Friday, July 30, 2010

Bush's ambassador to eastern Caribbean protected Stanford operations

August , 2010 -- Bush's ambassador to eastern Caribbean protected Stanford operations

Antigua became the favorite playground for CIA money laundering during Bush administrations...

Mary K. Ourisman, the Texas-born socialite wife of Maryland car dealer Mandy Ourisman, helped provide diplomatic and legal cover for jailed former Stanford International Bank chief Allen Stanford, according to Stanford insiders who spoke to us. Mary Ourisman was George W. Bush's ambassador to Barbados and the Eastern Caribbean States, which include Antigua and Barbuda, the headquarters for Stanford's one-time global banking and financial services empire that collapsed in 2009 after it was discovered to be a Ponzi scheme.... Stanford is in prison in Texas and has been refused bail as a flight risk -- Stanford is also a citizen of Antigua and Barbuda. He is scheduled to go on trial in January 2011, conveniently two months after the congressional election in November. Stanford's campaign contributions fell into the coffers of congressional members of both Democrats and Republicans.

However, as we previously reported, Stanford International Bank, Bank Al-Madina in Lebanon and Billions of syphoned monies from the Iraq and Afghanistan campaigns, also became a replacement for the collapsed Bank of Credit and Commerce International (BCCI) as a vehicle for drug money laundering and other covert operations on behalf of the CIA and other intelligence agencies....

Mary Ourisman, a political fundraiser for Bush and other GOP candidates and a close friend of former First Lady Laura Bush, became U.S. ambassador to Barbados and the Eastern Caribbean States in 2006. In her job, Ourisman ensured that Stanford's financial operations in Antigua and Barbuda, as well as in two other Caribbean nations where she was credentialed as ambassador, St. Kitts-Nevis and St. Vincent and the Grenadines, were protected from federal regulators.

To provide even more protection for Stanford's money laundering and other covert operations, Stanford showered GOP and Democratic senators with large campaign contributions, including $83,000 for John Cornyn of Texas and $950,000 for the Democratic Senate Campaign Committee, and particularly, Bob Menendez of New Jersey. Menendez, who maintains close connections to the Cuban exile community in Florida and new Jersey and its CIA/MOSSAD veteran operatives, has refused to investigate the Stanford fraud on behalf of its victims and has tried to block any Senate investigation of Stanford's links to the CIA/MOSSAD and top government officials, Democratic and Republican.

It is also noteworthy that Texas was the only U.S. state to have entered into a financial regulatory agreement with Antigua. The Texas Department Banking and the Antigua and Barbuda International Financial Sector Regulatory authority signed the agreement on July 26, 2001. More amazingly, the agreement was signed while Antigua was subject to a U.S. Treasury advisory warning of potential fraud.

Ourisman sat idly in Bridgetown, Barbados as Antigua's Attorney General, Errol Cort, who had also been Stanford's personal attorney on the island, changed the island nation's money laundering laws to the benefit of Stanford and his CIA/MOSSAD overseers, without a peep from any of the regulatory agencies in Washington. Cort, who is now the National Security Minister of Antigua and has used his position to make things uncomfortable for Stanford fraud investigators traveling to the island, also served on the board of the Eastern Caribbean Central Bank, which took over Stanford's Bank of Antigua after Stanford empire collapsed in 2009. Stanford had become a political kingpin in Antigua, exercising influence over the previous Lester Bird government and its successor, the present Baldwin Spencer government -- without any interference from Ourisman in Barbados or the State Department of stooges of CIA....

Even today, Antigua's ambassador to the United States, Debra-Mae Lovell, the wife of Antigua's corruption-tainted Finance Minister Harold Lovell, spends most of her time in Washington acting as a public relations flack for Antigua and ridiculing the former Stanford investors who were defrauded by the Ponzi scheme -- a scheme facilitated by a corrupt Antiguan government. Secretary of State Hillary Clinton, more concerned about the continuation of U.S. military basing rights on Antigua, has warmly embraced Ambassador Lovell and members of her government and has lavished hundreds of millions of dollars of aid on Antigua.

The bodies have piled up among those who were most familiar with Stanford's operations. On February 25, 2009, we reported, "No one will ever know just how Charlesworth Shelley Hewlett, who ran CAS Hewlett & Company out of a small office sandwiched between fish and chips shops on South Bury Road in Enfield in north London, came to be the accountant for Allen Stanford's $50 billion financial empire that included Stanford International Bank (SIB). That is because Mr. Hewlett, known as a quiet gray-haired man to those who had offices in his north London office block, died 'peacefully'...with help from CIA goons, a few weeks before the Stanford scandal hit the front pages. Hewlett was 73 but no one knows the reason for Hewlett's death." Hewlett also maintained an office on St. John's Street, in St. John's, the capital of Antigua.

Stogniew, who headed a one-man company in Florida, Stogniew and Associates, provided risk analysis services for Stanford. Stogniew produced a flimsy three-page risk analysis report for Stanford in 2003. It mostly consisted of disclaimers. Gerry Stogniew, who founded his company in 1980 and resided in Seminole, Florida, died in July 2008.... The firm was taken over by Stogniew's daughter and CIA.... Oddly, the professional staff for Stogniew and Associates are only listed by their initials. Federal Election Commission records indicate Stogniew donated to the campaigns of George H. W. Bush in 1987 and Florida Republicans Bill McCollum in 1999 and Katherine Harris in 2005.

Allen Stanford and Mary Ourisman shared more than an interest in protecting Stanford International Bank from nosy regulators: they were both born in the small Texas town of Mexia, Ourisman in 1946 and Stanford in 1950. The town's other "famous" celebrity: the late Anna Nicole Smith, who died from a suspected lethal drug overdose in Hollywood, Florida in 2007.....

The squandering of money in the utterly Corrupt PENTAGON procurement sysyems, whereby trillions are unaccounted for in USA, in Iraq and Afghanistan. For example, the missing pallets of cash:


Why aren't the American people outraged over this?

China finds a great friend in Germany

China finds a great friend in Germany....
By Jian Junbo

SHANGHAI - China and Germany are moving toward a closer and friendlier partnership, a process that seemed highly unlikely just three years ago and which could provide Beijing with an influential ally on the world stage.

In mid-July, German Chancellor Angela Merkel paid a four-day visit to China to boost economic and political ties; this was her fourth trip since taking office in 2005. Notably, German President Horst Koehler paid a state visit to China two months ago.

Merkel's delegation, which included cabinet ministers and business people, secured contracts worth billions of euros for leading German corporations such as Siemens, Daimler Benz, BASF and Volkswagen. The countries also signed a joint communique, their second since they established formal diplomatic relations in 1972.

When Merkel assumed office in November 2005, Beijing feared her hardline policy would seriously challenge the traditionally friendly Sino-German relationship. During her first China visit as head of government in September 2007, she talked openly about the importance of human rights and Chinese leaders did not take kindly to being lectured to.

More upsetting for Beijing was that shortly after returning home form China, Merkel met the Dalai Lama, the exiled Tibetan spiritual leader whom Beijing considers a separatist. Then, a month later, in October 2007, Merkel's ruling coalition issued a report on its Asia strategy in which a new German-China policy was outlined.

It stressed that Germany should balance its foreign policies among big Asian countries, which signaled that Merkel would attach greater importance to Germany's relations with countries such as Japan and India.

The report said that German partnerships could only be maintained when they were based on shared values and ideas. As such, Germany should form closer relations with democratic states, especially Japan, India, South Korea and Australia. Although seeing a rising China as a window of opportunity for Germany, the report considered China as more of a challenge.

In early 2008, when the torch for the Beijing Summer Olympic Games was making its way through Europe, members of the Free Tibet movement - which wants independence for Tibet from China - were very active in Germany trying to sabotage the torch relay. There were reports that they were supported financially and politically by German non-governmental organizations and even politicians.

In Beijing's view, such antagonism toward China in German civil society was at least acquiesced, if not encouraged, by the German government on the pretext that Germany was a democratic and free society. All the same, in February 2008, Merkel, in a telephone conversation with Chinese Premier Wen Jiabao, had promised that her administration would actively adhere to the "one China" policy, that is, not support independence for Tibet.

Then, shortly after the conclusion of the Beijing Olympics, the global financial crisis broke in the United States and quickly spread around the world, with Europe hit hard. In October 2008, Merkel visited China on the sidelines of an Asia-Europe summit in Beijing. Her visit signaled that China-Germany relations had started to improve.

That improvement has continued, with Wen saying Merkel's recent visit had "historical significance". The use of these words is important as they signify that major change(s) are underway. With these words, Chinese leaders expect China-Germany ties to become not only closer but also more stable than ever before, so that they evolve into a truly strategic partnership.

In other words, Chinese leaders hope the partnership will be based not only on economic mutual benefit but also on political trust and strategic dependence, beyond quarrels over ideological differences.

However, judging from the composition of Merkel's delegation, Berlin is still more focused on economic matters. In one sense this is understandable as China is the biggest foreign market for Germany, and at the same time Germany is the biggest economic partner of China in Europe.

Overall, German exports to China amounted to 36.5 billion euros (US$46.2 billion) last year, and imports totaled 55.5 billion euros, according to the German Federal Statistics Office. In the same year, Germany's total exports dropped 18% due to the global economic slump, while its exports to China climbed 7%, according to the German newspaper Frankfurter Allgemeine Zeitung.

Siemens, an electronics and engineering giant that is a bellwether for the global and German economies, said on Thursday that quarterly profits rose 9% to 1.44 billion euros (US$1.38 billion), in part "because of soaring sales in countries like China and India", the New York Times reported.

Volkswagen, the largest carmaker in Europe, said net profit rose more than fivefold to 1.35 billion euros, fueled by a 45% surge in sales to Asia. Volkswagen saw huge gains in China, where unit sales rose 46% to 951,000 vehicles in the first six months of 2010. China now surpasses Germany, where sales fell 16% to 533,000 vehicles, as VW's largest market. A year ago, sales in the two countries were almost even.

The importance of China to Germany is clear, and significantly Merkel refrained from lecturing her Chinese hosts on the importance of human rights, although she did touch on the topic in a speech to students at the Central Party School, the Chinese Communist Party's top training center for senior officials headed by Vice President Xi Jinping.

For Beijing, Merkel not bringing up the topics of human rights, good governance and democracy in meetings with Chinese leaders is a constructive attitude toward building a stable and pragmatic partnership. These topics can be addressed in the annual human-rights dialogue between the two countries.

It is interesting to note that Merkel visited Xi'an, the capital of Shanxi province in northwest China that was the national capital of several dynasties, including the Tang Dynasty (618-907 AD). This city, like Qufu in east Shandong province - the home town of Confucius - is undoubtedly a traditional culture center and in Chinese eyes, Merkel, by going to Xi'an, was showing her respect for Chinese culture. In other words, at least culturally, Berlin is now willing to consider China as an equal partner.

Merkel also had some kind words, "We must learn to understand China, its great culture and huge potential." This indicates that she is open to discussing issues beyond bilateral ties with China, such as climate change, energy and the world financial order.

A study on European Union-China relations by the European Council on Foreign Relations, an influential think-tank, has suggested that the members of the European Union should unite internally and with other powers, especially the US, to force China to yield to the West on issues such as human rights, trade protection, intellectual property rights and so on.

The report serves evidence that some Europeans still look at China with antagonism and hostility. Ideological differences between China and Europe become their cheap weapon to fire against China and geo-economic conflicts are a useful excuse to criticize China.

From this perspective alone, China's relations with the EU and its member states could and should be strengthened to become more stable and constructive. In this regard, Germany could prove an important ally.

Dr Jian Junbo is assistant professor of the Institute of International Studies at Fudan University, Shanghai, China.

Wednesday, July 28, 2010

Turkmenistan is interested in a peaceful settlement in Afghanistan and the construction of the TAPI

[The fact that Nabucco, Europe's salvation from Gazprom, depends upon Turkmenistan for the bulk of its gas, even though there is no reliable data on Turkmen gas reserves, shows the dicey nature of the whole pipeline pipe dream. They are in such a hurry to make the pipelines a reality before the total American economic and military collapse that they are trying to build pipelines without knowing beforehand that sufficient quantities of gas will be available....]

Turkmenistan is interested in a peaceful settlement in Afghanistan and the construction of the TAPI


At a July 23 meeting of the Cabinet of Ministers of Turkmenistan President Gurbanguly Berdymukhammedov pleased briefed the Foreign Minister, Deputy Prime Minister Rashid Meredov on the participation of the Turkmen side in a number of international meetings and conferences: an informal meeting of foreign ministers of the Organization for Security and Cooperation in Europe (OSCE) in Alma-Ata, International Conference on Afghanistan in Kabul, as well as the regional meeting on the issue of water management in Central Asia in Ashgabat, the State News Agency of Turkmenistan (TDH). The President drew particular attention to issues relating to Afghanistan, noting that Turkmenistan actively supports the peaceful settlement of the situation in the neighboring country, offering the development of new political and diplomatic mechanisms for solving existing problems and to stabilize the situation in this country, in particular, their willingness to provide the political space for inter-Afghan peace talks under UN auspices.

As the Foreign Minister of Turkmenistan, in this regard, special significance in the context of the forum in Kabul was to discuss the possibility of the project for the construction of the Turkmenistan-Afghanistan-Pakistan-India (TAPI), which promises, according to the Turkmen side, an enormous socio-economic benefits not only the direct project participants, but also all countries in the region.

As is known, the TAPI gas pipeline project worth $ 8 billion, the length of 1,68 square kilometers and a capacity of about 30 billion cubic meters. m per year discussed with the 1990′s. Originally, construction was scheduled for 2010 and 2015, the pipeline was supposed to earn. The project is supported by the Asian Development Bank (ADB). U.S. supports a plan to build TAPI as an alternative to export gas to Pakistan and India from Iran.

Directly project prevented at least three reasons: the unstable situation in Afghanistan, the Indo-Pakistan conflict and the lack of reliable data on gas reserves of Turkmenistan....

U.S. Special Envoy: Trans-Afghani gas pipeline project is interesting from commercial point of view

You can read the rest of the American diplomat’s enlightening comments on the Trans-Afghani gas pipeline (TAPI, Turkmenistan, Afghanistan, Pakistan, India) if you are a paid subscriber to Trend news service.

Since I am not, I dug-up the following link that confirms that the original pipeline planned by Texas oil companies and supported by the Taliban, at one time. TAPI remains a reality and its scheduled completion date is for 2015, one year after the end of “Enduring Freedom.”

It has always been about war and we have always known it. Pretending from the beginning that we were in Afghanistan for reasons of self-defense, the American people have simply played along because we wanted the gas and oil.

The world now knows that this has all been a big monstrous lie. It remains to be seen whether the rest of the world is also without morals, or whether we will be called to task for the war crimes that are being revealed on a daily basis.

Trio sign up for Turkmen gas

Alternative source: Turkmenistan

related stories

Representatives of Pakistan, India and Afghanistan signed a framework deal in Islamabad yesterday to buy natural gas from Turkmenistan, Pakistani media reported.

Upstream staff

The US-backed deal allows India to join a pact signed in 2002 to begin importing gas from Turkmenistan by 2015, Pakistan’s Dawn newspaper said in its online edition.

The agreement, which will require the building of a pipeline projected to cost $7.6 billion, is seen as an alternative to the so-called Peace pipeline plan to bring Iranian gas to India and Pakistan via Afghanistan.

The US is opposed to the Peace pipeline because it hopes to isolate Iran over its controversial nuclear programme.

The newspaper said uncertainty about the Iran-Pakistan-India (IPI) pipeline continued amid ongoing disputes between the partners about transportation fees and tariffs.

The Turkmenistan pipeline will supply 90 million cubic feet of gas per day to the Dauletabad field to Fazilka on the Pakistan-India border.

Under today’s deal, Afghanistan is proposing to tap 5 million cubic metres per day from the pipe during the first two years of operation and 14 MMcm per day thereafter. India and Pakistan will split the remaining capacity.

However, Pakistan and India both reportedly said following the signing that they remained commited to the Iran-Pakistan-India pipeline.

“There is no pressure on us over the IPI and we will move forward on the project,” Pakistani Oil Minister Khwaja Asif said at a press conference, Iran’s official IRNA news agency said.

Indian Energy Minister Morli Deora was quoted as saying: “We are still committed to the IPI”.

The pair said they would discuss the IPI pipe in talks in Islamabad today.

Asia Development Bank director Peter Fedon said the bank had assisted in the signing of the Turkmenistan pipe deal. However, he reportedly would no say whether the bank would play a role in the Iranian pipe project.

Nazarbaev faults Europe on Nabucco

Nazarbaev faults Europe on Nabucco
By Robert M Cutler

MONTREAL - President Nursultan Nazarbaev of Kazakhstan publicly endorsed the Nabucco natural gas pipeline earlier this month - then criticized Europe for putting too much talk into the project and not enough action.

Nabucco is projected to bring natural gas from the Caspian Sea basin to the Baumgarten gas hub in Austria via Turkey, Bulgaria, Romania, and Hungary.

Putting his personal prestige behind the concept, Nazarbaev stated in Astana last week, at a joint press conference with visiting German Chancellor Angela Merkel that "Kazakhstan has
never been against Nabucco; the issue is that in Europe there is a lot of talk about Nabucco, but in practice little is being done," he said. "The European Union could work more actively on this."

Kazakhstan's participation required either an undersea pipeline or, at a minimum, a gas liquefaction plant on the country's Caspian Sea coastline, he said, but "nothing is being done on either issue except talk".

Beate Eschment, a leading German expert on Kazakhstan, told Deutsche Welle that she was "very surprised" by Nazarbaev's criticism of Europe's pace in moving the project forward, which she called a " new development".

Merkel was in Kazakhstan on her way to China. She had already visited Russia earlier in the month. The trips were undertaken mainly with a focus on economic diplomacy on behalf of German industry. In Russia, she was responding both to domestic critics who have disparaged her recent inattention to Moscow as an important German economic partner on the one hand and, on the other, to Russia's President Dmitry Medvedev's signature, in June, on a bill that reduced the number of so-called "strategic enterprises" in the country from 208 to 41 and "federal unitary enterprises” from 230 to 159.

This move is intended to increase opportunities for foreign investors to assist in Medvedev's economic modernization program, by which he intends, he said in a speech to the Russian Foreign Ministry two weeks ago, to promote modernization of the political system as well.

In that speech, which caused a stir in Moscow as reported by Kommersant, he emphasized the fight against organized crime and the strengthening of Russian democracy and civil society as tasks of Russian foreign policy.

Insofar as the modernization of the economy and production were concerned, he named Germany in the first rank of foreign partners, followed by France, Italy, the rest of the European Union and also the United States. Thus Merkel's delegation included over two dozen German business leaders and scored some successes. The German side had its eyes especially on renovation of the Russian industrial plant, with special attention to the energy sector.

Merkel was also concerned to promote economic ties in China, which is increasingly competitive with German imports of raw materials from Russia as well as exports of finished goods to Russia. China is also highly competitive with Europe for energy exports from Kazakhstan, where it has a strong presence in the sector and for nearly a decade has been building oil and gas pipelines into western China. From there, the resources are transmitted to the central and especially eastern coastal parts of the country to satisfy ever-growing demand.

Nazarbaev's criticism of the EU regarding Nabucco is also applicable to the Kazakhstan-Caspian Transportation System (KCTS) project, which is set to take oil from the huge offshore Kashagan deposit to Eskene, onshore near Tengiz, and on to the port of Kuryk, near Aqtau. From there, it will be shipped across the Caspian Sea to Azerbaijan for insertion into the Baku-Tbilisi-Ceyhan (BTC) pipeline from Azerbaijan to the eastern Mediterranean - the capacity of the pipeline would be increased for the purpose by up to 70% through the use of chemical additives and other technical means - or, alternatively, conveyed to the Black Sea coast for transshipment to Europe. (See Four-way street in Kazakhstan, Asia Times Online, September 18, 2009.)

France signed onto that project last year, a significant development in light of the French company Total's participation in the consortium developing Kashagan as well as in operating BTC pipeline. However, planning construction of this pipeline has hit snags, and it is possible that oil tankers will do the job of taking the crude to Azerbaijan in the beginning. Even that development, however, requires planning of construction facilities and logistical foresight. Initial start-up for the project, in whatever form it acquires, is still set for 2012.

A pipeline across the seabed would be most cost-effective. Some estimates say the tanker transportation will not be cost-effective after 2017. A gas pipeline for associated gas from Kashagan could also run to Azerbaijan, and a pipeline from Turkmenistan could be built to join that pipeline in the Kazakhstan sector of the Caspian Sea, obviating the need for a solution to the dispute with Azerbaijan over the offshore Kyapaz/Serdar deposit that has up until now blocked bilateral cooperation on energy matters between the two countries.

With investment decisions falling due within the next 12 months on a series of projects including Nabucco as well as the competing Russian-sponsored South Stream project, Nazarbaev's public statement should serve to help focus the EU's attention on the crucial window now approaching and threatening to close.

Beginning about a year and a half ago, Merkel has been able progressively to increase her margin of maneuver vis-a-vis the German diplomatic tradition, reaching back into the 19th century, of centering its worldview on an entente with Russia. The movement from one coalition partner to another in the wake of the last parliamentary elections has facilitated that development.

If Germany is to have a truly global profile, and assist Europe in finding its place in the future, then it must not restrict its vision to partnership with Russia and Turkey, and instead go beyond them in both the metaphorical and geographical senses.

Hydrocarbon Geopolitics in the Eastern Mediterranean...

Lebanon to become an oil and Gas country?

By Sami Halabi

There’s an old saying in the oil industry: “Oil is like a wild animal. Whoever captures it has it.” The late American oil magnate, Jean Paul Getty, may have been talking about the oil and gas market of the 1950s, but his words continue to ring true. Ever since a joint US-Israeli exploration group headed by Texas-based Noble Energy discovered a large natural gas deposit at Tamar (90 kilometers off the coast of Haifa) in January, the proverbial animal has been officially let out of its cage in the Eastern Mediterranean.

Seismic survey vessels like this one, owned by Petroleum Geo-Services, have located vast hydrocarbon prospects in the Eastern Mediterranean

Analysts estimate reserves at Tamar of around 142 billion cubic meters (BCM), valued at around $3.6 billion, with a $1.5 billion extraction cost. The discovery has been heralded by Noble’s Chairman and Chief Executive Officer Charles Davidson as possibly “the largest discovery in the company’s history.” For a company like Noble that boasts assets of more than $12 billion, that’s no passing phrase.
A few months after the initial discovery, Noble found another deposit of gas at Dalit, 13 kilometers east of Tamar. That discovery is expected to yield reserves of around 14 BCM, or around 10 percent of the Tamar find. Noble declined to comment on the finds and Executive is legally forbidden to correspond with Noble’s Israeli partners.
The amount of gas present in the two fields could potentially serve Israel’s gas demand for a decade, or even longer.
“We are witnessing an historic moment in Israel’s energy market,” Israeli Infrastructure Minister Binyamin Ben Eliezer said at the time of the Tamar find.

Source: Noble Energy.

Source: Noble Energy.

A thorny relationship
At present Israel depends on Egyptian gas exports to run its power plants. The agreement for Egypt to supply Israel with a constant stream of gas comes under a clause of the Camp David accords, signed in 1979, and stipulates that the two parties will set a fixed price for each million thermal units (MMBTU), the standard unit of measurement for commercial gas exports, which corresponds to around 28 cubic meters of gas. The export of Egyptian gas to Israel has been the cause of much controversy in Egypt where anti-Israeli public sentiment is pervasive 30 years after the two countries’ leaders signed a peace treaty.
The issue of Egyptian gas exports to Israel remains a thorn in the side of both governments; politically for the Egyptians and in terms of energy planning for the Israelis. Hence, while energy independence for Israel would constitute a negative for Egypt’s current account, it could also translate into some much needed wiggle room for Egypt’s autocractic government.
“The opposition parties are always questioning the wisdom of supplying Israel with gas,” says Ibrahim Saif, resident scholar specializing in the political economy of the Middle East at the Carnegie Middle East Center. “Egypt is [always] trying to downplay that subject because there is a sentiment in Egypt that is against supplying Israel with gas.”

How much do they really have?
While Israel’s estimated gas reserves seem promising, they are still just that, estimates. The numbers currently available only indicate a ‘geological reserve’ based on seismic surveys conducted from above the seabed. The fields still have to undergo an appraisal phase to ascertain how large the ‘proven reserve’ is and exactly how much of the gas can actually be extracted.
“The initial discovery does not provide a clear picture as to the structure of the field. You need a year until it becomes a proven reserve and only part of it can be extracted,” said Ziad Arbahe, a Syrian energy consultant.
Arbahe explained that commonly only 30 to 40 percent of a geological reserve can be extracted. There have been rare cases where up to 50 percent has been extracted, but this usually requires that a company inject water into a field, increasing operational costs and often damaging the field itself.
“In general, when there is a find, countries and companies are optimistic about the amount. But when you start to produce… the initial estimation is usually much higher than the actual amount,” Arbahe adds.

On the Lebanese side…
The recent discoveries have “caused a flurry of interest in the Lebanese offshore area,” says Charles Harmer, executive vice president of multi-client services at Spectrum Geo, the company that previously performed preliminary seismic surveys for the Lebanese government between 2000 and 2007.
Fawaz Mourad, the regional representative of Petroleum Geo-Services (PGS), agrees. His company and Spectrum Geo have both conducted seismic surveys in Lebanon’s offshore area, which is part of the “Levantine basin.”
The Levantine basin is the underwater geological structure that is located beneath the territorial waters of Lebanon, Israel, Cyprus and Syria. The basin itself has “similar structures and formations” in both Israeli and Lebanese waters which makes “offshore Lebanon even more interesting and more prospective,” says Mourad.
Lebanese oil and gas exploration began in the late 1960’s and early to mid-1970’s with the drilling of several wells across the country. Then, like many things in Lebanon at the time, exploration came to a grinding halt when Lebanon’s civil war began in 1975. After the war, Syria and Lebanon formed the “Committee of Cooperation between Lebanon and Syria for Oil Exploration in Lebanon,” which lasted until Syrian troops pulled out of Lebanon in 2005 after the assassination of the former Prime Minister Rafiq Hariri.
“The order from [current Syrian] president Assad’s father was to help Lebanon by all means possible, even for free, to get oil out of Lebanese ground,” says Ali Haidar, a former member of the committee and current petroleum studies professor in Beirut. “There were some favorable interpretations of this behavior on some Lebanese sides and on others there were unfavorable [interpretations].”
During the run-up to Lebanon’s parliamentary elections, Nabih Berri, the country’s speaker of parliament and member of the current opposition, stressed the importance of “encouraging the exploration of [oil and gas] prospects in all the Lebanese territories,” ostensibly referring to the continuation of onshore exploration.
However, little headway has been made in Lebanon since pre-war drilling, despite the fact that Lebanon is part of the same geological structure where proven gas deposits have been found in Syria “only 40 kilometers from the Lebanese border,” says Haidar. Today, Lebanon’s old wells still sit idle and efforts to resume exploration have been “postponed” according to a senior executive at Lebanon’s Ministry of Energy and Water.
Ghazi Youssef, a member of Lebanon’s new ruling parliamentary coalition who used to manage the oil and gas file as an advisor to former Prime Minister Rafiq Hariri in the earlier part of this decade, is nonetheless pessimistic about the prospects of oil and gas aground in Lebanon. He says that the issue of exploring these wells should be put on a “back burner” because “all the reports I have seen in the past do not really show the possibility of a major find [onshore]. It’s mostly tar and other residue but not hydrocarbons. Things point more to the offshore fields than they do onshore.”

Move to water
Indeed, since 2000 the focus of the Lebanese government and international oil and survey companies has been on offshore exploration. In 2002, the Lebanese government entered into an agreement with Spectrum Geo to perform a two-dimensional seismic survey off the coast of Lebanon to supplement a survey completed in 2000, which did not require government permission “because of the location and the fact that there was no previous work in the area,” says Harmer. Two-dimensional seismic surveys are used to identify breaks and possible traps in geological formations where there is a high possibility that oil or gas may be present.
The agreement gave Spectrum Geo the right to gather data off the Lebanese coast at its own cost and to later sell the data to prospective oil companies on a licensing basis. The Lebanese government would then receive a percentage of the license agreement and get a copy of the final data.
“We had to try to sell it as many times as we could to cover our costs and then make a profit on it,”says Harmer.
The agreement itself, however, ended in 2007, and the government says Spectrum Geo has requested another five year agreement with the Lebanese state.
In both 2006 and 2007, the government commissioned another Norwegian survey company, Petroleum Geo-Services (PGS), to perform three-dimensional seismic surveys off the coast of Lebanon. Three-dimensional studies subject geological formations to sets of waves which then ‘bounce back’ off these structures to provide a clearer view below a surface.
But several experts have questioned the manner in which the three-dimensional studies were conducted. “Normally when you have such a huge possibility… you do a lot more than this,” says Haidar. Harmer of Spectrum agrees. “It is very unusual to shoot a [three-dimensional seismic survey] like that. I still don’t understand why they have shot those.”
Mourad of PGS, however, insists that the data acquired was “comprehensive” and that “there is enough data to allow the companies to drill. They don’t need to do more 3-D surveys. So if a bid-round takes place over the areas which are covered by the 3-D survey, then the oil companies are able to drill immediately, thus saving a lot of time,” he says.
According to Sarkis Hlaiss, general manager and head of Lebanon’s gas and oil installations committee at the Ministry of Energy and Water, the main reason that a more extensive survey was not done is that the Lebanese government and PGS are currently performing another two-dimensional survey on Lebanon’s Exclusive Economic Zone (EEZ), which was only delimited — the process by which a country defines its borders — in May by a committee at the energy and water ministry. A source at the United Nations, who spoke on condition of anonymity, said that the issue of border demarcation between Lebanon and Israel has yet to be officially resolved by the UN and stressed that maritime borders would only be addressed once the border delimitation on the ground has been completed. PGS insists that the issue is inconsequential.
“Even if they haven’t officially delimited it, it doesn’t mean that it is disputed. There is no dispute,” said Mourad.
In any case, most experts agree that it is premature to consider the possibility of common resources before all the results of Lebanon’s seismic surveys are completed to ascertain if there are fields shared with Israel. The results of the survey are expected to become available within four to five months.
“By the end of September we will have the complete data in two-dimensions and three-dimensions from PGS,” says Hlaiss.
The new survey will employ seismic technology developed by PGS that enables seismic waves to overcome the distortions caused by layers of salt present across the Levantine Basin. The results of the survey will provide data that is much clearer and more useful to prospective oil companies and the Lebanese government, who can negotiate better if a bidding round ever materializes.

Dollars for data
According to Mourad, PGS has invested “tens of millions of dollars” to acquire data off the Lebanese coast. The company “hopes to recover its investment by selling the data” to oil companies looking to enter any Lebanese oil and gas market, once the government starts a bidding round and offers licenses to companies to start drilling offshore.

Visualization showing how seismic surveys allow geophysicists to see beneath the surface and map areas that are not visible

“PGS has not sold any data for the simple reason that companies, when they own data, need to know that they can do something with it, like participate in a bid round,” said Mourad.
But in order to open up a bidding round, Lebanon would need to have a law that dictates the terms and obligations of both the Lebanese government and prospective oil companies — something the Lebanese government has been dragging its feet on for decades.
“Until now we don’t have a law, it’s a disaster,” says Hlaiss. All the countries of the Eastern Mediterranean who have access to the Levantine Basin have legislation that apportions their maritime territory into blocs, ready for sale to prospective oil companies looking to explore their offshore prospects. Cyprus opened its first bidding session in 2007, as did Syria.
Fortunately for Lebanon, they have some friends in high places within the oil and gas industry. Since 2007 the Norwegian Agency for Development Co-operation (NORAD), as part of its ‘Oil for Development’ program, has been assisting the Lebanese energy ministry to draft a new law to the tune of “several million dollars to start putting legislation in place [and] actually start a bid round,” says one oil and gas industry executive who spoke on condition of anonymity.
Martin Yettervik, counselor at the Norwegian Embassy in Lebanon, says that the program is about institution building as opposed to drilling and is aimed at helping the Lebanese avoid the pitfalls of an energy dependent economy.
“For any country that is new to petroleum, it is important to take into account the economic effect of the petroleum economy, because it is different from other kinds of economic factors,” says Yettervik. “There are examples around the world where, when the petroleum economy dominates, it is to the detriment of the other fields in the country.”
Countries such as Nigeria and Iran have felt the pain of an economy overly dependent on petroleum resources. However the risk to Lebanon is not just economic. The potential for oil and gas revenues to play into Lebanon’s polarized and volatile sectarian political mixture is very real. One look at the electricity or telecommunications situation in the country and an ineffective or politically tainted oil and gas industry could be “another killer,” according to professor Haidar.
Nonetheless, Yettervik insists that the program has not become “a tool for one or another power factor in a country” and that “since the beginning we have seen a trans-political cooperation, even when the country was in the deepest of crisis,” referring to the 18-month political standoff that led to the May 2008 conflict in Lebanon.

Norway’s helping hand
The Oil for Development program is set to carry on until 2011, at the behest of the Lebanese government. In order to expedite the process of drafting the still non-existent law, the Norwegian government has contracted an international law firm to assist the energy ministry with setting up a bidding round and has trained several officials at the ministries of energy and water, and finance and environment. Both Spectrum Geo and PGS’s head offices are located in Norway, but Hlaiss insists that the Norwegian government “didn’t ask for anything in return.”
Yettervik admits that the program “gives the Lebanese authorities familiarity with the Norwegian system,” but insists that any collusion between the Norwegian government and its companies “would be contrary to the spirit of the program.”
The government has confirmed that the new law will allow Lebanon to alter the output of any firm that extract’s oil or gas, which, if done hastily, could damage any potential field and substantially reduce its long term productivity. Moreover, the law will oblige future oil companies to adhere to the Lebanese labor law, which compels them to hire a majority of Lebanese citizens if qualified persons are present in the country.
According to the energy ministry and the Norwegian embassy, the draft exploration law is all but completed. The text, which is still in English, is complete and is in the translation process. Once in the Lebanese Parliament, it will be subject to the scrutiny of the country’s conflicting political interests.
“We are trying to push [the law] through this government,” says one government official who spoke off the record. “If we don’t, and the minister [of energy and water] changes, it will take us another three months to explain to the new minister what we are doing and then who knows [how long it will take].”
MP Youssef expressed his coalition’s desire to depose the current minister, whose party is part of the opposition, but insists that it will not derail the process.
“We believe that when someone comes to power you don’t just take everything and throw it down the drain; there’s continuity. We have to deal with [the law] and try to finish it as soon as possible.”

Sharing with the enemy
Perhaps the most important point to consider in Lebanon’s energy saga may be that if Tamar, Dalit or another field is a common field between Lebanon and Israel then the latter is currently usurping Lebanon’s natural gas.
“Whoever starts before gets the resources because of drainage,” says Haidar, adding that the clock is now ticking down on the Lebanese government’s opportunity to tap this resource before the Israelis do.
Contested borders have always posed a problem in the Middle East, especially when it comes to hydrocarbon resources. The “neutral zone” between Saudi Arabia and Kuwait that was demarcated by the Anglo-Turkish convention in 1913 still exists today. It has been a source of ongoing disputes over maritime borders between Kuwait and Iran for some time, although Kuwait and Saudi Arabia have come to an agreement over how to share the resources present in the area. Lebanon and Israel however remain in a state of war, and Israel still occupies some of Lebanon’s territory. Hence the issue of sharing resources, if indeed they do exist, seems far-fetched at best; more likely, perhaps, is the prospect of further conflict between the countries over energy.
“This is not going to be an easy issue,” says Saif. “If Israel starts to pump and utilize [any common resource], it would be a source of contention and Lebanon will find itself forced to move and to block any Israeli unilateral move.”
Most experts agree that it is highly improbable that the recent finds at Tamar and Dalit constitute a common field because of the distance between the finds and the border area, but that does not preclude the possibility of it being one or that one could exist, given the commonalties between the Lebanese and Israeli areas of the Levantine Basin. Just to make sure Israel is aware of Lebanon’s territorial concerns, the prime minister’s office has sent a letter to Noble demanding that the company does not encroach upon Lebanese maritime territory, according to a government source who spoke on condition of anonymity.
Even if Lebanon does manage to pass a law, starts the bidding process and brings in the oil companies in to begin drilling, the economic benefits will not be felt until much further down the line. The Tamar field is not expected to produce commercial quantities of gas until at least 2013. One energy consultant offered to bet this journalist $1,000 that commercial quantities would not be extracted before 2015. Moreover, any potential Lebanese field may take even longer enter production.
“In eight years, if we find something, we can actually open the lid and start making some money. Whoever wakes up first gets the money and the resources,” says Haidar.
If the Lebanese don’t wake up soon, they may well find themselves snoozing through yet another regional boom and lose the chance to revive their debt-ridden economy.

Beirut- PGS Geophysical of Norway has started the implementation of the agreement it signed last May with Lebanon's Ministry of Water and Energy on the multi-client MC3D seismic for offshore Lebanon.

The Survey Ship Atlantic departed last Tuesday with several experts on board. The Ship will complete its mission in approximately seventy days. Representatives of Lebanon's Ministry of Energy and Water are also on board.

PSG released the following on the agreement:

PGS Geophysical AS has entered into an exclusive agreement with the Ministry of Water and Energy to acquire non-exclusive Multiclient MC3D seismic offshore Lebanon. The offshore area approximately covers 25,000
and will be the subject of future licensing to oil and gas companies in 2006/2014.

Offshore Lebanon is already recognized as a very prospective sedimentary basin with a favorable petroleum geology, source rock, reservoir and seal development. This has led to multiple play development and the recognition of several viable petroleum systems with favorable timing of hydrocarbon

Water depths are in the region of 100-2000m’s, with the area
located close to the Arab Gas Pipeline Project.

The area is dominated by the Levant Basin which has resulted from three main structural phases 1) Triassic to Early Jurassic rifting, 2) Late Jurassic to Late Cretaceous passive margin development 3) Cenozoic compressional tectonics

Exploration History....

There are no wells drilled in the area offshore Lebanon.
However, seven wells have been drilled onshore between 1947
and 1967 all with shows of gas and or bitumen giving some
indications to the regional geology/prospectivity.
In the offshore region within close proximity to Lebanon,
wells/fields are known to contain oil and gas reservoir/source
potential within the Jurassic, Cretaceous and Tertiary.

Goldman's penny the utterly corrupt Beltway Bandits

Goldman's penny punishment...and much more....

This could very well be Keynesianism’s last hurrah. This may be the last inflationary episode, because those hundreds of ships cannot sit in the Middle East indefinitely. The re-issuance of massive amounts of government debt cannot and will not solve the problem. At this juncture there is no way that a devastating outcome can be avoided and those pulling the strings are well aware of that. No one will escape economic and financial pain. The degrees will just be different. Worst of all very little effort is being devoted to solving the problem and creating employment and prosperity. That is because our planners know the effort is futile. The real solution is to cut government expenses by 30%, stop deficit spending, lower taxes and let the problem solve itself, which entails a deflationary depression. Instead we are headed for a terrible fate and it was planned that way. This didn’t just happen.
As we have discussed before there is a massive misallocation of capital due to the Fed’s interest rate policy. The government pretends inflation is close to zero when in fact it is much higher. That is caused by government manipulation. We just saw the same thing in GDP figures.... This obfuscation isn’t fooling anyone. This inflation is caused in part by low interest rates and monetization by the Fed and to some extent by fiscal profligacy. The high inflation has been used for seven years to offset high deflation and it has not been too difficult to make inflation and GDP appear normal on the surface by just lying about the statistics. The problem the Fed has is that it must always create more inflation than deflation for fear they’ll lose control of the game and deflation, which once in command is impossible to stop. Underneath this game is a boiling cauldron of instability that could break loose at any time raising havoc with the system....

* US Treasury is Running on Fumes.....

By Hossein Askari and Noureddine Krichene
And he looked up, and saw the rich men that were casting their gifts into the treasury. And he saw a certain poor widow casting in thither two mites. And he said, Of a truth I say unto you, This poor widow cast in more than they all: for all these did of their superfluity cast in unto the gifts; but she of her want did cast in all the living that she had.
- Gospel According to St Luke
The Barack Obama administration and the US Securities and Exchange Commission (SEC) must have missed the lesson of the parable of the widow's mite in their upbringing and education. They should read the parable over and over again to get the message. The New York judge, the Honorable Barbara S Jones, who must still approve the settlement of the SEC's case against Goldman Sachs, should do the same before passing judgment....

The pending settlement of the case against Goldman Sachs, which was originally filed in April of this year, calls for a payment of US$550 million ($300 million to the US Treasury and $250 million to investors who lost in mortgage-backed securities that Goldman marketed) and does not require an admission of wrongdoing on the part of Goldman Sachs (normally the case in such settlements); instead, Goldman just admits that it gave "incomplete information" and that this was a "mistake" that it "regrets", and hands over the $550 million.

Now $550 million is a lot of money to mere mortals, that nobody can deny. But to Goldman Sachs? It is equivalent to just 4% of Goldman's net earnings for just one year, 2009 ($13.38 billion); or 3.4% of its bonus pool ($16.2 billion) for 2009. All this in one year, a year while the rest of the world was suffering.

These percentages aren't exactly equivalent to the pain felt by the widow in the parable. Just imagine, would you be in desperate straits and forced to change your ways if in one year of your life (note: not every year) you had lost 3-4% of your income? You get our drift. There is no pain in this settlement for Goldman. The financial markets gave their verdict, the price of Goldman's shares went up after the announcement was made: "Good deal Goldman Sachs, you did it again."

The $250 million of the $550 million destined for all those investors who lost in the mortgage-backed securities that Goldman marketed, represents only a fraction of the losses of one UK institution alone. Is this asymmetry between investor losses and Goldman payments fair? Is this just?

Now compare the aggregate pain inflicted on Goldman, its employees and its stockholders by this $550 million pending settlement to the aggregate pain inflicted on the millions of families in the United States and around the world who have suffered as a result of the financial crisis and the economic downturn.

Admittedly, the crisis was brought on by the misdeeds of other financial institutions and a host of other factors such as the failure of the US Federal Reserve policy, proliferation of debt and financial leveraging, misguided deregulation, inept supervision and more. But a key financial institution, Goldman Sachs, which was central to the excesses of Wall Street and received US government support when it was on the brink of collapse, has suffered almost nothing at all, while Main Street continues to bleed with no relief in sight.

What did the taxpayer do for Goldman? When Goldman was potentially on the brink of collapse, it was allowed by the Fed to convert its status from an investment bank to a bank holding company, affording it government support and protection. This resuscitated Goldman from near death. Goldman received TARP (Troubled asset Relief Program) funds (which it has since paid back with interest). It received 100 cents on the dollar from the insurance policies (more correctly, credit-default swaps) that it had purchased from what was a bankrupt company, AIG, which was given federal dollars to hand over to Goldman.

How much? $13 billion, that's how much. Now that's 23.6 times, or 2,360% of, the $550 million settlement. Some have even suggested that the amount might have exceeded this as Goldman may have received some indirect payments through other banks that received federal dollars from AIG. No bankrupt firm, such as AIG, pays off its creditors 100 cents on the dollar - but with taxpayer money and Goldman, anything goes.

This is the treatment that Goldman got. How did it treat the taxpayers? It turned around and paid its employees obscene bonuses while taxpayers suffered, with about 50 million Americans on food stamps. And as compensation for its excesses, Goldman set up a $500 million fund to assist small business and now this pending settlement.

Let's get back to the lawsuit and the settlement. Why did the SEC file the case? Presumably it thought it had a case. Presumably, it was seeking justice. And presumably an integral part of seeking justice was to cause enough pain to Goldman that it would never do the same again, or that at least it would think long and hard about any such transgression in the future, and hopefully in the process to send the rest of Wall Street a strong message.

Well, you be the judge. In retrospect, the SEC may not have achieved any of these goals and its actions may have, in fact, done more harm than good. Again, Wall Street signaled its reaction in the aftermath of the settlement; Goldman shares climbed. So the message to the rest of Wall Street is not exactly of a tough SEC, tough enforcement, or of changed oversight of Wall Street shenanigans.

Robert Khuzami, the SEC's chief enforcement lawyer and the man who represented the commission, has said the opposite of our conclusion. He has claimed victory because this is the largest fine in history. In this he clearly has not appreciated the parable of the widow's mite. Goldman Sachs feels little, if any, pain. Moreover, while the fine may appear large, the destruction caused by Wall Street and Goldman Sachs is significantly larger.

In support of Khuzami, we know what some legal minds have declared that this was the best that the SEC could get because its case was not tight and strong. If this were true, then the SEC should never have filed the suit, as it may have done more harm to Wall Street's perception of enforcement; before the suit and the settlement, Wall Street might have thought that the authorities had toughened their enforcement policies, but now the cat is out of the bag and they see that nothing has changed.

It would have been better for the SEC to fight and lose than to settle so. By fighting the case in court, the SEC would send a much stronger message (your reputation will be impaired as you will be in the headlines for months, not weeks) to Wall Street about future transgressions. Rest assured, future transgressions there will be; it's only a matter of time.

Let's face it - the US government and the two political parties are owned by the financial industry. US financial firms, such as Goldman Sachs, are having to pay back much more in Europe through higher taxes on bonuses than they will ever pay in fines and paybacks to the US, the country that rescued and resuscitated them. On July 20, 2010, Goldman reported that it had paid $600 million in such taxes in the UK alone.

What has the financial industry done for the real economy that we treat them so well? At a recent conference at the London School of Economics on July 14, the message of experts was clear. Quoting one of the authors, The Economist reported that the success of finance has been "as much mirage as miracle". The summary is not at all surprising: "The financial industry has done so well for itself, in short, because it has been given a license to make a leveraged bet on property ... The cost of that lesson is now being borne by the developed world's taxpayers."

The financial industry has received significant subsidies from governments; these subsidies have reduced their funding cost; and as result, over the past 30 or so years the financial industry has captured a growing share of the economy and it has prospered at the expense of the real economy.

It is now all up to the judge in New York. She is our last hope. If she approves the settlement, then the message that the SEC and the US government will be sending out to the financial industry is loud and clear: "No harm done, continue as you were."

Hossein Askari is professor of international business and international affairs at George Washington University. Noureddine Krichene is an economist with a PhD from UCLA.

* US Treasury is Running on Fumes


The White House is screaming like a stuck pig. CIA/DOD WikiLeaks’ release of the Afghan War Documents “puts the lives of our soldiers and our coalition partners at risk.”

What nonsense. Obama’s war puts the lives of American soldiers at risk, and the craven puppet state behavior of “our partners” in serving as US mercenaries is what puts their troops at risk.

Keep in mind that it was someone in the US military that leaked the documents to CIA/DOD WikiLeaks. This means that there is a spark of rebellion within the Empire itself.

And rightly so. The leaked documents show that the US has committed numerous war crimes and that the US government and military have lied through their teeth in order to cover up the failure of their policies. These are the revelations that Washington wants to keep secret.

If Obama cared about the lives of our soldiers, he would not have sent them to a war, the purpose of which he cannot identify. Earlier in his regime, Obama admitted that he did not know what the mission was in Afghanistan. He vowed to find out what the mission was and to tell us, but he never did. After being read the riot act by the military/security complex, which recycles war profits into political campaign contributions, Obama simply declared the war to be “necessary.” No one has ever explained why the war is necessary.

The government cannot explain why the war is necessary, because it is not necessary to the American people. Any necessary reason for the war has to do with the enrichment of narrow private interests and with undeclared agendas. If the agendas were declared and the private interests being served identified, even the American sheeple might revolt.

The Obama regime has made war the business of America. Escalation in Afghanistan has gone hand in hand with drone attacks on Pakistan and the use of proxy forces to conduct wars in Pakistan and North Africa. Currently, the US is conducting provocative naval exercises off the coasts of China and North Korea and instigating war between Columbia and Venezuela in South America. Former CIA director Michael Hayden declared on July 25 that an attack on Iran seems unavoidable.

With the print and TV media captive, why doesn’t Washington simply tell us that the country is at war without going to the trouble of war? That way the munitions industry can lay off its workers and put the military appropriations directly into profits. We could avoid the war crimes and wasted lives of our soldiers.

The US economy and the well-being of Americans are being sacrificed to the regime’s wars. The states are broke and laying off teachers. Even “rich” California, formerly touted as “the seventh largest economy in the world,” is reduced to issuing script and cutting its state workers’ pay to the minimum wage.

Supplemental war appropriations have become routine affairs, but the budget deficit is invoked to block any aid to Americans--but not to Israel. On July 25 the Israeli newspaper, Haaretz, reported that the US and Israel had signed a multi-billion dollar deal for Boeing to provide Israel with a missile system.

Americans can get no help out of Washington, but the US ambassador to the UN, Susan Rice, declared that Washington’s commitment to Israel’s security is “not negotiable.” Washington’s commitment to California and to the security of the rest of us is negotiable. War spending has run up the budget deficit, and the deficit precludes any help for Americans.

With the US bankrupting itself in wars, America’s largest creditor, China, has taken issue with America’s credit rating. The head of China’s largest credit rating agency declared: “The US is insolvent and faces bankruptcy as a pure debtor nation.”

On July 12, Niall Ferguson, an historian of empire, warned that the American empire could collapse suddenly from weakness brought on by its massive debts and that such a collapse could be closer than we think.

Deaf, dumb, and blind, Washington policymakers prattle on about “thirty more years of war.”

Paul Craig Roberts was an editor of the Wall Street Journal and an Assistant Secretary of the U.S. Treasury.

Even after the CIA/DOD/Wikileaks revelations, even though there is no logical reason to be in Afghanistan, even though the war won't help the economy, and even though most Americans want us to get out, Congress keeps increasing funding for the endless war.

And Alan Blinder (economist, banking consultant and former Vice Chairman of the Board of Governors of the Federal Reserve System) and chief Moody's economist Mark Zandi wrote a paper yesterday called How We Ended the Great Recession:

How We Ended the Great Recession

A source on Capitol Hill sent this to me, telling me that the paper is making the rounds on the Hill.

In the paper, Blinder and Zandi congratulate the Bush and Obama administrations for saving us from the Great Depression 2.0:
Eighteen months ago, the global financial system was on the brink of collapse and the U.S. was suffering its worst economic downturn since the 1930s. The Great Recession gave way to recovery as quickly as it did largely because of the unprecedented responses by monetary and fiscal policymakers.
In other words: "Mission Accomplished".

In the real world, however, the economy is on the second leg down of the crash, and the government's policies have not addressed the real problems. See this and this (no wonder consumer confidence is plunging but Wall Street is partying like it's 1999).

Indeed, while Blinder and Zandi and Congress are patting themselves on the back for a job well done, the facts simply do not bear out their claims. As just one example, they claim that the TARP bank bailouts helped the economy. But as I pointed out in March 2009, the bailout money didn't actually go to any productive economic uses:

The bailout money is just going to line the pockets of the wealthy, instead of helping to stabilize the economy or even the companies receiving the bailouts:

  • A lot of the bailout money is going to the failing companies' shareholders
  • Indeed, a leading progressive economist says that the true purpose of the bank rescue plans is "a massive redistribution of wealth to the bank shareholders and their top executives"
  • The Treasury Department encouraged banks to use the bailout money to buy their competitors, and pushed through an amendment to the tax laws which rewards mergers in the banking industry (this has caused a lot of companies to bite off more than they can chew, destabilizing the acquiring companies)
And as the New York Times notes, "Tens of billions of [bailout] dollars have merely passed through A.I.G. to its derivatives trading partners".


In other words, through a little game-playing by the Fed, taxpayer money is going straight into the pockets of investors in AIG's credit default swaps and is not even really stabilizing AIG.
The super-wealthy have been bailed out, and life is great for them. For everyone else, things are not so good.

The system is rigged to benefit the elites and their sycophants at the expense of the country. See this, this, this, and this.

And - because Congress members tend to be wealthy, and because they can engage in insider trading without having to worry about pesky things like the law - they continue (with only a handful of exceptions who challenge status quo thinking regarding finance and war) to make decisions which benefit their own bank accounts, instead of working for the American people.....

Europe's Iran sanctions will backfire

Europe's Iran sanctions will backfire
By Kaveh L Afrasiabi

The European Union (EU) on Monday adopted a new round of sanctions against Iran that, if implemented, will have serious implications not only for the EU as the Islamic Republic's largest trading partner, but also for its energy security.

The new European sanctions target Iranian shipping and air cargo companies, impose visa bans on officials and freeze assets linked to the Islamic Revolutionary Guards Corps, and also include trade insurance and financial sanctions. They ban new EU investments in Iran's nuclear and gas sectors as well as any technical energy assistance - this from a continent that receives roughly 29% of Iran's crude oil exports and is increasingly dependent on its gas exports.

The EU sanctions support curbs under the UN Security Council Resolution 1929 imposed on June 10, which were followed by US sanctions. The resolution paved the way for a fourth round of international sanctions over claims that Iran is building nuclear weapons. Tehran denies the accusations and says its nuclear program is for peaceful purposes only.

In light of Iran's serious need for foreign capital in its energy sector, the crippling effect of Western sanctions on its oil and gas is bound to have ripple effects in accentuating Europe's current energy insecurity, reflected in the 27-member EU's wariness of undue dependence on Russia and its frantic search to diversify sources of gas imports.

It may well be that the implicit assumption behind the new EU sanctions is the comforting assurance that the energy sanctions will not cripple Iran's ability to export, allowing Europe to continue to benefit. The crux of Europe's dilemma, however, is that sanctions on Iran will inevitably translate into economic, financial and energy losses for the EU.

By imposing sanctions on Iran's energy sector while expecting business as usual in the delivery of oil and gas, European politicians are engaging in the self-deluding notion that somehow they can be at the forefront of the sanctions regime on Iran without incurring substantial costs.

Already, Iran has warned that it may switch its energy transactions from the euro to other currencies, above all the dirham of the United Arab Emirates. The mere threat of such a move simply adds to the euro's weaknesses at a critical time when the eurozone is grappling with multiple difficulties in its currency and financial health.

Not only that, the new EU sanctions, in addition to switching the EU's so-called two-track diplomacy with Iran almost entirely to one-track coercive diplomacy, target Europe's own hitherto reliable source of energy, unlike sanctions from the US, which does not directly import oil or gas from Iran. A case in point is the Swiss energy giant EGL, which has signed a US$13 billion 25-year contract with Iran that almost certainly will be hurt by the new Western sanctions on Iran's energy sector.

Ironically, the EU's decision comes only a few days after Turkey signed a US$1.3 billion pipeline agreement with Iran that calls for gas exports of 2.1 billion cubic feet a day (cf/d) in three years. No surprise then that Ankara was quick in denouncing the EU's sanctions and openly stated it would not honor them.

In addition to the proposed 410 mile (660 kilometer) pipeline, the existing 745 mile Iran-Turkey pipeline, completed in 2001, can transport up to 1.4 billion cf/d of natural gas, although due to technical and other difficulties it has never operated at optimal levels and there have been periodic interruptions.

"The EU has foolishly and blindly followed the footsteps of the United States, which has no vested economic interests with Iran,'' a Tehran University political science professor told the author. ''This is going to have negative geo-economic implications for the European Union, that is, telling Iran that now we would love to have your oil and gas, but we will do everything possible to make sure that your energy sectors are crippled. What an irony."

In response, Iran would probably expand its energy ties with Asian countries such as India, which had increased its oil imports from Iran by 9% compared to last year, the professor added. Nor is there any sign that China and Japan, which together account for roughly one third of Iran's oil exports, are ready to risk their energy security over the nuclear standoff, as Europe has now done.

Without doubt, the European and US sanctions will have a significant impact on Iran's trajectory as a gas producer in the years to come. According to senior Iranian energy officials, Iran needs a minimum of $8 billion in investment in the gas sector, given the fact that some two-thirds of its gas reserves remain undeveloped, particularly in the giant South Pars. The gas field contains roughly half of Iran's gas and is shared with Qatar, which has far outplayed Iran in its exploitation of the reserve, much to the chagrin of the Iranians who are worried that Qatar will take advantage of the Western sanctions.

A big question concerns how the new EU sanctions will impact on plans for the ambitious "Persian pipeline" that could connect Iran's South Pars gas to Europe via Turkey? [1] Has Europe really given serious thought to these questions or, as the late German Iran specialist Johannes Reissner once put it, has Europe fallen into the malady of a "nuclear reductionism"?

Prospects for a mini-breakthrough
Meanwhile, in the maddening march of Western governments toward tougher sanctions on Iran there is the glimmer of a mini-breakthrough in the area of a nuclear fuel exchange for Iran's small medical reactor.

After extensive exchanges with the International Atomic Energy Agency (IAEA), there is reportedly a considerable narrowing of differences between the parties on this issue. By early to mid-September we may witness the finalization of an IAEA-proposed deal for a fuel swap.

Iran has now submitted a new letter to the IAEA and the Vienna Group, consisting of the US, Russia, France and the IAEA, regarding the technical aspects of the fuel swap, urging the other side not to "waste time".

Reports from Tehran indicate some new signs of flexibility on Iran's part, such as with respect to the thorny issue of Iran's production of 20% enriched uranium. Iran may now be willing to forego this in exchange for a firm commitment from the Vienna group on the timely delivery of nuclear fuel to the Tehran reactor.

Not only that, the chances are that Iran, which has offered a new round of multilateral nuclear talks this September, may be willing to entertain a deal whereby it would put its enrichment activities on "standby option" and agree to a temporary freeze without stopping its centrifuges from "dry spinning"; this in exchange for the lifting of sanctions.

The "standby option" is, indeed, the most that the West can expect from Iran at this stage, since the "zero centrifuge" option is a thing of the past - and politically unrealistic in Iran.

Thus, a combined nuclear fuel swap with the standby option, together with other "objective guarantees" regarding Iran's peaceful nuclear program, may at this point pose the best and most feasible scenario for ending a crisis that over the past few months has qualitatively worsened and, indeed, could get a lot worse.

Tuesday, July 27, 2010

More Iraqi Reconstruction Funds Are Missing and can be found in covert operations slush funds in the Levant...

Audit: US Can't Account for $8.7B in Iraqi Funds --

US audit finds weakness in Pentagon controls for Iraq funds; $8.7 billion missing but can be found in covert operations slush funds for the Levant and beyond, oiling the operations of the infamous White House Murder INC,....of the Siamese twins CIA/MOSSAD.

The U.S. Defense Department is unable to properly account for over 95 percent of $9.1 billion in Iraqi oil money tapped by the U.S. for rebuilding the war ravaged nation, according to an audit released Tuesday.

The report by the U.S. Special Investigator for Iraq Reconstruction offers a compelling look at continued laxness in how such funds are being spent in a country where people complain basic services like electricity and clean water are sharply lacking seven years after the U.S.-led invasion that toppled Saddam CIA Hussein....

Read more ....

Monday, July 26, 2010

China carries Bhutto's dreams...

China carries Bhutto's dreams...
By Antoaneta Becker

BEIJING - When President Asif Ali Zardari appeared at a Pakistan-China renewable energy forum in Shanghai on July 10, he rekindled a vision of his assassinated wife and former prime minister, Benazir Bhutto, who had envisaged gas pipelines, railway tracks and highways connecting China and Pakistan. Zardari said that he, as the first businessman president of Pakistan, was going to work to make that dream a reality.

Zardari's five-day trip to China, his fifth since coming to power in 2008, was deemed so successful by Chinese and wary Indian observers that Beijing felt the need to defend its growing investment and trade links with Pakistan.

"New Delhi does not need to fidget each time it sees signs of
intimacy between Beijing and Islamabad," said a commentary in the China Daily, the state-run English-language newspaper. "Instead, it should look to the larger picture of the India-China relationship and deepen its political trust with Beijing."

Chinese analysts have noted that New Delhi dispatched National Security Adviser Shiv Shankar Menon, a man from a family of diplomats with Chinese links, just a day before the president of Pakistan arrived in Beijing.

"Sending Menon, whom we regard as an 'old China friend', means that New Delhi was hoping to achieve as much as possible," Han Hua, a South Asia expert at Beijing University, told the 21st Century Business Herald newspaper. "India has all along been very uneasy about Pakistan and China exchanges in the nuclear energy field."

Yet the prospect of expanded nuclear cooperation between China and India's arch-rival is only one of the factors to have caused disquiet in New Delhi this time. Zardari and Chinese leaders reportedly discussed investment opportunities in numerous sectors, including port development, hydropower, roads, railways, mining and others.

Zardari said in Beijing that Pakistan could be a "force multiplier" for China's development. "We want to learn and recreate your success," he stated.

As the United States and European Union hesitate over allowing trade concessions to Pakistan, China has moved aggressively, promising liberalization of trade and offering soft loans along with investment. Beijing is quickly becoming Pakistan's main trading partner and has ambitions of doubling bilateral trade from the current annual US$7 billion to $15 billion in the next couple of years.

"The US sees India as a counterweight to contain Chinese influence, while China wants Pakistan to emerge as a power to counter India's ambitions for regional hegemony," says Syed Fazl-e-Haider, a development analyst in Pakistan. "Whether it is the issue of transferring nuclear technology or Iran gas pipeline project, China has always supported Pakistan against US and India."

To Indian observers, the prospect of snowballing Chinese investment and an increased Chinese presence in Pakistan reinforces a suspicion that China is using soft power and cash to embed itself on India's borders.

China is already the biggest investor and the largest aid donor in terns of commitment in Sri Lanka. There, as in Pakistan, China has challenged traditional trade partners like the EU and the United States, choosing not to ask questions or impose conditions over human rights and labor concerns.

In Chinese eyes, both countries provide ready markets for Chinese consumer goods, services and labor. As Beijing tries to rebalance the country's economy moving away from being dependent on exports to recession-hit markets like the United States and the EU, developing countries in the region are becoming more important by the day.

These countries are also seen as launchpads for China's ambitions in strategic industries like the nuclear sector and railway infrastructure. China's aspirations of becoming a global player in the nuclear energy sector have underpinned Beijing's decision to deploy nuclear know-how and investment to energy-starved Pakistan.

Indian concerns are not likely to stand in the way of agreements between Islamabad and Beijing to proceed with plans to add another two nuclear reactors to Pakistan's modest fleet of modern reactors, Chashma 1 and Chashma 2, also designed and built with China's help in the province of Punjab.

Although China is a member of the Nuclear Suppliers' Group (NSG) and thus subject to rules that forbid the sale and export of nuclear technology to Pakistan, Beijing has insisted that the new deal is an "extension" of the old cooperation over Chashma 1 and Chashma 2, which has been under safeguards of the International Atomic Energy Agency.

Chinese leaders can argue they have their own domestic reasons for pursuing accelerated economic development in the region. Beijing has just announced a new multi-billion US dollar investment package to boost the development of its laggard western regions. The decision comes in the wake of violent unrest in the restive minority areas.

The $100 billion package includes railways, roads, airports and hydropower projects and shows Beijing is intent on pursuing stability by infrastructure investment in both Buddhist Tibet and Muslim Xinjiang.

Kashgar - the southern hub of Xinjiang - long eclipsed by the more developed and resource-rich cities in the region's north, is being given a new lease of life as an important center to spread China's influence in Central and South Asia.

Among the projects discussed between Beijing and Islamabad is a proposed railway to link Kashgar to the southern Pakistan port of Gwadar. If realized, it would give China direct access to the Arabian Sea and provide an alternative route should a naval blockade cut oil supplies from the Middle East. The problem for Beijing is that the proposed line is to pass through Gilgit-Baltistan - an area seen by both India and Pakistan as part of the larger Jammu and Kashmir issue, which has not yet been resolved.

"All Chinese plans for gaining access to resource-rich Central Asia and building energy pipelines pass through Gilgit-Baltistan," said Syed. "Gilgit, the northern areas capital, has acquired the status of gateway to Central Asia after Pakistan-China barter trade agreement and accords with Central Asian States."

It is easy to read China's actions as intent on infuriating India, but Gao Heng, researcher with the Institute of World Economics and Politics of the Chinese Academy of Social Sciences (CASS), said this is misleading.

"One should not view everything China does in the region through ideology or geopolitics," he says. "A lot is driven by the market. The country's national interests are those that dictate the direction of China's relations with countries in South Asia."