Saturday, March 31, 2007

Talabani lashes out at US occupation

Surprising that Talabani speaks of an occupation. The US of course now considers itself as being present in Iraq at Iraq's invitation and UN approval. It uses these figleafs regularly. Of course one might wonder if Iraq is a sovereign nation why it cannot protect Iranians seized from Irbil or even have them released! It cannot even control US forces or control US jails in Iraq. Why does not this sovereign nation release to the press the new oil law and have a national debate about it before it passes parliament?


Talabani lashes out at US policy in Iraq under 'occupation'
March 30, 2007




Iraqi President Jalal Talabani attends the Arab summit in Riyadh on 28 March. Talabani has said that the US-led invasion of his country four years ago had turned into an occupation with dire consequences for Iraq.

Iraqi President Jalal Talabani said on Thursday that the US-led invasion of his country four years ago had turned into an occupation with dire consequences for Iraq.

Talabani, a member of the Kurdish minority, which has been largely insulated from the violence and devastation visited on other parts of the country since Saddam Hussein fell, was addressing the Arab summit in the Saudi capital.

"The decision to turn the liberation of Iraq into an occupation ... with the dire consequences this had internally and the fears (it aroused) in Arab, regional and international arenas, all this was contrary to what Iraqi parties and national forces were planning at the time," he said.


"This applies equally to many hasty decisions and measures taken by the occupation's civil administration without understanding the Iraqis' point of view and the consequences they had on the situation in the country and the political process as a whole," he said.

"The policies pursued in the wake of the overthrow of the former regime, and the weakness of the international response to the will of the political forces who rallied to rebuild the new Iraq, stymied our early quest to broaden popular participation in order to ... establish security and stability and confront the challenges of sabotage, chaos and terrorism as quickly as possible and with the least human and material losses."

Talabani did not spell out the mistakes he was referring to, but the US-run civil administration installed after Saddam's fall has been widely criticised for taking decisions that have made the situation worse.

Particularly were the disbanding of the Saddam regime's army and the banning of the former dictator's Baath party. That left tens of thousands of military personnel and civilian officials and bureaucrats without jobs, fueling an insurgency among the minority Sunni community from which most of them came.

Ethanol gas has no cleaner emissions than regular gas

Although this test is limited in nature it shows that the benefits of ethanol in gasoline are probably over-rated in terms of the environment. Of course the subsidies will help ADM and corn farmers!
To be fair it would make sense to test cars that run on pure ethanol and gasoline.
However, there is also the whole issue of whether there is much if any savings of energy at all if ethanol is made from corn. There apparently are more savings if it is made from other sources such as sugar cane as happens in Brazil.
These factors do not even consider the point that Castro brings up: should a food crop be diverted to be used as fuel.


Ethanol auto emissions no greener than gasoline: study
Last Updated: Friday, March 30, 2007 | 8:18 PM CT
CBC News
An unpublished federal report appears to undermine the belief that commercially available ethanol-blended fuel produces cleaner emissions than regular gasoline.

Many Canadians believe filling up with ethanol-blended gasoline reduces the emission of greenhouse gases that damage the environment.

Advertising sponsored by the Canadian Renewable Fuels Association encourages the idea, telling Canadians renewable fuels are "good for the environment," and even some provincial governments, including Manitoba and Saskatchewan, say the fuel "burns cleaner" than gasoline.

The federal Conservative government committed $2 billion in incentives for ethanol, made from wheat and corn, and biodiesel in last week's budget.

But based on Ottawa's own research, critics say the investment is based more on myth than hard science.

'Not a lot of difference'
Scientists at Environment Canada studied four vehicles of recent makes, testing their emissions in a range for driving conditions and temperatures.

Continue Article

"Looking at tailpipe emissions, from a greenhouse gas perspective, there really isn't much difference between ethanol and gasoline," said Greg Rideout, head of Environment Canada's toxic emissions research.

"Our results seemed to indicate that with today's vehicles, there's not a lot of difference at the tailpipe with greenhouse gas emissions."

The study found no statistical difference between the greenhouse gas emissions of regular unleaded fuel and 10 per cent ethanol blended fuel.

Although the study found a reduction in carbon monoxide, a pollutant that forms smog, emissions of some other gases, such as hydrocarbons, actually increased under certain conditions.

Bill Rees, an ecology professor at the University of British Columbia and longtime opponent of ethanol, has read the report and thinks Canadians need to know its conclusions.

"I must say, I'm a little surprised at that, because it seems to fly in the face of current policy initiatives," he said.

"People are being conned into believing in a product and paying for it through their tax monies when there's no justifiable benefit and indeed many negative costs."

Other benefits: minister
Federal Environment Minister John Baird said he knows about the report, which was commissioned under the previous Liberal government. However, he said, he is looking at the big picture.

"I think there's an issue between the tailpipe and the whole cycle," he said. "The whole cycle is better than the tailpipe."

Other ethanol proponents agreed, saying tailpipe emissions are not the only statistic that matters.

Ethanol is made from a renewable resource, they noted, and — although there is much scientific debate on this point — they argue ethanol produces fewer greenhouse gases when the entire production cycle, from gathering to refinement to emissions, is taken into account.

Intel Vets on Iranian capture of Brits.

Certainly the situation is dangerous and liable to escalation by either side. With US presence in the Gulf and even in the same disputed waters if the US wants a casus belli it can easily manufacture it or provoke Iran into providing one. The Revolutionary Guards seem to act independently of the Iranian govt. at times and they may even generate an incident without the US or UK doing anything more than what they are already doing namely asserting the right to search vessels within waters that Iran regards as its territorial waters. I guess it is not surprising that the naval officer involved should describe the situation in much more objective terms than Blair.

From: Veteran Intelligence Professionals for Sanity (VIPS)
SUBJECT: Brinkmanship Unwise in Uncharted Waters

The frenzy in America’s corporate media over Iran’s detainment of 15 British Marines who may, or may not, have violated Iranian-claimed territorial waters is a flashback to the unrestrained support given the administration’s war-mongering against Iraq shortly before the attack.

The British are refusing to concede the possibility that its Marines may have crossed into ill-charted, Iranian-claimed waters and are ratcheting up the confrontation. At this point, the relative merits of the British and Iranian versions of what actually happened are greatly less important than how hotheads on each side—and particularly the British—decide to exploit the event in the coming days.

There is real danger that this incident, and the way it plays out, may turn out to be outgoing British Prime Minister Tony Blair’s last gesture of fealty to President George W. Bush, Vice President Dick Cheney, and “neo-conservative” advisers who, this time, are looking for a casus belli to “justify” air strikes on Iran.

Bush and Cheney no doubt find encouragement in the fact that the Democrats last week refused to include in the current House bill on Iraq war funding proposed language forbidding the White House from launching war on Iran without explicit congressional approval.

If the Senate omits similar language, or if the prohibition disappears in conference, chances increase for a “pre-emptive” US and/or Israeli strike on Iran and a major war that will make the one in Iraq seem like a minor skirmish. The impression, cultivated by the White House and our domesticated media, that Saudi Arabia and other Sunni-majority states might favor a military strike on Iran is a myth.

But the implications go far beyond the Middle East. With the Russians and Chinese, the US has long since forfeited the ability, exploited with considerable agility in the 70s and 80s, to play one off against the other. In fact, US policies have helped drive the two giants together. They know well that it’s about oil and strategic positioning and will not stand idly by if Washington strikes Iran.

Lying Poodle

Intelligence analysts place great store in sources’ record for reliability and the historical record. We would be forced to classify Tony Blair as a known prevaricator who, for reasons still not entirely clear, has a five-year record of acting as man’s best friend for Bush. If the President needs a casus belli, Blair will probably fetch it.

Is there, then, any British statesman well versed in both the Middle East and maritime matters, who is worthy of trust? There is. Craig Murray is former UK Ambassador to Uzbekistan (until he was cashiered for openly objecting to UK and US support for torture there) and also former head of the maritime section of the British Foreign Office, and has considerable experience negotiating disputes over borders extending into the sea.

In recent days, former ambassador Murray has performed true to character in courageously speaking out, taking public issue with the British government’s position on the incident at hand. He was quick to quote, for example, the judiciously balanced words of Commodore Nick Lambert, the Royal Navy commander of the operation on which the Marines were captured:

“There is absolutely no doubt in my mind that they were in Iraqi territorial waters. Equally, the Iranians may well claim that they were in their territorial waters. The extent and definition of territorial waters in this part of the world is very complicated.”

Compare the commodore’s caution with the infallible certainty with which Blair has professed to be “utterly confident” that the Marines were in Iraqi waters, and you get an idea of what may be Blair’s ultimate purpose.

Writing in his widely read blog (http://www.craigmurray.co.uk/weblog.html ), Murray points to a “colossal problem” with respect to the map the British government has used to show coordinates of the incident and the Iran/Iraq maritime border—the story uncritically accepted by stenographers of the mainstream press. Murray writes:

“The Iran/Iraq maritime boundary shown on the British government map does not exist. It has been drawn up by the British Government. Only Iraq and Iran can agree on their bilateral boundary, and they have never done this in the Gulf, only inside the Shatt because there it is the land border too. This published boundary is a fake with no legal force...Anyway, the UK was plainly wrong to be ultra-provocative in disputed waters...

“They [the British Marines] would under international law have been allowed to enter Iranian territorial waters if in ’hot pursuit’ of terrorists, slavers, or pirates....But they were looking for smuggled vehicles attempting to evade car duty. What has the evasion of Iranian or Iraqi taxes got to do with the Royal Navy?”

Ambassador Murray has appealed to reason and cooler heads. To state what should be the obvious, he notes it is not legitimate for the British government to draw a boundary without agreement of the countries involved:

“A little more humility, and an acknowledgement that this is a boundary subject to dispute, might actually get our people home. The question is are we really aiming to get our people home, or to maximize propaganda from the incident?”

War Dreams

What is known at this point regarding the circumstances suggests Royal Navy misfeasance rather than deliberate provocation. The way the UK and US media has been stoked, however, suggests that both London and Washington may decide to represent the intransigence of Iranian hotheads as a casus belli for the long prepared air strikes on Iran.

And not to be ruled out is the possibility that we are dealing with a provocation ab initio. Intelligence analysts look to precedent, and what seems entirely relevant in this connection is the discussion between Bush and Blair on Jan. 31, 2003 six weeks before the attack on Iraq.

The “White House Memo” (like the famous “Downing Street Memo” leaked earlier to the British press) shows George Bush broaching to Blair various options to provoke war with Iraq. The British minutes—the authenticity of which is not disputed by the British government—of the Jan. 31, 2003 meeting stated the first option as:

“The US was thinking of flying U2 reconnaissance aircraft with fighter cover over Iraq, painted in UN colours. If Saddam fired on them, he would be in breach.”

Not to mention the (in)famous Tonkin Gulf non-incident, used by President Lyndon Johnson to justify bombing North Vietnam.

The increasingly heavy investment of "face" in the UK Marine capture situation is unquestionably adding to the danger of an inadvertent outbreak of open hostilities. One side or the other is going to be forced to surrender some of its pride if a more deadly confrontation is going to be averted.

And there is no indication that the Bush administration is doing anything other than encouraging British recalcitrance.

Unless one’s basic intention is to provoke a hostile action to which the US and UK could “retaliate,” getting involved in a tit-for-tat contest with the Iranians is a foolish and reckless game, for it may not prove possible to avoid escalation and loss of control. And we seem to be well on our way there. If one calls Iran "evil,” arrests its diplomats, accuses it of promoting terrorism and unlawful capture, one can be certain that the Iranians will retaliate and raise the stakes in the process.

That is how the game of tit-for-tat is played in that part of the world. What British and American officials seem not to be taking into account is that the Iranians are the neighborhood toughs. In that neighborhood, they control the conditions under which the game will be played. They can change the rules freely any time they want; the UK cannot, and neither can Washington.

Provocative behavior, then, can be very dangerous, unless you mean to pick a fight you may well regret.

Someone should recount to Tony Blair and Ayatollah Khameini the maxim quoted by former United Nations chief weapons inspector Hans Blix just last week:

"The noble art of losing face
Will someday save the human race."

By:

Ray Close, Princeton, NJ
Larry Johnson, Bethesda, MD
David MacMichael, Linden, VA
Ray McGovern, Arlington, VA
Coleen Rowley, Apple Valley, MN

Steering Group
Veteran Intelligence Professionals
for Sanity (VIPS)

Fighting rages in Mogadishu

This is hardly surprising. As long as the US is involved only through its proxies the Ethiopians it will be on the back pages of newspapers. There is no mention of African peacekeepers in this post. The government and Ethiopians and also the rebels I guess seem to have no compunction about using artillery in the city. The fighting will create another huge refugee problem.


Fighting in Mogadishu rages for 3rd day
By MOHAMED OLAD HASSAN - Associated Press Writer

MOGADISHU, Somalia --Fighting raged for a third day in the Somali capital Saturday as government troops and their Ethiopian allies continued a major offensive to quash a growing insurgency by Islamic militants.

Artillery fire and mortar shells rained down on the capital, sending residents fleeing some of the heaviest fighting in Mogadishu since the early 1990s.

On Friday, insurgents shot an Ethiopian helicopter gunship out of the sky and mortar shells slammed into a hospital, leaving corpses piled in the streets and wounding hundreds of civilians.

According to an official count, 30 people have been killed since the offensive started Thursday. But the fighting was so severe and widespread in Mogadishu that bodies were not being picked up or even tallied, and residents said hundreds more were believed dead across the city of 1 million people.

The insurgents are linked to the Council of Islamic Courts, which was driven from power in December by Somali and Ethiopian soldiers, accompanied by U.S. special forces.

Insurgents were firing mortars from residential areas of the city, and Ethiopian troops responded with barrages of heavy artillery. The attacks occurred across the flat seaside capital, and huge plumes of smoke rose into the air.

The International Committee of the Red Cross said dozens of people have been killed since Thursday and more than 220 wounded, most of them civilians with bullet, grenade and other shrapnel wounds.

"The population of Mogadishu is caught up in the worst fighting in more than 15 years," the agency said.

The U.N.'s refugee agency said 58,000 people have fled violence in the Somali capital since the beginning of February.

Islamic militants - who now dominate the insurgency - stockpiled thousands of tons of weapons and ammunition during the six months they controlled Mogadishu. The insurgency will likely last until that stockpile is depleted, or key leaders are killed.

The militants have long rejected any secular government and have sworn to fight until Somalia becomes an Islamic emirate. Clan elders have tried to negotiate several cease-fires, but cannot control the young insurgents.

On Friday, an Associated Press reporter saw an anti-aircraft missile hit an Ethiopian helicopter that had been bombing insurgent positions.

Somalia has been mired in chaos since 1991, when warlords overthrew dictator Mohamed Siad Barre and then turned on one another.

A U.N. peacekeeping operation in the 1990s saw clashes between foreign troops and Somali fighters, including the notorious downings of two U.S. Black Hawk helicopters in 1993 - which was followed by a firefight that killed some 300 Somalis in 12 hours. The U.S. withdrew from Somalia in 1994, and that was followed a year later by the departure of U.N. peacekeepers.

A national government was established in 2004 but has failed to assert any real control. The administration, with crucial support from Ethiopian troops, toppled the Council of Islamic Courts in December, but insurgents with links to the group have staged attacks nearly every day.

The United States has accused the Islamic courts of having ties to al-Qaida.

AP writer Salad Duhul in Mogadishu contributed to this report.

Friday, March 30, 2007

Iran May Skip Talks unless US releases six detainees from Irbil raid

THe Iraqi government has also asked for the release of the detained Iranians but heck don't the Iraqis know who is boss?

Iran May Skip Talks on Iraq If U.S. Keeps Six Detainees
Thursday, March 29, 2007; Page A15


Iran may not send a delegation to a key meeting with Secretary of State Condoleezza Rice, tentatively planned for next month, unless six Iranians detained by the United States in Iraq are released, a senior Iranian official said yesterday.

The meeting on Iraq's future, planned for Istanbul or Kuwait, is a follow-up to a lower-level meeting held this month in Baghdad. The State Department hopes the meeting will provide a venue for Iraq to engage Iran -- as well as Syria and other key players -- on efforts to stabilize Iraq.








Iranian Foreign Minister Manouchehr Mottaki would face serious internal pressure not to attend a high-level meeting with the United States in light of the impasse over its military and diplomatic personnel, said the Iranian official, who spoke on the condition of anonymity because of the topic's sensitivity. Iran had expected five of the six to be released last week, at the beginning of the Iranian new year.

The five are members of Iran's elite al-Quds Brigade who were detained during a U.S. raid on an Iranian diplomatic office in the Kurdish city of Irbil in January. The United States alleged that they were "suspected of being closely tied" to attacks on U.S. forces. Computers, cellphones and other equipment seized there have produced intelligence on Iranian operations in Iraq, U.S. officials said.

A sixth Iranian -- embassy second secretary Jalal Sharafi -- disappeared in Iraq last month, and Tehran believes he is also in U.S. custody. Sharafi was reportedly abducted from his car by men in Iraqi military uniforms. A U.S. military spokesman denied U.S. or Iraqi involvement.


-- Robin Wright

Gwynn Dyer: Iran-How to Start a War

Not only is the suggestion that the US would have fired on the Iranians provocative but the US has already created a provocation by raiding the quasi-consulate in Irbil and almost getting into a firefight with Kurds at the Irbil airport when they attempted to apprehend another Iranian. The Iranians have already made it clear that they may boycott the upcoming conference on Iraq security if the Iranians are not released. The Iraq government has called for their release but where is the new coverage and outrage about the US provocation? It is the arrest of Britons in disputed waters that causes all the chatter in the media.


Iran — How To Start A War

By Gwynne Dyer

03/30/07 "Jordan Times" -- - -“I don’t want to second-guess the British after the fact,” said US Navy Lieutenant-Commander Erik Horner, “but our rules of engagement allow a little more latitude. Our boarding team’s training is a little bit more towards self-preservation.”

Does that mean that one of his American boarding teams would have opened fire if it had been them in the two inflatable boats that were surrounded by Iranian Revolutionary Guard fast patrol boats off the coast of Iraq last Friday?

“Agreed. Yes.”

Just as well that it was a British boarding team, then. The 15 British sailors and Marines who were captured and taken to Tehran for “questioning” last week are undoubtedly having an unpleasant time, but they are alive, and Britain is only involved in two wars, in Iraq and Afghanistan. If it had been one of Eriik Horner’s boarding teams, they would all be dead, and the United States and Iran would now be at war.

Horner is the executive officer of the USS Underwood, the American frigate that works together with HMS Cornwall, the British ship that the captive boarding party came from. Interviewed after the incident by Terri Judd of The Independent, the only British print journalist on HMS Cornwall, he was obviously struggling to be polite about the gutless Brits, but he wasn’t having much success.

“The US navy rules of engagement say we have not only a right to self-defence but also an obligation to self-defence,” Horner explained. “(The British) had every right in my mind and every justification to defend themselves rather than allow themselves to be taken. Our reaction was, Why didn’t your guys defend themselves?”

So there they are, eight sailors and seven Marines in two rubber boats, with personal weapons and no protection whatever, sitting about 30cm above the water, surrounded by six or seven Iranian attack boats with mounted machineguns. “Defend yourself” by opening fire, and after a single long burst from half a dozen heavy machineguns there will be 14 dead young men and one dead young woman in two rapidly sinking inflatables, and your country will be at war. Seems a bit pointless, really.

It’s a cultural thing, at bottom. Britain has a long history of fighting wars and taking casualties, but the combat doctrines are less hairy chested. British rules of engagement “are very much de-escalatory, because we don’t want wars starting”, explained Admiral Sir Alan West, former First Sea Lord.

“Rather than roaring into action and sinking everything in sight we try to step back, and that, of course, is why our chaps were... able to be captured and taken away.”

That emollient British approach is probably why the Iranian Revolutionary Guard chose to grab British troops rather than Americans. It was obviously a snatch operation: the Iranians would not normally have half-a-dozen attack boats ready to go even if some “coalition” boat checking Iraq-bound ships for contraband did stray across the invisible dividing line into Iranian waters (which the British insist they didn’t).

But it was not necessarily an operation ordered from the top of Iran’s government. In fact, there is no single source of authority in Iran’s curious system of “multiple governments”, as one observer labelled the impenetrably complex division of responsibilities and powers between elected civilians and unelected mullahs. The Revolutionary Guards (who are quite different from the regular armed forces) enjoy considerable autonomy within this system.

According to the US authorities in Iraq, the five Iranian diplomats arrested by US troops in a raid in Erbil in Iraqi Kurdistan last January were actually Revolutionary Guards, and it would seem that their colleagues want them back. Kidnapping American troops as hostages for an exchange could cause a war, so they decided to grab some Brits instead. And it will probably work, after a certain delay.

In this episode, the American reputation for belligerence served US troops well, diverting Iranian attention to the British instead. In the larger scheme of things, it is a bit more problematic.

A quite similar snatch operation against the equally belligerent Israelis last July led to a monthlong Israeli aerial bombardment of Lebanon and a retaliatory hail of Hizbollah rockets on northern Israeli cities. Well over a thousand people were dead by the end, although nothing was settled.

Any day now, a minor clash along Iraq’s land or sea frontier with Iran could kill some American troops and give President Bush an excuse to attack Iran, if he wants one — and he certainly seems to. If the Revolutionary Guards had got it wrong last Friday and attacked an American boarding party by mistake, he would have his excuse now, and bombs might already be falling on Iran. All the pieces are in place, and the war could start at any time.

The writer is a London-based independent journalist whose articles are published in 45 countries.

In South Korea poverty and gap between rich and poor is growing

I am sure that the trend exhibited here is not just evident in South Korea. However, South Korea is often thought of as doing very well and hence people think that there will be less poverty. The gap between rich and poor is also growing in the US.


Poverty nearly doubled in the last decade

Economic disparities rise to record high as the rich get richer

With the middle class fast deteriorating, the nation`s poor population has nearly doubled in a decade to 2006, the Korea Institute for Health and Social Affairs said yesterday.

The state-run think tank said the "poor" class, defined as those earning less than half of the average national income, accounted for over 20 percent of the total population last year, up almost 9 percentage points from 1996.

The middle class tumbled to 43.7 percent last year from 55.54 percent a decade ago, indicating that about a quarter of middle class households were financially crippled over the decade.

But the "rich" class, defined as those earning over 50 percent or more than the average national income, jumped to 25 percent from 20 percent, according to the KIHASA.

The diverging data reflects Korea`s growing income gap between haves and have-nots.

The income gap between rich and poor households widened to a record level last year, the National Statistical Office said.

The top 20 percent of Korean households earned 7.64 times more than the bottom 20 percent, far above the earning gap in major European economies and Japan.

The Gini index, a barometer of income inequality, also rose to a record high of 0.351 for 2006, the NSO noted.

The KIHASA data showed the economic disparities are also hurting the population`s health.

Only 22 percent of the bottom 10 percent of the population was found to be healthy in a 2005 survey, down from 35 percent in 1998.

Park Jong-kyu, a research fellow with the Korea Institute of Finance, called on the poor households to cut down expenses to curb the growing deficits.

He pointed out that Korea`s bottom 10 percent earners had spent 50 percent more than their income in recent years, far above Japan`s lower class, who spends around 80 percent of their income.

"We should consider whether the poor class overly relied on debt rather than tightening spending," Park said in a report.

"It is important to create jobs through spurring growth and to restore the middle class to help the poor people recover from chronic deficits."

(kkt@heraldm.com)

By Ko Kyoung-tae

The bigger the house the worse the CEO!

Maybe companies should start giving bonuses to CEOs for reducing their house size!


from SLATE moneybox

Haunted Mansion
A study proves that the bigger his house, the worse the CEO.
By Daniel Gross
Posted Thursday, March 29, 2007, at 6:17 PM ET

The last two bubbles—the dot-com bubble of the 1990s and the
real-estate bubble of this decade—have combined to create a new
culture of real-estate voyeurism. Thanks to Internet-based services
and the digitization of public records, real-estate obsessives can
check out how much friends and neighbors paid for their homes
(domania.com), how much said homes might be worth (Zillow), and what
those homes look like from above (Google Earth).

These developments have been a boon to real-estate agents, would-be
flippers, celebrity trackers, and all-around busybodies. Now, thanks
to two finance professors who have examined the extreme home-buying
habits of some of America's wealthiest individuals, they could be a
boon to stock pickers, too. Robin Leach, meet Peter Lynch.

In a working paper titled "Where are the Shareholders' Mansions?"
David Yermack of New York University and Crocker Liu of Arizona State
wonder whether there is a relationship between CEO home-buying
behavior and stock performance. (The title is a riff on the classic
1940 investment book Where Are the Customers' Yachts?.) In doing so,
the two academics are invading one of the last preserves of executive
privacy, and we should all be very grateful! Thanks to Securities and
Exchange Commission filings, the public can learn a great detail about
the salaries, benefits, and perks that CEOs receive. But up until now,
homes have generally been off-limits. For security reasons and to ward
off jealousy from bitter shareholders, angry underlings, and discarded
first wives, CEOs like to keep their homes well-hidden behind security
gates and tall hedges. (About 18 months ago, I interviewed a famous
private-equity magnate. There were two ironclad ground rules. First,
the conversation would be on background. Second, I could not describe
the grounds, the furnishings, or the mind-boggling size of his house.)

Yermack and Liu insist there's a solid academic reason to look through
the keyholes. They want to figure out if a mansion purchase signals
commitment or cashing out. A CEO who buys a 12,000-square-foot mansion
could be showing his intent to stay for the long haul and to bust his
butt so that he'll have the cash to pay off the huge mortgage. In
which case, you'd expect stocks of the companies where the CEO just
bought an obscenely large house to thrive. Buy!

Or the purchase of an absurdly large house could signal entrenchment:
The CEO is too comfortable with his position and his personal
finances. He has made so much money that he can't really be bothered
with running the company. And the willingness to spend gazillions on a
house—not to mention the furnishings, artwork, and baubles to fill
it—betokens a general inattentiveness to costs. In which case, you'd
expect stocks of the companies where the CEO just bought an obscenely
large house to fare poorly. Sell!

Intuitively, the entrenchment argument makes sense. Just look at this
very long-term chart of Microsoft. You'll see that since the late
1990s, when Bill Gates moved into his gargantuan home, the stock has
essentially moved sideways, significantly underperforming the market.

Using property records, public databases, and search engines, Yermack
and Liu were able to identify the primary residences of 488 of the 500
CEOs of the S&P 500. These guys—and they're almost all guys—are
living
large. The mean residence of a CEO was anything but mean: 6,145 square
feet, 12 rooms, 5.37 acres of land, and a market value of $3.1
million. For the 164 in the sample who bought new houses after being
named CEO, the mean house was even less mean: 6,635 square feet, 13.1
rooms, 6.13 acres, and a market value of $3.9 million. "Aerial
photographs indicate that outdoor swimming pools, tennis courts,
boathouses, formal gardens, and detached guest houses or servants'
quarters are common features of CEOs' homesteads," Yermak and Liu
write. CEOs are also engaging in the same sort of financing that the
home-buying masses do.

Then the professors examined the returns of the CEOs' stocks, and
discovered that the bigger the home, the worse the stock performed. In
2005, the stocks of companies whose CEOs lived in larger homes (i.e.,
above the average for all CEOs) returned, on average, 3.35 percent
less than companies whose CEOs lived in below-average homes. And the
CEOs who lived in the biggest homes (at least 10,000 square feet or
over 10 acres) underperformed their peers who inhabited more modest
homes by 6.9 percent, on average.

Next, they looked at stock returns for 164 companies whose CEOs bought
new homes after becoming CEO. Here, again, they found trouble,
especially for CEOs who bought mega-homes on mega-plots. They found "a
significantly negative stock performance following the acquisition of
very large homes by company CEOs," on the order of 1.25 percent
performance lag per month. The conclusion: "We interpret the stock
return evidence as consistent with large CEO home purchase indicating
entrenchment and foreshadowing poor future stock performance." What's
more, when CEOs sold stock to finance the purchase of a home—as was
the case in 32 percent of the instances—those stocks performed worse
than companies where CEOs held on to their stocks. Yermack says this
is the most interesting finding. The data seem to indicate that a good
number of CEOs are selling shares—ostensibly to raise cash to buy a
house—just before their stock goes south. "I think it could be that
these guys know something and want to get out of the stock," he said.
"Ordinarily, you can't do that as an insider unless you have an alibi,
and buying a house is about the best alibi you can come up with."

A few caveats. CEOs can't be judged by square footage alone. A
4,000-square-foot co-op in New York can be just as self-indulgent as a
20,000-square-foot estate complex in Wichita, Kan. And they shouldn't
be judged on cost alone. In San Francisco, spending $5 million on a
home is par for the course among highly paid professionals. In
Wichita, it's almost unheard of.

And there's another possible explanation that could explain the link
between over-the-top home purchases and disappointing near-term stock
returns. Big-ticket home purchases rarely take place when the market
is about to boom. CEOs weren't exactly rushing to buy estates in 2001
and 2002. But when the market has been on a nice long-run bull run,
when people feel really good about the present and even better about
the future, they're far more likely to buy or build an extravagant
home. In other words, they may be buying at the top, so it's no
surprise that share prices drop soon after.

Still, the overall argument is compelling. If you want to judge the
prospects of a stock by crunching some numbers, perhaps your first
stop shouldn't be the SEC's Edgar database. Perhaps it should be
Zillow.



The very rich are also relying on funky mortgages to keep early
payments down. "We find almost a 50-50 split between fixed rate and
adjustable rate mortgages," the professors write, which is "intriguing
because fixed rate mortgages tend to dominate ARMs in the marketplace,
especially among borrowers with good credit histories."

Daniel Gross (www.danielgross.net) writes Slate's "Moneybox" column.
You can e-mail him at moneybox@slate.com.

US mortgage delinquencies

There is more on this with graphs at this site.

Here's the news we've been expecting, from CNNMoney:

A record high number of homeowners faced a serious threat of foreclosure during the fourth quarter of 2006, according to a survey released Tuesday by the Mortgage Bankers Association...

Troubled mortgage holders rose across the board: The delinquency rate for one-to-four-family houses rose to 4.95 percent of all loans outstanding compared with 4.67 during the third quarter and 4.70 percent 12 months earlier.

All major loan types contributed to the increase, but subprimes and FHA loans were up the most.

Bush and the Fadhil Bros. Blog: A Tangled Web

This is from the bushoutblog The article is an excellent analysis of the payment for psychwarfare material. No doubt there will be much more of this but this is clear evidence it is already well advanced into the blogosphere. Maybe I am on the wrong side..lol. I see sites such as antiwar.com and information clearing house begging for funds but if you are on the right side (pun intended) you can get govt. grants under the table. Of course only the right that sides with Bush will get funded.

Bush Cites Fadhils For Proof Of "Success" In Iraq!


When the President of the United States of America is reduced to quoting propaganda nonsense fabricated by his own neocon supporters, that's pathetic.

When he does so specifically in order to justify failed policies which continue to see dozens, if not hundreds, dead every day in Iraq, that's worse than tragic. It's criminal.

Here's what President Bush just said today:
The missions I described are only the opening salvos in what is going to be a sustained effort. Yet, the Iraqi people are beginning to say -- see positive changes. I want to share with you how two Iraqi bloggers -- they have bloggers in Baghdad, just like we've got here -- (laughter) -- "Displaced families are returning home, marketplaces are seeing more activity, stores that were long shuttered are now reopening. We feel safer about moving in the city now. Our people want to see this effort succeed. We hope the governments in Baghdad and America do not lose their resolve."
That's a direct quote from the Fadhil brothers' Wall Street Journal piece I just linked to five minutes ago. Bush is really scraping the bottom of the propaganda barrel here, folks.

Where do I start? Let's hope Bush's remarks shine some long-overdue light on the neocons' favourite fantasists.

For anyone not familiar with the story, which is a long-running saga on this blog, Omar and Mohammed Fadhil run a blog called Iraq The Model (ITM). They have a brother named Ali Fadhil who angrily departed the blog under very odd circumstances just before the 2004 US election, when Omar and Mohammed went to Washington to meet with Bush and Wolfowitz in the Oval Office. The White House meeting was organized by a bogus US "charity" called Spirit of America (SoA), whose CEO Jim Hake was also present.

Ali Fadhil alleged that the SoA staff were using the Fadhil brothers for propaganda purposes. He said that SoA CEO Jim Hake and his former "Director of Logistics and Procurement" Kerry Dupont were "stealing donors money" and lying to both Iraqis and Americans. He said Dupont offered the brothers $300,000 "that we could use to do what we want".
Mohammed seemed to recall her saying tht it was Kerry's personal money while I recall her saying it wasn't.
As I have said previously:
Three hundred thousand dollars is a lot of money to be throwing around, folks. And let's remember, this was happening while Paul Bremer was (supposedly) running Iraq and US$800 million was disappearing! Add two and two together and you would have to think that the money Dupont was offering came from those same taxpayer-funded coffers. But how the hell did Kerry Dupont get authorised to hand it out? Prior to her (extensive) involvement with Iraq The Model, Dupont was (as far as I can tell) just a plain old mother of two from Topsham, Maine. What happened on the way to Baghdad, Kerry?
When Ali complained to Jim Hake about Dupont's behaviour, Hake dumped him from the trip to the USA. Afterwards he promised Ali "any position I wanted and any salary I would find suitable". Instead of taking the offer, Ali went public with a barrage of blog posts exposing SoA projects where he claimed money had gone missing and SoA's claimed goals had proved illusory. Then suddenly - after discussions with his two brothers - Ali deleted his blog posts, aplogized for causing any trouble, and refused to discuss his allegations any further.

Ali maintained a blog of his own for a while, but the URL later pointed to a porn site and now suggests that Ali may be living in "freedom" in Germany. His brothers quickly removed Ali's blog link from their Iraq The Model site and no longer even mention his name.

That's just the start of it! When you look at the people who were behind setting up Iraq The Model and Spirit of America, a whole new ball game opens up.

Spirit of America was originally set up and supported by Cyber Century Forum (CCF), a group dedicated to spreading US influence worldwide, with a particular emphasis on covert cyber-intelligence measures. Cyber Century Forum’s three ageing members are old guard warhorses from the Cold War days. And they used oil company finances to set up Spirit Of America:
Cyber Century Forum's tax return for 2003 shows that it holds $109,440 in corporate stocks from Schlumberger Ltd, "the leading oilfield services technology company supplying technology, project management and information solutions to the oil and gas industries". It also holds a further US$9,292 in stocks from Transocean Sedco Forex, the world's largest offshore drilling company. Now isn't that a big surprise? "Freedom and Democracy for Iraq", sponsored by the US oil and gas industry.
There is even more if you want to keep digging. For example, two of the three members of Cyber Century Forum are also members of a top-level think-tank, the Center for Strategic and International Studies, which is also dedidicated to spreading US influence.

And Spirit of America is a client of Direct Impact, a "grassroots marketing" organisation, whose marketing involves creating a "Buzz" by getting seemingly ordinary people (or better yet, influential people) to promote a product by word-of-mouth. Online promoters include people like Jeff Jarvis, who also helped set up Iraq The Model.

And Jim Hake went on to set up a media company called SignalOne media with people like Ahmad al-Rikaby (from Baghdad's own Radio Dijla and formerly U.S.-funded Radio Free Europe) and former US Ambassador and Kissinger speech-writer Mark Palmer (a member of the Committee for Present Danger).

Paul Krugman on ethanol

This is from the New YOrk times via http://economistsview.typepad.com/economistsview/2007/01/paul_krugman_th_1.html.
Krugman mentions the lack of net energy production and also the contrast with Brazil that produces ethanol from sugar cane. No one mentions corn as food production as Castro does. Of course Krugman is not voted into office and so does not run in Iowa either.




The Sum of All Ears, by Paul Krugman, Corn Cop-Out, Commentary, NY Times: For those hoping for real action on global warming and energy policy, the State of the Union address was a downer. There had been hints and hopes that the speech would be a Nixon-goes-to-China moment, with President Bush turning conservationist. But it ended up being more of a Nixon-bombs-Cambodia moment.

Too bad... The only real substance was Mr. Bush’s call for ... ethanol to replace gasoline. Unfortunately, that’s a really bad idea. There is a place for ethanol in the world’s energy future — but that place is in the tropics. Brazil has managed to replace a lot of its gasoline consumption with ethanol. But Brazil’s ethanol comes from sugar cane.

In the United States, ethanol comes overwhelmingly from corn, a much less suitable raw material. In fact, ... researchers ... estimate that converting the entire U.S. corn crop — the sum of all our ears — into ethanol would replace only 12 percent of our gasoline consumption.

Still, doesn’t every little bit help? Well, this little bit would come at a very high price compared with ... conservation. The Congressional Budget Office estimates that reducing gasoline consumption 10 percent through ... fuel economy standards would cost ... about $3.6 billion a year. Achieving the same result by expanding ethanol production would cost taxpayers at least $10 billion a year...

What’s more, ethanol production has hidden costs. ...[T]he Department of Energy ... says that the net energy savings from replacing a gallon of gasoline with ethanol are only ... about a quarter of a gallon, because of the energy used to grow corn, transport it, run ethanol plants, and so on. And these energy inputs come almost entirely from fossil fuels, so it’s not clear ... ethanol does anything to reduce carbon dioxide emissions.

So why is ethanol, not conservation, the centerpiece of the administration’s energy policy? Actually, it’s not entirely Mr. Bush’s fault.

To be sure, ... Mr. Bush’s people seem less concerned with devising good policy than with finding something, anything, for the president to talk about that doesn’t end with the letter “q.” And the malign influence of Dick “Sign of Personal Virtue” Cheney, who no doubt still sneers at conservation, continues to hang over everything.

But even after the Bushies are gone, bad energy policy ideas will have powerful constituencies... Subsidizing ethanol benefits two well-organized groups: corn growers and ethanol producers (especially the corporate giant Archer Daniels Midland). As a result, it’s bad policy with bipartisan support. For example, earlier this month legislation calling for a huge increase in ethanol use was introduced by five senators, of whom four, including ... Barack Obama and Joseph Biden, were Democrats. In a recent town meeting in Iowa, Hillary Clinton managed to mention ethanol twice...

Meanwhile, conservation doesn’t have anything like the same natural political mojo. Where’s the organized, powerful constituency for tougher fuel economy standards, a higher gasoline tax, or a cap-and-trade system on carbon dioxide emissions?

Can anything be done to promote good energy policy? Public education is a necessary first step, which is why Al Gore deserves all the praise he’s getting. It would also help to have a president who gets scientific advice from scientists, not oil company executives and novelists.

But there’s still a huge gap between what obviously should be done and what seems politically possible. And I don’t know how to close that gap.

_____

McCain's flip-flop on Ethanol

This comes from this website.

Castro doesnt need to run in Iowa so I guess he is safe! The corn farmers and the big grain companies profit from the subsidies for ethanol production. Whatever happened to the beloved free market! How is it the World Bank and IMF get after Iraq for all those below market subsidized prices for gas but the US can subsidize ethanol?




John McCain’s Ethanol Flip-Flop
I knew that McCain had flip-flopped on this issue. The upcoming issue of Fortune tells the tale:

McCain's farm flip

It's a pretty good lesson on how tough it is to oppose ethanol and get yourself elected president, since Iowa has one of the first presidential caucus. So, despite McCain's long track record of criticizing ethanol, suddenly it's the thing to do.

Some excerpts from the article that I found interesting:



John McCain has a problem with alcohol - ethyl alcohol, to be precise.

Ethyl alcohol is the fuel better known as ethanol, and over the years, the Arizona senator has made a habit of ripping ethanol subsidies as corporate pork for agribusinesses like Archer Daniels
Midland.

McCain has argued that government support for ethanol actually raises gasoline prices. He has claimed ethanol does nothing to make the U.S. more energy independent. He has even questioned the science behind making fuel from corn - contending that ethanol provides less energy than the fossil fuels consumed to produce it.

But for a front-runner - one presumably interested in getting his as-yet-undeclared 2008 Republican presidential campaign off to a winning start - opposing ethanol is political lunacy.

Iowa, home to the first-in-the-nation presidential caucus, is the biggest corn-growing state in the country, and in Iowa ethanol isn't just another campaign issue. It's the cash cow, the golden goose and the fountain of economic youth all wrapped up in one.


This is how something that is good for Iowa, but not necessarily for the rest of us, can become national policy.

More:


Against this backdrop, it's obvious why McCain's past ethanol opposition is such an albatross. Fact is, criticizing ethanol is hard even for scientists these days.

At a recent BP-sponsored ethanol roundtable, University of California at Berkeley engineering professor Tad Patzek - whose anti-ethanol research McCain has invoked - so riled Roger Conway, the director of energy policy for the very pro-ethanol U.S. Department of Agriculture, that Conway told the foreign-born Patzek to "go back to Poland." (Conway denies making the remark, but four other participants confirm he did, including pro-ethanol scientist Michael Wang of the Argonne National Laboratory.)

Here's the before and after. The before:



For a politician like McCain, the stakes go far beyond a little name-calling. When McCain ran for president in 1999 and 2000, he barely campaigned in Iowa, knowing that his anti-ethanol stance wouldn't cut it in corn country.

Four years later, McCain hadn't changed his tune. "Ethanol is a product that would not exist if Congress didn't create an artificial market for it. No one would be willing to buy it," McCain said in November 2003. "Yet thanks to agricultural subsidies and ethanol producer subsidies, it is now a very big business - tens of billions of dollars that have enriched a handful of corporate interests - primarily one big corporation, ADM. Ethanol does nothing to reduce fuel consumption, nothing to increase our energy independence, nothing to improve air quality."

Even the most slippery politician would have a tough time wriggling away from a statement as unequivocal as that one, yet McCain's Straight Talk Express has been taking some audacious detours during recent trips to Iowa.

The after:



"I support ethanol and I think it is a vital, a vital alternative energy source not only because of our dependency on foreign oil but its greenhouse gas reduction effects," he said in an August speech in Grinnell, Iowa, as reported by the Associated Press.

"Well, at least now we know he's serious about running for president," quips Brown University presidential politics expert Darrell West, upon being told of McCain's ethanol about-face.

And the money quote:



"You can't trash ethanol and expect to win in Iowa," says Schmidt. "You can't continue to say the same things McCain said - even if you believe they're true."

What to do? Maybe some other states need to move their primaries ahead of Iowa's to stop them from having a disproportionate impact on national politics.
Labels: ethanol, Iowa, John McCain

posted by Robert

Castro on Ethanol

Some environmentalists agree with Castro but often the critique of ethanol use especially made from corn is that net energy gain may be small or even negative. It is not clear how in the US using corn for ethanol displaces corn grown to feed the worlds poor and makes their situation worth. Unless the US govt. subsidizes corn production to feed the worlds poor it would not be produced for their consumption anyway. Strangely enough Bush does not even mention the subsidies that the huge grain companies such as ADM get from US agricultural policy. I have also posted a couple of other articles on this issue to complement this one.

From Monsters and Critics.com

Americas News
Castro ends 8-month silence to slam US ethanol plans (2nd Roundup)
By DPA

Mar 29, 2007, 19:59 GMT

Havana - Ending eight months of silence, ailing Cuban President Fidel
Castro published an article in Cuban state media Thursday criticizing
US environmental policies, and in particular plans to boost the use of
ethanol.

'The sinister idea of converting food into fuel has definitely been
established as an economic lineament in US foreign policy,' the Cuban
leader wrote, arguing that US President George W Bush's support for
using crops to produce ethanol for automobiles in rich nations could
deplete food stocks in developing countries.

The article published in the Cuban Communist Party daily Granma was
the first attempt by Castro, 80, who is recovering from intestinal
surgery, to comment on international issues since he was taken ill in
July 2006 and handed over power to his younger brother Raul.

Fidel Castro has only been seen in half a dozen videos and several
pictures since the surgery, the last ones published in March where he
appeared with Colombian Nobel Laureate Gabriel Garcia Marquez.

'More than 3 billion people in the world condemned to premature death
by hunger and thirst,' read the headline of Castro's article.

Castro's health has been treated as a state secret in Cuba, which has
not revealed the exact cause of his illness. Over the past months,
rumours of the imminent death of the Cuban leader have been strongly
denied by the authorities. However, over the last few weeks the
expectation of his return has increased, owing to several hints by
Cuban and international officials.

A few weeks ago, Bolivian President Evo Morales announced the
possibility of that Castro would appear publicly on April 28. This
would mark the first anniversary of Bolivia's joining the Alternativa
Bolivariana para las Americas (ALBA), the Cuban and Venezuelan
alternative to the US-sponsored Free Trade Area of the Americas
(FTAA).

Cuba has not yet confirmed Castro's appearance. The island is entering
its ninth month without its socialist leader of almost half a century.

In the article, Castro warned that the plans to convert products like
corn, sugar cane or soy into ethanol for use as fuel additives could
cause serious ecological damage and would adversely affect the third
world population.

Castro referred to a meeting Bush had Monday with leading US
automotive groups, in which he urged them to double the number of
vehicles fuelled by alternative combustibles such as ethanol, in an
attempt to combat climate change and US dependence on oil.

'I think that reducing and recycling all the electricity and
combustible consuming motors is an elemental and urgent necessity for
all humanity. The tragedy does not consist in reducing the costs of
energy, but in the idea of converting food into combustibles,' Castro
said in the article.

Bush strongly promoted the production and use of biofuels in Latin
American countries in a regional tour earlier this month, with
Brazilian President Luiz Inacio Lula da Silva as his main ally. The US
and Brazil together produce around 72 per cent of the world's ethanol.

Brazilian Foreign Minister Celso Amorim said he 'respects' the Cuban
leader but defended the position of Lula's leftist government.

'I think everyone is free to express their opinion. But I do not think
that was meant against the Brazilian government or Brazil. Our opinion
on ethanol is that ethanol's success has been proved in practice,' he
said.

Amorim pointed out that Brazil produces ethanol from sugar cane, while
the United States uses less energy-efficient corn.

'Brazil is today looked at as almost an object of pilgrimage, or a
Mecca - to use two different religious examples - by all developed or
developing countries, who come to seek in ethanol and (other) biofuels
a way out of energy problems, not to remain totally dependent on oil.
Everyone knows that oil is going to run out,' the minister said.

According to the Cuban leader, even if the US dedicated its entire
corn production to the production of ethanol, there still would not be
enough ethanol for its fuel needs.

'If you apply this recipe in Third World countries, you'll see how
many people of the hungry masses of our planet will stop eating corn.
Or even worse: finance poor countries to produce ethanol from corn and
there won't even be one tree to defend humanity of the climate
change,' Castro wrote.

The Cuban president said instead of these policies, countries should
concentrate on other ways of saving energy, as Cuba does.

'All the countries in the world, poor and rich, could save millions
and millions of dollars just by changing all incandescent light bulbs
into fluorescent ones, something Cuba has been doing in all homes.
That would give climate change a break without starving the poor
masses of the world,' said Castro, who in the past few years has made
ecology one of his major interests.

(c) 2007 dpa - Deutsche Presse-Agentur

(c) Copyright 2006,2007 by monstersandcritics.com.

--

Incident at Iranian consulate in Basra

Who knows what happened. There are no reports from reporters at the scene it seems.
Iran is probably fortunate this is a UK controlled area. The US would probably invade the consulate and take the staff prisoners as at Irbil.

Britain denies troops surrounded Iranian consulate in Basra and fired shots
The Associated PressPublished: March 29, 2007




BAGHDAD: At a critical period in the crisis over Iran's seizure of 15 British sailors and marines, the Iranian consul in Basra charged that British soldiers on Thursday had surrounded his office in the southern city and fired shots into the air. Britain denied the allegation.

The Ministry of Defense in London said the shooting was an exchange of gunfire after British troops on a foot patrol near the Iranian consulate were ambushed.

But Iranian Consul-General Mohammed Ridha Nasir Baghban said British forces had engaged in a "provocative act" that "could worsen the situation of the British sailors."

"British forces should rely on wisdom and not react because of the British forces' detention. This reflects negatively on bilateral relations," Baghban told The Associated Press in a telephone interview.

Baghban claimed British forces surrounded the consulate about 10:00 a.m. and fired randomly into the air.

Thursday, March 29, 2007

Beijing Review: The US China trade surplus

This is from the blog China and Socialism. but is originally from the Beijing Review. Perhaps if China paid its workers better wages and improved working conditions its export goods would be more expensive. They would not export as much and this would help reduce the trade surplus but workers would have more spending power and hence local consumption would increase.



A Trade Off

Beijing Review vol. 50 no. 7

February 15, 2007

By ZHOU JIANXIONG

China's growing trade surplus has become a major concern for some of its major trade partners, such as the United States and the European Union. As the latest statistics from China's Customs Administration suggest, while the country's export growth rate fell 1.2 percentage points and that of imports rose 2.4 percentage points, the total surplus grew $75.59 billion last year to hit a record high of $177.47 billion. This proves to be a direct cause of friction between China and these trade partners. By the third quarter of last year, 70 cases of antidumping and countervailing investigations had been launched against China, making it the world's primary target of trade punitive measures. In addition, this trade surplus has brought about overheated investment in the wake of huge capital deposits building up in the banking sector, a phenomenon the Chinese central authorities have vigorously sought to control in recent years.

Many Chinese scholars and trade officials have attributed the trade surplus to the massive transfer of global manufacturing industries to China, which has boosted its export potentials, and led to an overcapacity that curbs demand for more imports. Others believe that a stronger global demand for Chinese processed goods may be the cause. This is substantiated by figures from the Ministry of Commerce showing that the trade surplus from processed products has been greater than that of general trade over the past six years. A higher savings ratio is also held accountable for the trade surplus, as it gives rise to an accelerating pace of investment as well as inadequate domestic consumption.

Whatever the causes, this trade surplus remains and is still rising, and given its status in the globalization process, cheap labor and other resources, and current stage of social development, China is likely to maintain an overall surplus in foreign trade over a relatively long-term period.

This, however, does not mean that the Chinese Government is taking an indifferent attitude toward the issue. On the contrary, various measures have been adopted recently to curb the rising surplus, including setting up a managed floating exchange rate system, lowering the rate of export rebate, and concluding of procurement contracts worth billions of dollars abroad. Chinese leaders have reiterated on many occasions that China has no intention of pursuing a huge trade surplus with any other countries, and the Minister of Commerce Bo Xilai has declared the reduction of trade surplus one of his top priorities for 2007. Conceivably, a series of new policy readjustments will be made to attain the goal in the foreseeable future, ranging from a more liberalized floating exchange rate system, replacing export incentives with new policies that encourage import and investment overseas, to optimizing the lineup of export commodities and taking fresh steps to stimulate domestic consumption.

Some Western observers have pinned their hopes on the appreciation of the Chinese yuan, assuming that a higher exchange rate of renminbi will be a miraculous cure to easing the trade surplus. This is only correct on paper, for China's trade surplus does not originate from an imbalance of international trade, but is a result of the changing setup of global manufacturing activities and international division of labor and market. Under such circumstances, China really needs outside help from some of its trade partners to cut its trade surplus, such as lifting restrictions on China's purchase of hi-tech products and clearing the barriers to Chinese business investment abroad.

Tension between Britain and Iran increases

As the article mentions many in the UK media do not think that Blair has heightened the confrontation enough. If the US had been involved the situation could have been out of control from the start. Perhaps that is what the US hoped for. Again as the article mentions the US would fire. You have a large US and UK fleet in war game exercises right near Iraqi waters, an invitation for an incident real or imagined.
Although Iran claims the detention has nothing to do with the US capture or Iranians in Irbil from a quasi consulate it would seem natural to take it as such.


Britain heightens confrontation with Iran over detained sailors
Fri, 2007-03-30 01:50
By Peter Symonds – World Socialist Web Site

The Blair government, backed by the Bush administration, yesterday stepped up diplomatic pressure for the release of 15 British sailors and marines detained by the Iranian Revolutionary Guards (IRG) last Friday. In an already tense situation in the Persian Gulf, US aircraft carrier battle groups have held a major military exercise over the past two days, while British ministers in London called for Iran to be further diplomatically isolated.

In a statement to parliament, Prime Minister Tony Blair condemned Iran’s detention of the British naval personnel as “completely unacceptable, wrong and illegal”. He warned: “It is now time to ratchet up international and diplomatic pressure in order to make sure that the Iranian government understands their total isolation on this issue.”

British Foreign Secretary Margaret Beckett announced that Britain had frozen bilateral talks with Iran on all other issues until the sailors were returned. The Foreign Office denounced footage shown on Iranian television of some of the detainees as “completely unacceptable”. During the TV segment, female sailor Faye Turney acknowledged that the British boats had “trespassed” into Iranian waters and said the detainees were being well-treated.

Vice Admiral Charles Style told a press conference that Britain “unambiguously contests” Iranian assertions that the sailors were inside Iranian waters. He produced charts, photographs and previously undisclosed navigational coordinates, purportedly showing that the sailors were about 3 kilometres inside Iraqi waters. He claimed that Iran had produced two conflicting sets of coordinates during secret diplomatic discussions.

British “proof” that its sailors were “ambushed” inside Iraqi territorial waters cannot be taken at face value any more than Iran’s “substantial evidence” to the contrary. The area of the Persian Gulf near the Shatt al-Arab waterway—the confluence of the Tigris and Euphrates rivers—has long been the subject of dispute between Iraq and Iran. “If this happened south of where the river boundary ends, knowing the coordinates wouldn’t necessarily help us,” Robert Schofield of King’s College, an expert on the waterway, explained to Associated Press.

More significant than the dispute over naval co-ordinates is the political context. The incident took place as the US, with British backing, intensified the pressure on Iran over its nuclear programs, its alleged supply of weapons to anti-occupation insurgents in Iraq and claims that Tehran is supporting “terrorism” throughout the Middle East. The US navy has doubled the size of its fleet, stationing two aircraft carrier groups in the area for the first time since the 2003 invasion of Iraq. The Pentagon has also sent Patriot anti-missile batteries to the Gulf States and mine-sweepers to the Persian Gulf.

The British navy too has doubled its presence in the Gulf since last October. The extra warships included the HMS Cornwall, which dispatched the two light craft seized last Friday by Iranian forces. The military build up is clearly aimed against Iran. Captain Bradley Johanson, commander of the USS John C. Stennis, told the press: “If there is a strong [American] presence, then it sends a clear message that you better be careful about trying to intimidate others. Iran has adopted a very escalatory posture with the things that they have done.” The Bush administration’s own “escalatory posture” was evident during the past two days of war games, as 15 warships and more than 100 warplanes practiced maneuvers and attacks not far from the Iranian coastline.

According to several press reports, the Pentagon may well have accelerated the planned exercise in response to the detention of the British sailors. A senior US military official in Bahrain told ABC News that the huge show of force was “a clear effort” to send a message to Iran. US naval officials said the operation was “hastily planned” after the 15 Britons were seized Friday. White House spokeswoman Dana Perino yesterday denied any connection, saying: “There is no escalation of tensions on our part.”

International investors are certainly concerned about the sharpening tensions. As Reuters noted: “US naval exercises in the Gulf have rattled global financial markets, sending oil prices higher and contributing to declines in stock prices. Markets got a jolt late on Tuesday by a rumor—which proved unfounded—of a clash between Iran and the US navy.”

The US and British naval build up in the Gulf is just one element of the US administration’s provocative stance against Iran, which included the imposition of tougher UN sanctions last Saturday. In January, President Bush declared that US forces in Iraq would “seek out and destroy” Iranian networks providing arms and other support to Shiite militias inside Iraq. On the same day, US special forces conducted an early morning raid on an Iranian diplomatic office in the northern Iraqi city of Irbil. The US military has detained five Iranian officials without charge for more than two months despite calls by the Iraqi government for their release.

The Irbil raid was a calculated US provocation which, as Washington was well aware, could produce a reaction. The British-based Telegraph confirmed this week that the CIA warned British intelligence chiefs that the arrests could result in reprisals, possibly against British troops in southern Iraq. “Although the CIA alert led to the United States raising its official security threat throughout the Middle East and elsewhere, Britain did not follow suit,” the article explained.

Several commentators have speculated that Iran may link the fate of the British sailors to the release of its officials held in Iraq—a claim that Iranian officials have denied. While the British and international media generally assume that the detention of the sailors is a calculated plot by Tehran, it cannot be ruled out that the incident was engineered in London or Washington. Veteran American journalist Seymour Hersh, among others, has alleged that US and Israeli intelligence agents are actively operating inside Iran.

The US-based Stratfor think tank, which has close links to the American intelligence and military establishment, headlined its article on the incident “Another step in the US-Iranian Covert War”. While uncertain about the motive for detaining the British sailors, the article indicated that it may be linked to Western intelligence operations inside Iran. It pointed to the alleged defection of a senior Iranian Revolutionary Guard general Ali Reza Asghari earlier this year. He is reportedly being interrogated by US intelligence, including over Tehran’s knowledge of Western agents operating inside Iran.

According to Stratfor, “With this in mind, there have been recent indications from US and Israeli intelligence sources that the British MI6 was engaged in an operation to extract one of its agents from Iran, but a leak tipped MOIS [Iranian intelligence] off to the plan. According to an unconfirmed source, the IRGC [Iranian Revolutionary Guard Corps] nabbed the British [MI6] personnel, as well as the agent, to use as a bargaining chip to secure the release of the five detained Iranians. If these negotiations go poorly for Iran, the Britons could very well be tried for espionage.”

Whatever the exact reasons for the seizure of the British sailors, the chief responsibility for their predicament rests with the Blair government and the Bush administration. The only reason for the presence of the British warships in waters disputed by Iraq and Iran is the illegal US-led invasion and occupation of Iraq in 2003. Far from pulling out of Iraq, the White House is now menacing neighbouring Iran as part of broader US ambitions to dominate the oil-rich region.

It is in this dangerous political hothouse that a small incident involving the detention of British sailors can spiral out of control. Several right-wing British newspapers have already denounced the Blair government for failing to take tougher action against Iran. An editorial in the Times on Tuesday condemned “the pusillanimous timidity of British officials and politicians, who have failed disgracefully to confront Iran with the ultimatum this flagrant aggression demands”.

The Telegraph argued for intensified sanctions against Iran unless “it stops lying to us about the details of its nuclear program, to stop arming and directing insurgents in southern Iraq, and to stop violating Iraqi territorial waters.... We wait anxiously to see whether this weakened and discredited Prime Minister has the necessary spine to do what is required, or whether Britain will persist in presenting its weakest aspect to a potential enemy.”

To date, the Bush administration has kept a relatively low profile over the incident. However, Lieutenant Commander Erik Horner, second-in command of the USS Underwood in the Gulf, left no doubt about US reaction to a similar situation involving American sailors. “The unique US navy rules of engagement say we not only have the right to self-defence, but also an obligation to self-defence,” he said. Asked if his men would have fired on Iranian forces, he bluntly declared: “Agreed. Yes”.

In other words, the Bush administration has stationed a huge US naval presence in the Persian Gulf with rules of engagement that oblige US forces to respond to any incident—actual or imagined. Any clash could of course become the pretext for unleashing a devastating assault on Iran using the overwhelming US firepower now in place.

- World Socialist Web Site -

Amy Goodman on David Hicks Trial

I wonder if her optimism about Guantanamo closing is justified. Of course even if it closes the US will still lease it in perpetuity and not return it to Cuba. Cuba does not recognise the lease and refuses to cash the yearly payments but fat lot of good that does!

American Kangaroo Court Claims Its First Victim

By Amy Goodman

03/28/07 "ICH " -- -- It is appropriate that a person from Australia, home of the kangaroo, should be the first one dragged before the kangaroo court at the U.S. naval base at Guantanamo Bay. David Hicks, imprisoned there for more than five years, pleaded guilty Monday to providing material support for terrorism.

The case of Hicks offers us a glimpse into the Kafkaesque netherworld of detentions, kidnappings, torture and show trials that is now, internationally, the shameful signature of the Bush administration. Hicks’ passage through this sham process affords us all an opportunity to demand the closure of Guantanamo and an end to these heinous policies. Conditions may soon exist to shutter the prison, with George Bush’s lame-duck status, the Democratic takeover of Congress, the possible departure of Guantanamo’s arch-defender and architect, Attorney General Alberto Gonzales, and, if recent reports are true, a desire to close the prison on the part of Secretary of Defense Robert Gates and Secretary of State Condoleezza Rice. These bogus military commission trials amplify global contempt for the Guantanamo prison.

The Pentagon claims that Hicks was in Afghanistan fighting against the United States, then was apprehended by the Northern Alliance in late 2001 while fleeing to Pakistan. After transfer to U.S. military control, he was moved around various detention facilities and, he says, brutally beaten and sodomized. By January 2002 he was in Guantanamo. He was subjected to repeated interrogations. He witnessed other prisoners being beaten and terrorized with dogs. He was at times kept in total darkness, at times in continual bright light (he has grown his hair to chest length so he can cover his eyes to allow him to sleep). He had no access to a lawyer for more than a year or knowledge of the charges against him. Others, those lucky enough to have lawyers or to have actually gotten out, tell similar tales of continual cold, of desecration of the Quran and of sexual humiliation designed specifically to torture Muslim men.

During his five years of detention, people fought for Hicks. His father, Terry Hicks, traveled to the U.S. He donned an orange jumpsuit, like the one his son was forced to wear, and stood in a 6-foot-by-8-foot cage on Broadway in New York while fielding questions from the press.

Even the U.S. Supreme Court, the body that appointed Bush president in 2000, agreed that the prisoners must have some access to habeas corpus, the right to challenge one’s imprisonment. This central tenet of Western law, established in the Magna Carta in 1215, has been thrown out the window, along with the Geneva Conventions, by Bush, Dick Cheney, Donald Rumsfeld, Gonzales and others.

Guantanamo has sparked one of the United States’ major growth industries: protesting against Guantanamo. From campuses to churches, the anger has driven regular citizens to action. Cindy Sheehan and members of the Catholic Worker Movement went to Cuba and marched overland to Guantanamo to challenge the illegitimate prison and its jailers in person.

Even in Hicks’ brief moment in the controversial “trial,” the government did what it could to strip him of the few rights it claims he has. The presiding military judge, Marine Col. Ralph Kohlmann, dismissed his civilian lawyer, Joshua Dratel, and a Navy reservist attorney, Rebecca Snyder, who was assisting Hicks’ government-appointed attorney. Hicks was stunned, and at first refused to plead. Hours later, after the trial was reconvened, he pleaded guilty to his one remaining charge. Having no hope for a fair trial, he reportedly believed that pleading guilty would allow him to serve his sentence in Australia—his only hope of escaping Guantanamo.

There are still more than 380 prisoners at Guantanamo. Almost none have been charged. Those ultimately charged with murder could be sentenced to death by the military commission. The decider of the death penalty after appeals are exhausted is none other than George Bush, who as governor of Texas oversaw the most active death chamber in the United States. Back then his lawyer was Alberto Gonzales.

The U.S. attorney scandal is threatening to take down Gonzales. But it is his condoning of torture from Guantanamo to Abu Ghraib that should seal his fate.

The grim Guantanamo experiment is reaching its climax. The house of cards that has been erected to support this immoral, criminal enterprise is poised to collapse. Call, shout, sit down, march, donate, write, protest … demand that Guantanamo be closed.

Amy Goodman is the host of “Democracy Now!,” a daily international TV/radio news hour airing on 500 stations in North America.

© 2007 Amy Goodman

Taking the war on terror on line.

This is from USA today. The comments on the article don't even bring up the legality of attacking terrorist websites nor do they show any inkling of the complexity of the issue. What are terrorist websites? Who decides which should be attacked and on what grounds. Almost no comments address the valuable intelligence information the sites provide--probably the main reason they are not already attacked.
Among those listed as terrorist sites by the State dept are: Hamas, Hezbollah, but also several Jewish extremist groups. The latter are no doubt regarded as legitimate in Israel and Hamas in Palestine and elsewhere and also Hezbollah. If terrorists attack websites it is cyberterror but if the US intelligence does it I guess it is supposed to be OK.
Actually hackers have already attacked some terrorist websites but attacks are common on all sorts of sites even Yahoo. Who knows for what reason. A US based Marxist archives suffered an attack from China! I guess the Chinese govt. fears Chinese learning about Marxism!
Any attacks by intelligence services is liable to "creep" that is extend the range of attacks and perhaps eventually to any radical criticque of government policy.


Military beefs up Internet arsenal
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By Jim Michaels, USA TODAY
WASHINGTON — The U.S. military is quietly expanding capabilities to attack terrorist computer networks, including websites that glorify insurgent attacks on U.S. forces in Iraq, military officials and experts say.
The move comes as al-Qaeda and other groups fighting in Iraq and elsewhere have expanded their activities on the Internet and increased the sophistication and volume of their videos and messages. Much of the material is designed to raise money and recruit fighters for Iraq.

"You should not let them operate uncontested" on the Internet and elsewhere in cyberspace, said Marine Brig. Gen. John Davis, who heads a military command located at the National Security Agency. The command was established to develop ways to attack computer networks.

Davis and other officials declined to say whether the military has actually attacked any networks, which would require presidential authorization. The techniques are highly classified.

Pentagon contract documents show the military asks companies to develop a "full spectrum … of computer network attack techniques." Run by the Air Force Research Laboratory, this program aims to spend $40 million over four years, documents show.

FIND MORE STORIES IN: Iraq | Afghanistan | US military | BAGRAM | Intelcenter | Sahab | Jim Michaels
The growth in offensive capabilities signals a shift in military thinking from just monitoring terrorist websites for intelligence to attacking those sites.

"The offensive is increasingly on leaders' minds," said John Arquilla, a professor at the Naval Postgraduate School who also works for the Defense Department on cyberwar issues.

Some officials say cyberattacks can result in losing critical intelligence.

"You always have the built-in tension between the operator who wants to destroy the target and the intelligence officer who wants to use the target to gain more information," said Lani Kass, director of the Air Force's cyberspace task force.

"Our opponents do a heck of a lot more than just watch us in cyberspace," Davis said. "They are acting in cyberspace. We need to develop options so that we can … dominate cyberspace."

Cyberattacks can take different forms, including eliminating terrorist websites and creating doubts among insurgents about their networks' security, said Arquilla, who favors an offensive approach he calls a "virtual scorched-earth policy."

Armed groups in Iraq videotape nearly all of their attacks on U.S. forces to help magnify their impact.

"Everything they do in Iraq and Afghanistan is geared toward propaganda," said Rep. Jim Saxton, R-N.J., who's on the House Armed Services Committee.

The videos and messages are "getting more and more professional," said Andretta Summerville of iDefense, a private contractor that monitors terrorist activity on the Internet.

Some sites find recruits and push "them toward a pipeline that ends in suicide attacks," said Lt. Col. Matthew McLaughlin, a spokesman for Central Command, which runs the wars in Iraq and Afghanistan.

Attacking websites may have limited value, said Ben Venzke of IntelCenter, a contractor that monitors terrorist websites and Internet forums. "The problem is the nature of the Internet itself," he said. "It can always come back up in 10 seconds."


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Wednesday, March 28, 2007

Iranian TV broadcast video of sailors and marines.

The US and UK and wester media regularly showed pics of detained Iraqis and of course they showed photos of Hussein in degrading situations. I guess the lady was glad for a smoke break! I wonder if the navy instructs them to say what the captors want when captured? I expect the stories will change when they are returned as I am sure they will be eventually.


Iranian TV broadcasts video of detained British sailors, marines

Nasser Karimi
Canadian Press


Wednesday, March 28, 2007



CREDIT:
Faye Turney, 26, the only woman amongst the British navy personnel seized by Iran, appears in this image made from television, in footage broadcast by Al-Alam, an Arabic-language, Iranian state-run television station, in Tehran, Wednesday March 28, 2007. Wearing a white tunic and with a black headscarf draped loosely over her hair, Turney said "Obviously we trespassed". (AP/APTN/Courtesy of Al-Alam)

TEHRAN, Iran (AP) - Iranian state TV showed video Wednesday of the 15 British sailors and marines who were seized last week, including a female captive who wore a white tunic and black head scarf, and said the British boats "had trespassed" into Iranian waters.

The British government protested Iran's broadcast of the captured crew as "completely unacceptable." The British military had earlier released what it called proof that its boats were in the territorial waters of Iraq - not Iran - when they were seized.

"Obviously we trespassed into their waters," British sailor Faye Turney said on the video broadcast by Al-Alam, an Arabic-language, Iranian state-run television station that is carried across the Middle East.

"They were very friendly and very hospitable, very thoughtful, nice people. They explained to us why we've been arrested, there was no harm, no aggression," she said.

Turney, 26, was shown eating with sailors and marines. At another point, she was seen sitting in a room with floral curtains, smoking a cigarette.

"My name is leading sailman Faye Turney. I come from England. I have served in Foxtrot 99. I've been in the navy for nine years," she said.

Turney was the only person to be shown speaking in the video.

It also showed what appeared to be a handwritten letter from Turney to her family. The letter said, in part, "I have written a letter to the Iranian people to apologize for us entering their waters."

The video showed a brief scene of what appeared to be the British crew sitting in an Iranian boat in open waters immediately after their capture.

Before the video was broadcast, a spokesman for British Prime Minister Tony Blair said any showing of British personnel on TV would be a breach of the Geneva Conventions.

"It's completely unacceptable for these pictures to be shown on television," the British Foreign Office said in a statement after the broadcast. "There is no doubt our personnel were seized in Iraqi territorial waters."

The statement also demanded that British diplomats be given immediate access to them as a "prelude" to their release.

Britain earlier said it was freezing most contacts with Iran until it freed all the crew members.

Britain's military said its vessels were 1.7 nautical miles - about three kilometres - inside Iraqi waters when Iran seized the sailors and marines on Friday after they completed a search of a civilian vessel in the Iraqi part of the Shatt al-Arab waterway. The border between Iran and Iraq has been disputed for centuries.

Vice Admiral Charles Style told reporters that the Iranians had provided a position on Sunday - a location that he said was in Iraqi waters. By Tuesday, Iranian officials had given a revised position three km east, placing the British inside Iranian waters - a claim he said was not verified by global positioning system co-ordinates.

Iranian Foreign Minister Manouchehr Mottaki told The Associated Press in Riyadh, Saudi Arabia, that Turney would be released Wednesday or Thursday, and he suggested that the British vessels' alleged entry into Iranian waters may have been a mistake.


"This is a violation that just happened. It could be natural. They did not resist," he told AP.

"Today or tomorrow, the lady will be released," Mottaki said Wednesday on the sidelines of an Arab summit in the Saudi capital, referring to Turney, the only woman among the 15.

The Iranian Embassy in London also said: "We are confident that Iranian and British governments are capable of resolving this security case through their close contacts and co-operation."


© The Canadian Press 2007

Pepe Escobar on the Capture of UK sailors

It seems that this could be a very dangerous game for Iran to play. It is true though that there has been almost no western criticism of the US nabbing Iranians in a quasi consular facility in Iraq and there has been no movement to release them. This also was a dangerous game that almost led to a shootout at Arbil (or Erbil?) airport with Kurds.

British pawns in an Iranian game

By Pepe Escobar

03/28/07 "Asia Times" - -- - The 15 British sailors and marines who were patrolling the Shatt-al-Arab - or Arvand Roud, as it is known in Iran - were not exactly indulging in a little bit of Rod Stewart ("I am sailing/stormy waters/to be with you/to be free"). They had their guns loaded. These would certainly have been fired against Iraqi smugglers - or, better yet, the Iraqi resistance, Sunni or Shi'ite. But suddenly the British were confronted not by Iraqi but by Iranian gunboats.

This correspondent has been to the Shatt-al-Arab. It's a busy and tricky waterway, to say the least. Iraqi fishing boats share the waters with Iranian patrol boats. From the Iraqi shore one can see the Iranian shore, flags aflutter. These remain extremely disputed waters. In 1975, a treaty was signed in Algiers between the shah of Iran and Saddam Hussein. The center of the river was supposed to be the border. Then Saddam invaded Iran in 1980. After the Iran-Iraq War that this sparked ended in 1988, and even after both Gulf wars, things remain perilously inconclusive: a new treaty still has not been signed.

The British are adamant that the sailors were in Iraqi waters checking for cars, not weapons, being smuggled. It's almost laughable that the Royal Navy should be reduced to finding dangerous Toyotas in the Persian Gulf. Some reports from Tehran claim the British were actually checking Iranian military preparations ahead of a possible confrontation with the US.

Western corporate media overwhelmingly take for granted that the British were in Iraqi or "international" waters (wrong: these are disputed Iran/Iraq waters). Tehran has accused the British of "blatant aggression" and reminded world public opinion "this is not the first time that Britain commits such illegal acts" (which is true). Tehran diplomats later suggested that the British might be charged with espionage (which is actually the case in Khuzestan province in Iran, conducted by US Special Forces).

Chess matters
The coverage of the sensitive Shatt-al-Arab incident in the Iranian press was quite a smash: initially there was none. Everything was closed for Nowrouz - the one-week Iranian New Year holiday. But this has not prevented radicalization.

Hardliners like the Republican Guards and the Basiji - Iran's volunteer Islamist militia - asked the government of President Mahmud Ahmadinejad not to release the sailors until the five Iranian diplomats arrested by the US in Iraq were freed. They also demanded that the new United Nations sanctions imposed on Iran over its nuclear program be scrapped. And all this was under the watchful eyes (and ears) of the US Navy's 5th Fleet in Bahrain.

Much of the Western press assumed Iran wanted Western hostages to exchange for the five Iranian diplomats, without ever questioning the Pentagon's illegal capture of the Iranians in the first place. Then the plot was amplified as an Ahmadinejad diversion tactic as the UN Security Council worked out a new resolution for more sanctions on Iran and as Russia told Tehran to come up with the outstanding money or the Bushehr nuclear plant it is building in Iran would not be finished.

The Shatt-al-Arab incident has been linked to an Iranian response to Washington's accusations that Tehran is helping Shi'ite militias with funds, weapons and training in Iraq. For the record, Iran's ambassador in Iraq, Hassan Kazemi Qomi, said there is absolutely no connection: "They entered Iranian territorial waters and were arrested. It has nothing to do with other issues." Not surprisingly, Iraqi Foreign Minister Hoshyar Zebari had to take the side of the occupiers who installed him in his post: he said the British were in Iraq invited by the Iraqi government and were operating in Iraqi waters.

This doesn't stop people, especially in the Islamic world, questioning what business the British, as an occupation force, had in the Shatt-al-Arab to start with.

From the depths of their abysmal, recent historical experience, even the Arab world - which is not so fond of Persians - sees the US-orchestrated UN sanctions on Iran for what they are: the West, once again, trying to smash an independent nation daring to have its shot at more influence in the Middle East. More sanctions will be useless as China and India will continue to do serious business with Iran.

Tactically, as a backgammon or, better yet, chess move - in which Iranians excel - the Shatt-al-Arab incident may be much more clever than it appears. Oil is establishing itself well above US$60 a barrel as a result of the incident, and that's good for Iran. It's true that from London's point of view, the incident could have been arranged as a provocation, part of a mischievous plan to escalate the conflict with Iran and turn Western and possibly world public opinion against the regime.

But from Tehran's point of view, for all purposes British Prime Minister Tony Blair is a soft target. The episode has the potential to paralyze both President George W Bush and Blair. Neither can use the incident to start a war with Iran, although Blair has warned that his government is prepared to move to "a different phase" if Iran does not quickly release the sailors.

If the Tehran leadership decides to drag out the proceedings, the Shi'ites in southern Iraq, already exasperated by the British (as they were in the 1920s), may take the hint and accelerate a confrontation. Strands of the Shi'ite resistance may start merging with strands of the Sunni resistance (that's what Shi'ite cleric Muqtada al-Sadr has wanted all along). And this would prove once again that you don't need nuclear weapons when you excel at playing chess.

Pepe Escobar is the author of Globalistan: How the Globalized World is Dissolving into Liquid War (Nimble Books, 2007). He may be reached at pepeasia@yahoo.com.

Juan Cole on McCain

This is just a part of a much longer article at Cole's website. Cole has a good analysis of the positive spin that McCain has been putting on events in Iraq.

Wednesday, March 28, 2007

McCain Checks into Cloud Cuckooland
116 Iraqis Killed in Day of Carnage

Senator John McCain has contracted Rumsfeld's Disease. This malady consists of a combination of bad temper, misuse of language to obfuscate reality, and a Panglossian optimism in the face of stubborn, sanguinary facts on the ground.

McCain, for instance, hailed that deployment of Iraqi brigades "at or above 75% of their programmed strength"! Put another way, a quarter of the Iraqi troops ordered to Baghdad technically speaking went AWOL instead! If a quarter of all US troops ordered to Iraq fled to Canada or refused to leave their home base, that would be a catastrophe. But McCain manages to deploy weasel words to make this incredible statistic seem a positive thing. Moreover, even his basic facts may be wrong. Last I knew, one of the Iraqi brigades ordered to Baghdad only came at half strength

Russia Criticizes US Global Policy

Both China and Russia will resist US attempts to impose even tougher conditions on Iran although both are also upset by Iran's refusal to stop enrichment. Iran and Russia are having troubles with respect to building of the new Iranian nuclear facility. However the sale of defence missiles to Iran shows Russia is willing to help Iran fend off a US or others who might attack.


Russia slams U.S. global policy
VLADIMIR ISACHENKOV
Associated Press
MOSCOW - Russia's Foreign Ministry on Tuesday criticized the United States for what it called over-reliance on force and warned Washington against military action against Iran.

But in a major review of foreign policy priorities, the ministry said Russia was ready to cooperate to end global crises if Washington treats it as an equal partner.

The statement reflects Russia's growing confidence and economic clout, and appears to be a signal to Washington that, while the two nations can work together, Russia will not always follow the U.S. lead. It also plays to national pride in advance of parliamentary and presidential elections.

Russia criticized what it called "the creeping American strategy of dragging the global community into a large-scale crisis around Iran," saying that Iran helps maintain stability in Afghanistan and Central Asia.

At the same time, the ministry's paper assailed Iran for its "unconstructive" stance, reflecting growing Kremlin irritation with its ally's refusal to freeze uranium enrichment, as the U.N. demands.

Russia and China, both permanent U.N. Security Council members with significant trade ties with Iran, have opposed U.S. efforts to impose harsh sanctions against the country. But years of growing international mistrust over Iran's ultimate goals led to initial U.N. sanctions in December and to tougher penalties imposed last Saturday.

Iran has remained defiant, rejecting the latest sanctions and announcing a partial suspension of cooperation with the International Atomic Energy Agency, the U.N. nuclear watchdog. It also accused Russia of caving in to Western pressure.

Russia's Foreign Minister Sergey Lavrov said Tuesday that the latest set of sanctions was a "call for the resumption of talks rather than an instrument of punishment" - a statement apparently aimed both at soothing Iran and assuring Russians public that their government was not betraying its partner.

The ministry's paper emphasized the need to conduct a "balanced course on Iran, protecting our national interests in that country while preventing violations of the nuclear non-proliferation regime."

The ministry also hinted that Russia would tie weapons sales to Iran to its cooperation on the enrichment program. "Military-technical ties with Iran must develop on the basis of strict compliance with Russia's international obligations while taking into account developments related to the Iranian nuclear program," it said.

Russia recently delivered 29 Tor M-1 air defense missile systems to Iran despite strong U.S. complaints.

The strategy paper said that arms exports would remain an important component of Russia's foreign policy.