Heartland Coin Gallery - Economic & Financial News Headlines

HEADLINE Economic, Financial & Global News...
every weekday, to keep you better informed.

Friday 01.13.2012

U.S. Sends Top Iranian Leader a Warning on Strait Threat
By ELISABETH BUMILLER, ERIC SCHMITT
and THOM SHANKER - NYTimes.com
WASHINGTON — The Obama administration is relying on a secret channel of communication to warn Iran’s supreme leader, Ayatollah Ali Khamenei, that closing the Strait of Hormuz is a "red line" that would provoke an American response, according to United States government officials.
The officials declined to describe the unusual contact between the two governments, and whether there had been an Iranian reply. Senior Obama administration officials have said publicly that Iran would cross a "red line" if it made good on recent threats to close the strait, a strategically crucial waterway connecting the Persian Gulf to the Gulf of Oman, where 16 million barrels of oil — about a fifth of the world’s daily oil trade — flow through every day.

Dear U.S.A.: Your Accout Is Overdrawn
BY CHARLES HUGH SMITH - FinancialSense.com
Dear U.S.A. — your overdraft protection is about to be pulled.
Dear United States of America: We regret to inform you that your withdrawals exceeded your deposits last year by $1,600,000,000,000 ($1.6 trillion), including your "supplemental appropriations" spending.
Your account does have an overdraft protection, and so bonds were sold to cover your $1.6 trillion overdraft. While we value your business, we feel obligated to remind you that this is the third year that your overdraft protection exceeded 10% of your gross national product (GDP), and it seems your account is on course to register yet another $1.6 trillion overdraft in fiscal year 2012.

Dollar Crisis Coming–Just a Matter of Time
The US Dollar Paper Tiger
By Jim Willie of Goldenjackass.com
Guest Writer for USAWatchdog.com
Events in the last decade displayed a vigorous effort to defend the USDollar. The rogue nation of Iraq sold crude oil in Euros for three years, until they were liberated. Its tyrant was a scourge to be sure. Weapons of financial mass destruction seem to have replaced the traditional type, the new variety being derivatives, mortgage bonds, and even sovereign bonds from weak nations. Newer weapons from the United States feature extended hands from clearing house fronts that snatch and grab segregated private accounts, and backdoor raids of exchange traded fund precious metal. Let’s not overlook the more frontal assault weapons deployed like unseating Qaddafi and capturing his gold held in foreign accounts, along with all that cash. Liberation has its benefits. The confrontation with Iran would be comical if not so dangerous. The claims have been silly in my view for years, in the perception of Iran as a serious threat to the West. They have been subjected to cut communication lines on the Persian Gulf seabed. They have been subjected to Stuxnet viruses to obstruct their nuclear refinement process, via the Siemens rear door. They have been subjected to an influx of heroin from the north, where the USMilitary manages the Afghan situation and locale.

Gold Is Investors' Favorite Asset in 2012
By: Antonia Oprita, Deputy News Editor - CNBC.com
Gold is investors' favorite asset for 2012, and developed markets are preferred over emerging markets when it comes to putting money in stocks or bonds, according to a poll carried out by Japanese investment bank Nomura.
Of the 164 investors who took part in Nomura's poll, 19.5 percent said they would choose to buy gold and hold it until the end of the year. Other favored assets were stocksand investment-grade corporate bonds in developed markets, with about 13 percent of responses.

China Gold Hoarding
Turns More Traders Into Bulls: Commodities
By Nicholas Larkin - Bloomberg.com
Gold traders are the most bullish in two months after mainland China imported the most metal ever from Hong Kong and investors bought U.S. bullion coins at the fastest pace in more than a decade.
Eighteen of 23 surveyed by Bloomberg expect the metal to gain next week, the highest proportion since Nov. 11. Mainland China imported almost 102.8 metric tons in November, valued at about $5.5 billion, trade data on Jan. 11 showed. The U.S. Mint said it sold 82,500 ounces of American Eagle gold coins in the first 11 days of January. Full-month sales would reach 235,000 ounces at that pace, the most since 1999.

Gold-Dollar correlation near zero. Is this unusual?
By Sumit Roy - CommodityOnline.com
It has been a bullish start to 2012 for gold, as Gold Prices rally swiftly off the lows set late last year. From the perspective of technical analysis, it looks increasingly likely that gold put in a double bottom at $1532 in December, but a decisive break of $1642 will be required for confirmation.

2012 gold panic in China?
By Adrian Ash - CommodityOnline.com
China's latest Gold figures look unrelentingly bullish. Too bullish perhaps...
So "Growth has [now] replaced inflation as Beijing's top policy concern," says Qu Hongbin, Asian economics expert at HSBC in Hong Kong, forecasting three cuts to China's banking reserve requirements by July.
"There is developing in Beijing, I think, almost a panic about global economic prospects and the impact of the European crisis on China," agrees Michael Pettis, finance professor at Peking University. He goes one further and forecasts debate - if not the fact - of a currency devaluation in 2012.

Dominic Frisby - Why Gold is the Currency of the Free
May, 2011 - at the Cheviot Sound Money Conference

Gold & silver: Creating the right exit strategy
CommodityOnline.com
As we climb the wall of fear in this present Gold and Silverbull market, weak hands are constantly calling tops, even though the kettle has not really started to boil. GI Metals DMCC views that there will be no need to think about getting out of this particular asset class and into another more undervalued one, until two things occur.
Firstly, the general public needs to be getting into gold and silver en-masse, and secondly, the end-game of the current fiat/debt crisis needs to commence in truth: the end-game is the collapse of the world reserve currency. Although this has been occurring slowly over the last century, in order for there to be a mad rush into gold and silver driven by fear and greed, there must also be a pronounced loss of confidence in the American dollar. That is what will turn gold and silver from being the excellent hedge and cultivator of wealth it has been over the last decade to being virtually the only place to be; for a time.

What the 11 year Gold rally and its corrections teach us
NEW YORK (Commodity Online): Right now you need to understand that Gold is beginning the twelfth year of major bull market; perhaps the most unprecedented bull market in our lifetime. Here's a quick snapshot of what that bull market has looked like since the 1999 bottom and the 2001 retest of that bottom:
And from the point of view as an investor, this is about as beautiful as it gets. As I mentioned above gold is entering the twelfth year of its bull market and has posted gains in each and every year. Below I have listed gold's closing price on the last day of each year:

2000 -- $273.60
2001 -- $279.00
2002 -- $348.20
2003 -- $416.10
2004 -- $438.40
2005 -- $518.90
2006 -- $638.00
2007 -- $838.00
2008 -- $889.00
2009 -- $1096.50
2010 -- $1421.40
2011 -- $1566.80

Rothschild Silver/Gold Manipulation Fraud Explained
from April, 2010

ECB-Gold reserves decline by 2 mn euros in January
FRANKFURT (Commodity Online): Gold and gold receivables held by euro zone central banks fell by 2 million euros to 423.455 billion euros in the very first week ending January 6, as per a report by the European Central Bank.
Gold holdings fell because of the sale of gold coins by a Eurosystem central bank.
Net foreign exchange reserves in the Eurosystem of central banks declined 1.6 billion euros to 217.7 billion euros, the ECB added.

China gold buying surge? It must be PBOC
By Ross Norman
In the old days unexplained rallies in the Gold price would be attributed to "hedge fund buying" with an insouciant shrug of the shoulders. Meanwhile a bounce in the price off a support level might be supposed to be "indian buying" coupled with the words "bargain hunting" or the more evocative "bottom-picking". There was often some truth in those suppositions.
Today gold strength is normally ascribed to the Chinese and with good reason. Hong Kong imports rose by a massive 20% in November over the previous month - which is a trebling over the last 11 months. Hong Kong imports rose from 86 tonnes in October 2011 to over 102 tonnes in November 2011. China exceeded Indian demand for the first time in the last quarterly report issued by the WGC in its World Gold Demand Trends.

Inflation: An Expansion of Counterfeit Credit
BY PATER TENEBRARUM - FinancialSense.com
.... Inflation is not rising consumer prices. One can’t understand much about the monetary system from inside this box. I offer a different definition:
Inflation is an expansion of counterfeit credit
Most Austrian School economists realize that inflation is a monetary phenomenon. But simply plotting the money supply is not sufficient. In a gold standard, does gold mining create inflation? How about private lending? Bank lending? What about Real Bills of Exchange?

Peter Schiff: A Silver Breakout is Coming
video from August, 2011

Europe's north is bustling, its south closing down
By Ludwig Burger and Paul Day
(Reuters) - At German car parts maker ixetic GmbH, Dragan Knezevic is struggling to keep up: His job as foreman is to make sure there are no hold ups in assembly of the parts needed to keep Audis, VWs, Toyotas and the like on the road.
"We are going full speed over all three shifts. Early, late and night shift," he says at the bustling plant in Bad Homburg, outside Frankfurt.
They are so busy that temporary workers have had to be found.

Deadly Dow 36,000
& The Secret History Of A 70% Market Loss
BY DANIEL AMERMAN CFA - FinancialSense.com
Some investors fear that the Dow may go to 4,000 or 5,000. Surely that would be bad, but there is a worse possibility to consider, which is that the Dow could go to 36,000 instead. Now, Dow 36,000 may sound like a "problem" that most investors would love to have! So what's the danger?
To demonstrate why Dow 36,000 could be a nightmare scenario, we will begin with a review of how 70% of stock investor wealth was annihilated the last time the US endured the combination of sustained high unemployment and high rates of monetary inflation. Using a series of simple steps, we will pierce through the generally accepted but false narrative about that market, and show how even with an assumption of "perfect" market timing - that is, buying on the best single day over a near 12 period, and selling on the best single day over an almost 10 year period - that the historical end result was still crippling investor losses, caused by three distinct wealth-destroying forces.

MF Global May Not Be Able to Pay Clients Back: Trustee
By: Reuters - CNBC.com
Former customers of MF Global Holdings' collapsed brokerage were disappointed to hear on Thursday that the trustee hunting for funds missing from their accounts has no immediate plans to transfer more money to them.
More than 250 customers met in New York on Thursday with James Giddens, the trustee in charge of liquidating the brokerage and returning money to customers, for an update on the status of his investigation into what may be $1.2 billion missing from their accounts.

Class Action Suit Against MF, JPM and CME (pdf)

MF Has Distributed $3.8B to Date: Trustee
By Tiffany Kary - Bloomberg.com
MF Global Inc. (MF) has distributed about $3.8 billion so far and has about $1.5 billion under its control, while there’s still $1.2 billion missing, according to the trustee for the failed brokerage.
About 100 customers gathered today at the New York Marriott Downtown hotel to hear James Giddens, the trustee appointed to liquidate the brokerage, describe his investigation. A lawyer for the trustee said the probe has involved imaging more than 800 computer drives and maintaining over 100 terabytes of data, more information than the Library of Congress contains.

Fed’s image tarnished by newly released documents
By Zachary A. Goldfarb - WashingtonPost.com
The leaders of the Federal Reserve went around the room saluting Alan Greenspan during his last day as chairman of the central bank. Then Timothy F. Geithner, the future Treasury secretary, made a prediction.
"I’d like the record to show that I think you’re pretty terrific, too," Geithner, who was president of the Federal Reserve Bank of New York, told Greenspan amid laughter on Jan. 31, 2006. "And thinking in terms of probabilities, I think the risk that we decide in the future that you’re even better than we think is higher than the alternative."

Bill Gross Called an 'Oddball,' in Fed Transcript
By Caroline Salas Gage - Bloomberg.com
Richard Fisher, a Federal Reserve official, called billionaire investor Bill Gross an “oddball” at a 2006 meeting -- then asked to have the remark withheld from a transcript that was released today by the Fed.
"I’ve known Gross for 20 years, and I know he’s an oddball," Fisher, president of the Federal Reserve Bank of Dallas, said at the Oct. 24-25, 2006 meeting. "Actually, I’d like that word struck from the record."

El Erian: QE3 Won’t Work, Europe Poses Big Risk to U.S.
BY CRIS SHERIDAN - FinancialSense.com
El-Erian, CEO of the world's largest bond bund, spoke with Bloomberg on a range of issues. He rightly points out that QE3 will not work towards reducing unemployment and that Europe represents the largest economic region in the world, posing a significant headwind to the U.S. and elsewhere.
"The Fed doesn't have enough policy instruments to deal with the challenges facing the economy. So what they're trying to do now is use communication as an extra instrument. So we've used rates—they're now held at zero—we've had QE2, which is use of the balance sheet. Now we're seeing them use communication—trying to push investors to take on more risk. The problem as Mike points out is two-fold: one is there's disagreement on the FOMC, so the market hears the whole range of communication rather than one theme, and secondly it's not a very effective policy instrument; or, to put it differently, using Chairman Bernanke's words, there aren't just limited benefits, there's also costs and risks. The Fed is in a difficult position. It's trying to be active, and rightly so, but it doesn't have effective instruments at this stage.

U.S. Debt Nears $15.194 Trillion Ceiling
By Damian Paletta - WSJ.com
The Treasury Department has begun maneuvers to avoid hitting the debt ceiling, as the Obama administration waits for Congress to return from the holiday break before it can raise the federal borrowing limit.
The U.S. government was just a hair below the $15.194 trillion debt ceiling on Tuesday, $25 million shy of the limit Congress set last summer. President Barack Obama sent a letter to congressional leaders Thursday, saying the U.S. debt was within $100 million of the ceiling "and that further borrowing is required to meet existing commitments."

Obama Sends Request To Congress For $1.2 Trillion Debt Ceiling Increase
Submitted by Tyler Durden - ZeroHedge.com
Update:

• HOUSE TO VOTE JAN. 18 ON OBAMA'S DEBT-LIMIT INCREASE REQUEST

Two days ago we wondered how long it would take for Obama to restart the debt ceiling theater. Not that long it turns out.

• OBAMA SENDS CONGRESS REQUEST TO RAISE DEBT CEILING
• OBAMA NOTIFICATION STARTS 15-DAY CLOCK FOR CONGRESS TO VOTE

So with Congress in recess, will Obama succeed in passing another automatic vote using base trickery? The same Obama, who as recently as 3 hours ago warned Congress that any attempts to pass approval on the Keystone Pipeline without his involvement are "counterproductive"... In other news, America' new debt ceiling of $16.3 trillion, or 107% of GDP is now just a formality, about to be interrupted by a little circus clowning.

The Financial System is a Farce: Part Three
By: Eric Sprott & David Baker - Sprott Asset Management LP
2011 was a merry-go-round of more bailouts, more deferrals and more denial. Everyone is tired of the Eurozone. It’s not fixable. There’s too much debt. The politicians don’t know what’s going on. Nothing has structurally changed. We’re still on the wrong path. There’s more global debt than there was a year ago, and it’s the same old song: extend and pretend, extend and pretend,... around and around we go,... and it isn’t fun anymore.

Keiser Report: Death by Thousand Revelations (E235)

The 10 States With the Most Trouble Paying Their Bills
By 24/7 Wall St. - DailyFinance.com
Balancing the budget isn't just a federal problem -- it's a state one as well. The Great Recession resulted in some of the lowest state revenues in years, and some of the biggest budget shortfalls of all time. According to a report on state budgets by the Center for Budget Policy Priorities, dozens of states faced shortages of hundreds of millions -- or even billions -- ofdollars.
24/7 Wall St. examined the 10 states that had budget shortfalls of 27% or more of their generalfundsfor fiscal year 2011 -- the states that were short the most money before they balanced their budgets. For the most part, those with the worst budget gaps also had among the most anemic economies. And because of their budget problems, all of them have been forced to make dramatic cuts to government services.

Mortgage Refinancing Plan Would Harm Banks: Dick Bove
By: Michelle Fox - CNBC.com
Speculation that a new mortgage refinancing plan may be introduced drove bank stocks higher Thursday, but noted banking analyst Dick Bove believes investors actually got it wrong. He told Larry Kudlow that a program like that would actually "harm" banks.
"It’s bad for banks, it doesn’t help them in any way, shape or form," Bove said.
The speculation was fueled by reports that suggested the White House may be preparing a new trillion-dollar plan to refinance home loans. However, administration officials told CNBC’s Dana Olick that they are notconsidering a $1 trillion refinancing program.

30-year mortgage rate hits new low of 3.89%
By Jonathan O’Connell - WashingtonPost.com
Mortgage rates hit a new historic low this week, averaging 3.89 percent for 30-year fixed-rate loans and beating the previous record —matched just the week before — of 3.91 percent, according to weekly survey data released Thursday by Freddie Mac.
Early into 2012 rates remain well below where they were last year at this time, when the average 30-year rate was 4.71 percent, according to Freddie Mac. The average rate for a 30-year fixed-rate mortgage has remained below 4 percent for six straight weeks.

Bulk Foreclosure Sales Could Cause Bigger Bank Write-Downs
By: Diana Olick - CNBC.com
As government, federal regulators and big-money private investors try to figure out a plan for bulk sales of foreclosed properties, big banks are already making deals, but they are few and far between.
The trouble is, they are looking at even bigger write-downs than forecast if they sell these distressed properties in bulk.

Ahead of Crash, Fed Saw Little Threat From Housing
By: Reuters - CNBC.com
Federal Reserve Chairman Ben Bernanke and other top officials of the U.S. central bank missed the nation's oncoming housing crash, believing as late as December 2006 that the market was stabilizing, according to transcripts of policy meetings released on Thursday.
Policymakers were also far too sanguine about the potential threat housing posed to financial markets, the transcripts of the Fed's 2006 policy meetings show.
The bursting of the housing bubble led to the deepest recession since the Great Depression and triggered a banking crisis that brought down Wall Street giantsLehman Brothers and Bear Stearns.

Philly Fed revises December factory activity lower
(Reuters) - Factory activity in the U.S. Mid-Atlantic region grew at a slower pace than originally reported in December, the Philadelphia Federal Reserve Bank said on Thursday.
Annual revisions showed the Fed's factory activity index was at 6.8 in December, shy of the initial reading of 10.3.
Any reading above zero indicates expansion in the region's manufacturing. The survey covers factories in eastern Pennsylvania, southern New Jersey and Delaware and is seen as an early indicator of the health of U.S. manufacturing sector.

Jobless Claims in U.S. Rose More Than Forecast
By Shobhana Chandra - Bloomberg.com
More Americans than forecast filed applications for unemployment benefits last week, raising the possibility that a greater-than-usual increase in temporary holiday hiring boosted December payrolls.
Jobless claims climbed by 24,000 to 399,000 in the week ended Jan. 7, Labor Department figures showed today in Washington. The medianforecast of 46 economists in a Bloomberg News survey projected 375,000. The number of people on unemployment benefit rolls rose, while those receiving extended payments decreased.

Amid downturn,
more older Americans employed than ever before
By Peter Whoriskey - WashingtonPost.com
Amid the wreckage of the economic downturn, something curious happened to older Americans.
More of them are working.
Though the recession has thinned the ranksof other generations in the workforce, more people older than 55 are employed than ever before, according to the latest figures from the Bureau of Labor Statistics.

Keep Their Feet to the Fire
By Ben Shapiro - PatriotPost.us
Mitt Romney is an enormous squish. On the squish scale, he falls somewhere between Jabba the Hut and Slimer from Ghostbusters. He can't be trusted on conservative philosophy, and he can't be trusted to act as a principled conservative while in office.
And that may be the best thing for the conservative movement.
Since the days of Herbert Hoover, conservatives have rallied around Republican presidents. Republicans are their guys. No matter that Eisenhower prompted the growing power of Arabism in the Middle East; no matter that Nixon imposed price and wage controls and kowtowed to China; no matter that Reagan raised taxes after cutting them; no matter that George H.W. Bush raised taxes after promising not to; no matter that George W. Bush imposed steel tariffs, created a massive new entitlement program, blew up the education budget and bailed out Wall Street. They were our guys.

U.S. Postal Service Sued
for Allegedly Blocking Probe of Campaign Mailings
By Joel Rosenblatt - Bloomberg.com
The U.S. Postal Service was accused by a political watchdog group of improperly blocking a freedom- of-information request seeking the source of negative campaign mailings in a California school-board recall election.
In a lawsuit filed today in federal court in Sacramento, California, the California Fair Political Practices Commission claimed the Postal Service improperly blocked its probe of William Eisen, a former member of the Manhattan Beach Unified School Board.

Food Lion’s owner closing 126 stores, retiring Bloom banner
By Danielle Douglas - WashingtonPost.com
Delhaize America, the Belgian owners of the Food Lion, Bloom and Bottom Dollar Food grocery chains, is taking some dramatic steps to shore up its portfolio of stores.
The company is closing 126 underperforming stores within 30 days, discarding the Bloom banner and shutting down its distribution center in Tennessee. About 4,900 store employees will be displaced as a result of these actions.

The Most-Often Overlooked Tax Deductions
By Kiplinger - DailyFinance.com
Years ago, the fellow who was running the IRS at the time toldKiplinger's Personal Finance magazine that he figured millions of taxpayers overpaid their taxes every year by overlooking just one of the money-savers listed here.
Cut your tax bill to the bone by claiming all the breaks you deserve -- including some you may have forgotten, and some you may have never even known about.

Epic to FTC: Google Search+ is violating users' privacy
Privacy watchdog that had successfully challenged the search giant over Buzz now calls on regulators to probe Google+
By Dominic Rushe - Guardian.co.uk
An influential privacy watchdog has asked the US government to investigate Google+, the search giant's social network, claiming it may violate people's privacy and raises anti-trust concerns.
In a letter to the Federal Trade Commission, the Electronic Privacy Information Center (Epic) says it is concerned about the changes Google has made to its service since the launch of Google+.

IBM Brains Turn 12 Atoms Into World’s Smallest Storage Bit
By Robert McMillan - Wired.com
IBM researchers have found a way to put a single bit of data on a 12-atom surface, creating the world’s smallest magnetic storage device.
It’s a breakthrough that’s not likely to make its way into hard drives or memory sticks for decades, but it gives us a hint at how much road lies ahead for magnetic storage devices.
Before now, physicists really didn’t know how small they could take magnetic storage before the laws of quantum mechanics would take over, making it impossible to reliably store data. String together 8 atoms, for example, and you simply can’t get a stable magnetic state, says Andreas Heinrich, the IBM researcher behind the discovery. "The system will just spontaneously hop from one of those states to another state in a timescale that is too fast for us to claim anything like a data storage [demonstration]. It might be switching 1,000 times per second."

Bain Capital Owns Clear Channel
(Rush Limbaugh, Sean Hannity,
Glenn Beck, Michael Savage, Etc.)
EndOfTheAmericanDream.com
Wouldn't it be great if a Republican presidential candidate could just buy the support of just about every major conservative talk show host in America? Well, it may not be as far-fetched as you may think. Clear Channel owns more radio stations (850) than anyone else in the United States. They also own Premiere Radio Networks, the company that syndicates the radio shows of Rush Limbaugh, Sean Hannity, and Glenn Beck, among others. Needless to say, Clear Channel basically owns conservative talk radio in the United States. So who owns Clear Channel? Well, it turns out that Bain Capital is one of the primary owners of Clear Channel. Yes, you read that correctly. The company that Mitt Romney ran for so long is one of the "big bosses" over virtually all conservative talk radio in America. Of course Mitt Romney is not running Bain Capital anymore. He is a "retired partner", but he still has a huge financial stake in Bain Capital. We're talking about millions upon millions of dollars. If you doubt this, just check out page 34 of this public financial disclosure report. So if you have been wondering why so many conservative talk show hosts are being so incredibly kind to Mitt Romney, this just might be the answer.

Xbox assembly workers in China
threaten mass suicide over jobs dispute
Unrest at Foxconn Technology plant defused but worker discontent highlights widespread unrest in China's economy
AP - Guardian.co.uk
Dozens of workers assembling Xbox video game consoles climbed to a factory dormitory roof, and some threatened to jump to their deaths, in a dispute over jobs that was defused but highlights growing labour unrest as China's economy slows.
The dispute boiled over last week after contract manufacturer Foxconn Technology Group said it would close the production line for MicrosoftCorp's Xbox 360 consoles at its plant in the central city of Wuhan and transfer some workers to other jobs, workers and Foxconn said Thursday.

Military Networks ‘Not Defensible,’
Says General Who Defends Them
By Noah Shachtman - Wired.com
The Defense Department’s networks, as currently configured, are "not defensible," according to the general in charge of protecting those networks. And if there’s a major electronic attack on this country, there may not be much he and his men can legally do to stop it in advance.
Gen. Keith Alexander, head of both the secretive National Security Agency and the military’s new U.S. Cyber Command, has tens of thousands of hackers, cryptologists, and system administrators serving under him. But at the moment, their ability to protect the Defense Department’s information infrastructure — let alone the broader civilian internet — is limited. The Pentagon’s patchwork quilt of 15,000 different networks is too haphazard to safeguard.

Defense Spending Is a Shovel-Ready Investment
By Victor Davis Hanson - PatriotPost.us
President Obama just ordered massive cutbacks in defense spending, eventually to total some $500 billion. There is plenty of fat in a Pentagon budget that grew after 9/11, but such slashing goes way too far.
Fairly or not, the cuts will only cement a now familiar stereotype of Obama's desire to retrench on the world scene. They follow symbolic apologies for purported past American sins, bowing to foreign royals, and outreach to the likes of Iran and Syria. Abroad, such perceptions can matter as much as reality, as our rivals begin hoping that Obama is as dubious about America's historically exceptional world role as are they.

US marines accused of war crimes
Video posted anonymously on YouTube claims to show American troops in Afghanistan urinating on dead bodies
By Chris McGreal in Washington - The Guardian
US forces in Afghanistan are facing fresh accusations of war crimes after film emerged which appears to show American marines urinating on dead bodies and laughing.
The US military command in Kabul, which was severely embarrassed last year by revelations that Americans soldiers were running a "kill squad" murdering Afghan civilians, said it would investigate the undated video, and that if it proved to be authentic, desecration of corpses would be regarded as a serious crime. Despoiling of the dead is illegal under the Geneva conventions as well as under US military law.

Surprising response.... or lack thereof
Taliban Shrugs at Video of Marines Urinating on Corpses
By Spencer Ackerman - Wired.com
A sign of the times, perhaps, in Afghanistan: When a video appears purporting to show Marines urinating on the corpses of Afghans, the U.S. military denounces it more strongly than the Taliban does. So far, Afghan reaction overall has been muted, and now there might not be insurgent propaganda to fan outrage. Could Afghans — even Afghan militants — be that jaded with the U.S. after 10 years of war?
The video has all the ingredients of a scandal. It shows, apparently, desecration of corpses by laughing service members. It’s gone viral. And it occurs in the context of a grueling war that requires Afghan support.

Police to investigate MI6 over rendition and torture of Libyans
Criminal inquiry announced as DPP says there is not enough evidence to prosecute agents over Pakistan and Afghanistan allegations
By Ian Cobain - Guardian.co.uk
Scotland Yard has opened a criminal investigation into secret MI6rendition operations that resulted in leading Libyan dissidents being abducted and flown to Tripoli where they were subsequently tortured in Muammar Gaddafi's prisons.
The announcement came as police and the director of public prosecutions, Keir Starmer, said there was insufficient evidence to prosecute any individual MI5 or MI6 officers following lengthy investigations into allegations of British complicity in the torture of terrorism suspects in Pakistan and Afghanistan.

Egypt's Muslim Brotherhood
enters 'uncharted waters' in new parliament
Islamist party is poised to take 45% of seats amid soaring public expectations but with few concrete powers to deliver reform
By Jack Shenker in Cairo - Guardian.co.uk
It's a triumph that's been 84 years in the making and, despite a concerted effort by all involved to stay humble and on-message during their movement's finest hour, few members of Egypt's Muslim Brotherhood can hide their exhilaration.
"These elections are a historic milestone for us and they are a historic milestone for Egypt," said Amr Darrag, secretary general of the Brotherhood's Freedom and Justice party in Giza. "We've not had such free elections since 1952, so it's a great moment for the nation," he said. "The Egyptian people really intend to seize this moment and secure the position for Egypt that it so clearly deserves."

George Mitchell on the Iran Crisis
By Jeffrey Goldberg - TheAtlantic.com
Goldblog just finished interviewing the former Obama Middle East envoy, Sen. George Mitchell, as part of an Atlantic Exchange event here at The Atlantic's glass-enclosed nerve center overlooking the Potomac. (This was event was held in conjunction with the S. Daniel Abraham Center for Middle East Peace, which produced the "Is Peace Possible?" feature on the Atlantic.com site.) I'll post some more of Mitchell's statements tomorrow, but here's an exchange about the most urgent issue of the moment. Mitchell is definitely a non-hawk on the issue of using military force to stop the Iranian nuclear program:
Jeffrey Goldberg: What are the consequences for the Middle East, and for the peace process in particular, of a nuclear-armed Iran? And what do you think the consequences are of a preemptive strike by Israel, or by the United States, to stop Iran--or at least delay Iran -- from developing nuclear weapons?

Geithner Gets Japan Backing on Iran After China Snub
By Toru Fujioka and Aki Ito - Bloomberg.com
U.S. Treasury Secretary Timothy F. Geithner’s efforts to tighten economic sanctions on Iran over its nuclear program won backing from Japan after China rejected limiting oil imports from the country.
"We want to take concrete steps to reduce our share in an orderly way as soon as possible," Finance Minister Jun Azumi said at a joint press conference in Tokyo yesterday with his U.S. counterpart. "The world cannot tolerate nuclear development."

Iranian paper calls for retaliation against Israel
By NASSER KARIMI - AP.org
TEHRAN, Iran (AP) -- A hard-line Iranian newspaper called Thursday for retaliation against Israel, a day after the mysterious killing of a nuclear scientist in Tehran with a magnetic bomb attached to his car. Iran's top leader blamed Israel and the U.S.
Provocative hints from Israel reinforced the perception that the killing was part of an organized and clandestine campaign to set back Iran's nuclear ambitions, which the U.S. and its allies suspect are aimed at producing weapons. Iran says the program is for peaceful purposes only.

Iran nuclear sites may be beyond reach of "bunker busters"
(Reuters) - With its nuclear program beset as never before by sanctions, sabotage and assassination,Iran must now make a new addition to its list of concerns: One of the biggest conventional bombs ever built.
Boeing's 30,000-pound Massive Ordnance Penetrator (MOP), an ultra-large bunker buster for use on underground targets, with Iran routinely mentioned as its most likely intended destination, is a key element in the implicit U.S. threat to use force as a last resort against Iran's nuclear ambitions.

U.S. military moves carriers, denies Iran link
By Phil Stewart
(Reuters) - The U.S. military said on Wednesday that a new aircraft carrier strike group had arrived in the Arabian Sea and that another was on its way to the region, but denied any link to recent tensions with Iran and portrayed the movements as routine.
The shift in the powerful U.S. naval assets comes at a moment of heightened tensions with Iran, which has threatened to close the Strait of Hormuz - the world's most important oil shipping lane - if U.S. and EU sanctions over its nuclear program cut off its oil exports

- - - - - - - - - - - - - - - -
Archived Page Link
- - - - - - - - - - - - - - - -