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This morning's key headlines from GenerationalDynamics.com
Network Solutions has crashed GenerationalDynamics.com again, apparently because they're unable to handle the increased number of visitors in the past couple of months.
So I'm currently in panic mode, moving the web site to another web hosting service. I've already signed up with another service, but it takes a couple of days for the domain name pointers to propagate through the internet.
Unless you see World View on another web site, or receive it in e-mail, then by the time you read this the web site will have been moved.
I apologize for the inconvenience.
We reported two weeks ago that the opposition Syrian National Coalition (SNC) canceled plans to attend meetings in Rome, Moscow and Washington to discuss the Syria issue, on the grounds that these meetings did not thing but provide a cover for the regime of Syria's president Bashar al-Assad to massacre innocent mothers and daughters in their homes, and innocent students in their college dormitories. Well, this apparently shocked the Obama administration into action, and now the administration says that they've reversed policy, and they're going to send aid to the Syrian rebels. The aid will include body armor, armored vehicles, and humanitarian aid. So the SNC has changed its mind, and will attend the meetings after all. However, this may well be an empty promise, since it has to be coordinated with the Russians, who have vetoed any aid attempt in the past. Washington Post
(Comments: For reader comments, questions and discussion, see the 28-Feb-13 World View -- In major reversal, U.S. will provide military aid to Syria opposition thread of the Generational Dynamics forum. Comments may be
posted anonymously.)
(28-Feb-2013)
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John Kerry says that Americans have the right to be stupid
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In Italy's parliamentary elections over the week, angry Italian voters send a clear and unmistakable message to Europe's leaders: That Italians are tired of efforts to raise taxes cut pensions and curb budget deficits, and are tired of taking orders from Germany. Voters firmly rejected the austerity measures of Mario Monti. Center-left leader Pier Luigi Bersani got the largest vote, but just a sliver higher than the vote given to Silvio Berlusconi, who promised to end the austerity taxes and refund the taxes already collected, and Beppe Grillo, a standup comedian who wants to reject all austerity demands from Europe. The rise of Berlusconi from the dead is particularly disturbing to European leaders, since they blame Berlusconi for causing the financial crisis in Italy in the first place. Monti has called Berlusconi Italy’s "Pied Piper," leading Italians to their doom. Italy's rebellion against austerity bodes ill for other European countries that have to go further than Italy, particularly Spain and Greece. The worst may be that since the vote was roughly even split among Bersani (about 31%), Berlusconi(30%) and Grillo (25%), leaving Monti with just 10%, it seems likely that Italy's government will be in ungovernable chaos, and a new election will be required soon. Spiegel and Bloomberg
John Kerry, the new Secretary of State, is the cockroach who testified to the Senate in 1971 that American soldiers regularly raped people, tortured people, cut off their ears and mutilated people, and were doing these things on a day to day basis. (See "John Kerry and Seymour Hersh trash the armed forces.".) In 2006, he vehemently reaffirmed his claim that American soldiers are nothing but rapists and terrorists, and also said:
"You know, education -- if you make the most of it, you study hard and you do your homework and you make an effort to be smart, you can do well. If you don't, you get stuck in Iraq."
It's not surprising that Kerry thinks that America soldiers are stupid, in addition to being rapists and terrorists, but now, in a trip through Europe, he's implying that most Americans are stupid:
"In America, you have a right to be stupid, if you want to be. And you have a right to be disconnected to somebody else if you want to be. And we tolerate that - we somehow make it through that."
I can only think that whatever room he's in, he's always the stupidest person in the room.
He's been making one gaffe after another in his Europe trip:
I've said many times that Hillary Clinton would have been a better president than Barack Obama because she actually knows what's going on in the world, while Obama does not. But replacing Secretary of State Hillary Clinton with John Kerry brings Washington stupidity to new heights. Daily Mail (London)
The U.S. military plans to air drop tens of thousands of dead mice laced with acetaminophen (Tylenol) onto foliage surrounding Andersen Air Force Base, in order to control the population of the brown tree snake. Acetaminophen is harmless to humans, but toxic to the brown tree snake. The snakes are natives of Australia, and came to Guam on board military boats after WW II. The native bird population is defenseless against the snake, and has wiped out almost all of Guam's native birds, making most of the species extinct. The dead mice will be fitted with tiny parachutes, so they'll catch on trees to make them more attractive to the snakes. The fear is that a similar infestation of brown tree snakes to Hawaii would cause over $2 billion in damage per year. The new mouse drop follows a pilot experiment in 2010 that worked well. However, activists from PETA (People for the Ethical Treatment of Animals) are expressing outrage that snakes will suffer, though hopefully the snakes at least won't get headaches. AP and CNN (9/2010) and Russia Today
(Comments: For reader comments, questions and discussion, see the 27-Feb-13 World View -- Italy's election portends trouble throughout Europe thread of the Generational Dynamics forum. Comments may be
posted anonymously.)
(27-Feb-2013)
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Network Solutions crashes GenerationalDynamics.com
This morning's key headlines from GenerationalDynamics.com
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In Italy's general elections this weekend, Italy's "hope and change" candidate was Beppe Grillo, head of the 5-Star Movement. Grillo is a 64 year old former comedian who has turned into an anti-austerity, anti-establishment, anti-euro firebrand. The problem is that his 5-Star Movement may well have won more seats in the Parliament than any other party. Grillo himself didn't run for election, because he's ineligible to do so: He was convicted off manslaughter in 1991 over a traffic accident. But he can still serve as the leader of the approximately 110 seats out of 630 that he won in the parliament. Grillo might ally himself with one of the other parties and become a kind of kingmaker, but the indecisive election results probably mean that a new election will be called. (Paragraph corrected. 26-Feb) Reuters
Germans are reacting with alarm to reports that Chinese hackers have stolen strategically important information from many German companies, including the European Aeronautic Defense and Space Company (EADS). and steelmaker ThyssenKrupp. Although Chinese hackers have been attacking Germany for years, the attacks became massive a few months ago. The hackers' tracks lead back to three major Chinese cities: Beijing, Shanghai and Guangzhou, and particularly to Unit 61398, a unit of China's People's Liberation Army which has been conducting massive cyber warfare. (See "20-Feb-13 World View -- New report reveals massive cyber war attack by China's army" from last week.) Despite everything, Chancellor Angela Merkel is not pushing back very hard against the Chinese, since China is one of Germany's major training partners. Spiegel
China announced on Monday that it's increasing its military patrols in the South China Sea to protect Chinese fishermen and, presumably, to keep out other countries' fishermen. China has declared that it's claiming sovereignty over the entire South China Sea, including regions that have historically belonged to other countries, including the Philippines, Brunei, the Philippines, Malaysia, Taiwan, and Vietnam. China announced last year that in 2013 it would start boarding and taking control of other countries' ships in the South China Sea. According to China, the new South China Sea patrols highlight great advances in China's law enforcement capability in relevant waters, as Beijing seeks to safeguard its sovereignty and national interests in the region. China Daily (Beijing)
I use different e-mail addresses for almost everything. That way, I know whether a company is using my e-mail address for spam.
In 2005, I registered with the Equifax web site to do some research for a brief period. Starting about a month ago, I've been receiving several spam messages a day to that e-mail address.
Therefore, I conclude that Equifax's networks and data bases have been hacked, and e-mail addresses have been stolen at the very least. Whether Equifax's credit card databases have also been hacked is something I have no way of knowing.
The GenerationalDynamics.com web site went down on Sunday evening at about 7 pm ET, and didn't come up again until 1 pm ET on Monday. I apologize to anyone who was inconvenienced.
About five years ago, I moved my web site from web.com (Interland) to Network Solutions because the customer support on web.com was actively hostile, and Network Solutions was very good at that time.
But that appears not to be true any more. You have to sit there on hold for about an hour to get an answer to even a simple question from Network Solutions customer support. The so-called "VIP support" is worse than nothing, in that you wait on hold to talk to them, and then they just transfer you somewhere else where you have to wait on hold again.
The web site service had actually been degrading gradually for a couple of months, getting random server errors at different times, before it crashed completely. This afternoon, I experienced several server resets, so I'm afraid there are more problems to come.
I'm not sure that anyone else is any better.
Despite the fact that the web site was down yesterday evening, I was able to get the e-mail messages out, since those go through Constant Contact rather than Network Solutions. The e-mail service is going very well, and since I use different e-mail addresses for everything, I am personally certain that subscribers to the Generational Dynamics e-mail service do not receive spam. You can subscribe to the e-mail list by clicking on the following link and typing your e-mail address:
http://www.generationalDynamics.com/Subscribe
(Comments: For reader comments, questions and discussion, see the 26-Feb-13 World View -- China increases military buildup in South China Sea thread of the Generational Dynamics forum. Comments may be
posted anonymously.)
(26-Feb-2013)
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Afghanistan's Karzai expels U.S. special forces from province
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Afghanistan's president Hamid Karzai has ordered that U.S. special forces immediately end all operations in Wardak province, the province adjacent to the capital city Kabul, and that they be expelled within two weeks. According to a presidential spokesman:
"In today’s national security council meeting… President Karzai ordered the ministry of defense to kick out the US special forces from Wardak province within two weeks.The US special forces and illegal armed groups created by them are causing insecurity, instability, and harass local people in this province."
The charges are not specifically targeted at U.S. forces themselves, but rather at Afghan national forces that work with the Americans and under the direction of the Americans. According to Karzai's spokesman:
"After a thorough discussion, it became clear that armed individuals named as US special force[s] stationed in Wardak province engage in harassing, annoying, torturing and even murdering innocent people.A recent example in the province is an incident in which nine people were disappeared in an operation by this suspicious force and in a separate incident a student was taken away at night from his home, whose tortured body with throat cut was found two days later under a bridge.
However, Americans reject having conducted any such operation and any involvement of their special force. The meeting strongly noted that such actions have caused local public resentment and hatred. ...
There are some individuals, some Afghans, who are working within these cells, within these [US] special forces groups. But they are part of US special forces according to our sources and according to our local officials working in the province."
According to a U.S. forces spokesman:
"We take all allegations of misconduct seriously and go to great lengths to determine the facts surrounding them.Until we have had a chance to speak with senior (Afghan) officials about this issue we are not in a position to comment further. This is an important issue that we intend to fully discuss with our Afghan counterparts."
The expulsion of U.S. forces has come as a surprise, and it's not entirely clear who the "Afghans, who are working ... within these [US] special forces groups" actually are. There has been growing friction between Karzai and the U.S. forces, against a backdrop of discussions of how many, if any, foreign troops will remain in Afghanistan after Nato's exit in 2014. BBC and AFP
There had already been several weeks or demonstrations in the West Bank protesting the detention of some 4,500 Palestinians in Israeli jails, but the sudden death of Palestinian Arafat Jaradat while being held in an Israeli jail has threatened to push the demonstrations to a boiling point. Jaradat, a gas station attendant and married father of two small children, was arrested on February 18 for throwing rocks and firebombs at Israelis near Hebron. The apparent cause of death was a heart attack, but following an Israeli autopsy observed by a Palestinian doctor, Palestinian officials say that Jaradat's body was bruised and showed signs of being beaten on the chest, back, arms and mouth and had two broken ribs, implying that "severe torture" led to the heart attack and Jaradat's death. According to an Israeli military commentator, Jaradat's death may become "the opening shot" in a third intifada. Palestinian officials are demanding that the United Nations investigate Jaradat's death and conditions in Israeli prisons. Jerusalem Post and LA Times
Analysts are questioning whether the West Bank protests are anywhere near a third intifada. The first intifada occurred in 1987, with Palestinians throwing rocks and Molotov cocktails at the Israeli Defense Forces (IDF), blocking roads and burning tires. The IDF was totally unprepared for the protests, and the IDF was blamed for brutality. The second intifada occurred in 2000, when thousands of Palestinians clashed with the IDF, and once again the army lost control of the situation. In contrast, this Sunday's protests involved 100-200 Palestinians throwing rocks at soldiers in a few locations, and the IDF quickly dispersed the protesters. However, the fear is that a new spark could cause the situation to deteriorate rapidly. Jerusalem Post and Haaretz
For those who enjoy historical analogies, here's one from George Will on Sunday's "This Week with George Stephanopoulos":
"No analogy is perfect, but go back to the Spanish civil war that began in 1936. By the time it got in full-blown proportions, there was no happy choice. It was going to be the communists who were going to control Spain or Franco was going to control Spain. And we may be at that point in Syria."
Will's point is that just as Spain was going to be controlled by the Fascist Francisco Franco or by the communists, Syria today is going to be controlled either by the Fascist Bashar al-Assad or by al-Qaeda linked terrorists.
There seems to be a growing feeling that the West has waited too long to intervene in Syria. In this view, if the West had intervened as soon as the al-Assad began his bloodbath, then it might have been possible to force al-Assad out and turn the government into a democracy. This is probably a fantasy, but the feeling persists. And the Russians are particularly being blamed from allowing this situation to arise by blocking all Western attempts to intervene. ABC News
(Comments: For reader comments, questions and discussion, see the 25-Feb-13 World View -- Death of Palestinian prisoner threatens third intifada against Israel thread of the Generational Dynamics forum. Comments may be
posted anonymously.)
(25-Feb-2013)
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An Egyptian army comeback threatens a clash with Muslim Brotherhood
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At least 12 people, including children, were killed and dozens wounded on Friday when three surface-to-surface missiles, assumed to be Russian-made SCUD missiles, struck the northern Syria city of Aleppo. This came just four days after 33 people including 15 children were killed in nearby Jabal Bedro.
Syria's opposition leaders had been scheduled to meet with Western leaders in Rome, Moscow and Washington in the next few weeks, but after the latest missile strikes in Aleppo, the Syrian National Coalition (SNC) pulled out of the talks. According to the SNC:
"[The withdrawal is] a message of protest to all governments of the world, Arab and non-Arab, that can see how the Syrian people are being killed, while they merely look on.Hundreds of civilians have been killed by Scud missile strikes. Aleppo, the city and the civilisation, is being destroyed systematically. ...
The Russian leadership especially bears moral and political responsibility for supplying the regime with weapons.
In protest of this shameful international stand, the coalition has decided to suspend its participation in the Rome conference for the Friends of Syria and decline the invitations to visit Russia and the United States. ...
We cannot visit any country until there is a clear decision on this savage, aggressive regime"
Britain and the U.S. issued statements asking the oppositioin to reconsider their decision, saying, "now is not the time to give up on talks."
These U.N. sponsored "talks" have been a farce since the day that U.N. and Arab League envoy Kofi Annan announced his six-point peace plan for Syria. (See "22-Mar-12 World View -- U.N. Security Council adopts farcical 'peace plan' for Syria") When Kofi Annan gave up and Lakhdar Brahimi took over as U.N. and Arab League envoy, the farce has only continued. The "peace plan" has actually been counterproductive. It provided a cover for Syria's president Bashar al-Assad to continue mass slaughter of thousands of innocent women and children as they slept in their beds; it provided cover for Iran and Russia to continue supplying billions of dollars of weapons to the al-Assad regime for use in slaughter of innocent women and children; and it provided cover for the U.S. and Britain and France and Turkey to do nothing, since doing something might harm the "peace process." AFP and Al-Jazeera
The reason given by the West for not supplying arms to the rebel opposition in Syria is the fear that the arms would fall into the arms of al-Qaeda linked jihadists in Syria, just as stores of weapons fell into the arms of Al-Qaeda in the Islamic Maghreb (AQIM) when the war in Libya ended. One of the reasons given by Russia for its unwavering support of the Bashar al-Assad regime is the fear that if he steps down, then the country will be taken over by jihadists.
It increasingly appears to be the case that these reasons have backfired. The Syrian rebels had been hoping for Western aid for months after the conflict began, but by now have become disgusted with the West for allowing tens of thousands of innocent Syrians to be mercilessly slaughtered with no Western intervention. This has provided an opening for the jihadist militia Jabhat al-Nusra (Nusra Front) to become more popular in Syria. In the last year, al-Nusra has grown from a shadowy terrorist group to a highly disciplined fighting force gathering adherents among the Syrian population. According to one al-Nusra activist,
"After two years of killings and butchering and the entire world standing by and watching us, now we depend on God only."
Al-Nusra activists have become increasingly popular by providing social services and they're even distributing flour to bakeries. They're also becoming more radicalized, and more closely linked with al-Qaeda. BBC (1/17) and CNN
For the first time, heavy weaponry, including anti-tank weapons and recoilless rifles, are reaching the secular opposition rebels in southern Syria, traveling across the Jordan border into Syria's Daraa province. The identity of the source of the weapons has not been disclosed, but it's believed that the source is either Saudi Arabia or Qatar.
The goal of these renewed deliveries, Arab and rebel officials said, is to reverse the unintended effect of an effort last summer to supply small arms and ammunition to rebel forces in the north, which was halted after it became clear that radical Islamists were emerging as the chief beneficiaries. According to one Arab official,
"The idea was to get heavier stuff, intensify supply and make sure it goes to the good guys. If you want to weaken al-Nusra, you do it not by withholding [weapons] but by boosting the other groups."
The army never liked the Muslim Brotherhood under presidents from Gamal Abdel Nasser to Hosni Mubarak, but the army has ostentatiously stayed out of the political battle between the Brotherhood and the secular and liberal opposition, saying that they'd intervene only if necessary to prevent chaos. Events of the past few months have exposed a growing fault line between the élite in Cairo versus the people in rural areas, especially in Port Said and other villages along the Suez Canal. This is in addition to the more obvious fault line between the Brotherhood versus the secularists and liberals. As chaos continues to grow in Egypt, along with the collapse of the economy, the army is standing in the way of president Mohamed Morsi's plans for a complete takeover of the country by the Brotherhood. This is leading to widespread rumors to the effect that the Brotherhood is forming a clandestine militia while setting up listening posts to monitor the army, to be ready to confront the army should it become necessary. Jerusalem Post
(Comments: For reader comments, questions and discussion, see the 24-Feb-13 World View -- Syria's opposition pulls out of talks after Scud missiles hit Aleppo thread of the Generational Dynamics forum. Comments may be
posted anonymously.)
(24-Feb-2013)
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Bawdy Silvio Berlusconi may return as Italy's Prime Minister
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Italy's outgoing Premier Mario Monti, who took the helm of an emergency government of unelected technocrats in November 2011 when Silvio Berlusconi resigned as premier with Italy's debt crisis threatening to spiral out of control, is expected to lose his job after Sunday's and Monday's general election. The most likely outcome is a stalemate, with no party having enough seats to control parliament. Monti has helped stabilize Italy's economy through a series of austerity measures that have cost him a lot of political support. Silvio Berlusconi's center-right alliance has been rapidly closing a double-digit polling gap, and may win, thanks to a media campaign where Berlusconi has called Monti's austerity measures "cruel and inhuman," and promised to reverse them, and even to refund tax money that Monti's government had collected. Gazzetta Del Sud
The possibility that 76-year-old Berlusconi might return to office has been appalling to politicians in other European countries, many of whom consider him to be a clown. He's also notorious for his involvement in multiple sex and corruption scandals that contributed to pressure on him to step down as prime minister in November 2011. Germany's Der Spiegel has been publishing numerous articles raising alarms about a Berlusconi comeback. Friday's article provides a list of "Berlusconi's most revealing gaffes," in an effort to dissuade Italians from voting for him. Some of the gaffes are:
United Nations officials, who usually express moral outrage and bring a holier-than-thou tone to almost any issue, are now claiming immunity for a catastrophe that United Nations peacekeepers inflicted upon the Haitian people after the 2010 earthquake. Haiti hadn't had a case of cholera in over a century, but a cholera epidemic started spreading rapidly in 2010 after the U.N. peacekeepers arrived. It turned out via DNA tests that the strain of cholera was identical to the strain of cholera that's endemic in Nepal. So the Nepalese peacekeepers came to Haiti, infected the water supply, causing the epidemic. U.N. Secretary-General Ban Ki-moon never accepted the conclusion that the U.N. was to blame, but promised to help Haiti's cholera victims. But on Thursday, the United Nations rejected a claim for compensation for thousands of Haitian victims of cholera, saying that the United Nations is protected by immunity. Global Post
The Pentagon has deployed about 100 troops to the West African nation of Niger to conduct unmanned reconnaissance flights over Mali and share intelligence with French forces fighting Islamist jihadists in the neighboring country of Mali. The United States already has drones and surveillance aircraft stationed at several points around Africa. Its only permanent military base is in the small country of Djibouti in the Horn of Africa, more than 3,000 miles from Mali. Reuters
Associated Press staff in Timbuktu, Mali, have stumbled on an al-Qaeda "tip sheet" with a list of techniques for avoiding American drone strikes.
The tip sheet was created several years ago by al-Qaeda in Yemen. Global Post and AP (PDF)
(Comments: For reader comments, questions and discussion, see the 23-Feb-13 World View -- U.N. claims immunity in Haiti cholera compensation case thread of the Generational Dynamics forum. Comments may be
posted anonymously.)
(23-Feb-2013)
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Stock market has 'mini-panic' over Fed QE signal
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Two terrorist bombings killed 13 people and injured dozens others in a crowded marketplace in Hyderabad in India. No one has yet claimed responsibility, but terrorist group Indian Mujahideen (IM) is suspected. India's security establishment is coming under criticism for ignoring the interrogation of an IM operative in Delhi in October. The interrogation revealed three planned sites for terror attacks, one of which was Thursday's Hyderabad site.
The Indian Mujahideen (IM) was founded by Abdul Subhan Usman Qureshi, who had come from an economically privileged background. and was educated at a school run by a Christian missionary in Mumbai. Anger at the mainstream media is cited by IM cadres as a motivator. It is argued that the mainstream media turns a blind eye to Hindu fundamentalist groups while mostly linking the fundamental nature of Islam to terrorism. IM is closely linked to Pakistan's Lashkar-e-Toiba (LeT), which supplies weapons and direction to IM. An objective of IM is to tie up India's security forces in India, giving LeT a free hand. Institute for Defence Studies and Analyses (IDSA)
The minutes from the Federal Reserve's January 29-30 meeting were released on Wednesday, and they "hinted" that some people at the Fed were getting concerned about the massive amount of money that the Fed is "printing" each month. There was a time, before 2008, when $60 billion dollars of one-time fiscal or monetary stimulus would have been considered an astronomical amount, and would have triggered national debate. But those days are long gone. For the last year or so, the Fed has been using quantitative easing to inject $85 billion dollars of monetary stimulus EVERY MONTH. The result was a kind of two-day "mini-panic" in the stock market.
I listen to the financial people on CNBC and Bloomberg TV -- as much as I can stand them -- and there's really no longer any pretense that the stock market represents anything real anymore. Everyone knows that the $85 billion in monthly stimulus hasn't help any ordinary people or small businesses. Instead, it goes to the investment banks and into the stock markets, so that the bankers can continue to pay themselves multi-million dollar bonuses and kick the money back into Obama campaign contributions. So when the Fed hinted that the $85 billion might be cut back, the stock market mini-panic began. Bloomberg
If the Fed had "printed" $85 billion per month of new money in the 70s, 80s or 90s, then inflation would have skyrocketed. But those days are past. As Alan Greenspan has pointed out, every single standard macroeconomic model has been completely wrong since 2007. The reason they've been wrong is that they're based on data from the 70s, 80s and 90s, when the Silent Generation was in charge. Today, the Gen-Xers and the Boomers are in charge, and the culture is now one of fraud, extortion, and screwing people. Today's culture is like the 1930s, and the only macroeconomic models that will work should be base on 1930s data.
The Fed puts out a regular report on "inflation expections" -- how much they expect inflation to rise in the current year, in the following year, and in each year for the next ten years. Unfortunately, the Fed's inflation forecasts have been abysmally wrong, year after year. Here's a chart of the Fed's inflation expectations as of February in each of the three past years:
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There are two interesting things about the above chart. One is that the Fed's inflation expectations have been falling each year, reflecting the fact that inflation itself has been falling.
The second interesting thing is that the Fed's models have been wrong every year in exactly the same way. Each year they predict a brief period of falling inflation, then a period of rising inflation. Instead, inflation keeps falling, and expectations keep falling.
Since 2003, I have been writing that, in this generational Crisis era, our economy is in a deflationary spiral. Since 2003, mainstream economists have been predicting that there would be inflation or hyperinflation the following year. They've been wrong every time, and I've been right. Marcus Nunes
Mainstream economists are always predicting that prosperity is just around the corner, so that people will buy their stocks or bonds or whatever. Each month, the Congressional Budget Office (CBO) forecasts when there will be a full economic recovery. The Economic Policy Institute has done a study of the CBO forecasts for the last four years, and found that they have failed in exactly the same sort of way that the Fed's inflation forecasts had failed. Here's a chart of the CBO recovery predictions for January of each of the last few years:
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So, in Jan 2008, the were project full recovery by 2011. By Jan 2011, it would be 2016. And the latest projection, from February of this year, puts the forecast of full economic recovery at 2018.
As I've written many, many times, mainstream economists have no clue about what's going on. They didn't predict, and can't explain, the tech bubble of the 1990s, the real estate bubble, the credit bubble, the credit crunch of 2007, the collapse of 2008, they had no idea what was going to happen in 2012, and they don't have the vaguest clue what's going to happen in the next year. Unfortunately, with the Gen-Xers increasingly in charge, the worst is yet to come. Washington Post and Economic Policy Institute
(Comments: For reader comments, questions and discussion, see the 22-Feb-13 World View -- Indian Mujahideen suspected in bombing in Hyderabad thread of the Generational Dynamics forum. Comments may be
posted anonymously.)
(22-Feb-2013)
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British women convert to Islam in droves
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North Korea has frequently threatened war with South Korea in the past, but now that a young, immature new leader, Kim Jong-un, is in place, the threats are becoming more intense. Apparently the recent successful test of nuclear weapons has made Kim even more belligerent.
At a U.N. Conference on Disarmament meeting held in Geneva on Tuesday, North Korea's diplomat Jon Yong-ryong said:
"As the saying goes, a new-born puppy knows no fear of a tiger. South Korea's erratic behavior would only herald its final destruction."
I guess this statement wasn't politically correct at a "disarmament" conference.
Apparently this threat was so extreme, even by United Nations standards, that other diplomats expressed shock. Spanish Ambassador Javier Gil Catalina said the comment left him stupefied and appeared to be a breach of international law.
"In the 30 years of my career I've never heard anything like it and it seems to me that we are not speaking about something that is even admissible, we are speaking about a threat of the use of force that is prohibited by Article 2.4 of the United Nations charter."
According to one analyst, "They would not use the term 'final destruction' if it wasn't for nuclear arms." Reuters and Yonhap (Seoul)
Russia has reversed itself, and is now willing to meeting with leaders of the forces in opposition to the regime of Syria's president Bashar al-Assad. Sergei Lavrov, Russia's foreign minister, said on Wednesday that Moscow was working to encourage dialogue between the rebels and the regime of president Bashar al-Assad:
"Neither side can allow itself to bet on a military settlement as this is a path to nowhere, a path to mutual destruction.There are signs of positive tendencies, signs of tendencies for dialogue both from the side of the government and the opposition.
It is important that they do not come out with any conditions for each other, and say that I am going to talk to this person but not that one. ...
[The diplomacy was aimed at] creating the conditions for the start of direct dialogue" between the regime and opposition."
Since the conflict began in March 2011, 70,000 people have been killed, and close to a million people have been displaced from their homes. Al-Jazeera
The United States Postal Service announced that it's going into the clothing business, and plans to launch a new product line of apparel and accessories until the brand name, "Rain Heat & Snow," based on the USPS creed, "Neither snow nor rain nor heat nor gloom of night stays these couriers from the swift completion of their appointed rounds." According to the USPS,
"This agreement will put the Postal Service on the cutting edge of functional fashion. The main focus will be to produce Rain Heat & Snow apparel and accessories using technology to create ‘smart apparel’ — also known as wearable electronics."
The goal is to sell this product in premier department and specialty stores, starting in 2014. U.S. Postal Service
The Muslim population in England and Wales has increased by 80 percent since 2001 according to a British government census. With 2.7 million known adherents, Islam has become Britain's second-largest religion, after Christianity. Immigration accounts for most of the increase, but there are over 100,00 converts from other religions as well. Reasons why young British women convert to Islam include the desire to please Muslim fiancés and husbands, but others see Islam as a safe haven within a society that denigrates the female form in newspapers and magazines and celebrates a pub/club culture where regular nights out with "mates" getting "sloshed." Tony Blair’s sister-in-law Lauren Booth converted to Islam, and says that she finally felt "what Muslims feel when they are in true prayer: A bolt of sweet harmony, a shudder of joy in which I was grateful for everything I have (my children) and secure in the certainty that I need nothing more (along with prayer) to be utterly content." Arab News
(Comments: For reader comments, questions and discussion, see the 21-Feb-13 World View -- North Korea threatens 'final destruction' of South Korea thread of the Generational Dynamics forum. Comments may be
posted anonymously.)
(21-Feb-2013)
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China rejects Philippines arbitration application
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Mandiant, an American computer security company, has issued a lengthy report that shows, beyond a reasonable doubt, that China's People's Liberation Army (PLA) is directing its "Unit 61398" to conduct a stealth world wide cyber war, particularly targeting American government and corporate organizations. Unit 61398 has possibly thousands of people, specializing in hacking into American and Canadian networks. It works in a Shanghai building guarded by PLA soldiers. Mandiant refers to the unit as APT1, and according to the report:
"Our evidence indicates that APT1 has been stealing hundreds of terabytes of data from at least 141 organizations across a diverse set of industries beginning as early as 2006. Remarkably, we have witnessed APT1 target dozens of organizations simultaneously. Once the group establishes access to a victim’s network, they continue to access it periodically over several months or years to steal large volumes of valuable intellectual property, including technology blueprints, proprietary manufacturing processes, test results, business plans, pricing documents, partnership agreements, emails and contact lists from victim organizations’ leadership. We believe that the extensive activity we have directly observed represents only a small fraction of the cyber espionage that APT1 has committed. ... Since 2006 we have seen APT1 relentlessly expand its access to new victims."
Once APT1 gains control of someone's network, it retains control in stealth mode and downloads all the data in the network. In one case, APT1 accessed a network for four years and ten months. In another case, APT1 downloaded 6.5 terabytes of information in ten months. According to the report:
"Our research and observations indicate that the Communist Party of China is tasking the Chinese People’s Liberation Army to commit systematic cyber espionage and data theft against organizations around the world."
There have been dozens of publicly known Chinese hacker attacks on American companies, including recent ones on the New York Times and the Wall Street Journal, and probably tens of thousands more that are unknown or haven't been publicized. Whenever one is made public, the Chinese angrily deny it, and demand proof. Thanks to the Mandiant report, we now have proof.
The White House has responded by threatening to "strike back" through fines, penalties and other trade restrications, but this appears to be a fantasy to me. Telegraph (London) and AP and Mandiant
It's worth taking a moment to review previous statements and actions by China, as it prepares for war:
Now we have the Mandiant report that proves that China has been conducting cyber warfare against the United States for years.
Last year, House Intelligence Committee warned American companies against doing business with Chinese companies Huawei (pronounced WAH way) and ZTE. (See "14-Oct-12 World View -- Huawei scandal exposes potential 'Cyberwar Pearl Harbor' from China") The reason is computer chips supplied by these vendors appear likely to contain "back door" capabilities that would permit the Chinese to take control of any computer or router in which their chips were installed.
Since then, I've seen a number of young people ridicule these concerns. One British politician said that all these chips have been thoroughly tested, and so a "back door" is impossible. Some Chinese officials have sworn that there are no back doors. So I'd like to respond to these comments.
In the past, I've developed software for embedded systems down to the bare hardware level. At that level, you're dealing with chips that are completely opaque, except for a set of specifications that say, "If you send the chip the command 'x', then it will do 'y'". So anyone who tests the chip will simply verify that it works correctly according to the specifications. You have no visibility into how the chip executes that command. In particular, if "x" is some 512-bit code, known only to the chip designers, that makes the chip do something that's not in the specifications, then no test can determine that fact. Those codes would be known only to the chip designers, and not to even other Chinese workers and managers working on related projects that use the chips. So if the PLA ordered a chip maker to add a backdoor to a chip, it could not be found by testing, and no one else would know about it.
Now, since the PLA COULD have done this, we can conclude that they MUST have done this, because they're preparing for war in every other way, and would not give up the opportunity to prepare for war in this way.
Huawei and ZTE are among the biggest chip producers in the world, with large shares of the market in almost every country. There's a good chance that your computer has one of these chips, and that my computer has one of these chips. The same is true of utilities and manufacturing organizations around the world.
Earlier this year, the Philippines applied to the United Nations International Tribunal on the Law of the Sea (ITLOS) to settle the dispute over the Scarborough Shoal, a Philippines island that China is claiming. (See "24-Jan-13 World View -- Furious Chinese spokesman blasts Philippines for seeking arbitration")
On Tuesday, China officially rejected arbitration:
"Chinese Ambassador to the Philippines Ma Keqing had an appointment with officials from the Philippines' Foreign Ministry on Tuesday and returned a note and related notice after expressing China's rejection. The note and related notice not only violate the consensus enshrined in the Declaration on the Conduct of Parties in the South China Sea, but are also factually flawed and contain false accusations."
The Philippines Department of Foreign Affairs responded as follows:
"This excessive claim is the core issue of the Philippines’ arbitration case against China. The Department stresses that China’s action will not interfere with the process of Arbitration initiated by the Philippines on 22 January 2013. The Arbitration will proceed under Annex VII of UNCLOS and the 5-member arbitration panel will be formed with or without China."
(Comments: For reader comments, questions and discussion, see the 20-Feb-13 World View -- New report reveals massive cyber war attack by China's army thread of the Generational Dynamics forum. Comments may be
posted anonymously.)
(20-Feb-2013)
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Hugo Chavez tweets a return to Venezuela
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Demonstrations and protests were held in cities across Pakistan on Monday, including Karachi, Lahore, Rawalpindi and Islamabad. In Quetta, where the terror carnage took place on Saturday, thousands of Shias blocked the roads in a sit-in, and refused to bury their dead. They're making three demands:
The Shias in Quetta made some of these demands after the horrific January 10 terrorist attack that killed over 100 people. At the time, they ended their protests and buried their dead only after the government had promised protection. However, once the protest ended, the promises were forgotten. It seems the most likely scenario is that none of the demands will be met, the protests will end anyway, and another big terrorist attack will take place in a month or two. Dawn (Karachi) and Al-Jazeera
Sectarian violence between Sunni and Shia Muslims appears to be approaching a "red line." Currently, the violence takes the form of sectarian clashes in Syria and Iraq, or in terrorist acts by Sunni terrorist groups targeting Shias in Nigeria and Pakistan. However, the most frightening scenario is the unrestrained complete jihad between the two sects of Islam which would cross state boundaries. This could occur by the gradual spread of existing clashes across national boundaries, or more directly by a high-level religious leader in either sect calling for sectarian jihad. Saudi Arabia and Iran serve as national exemplars of Sunni and Shia faiths, respectively. Both are historic centers to their faiths. However, Iran is the only Shia state with the position and real obligation to protect and expand this variant of Islam. Thus, funding Syria's regime and Hezbollah are seen as important not only for political reasons, but also as religious duty. This increases the chances of a "red line" being crossed, resulting in broader sectarian war. Eurasia Review
Supporters of Venezuela's ill president Hugo Chávez were cheered on Monday when he returned from Cuba in the middle of the night and tweeted:
"We have arrived again to the Venezuelan homeland, Thank you my God!! Thank you my beloved people!! We will continue the treatment here.""Thanks to Fidel, to Raul and all of Cuba!! Thanks to Venezuela for so much love!!"
"I continue clinging to Christ and confident in my medicine and nurses. Onward to victory forever!! We shall survive and we shall overcome!!"
Chávez will continue to be treated in secrecy, and there were no photos of his return. The nature of his cancer has never been revealed. He's unable to speak because he is breathing through a tracheal tube.
Perhaps Chávez will make a miraculous recovery, but many suspect that Chávez does not have long to live, and that he is returning to Venezuela to spend the last few weeks of his life with his family and friends. Deutsche-Welle and ABC Univision
(Comments: For reader comments, questions and discussion, see the 19-Feb-13 World View -- Sunni vs Shia sectarian violence may be approaching a 'red line' thread of the Generational Dynamics forum. Comments may be
posted anonymously.)
(19-Feb-2013)
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North Korea tells China that it's preparing new nuclear tests
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After a terrorist bombing on January 11 killed 100 people in Quetta, the victims' families blocked the roads and refused to bury their dead until the government in Islamabad committed to providing protection against further terrorist attacks. After three days, the protest ended with the promise that the government would provide protection. Now, after a new horrendous bombing on Saturday that killed over 80 people and injured hundreds, many critically, it's clear that Islamabad is doing nothing.
The terror group Lashkar-e-Jhangvi (LeJ) has claimed responsibility for both bombings, as well as bombings of Shia and Sufi shrines around Pakistan. LeJ works hand in hand with Tehreek-e-Taliban Pakistan (TTP), Pakistan's Taliban, though LeJ has been even more brutal. Between the two of them, there are terrorist attacks across Pakistan on a continuing basis. Each time a new terrorist attack occurs, it confirms the opinion of many that the government is providing support to the terrorist groups for political purposes.
According to Nawab Zulfiqar Ali Magsi, governor of Baluchistan province in which Quetta is located:
"The terrorist attack on the Hazara Shiite community in Quetta is a failure of the intelligence and security forces.Our security institutions, police, FC (paramilitary Frontier Corps) and others are either scared or cannot take action against them."
The Quetta attacks have particularly targeted the Hazaras, a Shia Muslim ethnic group that migrated from Afghanistan over a century ago. According to Aziz Hazara, vice president of the Hazara Democratic Party:
"The government is responsible for terrorist attacks and killings in the Hazara community because its security forces have not conducted operations against extremist groups. We are giving the government 48 hours to arrest the culprits involved in the killing of our people and after that we will launch strong protests."
The 48-hour ultimatum is a bit puzzling, since the only thing being threatened is another protest.
The official is demanding that Islamabad send in the army to protect Quetta. Another demand is that the army track down the LeJ terrorists and bring them to justice. Daily Times (Pakistan) and Express Tribune (Pakistan)
Protesters point out that there have been many terrorist attacks by TTP and LeJ, and NOT A SINGLE PERPETRATOR HAS BEEN BROUGHT TO JUSTICE.
Does that sound familiar to you, Dear Reader?
If you're a long-time reader, then you know very well that the Obama administration has adamantly refused to investigate anyone who perpetrated the massive fraud that caused the financial crisis, and that NOT A SINGLE PERPETRATOR HAS BEEN BROUGHT TO JUSTICE.
As I've written in the past, from the point of view of generational theory, we now have three very similar events. In each case, the crimes begin because of generational hatred of an older generation. Once that happens, then people in all generations are forced to choose sides, and the generational split morphs into a political split, and the corruption metastasizes throughout all the "elite" politicians, financiers, businessmen, labor unions, and so forth. Respectable people turn out to be gangsters, and gangsters are treated as respectable people. The three examples are:
These situations occur in all times and places throughout history, and result in history's greatest catastrophes. In each case, the generational conflict morphs into a political conflict, as people in every generation are forced to choose sides in the generational debate. In 1930s Germany, it was the Christians blaming the Jews for German humiliation in World War I. In America today, it's the Democrats blaming the Republicans for financial deregulation. In Pakistan, it's the Sunnis blaming the Shias. The result is always the same: catastrophe.
Sectarian tensions are growing almost on a daily basis across the Mideast from Algeria to Bangladesh. On Sunday, there were several new car bombs in Baghdad, iraq, mainly targeting Shia areas of the city, killing 37 and injuring dozens. No one has claimed credit, but it's assumed that the bombers were al-Qaeda linked Sunni terrorists. BBC
According to an unnamed source, North Korea has told China that it is preparing to to stage one to four more nuclear tests this year, increasing in size, as well as new rocket tests. The tests will be undertaken unless Washington holds talks with North Korea and abandons its policy of what Pyongyang sees as attempts at regime change. North Korea has repeatedly adopted a pattern of promising to end belligerent actions in exchange for something from the West -- food aid, lifting of sanctions, etc. -- and then continuing the belligerent actions anyway after it got what it wanted. Technically, the Korean War has never ended, although an armistice was declared in 1953. The North Koreans appear to be angling for a permanent "peace" agreement with the United States and its removal from America's list of terrorist states, thus removing financial and other sanctions. Whether the West falls for this again remains to be seen. Reuters and 38north
(Comments: For reader comments, questions and discussion, see the 18-Feb-13 World View -- Protests boil across Pakistan after mass slaughter of Quetta Shias thread of the Generational Dynamics forum. Comments may be
posted anonymously.)
(18-Feb-2013)
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Federal Communications Commission warns of a zombie attack
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A large water tanker, filled not with water but with 800 kg of explosives, exploded in a crowded vegetable market after it was placed near a pillar in a two-story building, causing the building to collapse and killing at least 79 people, while injuring hundreds others in Quetta, Pakistan. Many of the injured are in critical condition, and many others are still trapped beneath the collapsed building. This is the second horrific bomb attack this year targeting Shia Muslims in Quetta. The last one occurred on January 10, killing over 120. (See "13-Jan-13 World View -- Shia families in Quetta Pakistan refuse to bury bombing victims")
The al-Qaeda linked terror group Lashkar-e-Jhangvi has claimed credit for both bombing in Quetta. As we're written in the past, Lashkar-e-Jhangvi targets Shia and Sufi shrines in Pakistan and Afghanistan. In addition, it's connected to Jundullah, a terrorist group that has perpetrated major attacks on Shia mosques and Revolutionary Guard stations in southeastern Iran. The year 2012 was the bloodiest year ever for Shia Muslims targeted by Sunni Muslim terrorists, and already it seems that 2013 is going to be much worse. AFP
Although an absolute minority, the Hazaras are the third largest ethnic group in Afghanistan, after the Pashtuns and Tajiks. According to some reports, in 1998, the Taliban killed more than ten thousand Hazaras in Afghanistan's northern city of Mazar-i-Sharif. Hazaras are Shia Muslims who migrated to Pakistan from Afghanistan more than a century ago. They've been the victims of discrimination and numerous atrocities, and mass killings in Pakistan have been on the increase since 1999. After the January 10 bombings, furious Hazaras demanded that Pakistan's government in Islamabad provide protection to the Hazaras, but no such protection has been provided. Daily Times (Pakistan) and AP
The Federal Communications Commission (FCC) is using its Emergency Alert System (EAS) to warn residents of Montana of a potentially dangerous zombie attack:
"Civil authorities in your area have reported that the bodies of the dead are rising from their graves and attacking the living. Follow the messages onscreen that will be updated as information become available. Do not attempt to approach or apprehend these bodies as they are considered extremely dangerous."
Television stations that broadcast the alert later issued retractions:
"This message did not originate from KRTV, and there is no emergency. Our engineers are investigating to determine what happened and if it affected other media outlets."
What happened is that hackers attacked the FCC's Emergency Alert System and posted the alert. The FCC has issued an urgent advisory to television states to change passwords, but this will do little to stop another attack. This is just one more place where the technological infrastructure is vulnerable to easy attack from hackers or from foreign nations. Reuters and Information Week
The Administration has approved legislation that is expected to immediately accelerate the use of domestic surveillance drones within the United States. According to the schedules, drones are likely to start flying regularly in the US by late 2015, and as many as 30,000 non-military drones are expected to be in the sky by the end of the decade. The US Department of Homeland Security already has an arsenal of the aircraft at its disposal for use in border-patrol missions. Russia Today
Gun control opponents, already on edge fearing Administration-led attempts to keep law-abiding citizens from owning guns, are now wondering why the Department of Homeland Security (DHS) is stockpiling more than 1.6 billion bullets -- equivalent to the number of bullets that would have been needed in the Iraq war for a full 24 years. In addition, DHS is acquiring 7,000 assault weapons. Activists worry about a DHS report that warns of "rightwing extremism," while DHS is refusing to provide any explanation for the massive buildup of assault weapons and ammunition. Investors Business Daily
A new scheme by the government of Singapore to increase population through immigration and increased birth rates is being described as a "population Ponzi scheme." The city-state is already very crowded, with 3.3 million citizens and 2 million foreign residents, but economic growth has been slowing. So Singapore wants to boost prosperity by increasing both immigration and the birth rate, to have a population of 6.9 million by 2030, and plans to reclaim land from the sea to have room for more people. But like a financial Ponzi scheme, a "population Ponzi scheme" works only as long as the population increases faster and faster. This creates a financial bubble that pops when the population growth stalls. On Saturday, thousands of people staged one of Singapore's largest ever protests, demanding that the proposal be dropped. Protesters blame the flood of foreigners over the past decade for stagnant wages, crowded trains and rising real estate prices, and say that more immigrants would change the very nature of the island. Bloomberg and Reuters and Hey Baby! Singapore site encouraging children
(Comments: For reader comments, questions and discussion, see the 17-Feb-13 World View -- Another horrific bomb attack targets Shias in Quetta, Pakistan thread of the Generational Dynamics forum. Comments may be
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(17-Feb-2013)
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Wal-Mart's 'total disaster' in sales blamed on rise in payroll tax
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A once in a lifetime event occurred on Friday, when two astronomical events caught worldwide attention on the same day. The second event had been predicted, a large asteroid that flew by the earth, with its closest approach above Indonesia, but not causing any damage. But several hours before the asteroid, everyone was surprised when a totally unrelated meteorite flew into the earth's atmosphere, raining down on central Russia and injuring hundreds of people.
But one Russian politician says that there was no accidental coincidence at all. Russian Nationalist politician Vladimir Zhirinovsky explained that the meteorite could not possibly have come from outer space, because there's no gravity in outer space, and so nothing ever falls:
"Those aren’t meteors falling, it’s the Americans testing new weapons.Nothing will ever fall out there [from outer space]. If [something] falls, it’s people doing that. People are the instigators of wars, the provocateurs."
He also said US Secretary of State John Kerry had tried to warn Russia about the weapons test, but had been unable to reach the right person by phone. Ria Novosti (Moscow)
A group of Chinese-Americans, calling itself the "Concerned Citizens on U.S. Policy towards Japan," wrote a letter to the Obama administration calling on the U.S. to repudiate its policy supporting Japan. The letter was written by Wenji V. Chang, a professor from the University of Southern California. The letter, which was sent on the eve of a scheduled visit by Japanese prime minister Shinzo Abe to Washington later this month, calls on Obama to reject any support for Japan's claim to the Senkaku/Diayou islands, and also calls on Obama to oppose Japan's attempt to modify the anti-war provisions of its constitution. Saying that Japanese society is turning rapidly nationalistic and militaristic, like Japan prior to World War II, it said:
"We strongly urge you to reject both attempts, because they are against the fundamental and long-term interests of our country.The ultra-conservative wing of the Japanese political spectrum, of which Abe is the leader, will not be our long-term friend. ...
The US should not become a tool of Japanese ultra-conservatives."
An internal email message sent on February 12 by Wal-Mart's VP of finance and logistics to other executives says:
"In case you haven’t seen a sales report these days, February MTD [month-to-date] sales are a total disaster. The worst start to a month I have seen in my ~7 years with the company."
Economists had expected a strong start to February because of the Super Bowl and milder weather. The poor sales are blamed on the 2% increase in payroll taxes, and an IRS delay in issuing income tax refunds. Bloomberg
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The Venezuelan supporters of president Hugo Chávez were cheered on Friday when the government released photos of a smiling Chávez in bed in Havana, Cuba, with his two daughters. Many people had speculated that Chávez was close to death after his December 11 cancer operation and subsequent respiratory complications, but the photos appear to show him recovering, although a statement accompanying the photos says that he has been fitted with a breathing tube in his throat, making it hard for him to speak:
"After two months of a complicated post-operatory process, the patient (Chávez) is conscious, with the integrity of his intellectual functions, in close communication with his governmental team and at the head of the fundamental tasks inherent to his position.As was opportunely informed, the respiratory infection which emerged in the course of the post-operatory treatment was controlled, although a certain grade of (respiratory) insufficiency persists.
Given this circumstance, that is being duly treated, President Chávez is currently breathing through a tracheal tube, which temporarily makes it difficult for him to speak.
The medical team is applying an energetic treatment for the base illness (cancer), which is not exempt from complications.
The patient is cooperating with the treatment and rehabilitation in close coordination with his medical team."
Thousands of Islamists rallied in Cairo on Friday in support of Mohamed Morsi, the Muslim Brotherhood president who has been the target of protester rage in weeks of violent demonstrations. The protest descended into violence as night fell. State media reported that “troublemakers” had thrown rocks and petrol bombs. Security forces unleashed tear gas and water cannon, it said.
The Muslim Brotherhood backed Friday's rally in a symbolic way, but did not mobilize its members for the event. Instead, the pro-Morsi rally was principally supported by a hardline Salafist Islamist group, Al-Gama’a al-Islamiya.
Indeed, Morsi's principal Islamist support, the Salafist al-Nour party, has been launching scathing political attacks on Morsi and the Muslim Brotherhood this week. Referring to Egypt's prime minister Hisham Kandil, an al-Nour politician said:
"The Morsi-appointed government of Hisham Kandil has run out of steam and lost all credibility. Under this government the lives of Egyptian citizens are deemed worthless.It has become clear that Kandil has little control over his government and lacks any economic or political vision for the country’s future. His government has to go, and go quickly, to be replaced by a national salvation government capable of organising free and democratic parliamentary elections."
Other parties are becoming equally contemptuous of Morsi, complaining that the only thing he cares about are the political interests of the Muslim Brotherhood. According to a member of the liberal Geel (Generation) party:
"Kandil has repeatedly refused to come to the Shura Council to explain his unsuccessful strategies. He has done nothing to contain the repressive practices of the Interior Ministry, including the torture of opposition activists while being detained in Central Security Force camps. His government refuses to answer the council’s questions about the deaths of a number of political protesters."
It's now been two years since the 25 January Revolution that deposed Hosni Mubarak. Protests and demonstrations were routine in Cairo's Tahrir Square during those two years, and usually peaceful. But things have changed after the protests that occurred on the second anniversary of the revolution. (See "27-Jan-13 World View -- Egypt in crisis after two days of violent clashes")
Tahrir Square has been abandoned for other locations, and the protests have become increasingly violent. About 60 people, including three police officers, and been killed in just the last three weeks, and over 2,000 people have been injured. At least 35 government buildings and 15 private institutions have been attacked.
We've previously described how Port Said and other cities along the Suez Canal are getting increasingly contemptuous of Morsi and Cairo in general. That's because these cities make a lot of money for Cairo, but it all goes into the pockets of the wealthy élite in Cairo, with little returning to Port Said. This contempt is worsening with the faltering economy, police brutality and mass detentions. The contempt is turning into seething anger, according to rights activists. However, as activists point out:
"Nobody in the opposition has a comprehensive alternative. They simply envision replacing Morsi with someone else while retaining the same system. ...Many voters will think twice before voting for the Brotherhood again but then there is no convincing alternative that can fill the vacuum. And elections in Egypt, in the end, are a matter of mobilization and business, not politics."
Al-Ahram (Cairo) and Jerusalem Post
(Comments: For reader comments, questions and discussion, see the 16-Feb-13 World View -- Egypt continues to become more unstable and violent thread of the Generational Dynamics forum. Comments may be
posted anonymously.)
(16-Feb-2013)
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S. Korea unveils cruise missile that can strike anywhere in N. Korea
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Russian police apparently panicked last week and blindly conducted a large-scale operation targeting radical Muslim groups in various parts of St. Petersburg. Reports indicate that as many as 700 Muslims were detained and questioned. As part of such operations, the police deliberately break into prayer rooms with their dogs to desecrate Muslim prayer rugs, infuriating and humiliating the Muslims. Russia's police were caught by surprise by this enclave of allegedly radical Muslim groups because they were not from the North Caucasus provinces, but instead were from the east, including Tajikistan and Uzbekistan. The huge operation produced almost no results, though seven Muslims were deported for having insufficient documentation. This operation has electrified the Muslim community, and Russia can expect blowback, possibly in the form of terrorist operations. The attack on the St. Petersburg mosque was justified because the mosque was "unauthorized," and Russia is now considering a bill that would make illegal any unsanctioned prayer services held outside of religious sites or cemetaries, without permission from authorities. Jamestown and Russia Today
The euro zone slipped deeper into recession in the fourth quarter of 2012, much more severely than economists had predicted. Germany's economy contracted 0.6%, while France's fell 0.3%. Furthermore, France's figures for the first and second quarters of last year were revised to negative, indicating negative growth for three of the four quarters of 2012. This is not a minor thing. All the speeches by European politicians, all the policies by financial ministers, all the plans and budgets by analysts -- all of them are based on the assumption that all the 1980s and 1990s macroeconomic models still work. As I've said repeatedly, the only models that work today are the ones from the 1930s, because that was the last generational crisis era. Alan Greenspan has also pointed out that every macroeconomic model has been a failure for the last five years. Reuters
North Korea's nuclear weapon test has changed some of the dynamics in Asia. The American administration has reaffirmed that it will defend both South Korea and Japan, honoring previous treaty commitments. But with North Korea becoming a nuclear weapons state, and with neither China nor the United Nations able to take any meaningful counter-steps, some experts believe that the focus will have to change to find ways to prevent it from transferring technology or weapons to other rogue states or to terrorist groups. (It's hard for me to see how this new focus will be any more successful than the old focus.) South Korea has announced measures to strengthen its own military, to deter the North Koreans. On Thursday, South Korea announced a cruise missile that it said can strike anywhere in North Korea:
"The cruise missile being unveiled today is a precision-guided weapon that can identify and strike the window of the office of North Korea's leadership."
Asia One (Singapore) and Reuters
(Comments: For reader comments, questions and discussion, see the 15-Feb-13 World View -- Economists shocked at severe shrinkage of eurozone economy thread of the Generational Dynamics forum. Comments may be
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(15-Feb-2013)
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Venezuela's Hugo Chavez undergoing 'complex, tough' treatment
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For the last five days, Egyptian forces have been flooding with water the underground tunnels that smugglers in Gaza have dug to allow goods to reach Gaza without having to pay taxes, or be confiscated if they're illegal. An estimated 30% of all goods that reach Gaza come through the tunnels, circumventing the Israeli blockade. Flooding the tunnels causes them to collapse and makes the unusable. According to one Gaza resident:
"Egyptian measures against tunnels have worsened since the election of Morsi. Our Hamas brothers thought he would open up Gaza. I guess they were wrong. Perhaps 150 or 200 tunnels have been shut since the Sinai attack. This is the Morsi era."
Before 2010, there were some 2500-3000 tunnels between Gaza and Egypt, but the number has shrunk markedly since Israel eased some of the limits they imposed on imports into Gaza. Reuters
What's interesting about this tunnel story is the variety of explanations being given by different news agencies. Reuters, quoted above, says that the tunnel flooding is opposed by the Hamas government in Egypt. However, AFP is reporting that Hamas and Egypt are cooperating to close the tunnels, because they're being used to smuggle drugs and other harmful items into Gaza. According to an unnamed Hamas official:
"Many of them were closed down because they were used to smuggle banned materials that harm citizens."
Finally, an analysis in Jewish Press says, "Egypt is flooding Gaza smuggling tunnels, choking off one of Hamas’ biggest sources for money and placing a virtual siege far more severe than Israel ever created."
We report, you decide. AFP and Jewish Press
Venezuelan President Hugo Chávez is undergoing “very complex and tough” medical treatment in Cuba, where he has been hospitalized since Dec. 11 after undergoing cancer surgery. According to vice president Nicolas Maduro:
"Our commander is being subjected to supplementary treatment, as we have reported, treatments (that are) very complex and tough. [Chávez is] undergoing alternative treatments ... but they are complicated and difficult treatments that must – at some point – end the cycle of his illness."
The last report on Chávez's condition was given on January 26. At that time, his progress was said to be "favorable," though he continued to have "a certain level of respiratory insufficiency." Latin American Herald Tribune
The U.N. Security Council issued "strong condemnations" of North Korea's nuclear test, but is unlikely to do anything more than issue statements. China had threatened trade sanctions if North Korea went ahead with the test, but is now considered unlikely to do anything. China is unwilling to back any U.N. sanctions on North Korea, for fear that it could lead to upheaval, causing an outcome that might favor the U.S., and sending a refugee flood into China. China has even less flexibility with N. Korea, now that it feels threatened by the U.S. military "pivot" from Europe to Asia. North Korea is aware of this tension, and feels free to blatantly disregard China's wishes, secure in the knowledge that no serious sanctions will be imposed by anyone. Reuters
(Comments: For reader comments, questions and discussion, see the 14-Feb-13 World View -- Egypt flooding Gaza tunnels to curb smuggling thread of the Generational Dynamics forum. Comments may be
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(14-Feb-2013)
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David Einhorn seeks to undermine Apple Computer
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North Korea's official Korean Central News Agency (KCNA) issued he following English language statement on Tuesday:
"The scientific field for national defense of the DPRK [Democratic People’s Republic of Korea] succeeded in the third underground nuclear test at the site for underground nuclear test in the northern part of the DPRK on Tuesday. The test was carried out as part of practical measures of counteraction to defend the country’s security and sovereignty in the face of the ferocious hostile act of the U.S. which wantonly violated the DPRK’s legitimate right to launch satellite for peaceful purposes.The test was conducted in a safe and perfect way on a high level with the use of a smaller and light A-bomb unlike the previous ones, yet with great explosive power. ...
The nuclear test will greatly encourage the army and people of the DPRK in their efforts to build a thriving nation with the same spirit and mettle as displayed in conquering space, and offer an important occasion in ensuring peace and stability in the Korean Peninsula and the region."
The significance of the phrase "smaller and light A-bomb" is that, if true, it means that they have tested a nuclear bomb that's small enough to fit into long-range missile. The North Koreans have previously said that the intended target of their nuclear missile weapons is the United States. AFP
The United Nations Security Council held an emergency meeting on Tuesday, and came out of the meeting issuing strong condemnations of the North Korean nuclear test. They backed up their condemnations with an explicit threat: If North Korea doesn't end its nuclear test program, then the United Nations Security Council will hold another meeting.
It remains to be seen whether the Security Council will do anything more. China has repeatedly expressed strong disapproval of North Korea's nuclear tests, and recently threatened trade sanctions if the North Koreans went ahead with the test. However, China has always backed down in the past, since their main fear is an unstable North Korea that will send potentially hundreds of thousands of refugees across the border into China. CS Monitor
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Hedge fund manager David Einhorn, president of Greenlight Capital, is suing Apple Computer because Apple Computer has too much cash on its balance sheet, and Einhorn would like a piece of that cash. In an interview on CNBC last week, here's what he said (my transcription):
"Let me tell you what I think is going on here. Apple is a phenomenal company, it's filled with talented people, creating iconic products that consumers around the world love. But Apple has a problem, which is, it has a cash problem.It has sort of a mentality of a depression. In other words, people who've gone thru traumas, and Apple's gone thru a couple of traumas in its history, they sometimes feel that they can just never have enough cash.
I remember my grandma, she was depression era for her childhood, and she wouldn't even leave me a message on my answering machine so I could call her back, because she didn't want to get charged for the phone call. And that's kind of the way that people's attitudes sometimes are, once they've been thru this.
So we've been thinking about Apple carefully. and we recognize that the company wants to have a very large cash hoard, they wanna have it in case bad things happen, they wanna have it so that they can be strategic, they wanna have it so that they can do acquisitions if they wanted to.
And this has been building up to a large number over quite some time. And what we thought about is that we came up with what we think is a solution, where Apple can maintain its cash, and its strategic flexibility and its comfort money and its war chest, and at the same, shareholders can receive the value that is embedded within the balance sheet."
This is amusing because a lot of people who read my Generational Dynamics web site also have a "depression era mentality," and many of those people wish that the federal government did so as well, and not spend the country into trillions more in debt.
Whatever Apple's motivation for maintaining a "very large cash hoard," Apple is doing the right thing. A financial crisis will leave Apple in good shape to survive, while other companies will go bankrupt, and people like Einhorn will lose everything and end up jumping out of windows (alluding, again, to a depression era mentality).
This example is instructive. Gen-X hedge fund manager David Einhorn doesn't give a sh-t about the shareholders whose interest he claims to be representing, but he undoubtedly expects to make millions for himself from this deal. Einhorn is contemptuous of his own grandmother, and he's contemptuous of Apple for wanting to preserve cash at a time of financial crisis. He sees Apple as a juicy plum that he can pluck and cripple for his own financial gain. This anecdote shows many of the dynamics that created the financial crisis, and are making the financial crisis worse every day. Anyone with money is a potential target in this culture of fraud and corruption.
(Comments: For reader comments, questions and discussion, see the 13-Feb-13 World View -- North Korea announces successful nuclear test thread of the Generational Dynamics forum. Comments may be
posted anonymously.)
(13-Feb-2013)
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Hugo Chavez devalues Venezuela's bolivar currency by 32%
This morning's key headlines from GenerationalDynamics.com
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Many historians believe that America's 1931 Smoot-Hawley Tariff Law, designed to "save American jobs" by making it expensive to import previously cheap goods from other countries, like Germany or Japan. Instead of saving American jobs, the law triggered retaliatory tariff wars around the world, dramatically reducing the amount of world trade between countries, actually costing jobs.
Today's politicians are very well aware of what happened in the 1930s, and, except for a few skirmishes, have avoided imposing trade tariffs during the current financial crisis. However, human nature being what it is, there's concern that countries are trying to do the same thing in a different way, by devaluing their currencies. A central bank does this by "turning on the printing presses" and using techniques such as quantitative easing to make more money available. If one country does this, then its currency will become cheaper relative to the currencies of other countries, and this will improve exports, since that country's manufactured goods will be cheaper in other countries. For example, America's Federal Reserve has been flooding the markets with $85 billion per month in new "printed" money, and plans to continue doing so for a while. Japan's central bank has said that it plans to do something similar. Of course, if all countries devalue their currencies, then you have "currency wars," and no one benefits. Bloomberg
Talk of "currency wars" has been increasing because the euro currency is gaining strength against other currencies. On Monday, the value of a euro rose to $1.34, when it was close to $1.20 not too many months ago. This is making European exports extremely expensive in America, while making American exports cheap in Europe. It's also splitting the euro zone countries down the middle, along the same lines as the split over bailing out Greece and Spain. France and the southern countries want the European Central Bank (ECB) to "print" a lot more money to bail out countries that need it, devaluing the euro currency at the same time. But Germany, the Netherlands, Austria and Luxembourg and opposed to bigger bailouts and also to devaluing the euro. Reuters
Venezuela's President Hugo Chávez, who is recovering from cancer surgery in Havana, ordered his government to weaken the exchange rate for the bolivar currency to 6.3 bolivars per dollar from 4.3 bolivars per dollar. This is the fifth devaluation in nine years, and it follows a spending spree last year that helped Chávez win reelection, but also tripled the fiscal deficit and increased inflation.
The devaluation, which was announced on Friday and is effective on Wednesday, is already having dramatic effects. Venezuelans experienced panic buying of televisions and airline tickets over the weekend, and also stocked up on groceries for fear that inflation-based food price increases. The weaker exchange rate will give the central government an additional 84.5 billion bolivars ($13.4 billion) in revenue, mostly from oil sales done in dollars. On the other hand, foreign companies that sell products in Venezuela can expect a sharp decline in earnings, when their sales in bolivars are converted back to dollars. This includes a wide range of companies, including Avon Products, Coca-Cola, and Mexico-based Gruma SAB, the world's largest tortilla maker. Analysts said that while the latest devaluation was expected and necessary, it still did not bring the official exchange rate anywhere close to the black market, meaning yet another round of devaluations was likely before long. Bloomberg and Reuters
(Comments: For reader comments, questions and discussion, see the 12-Feb-13 World View -- Strengthened euro currency raises fears of 'currency wars' thread of the Generational Dynamics forum. Comments may be
posted anonymously.)
(12-Feb-2013)
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Iran and Hezbollah build militia networks in Syria
This morning's key headlines from GenerationalDynamics.com
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Two weeks ago, France's president François Hollande declared "mission accomplished," after French troops regained control of several cities from the jihadists and rebels, with barely any casualties. Many reports suggested that the rebels had simply fled to their bases to regroup for a counterattack, and on Sunday a counterattack began in Gao, the largest city in northern Mali. Black-robed Islamic extremists armed with AK-47 automatic rifles invaded Gao in wooden boats Sunday to launch a surprise attack that included two suicide bombings. Gunfights are continuing into Sunday night. Many of the rebels have combat experience from the war in Libya, and are well-armed, thanks to the stores of weapons stolen from Libya. By the end of March, France wants to hand over responsibility to the Malian army, supported by troops donated by neighboring countries. Whether that actually happens will depend on how successful the counterattacks are. AP
An unnamed Obama administration intelligence official says that Iran is backing as many as 50,000 militiamen in Syria, supplying them with money and weapons. Syria is an important client of Iran, and the Lebanon-based terror group Hezbollah is also an important client. Iran and Hezbollah are setting up the militias to provide contingency plans in case Syria's president Bashar al-Assad has to step down. Right now, the militias are fighting alongside al-Assad's army, but if he's forced to step down, then the plan is to create an enclave in northwest Syria under control of Iran and Hezbollah. This would provide an Iran-controlled supply route from the sea into Lebanon, so that Hezbollah could continue to control Lebanon politics. Washington Post
After Kenya's last presidential election, in 2007, an outbreak of ethnic violence killed than 1,200 people, and many thousands were driven from their homes. (See "Post-election massacre in Kenya raises concerns of tribal war".) Now many Kenyans are dreading a new presidential election on March 4, because there may be a new outbreak of ethnic violence. There's already been one recent bloody ethnic massacre ( "22-Dec-12 World View -- Ethnic revenge massacre in Kenya kills 41".) Even business is affected, as Ugandan traders are shifting from Kenya's sea port to Tanzania's more distant sea port.
There's a really bizarre overlay to the election: One of the presidential candidates, Uhuru Kenyatta, has been charged with crimes against humanity, and is due to face trial in the International Criminal Court (ICC) in the Hague in April. With this trial approaching, it suddenly seems that dozens of Kenyan witnesses who were expected to testify at the trial have been disappearing and are presumed dead. These disappearances are only adding to the ethnic tensions that already exist throughout the country. Kenya's last generational crisis war was the Mau-Mau rebellion that climaxed in 1956, 57 years ago. It's fairly common for a new crisis war to begin around the 58-year point following the climax of the preceding crisis war, as that's the point where the survivors of the preceding crisis war almost completely lose their influence. BBC and Independent (Uganda)
(Comments: For reader comments, questions and discussion, see the 11-Feb-13 World View -- Ethnic tensions grow in Kenya as March 4 elections approach thread of the Generational Dynamics forum. Comments may be
posted anonymously.)
(11-Feb-2013)
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Food fraud surges in America and Europe
This morning's key headlines from GenerationalDynamics.com
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Thousands of supporters of Tunisia's governing Islamist party Ennahda ("Renaissance") marched in Tunis, the capital city, on Saturday, chanting pro-Ennahda slogans, many carrying the Ennahda flag.
There were large "riots and clashes with police on Wednesday," after word spread that popular secular leader and outspoken left-wing government critic Chokri Belaid was shot dead in the morning with three bullets fired from close range. There were larger riots on Friday, the day of Belaid's funeral, with protesters accusing the Ennahda party of responsibility for the murder.
So Saturday was a pro-Ennahda demonstration to counter the anti-government demonstrations of the preceding three days. There was a large anti-France component to Saturday's demonstrations, with protesters accusing the French of behaving like a colonial power again, especially after France's Interior Minister Manuel Valls warned of rising "Islamist fascism" in Tunisia.
Ennahda has repeatedly denied any responsibility for Belaid's murder. The party's leader, Rached Ghannouchi, even threatened lawsuits against anyone who accused Ennahda of the murder. VOA and Euro News
Tunisia and its "Jasmine Revolution" has been considered the model of the Arab Spring. The long-time dictator President Zine al Abidine Ben Ali stepped down from power peacefully, and there were democratic elections in October 2011, bringing the Ennahda party to power. The Ennhada party is usually described as a "moderate Islamist" party, to distinguish it from the secularists on one side, and the conservative Salafists on the other side. But there have been several acts of violence against secularists and artists, culminating in Belaid's murder, and the suspicion has been growing that Ennahda's claim of being "moderate" is really just a show to gain support from the West, and that Ennahda is really in league with the Salafists after all.
These tensions are splitting Tunisia's government itself. Tunisia's prime minister Hamadi Jebali has proposed replacing his government with a "technocrat" government of ministers with no party affiliation, to govern the country through the current crisis, until new elections can be called. However, Saturday's pro-Ennahda demonstrators demanded that the Islamists remain in power, and ministers in Jebali's government are refusing to relinquish power. Jebali has threatened to step down if the "technocrat" proposal is rejected.
There is a growing political fault line growing in Tunisia, and it's the same fault line that's growing in other Arab Spring countries. It's not a fault line between Muslims versus Jews and Christians. It's a fault line between moderate Islamists versus radical Islamists. We're seeing this in Mali, in Libya, in Egypt, and in Palestine, with a Shia Alawite versus Sunni fault line in Syria.
When the Arab Spring began, it was hoped by the Pollyannaish Western dreamers that it would bring freedom and democracy to the Mideast. That was never a possibility, with much of the Mideast in a generational Crisis era. Instead, what we're seeing is a steady, continuing increase in instability across the region that will, at some point, descend into total war. AFP and BBC
A major food scandal is spreading across Europe with the discovery, verified through DNA tests, that many ready-made meals, such as beefburgers or lasagna, contain horsemeat rather than beef. The Brits are blaming it on a French supplier, Findus. Findus is blaming it on another French supplier, Comigel. Comigel is blaming it on a supplier in Romania. Britain's environment secretary Owen Paterson said that the scandal was caused by gross incompetence, or by an international criminal conspiracy. Guardian and Food Business News
At the same time, the non-profit U.S. Pharmacopeial Convention has found a huge increase in food fraud in the United States since 2010. Fraud is a significant problem in seafood, while olive oil, milk, saffron, honey and coffee were also affected. Food fraud refers deliberate substitution of ingredients in food, or deliberate mislabeling of food ingredients. Food Business News
This comes after thousands of babies got sick in 2008 because Chinese milk producers added melamine, an industrial chemical used to make plastics and fertilizer, to their milk products, in order to give the appearance of higher protein levels. (See "A generational view of China's growing melamine food disaster" from 2008.) As we've recently reported, China mainland mothers are still distrustful of milk powder and baby formula manufactured in China, and so they're buying these products from Hong Kong, creating a shortage for mothers there.
(Comments: For reader comments, questions and discussion, see the 10-Feb-13 World View -- Arab Spring destabilization increases with Tunisia crisis thread of the Generational Dynamics forum. Comments may be
posted anonymously.)
(10-Feb-2013)
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Panetta: A cyber attack may be the next Pearl Harbor
This morning's key headlines from GenerationalDynamics.com
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Hong Kong is one of Asia's wealthiest cities, but real estate prices have surged 25% in the last year alone, with rental prices following suit, putting a decent home out of reach of hundreds of thousands of the poorest. For many of them, this means living in a small metal cage in an apartment that's been subdivided with as many metal cages as can be made to fit. Cage homes originally sprang up in the 1950s to cater to single men coming in from mainland China. AP
Defense Secretary Leon E. Panetta is warning that cyber attacks are a primary threat to U.S. national security, with a potential "crippling" effect on government, financial and commercial networks. According to Panetta,
"The developments that have taken place in the cyber arena have been incredible over these last 10 years. ... I believe that it is very possible the next Pearl Harbor could be a cyber attack ... [that] would have one hell of an impact on the United States of America. That is something we have to worry about and protect against."
I received a lot of comments on yesterday's article, "8-Feb-13 World View -- Libor-rigging scandal and lying on Wall Street".
"Thank you for all your hard work on your site. I really enjoy it. I have a quick thought on the lawsuit against S&P. It is my belief that the prosecution is politically motivated rather than generationally motivated. I understand that the two are not mutually exclusive but remember that S&P was the first firm to downgrade US debt. This may be payback for do so before the elections or in defiance of an order from this administration. From what I've seen; if you make friends with the administration, then all your legal troubles seem to go away. On the contrary, when you fight the administration, your legal troubles seem to compound. Did Putin teach our administration how to use the law for political advantage?"
Apparently a lot of people believe that the administration brought charges against S&P Financial Services (as opposed to Moody's or Fitch) for purely political reasons, because S&P lowered the U.S. credit rating during President Obama's reelection campaign. Apparently even Democrats agree that this is a possibility (though they're willing to forgive it, while Republicans are not). It's a reflection of how the Administration seems willing to break any law that the public is so willing to believe something like this.
However, there have been a number of news stories suggesting that the Administration is close to bringing a similar charge against Moody's, which did exactly the same thing. If no such charge is forthcoming, then suspicion will grow that the charges against S&P were indeed politically motivated. We'll see.
"Standard & Poors is not a Bank. No person is being prosecuted. No corporation is being prosecuted. No serious criminal investigation of the fraud has been announced... And it has been more than six years since the whistle blowers came forward with documentation. A civil suit does not carry the threat of 30 years in jail, that causes little fish to tell all and expand the investigations to other corporations and bigger fish."
I had suggested that perhaps things were changing, and that now that the election was over, bankers that had committed fraud, causing the financial crisis, would finally be prosecuted. However, it's true that the S&P charges don't really change anything. It's still true today that nobody has been criminally charged, and no American banker has even been civilly charged.
When I suggested that things were changing, I was referring to a trend. Let me put this into context:
In each of these cases, I was referring to an apparent trend that wasn't being recognized by the public in general. For example, it was only in 2010 that mainstream economists finally started admitting that there was a real estate bubble in 2006.
So that's what I'm talking about now. A year ago, there was no sign at all of bringing charges for the financial crisis. But the Libor-rigging scandal was so egregious that it's no longer possible for the Administration to avoid bringing charges. They may still be loathe to charge their banker pals with anything, but I'm seeing a trend where they're going to be increasingly forced to do so, whether they want to or not.
"I notice that you rant very hard against the GenXers as a category but seem to leave the Boomers off the hook as a category. Ron Baron is clearly a Boomer as were all the principal propagandists for the legitimacy of the scams. After all, abstract rhetorical arguments are what Boomers excel in. The GenXer desperado/nihilistic/self-destructive ruthlessness is definitely a key component, but so too is the narcissistic air-headedness of the Boomers coupled with their bogus, anti-historical, anti-mathematical rhetorical flourishes. In fact, the Boomers were the ones in charge during the ascent of the GenXers. It is true that the GenXers would play on the messianism, greed and ego of the Boomers in advancing their schemes. But the Boomers were where the buck stopped; and still where the buck stops today. So to only blame the devious Xers is to imply that the Boomers were innocent just because they were naive idiots who just happened to be egomaniacal and greedy."
I didn't go into the subject of Boomers versus Gen-Xers in yesterday's article, but I've written many times in the past that the Boomers are just as criminal as the Xers. Also, I suggested that Baron was a liar or a crook in the full knowledge that he was a Boomer.
I've been writing about generational theory for over ten years now, and today I have few doubts left about the relationship between the Boomers and Xers. The key to understanding is the difference between the 1990s tech bubble and the 2000s credit bubble. The Boomers brought about the 1990s tech bubble by making incredibly stupid investments, because the Silents were no longer around to tell them to be risk averse. However, the tech bubble was caused by stupidity, not by fraud. The Gen-Xers brought about the disastrous credit bubble by purposely defrauding investors. The Boomers went along with it, because they used to do what the Silents told them to do, and now they do what the Xers tell them to do. The Boomers are amoral, while the Xers are immoral.
In the past ten years, I've personally seen one incredibly stupid and destructive decision after another made by Gen-Xers in the computer industry, simply because the Xers hate the Boomers. And perhaps theoretically "the buck stops here" with the Boomers, but in actual practice what I've seen is that the Boomers do nothing except to go along with these incredibly destructive decisions. (After all, the Boomers just want to be loved by the Xers -- or laid.)
And the same is true in politics in Washington, and in finance on Wall Street. The Gen-Xers in the Administration and the Congress make incredibly destructive decisions, and the senior politicians just go along with them. If I'm not mistaken, all the people on Wall Street whom I've called crooks and liars have been Boomers, but they all get their fallacious data from their Gen-X staffers.
Last year, I wrote about the "The Metastasis of Corruption" -- how the corruption and fraud began with the Gen-Xers in the early 2000s because of their hatred of Boomers, and how it metastasized to the point where almost everyone in Washington and on Wall Street appears to be corrupt. I compared this to 1930s Germany, where corruption began with Germany's Lost Generation because of their hatred of the "Missionary Generation," but then it metastasized into hatred of the Jews, as representatives of the Missionaries, and into a full-fledged Holocaust.
This is exactly the kind of process that's going on today in Washington and in Beijing, and the result is going to be calamitous for everyone.
Egypt's Prime Minister Hisham Qandil is warning women about the dangers of "unclean" breasts. In a speech, he referred emotionally to rural areas of the country where he saw the suffering of newborns having to deal with diarrhea after being breast fed. The prime minister claimed that the reason behind the diarrhea epidemic in rural Egypt is that some female villagers are too ignorant to clean their breasts before feeding their babies. Al-Bawaba (Jordan)
(Comments: For reader comments, questions and discussion, see the 9-Feb-13 World View -- Comments and questions on the Libor-rigging scandal thread of the Generational Dynamics forum. Comments may be
posted anonymously.)
(9-Feb-2013)
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The moral bankruptcy of Washington and Wall Street worsens
This morning's key headlines from GenerationalDynamics.com
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As we've been saying for a long time, the Obama administration has adamantly refused to even investigate, let alone prosecute, American bankers for the financial crisis, even where there's massive evidence of fraud. (See "Financial Crisis Inquiry hearings provide 'smoking gun' evidence of widespread criminal fraud" from 2010.) I've described two reasons for this: One is that Generation-Xers, having had bad experiences with the criminal justice system in the 1980s, are unwilling to prosecute other Gen-Xers; the second is that the Obama administration benefited greatly through criminal activities of bankers because of campaign contributions.
Now the tide seems to be turning. It's becoming overwhelmingly clear that the crimes of Gen-Xers were so egregious that blaming Boomers no longer makes sense in many cases. And the presidential campaign is over, so there'll be no more political contributions for a while anyway.
On Wednesday, the Justice Dept. filed a civil lawsuit charging Standard & Poors Financial Services with effectively colluding with banks to give invalid AAA ratings to synthetic securities backed by subprime mortgages. According to e-mail messages, S&P knew as early as 2004 that their models were wrong, but they kept the invalid models anyway so that they could continue issuing AAA ratings. (See "A primer on financial engineering and structured finance" from 2008.)
The result of this fraud was disastrous, as shown by the chart above, which shows the default rate of investment grade subprime mortgage-backed securities issued in 2005-2007. AAA rated securities were downgraded (equivalent to a default) 80% of the time, even though the ratings models assume that an AAA default rate of less than 0.1%. Even BBB rated securities are supposed to downgrade or default only 1% of the time, but 100% of them failed. USA Today and Dept. of Justice and Text of lawsuit (PDF)
Libor (London Interbank Offered Rate) is the benchmark interest rate used in the pricing of some 1/3 of $1 quadrillion in financial instruments worldwide, so even a small change in the Libor rate can affect trillion of dollars in securities. There are about 20 banks in Europe and N. America that compare rates every day to come up with the Libor index for that day. What was revealed last year was that bankers at Barclays were purposely rigging Libor rates in order to control the values of securities that they bought and sold, in order to make vast profits. The bankers setting Libor rates at the 20 banks knew each other and did favors for each other -- raising or lowering Libor rates by small amounts so that they could all profit -- in what is being called the biggest financial fraud of all time.
For example, an e-mail message from one UBS to a trader in 2008 says:
"I need you to keep it [Libor] as low as possible. If you do that ... I’ll pay you, you know, $50,000, $100,000 … whatever you want ... I’m a man of my word."
According to former Fed Chairman Alan Greenspan:
"Through all of my experience, what I never contemplated was that there were bankers who would purposely misrepresent facts to banking authorities. You were honor bound to report accurately, and it never entered my mind that, aside from a fringe element, it would be otherwise. I was wrong."
Greenspan is part of the Silent generation that survived the Great Depression and World War II. The reason that he was wrong is because he never dreamed that Generation-X would be so much more lacking in ethics and morals than his own generation.
On Wednesday, the Royal Bank of Scotland (RBS) was fined $612 million for "widespread misconduct" in the same Libor scandal. One RBS employee jokingly texted: "I'm like a whores' drawers. I'll send lunch around for everybody." The RBS traders were so stupid that they continued rigging Libor even after the investigation had started. Guardian (London) and Bloomberg
The stupidity, depravity and debauchery of the Libor-rigging traders is so egregious, that the public may actually be catching on to what happened. According to the Economist:
"They were said to be among the most talented of their generation, recruited after exhaustive interviews and grueling internships. They worked at firms prepared to spend small fortunes to attract and retain them lest they take their skills elsewhere. Yet the moral bankruptcy of traders implicated in the rigging of the London Interbank Offered Rate (LIBOR), one of the world’s most important interest rates, is matched only by the incompetence with which they covered their tracks.Take traders at the Royal Bank of Scotland (RBS), who left a trail of evidence in a trove of e-mails and audio recordings detailing how they set about trying to manipulate LIBOR, even after they knew investigators were looking into the issue. “We’re just not allowed to have those conversations over Bloomberg anymore,” said one trader, laughingly, in a call to another who a little earlier had asked in writing for a rigged rate. “Its [sic] just amazing how libor fixing can make you that much money,” was the verdict of another trader. ...
The scandal has also hardened the views of regulators and politicians."
If the views of regulators and politicians are really becoming "hardened," then we can expect to see a lot more investigations and prosecutions. The Economist
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The Libor-rigging scandal is only a small part of the sickness that's controlling Washington and Wall Street. Lying and fraud are the norm. I've repeatedly named names of so-called "experts" who lie openly about stock valuations. (See, for example, "14-Apr-12 World View -- Wharton School's Jeremy Siegel is lying about stock valuations" from earlier this year.) In today's world, respectable people are gangsters, and gangsters are treated as respectable people. One of those people whom I quoted lying was Ron Baron, chairman and CEO of Baron Capital. That was about a year ago.
Well, this week Baron was back on CNBC leaving me breathless as he blurted one ridiculous statement after another. Here's what he said (my transcription):
"14,000 is where we were in the Dow Jones [Industrial Average] in 2007, so it's been flat for five years. If you go back further than that to 1999, you'll see that for the last 13 years, it happens to be the worst period in the financial history of the united states. The market is up 20-30%, companies have gone up in earnings 2 1/2 times. the reason that has happened was because we started off in 1999 at 32 times earnings, we're now at 13 times earnings. So if you go back 100 years, 200 years, 50 years, the stock market normally trades between 10 and 20 times [earnings], and the median is 15 1/2. You're now 13, it was 32 - that's the highest it's ever been. So the market is now at an attractive level, compared to its median for a very long period of time. ...We've been through civil wars, we've been through world wars, we've been through depressions, deflations, inflations, and yet the stock market has grown 7% a year for 100 years, 200 years, and so do I think it's gonna change over the next 20 years or 30 years, no. And just every now and then you go through these periods of time where not much happens it happened - I started my career in 1970, between 1966 and 1982, the stock market traded between 1000 and 600, and then in March of 1982, we started Baron Capital, the Dow is 880, and in August of that year, went to 1000, and went on the way to 14000. What I think is the same sorta thing is gonna happen in the next 10 years maybe 20 years. Everyone who works in my firm and they're gonna have the same opportunities that I had in the 1980s and 1990s - they're about to have it."
This is absolutely breathtaking in its erroneousness, since many of the figures are lies.
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So what should we make of this breathtaking display of stupidity? Is Ron Baron just another debauched Libor-rigging crook who thinks it's fun to defraud anyone for his own personal gain? Or is he so stupid that he's unable to do long division, and is unable to figure out how to divide price by earnings to get the P/E ratio? Well, Dear Reader, whether it's crook or stupidity, this is not a person you should trust your money with.
You have to remember, Dear Reader, that the Libor-rigging scandal was not some unique circumstance. It's characteristic of the entire financial and political culture today, in Washington and on Wall Street, where massive fraud and screwing people is perfectly OK if you can get away with it. And we've all barely begun to pay the price.
(Comments: For reader comments, questions and discussion, see the 8-Feb-13 World View -- Libor-rigging scandal and lying on Wall Street thread of the Generational Dynamics forum. Comments may be
posted anonymously.)
(8-Feb-2013)
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China: N. Korea 'must pay a heavy price' for third nuclear test
This morning's key headlines from GenerationalDynamics.com
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Long-term simmering tensions between secularists and Islamists in Tunisia exploded into violence Wednesday, as word spread that a popular secular leader and outspoken government critic Chokri Belaid was shot dead with three bullets fired from close range. Police fired tear gas at the thousands of protesters gathered outside the interior ministry in central Tunis to denounce the murder. It's not known who is responsible for the murder, but protesters are blaming the ruling Ennahada party and its leader Rached Ghannouchi. Ennahada party offices were torched and ransacked in Tunis and in other cities, including Sidi Bouzeid, considered the birthplace of the Arab Spring. Tunisia's government has collapsed for the time being, and opposition parties are calling for a nationwide general strike to protest the murder. France 24
Over two years of turmoil throughout the Arab world, known as the "Arab Spring," is thought to have been triggered on December 17, 2010, when a street vendor, Mohamed Bouazizi set fire to himself in Sidi Bouzid in central Tunisia, in protest of the police confiscation of his vegetable cart. After days of clashes between protesters and the police, long-time dictator Ben Ali was forced to flee the country, and is currently in exile in Saudi Arabia. By January the clashes had spread to Egypt, Yemen, Morocco and Lebanon, launching the Arab Spring. Tunisia's current government is led by prime minister. Hamadi Jebeli, secretary general of the Ennahada party. The Ennahada party is usually referred to as a "moderate Islamist" party, not as religiously conservative as Tunisia's Salafist parties, but opposed by Tunisia's secular parties. The secularists are blaming Ennahada and the Salafists for the murder, but so far the perpetrator has not been identified. Daily Star (Beirut) and Reuters
According to state-run Chinese media, a third nuclear test by North Korea, which is considered by outside observers to be imminent, is complicating relations between China and North Korea. China has strenuously expressed its disapproval of North Korean nuclear testing, and has threatened economic sanctions if a third test proceeds. North Korea will pay a heavy price if it conducts a third nuclear test. Some fear the worst case scenario, that the rupture that occurred in relations between China and Soviet Union will be repeated. But China will not be taken hostage by North Korea's intransigence, although China and North Korea have a strong friendship. Global Times (Beijing)
Fears are increasing that North Korea's imminently expected third nuclear test will be of a type that will allow North Korea to create a nuclear weapon small enough to be the nuclear warhead of a long-range missile, such as the missile they recently tested. The South Koreans are weighing the possibility of a pre-emptive strike on North Korea's nuclear test site, although no such strike is planned at the current time. According to South Korea's Defense Committee chairman, when told that a strike is possible if the situation changes:
"Are you sticking to your guns even if a pre-emptive strike on the North's nuclear weapons will lead to a full-scale war? It would be better to destroy the North's nuclear weapons first than to be struck by them, given that that would lead to a war in any case."
Japan's Prime Minister Shinzo Abe is pushing a goal to reinterpret Article 9 of Japan's post-war Constitution, in which war was renounced. The changes would be aligned with the Japan-U.S. military alliance, and would permit military action in four specific situations:
Public opinion now strongly favors such a constitutional change, where it didn't just three years ago. However, there is some parliamentary opposition to the change. 76-year-old Yohei Kono, who lived through World War II, says:
"I don’t think politicians understand the price we have to pay if we are going to revise the Constitution or reinterpret Article 9. The Constitution has contributed to the peace and regional stability of Japan since the war, which is why we have not revised the Constitution even though creating our own Constitution has been one of the LDP’s goals since the party was launched in 1955."
According to Kono, the rightward shift in public opinion is occurring because so many of the current crop of lawmakers were born after World War II and have no experience with the horrors of war -- which is exactly the kind of point that Generational Dynamics makes. Japan Times
(Comments: For reader comments, questions and discussion, see the 7-Feb-13 World View -- Riots in Tunisia after assassination thread of the Generational Dynamics forum. Comments may be
posted anonymously.)
(7-Feb-2013)
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Bulgaria blames Hezbollah for bus attack killing Israelis
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On July 19 of last year, a young man wearing plaid Bermuda sports, a bright blue T-shirt, baseball cap, sunglasses and long hair boarded a bus in Burgas, Bulgaria, along with 44 Israeli tourists on their way to a Black Sea beach-front hotel. A few seconds later, an explosion killed the bus driver and five Israelis, and injured dozens more. Initial indications pointed to involvement by Iran and Hezbollah, but nothing could be proven at the time. But after months of investigation, Bulgaria on Tuesday accused two Hezbollah agents of carrying out the bomb attack:
"There is data showing the financing and connection between Hizbullah and the two suspects.What can be established as a well-grounded assumption is that the two persons whose real identity has been determined belonged to the military wing of Hezbollah."
Iran denied any involvement, but Israel accused Hezbollah and Iran of waging a "global terror campaign," saying the Burgas bomb was among a series of such attacks carried out in Thailand, Kenya, Turkey, India, Azerbaijan, Cyprus and Georgia. Reuters and Spiegel (July, 2012)
Prime Minister Najib Mikati vowed that Lebanon's government would cooperate with Bulgaria in investigating the involvement of Hezbollah in last July's bus attack:
"[Lebanon's government is] ready to cooperate with Bulgaria to uncover the circumstances [of the attack].Lebanon also reiterates its commitment to the security of Bulgaria and all members of the EU. Lebanon trusts the Bulgarian authority in its investigation and is ready to cooperate to uncover the circumstances of the issue for the sake of justice."
It remains to be seen just how much Lebanon's government will be able to cooperate, however, since Hezbollah is part of Lebanon's government. Daily Star (Beirut)
Japan on Tuesday accused China of locking its "fire control radar" on a Japanese destroyer and helicopter in two separate incidents last month. Locking fire control radar on a target is the step that's taken just before a radar-guided "fire and forget" missile is launched on the target. The radar can track a moving target to guarantee that the missile attack will succeed. Since China did not actually push the red button that would launch the missile, the locking was apparently intended as a threat to Japan to back off from its claims to the Senkaku/Diaoyu islands. However, this is a major military escalation by the Chinese, because when a vessel detects that it's being targeted by fire control radar, then the captain of that vessel only has a few seconds to decide whether to return fire. Last month, China issued a directive to the People's Liberation Army: Get Ready for War, and China continues to take actions that signal that a preemptive Chinese attack is coming. The Asahi Shimbun (Tokyo) and Sydney Morning Herald
China did not comment on the radar locking threat on Tuesday, but instead accused Japan of escalating the dispute of the Senkaku/Diaoyu islands "by setting up a new publicity office aimed at ... propaganda issues."
"[China] stressed that the Diaoyu Islands are China's inherent territory and so are the surrounding waters, and Chinese marine surveillance vessels are conducting regular patrols in Chinese territorial waters."
According to Chinese government media,
"China has a much larger population than Japan and there are many more overseas Chinese than overseas Japanese. Japan is not expected to take a rational attitude toward China. The Chinese public and overseas Chinese should take the initiative and carry out legal campaigns against Japan.The time when Japan gained advantages from moves like this has long gone. China's retaliatory restrictions have shocked Japan. If Japan makes provocations once again, it is Japan that is bound to suffer."
Global Times (Beijing) and China Daily (Beijing)
There is a striking analogy between China today and Germany before World War I. The adept leadership of Otto von Bismarck gave way to much clumsier political and military leadership by younger generations in the years before WW I, who encouraged nationalism as an alternative outlet for anti-government sentiment. According to analyst Graham Allison,
"The mechanism in 1914 is instructive. Who could imagine that Serbian terrorists could kill an archduke no one had heard of and trigger a great war, at the end of which all contestants were devastated. My view is that the Chinese leadership has no intention of challenging the US militarily, yet. But what about the hothead nationalists in China or Japan?"
The "hothead nationalists in China and Japan" today are the generations corresponding to America's nihilistic Generation-X. Gulf News / FT
(Comments: For reader comments, questions and discussion, see the 6-Feb-13 World View -- In escalation, China locks its 'fire control radar' on Japanese targets thread of the Generational Dynamics forum. Comments may be
posted anonymously.)
(6-Feb-2013)
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Conspiracy theory alleges link between Jews and Muslim Brotherhood
This morning's key headlines from GenerationalDynamics.com
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The neo-Nazi Chrysi Avgi (Golden Dawn) political party in Greece, which is gaining popularity in the financial crisis, is establishing close contacts with neo-Nazis in Bavaria in Germany. Golden Dawn is led by Nikolaos Michaloliakos and has called for a revolution in Greece and an "ethnically pure" nation. Members of the party are accused of physically attacking immigrants and members of the country's left-wing. They also regularly stage intimidating marches, wearing military uniforms and singing Nazi chants, in immigrant neighborhoods of Athens. Spiegel
As we recently reported, China's coal consumption has triped in the last decade, and continues to surge, with the result that heavy, dangerous smog is covering much of eastern China, not only creating respiratory disease, but even causing traffic accidents because of reduced visibility. Now air pollution over western Japan is reaching dangerous levels, as prevailing winds bring airborne particles from China. According to one person on the streets, of Tokyo, "It is very worrying. This is dangerous pollution, like poison, and we can't protect ourselves. It's scary." AFP
Israel is considering creating a buffer zone inside Syria to protect Israel from Syrian militias. The buffer zone could reach 10 miles inside Syria, and would be modeled on the Lebanese security zone, which is jointly policed by the South Lebanese and Israeli armies. There is already a 20-foot steel wall being constructed along the border, replace a 40 year old fence. The buffer zone would serve as temporary protection until the wall is completed. UPI
A conspiracy theory circulating in the Arab world, presumably among those wishing to attack both Jews and the Muslim Brotherhood, is claiming that the Muslim Brotherhood is cooperating with the Jews in order to control Muslims and establish a "Greater Israel." According to an official of the Anti-Defamation League,
"It would seem that no allegation made against Jews and Israel is too absurd when it is used to discredit others. However bizarre and ludicrous, it is an increasingly popular conspiracy theory that the Muslim Brotherhood is a Jewish production to destroy Egyptians."
(Comments: For reader comments, questions and discussion, see the 5-Feb-13 World View -- Neo-Nazis in Greece and Germany establish mutual links thread of the Generational Dynamics forum. Comments may be
posted anonymously.)
(5-Feb-2013)
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Polish is second most spoken language in England
This morning's key headlines from GenerationalDynamics.com
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Results from the 2011 census show that, in England and Wales, neither English nor Welsh is the main language for about 8% of the population. Polish has become the most commonly spoken non-native language in England and Wales, while it was not even in the top 12 ten years earlier in 2001. However, the Polish language itself is being infiltrated by English words. This is especially true in the office, where such English words as "briefing", "marketing," and "PR" are now commonly used by Polish speakers. Other languages frequently used in England and Wales include Punjabi, Urdu and Bengali. Independent (London)
The armies of Syria, Lebanon and Jordan are all on high alert, according to a report from Lebanon. The alerts are a consequence of Israel's warplane attacks on Wednesday. There's still a bit of mystery surrounding the Israeli air strike. Western sources say that the target was a convoy of trucks carrying advanced Russian-made surface-to-air missiles from Syria to Hezbollah, for use in targeting Israeli aircraft. However, Syria says no, that's not it at all. The strike was on a military research building. Syria says that it's going to retaliate against Israel for the attack, leading to increased tension in the region. Israel's Defense Minister Ehud Barak on Sunday did not admit to the air strike, but hinted at it by saying,
"That is another proof that when we say something we mean it. We say that we do not think it should be allowable to bring advanced weapons systems into Lebanon."
But Syria's president Bashar al-Assad accused Israel of trying to "destabilize" Syria and overthrow his regime, adding, "(This action) unmasked the true role Israel is playing, in collaboration with foreign enemy forces and their agents on Syrian soil, to destabilize and weaken Syria." Israel National News and VOA
Poor and unemployed, with little hope of being able to earn a living, thousands of migrants from countries like Afghanistan, Pakistan, Bangladesh, Georgia, Ghana, and Iraq are applying for a funded program that helps them leave Greece to return to their home countries. Greece is a major transit country for thousands of irregular migrants trying to reach Western Europe. But many decide to return home when they become stranded, jobless and are forced to sleep on the streets of Athens. The International Organization for Migration (IOM), which is funded by grants from Norway, Iceland and Liechtenstein, provides small grants to migrants who have simply run out of money and want to return home. Kathimerini and International Organization for Migration
Niger has confirmed that France's special forces are protecting one of the country's biggest uranium mines. French company Areva plays a major part in uranium mining in Niger, and French special forces have been assigned to the Arlit mine after 37 foreign workers were killed when al-Qaeda linked militants seized a gas plant in Algeria two weeks ago. Meanwhile, France said that 30 warplanes had bombed sites run by Islamist extremists north of the historic Tuareg center Kidal, in preparation for the entrance of French-led troops. The troops are meeting little resistance, because the militants are fleeing to the mountainous terrain around Kidal, probably to regroup and strike back when the French troops leave. France is now desperately trying to finish up and withdraw its troops before "anything" happens, but Mali officials are begging the French to stay longer. BBC and AFP
(Comments: For reader comments, questions and discussion, see the 4-Feb-13 World View -- Thousands of migrants in Athens Greece apply to return home thread of the Generational Dynamics forum. Comments may be
posted anonymously.)
(4-Feb-2013)
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Mali's 'Savior' says that France's fight is far from over
This morning's key headlines from GenerationalDynamics.com
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France's president François Hollande visited Bamako and Timbuktu in Mali and received a rapturous welcome from his former colonial subjects, with shouts of "Hollande the savior," and "the angel who stopped the disaster in Mali." However, Saturday may well be the high point of France's military adventure in Mali, because France "won" the war with barely a single casualty. According to Hollande,
"There is still a whole part of the north that remains unconquered ... There are terrorist elements concentrated in some areas of the country, others who are dispersed. There are risks of terrorism. So, we have not yet finished our mission."
The jihadists could not counter the well-equipped French and Malian armies, supported by air power, and so they simply melted away, taking refuge in the mountainous and inaccessible areas on the borders. From there, they can mount hit and run attacks, and fighting that war will require the use drones in the way that the U.S. military is using them in Pakistan and Yemen. However, France does not have the capabilities to fight that kind of war, and may be forced to call on Nato and the U.S. for help. Hollande said, "We do not foresee staying indefinitely," (famous last words), but didn't specify any specific time frame for departure. Reuters and BBC
Hong Kong's government has announced a string of emergency measures to cope with the shortage of milk powder and baby milk formula on grocery store shelves. The problem is that mainland Chinese mothers don't trust the quality and safety of milk powder manufactured on the mainland. In 2008, thousands of babies got sick because Chinese milk producers added melamine, an industrial chemical used to make plastics and fertilizer, to their milk products, in order to give the appearance of higher protein levels. (See "A generational view of China's growing melamine food disaster" from 2008.)
The recent crisis has been exacerbated by a surge in "parallel trading" in milk powder. That phrase refers to unauthorized exports of a product to another country (in this case, milk powder to mainland China), in order to make unauthorized profits. Parallel traders have been flooding Hong Kong markets and carrying as much milk powder back to the mainland as possible, where they take advantage of mothers' anxieties and charge extremely high prices.
Among the measures that Hong Kong authorities are taking to stop parallel trading of powdered milk are:
This parallel trading dispute is only the latest example of the contempt that Hong Kongers have for mainland Chinese. As we described last year, a popular song in Hong Kong is "Locust World", which describes how mainlanders come to HK like a swarm of locusts that are "experts in stealing, cheating, deceiving and lying." South China Morning Post (Hong Kong) and People Daily (Beijing)
Japan's coast guard arrested the captain and 13-man crew of a Chinese coral fishing boat on suspicion of fishing in the Japan's exclusive economic zone (EEZ) without permission from Japan. The boat tried to escape after it was originally spotted by a patrol plane, but Japan's coast guard caught up. A similar incident in 2010 set off an international uproar and caused a huge wave of xenophobic nationalism in China. Japan was forced into a humiliating climbdown after China threatened severe trade sanctions. Earlier in the day, Japan's Prime Minister Shinzo Abe spoke about the island dispute with China to a Coast Guard audience:
"Since the country has acquired the ownership of the Senkaku islands, there has been an increase in incursions and patrols by Chinese government vessels. I highly commend the daily work and the effect that you of the Coast Guard [have] as you protect the waters around our country.It can be predicted that the situation in the southwestern ocean will continue to be difficult. I hope that you of the Coast Guard will continue in your work of protecting Japan's sovereignty."
Japan Times and VOA
(Comments: For reader comments, questions and discussion, see the 3-Feb-13 World View -- Japan arrests China fishing boat accused of fishing Japan's fish thread of the Generational Dynamics forum. Comments may be
posted anonymously.)
(3-Feb-2013)
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Far left suicide bomber attacks U.S. embassy in Ankara Turkey
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Ecevit Sanli, a member of the far-left terrorist Revolutionary People's Liberation Party/Front (DHKP/C), detonated a suicide vest on Friday at the entrance of the U.S. Embassy in Ankara, Turkey. Embassy security had been increased since the embassy attack in Benghazi, and so the Sanli was stopped at the first of a series of checkpoints as he attempted to enter the embassy. As a result, there was only one death besides the bomber -- the Turkish guard at the first checkpoint. Police detained nearly 100 DHKP/C members last month, and 55 of them were arrested pending trial on accusations of being members of a terrorist organization. Police seized a large number of documents from the addresses of the suspects, which revealed the group's plans to assassinate politicians, judges, prosecutors and police officers. There has been no claim of responsibility for the attack. It's not known whether the terrorist attack is related to the conflict in Syria, or to the batteries of Nato's Patriot anti-missile missiles being installed on Turkey's border with Syria. Zaman (Istanbul)
With Russia's population having suffered a devastating decline in recent years, president Vladimir Putin is looking for new ways to promote his fertility campaign, to get Russian couples to have more sex and more kids. Putin's latest attempt to inspire men and women comes just before Valentine's day, as the Western R&B trio Boyz II Men will perform a selection of their classic and new romantic ballads in a concert in Moscow on February 6. Rumors are that they may write a new song about Moscow. Moscow Times
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In the Mideast, the largest demonstrations always occur on Fridays, after midday prayers end, and worshippers pour out the mosques into the streets. In Egypt, the National Salvation Front (NSF), a group of 16 Egyptian opposition parties and movements, had called for massive "Friday of Deliverance" anti-government protests. Tens of thousands of protesters took to the streets on Friday. The protests were peaceful at first, but turned violent in the evening, especially near the Presidential Palace in Cairo. At one point, protesters hurled Molotov cocktails and firecrackers at the police, who returned the attack with gun fire and volleys of teargas. The political situation in Egypt is deteriorating rapidly, and it's far from clear that president Mohamed Morsi will be able to stop the carnage and bring it under control. The riots and violence have broader implications, in that Qatar is supporting Morsi and the Muslim Brotherhood, while the Saudis are supporting the Salafist al-Nour party, and the Obama Administration supports the Army. There are increasing fears that these three forces will clash, leading either to a military coup or to a civil war. Al-Ahram (Cairo) and Debka
(Comments: For reader comments, questions and discussion, see the 2-Feb-13 World View -- Egypt protesters clash with police in 'Friday of Deliverance' thread of the Generational Dynamics forum. Comments may be
posted anonymously.)
(2-Feb-2013)
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France declares 'Mission Accomplished!' in Mali
This morning's key headlines from GenerationalDynamics.com
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China's consumption of coal has tripled in the last decade. Currently, China burns as much coal as the rest of the world combined, and the amount is still surging. Beijing and other Chinese provinces are paying a heavy price right now, because the smog is causing respiratory problems, and thousands of premature deaths according to one study. There's little chance of any cutbacks, as coal accounts for two-thirds of China's energy supply. Millions of cars also add to the pollution. The air quality index is so high that the Beijing Meteorological Bureau is advising children and the elderly not to leave home. To make matters worse, the smog is reducing visibility on the icy roads. There have been at least 2,000 reports of traffic accidents, and at least two people have died. BBC and Xinhua
Attackers have been hacking into computer systems at the NY Times for the last four months, stealing the corporate passwords for every employee and compromising the home PCs of multiple reporters. It's believed that the attackers gained initial entry by using "spear phishing" attack on some of the reporters. That is, the attackers gathered personal information about the reporters from multiple sources, including Facebook, and used that information to create a credible, personal e-mail message with a link that the reporter would click on, resulting in malware being installed on his computer. Once the malware was installed, the attackers could gather additional information to escalate the attack. Some 45 people's computers were infected with custom-designed malware, indicating a large, sophisticated attack. China's government is the suspected perpetrator, but that hasn't been proven. The NY Times' computers were supposedly protected by Symantec's Norton Antivirus, and is now suffering a major black eye as a result of the incident. Information Week and Forbes
The United Nations Human Rights Council (UNHCR) is demanding that Israel permanently end its settlement building in the West Bank, and that Israel immediately begin a process of withdrawing from the West Bank and east Jerusalem. According to the draft report, prepared by 3 members of the UNHCR:
"The establishment of the settlements in the West Bank including east Jerusalem is a mesh of construction and infrastructure leading to a creeping annexation that prevents the establishment of a contiguous and viable Palestinian state and undermines the rights of the Palestinian people to self-determination."
The report stopped short of advocating that the issue be brought to the International Criminal Court (ICC), but says that the ICC has jurisdiction. In particular, the State of Palestine may go to the ICC, with a result that "may lead to accountability for gross violations of human rights law and serious violations of international humanitarian law and justice for victims. Israel has rejected the report as "biased," pointing out that there's no mention of the experience with Gaza. In 2005, Israel withdrew all its settlements and military from Gaza, but the result has been something that no one expected: Hamas took control of Gaza in 2008, and has been using Gaza as a base for terror and rocket attacks on Israel. The Israelis fear that the same thing could happen in the West Bank. Jerusalem Post
France's Defense Minister Jean-Yves Le Drian said France's air attacks had hit the Mali rebels hard:
"The jihadists suffered heavy losses. There were numerous strikes which hit their equipment and men.The French intervention has succeeded. [Rebel fighters are] returning home, or trying to cross the borders, which will be more and more difficult... or they are making a tactical retreat."
Le Drian said that France's warplanes were striking Kidal, the last militant stronghold in northern Mali, and ground troops were gathering to enter the city. France now has 3,500 troops on the ground. AFP
(Comments: For reader comments, questions and discussion, see the 1-Feb-13 World View -- Israel threatened with International Criminal Court over settlements thread of the Generational Dynamics forum. Comments may be
posted anonymously.)
(1-Feb-2013)
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