April 2015 archive

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This Day in History

Martin Luther King Jr. gives speech before assasination; Bruno Richard Hauptmann electrocuted for kidnap and murder of Charles Lindbergh’s son; President Harry Truman signs Marshall plan; Jesse James shot to death; Pony Express begins service; Marlon Brando is born.

Breakfast Tunes

Something to Think about over Coffee Prozac

A hero is someone who understands the responsibility that comes with his freedom.

Bob Dylan

Of course the proximate issue is whether the prospective deal with Iran is ‘another Munich’.

Now I’ll leave aside some minor contemporary details like the fact that as a signatory of the Nuclear Non-Proliferation Treaty Iran is perfectly within its rights to develop nuclear power for peaceful purposes in any way they see fit, and that Ayatollah Khameini “has also issued a fatwa saying the production, stockpiling and use of nuclear weapons is forbidden under Islam.”, and that Pakistan (Sunni) is a non-participant that openly has nuclear weapons and Israel (another non-participant) almost certainly has them but will not admit it, or that Saudi Arabia (participant) has stated that they will purchase them if they deem it desirable.

Let us think instead about Munich.

The logic (in so far as it can be called logic and not simply Islamophobic bigotry or resentment that a popular revolt replaced a US puppet regime of despots and torturers) of those who cry ‘appeasement’ is that it was clear by 1938 that Hitler was a monster who could only be stopped by War.

Well, duh.

That was clear from March 1936 when the Rhineland was re-militarized.

The two Western Allies, Britain and France, immediately launched crash re-armament programs that were none too popular with the war weary taxpayers.  The recently consolidated Soviet Union was understandably deeply suspicious of them since they had just spent the last 10 years trying to roll back the Revolution and restore the Romanovs (or some other non-Communist regime).  In any event its military was in no shape for offensive action against Germany and while it did start a re-armament program (partly for its economic effects) it was made even less effective by Stalin’s paranoia and purges.

I would ask, what makes you think that military action by France and Britain in 1938 supporting an isolated ‘Ally’ a thousand miles away would have been any more effective than when it was actually attempted in 1939 in ‘defense’ of Poland?

May I remind you the result of that was the fall of all of Western Europe with the exception of Britain who barely survived?

Now it is true that several members of the German General Staff thought annexation of the Sudetenland was too ambitious and would result in defeat, but there was opposition in that quarter throughout the War to many of Hitler’s more aggressive plans including the Invasion of France.

There is a body of evidence, not conclusive to be sure but not easily dismissed, that Chamberlain and Édouard Daladier understood the weakness of their militaries and the strategic difficulties of operating so far from their lines of supply.  In any event they didn’t (contrary to popular belief) simply throw Czechoslovakia under the bus.  They got a commitment from Hitler to respect the border of the Czech and Slovak majority areas.

The fact that Hitler ignored it makes it seem worse in 20/20 hindsight, however I once again ask- how could they have achieved better results in 1938 than they ultimately got in 1939?

So what is the position we are in today?

Even the most optimistic war hawks concede that should they decide to do so, conventional military action (and I’m talking full on ground assault and pounding their cities to dust) will prevent the Iranians from acquiring nuclear capability for at best 5 to 10 years after we end our occupation (Iran is roughly 4 times the size and twice the population of California and, if we sent every single member everywhere of our Armed Forces and Reserves including Generals, would only outnumber us 35 to 1).

But the truth is much, much worse than that.  They will kick our ass.

The latest Russian and Chinese anti-ship missiles are no joke and Carriers are big targets that have no business in a confined space like the Straights of Hormuz.  The Straights are literally carpeted in mines and our Mine Sweeping capability is a joke because no one good wants to Captain a Minesweeper and no Admiral wants to budget for it.  While it might not have the commodity shock it once did it will only take a single hit to close the Straights to commercial traffic.

Should we somehow struggle ashore, how long could we stay?  Hard to say, we’re still in Iraq after all but then again Iraq is almost exactly the size and population density of California.

Nuke ’em from orbit?  Admirable sentiments Ripley and effective against aliens on a planet far, far away.  In the real world nuclear attacks of the level necessary to achieve “victory” would be globally environmentally damaging and probably not something the Russians and Chinese would let pass without some kind of response.  I suspect that even Europe might be a tad upset and if you think the future of US Hegemony is to be found in an alliance with Sunni Muslims led by Saudi Arabia and Israel I might advise you to seek professional help for your delusions.

Creating your own reality is a symptom of severe mental illness you know.

The Great Game in Afghanistan: The US Is Losing Out

By Dilip Hiro, TomDispatch

Wednesday, 01 April 2015 00:00

Call it an irony, if you will, but as the Obama administration struggles to slow down or halt its scheduled withdrawal from Afghanistan, newly elected Afghan President Ashraf Ghani is performing a withdrawal operation of his own. He seems to be in the process of trying to sideline the country’s major patron of the last 13 years — and as happened in Iraq after the American invasion and occupation there, Chinese resource companies are again picking up the pieces.

…

In the new foreign policy that Ghani recently outlined, the United States finds itself consigned to the third of the five circles of importance.  The first circle contains neighboring countries, including China with its common border with Afghanistan, and the second is restricted to the countries of the Islamic world.

In the new politics of Afghanistan under Ghani, as the chances for peace talks between his government and the unbeaten Taliban brighten, the Obama administration finds itself gradually but unmistakably being reduced to the status of bystander. Meanwhile, credit for those potential peace talks goes to the Chinese leadership, which has received a Taliban delegation in Beijing twice in recent months, and to Ghani, who has dulled the hostility of the rabidly anti-Indian Taliban by reversing the pro-India, anti-Pakistan policies of his predecessor, Hamid Karzai.

…

As an official of the World Bank for 11 years, Ghani had dealt with the Chinese government frequently. This time, he left Beijing with a pledge of 2 billion yuan ($327 million) in economic aid for Afghanistan through 2017.

The upbeat statements of the two presidents need to be seen against the backdrop of the twenty-first-century Great Game in the region in which, after 13 years of American war, Chinese corporations are the ones setting records in signing up large investment deals. In 2007, the Metallurgical Corporation of China and Jiangxi Copper Corporation, a consortium, won a $4.4 billion contract to mine copper at Aynak, 24 miles southeast of Kabul. Four years later, China National Petroleum Corporation in a joint venture with a local company, Watan Oil & Gas, secured the right to develop three oil blocks in northwestern Afghanistan with a plan to invest $400 million.

In stark contrast, 70 U.S. companies had invested a mere $75 million by 2012, according to the Afghanistan Investment Support Agency. What Washington policymakers find galling is that China has not contributed a single yuan to pacify insurgency-ridden Afghanistan or participated in the U.S.-led International Security Assistance Force in that country, and yet its corporations continue to benefit from the security provided by the presence of American soldiers.

Former Blackwater gets rich as Afghan drug production hits record high

Spencer Ackerman, The Guardian

Tuesday 31 March 2015 17.13 BST

In a war full of failures, the US counternarcotics mission in Afghanistan stands out: opiate production has climbed steadily over recent years to reach record-high levels last year.

Yet there is a clear winner in the anti-drug effort – not the Afghan people, but the infamous mercenary company formerly known as Blackwater.

Statistics released on Tuesday reveal that the rebranded private security firm, known since 2011 as Academi, reaped over half a billion dollars from the futile Defense Department push to eradicate Afghan narcotics, some 32% of the $1.8bn in contracting money the Pentagon has devoted to the job since 2002.

The company is by far the biggest beneficiary of counternarcotics largesse in Afghanistan. Its closest competition, the defense giant Northrop Grumman, claimed $250m.

According to the US inspector general for Afghanistan “reconstruction”, the $569m Academi got from US taxpayers paid for “training, equipment, and logistical support” to Afghan forces conducting counternarcotics, such as “the Afghan National Interdiction Unit, the Ministry of Interior, and the Afghan Border Police”.

Far from eradicating the deep-rooted opiate trade, US counternarcotics efforts have proven useless, according to a series of recent official inquiries. Other aspects of the billions that the US has poured into Afghanistan over the last 13 years of war have even contributed to the opium boom.

…

Academi and its former Blackwater incarnation have an infamous history in Afghanistan. It once set up shell companies to disguise its business practices, according to a Senate report, so that its contracts would be unimpeded by company employees’ killings of Iraqi and Afghan civilians.

HSBC is ‘cast-iron certain’ to breach banking rules again, executive admits

by Harry Davies and James Ball, The Guardian

Thursday 2 April 2015 14.50 BST

A senior HSBC executive has privately admitted that the bank is “cast-iron certain” to have another major regulatory breach in the future, and is struggling on multiple fronts to clean up its worldwide operations.

Global head of sanctions Lee Hale – whose recorded comments appear to contrast with public statements from HSBC’s chief executive that the bank has fundamentally transformed itself after recent scandals – said gaps remained in the bank’s compliance with sanctions policies and the screening of certain financial transactions.

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Hale was meeting with independent lawyers monitoring HSBC as part of a controversial 2012 deal with the US Department of Justice, in which the bank avoided prosecution over sanctions-busting and money-laundering in its Mexican branch in exchange for paying a $1.9bn fine and receiving additional regulatory scrutiny for a period of five years. The deferred prosecution agreement was signed by the then US attorney for the eastern district of New York, Loretta Lynch, who is now Barack Obama’s nominee for US attorney general.

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Explaining the past difficulty of overhauling sanctions standards at the bank, Hale said HSBC staff were not used to providing the required level of detail for compliance to sign off dispensations. He said: “I think it’s really the first time where we’ve looked to do this with the right level of rigour … the quality of the initial submissions was not great.”

The monitor is required each year to file a lengthy report to the Department of Justice, which in turn files a much shorter summary update to a court in New York. As the agreement was signed in December 2012, the head of the DoJ’s criminal division said HSBC had the “sword of Damocles” over its head should it not follow through on its commitments.

HSBC Violates its Sweetheart Deal and Lynch Praises It

by William Black, New Economic Perspectves

April 2, 2015

HSBC got a sweetheart deal from the Obama administration.  It laundered vast amounts of money for Mexico’s murderous Sinaloa cartel, helped bust sanctions for terrorists and mass murderers, and did not cooperate with the investigation.  The U.S. Attorney in charge of the case, Loretta Lynch, refused to prosecute any of the HSBC bankers or even sue them individually.  Instead, there was a pathetic non-prosecution agreement limited to HSBC.  Lynch is accused of not contacting either of the primary whistleblowers in the case.  The failure to contact one of the whistleblowers has already blown up in Lynch’s face as it became public a few months ago that the governments of the U.S. and Europe were provided many years ago with data on HSBC’s Swiss affiliate that show it was helping terrorists, genocidal leaders, the most violent drug gangs, and tens of thousands of wealthy people evade taxes.  Lynch failed to bring that case or use any of the invaluable data provided by the whistleblower who copied the files from the Swiss bank.

Now comes word that, like Standard Chartered, HSBC is failing to abide even by the pathetic sweetheart deal Lynch gifted HSBC’s criminal managers with.  In the case of Standard Chartered, NY authorities came down on Standard Chartered with at least one foot on the neck.  Lynch is made of considerably less stern stuff.  She failed even to do the most obvious move of extending the agreement with HSBC.

…

HSBC’s violations were a heaven sent opportunity for Lynch to undo the massive embarrassment of the shameful deal she gave HSBC – one of the world’s largest and most destructive criminal enterprises.  She could use the “watchdog” report damning HSBC to state the reality – HSBC’s managers have acted in bad faith and violated the deal that would have got them off with no real prosecution.  Lynch could now prosecute HSBC and its senior managers for all the frauds – including the vast frauds she missed last time because of her failure to talk with the whistleblowers.  And the chances of that happening closely approach zero because Obama chose Lynch to continue Holder’s shameful policies of refusing to prosecute bankers rather than change those policies.

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Holder’s refusal to prosecute the bankers has led to “repeat offenses on Wall Street.”  Ponder that which DealBook religiously refuses to ponder – if fraudulent bankers find they grow wealthy from the “sure thing” of fraud with no risk of prosecution or even being sued, why wouldn’t they respond with “repeat offenses” that would create a “pattern of corporate recidivism?”  DealBook is very sympathetic to Holder and Lynch.  They are portrayed as “grappling” with the thorny problem that because senior bankers realize that under Holder and Lynch they can grow wealthy and powerful by leading “repeat offenses” they will do so even though they promise “dad” (Holder) or “mom” (Lynch) that they’ll never do it again.  (DealBook hates to use the “f” word to describe elite bankers’ frauds.)

As DealBook (hilariously) portrays the matter, Holder and Lynch “grapple” with this intractable and apparently inconceivable (in the Princess Bride sense of the word made famous by Vizzini) problem that the elite bankers keep on committing massive felonies helping terrorists and the world’s most violent drug gangs even after they look Holder and Lynch (dad and mom) straight in the eyes and solemnly promise to never hit their little brother and steal his toy truck again.  Five minutes later, dad and mom hear a smack followed by the little brother breaking into tears and find big brother with little brother’s toy truck.  Big brother, of course, solemnly says he never hit his little brother and the truck in his hand is not his little brother’s truck.  Big brother, being sophisticated, even pleads in the alternative that if he is holding little brother’s truck it is because little brother gave him the truck.  Except, that we’re not talking about toy trucks, but senior bank officers knowingly funding mass murder and terrorism.

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The truth is that Holder and Lynch are taking no meaningful efforts against what even DealBook now admits is “the pattern of corporate recidivism” by our most elite bankers.  The only thing they “grapple” with is the bad publicity arising from the stench of that “pattern” of the most despicable and harmful elite financial frauds in history.

There can be no more incriminating indictment of the Nation’s leading federal prosecutors than the fact that even the sycophantic DealBook admits that on Holder and Lynch’s watch a “pattern” of recurrent frauds by our most elite CEOs has emerged – and those frauds commonly involve profiting from the banks aiding the funding of mass murderers.  The administration has managed to turn into reality all those bad novels they sell in airport book stores that describe networks of criminal elite bankers financing terrorists, drug gangs, and venal and brutal kleptocrats with impunity from the laws.