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Monday, 22 September 2008

Senate Pumps Laser Weapons

Even as the US government is set to acquire massive amounts of bad private debt, the Senate demonstrates that is has not forgotten about those defense contractors, who must be feeling a tad slighted considering the size of the Wall Street bailout.
The Senate has embraced last year's Defense Science Board conclusion that directed-energy weapons -- such as high-, medium- and low-power lasers -- hold great potential and should be developed as soon as possible.

In the fiscal 2009 defense authorization bill, which was approved Wednesday, the Senate included additional funds for laser programs and a provision requiring Defense Secretary Robert M. Gates to accelerate work that would make directed-energy weapons operational in the near future.

However, the government promised tax payer relief when FEMA unilaterally decided that the agency would no longer deliver ice to hurricane victims.  Big savings are sure to be had.


Paulson's Bailout: "Financial Terrorism"

Karl Denninger at The Market Ticker takes Secretary Paulson to task for his complicity in the financial meltdown, and the subsequent move to seek plenary authority over the financial system, such as it is right now.

Denninger then deconstructs the LEGISLATIVE PROPOSAL FOR TREASURY AUTHORITY TO PURCHASE MORTGAGE-RELATED ASSETS, declaring it, as many have, as a "de-facto nationalization of the entire banking, insurance, and related financial system," which comes complete with unassailable authority to take "such actions as the Secretary deems necessary to carry out the authorities in this Act" and to do so "without limitation."  This limitless authority includes "designating financial institutions as financial agents of the Government," which will then be required to "perform all such reasonable duties related to this Act as financial agents of the Government."

That's right.  Any and every bank in the nation can be made an agent of government upon designation by the Secretary of the Treasury.  Welcome to the Republican free market mentality.

Review of any of Paulson's actions that he, and he alone, "deems necessary" is neither permitted nor reviewable by any other branch of government, including Executive branch agencies. 

(3) Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.

Denninger concisely states the bottom line of this proposal: 

Saturday, 20 September 2008

Massive "Symbolic" Blast Hits Islamabad

Click on image for a larger version
The Pakistani arm of the Taliban appears unpersuaded by the rise and rhetoric of President Zardari, for within hours of his presidential inaugural address, a massive truck bomb rammed through a security perimeter at Islamabad's Marriott Hotel.  Noted as a "symbol of wealth and privilege" and favoured by western visitors, the hotel is a mere 500 meters away from the Pakistan parliament buildings and is a frequent meeting site of Pakistani politicians and foreign diplomats.  Dozens were killed.

Authorities believe the intended target was actually the national parliament itself, but stringent security deterred the attacker, who then veered toward the Marriott.
The 290-room building was the scene of total carnage as the blast ripped into its facade, destroying everything in its path.

The Marriott is just a half kilometre from Pakistan's national parliament and the residence of the prime minister.

Security sources believe these were the preferred targets, but the bomber (or bombers) was deterred by a huge


McCain's Stealth Path to Single Payer Health Care

Certainly, a lot of people are making hay right now out of the health care deregulation burbling of John McCain, which appears in Contingencies, a journal of the Academy of American Actuaries.  What does McCain propose?  Why, he wants to open up "health care markets" to make them more like the banking industry, or I guess we should say, "the banking industry."
Opening up the health insurance market to more vigorous nationwide competition, as we have done over the last decade in banking, would provide more choices of innovative products less burdened by the worst excesses of state-based regulation.
The worst excesses of regulation!  Hilarious, certainly.

But what people must not realize with McCain's proposal is that he is actually proposing a stealth attack on the privatized, for-profit health insurance business.  Clearly that must be the case, given the imperative socialist move of the US government vis-a-vis the "banking industry," the deregulation of which has now led directly to the vast government take-over of venerable Wall Street firms that had operated under the paradigm of deregulated "innovation."

You see, John McCain wants Americans to have single-payer health care and deregulation, as demonstrated by the very banking industry he cites, will be the fastest way for that to happen.  But being the Republican presidential candidate, he just can't say that.  That wouldn't sound very … Republican.  So he proposes the usual claptrap that his party's free marketeers expect to hear knowing

Sunday, 14 September 2008

The Wide World of US Weapons

George Bush will leave many a legacy, indeed.  Not the kind he imagines, of course, but rather a vast endowment of failure, malfeasance and murderous disaster.  But apart from Iraq, Afghanistan, torture and secret prisons, there is another legacy that the Bush administration will leave with the world: arms sales that have drastically escalated in the waning years of Bush's second term, and whose delivery lifetimes will ensure that weapons deals  will be "one of President Bush’s most lasting legacies."  Some of those were just documented here a couple of days ago.

Given the state of the American economy, weapons are truly becoming some of the only "Made in the USA" products anyone wants anymore.  And, from the numbers, it does appear that American weapons systems are in high demand.
The Bush administration is pushing through a broad array of foreign weapons deals as it seeks to rearm Iraq and Afghanistan, contain North Korea and Iran, and solidify ties with onetime Russian allies.

From tanks, helicopters and fighter jets to missiles, remotely piloted aircraft and even warships, the Department of Defense has agreed so far this fiscal year to sell or transfer more than $32 billion in weapons and other military equipment to foreign governments, compared with $12 billion in 2005.

The trend, which started in 2006, is most pronounced in the Middle East, but it reaches into northern Africa, Asia, Latin America, Europe and even Canada, through dozens


Financials Reel, Retrench

The unraveling on Wall Street continues, as Lehman looks at liquidation, while BofA is in talks for a buyout of  Merrill Lynch.  Masters of the Universe….
Unable to find a savior, the troubled investment bank Lehman Brothers appeared headed toward liquidation on Sunday, in what would be one of the biggest failures in Wall Street history.

The fate of Lehman hung in the balance as Federal Reserve officials and the leaders of major financial institutions continued to gather in emergency meetings on Sunday trying to complete a plan to rescue the stricken bank.

But Barclays, considered the leading contender to buy all or part of Lehman, said Sunday that it could not reach a deal without financial support from the federal government or other banks, making a liquidation more likely.

Bank of America is in advanced talks to buy Merrill Lynch for at least $38.25 billion in stock, people briefed on the negotiations said on Sunday, as a means to preserve that investment bank while Lehman Brothers looks likely to collapse.

The move suggests a desperate effort at triage on Wall Street, as Bank of America works to shore up the likely next victim of the credit crunch. A deal, valued at between $25 a share to $30 a share, could be announced as soon as Sunday night, these people said. Merrill shares closed at $17.05 on Friday.


Friday, 12 September 2008

Russo-American Tit-for-tat Widens

Following up on Cernig's post about the deployment of two Tu-160 strategic bombers to Venezuela and signaled joint naval exercises with Venezuelan frigates, submarines and aircraft, comes news that Russia is amping up naval cooperation with Syria. Not only is this an obvious counter move by Moscow to US naval presence in the Black Sea, it could have a serious impact the on-going Israeli-Syrian peace talks that had heretofore been delayed by the resignation of a senior Israeli mediator.
Russia said Friday it was renovating a Syrian port for use by the Russian fleet, signaling an effort to establish a firmer foothold in the Mediterranean at a time of tensions with the United States over Georgia.

Friday's announcement was the first tangible sign of any new cooperation. The Itar-Tass news agency reported a vessel from Russia's Black Sea fleet had begun restoring facilities at Syria's Mediterranean port of Tartus for use by the Russian military.

The two countries' naval chiefs also met in Moscow on Friday and discussed "further strengthening mutual trust and mutual understanding between the two states' fleets," a Russian naval official, Igor Dygalo, told Itar-Tass.

The Tartus renovations could signal an intention to have a long-term Russian naval presence there. In late August, Russia's ambassador to Damascus, Igor Belyev, said Russian ships already patrol the area, but "a new development is that the Russian presence in the Mediterranean will become permanent."

Indeed, the Georgian conflict, far from being an isolated, if ill-conceived incident, is proving to have staying power. Aggressive Russian posturing has no doubt [...]More

This Week in Weapons

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The big weapons news this week, of course, was the deployment of two (2) Tupolev Tu-160 strategic bombers to Venezuela, which Hugo Chavez himself promised to fly.  Reports remain sketchy on details of the promised flights.

Under the media radar, however, and amidst widespread disease, suffering and destitution, the world's oligarchs trade money, guns and weapons platforms in a host of other weapons deals that are in the works, mostly involving US weapons manufacturers seizing on heightened tensions since the Russo-Georgia conflict.  The bellwether of defense stocks is Lockheed Martin (NYSE-LMT, Last tick: 117.27 +2.17, 1.89%), which is up 17% since July 20.


Charlie's Angel

While generally avoiding covering much of the nonsense that passes for what American calls its "presidential election campaign," the Palin piñata is proving too much to avoid even for the staid observatory here at Shockfront.  Of course, we all know about the historic Palin/Gibson interview and just how very badly the woman looked in her first appearance on national television since the GOP convention.  Deconstruction of that sorry performance can be found in many a place, but I would like to jab a stick at a couple of the exchanges in the interview.

Firstly, of course, is the Bush doctrine fumble, with a compression of that worrisome scene:
GIBSON: Do you agree with the Bush doctrine?

PALIN (short version): Whatever that is, I'm for it! … Charlie.
Perhaps more worrisome still was Palin's apparent source of foreign policy comprehension.
Pressed about what insights into recent Russian actions she gained by living in Alaska, Palin told Gibson, "They're our next-door neighbors and you can actually see Russia from land here in Alaska, from an island in Alaska."
That is not insight, Ms. Palin.  It is just sight.

No wonder the McCain campaign is keeping Palin under wraps.  After her odd comment about Fannie Mae and Freddie Mac raised eyebrows, it's

Thursday, 11 September 2008

Iraq Cancels No-bid Contracts with Big Oil

These are dark days for American influence in Iraq, especially regarding western access to oil.  Big Oil has been haggling with the Iraq Oil Ministry for weeks over terms of no-bid service contracts initially offered in June this year.  And while western oil interests were arguing for payment in oil rather than cash, Iraq signed the country's first oil contract with the Chinese National Petroleum Company (CNPC).  Reports further had it that the oil majors, Exxon, BP, Shell, Total and Chevron, were also demanding that they be "guaranteed a slice of the massive oil-pumping deal" in future expected Production Sharing Agreements (PSAs).  The Iraqi government balked on such demands, seeing them as far too politically contentious, which they clearly were.  Despite the obvious political difficulties, Big Oil held firm.

Now, after several weeks of wrangling over these demands in the no-bid oil service contracts, Iraq Oil Ministry has cancelled the award.
Iraq’s oil minister, Hussain al-Shahristani, told reporters at an OPEC summit meeting in Vienna on Tuesday that talks with Exxon Mobil, Chevron, Shell, Total, BP and several smaller companies for one-year deals, which were announced in June and subsequently delayed, had dragged on for so long that the companies could not now fulfill

Wednesday, 10 September 2008

Post-Georgia Conflict Repercussions Widen

Irony continues to cut a wide swath in the Caucasus, as repercussions grow in the wake of the Russo-Georgia conflict. After helping arm and train the Georgian military, Israel is now reportedly telling Israeli businessmen "involved in military sales" to halt all travel to Georgia.
Israeli defense officials say the government has told all businessmen involved in military sales to Georgia to immediately cease visits to the former Soviet republic.

The officials say the directive was decided upon this week because Israel is concerned about damage to its relations with Russia. Israel had decided to stop most weapons sales to Georgia even before the Russia-Georgia war last month.

One of Israel's primary concerns is that Russia could sell Iran advanced weapons, including anti-aircraft missiles.
This could be a little psy-oping here, but it does further suggest that, indeed, Israel had been out of the loop on the Georgian operation and that Saakashvili's decision was the rogue move many think it was, one that may have been encouraged by US elements operating outside nominal channels. Long-time Georgian lobbyist and McCain foreign policy advisor Randy Schueneman redound such suggestion, while convenient circumstances brought Karl Rove and Saakashvili together in the weeks prior to the conflict. Both had attended the Yalta European Strategy (YES) conference and, in fact, were present during the same conference session on July 12. Speculation, of course, but that is some of what I thrive on here.

This move by the Israelis follows in the wake of [...]More

Tuesday, 09 September 2008

Azerbaijan Rebuffs Cheney Demand

Now, more than ever, people -- at least ones overseas -- are finding some new inner strength and telling Dick Cheney to screw off.

During Cheney's recent convention-avoidance Caucasus tour, the vice president apparently insisted to President Aliyev that Azerbaijan commit to pumping natural gas through the long-planned, though possibly defunct, Nabucco pipeline.  Reportedly, Aliyev declined to make any such commitment, making clear that Azerbaijan "is not about to start an argument with Russia."

People in the crowd reported hearing a distinct sucking noise, thought to be Cheney balls retracting into his pelvic cavity.

But the slights continued, as Aliyev then telephoned Russian president Medvedev to inform the Kremlin of the Bush administration's "energy stance."  I doubt Moscow was surprised by anything Aliyev told them, but it's the thought that counts.  In response to the apparent preference for Moscow's favour over that of Washington, Cheney, in a fit of decidedly undiplomatic pique, skipped a reception honouring the veep.

Cheney must be sensing his own irrelevance at this point.  That, unfortunately, has not come soon enough.  His departure is eagerly awaited.

US Military Claim Backed by ... Oliver North

Blunt counterinsurgency in Afghanistan
Tensions have been on the boil since the August 22 bombing of the Afghan village of Azizabad.  Hell had indeed been unleashed upon the village, as a combined operation of US Special Forces and Afghan commandos descended on the village after US attack helicopters, drones and a C-130 Spectre gunship leveled the town.

While Immediate accounts were divergent, with locals and the Afghan government claiming that 76 civilians -- later bumped to 90 civilians -- were killed, the US military held fast to their usual line that Taliban militants had been the only casualties.  Nothing seemed to back up the military's position, as a subsequent UN investigation corroborated the large number of civilians deaths, while President Karzai fired two top Army commanders over the incident.  At that point, the US military began to accede to findings that some civilians had died but still maintained that most of the dead were armed insurgents.

Despite a previously poor record in these situations, US brass held fast, even accusing the local population of spreading "Taliban propaganda."  A more clueless and ill-conceived pronouncement could not have been forthcoming; a classic lose-lose proposition.  If the locals are, in fact, doing that, then the

Google Could Face Anti-trust Lawsuit

Looks like all those lobbyists Microsoft hired after their own anti-trust lawsuit are starting to pay dividends.
The Justice Department has quietly hired one of the nation's best-known litigators, former Walt Disney Co. vice chairman Sanford Litvack, for a possible antitrust challenge to Google Inc.'s growing power in advertising.

Mr. Litvack's hiring is the strongest signal yet that the U.S. is preparing to take court action against Google and its search-advertising deal with Yahoo Inc. The two companies combined would account for more than 80% of U.S. online-search ads.

Google shares tumbled 5.5%, or $24.30, to $419.95 in 4 p.m. trading on the Nasdaq Stock Market, while Yahoo shares were up 18 cents to $18.26.

Google stands by the deal and says the arrangement does not and will not violate anti-trust law. In fact, they say, Google will delay implementation until the DoJ has time to "understand it."  Knowing just how gutted the DoJ is of actual lawyerly abilities, this is something that might never happen.

Google has said the Yahoo deal doesn't violate antitrust law. It has forcefully argued -- in public testimony before Congress and in private meetings with Justice Department lawyers -- that the deal is pro-competition. The companies say they voluntarily delayed closing the deal until early October, to allow the U.S. to complete its review.

"We voluntarily delayed implementation of this arrangement to give the Department of Justice time to understand it, and we continue to work cooperatively with them," Google said. "While there has been a lot of speculation about this agreement's potential impact on advertisers or ad prices, we think it would be premature for regulators to halt the agreement before we implement


Advocate General

Sunday 31 August 2008: Palin play no role in national defense activities, even when they involve the Alaska National Guard. The entire operation is under federal control, and the governor is not briefed on situations.
-- Major General Craig Campbell, 
Adjutant General of the Alaska National Guard

Wednesday 3 September 2008
while the Alaska National Guard operates a launch site for a US anti-missile system at Fort Greely, about 100 miles south of Fairbanks, the Alaskan governor is not in the site's chain of command and has no authority over its operations. Nor are the recent deployments to Iraq and Afghanistan by the Alaska National Guard under Palin's purview. Her primary role is in recruiting National Guard volunteers.
-- Major General Craig Campbell, 
Adjutant General of the Alaska National Guard

Friday 5 September 2008: "I've not been very pleased with what I've been seeing about the chastising of the National Guard by having it diminished by the insinuation that a commander-in-chief of the National Guard doesn't really control the military. National Guards are state military forces run by governors, and Sarah Palin does it great."

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