Update no.659

Update from the Heartland

No.659

28.7.14 – 3.8.14

Blog version:  http://heartlandupdate.blogspot.com/

To all,

The follow-up news items:

-- An interesting alternative perspective in the on-going Eastern Ukraine situation [640, 657]:

“MH17: China Defends Russia, Criticizes the West – China’s state media has strongly condemned the Western response to MH17, and largely backed Russia.”

By Zachary Keck

thediplomat.com

Published: July 24, 2014

http://thediplomat.com/2014/07/mh17-china-defends-russia-criticizes-the-west/

I suppose the PRC finds it hard to condemn Russia’s hegemonic actions in the light of their actions against their neighbors.

-- The EU and U.S. have further expanded sanctions against Russia for their continued surrogate aggression in Eastern Ukraine [640, 657].  The more the West tightens the sanction screws, the more those actions will hurt the Russian people rather than the real culprits in this situation.

-- With unusual frankness, CIA Director John Owen Brennan apologized to the leaders of the Senate Intelligence Committee after an agency investigation determined that its employees improperly searched computers used by committee staffers to review classified files on interrogations of prisoners [639].  Now, I would like to see an apology from Senator Feinstein for the committee’s staffers accessing CIA documents beyond their authorization.

-- What can we say about Gaza [657]?  Ceasefire, no ceasefire!  The horror of it all!  What more can be said?  Here is another perspective.

“Gaming Israel and Palestine”

by George Friedman

Geopolitical Weekly, Strategic Forecasting, Inc.

Published: TUESDAY, JULY 29, 2014 - 03:04

http://www.stratfor.com/weekly/gaming-israel-and-palestine?utm_source=freelist-f&utm_medium=email&utm_campaign=20140729&utm_term=Gweekly&utm_content=readmore - axzz390GZOcYC

            Israeli-Palestinian behavior is quite like addiction, and in this case, both parties are addicted to this damnable violence.  There has been evidence that one side or the other sought peace in the past.  Until they both want peace at the same time, there will be no peace.  Imagine what might happen is the world agreed to a Palestinian state on the west bank with the Palestinian Authority.  Hamas would further be isolated.

            As noted in this forum several times, duality is a powerful force in relationships even among nation-states.  They both need bad guys to focus their people, followers and supporters.  Eventually, the cycle will be broken . . . perhaps not in my lifetime, but there is always hope. 

The House of Representatives passed Resolution 676 by a vote of 225-201-0-6, to authorize the Speaker to pursue legal action against the President of the United States over the implementation of the Patient Protection and Affordable Care Act (PPACA) [PL 111-148; 124 Stat. 119] [432] and the Health Care and Education Affordability Reconciliation Act of 2010 [PL 111-152; 124 Stat. 1029].  I suppose in a small way I can understand and appreciate the frustration of the House majority.  Yet, in total, this action is far more baffling and disturbing than understandable.  It is not clear whether the Speaker or General Counsel of the House will actually file a complaint against the President.  Perhaps just Resolution 676 is sufficient to placate the majority.  If the House does proceed, the Speaker has several very important and high hurdles to even reach the judgment stage, not least of which is judicial standing.  There are significant precedents in the President’s favor – a lot of history.  There is no complaint to review other than the resolution text, so it is difficult to assess.  At this stage, this initiative appears ill advised and emotional, and far worse, an extraordinary waste of what minimal capacity the House has had for the last decade.

News from the economic front:

-- The Commerce Department reported the U.S. Gross Domestic Product (GDP) increased at a seasonally adjusted annual rate of 4.0% in 2Q2014, after suffering the sharpest contraction in 1Q2014 since the recession ended.

-- In its July policy statement, the Federal Reserve said, "Economic activity rebounded in the second quarter," noting the labor market is improving, the jobless rate declining and inflation moving closer to its 2% objective.  The Fed added the qualifier that a range of indicators suggest their is still weakness in the job market.  They also expected to continue reducing its purchases of mortgage and Treasury bonds to US$25B, which would keep the central bank on track to end the stimulus program by October.

-- A federal judge in New York ordered Bank of America to pay US$1.27B penalty after the bank was found liable for Countrywide Financial Corporation's “Hustle” mortgage program, in which the lender churned out mortgage loans with an eye on quantity, not quality, and then sold them to investors like mortgage-finance giants Fannie Mae and Freddie Mac.  The bank is assessing its options for an appeal.

-- The Labor Department reported nonfarm employment rose by a seasonally adjusted 209,000 in July.  The unemployment rate ticked up slightly to 6.2% in July from 6.1% in June.  The jobless rate has fallen 1.1 percentage points since July 2013, when it was 7.3%, continuing to show strength in the labor market and the broader economy.

London Inter-Bank Offered Rate (LIBOR) Debacle [552]:

-- Lloyds Banking Group becomes the 7^th financial institution to reach a deal with U.S. and U.K. authorities in the long-running investigation regarding widespread efforts to manipulate the LIBOR, and other widely used interest-rate benchmarks.  The bank will pay roughly US$370M in fines for attempting to rig benchmark interest rates.

-- So we don’t lose focus . . . the infamous 16, involved, international banks are:

• ·      Barclays [UK] – US$454M fine [550]; Singapore sanctions [600]; three charged {Johnson, Mathew, Contogoulas} [636]
• ·      Bank of America [U.S.] – Singapore sanctions [600]
• ·      BTMU [Japan] – Singapore sanctions [600]
• ·      Citigroup [U.S.] – Singapore sanctions [600]
• ·      Credit Suisse [Switzerland] – Singapore sanctions [600]
• ·      Deutsche Bank [Germany] – US$654M LIBOR profit [578]; set aside €500M (US$641M) for LIBOR liability [589]; Singapore sanctions [600]
• ·      Lloyds TSB [UK] – fined US$370M [659]
• ·      HSBC [UK] – Singapore sanctions [600]
• ·      HBOS [UK]
• ·      JPMorgan Chase [U.S.] – Singapore sanctions [600]
• ·      Norinchuckin [Japan]
• ·      Rabobank [Netherlands] – fined €774M (£663M, US$1.06B); CEO resigned; 30 others censured [620]; three charged {Robson, Thompson, Motomura} [631]
• ·      RBC [Canada]
• ·      RBS [UK] – £390M (US$612.6M) in fines, 21 employees involved [582]; Singapore sanctions [600]
• ·      UBS [Switzerland] – US$1.5B fine, two charged {Hayes, Darin} [575]; Singapore sanctions [600]
• ·      West LB [Germany]

Added to the list by the Monetary Authority of Singapore [600]:

• ·      ING [Netherlands] – Singapore sanctions [600]
• ·      BNP Paribas [France] – Singapore sanctions [600]
• ·      Crédit Agricole [France] – Singapore sanctions [600]
• ·      DBS [Singapore] – Singapore sanctions [600]
• ·      Oversea-Chinese Banking Corporation [Singapore] – Singapore sanctions [600]
• ·      Standard Chartered [UK] – Singapore sanctions [600]
• ·      United Overseas Bank [Singapore] – Singapore sanctions [600]
• ·      Australia and New Zealand Banking Group Ltd. [Australia] – Singapore sanctions [600]
• ·      Macquarie [Australia] – Singapore sanctions [600]
• ·      Commerzbank [Germany] – Singapore sanctions [600]

Others involved:

• ·      R.P. Martin Holdings Ltd. [UK] – two charged {Farr, Gilmour} [583]
• ·      ICAP [UK] – fined US$87M + three executives charged {Read, Wilkinson, Goodman} [615]

I trust none of us will lose sight of what these banks have done.  Lest we forget!

Comments and contributions from Update no.658:

“A couple of points. Israel is taking heat for direct tank fire on a school- not arty fire.  Three direct shots that were fired.  UN officials say they tried to get time for it to be abandoned.  The Israelis have a different story.  From what I have seen so far, I would believe the UN people.

“This is from Andrew Sullivan’s blog relating to the beginning of this mess.”

“The Lie Behind The War”

by Andrew Sullivan

Published: JUL 27 2014 @ 9:15PM

http://dish.andrewsullivan.com/2014/07/27/the-lie-behind-the-war/

My response:

            So, the basic premise of Sullivan’s Blog opinion is that Israel used the murder of three boys to hammer Hamas – an opportunity not to be passed up, since they just wanted to kill Hamas militants or perhaps just Palestinians.

            To my knowledge, the cross-border tunnels were not created or used by Israel, and they did not create the cross-border incursions.

            Let us assume that Israel made everything up, created the entire situation, killed the three boys, killed the Palestinian boy, even fired the rockets into their own country . . . for what purpose?  . . . some more settlements?  . . . obliterate the Palestinian people?  . . . deny the Palestinians their statehood?

            If Sullivan’s opinion is true and accurate, the outcome could never be what the Israelis seek.  Also if true, the violence in that region will remain perpetual.  It has already been more than my lifetime, and neither of us is likely to see peace in that region, which brings me to the conclusion.  Let us grant Palestinian statehood and let them fight it out state-to-state.  Who knows it might just be the paradigm shift required.

Round two:

“The Israelis used the pretense of looking for the boys to run their operation into Palestinian areas.  They had the goal going into Hamas areas, only later they found the tunnels.  In view of the fact that it has come out that the authorities knew the boys had been killed almost right away, and that the kidnappers were outliers to Hamas and were known to free-lance, their placing the blame on Hamas during the three weeks was a sham.   Former DIA acquaintances think they had this multi-week operation planned – due to logistics and manning unique to the IDF- and were waiting for a pretext.  The searches of Hamas outposts were done under pretext of looking for the boys, and as a result, the tunnels were found.    Not to excuse the Hamas starting shooting later, but ‘til then, this year had been very quiet as far as rockets.

“The DIA people think the Israeli goal has not so much to do with tunnels or rockets, but stopping the Two-State solution. The leadership of the Israeli government is very strongly anti-Two-State; the foreign minister is very outspoken against it.  Netanyahu, while not overtly anti-Two State, has done nothing to promote it and his party is against it.  With Hamas and Fatah moving together, that would have put more Palestinian pressure on that measure.  The main goal in all this is to prevent Hamas-Fatah closure and to weaken Hamas.

“A pox on everyone I suppose.  The Israelis maybe making another bad mistake re: Hamas.  They ‘used’ Hamas at one point to go against other factions, only to see Hamas grow into a threat. If Hamas is eliminated, then the ISIS is expected to take over.  The DIA folks are very, very concerned about that possibility, and have seen signs that ISIS is in Gaza already.  And ISIS is anticipated to be a greater threat than Hamas.  Not only to Egypt, but to Jordan and Egypt.

“A related concern, is that if Israel continues to kill Palestinian civilians at the great rate, the country could be branded an ‘Enemy of Islam’ by a Muslim leader, perhaps Khameni of Iran.  Even though a Shi’a, such a decree would be devastating and would turn Muslim countries, both Shi’a and Sunni against Israel.

“A greater worry is that if the Turkish humanitarian organization tries another flotilla to Gaza, as was tried in 2010.  There are reports of such a flotilla being formed and further, reports that the Turkish Navy will accompany it.  If so, and the IDF uses force to stop it like before, Turkey might invoke Article 5 of the NATO Charter (mutual defense).  That would put us and the rest of NATO into a quandary.  We have treaty obligations to Turkey- and none to Israel.  And Turkish PM Erdogan, has been making some strident comments lately.   With the destruction in Gaza, a humanitarian flotilla is something that could be expected, especially when the fighting ends.  This final scenario is one that has people most worried.”

 . . . my response to round two:

            Re: Israeli incursion.  OK, if the boys were an excuse, what was the purpose of the original incursion?  I thought the IDF had plenty of evidence of the tunnels . . . perhaps not the full extent but at least their existence.  What was the IDF’s original mission?

            Re: two-state solution.  Why would Israel not want a Palestinian state?  Well, with at least the Palestinian Authority on the West Bank?  I know Jerusalem remains an issue.  IMHO, the West Bank should be fully recognized with statehood.  The Jewish settlements in Palestine would be part & parcel to the territory of Palestine.  Jewish settlers would have a time window to leave or become Palestinian citizens.  And, I would make Jerusalem whole and the capital of Israel; Muslims have to get visas to visit lots of shrines.  The pressure on Hamas would be enormous, if the Gaza Palestinians watched normalization on the West Bank, while they suffered continued isolation under Hamas.    I suspect even the Palestinians in southern Lebanon would seek the peace of statehood.

            Re: Hamas.  I am not so sure the Israelis are making a mistake relative to Hamas.  Hamas remains committed to the extermination of Israel.  I am not aware of the same professed hostilities by Fatah.

            Re: ISIS.  I certainly agree with the threat.  Those guys are clearly demonstrated bad guys.

            Re: Enemy of Islam.  The IRI has repeatedly proclaimed their hostility to Israel.  Sure, the Israelis must be as careful as possible, but Hamas cannot be allowed to hide behind civilians.  Further, I am not sure how we define “civilian” anymore given our enemy’s propensity to use children and women in burqas for suicide missions and launch rockets from mosques and schools.  Hamas wants true civilian deaths.  Further, I suspect some of the “civilians” killed are culpable and not innocent.  War is war.

            Re: Turkish relief flotilla.  If the Turks pursue a relief convoy, the Israelis and Turks can coordinate a pre-sailing inspection & sealing of the cargo & passengers to avoid any confrontation.  Yet, at the bottom line, the Israelis cannot allow Hamas to be resupplied with weapons or articles of war.  The IN would have to shadow the convoy to prevent mid-cruise supplementing of the cargo.  Perhaps other navy units could do the same thing to maintain some semblance of neutrality.

            We must think outside the box.  Well, actually, the Israelis must think outside the box.  Resisting the two-state solution is useless and futile, and I do not think we should continue to be held hostage by right-wing Israelis.

Another contribution from a third party contributor:

“The Russians have never been very good at time-tables either. Recall that WW III was /supposed/ to have started today.”

Comment:

“All the Super Powers are running on unsynchronized ATOMIC clocks (you like that, now that was clever on my part).”

My reply:

            Too much chest-beating on both sides of this issue.  Uncle Vlad may be serving his reconstituted Politburo.

My very best wishes to all.  Take care of yourselves and each other.

Cheers,

Cap                        :-)