Current Events

Iran vs. Israel–“The Day of Reckoning Is Near”

On September 27, The Daily News published the following opinion by Mr. Baer, a former CIA case officer. Mr. Baer is the author of the just-released book, “The Devil We Know: Dealing with the New Iranian Superpower”:

“Are we going to have an October surprise, an attack on Iran by either the Bush administration or by Israel to stop the regime from becoming a nuclear power? It could happen – and alter the dynamics of the presidential race in the blink of an eye – but only if Israel pulls the trigger. Don’t expect the United States to drop bombs anytime soon. The reason: Iran has us over a barrel.

“According to Britain’s Guardian newspaper, Bush earlier this year nixed an Israeli plan to attack Iran’s nuclear facilities. Reportedly, the President said no because we couldn’t afford Iranian retaliation against our troops in Iraq and Afghanistan or Iran closing down Persian Gulf shipping… Iranian Silkworm missiles could close down Gulf oil exports in a matter of minutes, taking about 17 million barrels a day of oil off world markets. Americans could suddenly be looking at the prospect of $10-$12 for a gallon of gas… An angered Iran could punish us with thousands of extra casualties in Iraq and Afghanistan, as Iranian-trained, armed and funded fighters flow back into the war zones with a vengeance…

“But none of this changes the fact that Israel – on its own, without U.S. complicity – is moving closer to a decision to attack Iran, almost by the day. What many Americans miss is that Iran is a threat to Israel’s very existence, not an imagined danger used by politicians for political advantage. Every Israeli city is within range of Iranian/Hezbollah rockets. To make matters worse, since the July 2006 34-day war, Hezbollah may have as much as trebled the number of rockets it has targeted on Israel.

“Meantime, Hezbollah has become the de facto state in Lebanon. And lest we forget, Israel lost that July 2006 war to Hezbollah, pulling its troops out of Lebanon without having obtained a single objective. In other words, Israel no longer has its deterrence credibility, the fear that it can decisively retaliate against its enemies…

“Israel has to calculate that American influence around the world is on the wane. Americans are tired of the wars in Iraq and Afghanistan. And now, after the war in Georgia, Russia is opening up its flow of weapons to Iran… [Israel] is starting to believe that it has no choice but to change its fortunes with arms… The day of reckoning is near.”

New Toothless Security Council Resolution Against Iran

AFP reported on September 27:

“The UN Security Council on Saturday unanimously adopted a resolution again urging Iran to suspend its sensitive nuclear fuel work but offering no new sanctions and merely reaffirming existing ones…

“US Ambassador to the UN Zalmay Khalilzad immediately welcomed the adoption of the resolution by all 15 council members… Russian Ambassador Vitaly Churkin, who Friday ruled out any new sanctions for now, told reporters after the vote: ‘[The] added value of this resolution is in channelling the thinking of everybody in the direction of political rather than military enterprise.’

“Western diplomats had expressed fears that a lack of action by the Security Council might have led Israel to carry out its threat to resort to military action to ensure that its mortal enemy, Iran, does not acquire nuclear weapons… The United States and its European allies had pushed for new, tougher sanctions against Tehran but ran into resistance from Russia and China.”

Iran’s New Gas Pipeline with Europe

The EUObserver wrote on September 26:

“Iran oil minister Akbar Torkan has said Tehran wants to build a $4 billion, 37 billion cubic metre a year gas pipeline to the EU, newswires report. The ‘Pars Pipe’ would bypass Russia and be an alternative to the EU’s favoured Nabucco.”

Next–Conflict over Azerbaijan, Nagorno-Karabakh?

The EUObserver reported on September 26:

“Azerbaijan is sticking to plans to reduce oil exports to the EU and increase shipments to Russia and Iran… In the immediate aftermath of the Georgian crisis Azerbaijan decided as a temporary move to reduce shipments through Europe’s only direct import route from the energy-rich Caspian Sea… and to increase exports to Russia… Unlike Russia-critical Ukraine, Azerbaijan has remained silent over Russia’s invasion of Georgia despite disruptions caused to its oil business.

“With presidential elections coming up on 15 October, Azerbaijan’s head of state, Ilham Aliev, is trying to strike a balance between a re-assertive Russia and the West, especially since his country also has a frozen conflict on its own territory. The majority-Armenian populated region of Nagorno-Karabakh split from Azerbaijan in a civil war in 1991 and remains under Armenian occupation, with Russia and Armenia enjoying close ties. An alleged Armenian-Russian link during the Georgian conflict was highlighted by the chairperson of the European Parliament’s foreign affairs committee, Jacek Saryusz-Wolski, who asked EU’s foreign policy chief Javier Solana in a public hearing on 10 September if Russian bases in Armenia were used to launch missiles at Georgia during the conflict…

“During a visit in Baku last week, the United States’ chief mediator in the region, Matthew Bryza, said it was more important than ever to resolve the dispute after the Russia-Georgia war. ‘The recent events in Georgia underscore the importance of a timely resolution of the Nagorno-Karabakh conflict,’ he said, adding that the US strongly support[s] the sovereignty and territorial integrity of Azerbaijan.”

Far-Right’s Strong Gains in Austrian Elections

AFP reported on September 28:

“Austria’s far-right notched up the strongest gains in snap parliamentary elections Sunday, while the two main parties, the Social Democrat SPOe and centre-right OeVP, slumped to historic lows.

“The SPOe and the OeVP, whose ‘grand’ coalition held power for just 18 months, held on to the first and second places again this time round, according to preliminary estimates… But voter dissatisfaction with the left-right coalition, which collapsed in bitter disarray three months ago, meant the two parties lost valuable votes to the far-right Freedom Party (FPOe) and Alliance for the Future of Austria (BZOe).

“According to an estimate…, the Social Democrat SPOe scored 29.2 percent of the vote and the centre-right People’s Party or OeVP came second with 24.9 percent. The far-right Freedom Party or FPOe saw its score jump by 7.3 percentage points to 18.3 percent. Joerg Haider’s BZOe nearly trebled its showing at 11.5 percent, while the environmentalist Greens came fifth with 9.8 percent… Final results will be published on October 6, after some 586,700 absentee ballots — almost ten percent of the electorate — have been tallied.”

The Associated Press added on September 28:

“At this point, the two right-wing parties were not expected to join forces due to resistance from Freedom Party chief Heinz-Christian Strache. However, Joerg Haider, leader of the Alliance for the Future of Austria, has suggested it is something worth thinking about. And Strache on Sunday suggested he was interested in becoming chancellor.”

Austria’s Far Right

Der Spiegel Online wrote the following on September 29:
“… But will Strache be the kingmaker? As a young man, Strache played paramilitary games with known neo-Nazis in the forests of Carinthia, and he has been forced to admit having had close ties with the now-outlawed right-wing extremist ‘Viking Youth’ group. But now he plays the part of a Mr. Goody-Two-Shoes and demands that he be given an important role in the future government, and he even drops rather big hints that he has his eyes set on becoming chancellor. Newcomers, immigrants and asylum seekers — they will all have to brace themselves for what lies ahead, as will the political system in the Alpine state. That’s because Strache isn’t the type of person concerned with making peace; he’s much too interested in using some heavy rhetorical baiting… And he loves to speak out against foreigners…

“Strache is in no way the only one who has benefited from the Austrians’ frustration at the political status quo. His former mentor, Jörg Haider and his right-wing Alliance for Austria’s Future (BZÖ) party were able to pull in 11 percent of the vote — or almost three times as much as they did in the last elections… Haider’s success was the biggest surprise of the election.

“Though they were once close, Haider and Strache have now completely fallen out. Strache accuses his former mentor of having betrayed the FPÖ. Following a disagreement, Haider abandoned the FPÖ in 2005 and founded the BZÖ. But political observers in Vienna are already asking themselves what would happen if the two rivals were to patch up their differences and join forces into an alliance… If they did so, the whole political power structure in Austria would be thrown into complete confusion.

“Together, the FPÖ and the BZÖ would have 29 percent of the vote, which would put them at eye level with the SPÖ. Even if the far right is fragmented into two parties, it is still stronger than it ever has been. Indeed, it is in an even stronger position than it was in 1999, when Haider made the FPÖ the second-strongest party with 27 percent of the vote…

“After the 1999 election, then party chairman Wolfgang Schüssel scored an historic coup: By pulling Haider’s FPÖ, which secured the third most votes, into the government, he not only snapped the chancellery away from the Social Democrats, but also ended a decades-long tradition of joint Christian- and Social Democratic rule. For years, Schüssel gloated about the fact that — by including the right-wing populist FPÖ into his government as well as its leading figure Haider — he had helped to eliminate the far-right’s mystique. But Sunday’s election result has proved otherwise.”

Rightwing Populism on the Rise in Europe

The Financial Times wrote on September 30:

“In 2000, Austria was shunned by most of its European Union partners after Wolfgang Schüssel invited the far right Freedom party into a coalition with his conservative People’s party. Eight years later, the possible return to government of the extreme right is high on the political agenda again after two far right parties scored massive gains in Sunday’s general election. But even if the far right re-enters the halls of power, political pundits expressed confidence yesterday that there would be no repetition of Austria’s isolation.

“That is largely because of a shift in Europe’s political landscape since Vienna was ostracised. Rightwing populism has gained ground amid fears of unfettered immigration and anxieties about crime and social security abuses by foreigners… another grand coalition [in Austria] could ultimately benefit the far right. Some Austrian analysts believe that Mr Haider and Mr Strache might one day even feel bold enough to form a government themselves…”

Bavaria’s Disastrous Elections–Are Big Changes Coming in Germany?

Der Spiegel Online wrote on September 29:

“Bavaria’s Christian Social Union has lost its absolute majority after suffering its worst election result in over half a century. German commentators warn that the consequences of the CSU decline could be felt far away in Berlin… The sister party to Chancellor Angela Merkel’s Christian Democrats may have ended up with 43.4 percent of the vote but in Bavaria that is the equivalent to a political debacle. The CSU has grown used to an absolute majority in state elections and a monopoly on power in Bavaria, German’s largest and richest state. Only five years ago the party experienced its second highest vote of 60.7 percent.

“Following the ousting of long-time leader Edmund Stoiber last year a new leadership duo was put in place but neither Governor Günther Beckstein nor CSU party head Erwin Huber have shone and supporters have defected to both the pro-business Free Democrats and the conservative protest group the Freie Wähler (free voters.) Now the CSU faces the novel task of having to court potential coalition partners.

“The left, however, failed to capitalize significantly on the Bavarians’ dissatisfaction with the CSU. The Social Democratic Party (SPD), despite a recent change of leadership in Berlin, saw its vote actually fall below its abysmal 2003 tally while the Left Party didn’t quite make it past the 5 percent hurdle to secure seats in parliament…

“The center-left Süddeutsche Zeitung, which is based in the Bavarian capital Munich, writes:

“‘The unthinkable has happened: The CSU has not only lost its absolute majority, but it can no longer govern Bavaria without a coalition partner…’

The conservative Die Welt writes:

“…’The CSU disaster is something of a mystery. Five years ago Stoiber achieved 60.7 percent, the second best state election result in the party’s history. However, soon afterwards the people and the party were united in wanting rid of the governor … Stoiber was pushed out of office in a putsch — and it was done completely openly. The CSU knew that they didn’t want him anymore. But they had no idea what they wanted instead. Now they are paying the price.’…

“The financial daily Handelsblatt writes:

“Politics will be exciting over the next few months not just in Bavaria but at the federal level. The union must now show whether the disaster in Bavaria rips it out of its lethargy or if it will go on dozing. They can no longer rely on the big win in the south balancing out weak results in the north. It should now be clear … that the CDU and the CSU have not yet won the 2009 federal elections… The worse the economic problems are perceived, the less Merkel’s policy will bear up. Like Huber and Beckstein she has believed that she will be rewarded for the economic upswing. Now she will have to rush to find an alternative route to that of the two crash pilots.'”

America Tries to Threaten and Blackmail Europe

The Daily Mail wrote on September 29:
“American anti-terror chiefs are threatening to withdraw the Visa Waiver Scheme for British and European tourists unless the EU signs an agreement on the new measures before Christmas. Under the US Homeland Security scheme, all travellers – including children – without a visa must fill out a detailed online questionnaire about their health and criminal history at least three days before departure…

“The measures have caused concern among European leaders and data protection authorities, with the EU demanding assurances about how the information will be used, who will have access to it and how long it will be kept…

“Michael Chertoff, director of the Department of Homeland Security, has called a halt to negotiations and is warning the European Commission that it must agree to the measures before the end of the year… The blunt rebuttal to EU concerns comes after the influential American Civil Liberties Union warned: ‘The negotiations under way between US security agencies and their European counterparts over the transatlantic transfer of personal data are just the latest of . . . the Bush Administration’s attempts to collect the personal information of an increasing share of the world’s population…”

Tight Cooperation Between Russia and Venezuela

The Los Angeles Times wrote on September 27:

“Venezuelan President Hugo Chavez was feted here Friday with what are emerging as the trademark tokens of Russian favor: oil and gas deals; the promise of nuclear cooperation; and, most significant, a $1-billion loan to buy weapons. Moscow agreed to lend Venezuela money to buy a wide variety of Russian weaponry and hardware… Reminiscent of Soviet loans to its Cold War allies, the deal is among a number gradually binding the two oil-rich governments, whose ties with the U.S. are strained, into tight cooperation… Russia sent a pair of strategic bombers to Venezuela this month for training exercises… In November, Russia is expected to dispatch warships for exercises in Venezuelan waters…

“In recent years, [Chavez’s] country has ordered more than $3 billion of Russian weapons and military hardware, including helicopters, missile defense systems and dozens of fighter jets. Russia also has sold Venezuela about 100,000 assault rifles and started work on two Kalashnikov plants in Venezuela…

“During Friday’s meetings, Putin also said that Russia was ready to cooperate with Venezuela on nuclear energy. Their ministries signed a memorandum of understanding that sets out plans for an energy consortium. The deal would give Russian companies greater access to fields in Venezuela, which would reap billions of dollars in Russian investments.”

Largest Bank Failure in US History

The Associated Press reported on September 26:

“As the debate over a $700 billion bank bailout rages on in Washington, one of the nation’s largest banks — Washington Mutual Inc. — has collapsed under the weight of its enormous bad bets on the mortgage market.

“The Federal Deposit Insurance Corp. seized WaMu on Thursday, and then sold the thrift’s banking assets to JPMorgan Chase & Co. for $1.9 billion.

“Seattle-based WaMu, which was founded in 1889, is the largest bank to fail by far in the country’s history. Its $307 billion in assets eclipse the $40 billion of Continental Illinois National Bank, which failed in 1984, and the $32 billion of IndyMac, which the government seized in July… The seizure by the government means shareholders’ equity in WaMu was wiped out.”

The Failed Bail-Out Plan

The New York Times wrote on September 29:

“The collapse of the proposed rescue plan for the teetering financial system was the product of a larger failure — of political leadership in Washington — at a moment when the world was looking to the United States to contain the cascading economic crisis.

“From the White House to Congress to the presidential campaign trail, the principal players did not rally the votes they needed in the House. They appeared not to comprehend or address in a convincing way an intense strain of opposition to the deal among voters. They allowed partisan politics to flare at sensitive moments.

“If there was any doubt that President Bush had been left politically impotent by his travails over the last few years and his lame-duck status, it was erased on Monday when, despite his personal pleas, more than two-thirds of the Republicans in the House abandoned the plan.

“While there were lawmakers who opposed the package on the merits, with Election Day just five weeks away, substantial numbers decided that to favor the bill would be to imperil their own political futures. And once the vote was under way and so few Republicans were voting aye, Democrats were disinclined to force more of their members to help pass the unpopular plan.

“The leaders of both parties failed, many analysts agreed, in bringing the measure to the House floor without knowing whether it had the votes to pass — a bad move at any time, but especially so in this case given the risk of the markets and the badly weakened financial system reacting badly…

“The candidates to replace Mr. Bush, Senator John McCain and Senator Barack Obama, were far from Washington, bit actors at best in helping to resolve a crisis that one of them will inherit… The episode underscored that Mr. Bush’s credibility and political clout, long gone among Democrats, is lacking among Republicans as well.”

After Rejection of Bail-Out Plan—Biggest Single-Day Loss EVER reported on September 29, 2008:

“Stocks skidded Monday… in the biggest single-day point loss ever, after the House rejected the government’s $700 billion bank bailout plan. The day’s loss knocked out approximately $1.2 trillion in market value, the first post-$1 trillion day ever… The Dow Jones industrial average lost 777.68, surpassing the 684.81 loss on Sept. 17, 2001 – the first trading day after the September 11 attacks.”

The Los Angeles Times added on September 29:

“Stocks plunged today as the House of Representatives shocked Wall Street by voting down the government’s proposed $700-billion financial-system bailout. The Dow Jones industrial average fell more than 700 points as the vote was being concluded and investors realized that the uncertainty that pervaded Washington and Wall Street last week would continue this week… The vote threw another monkey wrench into an already chaotic stock market, with investors speculating about when and whether the rescue measure would be resurrected and how the troubled credits markets would fare in the meantime…

“An agreement by Citigroup Inc. to take over the banking operations of troubled Wachovia Corp. in a government-brokered deal — plus a series of bailouts of major banks in Europe overnight — served as a reminder that some large banks remained at risk. Stocks around the world fell hard overnight as news of the European bailouts raised fear that the financial crisis is increasingly infecting banks outside the United States.”

America’s Long Recession

AFP wrote on September 30:

“A vacuum of fear is causing a desperate shortage of funds in the interbank system, despite infusions from central banks, and is a critical factor in pressures that have brought down many top names in US and European banking… Around the world officials and commentators used the language of disaster and despair to describe the possible impact of further delay in US action on the world economy and especially the interbank lending system…

“Former World bank chief economist and Nobel economics prizewinner Joseph Stiglitz [said]… ‘We will have other dramatic failures of financial institutions. The American economy is headed into a long recession.'”

Europe Feels the Heat

Reuters reported on September 29:

“The governments of Belgium, the Netherlands and Luxembourg moved to partly nationalize Belgian-Dutch group Fortis NV with an injection of more than $16 billion. German lender Hypo Real Estate Holding AG secured a credit line from the German government and banks of up to 35 billion euros.

“British mortgage lender Bradford & Bingley Plc was brought under the government’s wing. Shares of French bank Dexia tumbled on a report it might need emergency capital, and bank rescue deals also emerged in Iceland, Russia and Denmark.

“‘The contagion is spreading to mainland Europe and everyone’s asking, “Who’s next?”‘ said Mark Sartori, head of European sales trading at Fox-Pitt, Kelton in London…

“In the Fortis rescue, the governments of Belgium, the Netherlands and Luxembourg agreed to inject 11.2 billion euros ($16.4 billion) into the banking and insurance company, which has 85,000 staff worldwide.”

Germany Blames USA For Financial Crisis–Which May Be Hypocritical

Der Spiegel Online wrote on September 26:

“Germans were reacting to the finger-wagging performance of German Finance Minister Peer Steinbrück before the federal parliament, the Bundestag, on Thursday. ‘The world will never be the same as it was before the crisis,’ Steinbrück told German lawmakers. ‘The US will lose its status as the superpower of the global financial system.’ His speech blamed Wall Street’s ‘blind drive for double-digit profits’ and insufficient regulation for the crisis…

“In Friday’s papers, German commentators digest Steinbrück’s comments in a number of ways. In general, though, none of them appear ready to gloat — and none of them are ready to believe that the danger has passed.

“The center-right Frankfurter Allegemeine Zeitung writes:

“‘It’s the rhetoric of Sept. 11. … But this crisis actually has much larger dimensions than the attack against the twin towers and collapse seven years ago. Why? Because, this time, the attack on all-American doctrines is not the work of some foreign enemy. It comes from within, from the depths of the system. Largely unobstructed by its own state controls, American capitalism has created its own suicide bomber whose explosives — derivatives — have had an even greater effect than the flying bombs of the jihadists. The whole world — and not just New York — has a new ground zero now — Wall Street.’

“‘Germany will also pay a high price for the sins of the US financial system — higher even than the €320 million that the KfW so prematurely transferred to the bankruptcy administrators of Lehman Brothers. Even if German banks and the German credit system are spared from the chain reaction of a crash, the aftereffects on this side of the Atlantic will be plenty painful: shrinking growth, higher unemployment and less room to maneuver.’

“The Financial Times Deutschland writes:

“‘There’s no doubt that Steinbrück was right on a lot of points. But the finance minister’s droning self-righteousness was completely out of place. And it can’t distract us from the fact that he hasn’t provided answers on a number of important issues. You can start by taking a look at continuing economic developments. Steinbrück is now trying to propagate the theory that the US financial crisis is stabbing Germany’s solid economy in the back. But that is nonsense, as can be seen with a cursory glance at the pertinent figures, which show that the economic downturn had already begun much earlier. Steinbrück also gave no hint at how he will handle the foreseeable slump. There wasn’t much more than the impassioned warning of hard times ahead.’…

“The center-left Süddeutsche Zeitung writes:

“‘The government in Washington is trying to plaster over this crisis with strong words — and with strong acts, by bracing itself against the crisis with a $700 billion rescue plan. But… it could still go awry. Were that to happen, there might be a chain reaction: Banks could go belly up, one after the other; lending institutions could constrict the amount they grant in loans; the crisis could overwhelm the real economy; and companies could start going into tailspins. And in the end, just as Bush is warning us, millions of jobs could be lost. This could happen, but it doesn’t have to. If governments, central banks and overseers really take the right steps, and if they can boost the economy and not just rescue the speculators by buying them, it might be possible to get past this crisis. But it will presumably take a long time. However, if politicians and overseers continue to make as many mistakes as they have in the last few years, disaster awaits us.'”

A Country on Its Way Down

The German magazine, Der Stern, wrote the following on September 30:
“The suicidal ‘No’ of the American Congress shows the downfall of the USA… ‘We are dealing with a government which is unable to function in times of great need,’ economic commentator Paul Krugman said sadly, but correctly. ‘A group of insane people acts in Congress, and nobody trusts the White House anymore. We are a banana republic with atomic weapons.’… President Bush… is now lamer than a lame duck… Wall Street is dead… What is left is a weak, insecure America. A country on its way down. It has to come soon to its senses, so that it does not continue to drag along [or destroy] the entire world…”
Der Spiegel Online wrote on September 30, under the headline, “The End of Arrogance”:
“The banking crisis is upending American dominance of the financial markets and world politics. The industrialized countries are sliding into recession, the era of turbo-capitalism is coming to an end and US military might is ebbing. There are days when all it takes is a single speech to illustrate the decline of a world power. A face can speak volumes, as can the speaker’s tone of voice, the speech itself or the audience’s reaction. Kings and queens have clung to the past before and humiliated themselves in public, but this time it was merely a United States president. Or what is left of him… Even America’s closest allies are distancing themselves — first and foremost the German chancellor…
“Economists now characterize what began two years ago with falling prices in the American real estate market as the biggest economic disaster since the world economic crisis of the 1930s. No one knows whether and how the meltdown of global financial markets, which would have grave consequences for the world economy, can still be prevented. And now, of all times, the world is faced with a preeminent power that no longer seems capable of leading and a US president who is not even able to unite his divided country in an hour of need.”

US Senate Attempts to Save Bailout

The United States Senate met in an urgent attempt to respond to America’s money crisis.

CNN reported on late Wednesday, October 1:
“The Senate on Wednesday night passed a sweeping and controversial financial bailout similar in key ways to one rejected by the House just two days earlier.”
The article continued, “The legislation, if passed by the House, would usher in one of the most far-reaching interventions in the economy since the Great Depression.”

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