Russia bridges - Middle Eastern divides

Syria is Still Driving Middle Eastern Political Developments

By M K Bhadrakumar 

A multi-billion dollar arms deal with Iraq, a summit meeting with Turkey, a fence-mending exercise with Saudi Arabia, a debut with Egypt's Sphinx-like Muslim Brothers - all this is slated to happen within the period of a turbulent month in the Middle East. And all this is to happen when the United States' "return" to the region after the hurly-burly of the November election still seems a distant dream. Simply put, Russia is suddenly all over the Middle East. 

Moscow announced on Tuesday that Iraqi Prime Minister Nouri al-Maliki was in town and the two countries signed contracts worth "more than" US$4.2 billion in an arms deal that includes Iraq's purchase of 30 Mi-28 attack helicopters and 42 Pantsir-S1 surface-to-air missile systems that can also be used to defend against attack jets. 

The joint Russian-Iraqi statement issued in Moscow revealed that discussions had beem going on for the past five months over the arms deal and that further talks are under way for Iraq's purchase of MiG-29 jets, heavy-armored vehicles and other weaponry. A Kremlin announcement said Maliki is due to meet President Vladimir Putin on Wednesday and the focus of the discussions will be energy cooperation between Russia and Iraq. 

The Clock Is Running and the Cash Is Almost Gone

Make-Believe Will No Longer Suffice

By Mark Grant

This is the piece I wrote on Friday afternoon.

“I would say that we have entered the crisis stage of Europe now. We have a stand-off between France and the southern nations, the troubled countries, in one corner and Germany, Austria, Finland and the Netherlands in the other. The last summit yielded nothing and worse than nothing because the two camps are worlds apart and sharply divided. They couldn't agree on the banking supervision issue. They have no agreed upon path for Spain, for Greece, for Cyprus, for Ireland or for Portugal. Germany has drawn a line in the concrete concerning legacy sovereign issues, legacy bank issues and Ms. Merkel has stated quite dramatically that Germany will not allow the new ESM to be used for old problems and that the individual nations will have to foot the bill for them. The "Muddle" is over in my opinion and the "Crisis" has now begun. The long, long road of "put it off" has reached its conclusion and there is no agreement and no compromise on how to proceed. We have finally reached the "Danger Zone" and I advise you to note the change!”

Having had any number of questions since I wrote this I thought that it might be helpful to provide some further explanation. It is really a question of translation and some definition of “political-speak” because all of the wrangling in Europe now can get quite confusing and literal translations can lead you to incorrect conclusions.  In Europe the old adage is firmly in play; “appearances can be deceiving.”

Our Real Food Problem

We don’t have a food system problem, but a problem of self-control

By Blake Hurst

“Divided We Eat,” a recent Newsweek cover story about class and income distinctions in our diet, may be the perfect example of what’s wrong with how we think about food. Written by Lisa Miller, the piece manages to accept every bit of the conventional wisdom about what is wrong with how we eat, without challenging a single assumption of New York foodies.

Miller is convinced that income disparity causes obesity. If only the poor could afford organic, locally raised food, we’d all be healthier. But Miller doesn’t explain how we could force them to eat that food. As a frequent visitor to a convenience store in a small, low-income farming town, my mind absolutely boggles at the size of government it would take to encourage my neighbors to share Miller’s breakfast of a hand-whipped, organic cappuccino and two slices of imported Dutch Parrano cheese. Miller is something of a farmer herself; never have so many axioms been planted in such stony ground.

Food is the newest battlefield in our culture wars. Now that the victory of the sexual revolution is complete, organic and local have replaced sex as the cultural dividing line. According to our culinary advisors, the only place left to improve the habits of the great unwashed is in the supermarket. Happy Meals have replaced Victorian morals as the best way to distinguish between those who are “cool” and those who subsist on starch and dreams of Sarah Palin.

Marcellus Reserves Larger Than Expected

The Marcellus could contain "almost half of the current proven natural gas reserves in the U.S."

By KEVIN BEGOS

There's been plenty of debate over the Marcellus Shale natural gas field, but new research adds a twist that could impact political and environmental battles. Two independent financial firms say the Marcellus isn't just the biggest natural gas field in the country — it's the cheapest place for energy companies to drill.

One of the reports adds that the Marcellus reserves that lie below parts of Pennsylvania, West Virginia, Ohio and New York are far larger than recent government estimates, while another said the powerful combination of resource, cost and location is altering natural gas prices and market trends across the nation.

The Marcellus could contain "almost half of the current proven natural gas reserves in the U.S," a report from Standard & Poor's issued this week said.

Another recent report from ITG Investment Research, a worldwide financial firm based in New York, found that a detailed analysis of Marcellus well production data suggested that federal government estimates of its reserves "are grossly understated," 

British engineers produce amazing 'petrol from air' technology

Revolutionary new technology that produces “petrol from air” is being produced by a British firm, it emerged tonight

By Andrew Hough, graphic by Mark Oliver

A small company in the north of England has developed the “air capture” technology to create synthetic petrol using only air and electricity.

Experts tonight hailed the astonishing breakthrough as a potential “game-changer” in the battle against climate change and a saviour for the world’s energy crisis.

The technology, presented to a London engineering conference this week, removes carbon dioxide from the atmosphere.

The “petrol from air” technology involves taking sodium hydroxide and mixing it with carbon dioxide before "electrolysing" the sodium carbonate that it produces to form pure carbon dioxide.

The fiscal future?

Well, that can wait

By Robert J. Samuelson

What we heard in the second presidential debate was President Obama and Mitt Romney not discussing the nation’s future. Almost every expert agrees that controlling health costs is the crux of curing chronic budget deficits. Health-care spending already exceeds a quarter of federal outlays. With Obamacare’s coverage of the uninsured starting in 2014 and retiring baby boomers flooding into Medicare, the share is headed toward a third. Neither Obama nor Romney uttered a word about how to tame health spending.

And then there’s the “fiscal cliff” — the roughly $600 billion of spending cuts and tax increases scheduled for early 2013 that, if allowed to take effect, would almost certainly plunge the economy back into recession. Not a peep from either on how to avoid the cliff: which tax increases or spending cuts should be postponed, why and for how long; and how to win congressional support from the other party.

The illusion of health-care ‘trust funds’

Changes that other countries have made soberly, achieving lower costs and better health outcomes, will be imposed on us by our creditors

By Bryan R. Lawrence

Machiavelli famously advised princes to use deception to win power and to get things done. Five centuries later, a deception used by our leaders to win power is making it harder for them to fix the biggest issue facing our nation.

If we do not reduce the growth rate of health-care costs, they will consume the federal budget. We risk a debt crisis rivaling the 2008-09 crash. Changes that other countries have made soberly, achieving lower costs and better health outcomes, will be imposed on us by our creditors. Their goal will be the return of their money, not the quality of Americans’ health care.

This danger is laid out clearly in reports from the Treasury Department and Medicare trustees, calling our finances “unsustainable.” President Obama said in 2009 that “the biggest threat to our nation’s balance sheet is the skyrocketing cost of health care. It’s not even close.”

But many voters don’t understand the need to reduce cost growth. Decades of bad accounting, and of politicians promising to protect the Medicare and Social Security “trust funds,” have encouraged the widespread belief that people have spent years paying into a fund for their future benefits.

The Seeds of our dysfunction

The Founders understood the need to limit government because of the limitations of the people

By George F. Will

Elections supposedly prevent convulsions, serving as safety valves that vent social pressures and enable course corrections. November’s election will either be a prelude to a convulsion or the beginning of a turn away from one.

America’s public-policy dysfunction exists not because democracy isn’t working but because it is. Both parties are sensitive market mechanisms, measuring more than shaping voters’ preferences. The electoral system is a seismograph recording every tremor of public appetite. Today, the differences that divide the public are exceeded by the contradictions within the public’s mind.

America’s bold premise is the possibility of dignified self-government — people making reasonable choices about restrained appetites. But three decades ago, Harvard political scientist Samuel Huntington postulated that America suffers regularly recurring political convulsions because the gap between the premise and reality becomes too wide to ignore.

Now Michael Greve, a constitutional scholar at the American Enterprise Institute, argues: “We like to tell ourselves that all our constitutional stories must have a happy ending.” The Founders’ foremost problem, Greve says, was debt. To establish the nation’s credibility, they needed to replace the Articles of Confederation with the Constitution. “We,” Greve says, “merely have to return to it, if we can.” He wonders whether we can.

Germany Is Barreling Headlong Into A Painful Inflation Trap

There is nothing more “anti-social” than inflation

By Wolf Richter

It was a blatant act of fear mongering just before the EU Summit: if Greece were allowed to default and exit the Eurozone, it could trigger the exits of Portugal, Spain, and Italy, which, in a worst-case scenario, could cost the world economy €17.2 trillion in economic growth.

“Hence it is incumbent upon the community of nations to prevent Greece from a sovereign default as well as leaving the euro, and the domino effect that this event could induce,” the study urged.

The study was commissioned by the politically powerful Bertlesmann Foundation, which owns 77.6% of Bertlesmann SE & Co., a multinational media company based in Germany. The foundation is known for its agenda—now including the doctrine that taxpayers must always bail out certain bondholders in order to prop up confidence in the financial markets.

“Insolvency procrastination” is how a quintessential German industrialist responded. And if after Greece’s exit, the whole Eurozone dissolved? “To throw good money after bad is something that normally only over-indebted businesspeople do,” he said. “It’s irresponsible.”

Europe vs. Scientific Consensus

All of Europe ranks behind countries like Uruguay, Pakistan, and the Philippines in the cultivation of recombinant DNA-modified crops

By Henry I. Miller and Drew L. Kershen

The modern techniques for genetic improvement — recombinant DNA, or “genetic modification” (GM) — began to be applied to bacteria and plants 40 years ago. For the first time, molecular biologists could very precisely move genetic material and its traits from one species to another. The resulting new plant varieties have revolutionized agriculture by boosting farmers’ profits and food security in much of the world. But not in Europe.

For more than 20 years, bucking a worldwide scientific consensus, the European Union (EU) has maintained literally nonsensical laws and regulations that focus not on the risk-related characteristics of new plant varieties but on the process — recombinant DNA technology — used to create them. The result is a dysfunctional regulatory system in which there is an inverse relationship between the degree of regulatory scrutiny and the perceived risk of the products. Recombinant DNA-modified plants are regulated into virtual oblivion while new plant varieties crafted with less precise, less predictable techniques are generally unregulated, whatever risk they might pose.

Seven Billion Reasons to Celebrate

There is an ugly underside to today’s international “population movement”

By Nicholas Eberstadt

We do not know exactly when he or she will arrive—the U.S. Census Bureau says it may not be until March next year, while the United Nations’ Population Division suggests it already happened yesterday—but the seven billionth member of humanity is going to be joining the planet very soon.

We cannot tell with certainty where he or she will be born, but given the odds—less than 10 percent of today’s babies are born in North America, Europe, Oceania, or Japan—the child will most likely be born in what the UN calls the “less developed regions.”

The Times of India opines that this baby is more likely to be born in India—which currently accounts for 18 percent of the world’s newborns—than in any other country, and within India, is most likely to be born in Uttar Pradesh, the state which claims about a fifth of the nation’s overall births. But there is also a good chance the baby will be born in sub-Saharan Africa, where nearly a fourth of the globe’s births are now occurring. China (with about 12 percent of the world’s births), Indonesia, and Pakistan (the latter two with just under 4 percent of the world’s total apiece) would certainly be in the running as well.

Scary Pictures

Cashing on the fear factor

By Bjørn Lomborg

Campaigners on important but complex issues, annoyed by the length of time required for public deliberations, often react by exaggerating their claims, hoping to force a single solution to the forefront of public debate. But, however well intentioned, scaring the public into a predetermined solution often backfires: when people eventually realize that they have been misled, they lose confidence and interest.

Last month, there were two examples of this in a single week. On September 19, the French researcher Gilles-Eric Séralini attempted to fuel public opposition to genetically modified foods by showing the public how GM corn, with and without the pesticide Roundup, caused huge tumors and early death in 200 rats that had consumed it over two years.

Germany Takes Hard Line on Spanish Banks

Germany is set to clash not only with Spain and Ireland, but also with Italy and France

By GABRIELE STEINHAUSER

German Chancellor Angela Merkel took a hard line on Spain Friday, saying that Madrid will have to keep on its own balance sheet the tens of billions of dollars it is about to inject into its banks and won't be able to transfer them to the euro-zone bailout fund.

That position, laid out after a two-day summit of European Union leaders in Brussels, would mean that Spanish borrowing from the euro zone to bolster the capital of shaky banks—estimated to be as much as €60 billion ($78.72 billion)—will swell the country's already-heavy debt load.

Germany's stance appeared to dash hopes, fostered by the leaders at a summit in June, that the government's capital injections into the banks could later be transferred to the bailout fund once an effective euro-wide bank supervisor is in place, something that is now slated for 2013. The position could hurt the Spanish government's ability to fund itself on the market, just as interest rates on its bonds have dropped to multi-month lows.

"There will be no retroactive direct bank recapitalization [for Spanish banks]," Ms. Merkel told reporters. "As and when direct recapitalization is possible, it will apply only in the future."

Syria: An Energy-Based Proxy War in the Making?

The US wants Assad to go just as much as Putin wants him to stay

By Marin Katusa

The Vietnam war wasn't really about Vietnam. Spaniards may have fought in the Spanish Civil War, but the real opponents were elsewhere. US and Soviet machinations in Afghanistan in the late 1970s had little to do with liberating a repressed population.

They were all proxy wars, struggles between superpowers that chose to fight their battles in faraway lands and inflict their collateral damage on other peoples instead of their own.

Each war had a cover. Each time the superpowers of the world got involved – overtly or covertly – to right an arguable wrong. Really though, they were there to fight each other. To weaken each other. To claim moral superiority and political preeminence. And to win the right to use the proxy nation's resources and location to their advantage.

It would be lovely to think such wars are a thing of the past... but another proxy war is rapidly developing.

This one pits the world's biggest oil producer against one of its largest customers. It positions a nation with a stranglehold on European gas supplies against one with newfound gas wealth and dreams of future exports. It involves pipelines and terrorism and sovereignty and religion and contrasting concepts of human rights and political progress.

It is Syria.

Don't Expect a Celtic Comeback

Enda Kenny leads a Vichy government—captive externally to its creditors and internally to the unions

By EDDIE HOBBS

On Dec. 13, 1862, they came through the morning fog, wave after wave, some of the finest fighting troops in the Union army. After earning distinctions at Seven Pines, Malvern Hill and Antietam, the Irish Brigade was asked to carry the green flag where others could not go, to secure Marye's Heights over the Virginian town of Fredericksburg.

Though glorified by the London Times, it was a hopeless charge that never should have been asked of any soldiers. The myth of the "fighting Irish" was sealed. But the reality was that the Irish were destroyed, suffering over 80% casualties on a field that had grown crops to relieve the earlier Irish famine.

The myth of Irish pluck continues today, even amid the financial crisis. Prime Minister Enda Kenny recently graced the cover of Time magazine. But according to data from the International Monetary Fund, Ireland has displaced Japan as the world's most indebted economy. Government, household and nonfinancial company debt add up to 524% of Irish GDP. (The Central Bank of Ireland uses a different basis for calculating the debt of nonfinancial firms; its estimate for total debt would be lower than the IMF's.) Funding this gargantuan load at an average cost of 4.5% would swallow nearly 24% of GDP—in other words, Ireland's entire industrial output.

Yet still a Celtic comeback is prophesied. There are three huge problems with this myth:

• Irish taxpayers are still paying for the mistakes of Irish banks. Having started the crisis with a sovereign debt-to-GDP ratio approaching 20%, Ireland will have added another 100% before it's over. And in a perverse reversal of democracy, two-thirds of this load was foisted on the Irish under pressure from the unelected board of the European Central Bank to save German, French and British banks—together with a panoply of other bank bondholders—from the consequences of their investment decisions.

A Golden Solution for Europe's Sovereign-Debt Crisis

Using countries' gold reserves to lower the borrowing costs of euro-zone governments

 By STEPHEN FIDLER

Central banks of the 17-nation currency union are sitting on more than 10,000 metric tons of gold. At northward of $1,740 a troy ounce, that's a chunk of change. (There are 32,151 troy ounces in a metric ton.)

From the point of view of Europe's debt crisis, most of it is in the wrong place. Nearly a third of it belongs to Germany and almost a quarter of it is in France, neither of which is struggling with high debt-interest costs. For some countries burdened with debt—Spain, which holds 282 tons, Greece with 112 tons and Ireland with just six—their holdings are too small to make much of a difference.

But two countries have enough gold to make a difference to their financing costs. Italy, which has flirted with unsustainably high borrowing costs, is sitting on the second-largest holding of gold reserves in Europe: 2,450 tons. The small economy of Portugal, which is in a bailout program after it lost access to affordable government finance, has reserves of 382 tons.

The idea is not to sell the stuff. Instead, the proposal is to bring down borrowing costs by using gold to guarantee the partial repayment of bonds to investors in case of a default. Italy's gold reserves would cover 24% of its estimated borrowing needs over the next two years and Portugal 30%. If the two countries could issue some unsecured debt at the same time, they could bridge an even longer period.

First, some perspective on an idea that could hypothetically help Italy to avoid asking its neighbors for a bailout and aid Portugal to regain access to the bond markets.

It is not from a disinterested party: The World Gold Council exists to promote the use of gold on behalf of the world's gold miners.

Syrian Conflict Raises Kurdish Specter For Turkey

Erdogan's best friend in the Arab world became his worst enemy

By Daniel Steinvorth

As the confrontation between Turkey and Syria escalates, Ankara is readying not only for possible war against Syrian President Bashar Assad, but also against Kurdish separatists. Turkey fears they may be emboldened by the situation in Syria and resurrect their cause.

Necdet Özel, the chief of the Turkish General Staff, pulled his visor cap deep down over his face and placed his right hand on his holster. In Akçakale, where a Syrian shell killed five civilians in early October, and which has come under more artillery fire from the neighboring country since then, the commander of the Turkish army threated to strike back with "full force" if the shelling from Syria didn't stop. "We are here," he said, "and we are standing tall."

Several tank groups rumbled up to a few meters from the border, and at least 25 additional fighter jets landed at the Diyarbakir air base. Özel's message was that Turkey, whose army of 612,000 troops is the largest in the Middle East, is preparing for war with Syria.

Welfare spending jumps 32% in the last three years

Welfare spending as measured by obligations stood at $563 billion in fiscal year 2008, but reached $746 billion in fiscal year 2011

By Stephen Dinan

Federal welfare spending has grown by 32 percent over the past four years, fattened by President Obama's stimulus spending and swelled by a growing number of Americans whose recession-depleted incomes now qualify them for public assistance, according to numbers released Thursday.

Federal spending on more than 80 low-income assistance programs reached $746 billion in 2011, and state spending on those programs brought the total to $1.03 trillion, according to figures from the Congressional Research Service and the Senate Budget Committee.

That makes welfare the single biggest chunk of federal spending — topping Social Security and basic defense spending.

Sen. Jeff Sessions, the ranking Republican on the Budget Committee who requested the Congressional Research Service report, said the numbers underscore a fundamental shift in welfare, which he said has moved from being a Band-Aid and toward a more permanent crutch.

"No longer should we measure compassion by how much money the government spends but by how many people we help to rise out of poverty," the Alabama conservative said. "Welfare assistance should be seen as temporary whenever possible, and the goal must be to help more of our fellow citizens attain gainful employment and financial independence."

Welfare spending as measured by obligations stood at $563 billion in fiscal year 2008, but reached $746 billion in fiscal year 2011, a jump of 32 percent.

Complex story

The numbers tell a complex story of American taxpayers' generosity in supporting a varied social safety net, including food stamps, support for low-income AIDS patients, child care payments and direct cash going from taxpayers to the poor.

The French Great Socialist Revolution Will Be Homework-Free, And Very, Very Cold

Because it is only fair

by Tyler Durden

Whereas some may have welcomed the latest development in the Great French Socialist Revolution chronicles, primarily those 8-16 year olds who would directly benefit from president Francois Hollande's attempt to capture the vote of those still ineligible to actually vote, by promising to do away with homework (because it encourages "inequality" as homework apparently "favors the wealthy"), everyone else saw right through it for the sad attempt at populism it was. Luckily, the impact of this idiotic policy, if it were to actually pass, would not be visible for at least a decade at which point French society would be so dumb (not to mention poor) that few would actually care. However, another proposal being currently contemplated in France may have far more immediate terminal consequences to the life expectancies of those personally experiencing the reincarnation of wholesale of socialism. Because as Bloomberg notes,

 "Heating a French home could soon require an income tax consultation or even a visit to the doctor under legislation to force conservation in the nation’s $46 billion household energy market." 

Congratulations Europe: in your ongoing crusade of wealth redistribution (when all this could have been averted if you, and the US, had simply allowed the banks who control your society to collapse), you are about to make heating one's home a privilege for the despised Bourgeoisie, an act which must be monetarily punished, and socially ostracized.

More on this sad and pathetic at the same time development, coming to broke socialist countries near you:

A bill adopted by the lower house this month would set prices that homes pay based on wages, age and climate. Utilities Electricite de France SA and GDF Suez SA (GSZ) will use the data to reward consumers who cut power and natural gas usage and penalize those whom regulators decide are wasteful.

Peace Is the Ticket to Victory

As Obama takes up the antiwar mantle, will Romney double down on interventionism?

By PATRICK J. BUCHANAN

Usually, not always, the peace party wins.

Gen. Sherman’s burning of Atlanta and March to the Sea ensured Abraham Lincoln’s re-election in 1864. William McKinley, with his triumph over Spain and determination to pacify and hold the Philippines, easily held off William Jennings Bryan in 1900.

Yet Woodrow Wilson won in 1916 on the slogan, “He Kept Us Out of War!” And Dwight Eisenhower won a landslide with his declaration about the stalemate in Harry Truman’s war: “I shall go to Korea.” Richard Nixon pledged in 1968 that “new leadership will end the war and win the peace.” Vice President Hubert Humphrey, behind by double digits on Oct. 1, promised to halt the bombing of North Vietnam. He united his party and closed the gap to less than a point by Election Day.

George McGovern ran as an antiwar candidate in 1972. By November, almost all U.S. troops were home from Vietnam, however, and in late October Henry Kissinger had announced, “Peace is at hand.” Nixon had expropriated the peace issue. Result: 49 states.

Today, after the longest wars in our history in Afghanistan and Iraq, Americans are sick over the 6,500 dead and 40,000 wounded, fed up with the $2 trillion in costs, and disillusioned with the results that a decade of sacrifice has produced in Baghdad and Kabul.