*** 9-Sep-14 World View -- Ukraine conflict and rise of ISIS put Russia's Caucasus at risk
This morning's key headlines from GenerationalDynamics.com
- France's scapegoat 'Rogue trader' Jerome Kerviel is freed from prison
- Ukraine conflict and rise of ISIS put Russia's Caucasus at risk
- WHO: Ebola virus is spreading 'exponentially' in Liberia
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**** France's scapegoat 'Rogue trader' Jerome Kerviel is freed from prison
****
Jerome Kerviel (AFP)
The "rogue trader" Jérôme Kerviel was released from French prison on
Monday, after serving part of a three-year sentence from his 2010
conviction on charges of breach of trust, forgery and entering false
data. He'll serve out the rest of his sentence under partial house
arrest. Kerviel worked at Sociéte Générale's as a trader. He placed
fraudulent trades for months and made huge sums of money for the bank.
Then his luck ran out, and his fraudulent trades failed, and he cost
the bank $7.2 billion. Kerviel acted only on behalf of SocGen, and
never tried to make any money himself.
What's so outrageous about this situation is that Kerviel is pretty
much the only person who's ever been prosecuted for causing the
financial crisis. As I've been writing for years, the evidence is
unambiguous that individual "financial engineers" at Citibank, JP
Morgan and other banks purposely created tens of trillions of dollars
of synthetic subprime mortgage backed securities and sold them, knowing that
they were fraudulent. Millions of people have lost their homes, or
gone bankrupt, or had their cars repossessed because of the financial
crisis, and no one is prosecuted except Kerviel.
An example of the fraud that was committed was exposed in 2010 by the
Senate's Financial Crisis Inquiry Commission, as I described in
"Financial Crisis Inquiry hearings provide 'smoking gun' evidence of widespread criminal fraud". According to the testimony at the hearing, what
Citibank did was as follows in simple terms: The financial engineers
took a collection of subprime-backed B rated securities, applied a
"slicing and dicing" process, and converted them into an equivalent
value of AAA-rated securities. This is mathematically impossible, and
as the Senate hearing showed, this was "smoking gun" proof of fraud.
These financial engineers were so-called because they were Gen-Xers
who had gotten Masters degrees in financial engineering in the 1990s.
They knew exactly what they were doing when they created and sold
these fraudulent securities. Their Boomer CEO bosses could not
possibly have understood the math that was used to create these
fraudulent securities, but they must have known that the process of
transforming B-rated securities to AAA-rated securities was
impossible, and had to be illegal.
The model for handling this situation occurred in the late 1980s, when
the Savings and Loan scandal occurred. The Bush 41 administration
prosecuted thousands of people, sending many to jail.
But Attorney General Eric Holder has not prosecuted a single
individual. Holder is always whining that no one respects him, and he
whines because he was treated unfairly when he was held in Contempt of
Congress for failing to produce documents. And yet, this jerk has not
prosecuted a single individual for the financial crisis since he took
office in 2008. Why? Either it's because he's totally incompetent,
or it's because these bankers have contributed millions of dollars to
Obama administration campaigns or organizations endorsed by the Obama
administration, and not prosecuting is payoff.
But at least the French sent Kerviel, who never made a penny for
himself, to jail. As I always like to say whenever I write about
Kerviel, it's good to know that we're all safe today, because the
person who caused the financial crisis has been identified, and is no
longer at large.
Or perhaps we're not so safe. According to Friday's Wall Street Journal, the S&P 500 Price/Earnings index (stock
valuations) on Friday (September 5) morning was 18.97 -- almost 19 --
which is astronomically high by historical standards. This means that
the stock market is still in an enormous bubble, and the financial
crisis is going to get much worse. Deutsche Welle and AFP
****
**** Ukraine conflict and rise of ISIS put Russia's Caucasus at risk
****
In recent days we've been discussing the realignment of the Mideast
following the Gaza war and the rise of the Islamic State / of Iraq
and Syria (IS or ISIS). These crises, along with the conflict in
Ukraine, intersect in Russia's southern provinces in the North
Caucasus. The population of Chechnya, Dagestan, North Ossetia and the
other Caucasus provinces are largely Muslim, and have strong jihadist
presences that are kept under title control by Russia's army.
The ISIS crisis and the Ukraine crisis intersect in the North
Caucasus, because ISIS is posing a greater threat to the region, while
Russia is drawing soldiers out of the region to fight in east Ukraine.
For years, the best combat-ready Russian forces were concentrated in
the North Caucasus to fight first Chechnya's pro-independence movement
and later the insurgency that spread across the entire region. As
Russia is increasingly drawn into the conflict with Ukraine, Moscow is
forced to relocate its best prepared military units from the North
Caucasus to Ukraine. Some observers regard this as a potential
"window of opportunity" for the North Caucasian militants.
At the same time, ISIS is posing a direct threat the Caucasus.
Thousands of young Muslim men have gone to Syria to join ISIS and
become jihadists, including many from the Caucasus. Citizens of
Russia do not require visas to visit Turkey, and there are daily
flights from North Caucasus locations to Istanbul. From there,
would-be jihadists have no trouble traveling to the porous border with
Syria and crossing over.
A video recently posted by ISIS on the internet threatens Russia, and
Russia's president Vladimir Putin in particular:
<QUOTE>"Vladimir Putin, these are the Russian planes that you
sent to Bashar. Allah willing, we will take them back to your own
turf, and liberate Chechnya and the Caucasus, Allah willing. The
Islamic State is here to stay. It is spreading and has become a
caliphate. Your throne is being threatened by us. Allah will grant
us success. You can see the evidence for that in the Levant. There
are consecutive conquests here. We are coming, Allah
willing. Allah Akbar."<END QUOTE>
Ramzan Kadyrov, the Putin-appointed governor of the province of
Chechnya, immediately released a statement with a counter-threat on
Instagram:
<QUOTE>"Taking all responsibility, I declare that those who
have voiced a threat against Russia or who have mentioned the name
of our president Vladimir Putin will be destroyed right where they
made their statement. We will not wait for them to get behind the
steering wheel of a plane. They will go where his fellow
terrorists are rotting."<END QUOTE>
In the immediate future, the primary danger for Russian rule in the
North Caucasus comes from widespread discontent for economic reasons.
In the approach to the Sochi Olympics games earlier this year, Russia
had been pouring billions of extra dollars into the North Caucasus to
build infrastructure, and to reduce public discontent. But now that
source of funds has dried up, and the people in the North Caucasus are
bearing the brunt of the European sanctions that have been imposed
because of Russia's actions in Ukraine. Jamestown and Ria Novosti and Memri and
Jamestown
****
**** WHO: Ebola virus is spreading 'exponentially' in Liberia
****
Whenever an Ebola treatment center opens in Liberia, all the beds are
taken immediately. Patients fill taxis going from place to place,
hoping to find medical care. The World Health Organization (WHO) says
that more than 3,600 people have been infected with Ebola, and 2,000
have died, but as many as 20,000 will be infected. Health care
workers have been hit especially hard -- 79 of them have died.
"Transmission of the Ebola virus in Liberia is already intense and the
number of new cases is increasing exponentially," according to WHO.
Well, if that's really true then a lot more than 20,000 will be
infected. Liberia has a population of 4.4 million people, and at the
current rate of exponential transmission, 20,000 infections will be
reached in just a few more weeks, with a lot more to come. NBC News
KEYS: Generational Dynamics, France, Societe Generale, Jerome Kerviel,
Islamic State / of Iraq and Syria/Sham/the Levant, IS, ISIS, ISIL,
Ukraine, Russia, Chechnya, North Caucasus,
Vladimir Putin, Ramzan Kadyrov,
World Health Organization, WHO, Liberia, Ebola
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