on daily team information and strategy to southern-based mobsters.
That admission was just the latest in a long line of often bizarre match-fixing scandals to rock the league since pro-ball began here in 1989. Since then, authorities have unearthed five full blown match-rigging syndicates – four of them in the last seven years – and scores of “incidents” that read like the plot of a Hollywood mafia movie.
And for the players who chaffed at the idea of being bought off with money, cars, drugs or prostitutes, things got very ugly, very fast.
Mobsters have kidnapped, beat, pistol-whipped and stabbed scores of players and managers. Guns have been inserted in players’ mouths, bullets sent to their homes as warnings, and rumors abound about players being thrown off balconies or going missing after speaking with investigators....
Execs Are Dumping Stock. Is It Time to Sell?
As stocks have soared, top executives and other insiders appear to have turned bearish. Should you follow their lead?
As the stock market rally heads toward its sixth month, corporate executives are looking to cash in. Nike (NKE) Chief Financial Officer Donald Blair sold 11,000 shares of his stock in the company – more than $1.2 million worth – earlier this month, according to SEC filings. Michael Kors, the fashion designer and chief creative officer of Michael Kors Holdings (KORS), will unload nearly 3 million shares of his company’s stock, which has almost doubled since its first day of trading in December. The planned sale represents more than 18 percent of his current stake. And Mark Pincus, the CEO of Zynga (ZNGA), plans on selling more than $200 million worth of his stock in a secondary offering of shares in the videogame-maker, which also went public in December.
Across corporate America, as stocks have soared – the S&P 500 is up nearly 30 percent from its October 03, 2011 low, while the Dow Jones industrial average has climbed nearly 25 percent over that time – some top executives and other insiders have turned bearish. Insiders have sold $4.7 billion worth of stock so far this month, putting March on pace for the highest total since last May. And the ratio of selling to buying reached 20.8, the most bearish it’s been since early last year, according to TrimTabs Investment Research, which tracks insider transactions. “What we’ve seen,” says David Coleman, editor of Vickers Weekly Insider Report published by Argus Research, “are levels of sales relative to purchases that we have not seen since about February 2011.”......
3/27/2012 @ 11:12AM |3,621 views
Ben Bernanke's Views on Gold Are Rather Passé
Federal Reserve chairman Ben Bernanke’s big speech last week before the students at George Washington University didn’t necessarily start out to be a screed against the gold standard, but it sure turned out that way. For its first two-thirds, the speech was a folksy historical justification of central banking. But in the peroration, the end, and then the Q&A, almost against its better instincts, it devolved into gold-bashing.
It was a pretty undisciplined speech, and the shots Bernanke fired against gold ran the gamut. He repeated the utterly minor point that gold standards encourage gold exploration and development, thus diverting resources from the real economy. He said that bank failures happened in number in the gold-standard era, but provided no point of reference as to the relative size of these failures. And at last he dwelt on the gold standard’s complicity in the onset of the Great Depression...
Iranian Website Describes How Iran Will Repulse a Ground Attack
By: A. Savyon & Y. Mansharof*
Following statements by U.S. President Barack Obama in early March 2012 clarifying that no attack on Iran was in the offing, and stressing the need for further diplomatic efforts vis-à-vis Tehran, Islamic Revolutionary Guard Corps (IRGC) Al-Qods Forces commander Qassem Suleimani tauntingly declared, at a March 13 ceremony paying tribute to martyrs, that his "regime's military forces will work determinedly, with honor and national force, and will demonstrate their zeal in facing any blind attack from the enemy."
On March 15, the website Mashreq News, which is close to security circles in Iran, cited Suleimani's statements and elaborated on them, describing in detail how the IRGC would repel a ground attack on Iran, including a list of the means of warfare it would use. According to the website, the account is based on the IRGC's latest military maneuvers in eastern Iran, and assumes that the country would be invaded from the east. The maneuvers, it should be mentioned, included mechanized infantry, armored forces, helicopters and concealed forces.
What is remarkable about this article is that, while all assessments and predictions published in the media in recent months have envisioned a surgical Western air strike on Iran's nuclear facilities – including a New York Times article envisaging a 100-plane Israeli strike – Mashreq discussed an extensive ground attack in eastern Iran, stressing the country's ability to repel such an attack by listing the weapons systems in its possession, which are for the most part outmoded. Also of note is the defensive nature of the military response described in the article, which makes no mention of previous Iranian threats to strike U.S. airbases in the Gulf or other U.S. or Israeli interests (See MEMRI's recent reports for more on these threats).
By staff reporters Li Qing and Li Huawei 03.23.2012 16:05
Futures Sector Expands – And Seeks Investors
Frenetic speculation and sloppy management marked the early days for China's 20-year-old futures trading network.
Today, having survived tests, overhauls, break-ups and reconciliations of decades past, the futures market arena has settled into a period of stable development.
This stability, in the eyes of the network's builders and supervisors at government agencies, has helped create the right atmosphere for adding new, diverse products and platforms.
The China Securities Regulatory Commission (CSRC) has thus accelerated approvals for new futures products since 2006, giving markets permission to add 20 commodities in areas as diverse as agricultural goods, metals, energy and chemicals. In addition, a financial futures platform was allowed to open in 2010.
So far, though, investors have shown limited interest in this ever-expanding product arena. Some reluctant investors point to risk concerns as a reason for caution, while others say regulations that restrict futures trading access are too tough.
The result has been a market that many say has yet to reach its potential.
Despite stability and CSRC's official approval stamp on new products, the total value of all futures traded on China's platforms including the Shanghai Futures Exchange (SFE), Zhengzhou Futures Exchange and Dalian Futures Exchange – was 137.5 trillion yuan last year
Can futures in China reach a development stage that combines by stability with trading growth as well as eager investors? And will CSRC continue supporting an ever-wider product field?.....
By Andy Xie 03.23.2012 15:27
The Yen's Looming Day of Reckoning
Japan is on an unsustainable path of a strong yen and deflation. The unprofitability of Japan's major exporters and emerging trade deficits suggest that the end of this path is in sight. The transition from a strong to weak yen will likely be abrupt, involving a sudden and big devaluation of 30 to 40 percent. It will be a big shock to Japan's neighbors and its distant competitors like Germany. The yen's devaluation in 1996 was a main factor in triggering the Asian Financial Crisis. Japan's neighbors must have a strong banking system to withstand a bigger devaluation of the yen.
Japan's nominal GDP contracted 8 percent in the four years to the third quarter of 2011, and six percentage points of that was due to deflation. Without increased government expenditure, the contraction will be one percentage point more. Japan has not seen this kind of sustained deflation since the 1930s.
Without government deficits, Japan's economy will decline much more. Central government bonds and borrowings plus its guaranteed debts rose by 116.3 trillion yen during the period, equivalent to one-fourth of the level of the nominal GDP in the third quarter of 2011. If Japan had adopted balanced budgets, its economy would have contracted two to three times more. This will lead to a debt crisis in its private sector.
A strong yen, deflation and rising government debt form a short-term equilibrium that lasts as long as the market believes it is sustainable. The yen has seen a relentless upward trend since it depegged from the dollar in 1971...
Posted By Stephen M. Walt Tuesday, March 27, 2012 - 5:13 PM
At the Big Think website, John Horgan argues that war is just a cultural practice that humankind could eventually abandon, unless we keep infecting ourselves with the "war virus" (h/t Andrew Sullivan). If one state gets infected by war-proneness, so his argument runs, its neighbors may have no choice but to follow suit and adopt similar measures in order to prevent themselves from being conquered. In Horgan's words (as reported by Mark Cheneyhere):
"Imagine your neighbor is a violent psychopath who is out for blood and land. You, on the other hand, are person who wants peace. You would have few options but to embrace the ways of war for defense. So essentially your neighbor has infected you with war."
It's an arresting use of language, perhaps, but the history of social Darwinism should have taught us to be wary of bringing misplaced biological analogies into the study of world politics. Viral infections spread by very specific and well-known mechanisms -- e.g., they take over the DNA of neighboring cells and replicate themselves-and that's not remotely like the mechanism that Horgan is identifying here. Instead, he's actually describing a situation where an external threat forces the leaders of neighboring states to rationally chooseto adopt policies and strategies designed to insure their survival. That's not how viruses spread: You don't catch a cold because you've decided the only way to protect yourself against your sneezing neighbor is to start sniffling and sneezing along with them.
President Obama's real constitutional overreach was Libya, not health care.
BY MICHAEL A. COHEN |MARCH 28, 2012
This month marks the one-year anniversary of the onset of U.S. military engagement in the Libyan civil war. While the verdict is still out on the long-term effects of the conflict for U.S. interests in the region, it's closer to home where one can point to the war's greater lasting impact -- namely in further increasing the power of the executive branch to wage war without congressional authorization. But don't expect to hear much about that issue on the campaign trail this election year. Rather the erosion of congressional oversight of the executive branch's war-making responsibilities has been something of a bipartisan endeavor -- and one that is unlikely to end any time soon.
The United States has a long history of inadvertently (and sometimes not so inadvertently) training future coup plotters around the world.
BY JOSHUA E. KEATING |MARCH 28, 2012
AMADOU HAYA SANOGO
Training: U.S. military officials have acknowledged that Sanogo "participated in several U.S.-funded International Military Education and Training (IMET) programs in the United States, including basic officer training," though it's not yet clear which courses he took. He has affirmed receiving U.S. training in several interviews, but has declined to elaborate. Until this month's events, the United States allocated $600,000 per year for military training in Mali as part of an effort to combat Al Qaeda in the Islamic Maghreb.
Back home: On March 22, Capt. Sanogo and a renegade group of officers calling themselves the National Committee for the Reestablishment of Democracy and the Restoration of the State overthrew the government of President Amadou Toumani Touré. (Touré himself first took power in a 1991 coup but quickly handed over the presidency to a civilian government and was then elected a decade later.) The soldiers felt they were insufficiently supported in their fight against Tuareg rebels in the country's north. The junta has dissolved the country's governing institutions and closed its borders while several key international organizations have suspended Mali's membership. The United States has denounced the coup and cut off military aid...
U.S. officials believe that the Israelis have gained access to airbases in Azerbaijan. Does this bring them one step closer to a war with Iran?
BY MARK PERRY |MARCH 28, 2012
In 2009, the deputy chief of mission of the U.S. embassy in Baku, Donald Lu, sent a cable to the State Department's headquarters in Foggy Bottom titled "Azerbaijan's discreet symbiosis with Israel." The memo, later released by WikiLeaks, quotes Azerbaijan's President Ilham Aliyev as describing his country's relationship with the Jewish state as an iceberg: "nine-tenths of it is below the surface."
Why does it matter? Because Azerbaijan is strategically located on Iran's northern border and, according to several high-level sources I've spoken with inside the U.S. government, Obama administration officials now believe that the "submerged" aspect of the Israeli-Azerbaijani alliance -- the security cooperation between the two countries -- is heightening the risks of an Israeli strike on Iran.
In particular, four senior diplomats and military intelligence officers say that the United States has concluded that Israel has recently been granted access to airbases on Iran's northern border. To do what, exactly, is not clear. "The Israelis have bought an airfield," a senior administration official told me in early February, "and the airfield is called Azerbaijan."
Pimco’s Gross Says Fed to Shift Operation Twist to Mortgages
Pacific Investment Management Co.’sBill Gross said the Federal Reserve will probably shift focus to mortgage securities to keep borrowing rates low when its so-called Operation Twist program ends in June.
It will be a “twist on another twist going forward,”Gross, who runs the world’s biggest bond fund, said from Pimco’s headquarters in Newport Beach, California, during an interview on Bloomberg Television’s “InBusiness with Margaret Brennan.”
Fed Chairman Ben S. Bernanke said this week unemployment remains too high, the U.S. economic recovery isn’t assured and policy makers don’t rule out any further options to boost growth, including additional debt purchases. Investor expectations for more monetary stimulus declined after Fed policy makers raised their assessment of the economy March 13.
“The Fed is outcome oriented,” Gross said. “And what he said on Monday in terms of the employment picture basically suggested that, up until now we’ve done very well in terms of reducing unemployment but it will be a tougher row to hoe going forward.”
Bank of China Seeks to Join World’s Biggest Metals Exchange
BOCI Global Commodities (U.K.) Ltd. is seeking to become a category 2 member, giving it the right to trade by telephone and electronically, the LME said in a notice today. It won’t have access to the ring, London’s last open-outcry trading floor.
China accounts for about 39 percent of global copper usage, 42 percent of aluminum and 43 percent of nickel demand, according to Barclays Capital. The LME opened its first Asian office in Singapore in 2010 and introduced new contracts with the Singapore Exchange Ltd. last year to attract new investors. The LME is also considering takeover bids for the 135-year-old exchange after trading volume climbed to a record last year.
“China is such a big user of the LME,” said Herwig Schmidt, head of sales at Triland Metals Ltd., one of 12 companies trading on the floor of the LME and a unit of Tokyo-based Mitsubishi Corp. “It’s the first step that encourages others to follow.”
The LME’s board will review the application on April 23, said Chris Evans, the exchange’s head of business development.
The LME handles more than 80 percent of industrial metals futures trading. The Bank of China is the country’s third-largest lender by assets. BOCI Global Commodities was not immediately able to provide comment...
March 28, 2012, 12:01 a.m. EDT
The next leg of gold’s bull run
Commentary: Buy the big central banks
By Matthew Lynn
LONDON (MarketWatch) — Has the great bull run in gold run its course?
On the surface it looks as if it might have. After running up close to $2,000 an ounce during the market panic of last autumn, it has slipped below $1,700. And it shows little sign of reclaiming its highs.
But here’s one reason why it could have a lot further to go.
The big, developed world central banks will start buying again. And if they do, it would put real rocket fuel into the price of the precious metal.
In his budget last week, British Chancellor George Osborne caused a small flurry in the markets with a line that suggested the Bank of England might start stockpiling gold. The U.K. Treasury quickly denied it, saying that he had just been talking about reserves in general, rather than gold specifically.
Pre-cast bars of gold.
But in fact, Osborne was onto something.
The developed world central banks should all be increasing their reserves dramatically. The best way would be by refilling their vaults with the precious metal.
In his speech, Osborne said that he planned to increase Britain’s reserves, something most developed countries have not worried about for the best part of three decades. They are certainly in a sorry state. For a major developed economy, the U.K.’s reserves are laughably tiny....
Banks Hold $1 Billion in MF Global U.K. Cash, KPMG Says
About $1 billion of MF Global Holding Ltd. (MFGLQ) U.K. clients’ money remains locked away in other financial institutions five months after the brokerage’s collapse, administrators KPMG LLP said.
KPMG has collected more than $500 million from those accounts to date, the firm said in an update published on its website. The figures relate to unsegregated client accounts, which MF Global was allowed to mix with its own funds and which have proved difficult for the administrators to recover.
KPMG said it was taking action to obtain the $1 billion of unsegregated assets from a “small number of financial institutions” that it didn’t identify. The firm threatened to sue banks that don’t hand over funds, it said at a London creditors meeting in January.
KPMG, appointed to wind up the London-based unit when the New York-based parent filed for bankruptcy in October, plans to produce statements setting out the account positions of 75 percent of customers by March 30. MF Global was the fifth-largest financial company to file for bankruptcy when it sought protection on Oct. 31 after getting margin calls on its bets on European sovereign debt.
Metal Exchange Customers
MF Global customers that traded on the London Metal Exchange are unlikely to receive statements until April because of the complexity of their positions, KPMG said...
EU Nears One-Year Boost in Rescue Fund to $1.3 Trillion
European governments are preparing for a one-year increase in the ceiling on rescue aid to 940 billion euros ($1.3 trillion) to keep the debt crisis at bay, according to a draft statement written for finance ministers.
The euro-area finance chiefs will probably decide at a meeting in Copenhagen tomorrow to run the 500 billion-euro permanent European Stability Mechanism alongside the 200 billion euros committed by the temporary fund, a European official told reporters in Brussels yesterday.
Beyond that, they are also set to allow the temporary fund’s unused 240 billion euros to be tapped until mid-2013 “in exceptional circumstances following a unanimous decision of euro-area heads of state or government notably in case the ESM capacity would prove insufficient,” according to the draft dated March 23 and obtained by Bloomberg News.
The boost to the war chest would come after Chancellor Angela Merkel of Germany, the dominant power in two years of crisis fighting, this week warned of “fragility” in Portugal and Spain. It would also be designed to lure the rest of the world into putting more money into the International Monetary Fund’s arsenal.
European policy makers are wrangling over amendments to rules written last year that limit total available bailout funds to 500 billion euros. The IMF has made additional aid contingent on Europe first doing more to help itself.
55 min 37 sec ago
1 hour 2 min ago
1 hour 2 min ago
1 hour 31 min ago
Correction to my comment about the Russian Nightclubs
1 hour 33 min ago
1 hour 34 min ago